Well, welcome to the uh March Sustainability and Resiliency Commission meeting.

Um, we're going to call the meeting to order and start with a roll call uh vote of the attendees, Seth Fairens.

Present.

Amy?

Here.

Amanda Holloway present.

Terry Kinsey here, Casey McQueen's here.

Edward Cohen is out of town since um Brian Morgan?

Leah Arroyo?

Here.

Stuart, Risier.

All right, great.

So do we have anyone on uh oh, we're gonna approve the February minutes.

The February amendments were included in the package that you received in advance of the meeting that were posted on the website for the general public.

Or were there any additions or corrections to the minutes?

Not see not seeing any.

I move to approve the minutes.

Move to approve.

I second vote.

Second, all in favor?

Anyone opposed to the minutes?

No, good.

Okay.

Do we have anyone online?

We have one person present.

So our open comment period is an opportunity for the public to provide comments to the commission regarding items not in the agenda.

The commission will not discuss or take action on them.

According to the advisory board, committee, and commission rules of procedure and operation, each speaker is limited to four minutes, and there's a 15 minute limit for open comments uh on the agenda.

Uh anyone like to make any comments?

No, right now, thank you.

Okay.

All right.

So our moving right along.

All right, next item on the agenda under old business is the natural gas franchise fee engagement, which we I think we've talked about for the last maybe three meetings for the meeting for a while.

So on topic.

It is yes.

Thank you.

So ready to go?

Right.

And if just wanted to mention, we just open those windows to cool it down in here.

So if it gets too loud, or if you want to close the windows, feel free.

Um, so we'll start with the presentation.

Um we'll be talking about the gas franchise fee both at this month's meeting and next month's meetings.

And so, really, because we're actually you all are the last engagement um official community engagement um event of the engagement period, we're leaving the online survey open through Friday at 5 p.m.

And then we as of Friday at 5 p.m., kind of the engagement period of this project is wrapped up after that.

So, what that means is for the next few weeks, there'll be kind of analyzing all the data from both the online survey, all the community events that we've presented to, feedback from you know the in-person events, virtual events, small group events, things like that, and drafting a recommendation report to city council.

Um, we are scheduled for the city council study session to talk about the results of the engagement period on Monday, April 13th.

Um, and so if you think about the timeline of XRC next month, our meeting is the meet before that.

So it'll be Wednesday the 8th, I believe.

Um, but the council packet isn't published until after that.

So it gets published that Thursday.

Um, and so while we won't be able to be able to share kind of the full recommendation report and the council items that because we don't want to, you know, discuss that with you all before we go to city council.

Next month is really when you all will have the chance to draft or to review and finalize your recommendation report.

So really the goal of today is just to provide feedback about the project as any other community group has done.

So I presented to Kiwanis, Groveries, um, the lunch with local leaders, the you know, the chamber of commerce, um, several different groups over the last few months.

And so this here today is just kind of one, the the statement stuff as one of those.

So we're I'm just looking for general feedback.

Um, I do have the board up here.

So this is what we've brought to all of our engagement events so far.

This um reflects kind of all of the questions that are also reflected in the online survey.

So you're welcome to participate on this board here today in person or through the online survey if you'd like to do that or you haven't already before Friday at 5 p.m.

And we'll just talk through some general questions in the discussion period of this.

So we'll talk through um the questions up here on the slide.

So, based on what you what is presented to you today, what elements of a potential fee feel most important for the city to get ready?

So thinking about portability, fairness, equity, transparency, impacts of the revenue use programs.

If a few were adopted, what types of programs are faster?

Do you think we should prioritize?

That could be both on the community side and the city side, and then preparing for the SRC recommendation report next month.

What considerations or what kind of components do you feel are important for ACE and for Terry to take into consideration when they draft that report and then bring it back to you next?

Any questions?

Is that clear?

So we'll do clarifying, we'll hold our questions till the end of the presentation.

I know, and I do know, and I and I want to say I think we all greatly appreciate that almost everybody here, as far as I know has in one way or another already engaged with this.

But this is a great chance for us to synthesize it here at the very end.

So if there's clarifying questions, hold them to the end, and then there's a lot of time for discussion so that we're prepared for next month.

We actually will drop that letter.

That's a great point, actually.

You all have probably seen this presentation before.

So okay.

All right, so jumping in, um, this is kind of an overview of the engagement.

So our project website, Rochester Mn.gov slash Flidd here.

I'll move this down so that if anyone wants to scan that QR code, it does go to the website, I believe.

Um, we've had again several in-person meetings um since late mid to late January.

We've had virtual sessions with kind of some interactive polls during those virtual sessions.

There's much more information on the project website.

There's a link to this document on the project website, which is kind of a high level summarized overview of the project.

And then also on the website is the link to that community feedback form, just the virtual version of this survey board right here.

Okay, so um during the presentation, I will provide an overview of the project, answer any questions that you all have, and then again we'll have time to gather your input and hear from you.

Okay, so a little bit of an overview of the project.

So before I jump into what is a franchise fee and what does that mean?

Some framing of kind of why we're talking about this right now.

So I think you all have probably maybe seen this before, but um the city's foundational principles and strategic priorities are kind of the foundation of um or the framework of kind of all of our work at the city.

So foundational principles are really the lens that we apply to all the projects that we work on in the different departments.

And the strategic priorities are set by city council when there is what we call a new council, or when you know uh several council members are re-elected, or we have several new council members, they go through a strategic planning process um and then set their strategic priorities for the next several years.

This election happened in 2024, they went through their strategic planning in 2025, and these are the strategic priorities that came out of that planning.

So, as you can see, responsible environmental stewardship is listed under one of the city council's strategic priorities, um, which then um staff kind of creates what's called an action plan under that.

So there are several different topic areas under responsible environmental stewardship with different projects and priorities under that.

And so that's kind of the framing of what we're working on as the city to support this larger strategic priority of responsible environmental stewardship.

One of the tactics under that is looking at a natural gas franchise fee as a way to fund sustainability work, and so that's kind of what provided um Erin and myself the direction to start working out on this.

We're at 29% as of 2024, and we know that by far our largest emissions sector is building energy use.

