The order will be approved as presented.

Business items, the minutes from our last meeting, November 24th, 2025.

Provided for us again earlier.

Is there a motion to accept those minutes?

So moved.

Second.

Any discussion of those minutes.

They are approved.

We are all ready to reviewing the financial statements of 125 live.

Our administrator zones, please.

Thank you, Chair Wall.

I um I did want to point out that we are still working with all of the outside agencies to try to get them on a more standardized reporting format, like we talked about last time.

Some of them have been more successful than others.

125 Live has always provided a pretty um robust set of information.

They haven't had significant changes from the last period.

But they did see an increase in revenue, which is promising for them.

And their current ratio went up just slightly, uh, and their operating reliance ratio also went up.

So again, can see that uh revenue generation that they have is um helping them uh become more self-sustaining.

I would also note that we do have a contract with 125 live that contains these members, so a little bit different than some of the other outside agencies that we review, and you can see going back um to the 2017-18 timeframe, um, that they've seen a significant increase in their operating reliance ratio.

I'm a member of 125 live.

So very go in place.

Whenever we're there, it's lots of people.

Imagine when the parking ride is live.

Yeah.

And what part of what I'm surprised at uh uh is that more and more young people are joining.

Yeah, even though we go at you know early afternoons.

Uh we see quite a few young people.

I don't I've never been there at six o'clock.

Who knows?

Maybe it's all young people at six o'clock.

I don't know.

Yeah, I don't I don't know either.

Any questions about 125 live?

Have you participated in cardio drumming yet?

My wife has.

I have not.

The record requires.

Yeah, right.

Very important question.

Yep.

We uh we have a pair of sticks at home.

Then let's move to the history center, please.

All right.

So uh the city uh budgeted um 47,500 in the 2026 budget for the history center.

And um, you can see that they vacillate a little bit in their financial narrative.

They did provide some information.

They have an ongoing grant process.

Um, and it's really a bonding request out now to be able to complete the um capital campaign for their expansion of the sub barnstead.

Um, so they had some adjustments um in their not assets, but those were planned adjustments based on the investments that they're making in the facility.

Um, and they did it was helpful that they provided this amount of detail, I think, on their financials.

So I think we're seeing more utilization of that part of the reporting.

That helps understand.

Um, there's a lot of seasonality that happens for these nonprofits for when they bring dollars in when some of their expenses come due because of the grant funding that they rely on.

They are a quarter behind in reporting, but uh just takes them a little time to pull together the year end, even as we saw that in our city report uh week ago.

Right, and we do require that they provide their board most recent board approved, so that's what we're trying to work with folks on.

Is even if they're providing the most recent board approved, do they have a non-board approved?

That's a standard format and great point.

There with all the other things that the nonprofits are providing in the community.

A lot of them have board members that also serve as their treasurer.

So um, as you all can appreciate, multiple responsibilities sometimes um means timing isn't as ideal as you might hope.

Yeah, very healthy uh report.

Are there questions or comments on history center?

Not everybody, none for me.

Another different kind of report of uh the human rights commission, please.

Um, sure.

And this is where we start to um see changes that happened in the budget.

So again, we're looking backwards.

Um, so the city had provided $5,400 to um the Human Rights Commission, which has evolved into being primarily a phone line in the budget.

The OMSA County was asking for us to shift that to the youth council so that we could have more equal funding between the city and the county.

So you won't see this again unless something changes.

But again, looking backwards, the city had continued to provide that same dollar amount for many, many years.

And this is an odd report because it's the county.

And so we really look at their budgeted expenditures, which are about $25,000 a year.

Any questions on perhaps our last opportunity to weigh in on the Human Rights Commission.

Then we move from a simple report to a very complicated work to ready, please.

All right.

So the Rochester Area Economic Development Week.

They had some unique changes within their financials by changing a CD.

So that kind of adjusts how their financials show up in this quarter.

But they also have some timing on their investor revenue, but they get a lot of that in 2026, although the expenses happen in advance.

And so they had uh booked some prepayments in November.

Um I would note that our this time of year, I mean, they always do run a little bit in the negative.

You can see um so their operating reliance ratio stayed pretty similar, um, but their current ratio went down in part because of that CD that they cashed out.

That's how I read it anyway.

If there's total power.

Yeah.

Right.

So they have basically more of their financials are committed to sort of like a paper change, I guess, is what I would I mean it's still very healthy.

They definitely, you know, they've been changing over time.

And with um SBDC also reported here, if you look in their financials, there obviously were some federal implications for SBDCs that have been evolving over the last few months.

So we may see some timing and reporting um that is unique also as we move into the beginning of 2026, with how quickly or not they're able to pull down the matches.

Um, and they're just sort of awaiting understanding of whether the verbal things they're hearing will result in a change to their ability to um pull down dollars in Minnesota.

So that is it's just a risk that's out there for them.

We have experienced that as well.

Very healthy with explanation, any comments on ready.

Then we go to our quarterly mystery report for SBDC.

Yes, and I again I think that um I guess committee member Miller shared.

But we're still working with understanding if we could get some different reporting.

I I also don't know how much some of the changes that are happening at the federal level may influence this, or if it's something that they might need to try to work on directly um within the local SBDC.

Like, I mean, just because they are providing this to federal reporting requirements, there might be something different that they can provide us.

And I don't know if they're still going to end up categorizing it this way, depending on how things continue to change with the federal requirements for SBDC.

Which maybe wouldn't be a bad thing.

I don't have anything to add other than I'm still working on it as well.

Okay, and I have a constituent who reached out to SBDC in this most recent period and was very satisfied with the service received and was not aware of it before.

So great.

Go ahead.

I mean, I we've talked about how to solve it.

No, add the numbers up to make them.

Yeah, it's just it's very hard.

I guess for the record, it is important to note these are self-reported numbers.

So when someone receives service, they're not obligated to report um as part of that.

It's after the fact and um it had been shared with us before that um they feel it's underreported based on especially the financials, because once people have required the capital, like the likelihood that they're tracking that maybe becomes a little bit less.

Um, but you can see they do um they do parse it out by the city of Rochester and um SBDC.

And so the city is a you know not a small part of the 11 county agenda they're serving.

Um the way that the dollars that the city provides work is they have to have a match for everything that they pull down from the federal government.

So it's really trying to ensure that they can maximize what's available to the region.

Correct.

Any questions or comments on small business development center?

On to our neighbors, please.

So our neighbors, the funding um did increase fairly significantly for 2026, but you'll note that in the past um we had seen reductions there, and then we're trying to respond to some challenges that they were having.

Um they provide they didn't provide updated financials, they weren't going to be able to get those until this week.

Um, and um I didn't put it, didn't list it in writing, but they did request an advanced payment for 2026, which we did not provide because the budget wasn't approved, etc.

And we provide these on a quarterly basis.

So just something to know if the funding were not to be approved, that might be challenging for them, but it might be something where if you wanted to have them come in person next time to share if they're how they're doing.

Um, that could maybe be something that would be helpful um to understand if you know.

I know that there have been concerns before about um how reliant they are in the city, and they are unique in some cities.

This would be like a part of the community development department and their administration.

Um, and a lot of their costs are associated with personnel.

So well, we have been watching their fund balance draw down significantly since uh COVID.

And now at least what's reported is dangerously close to uh to zero.

So I can understand a need for an advanced payment or whatever it might take.

Well, I guess my question is could that request come formally?

Is that the full council approval or we we make orderly disbursements as actions here?

Since there is an approved budget, would that be an item that this commission would take up, or would this request need to go to full council?

To pay it or if we were to if we were to request if we were to consider that request of advanced payment.

I think we already did not provide advanced payment, and this would be the payment that we would be making for the first quarter.

The budget wasn't even approved, so forward to a year needed to request come back.

Um I would have to look at the resolution, but I think that that is something that we would probably just want to speak to the full council on the increase in support, um, move them into a uh more healthy position in years to come.

It should make it a lot more viable.

I mean, it's about an $18,000 increase from a prior year.