So about 80% of our overall emissions come from building energy, so that's fuels and electricity in all of our residential, commercial, industrial, and municipal buildings.

All right, so what is the franchise fee?

Um, so utility providers use the public right of way.

So think like a cable utility or in this case a gas utility.

So they use our roads, our sidewalks, the land underneath roads and sidewalks to deliver utility services, so putting down cable wires, gas pipeline, um, to deliver those utilities to homes and businesses in the community.

So because they use the public right of way, utilities enter into what's called a franchise agreement with a city.

The franchise agreement essentially outlines the use of the right-of-way and allows cities to start a franchise fee.

So we have a franchise agreement right now with Minnesota Energy Resources, our national gas company who does not have the franchise fee.

But under Minnesota law, cities are able to collect gas franchise fees.

And it is considered a pass through cost.

And so how this would work is Minnesota Energy Resources would recover that fee by adding it as a line item to natural gas bills.

They would collect that revenue on behalf of their natural gas users on the utility bill and then remit that revenue back to the city.

Many Minnesota cities use gas franchise fees to help fund local programs of priorities.

We found over 200 cities are currently have natural gas franchise fees.

We had and did a deep dive on 90 of those cities.

So I'll talk a little bit more about that later on.

It's not a tax, it's a fee on the natural gas natural gas accounts or meters.

It is up to the cities if they would like to start a franchise fee, and it is up to the cities how they would like to use the revenue.

So the state statute just allows cities to start a franchise fee that it's up to the city how they want to do that and use the funds.

So we feel that a franchise fee could be an alternative, um an alternative funding source for uh creating and providing a stable local funding source for the strategies and tactics under this responsible environmental stewardship strategic priority.

We also feel that it could be a funding source to you know invest uh revenue back into the community to create cost share programs for residents and community members to kind of bring down the high upfront costs of some of these energy efficiency projects that we know kind of have higher upfront costs, but then bring down utility costs over time.

So just to mention again that this proposal in this presentation only focuses on our national gas utility, not cable, electric or any other utilities or franchise agreements.

Um kind of spoke to this already, really just recognizing that you know some of these projects and priorities have high upfront costs, and if we can kind of fill the financial gap for some of this, break down that high upfront costs.

The idea is that we can bring down kind of utility costs over time by increasing efficiency.

We also recognize that many of our priority um items at the city so gives me about some of our capital projects, like our you know, bus racket transit, um, geothermal initiatives, our air quality work, our healthy homes programming.

Um a lot of our work at the city is funded through property taxes currently.

Um so because of this, funding is limited, and you know, a natural gas franchise fee could be an alternative to kind of distributing these costs across all natural gas users and kind of diversifying the funding source and reducing the pressure on property taxes.

Um, when we look at how to fund environmental initiatives.

Okay, this graph um is there's quite the leg.

Yeah.

Wow.

It is totally great.

That should be so low.

Okay.

Wow.

Okay.

I was just going right along.

Um, this graph shows um a lot of information, but essentially I have said that we did a deep dive on 90 cities in Minnesota that have a gas franchise fee.

This one shows the comparison of 62 Minnesota cities that have a flat residential uh franchise fee, natural gas franchise fee.

And so across all these 62 cities that have a flat monthly residential and gas franchise fees, we find on the right side that the average is $3.50.

Oh, $100.

I did it sooner than I needed to, but I thought it might take a while.

The average across all those cities is $3.50 per month.

So that kind of gives a framing out as to what other cities, the kind of level of fees that we're seeing in other cities in the state.

When we think about how revenue could be used in a franchise fee, we are considering a 50-50 split of revenue.

So that means 50% of the revenue invests back in the community programs.

So again, cost-hair programs to bring down the upfront talk of energy efficiency projects.

It could be in sending for new construction, focusing on maintaining rental housing, multi-family housing, preserving our existing building stock.

We're also potentially looking at community-led initiatives.

So it could be something like community grants for you know energy efficiency work or a greenhouse greenhouse gas reduction efforts.

And then support for our business community.

And part of the engagement right now is understanding from the community which programs kind of bubble up to the top.

And so we really probably will focus on you know a few um different priority projects or programs, especially to begin with.

So that's something that we're looking for feedback on is what is most important to the community when we talk about funding for big programs with potential revenue.

And then 50% for municipal initiative.

And so this is you know, those high ROI improvements uh for energy efficiency in city buildings that again bring down those monthly costs and save everyone's money in the long run.

And that is one of our questions on um board over here is do you agree with the 50-50 split of funding?

Do you feel like more funding to go towards communities or towards me visible?

And then what types of programs should we keep talking?

Wait, I should I okay.

So the first option, and you guys um you can kind of follow along with this too.

And I think the um kind of does a good job of overview document of walking through this.

The first option here is a flat monthly fee.

And so what this is is um a consistent fee month over month, um, regardless of how much gas is used.

And so what this means is it's simple, it's easy to understand, it's it's one dollar amount.

It doesn't, you know, vary based on season, based on weather, based on usage, based on home size or anything like that.

Um it's predictable, easy to budget for when we think about you know residents and businesses.

Um, but kind of a drawback, I guess, on the MUAC is that a house or business that uses a little bit of gas would pay the same as a house or a business that uses um more of that.

So the numbers that we're looking at um for option one, and again, these are not none of these are officially proposed or anything like that.

These are just um a starting place, and we're we're looking for feedback from the community.

Um dollars per residential, so that's any home or apartment, two dollars per month, and then five dollars per commercial.

So that's small, medium, and large businesses.

What else say five dollars?

Option two is uh a per term or a usage-based fee.

And so a therm is the way that gas is measured on a utility bill.

So you may see when you get your bill, you know, 30 terms per month or 60 thirds per month.

Um, as you know, it fluctuates month to month based on usage, so likely higher gas usage in the winter because a lot of people have gas powered further.

So under this scenario, the fee would increase or decrease with usage, but also increase or decrease month over month based on season.

Um then you know, based on size of home or size of business and things like that.

So it's a little bit hard to budget for when it comes to you know, businesses, especially because it does fluctuate, but it does tie the fee directly to the usage, so it really gives at that higher users pay more sort of concept and it encourages energy to see conservation because if someone were to take advantage of a program reduce their energy use, then they would see the reduced franchise fee on the network spot.

And so this um gives so for this option, we're looking at three cents per therm for residential and uh business.

And so here you can see some estimates, and again, it's estimates because it would fluctuate months per month.

But if you're an apartment or a small home using 20 thirds per month, it could be something like 60 cents, and then kind of working your way up.

If you're a very large business, let's say 9,000 therms per month, um, yeah, it would kind of be 70 dollars.

Option three um was really created to kind of blend together um some of the concepts from the first two options, and so option three is a what's called a tiered flat fee.

I'll give it a second here.

I wonder why this I don't know, I would keep talking.

I guess you all could follow.

I wonder if I wonder if Chris on Ronnie sees this, or if he's nice.

Um so a tier flat fee um keeps one uh flat rate for residential accounts, and then is has a tiered rate for commercial accounts based on business size or annual gas.

So a smaller business will pay smaller fees, a larger business or a higher gas user would pay a higher monthly fee, but that monthly fee would stay the same month over month.

So it wouldn't fluctuate.

So it kind of balances that ability with that idea of larger users to be paying more.

And it also kind of gets at that stability when it comes to thinking about annual budgeting and things like that.

So what we're looking at for the uh option three is $2 for residential, $5 for small businesses, and for context, small businesses are 39% of the overall business community in Rochester, uh, $15 for medium businesses and medium businesses make up 59% of the overall business community in Rochester, and then $120 per month for large businesses, and so large businesses are 2% of the overall business.

So again, um monthly costs are predictable.

That's an annual usage of the business, and then it switches right away.

Okay.

Um so we did an analysis of those 90 cities looking at um uh looking at the most common types of franchise fees, and we found that whoops.

And we found that 55% of cities that we looked at have that tiered uh flat fee.

So option three.

Uh 14% have a flat monthly fee, so it just stays the same.

And then um only 2% of the cities that we've looked at have that first term fee.

Um, there are also some gas companies that are able to kind of cap a perm fee.

So they would say, you know, three cents per term, but not more than $100 per month or something like that.

Our gas company is not able to do that with their billing software, and so we know that if we work to go with the first term fee, uh energy resources is not able to cap any monthly uh cost or it's a limit uh what that part-term fee would be like.

Tell me which cities are in two percent.

I don't know off the top of the head.

I'd have to check the spreadsheet.

Um, and then the percent of revenue is another type of fee that we're not looking at again due to some limitations of our gas company billing software.

Okay, this slide um is kind of an overview again, kind of shows a comparison between the three options, one, two, and three, and then the differences in annual revenue.

So if you look at options one and option three, the flat and then tiered flat monthly fee have similar annual revenue.

So 1.1 to 1.4 million is what we're estimating for uh option one and option three.

So you can really see option two kind of jumps up to that 3.1 million per year, and so really the difference there comes in those larger users, those larger commercial users.

So, really kind of the basis of um our three options was direction from console.

Oops, direction for console in the fall to limit the impact on residents and really focus on you know a very conservative type of fee.

So we structured the three fees um based around the idea of keeping the residential monthly around that two dollar um the two dollar uh kind of uh dollar amount with the print term.

Obviously, if you have a larger home, um you know, and you would pay more than two dollars, but you could also pay less than two dollars um with that as well.

So that was kind of the motivation behind your work.

Okay, last section here reporting and program transparency.

So um we so this is would be a dedicated funding source or revenue source in the city, and so we would um you know we would uh provide public reporting on any of the funds collected and how those funds first of all are split up between municipal uses and community uses, and then how the funds are spent.

So we would um be adding that to a city book website and then sharing those updates regularly with the community.

Um, as far as the review of the fee, so all of our city fees go through an annual fee process, annual fee review process.

So the franchise fee would be evaluated annually through that process that the city goes through all of our fees.

Um, but certainly city council could say, you know, we want to take a look at this fee specifically works every year, every two years or something like that.

That's a city council decision.

Um, and any adjustments that would be made to the fee would be made within the terms of our franchise in that look.

Looking at timeline for implementations, um, like I mentioned, we are going back to city council um on April 13th for a discussion on this at us at a study session.

And so no formal action is taken at study sessions, but it is our opportunity to kind of share the feedback of the engagement period with the council, hear their thoughts, and kind of um hear from them about you know where they would like to see this go.

Um, if they would like to see a fee uh move forward, it would kind of go through a formal approval process.

And the fee would not take a factory sooner than 90 days after a council agenda, the formal decision by council, then they could say, you know, we want to push it out until January 1st of 2027 or something.

And our gas company has said they need 60 days.

And then they do um alert to all of their customers on their film.

They've like kind of an overput.

So they take care of that feature.

All right, well, that's everything that I have for you.

Um again, project website online form.

And I'm gonna go back to this that has the questions for you all.

Well, let's start first with are there any clarifying?

I know you guys have done a lot of homework on this, but are there any clarifying questions that anyone wants to ask about the data in the presentation?

One make make clarifying question being the franchise agreement with Merck.

When does that expire?

We just re just read that last year.

Um depends on the 10-year-old.

Um there are modification opportunities that we've wanted to exercise that for to 10-year term.

I know as Kayla said the um the agreement allows for franchise fees.

So that was already built in.

Um it just it's not being implemented right.

Or yeah, I was trying to understand how long this was a revenue source for um it would get improved.

Well, 2027.

Well, I think that would be never and even under that agreement because state rules um basically require the Merc allow a franchise fee collection, you know, for us.

It could go forever.

It's up to the city to determine the length of the revenue source.

So at any point, council could say we're gonna stop collecting franchise fees with a notification process to MERC, and then they will stop that vouch process.

But it's a city local city decision on how long those fees would be in place unless of course state statute changes the ability to chart and apply from the trust fee.

Thank you for questioning.

Any other clarifying questions?

Okay, so then we're gonna go into discussion, and as we have successfully implemented, we'll go person to person and give each person you know a few minutes.