So um they had asked for more than that, and we had phased it over two years to make sure that um use the funds and I know that's something they had continued to be adding some staffing, but also like some of the intent of this is to be grants and support to neighborhood organizations.

So what's the right mix of that to be able for the I guess council or community to feel like they're receiving the support?

Thank you.

Absent that you could always have um if you wanted to have them at culture meetings to understand like how they're utilizing the dollars.

Yes, and we just make that an informal request here without the motions that we would like to have our neighbors at our next meeting.

Yep, and I guess they could probably do it as remotely if they needed to if it worked better for their schedule.

But we've also discussed having a civic theater people to share similarly about some of the change in their subscription revenues from CAD sales.

I think building that cadence of having an organization found a couple each time.

Yeah, when you want to next time or if they're available, I think having one or two per meeting as we cycle through some of these would help build our understanding of their operations that would take forever to get through this many in one per quarter.

So sure.

Yeah, I I would be fine with two, and I think we should prioritize maybe groups like our neighbors that are it's such a thin margin that they're operating on, but also their their inability to communicate their financials what that should be almost an automatic trigger that we would like to see what the next meeting.

That's my preference.

So I'm certainly hearing our neighbors that we're would we like to hear from the city theater as well.

I'm interested.

Yeah.

It doesn't have to be the next meeting, but at some point has it gone through uh leadership change.

Maybe that could be the second priority, and if they're available next time, grade if they aren't available, then we could find a whichever meeting they're available on that's sooner.

So we'll bring on a second one next time if they are available to remove this.

Yeah, because there are some questions when we get to them that might be not quite next, but soon somewhere on here.

So understand their operation and how that may or may not change needs outside support.

All right.

Any more questions on our neighbors?

So to the art center, please.

The Art Center, the city um has budgeted 185,000 um for uh support to the art center this year.

Um that is a small increase from prior year.

Um and what the support was that was provided.

Um they did indicate that they've had um some additional earned revenue, but not a substantial amount of earned revenue.

Um, and they've also had um increases in the cost of to keep up with their program um programming requirements that they have.

Um they also um ended with a positive cash flow, but it's a fairly slow cost positive cash flow.

Um, but I think any positive cash flow probably feels great if you're a nonprofit.

Um, and you can see their current ratio was down just slightly, um, and their operating ratio um as well held pretty pretty steady.

Um their total expenses do exceed the revenues less the city sponsored uh amount of uh funding, but um, without the city's funding, they would be it would be challenging for them to break it in.

Yep.

It's not remarkably steady compared to eight or nine years ago.

Yeah, and I guess I would just know um they have a unique way that they report their um, I would say unique personally, but um in their net assets, they also count sort of the lease value of um the art center facility that the city owns, but there were contributions from the art center members to build that in the first place.

Um I would say much of their total net assets is a question.

I mean, they can't really liquidate.

Um just something that's unique compared to some of the others.

Anything to add to the art center?

I have nothing to add, nothing to then we'll go to the civic theater, and I know a few of us are a part of the ongoing operation over there.

Yep, so the civic theater, um, the funding for 2026 that's budgeted is 115,000.

That's 15,000 increase from prior year.

Obviously, going back in time.

Um, there was uh much more significant amount of city revenue, but this is part of this and the art center are part of one roof now, and so there are costs that they aren't um carrying anymore within their operating budget, and so both this and the art center are really focused on their primary mission of programming and the city um funds experienced Rochester to help support some of that maintenance.

Um you can see that their current ratio um went down slightly, still much higher than it have been um in prior years, and then um their operating reliance ratio actually increased slightly.

Um, so they've had their revenues have been down, except for frozen.

Um, one of the things that I would share is that um they are trying to get the word out about um purchasing tickets directly from um the theater.

Uh, you probably saw the story that with the challenges with third-party vendors really driving up the costs.

Um, that is something that the that city teammates are in conversation with them about how do we maybe use a summer newsletter to get like information out about uh purchasing directly.

You can buy a ticket for significant amount of money, but the the civic theater is not getting any of that margin.