We've set aside 30 minutes for discussion because this is you know, the next time we'll be talking about this, we'll be drafting a letter to go to city council for the study session about this.

So um you ready to go?

I'm gonna I always leave I I tend to go to my left on this.

So some of this is informed by similar conversations over the years with RPU and rates.

We're implementing a fee instead of a tax.

Note who that impacts differently, anybody buying natural gas versus anybody who doesn't.

Most modern apartments don't have natural gas, or like 50% don't, and they run off air source heat pumps.

So some apartment dwellers will be not paying in anything, but by taxing a landowner, you are getting the landowner.

When you go for fees, think all your apartments that have gas meters are now paying in instead of the landlord.

So programs built around this or pulling money from residents rather than landowners.

Think about also businesses and landlords, nonprofit institutions that may not pay uh other taxes.

A fee is a good way to I don't know, it's shifting where that money comes from, right?

So just be conscious of that as we consider this.

I strongly feel like a per term cost is a better way to go to $2 per residential unit.

You're charging an extra dollar 40 per apartment dweller.

These are some of your lower income people that are new that don't have as much money.

You're overcharging them by something like 3x if you go to the flat fee versus a per therm fee.

The businesses I've worked for in town, when they budget their utilities, they're you know they've got years and years of data of what their business is running, and they're got a pretty good handle on it, right?

There's still variability with weather, but you're adding about 2.5% to a fee that they're already having to calculate for area building.

So I don't know that that's at least to me, that's not a big concern.

Um very much want to see that happen.

And then I'll throw this question out there.

The numbers between three million if you did the per therm or one million if you don't, what would the additional revenue go towards?

Like what's the first thing you're adding if we gave you more money than you're asking for?

And what's the first thing that's cut if we dial this back?

Because right now it's about a two and a half percent fee per therm, according to Merck's going rate right now.

I don't know, Eric, you want to speak to the question around the um the keeping programs the same versus programs are outside or um yeah.

So the so to answer from two different ways.

One, the goal is to be able to keep existing programs that are already being implemented to be able to continue those.

So that would be some of the starting priorities on that secondarily, you know, part of the question.

So we wanted the community feedback from us to be able to then identify which ones are most important for the residents.

So those would rise to the top of the ones that if there were additional revenues to be able to afford those those would be the first, but we would target, or at least make the recommendation, yeah.

The council to be able to target um the implement.

Okay.

I think it would be good if you guys are willing to in April you've outlined if you can outline what those priorities are so we see what's at the bottom of it in terms of what's narrowly missing being included, or what's the first thing that's being cut if we were to recommend a lower fee being charged.

Um the city side because no decision's been made on what the community projects are, correct?

I mean what we have right now is the engagement response that you know have shown us kind of where does the where did the random community interest why?

And so I think we're oh, so that'll that's that's what will be presented to city council.

So I think we're still kind of talking through what of that information can be present to you in annual, obviously, not the final staff recommendation or anything, then more official.

Maybe we could share some info around you know, programmatic things.

Um, we'll just have to talk through what we feel comfortable sharing specifically.

Just because the timeline is so tight between this meeting and council next month that I just want to make sure that we move correctly.

Okay, absolutely.

So frankly, kind of skip our water question.

So um if I heard you correctly, I think one of the things we were starting to get at is like say for 1.4 million projects we could want, right?

Is that what you're looking at?

Yeah, because your flank fee is listing one point something in revenue.

Your uh tiered approach gets you much more revenue.

So we could be recommending based on well, one gets us more revenue, let's go do that, or one seems to be much more fair to most residents.

They happen to be the same thing in this case, but uh I want to, I guess decouple those from the how we make our decision.

Okay, because when we go to council in April, you know, some of these projects are conceptual, right?

You know, and so we're not gonna have dollar amounts, you know, to be able to buy some of that too.

So that I was thinking you were starting to go down that realm, but I think we can work where that's a good recommendation.

We can work with on that as we look into with April and how communicate that we're council.

I might recommend that if we're gonna go to council with a recommendation to charge money from our residents and businesses that we have a pretty good idea of what we're gonna spend it on before we ask for too.

I know you guys are planning on getting to that point, but I think that will help all the decision makers involved in setting what that amount should be.

Yeah, but again, my my comment, I guess, to the rest of the commission is really we'll take a hard look at these numbers.

I just feel like the flat fee of two dollars per month per resident is going to unfairly charge people that are at least able to take on another two dollars a month.

And it sounds like a fairly trivial amount, but between this, the stuff that RPU has added recently across the board, all that stuff goes up and it hits apartment dwellers harder than that.

Just a note on the apartment, um, Elizabeth.

So when we look at the number of residential gas meters, it does reflect the number of RPU water members, which is to believe that Bert is metering.

Sorry, maybe you're sitting over there, that Merck is uh metering natural gas in a similar way to have RPU meters of water.

And so that means for some multifamily apartment complexes in town, specifically older apartments, I believe, there typically will be one gas meter per building.

And so if we were to go with a flat or a tiered flat fee, under that scenario, the building would just have one fee versus a per therm, which would reflect the gas usage of the entire building, and I think would be more likely to be passed on.

And so in some multifamily dwellings, there is a separate gas meter per unit, in some there's just that one year.

Um and we think the majority of multi-family have the one meter.

I'll also point out that most people living in apartments benefit from having a lot of shared walls and a lot less heat loss to the outside versus homeownership.

So their current therm cost or their total number of therms per month is going to be much lower than a single family dwelling would be.

Um I just I don't know.

That's something that I I personally feel pretty strongly about in terms of how we equitably charge folks, plus the flat fee at 9,000 therms being your upper tier.

There are a handful of businesses in town that are using 10 or 20 times that are getting great discount.

Yeah.

And they're probably the most capable of funding system.

An assumption.

All right.

Thank you.

Seth.

Yeah, I I guess Brian spoke to a lot of a lot of what was going on in my head.

Part of expand on that um whether it's the 1.1 million to 1.4 million or 3.1 million.

I guess comparing that to what this group has brought to city council as recognized not exactly apples to apples, but like budgetary asks for sustainability group.

It seems like I was struck by that's that's a fairly high number, like all three of those.

And I'm not saying that's a bad thing, but um I guess I'm just wondering, you know, to you folks, what what was your thought when you ran those numbers and got the answer?

What did that feel appropriate for what we were looking for and our the priorities that we're trying to move forward?

Or um did it feel like maybe we're a bit high and should be maybe looking at what those rates per term or the costs, the flat fees should be.

Yeah, I'll just say that I think we started um kind of from that direction from city council to you know, not to keep the the cost on the residential sector low.

And so we decided on the two dollars per month because we felt like that was conservative enough, and also allowed us to go down if we needed to with like a you know, moving towards a final recommendation.

Um, so I think it allowed us the flexibility to kind of start to socialize these concepts in the community and start asking questions about what people's comfortability level would be with two dollars versus five dollars or one dollar or something like that.

So I think that was kind of the the basis of it.

And then I'll turn it over to you as far as the overall budget and like maybe shifting some cost things like that.

Okay.

Um so uh to directly answer the question on the cost.

I I don't think that those are too high of a cost that they're that they're employed.

I I speak to that because we have the sustainability division and the word specifically the sustainability division, which is much smaller, and I think those are the numbers that you're thinking.

Oh and then we have sustainability efforts across the entire city, which there's a lot of shared work with other departments with um stormwater is a great example, you know, um of that our our public works department, you know, is implementing a lot of programs and things like that.

So if you think about sustainability efforts um across the city and the programs that are available, um that's more in line with where the current investments are happening under the current levy um charges or be charged, you know, back towards the levy.

Yeah, so you got to kind of decouple just the sustainability division of the small group with sustainability efforts across the city.

That makes sense.

And that makes sense.

Well, I don't get me wrong.

I'm I'm all for this.

I'm just trying to play devil's advocate.

Um from a taxpayer or you know the Dovy gas users perspective.

Um was it all what is that?

Was it ever considered to make this only a commercial?

Um, you know, affect businesses in the commercial sector and not have a fee on residents.

No, I mean that would yeah, that was not discussed and was not something that was considered.

I don't know because I'd ever you know look at the state statutes to see if there's any limitations on specifically targeting certain groups, um, you know, and whether or not it's even a while, but it was not considered and it's not being considered currently certainly you know that's the type of public feedback, you know, um to capture as part of this process to alternative things to consider outside of these options presumptive.

I will say there is uh there are a wild range of different fees on the commercial sector to the point where we don't even have any graphs on it because it's all for the four, whereas residential, you know, that one graph that we're putting on different levels that you can kind of start to look at some trends where it's on the commercial side, it's all all past the board.

So that could be something to you know, get at that.

What do we create a fee where it's for on the commercial sector?

All right, keep thank you.

We're keeping moving, Stuart.

Yeah, um, so a couple of thoughts as going through this and sitting through some of the presentations or I think one is looking at this of sort of asking the question of why why are we doing this?

Um and what is the impact it's gonna have in really coming in from that direction.

Um, and so I think you know, things that jump out at me are one is the idea of that the uh Kaylee identified early on is building energy in this 80% of our program, right?

So as we're thinking about like what is the impact, why we what are we going to do with this money, um, addressing some of those key issues and trying to create behavior change and put that um in the right direction is all um significant.

I think the other I actually came from the opposite direction that's looking at like the overall pot of money that we're looking at is significant is is not that much money to really make a lot of impact in the whole scheme of things.

Um so being uh realistic about what is what can be achieved with the money that we're getting.

Um so I think that was one filter I was looking at.

The other is around fairness and thinking about how to do the spare.

Um and as and that kind of got me in kind of two areas.

One is this question around the 50-50 split.

Um, and for me, I feel that because the the way the fee is administered that it's community wide and it's hitting a lot of different people, that at least in the beginning, there should be more of the benefit of the money should go to the community.

Um so I don't see it's I don't see it, but I don't know what the right percentage split is, but I see more of it going to the community than for municipality projects.

Um, and then the second thing that I was I I want to encourage the per therm because I know that's how you create behavior change.

We're going to encourage change, um, but also understand the complexity of it.

Um I've been leaning towards the the tier um flat fee um for some simplicity.

Um, but I think it needs to there'd be more differentiation between the options, and I would like to see that the ultimate goal of more of a two million dollar um budget or would be achieved through that, and then figure out how to um move the fees um to more reflect the business community again around fairness, um for key dots yeah, um the as somebody who's never paid for natural gas, I suppose I have a different perspective um and I can't attest to how that affects the budget.

Um but I do think there's a lot of worth to Brian.

Okay, so learning it for Brian was saying with um keeping residential fees lower, and I do agree that it is would definitely be rather disproportionate to implement a two dollar fee on somebody who would otherwise be paying less than half a dollar.

Um I don't know if I could necessarily recommend any specific one, but looking at a tier flat fee, I would consider if that residential cost is something that's worth lowering if we want to in a sense be more fair to our residential users.

Um the other hand, with a per therapy, I do feel that that is more directly in line with the strategic priority of responsible environmental stewardship, and taking an active step to encourage um all users to increase efficiency and lower overall use.

So I do think that is going to have a larger suggestive effect in a sense.

Um screen.

Thank you.

Amanda.

So I'll be honest, I feel a little conflicted uh between my personal opinions and my professional opinions.

Um I do think that we need to center fairness and equity at whatever recommendations we're making, since that's part of our charge to not only look at the environmental impacts but also the impacts to um the financial impacts to residents as well as businesses in the community.

Um thing with the per therm, I think if we were to move in that direction, considering that only four percent of the cities that were reviewed do administer a per therm, I think we'd have to have a really good argument for why we wanted to do something different than the majority of the other Minnesota communities.

Um also option three, the tiered flat fee, and I agree with both of the previous statements that I think that there's still a way that you could lower that impact on the residents and put more of that on the business community without it being a significant impact, like the per therm could be on some of our larger businesses.

Yeah, thanks.

So first question about what's the most important element of this.

I think program impacts is probably where most of the uh information needs to come from.

But I don't heard some pushback about how is this money being used and how do we know that it's going from us?