Um, and they do have a process for if they find out that they basically withhold the ticket and have you come in so that you don't have to pay.

I mean, I believe their ticket price is generally 35.

So some of those that were out there for like 100, 300, 500.

Um they would certainly welcome a donation at an excess of 35 dollars.

But what people are purchasing from the third-party vendors, they're actually not receiving any of that margin.

So but in those third-party purchases, that person is actually receiving a ticket.

They are receiving a ticket.

They do have a process though when they see that that they try to withhold the ticket from the vendor, make contact with others so it makes the purchase so that they can actually get their ticket for a reasonable price.

It is fraud, but it's not a weak loss.

It should I don't know if it's technically fraud, but it is not going to the civic theater.

Yeah.

So if someone you know is purchasing for for that dollar amount, they can get a ticket.

It's just they they they try to um intervene when possible.

I don't know how um successful they are in doing that.

And it's really up to the ticket purchaser.

So um but that is something that they were hoping to get the word out about a bit into the community that you can always come there directly and that you shouldn't expect to get uh higher ticket price than at the civic theater.

Right.

There is there are a number of ways you can you can call them and have them hold it.

There's lots of ways you can purchase it directly from them so that they're getting the dollar.

Um I was at their fundraiser last night, the black box and their uh black box bash, and they're uh rolling out a new um program as sustainer model.

So separate from the the tickets, the season ticket holder model where they're looking for, I think they estimated 120 100 a month sustainers of the civic theater, um looking to raise a good amount of capital.

Um it was interesting, so it'd be interesting to see how that would affect funding from the city or what what what they're looking to do with it.

I guess the other thing that doesn't show up here because it's not part of the ongoing operating support is that um because the civic theater is in a city owned facility, we did participate in their rigging.

Yep, they needed an updated rigging um system, and so I think that's almost done.

Um, and so that will hopefully for them be helpful in what they can actually put on their how much they need, how much thing they need to do that.

That was about 125,000 expense for to the city.

Yeah, and it's I mean it's something that stays with the building.

So if they were ever to not be there, we will have a rigging system for someone to use.

Um that's kind of how we try to look at those operating expenses within the one room um category.

If you can like pick the box up, turn it upside down and shake it and it falls out.

That's probably more on the operator, but it's something that's attached to the building to say or we partner on it, depending on what we do.

So I have a very long history with this.

Yeah, and recall very good years and very bad years.

And it seems like the very bad years coincided with what I would consider to be a less than public uh appealing set of plays.

Yeah.

Um really drove the theater into bankruptcy and but we don't have to rehearse all that.

Uh I've talked to people who have not renewed their scene their tickets for this year.

I'm strained a little bit from our purview.

Sure.

Um and maybe one of you two sit on the play selection committee.

Uh um do they would they take this year's lessons or lessons from quite a long time ago to say, yeah, I guess you know, and Rochester's appetite is for this as opposed to this.

I mean low frozen.

Maybe not some of the others.

Yeah, I I think they are.

They so they've announced three of the shows for next year.

One is Mean Girls, which I have no appetite to see whatsoever, but they're revisiting late Mays and that's when 20.

So that's what they ever did.

Right.

Well, thanks, oh that was oh my god.

I was I would say I was in it.

I would just dump.

So they're I they're going back.

So it's it's the seven to 75th anniversary of the civic theater, so they're rolling some of those those those big shows back out.

I so I think lessons have been learned.

Oh, this is part two.

I mean, they they've had a change in managing director, yeah, creative director this year.

And I I suspect that there are some creative vision changes.

Yeah, and and she would not have had any influence over this year's place collections.

Right.

Yeah.

Yeah.

No, I was the understate for Jean Valjean.

I was saying the role of the bishop.

Oh, well, I think um, yeah, so I I think lessons have been learned.

And and uh they have some really dynamic development people who are now working.

I I'm glad to hear that they are considering support beyond just season ticket subscribers.

It's always felt like a missed opportunity, and the film only sells season tickets as packages to the shows and not are not advertising additional opportunities to for patronage support.

Yeah.

So just as an aside to go back, when I heard Lem is, I went.