People just know that this this fee is something that's going to improve either their lives for their neighbors or their friends or their community somehow.

So I think that's one of the most important things that we should highlight going forward is how is this money going to be used and how is it going to benefit you and your community?

Um another thing.

I work for one of those large manufacturing businesses, that's only two percent of the energy users here, and they are always talking about how they want to give back to our community.

So we could very well frame this as a way for the company to be giving back to the community.

I thought some kind of how are they really giving back?

Do they really care about the environment?

They say these things are important.

Let's push them on it.

And this is a good way for them to get back, especially if a majority of it is going back to the people, and it should be going to the people who need it the most, people who are struggling with their bills who are maybe stuck in their houses and aren't able to move or to improve their own uh situation because they lack the fund to change them.

So not only would they um also the reason that I would suggest the um per therm base, the people are paying uh in proportion to how much they're using, they're not paying more than what they're able to do, and they would actually see a fall in what they're paying if they're able to reduce that cost as well.

Um having a tier flat fee will do nothing to change behavior if we want to have them reduce their usage.

Obviously, having a lower gas bill from reduced use is its own thing.

But if we can tie that this fee to that as well, I think that'll help out, and it won't put the burden as much on the lower end of the spectrum of the income earners and the small businesses and put more of that pressure on the higher income earners, the 10 million dollar a month businesses like the ones that I work for.

Um yeah, so that'd be some of my thoughts.

Thank you.

I I think as a sustainability commission, we have to be per firm.

If even so the city council can say net there because uh you know, far far left environmentalists, then they can come in and pick something that is still a fee, but not what we suggested, but I think that if we are environmental, we have to pick we have to suggest that that would be our first goal.

Second goal, of course, would be what you use it for, and then any source of money is good.

But this one can change behavior.

And that's why I think it's really important to know what are the two percent of the communities that are using it and how it affects people.

So if you can get the examples to have them ready.

But after hearing some of the negative pushback on this from a couple of men I attended, I think here's what we're up against by doing this now instead of putting it off for some time in the future.

First of all, uh with the war in Iran, I think we're gonna see natural gas prices go up, just like and so people are going to be out of out of their minds.

Are you kidding?

Adding another fee when we're gonna be paying way more for natural gas.

So there's gonna be that kind of pushback against the council.

The second kind of pushback that the council certainly has to be aware of is um a lot of people don't trust them anymore after the sports center.

I would call debacle.

And so I know that Kayla was told she was supposed to be wide open and gather information on how to do this, but this is at least as wide open as the sports center concept.

Everybody has an idea of what the money would be used for, um, how it would be administered, because we're not being exact because Caleb was told.

Well, people want to know exactly because they got burned before, and so I think we should at least give them two or three possible options, none of which sound like uh softball fields instead of uh you know, instead of a center.

And then um, third, I just think that there have been a lot of recent increases on the RPU bill that people are so this is the headings.

I think we're running into that the city council is going to be very aware of.

Um that doesn't mean we didn't don't push for it, but I think we should at least push for the environmental, which is and you have we think that this is too much go for a million and half, cut the firms we're going for it in half.

Um, suggest an option of reducing it that way rather than doing it a different method.

That would just be my suggestions, but I was just amazed at the pushback, and it was from these different factors because you weren't exact enough.

How do we know how you're gonna spend it?

What is it gonna be used for?

How can you account for it?

Ah, fraud, fraud, you know.

Are you gonna have a huge administrative overhead?

How are you handing out the money?

All that kind of stuff.

People wanted to have specifics, and it I don't think they would have been that way two years ago, but I think it's a sports center thing.

Spending on that, I worry that if we don't have a clear list of things that we would do something with the money, somebody else with a special interest will come in with an idea of what that money should be spent on.

Right.

Okay.

Um we're going to leave five minutes here to do the exercise on the board.

Um, thank you all for your comments.

I'm just gonna say one thing, which is um there's so much that can be changed.

We can't think that we have to come up with a final answer today.

We don't have to.

And the letter we write isn't that we have to decide on a particular recommendation.

We can talk about the pros and cons of each, which you've all said.

We don't all have to agree on this.

I encourage you all to make sure if you haven't already, I've done it, fill out the survey.

I know that everybody here has been engaged in this.

This is a big initiative, and I think we should give Kayla a round of applause for going out there and trying so hard to get the feedback.

Thank you to all of you for attending these meetings.

Our defendants that we have now received a sustainability commission be as involved as our to you and they're like in all the other cities, be like we try try to get people to promote and support and have the you know supporters show up and it's like calling teams sometimes and they find the numbers and anything like that.

So thank you to all of you for attending all the events.

Okay, so you take your things, and you some of us have done this before, and we're gonna go up here and vote, right?

Yep, and so how many votes do we get?

Um we are not in Chicago.

There should be eight total on the board.

So only use eight of your it's one for each of the main questions, and then three for down here, and then if you have a little feedback, if we can work right there.

Okay, we've got like three minutes to do this, so this is early than I know maybe not your five.

Yes, but it's a couple of yeah.

I think it's something that's a books.

You are the challenge one thing.

Exactly.

That's one of the things.

She was when your income was high in the sex.

She's gonna sorry.

You did that for a few years ago.

Okay, yeah, one minute.

I have to include six seconds to get to the candidate with training.

Oh six or five.

What's up?

Do you want to be on the candidate for local office?

So you can do some fun.

Not this time.

No.

I joined the A or B executive.

Ooh.

So now I'm gonna be trying to do some advocacy work and learn from more stakeholders.

So we should read this one for six minutes.

Yes.

Well the six seconds.

Yeah, we can right there.

No.

Okay, so maybe next year after the election.

Or you know, or just you know, do this sort of time.

Maybe okay.

25 seconds.

Very good timekeeper.

We have to be, right?

We do.

Learn from the best here.

We've got our meetings to where we get everything done, but you know, we we cannot be here.

We could be here for hours and hours and hours, but we can't learn right.

So a few times and at one point someone one of the persons like just gonna call you flavor play and all right.

Good job.

Excellent participation, everyone.

All right.

Well, okay, we're wrapped up here.

Thank you.

All right, um, we're gonna move on to new business, which is our 2026 sustainability events and the nature of uh SRC participation.

So while try to get the slides to move forward as a reminder, last year we did some fun events.

We did um miniature golf with the kids for Arbor Day.

It was very fun.

Um we did the uh um test.

Birthfast.

Uh there's another great one.

So go ahead and scan.

Okay, so I'll sit or me up, and then we can open it up.

And uh the goal of this this question item is to choose SRP members to attend and support 2026 okay.

So um specifically the two events that we're here to discuss, and feel so strongly about other events we can talk about that too, but really the two that I have um indicated here is the Arbor Day celebration again, which is Friday, April 24th from 11am to 1 p.m.

at RCTC.

I believe it's at the field house, correct?

No, it's been moved to McQuillen Field Park.

They're gonna do an outdoors.

That's what it said.

I just read it because I was doing my calendar.

Okay, I will confirm on that.

So double check, but that was what I had just seen.

Um and this one is really asked theme team players and supporting public environmental services and the stormwater team.

Um so water like sustainability is sometimes a one-person show.

Um, and so and Rachel Strauss, you know, is a great partner for us.

And so we um support her at this event.

So Kristen and I will be supporting.

Um and then we're looking for other SRC members if you're available for two hours.

Um so basically what it is has anyone seen Stormwater Mini Golf activity?

We have it at a lot of events last year.

They have I think eight um mini golf polls um representing different stormwater pollutants.

And basically, I think it's all elementary school kids in our RPS are invited to this event, so there's a lot of kids.

And Rachel's thought is the more people that we can get to support, the more mini golf polls that we can have, and we need more person to the more kids we can get through the lines quicker because we can essentially be like voting one voter to go to free.

So each kid gets to do that role.

Um the app there would be to come and help us staff the stormwater mini golf activity.

Um Friday, April 34th from 11 to 1.

I also recognize it's during the work day, so no problem.

So we should not be able to work that day.

It's really funny you get a free package.

Yeah, it'll be one of my volunteer days.

We did it last year, and it was just a blast.

The kids were really enjoying it.

I mean, it's just and I think they did learn some things.

They were and they were most entertained by the one with the dog booth.

But they are the ones walking those dogs.

I need to know that it's important to clean up.

So I think the you know, it it is impactful, and how do you get kids to actually have miniature golf?

And these are just such creative games.

I I agree.

I think I one of the more creative.

Well, I volunteer.

And other people probably have to check their schedules and things too.

So we understand looks like everyone does.

Perfect.

All right.

So we want this like so.

Our action item here would be to email you and confirm.

So you have it all.

So wait, who's confirmed?

Who's can for sure that?

So it looks like we have Terry, Brian, Seth, Dan, and wow.

Okay, well, if we need more, that seems like a lot of people.

No, it's no, there's a hordes of these children.

Of course.

And you need a person at each hole, and you need somebody at the front directing them to where to go.

And so we would with six people you can, and then you we had somebody at the end, I think, giving out stickers and getting them out because they you kind of have to shoe them.

It is oh no.

And then we had some people from the stormwater group too.

I mean, so it was but yeah, yeah.

And I should also mention this is an RPU event.

So it's also a partnership with RPU.

It's a good event to for a DNA player.

Well, thank you, everyone.

Rachel is going to be a Saturday.

Um, when we held her there, we are by volunteer as that's coming.

So it'd be great.

Um, the next one is request expo, which is Saturday, May 2nd, 9 a.m.

to 2 p.m.

at St.

Mary's University, Castle Meadow.

So that's the same location as last year.

It was a new location last year, but same after last year for 2026.

Um, support to help staff the city sustainability table um and share information about initiative.

So primarily that healthy home helpers.

Did I tell you all that it's been rebranded?

That might be an staff update.

You mentioned it, we haven't said it today.

Okay.

I forgot to put the best step updates.

The Healthy Air and Holmes Initiative has been recently rebranded to be Healthy Home Helpers.

I think we knew the other name wasn't gonna be there long term.

Um so helping to get the word out about the Healthy Home Helpers program, getting folks um signed up for it or at least educated about it, sign up for our item at email listserv or something like that, and then the sustainability meetings that are so general sustainability tabling.

We'll have our um giveaways and things like that.

And I think we can split it up at shifts too.

I think we had it.

We last time we had it in shifts.

I'm trying to remember yeah, nine to 11.

Well, yeah, and I can set up the table so that you can just start at nine.

So we could do nine to 11:30 and 11:30 to I think we'd want um ideal two for yeah.

All right, right.

Why not?

I can volunteer to I I have to check my calendar, but on the baby.

I'm a strong maybe.

All right.

Are those leave?

We have uh a specific shift.

I have flexibility for either.

Okay.

It's Saturday.

I can do what I want.

Okay.

With Terry potentially being able to support lunch.

And then Kristen and I will be there so we can also float a little bit if we need to.

Anything else on it?

Will we be in terms of events?

Will we be um at the things that they do?

I don't even know what they're called, where you go and you get free hot dogs.

Everything is hot dogs.

You get the hot dogs in your communities.

I know mine's at the local elementary school when the police come and they have all the boosts.

Will we be able to put items there even if we're not staffing it with our stormwater friends?

Yeah, that's something that Stormwater and I were discussing the other day.

I don't, you know, I think we we kind of did an analysis of is it for kind of the time to go to all those community park events and then um neighborhood night outs or whatever and numbers to you send first or whatever that is.

Thursday's at first is a different one.

That one we didn't even do last year.

We have a 10 AM to APM or something.

It's a really long day.

Yeah.

And there's a significant fee for that one.

But I'm talking like the Wednesday night conference in the park, and then the whatever night it is with the police events that kind of move around the city.

We did staff all this last summer.

Nolan primarily um staffed those.

Um with Nolan and Sarah leaving, and then Kristen coming in.

There really is a capacity for us to cover those again this year.

Um, and I think Stormwire kind of you know feels the same way.

They do a lot of education in the community already, and I think we're just not finding value in uh being at all of those events in person.

So I think we're able to questions great.

Okay.

Okay, staff up there.