Then I saw it and I went.

Couldn't believe we have that down in the city.

So don't miss it.

Yeah.

No.

Anything else on Shoevering?

It's uh Bob Millen.

I guess, yeah.

Something for everyone.

That's right.

Uh anything else on civic theater?

No.

Rochester Downtown Alliance, please.

Um, the 2026 funding for the alliance that is for this operating support is 125,000.

There are other ways that we also support Rochester Downtown Alliance, um, but we don't review here.

Um, they have those are contractual arrangements that we have with them.

Um, so they um did see a change in that assets, a large part of that was related to the Mayo Clinic grant that they received that they're now delivering um subgrants um to different businesses, and I believe that that grant was 500,000 if I recall correctly.

Um so they noted that in um the um this grant or in this report that they had about 112,000 of grants dispersed um from that, and that we'll see more um forthcoming in the first quarter of 2026.

So um they always provide very robust um financials for us, probably the ones we would maybe like to see everyone report this way.

Um they also have a lot of different lines of business that they provide where it's probably very important for them to be reporting on uh on the basis of what they deliver for their membership.

A large part of their um non-city supported funding is coming from the special um district um charges that they have.

And um, they also rely fairly heavily on different contributions for the programming that they provide.

So important for them to be able to show the folks that are providing uh support how their money is being utilized.

Um a couple of years they uh decided to go more heavily with contracted services and reducing employees.

It looks like that's been reversed.

Like contracted services are way down and uh employee wages are up.

Is that is that an accurate reading?

I believe that that's an accurate reading.

I would have to check um with Sean Fagan to understand what what the mix has been.

I do think they found that you know, in order to be able to deliver their their programs, it's probably harder on the executive director to not have folks that are directly in that space.

Um, they also did have some turnovers, so I don't know how much of the expenses being down were related to turnover versus a change in how they were operating, but they also had transition year um back in 2024.

I barely know what year it is.

I can't believe it's 2026.

Yeah, so I think it's a combination of things.

There was a very strong desire to go to do more advertising, and they're doing that.

Um, but I think they're finding that like as they level out a different way of operating that maybe there needs to be a mix of contractual and um and folks to like lead and push for those initiatives also we can ask them for more clarity on on how that's sort of settling up.

No, I would be interested in that, and maybe their rationale was to uh those budget monies further advanced Rochester's causes.

Well note we did receive a slipbook council um quite a few letters of praise of RDA's role in bringing business advertising and a positive impact for downtown businesses and just quite recently and I've heard that numbers, preliminary numbers for socialized work over prior years, about nine percent is what I was hearing.

That's great.

I'm glad to see.

Yeah, and the other thing that they're doing in conjunction with the city is that um downtown the downtown wayfinding.

And so as we're seeing some of that go up, um, I think they've been a great partner in trying to integrate um the ideas of inside and outside the skyway and you know, marketing to get people here, but then also marketing and keep people moving through downtown on once they are here, and hopefully the catchment of them is a little bit longer because they have you know they're more inspired to maybe you know visit other things than their their primary purpose for coming downtown.

Anything to add for RDA Southeastern Minnesota Initiative Fund and the very thorough report.

Oh, actually, I don't think we have them on here anymore.

They did not provide a report.

We did not provide funding for them for 2026 and the items, right?

Um apologies.

Um it's listed up here because it was a year.

Um but you'll recall that they have millions of dollars in the bank, and so a great partner in the um 11 region area, 11 county region area.

Um, and they continue to provide information that's going to businesses, and um, I know that was a hot topic of conversation, so um, it is something that if the council ever wanted to consider again, they could or consider meaning different use of this.

But we didn't include them because we didn't get a report.

Well, also we're not putting funding.

Hence no report.

Yeah, that probably wasn't on their list.

Thanks to it.

Thank you.

How about the youth council?

Um, the youth council, you'll see funding for 2026 listed at 15,400.

Uh, they um of course provided um a some financials.

Uh, they continue to provide um primarily the personnel um contractual support to operate the youth council.

I would say that the county board is looking at they're starting to plan for their 2027 budget, and there was some thought that perhaps this would be a city um youth commission.

I don't know where that will go.

Um, and there have been some concerns raised about um a desire from at least one elected official that the city's funding should be for like travel and support for um the meetings, and the county board is less they're they're not concerned about travel to say like the National League of Cities or the National Association of Counties, um, but I think there was a desire to have um some travel to an international city, and I think the board was a little bit concerned about that.

So I don't know where that will go.

Um there could be a possibility that the resolution of that would be that we wouldn't provide them all the funds and the city would make the determination about um youth travel, but um, I did just want to share that sort of I believe they're making a presentation to the county board we're highlighting the impacts of recent international travel.

They hadn't youth members have not yet presented, I believe they're all.

I thought that was very impactful when we came to the case.

I thought it was I agree.

But it's also sort of could be a boss we didn't have some it very well, maybe um and I know they're looking at their 27 budget to have no tax increase.

So we did that here in COVID, and we've been climbing out of that for ever since I've arrived.

So that would it could be really challenging for them to achieve, and I could understand if they're looking at all of their different right.

Anything else on the youth council.

I don't believe so.

We are to 3L approving the 2026 first quarter disbursement of funds for the outside agencies.

Is there a motion?

So moved.

Is there a second?

Second.

Is there a discussion on approving the first court of disbursement as listed in our agenda?

Discussion.

All in favor say aye.

Aye, opposed no.

It is approved.

Do we have any other business before the group?

Looking at our financial statements and particularly the graphs of operating reliance ratio and front ratio.

It might be helpful to show uh city support quarterly over time, whatever the disbursements went out.

I think it could have context to particularly spikes or stabilization.

Whereas right now it just shows the current funding level or the most recent year that we're gonna have thoughts on that, or those quarterly disbursement figures are available.

They're available back to when we started doing it quarterly.

Okay, but we used to not do them quarterly, maybe three years ago.

Two or three years ago, we started making it quarterly because how else would you we had um one of our former outside agencies full and we had already provided?

We actually did recover a little bit from that um in bankruptcy court.

Um but um yeah, it was a little bit harder to once you pay the money, which usually we were doing in like January or February, more challenging to uh be able to have that.

Um but um yeah it was a little bit harder to once you paid the money, which usually we were doing in like January or February, more challenging to uh be able to have that, but we could maybe look back to the annual payments, which might also still tell you something.

Just a curiosity of where the city support is particularly for those agencies that have seen an increase and perhaps stabilized after an increase.

I think it will as the city provides a substantial part of uh their income as well.

Yeah, should we remember?

I guess I should go open it.

I would also be okay if just going back to the start of quarterly disbursements, not necessarily to have a full history comparison.

We could also put just like a look back of what we I think I have that somewhere of like their annual payments, like and how that's adjusted over time.

I think I have that from the budget book.

Um I think Jessica had it somewhere in her giant smart sheet.

Um there's a joke in there.

Um I love smart sheets if someone uses them plate does them for me, but I don't want them if I have to figure out how to use it.

Um and then I see someone has a whole workbook of like a brief history of time, and I'm like, I don't know how to do that.

Um but yeah, and we will also try to um we'll we will continue working with the different agencies to try to refine their reporting, but also um prioritize our neighbors than civic theater, then um history of center based on timing.

And since we've shortened your agenda, there's well then we'll maybe go through the list, but I heard so we kind of is in our order today.

I'll just I I also heard that we are curious about some of the operating model changes of RDA.

Maybe they pair with the history center or around what the year or Q4.

I mean I think if you had two per time, at least based on today, you would have had what 20 minutes for Volvo, which is a short amount of time.

Okay.

Assuming you wanted to keep try to keep these to an hour.

Please you will take that and do it.

And we could put guests on early so they wouldn't have to stay for discussion.

Right.

Yeah.

And the other other business.

Is there a motion to adjourn?

So is there a second?

Yes.

Aye.

Oppose no.

We are adjourned until 3:30 p.m.

Very well.

It would have taken me longer.

Uh no.