Yep, we're ready and staff likely.

Um we are well, okay.

So in addition to rebranding the Healthy Air and Homes initiative into that healthy uh home helpers program.

We are also rebranding uh the air quality alliance.

So we renamed it last year to Air Quality Alliance.

So now we're updating the logo and kind of the look of the organization.

Um we put together a 236 work plan.

So we're working on the priority items in that work plan, um, including really focusing on enhancing outreach and engagement this year.

The AQA will have a presence at Earth Fest um this year, and we are developing participatory science components of the program.

So basically we need for residents who um have an air quality sensor to participate with the air quality alliance, or for neighborhood associations or more formal groups to potentially be more formal partners with the air quality alliance and maybe post an AQA answer.

Um so we're we're still developing uh the components of those programs, but start working on that.

We are speaking um in collaboration with Stormwater at 2026 and 2027 Minnesota Green Board member to support environmental services um for an 11 month period, which would begin in the fall of 2026.

So that was to consult for approval to apply um in a few weeks, and then the application is due later this month.

That should be Monday this council.

It's Monday.

Going to council on Monday.

Um a little bit better is coming up the spring that litter cleanup.

So April is May.

Um long-standing effort in the community.

2020 years of the program this year.

So is there a specific location where that happens?

Or just kind of all over the city.

I'm done.

I've not done that.

You can no, I'm the I'm the drain water person.

That's my obsession.

My about to drain.

So another bit better is self-organized, and if you pick a parcel and you say, like me and my family or my three neighbors around me or whoever are going to we commit to cleanup this parcel.

You go on the map and you click the parcel and you sign up for it.

So you can sign up for anywhere that isn't already claimed, or you could join the cleanup at any point in time during that time period, um, and then potentially just committing to cleaning that area.

So sometimes group groups do cleanups like along the river, sometimes these are on neighborhood fields, parks, whatever maybe.

Okay.

We do volunteering events, and I can bring that forward.

Especially if it's especially polluted that we could go to.

I have received emails about um areas around Low Walmart, like being littered, I think south of that Walmart north.

There's um some areas that we can sometimes.

There's um some areas that we can sometimes know what you're talking about, yeah.

Okay.

Um okay, the city of Rochester has received a $50,000 healthy institutional communities award for um a move to the market program, which is a partnership between the city's um the mayor's office and the village, which is the local food co-op or local food cooperative, not the people's co-op, but a food um organization world healthy food access, supporting local farmers and local agriculture, and kind of connecting physical activity and incentives.

Um we are looking for community input um through a survey open until March 23rd to guide future programming at the Rochester Regional Sports Center.

And this is not the sports complex.

This is the sports center at RCT, I believe, right?

Okay, yes.

This is the RCTC for calculation price.

Yes, so share your feedback through the survey, not through the franchise survey.

Um and then for next month here we'll be talking about franchise B again, talking to the council recommendation, the draft recommendation report.

Um we'll be kind of circling back on that idea to um host a community event for reporting on the sustainability plan.

That was something that was brought up last year.

So we'll talk through maybe options for that and what that can look like.

You all still feel strongly about that.

And then we will start the conversation.

One of the topics that was raised by SRC members um last year on pollinators of turf grass.

So kind of learning about what the city is today in that sales.

Yeah, but just a quick comment.

I'm great to see the moving markets forward and focusing on that particular issue because it um there's an organization called Opportunity Index, which does like community needs assessments and access to food is one of the areas where Rochester's as a general rule doing really well.

But that's one of uh one of our gaps for interesting.

I wonder if we reference that in the application.

And then I did oh yep, just chair two other quick updates included in the staff updates.

Sure.

So one I quickly while we were talking here, I have an answer to the question on who is charging the per term.

Um so the Delano is doing perm, and that's uh three basically almost four cents for all buses.

So it's 0.0391 dollars, and that's across all onces of approximately four sides, and uh North St.

Paul is the other one.

Uh both of these are with Excel energy, and they have a little bit more flexibility, but North St.

Paul was a percent of revenue for residential, and then a commercial firm demand group.

So basically kind of a smaller commercial, and then they have a half cent um birth for all other places.

Um they have higher still up.

So Delanor and Delano and St.

Paul are the token.

So, how close they are to what you all suggest the terms.

So Delano is is close or a little bit higher than a lot of sense.

It's a Republican district.

Which we're considering to are still doing for the wow.

And the other quick staff update if I could do a quick plug for the adopted rain initiative, especially as we move into snowmelt and spring rains.

Um adopted drain to help keep those trains clear, um, reduce the amount of sediment that gets washed on their debris.

We really appreciate it.

So if you go on our stormwater website, you can adopt a drain there.

Thank you.

I'm happy to talk to anybody.

I've adopted my drain and the drain across the street.

Because the people have little babies and they don't have time to clean their drain.

But yes, it's very easy.

And you can sign something coming up tonight, and then not next Wednesday, but the Wednesday after the news day after.

If you or you know somebody who's interested in running for city council, county board or school district, head over to 125 live, skip supper, 6 to 8:30 tonight, and you will learn how to do it.

That's where I have to go next.

I'm not running for anything, I'm just in the Lingerman Voters, and we're gonna show escape.

Thank you, Amy.

Okay.

Oh, that's it for me.

Just wanted to share the events here the rent as the city council presentation on gas rate, the RPU RA event, which might not be a field.

That's the that's the rain site.

The outdoor site is the site unless it rains.

I just looked it up too.

And then for fast.

Okay.

Thanks any our period where any commissioner can make any comment that um they would like.

We have uh we have some time left.

I can share just a quick another um event.

Free drinks is meeting on Thursday, March 26th this month.

We'll be at Novios Cafe again, and we'll have a represent representative from the Rochester Public School District talking about their um garden program for middle school and high schools.

So super curious to learn more about what they're doing.

What's the time again that starts there?

Uh 5:30 p.m.

March 26th.

Great.

No votes.

No one had any votes.

Anyone else?

Hearing none.

Is there a motion to adjourn?

Motion to adjourn.

Okay.

And all in favor.

And I leave.

Okay.

Thanks everyone.

Thank you.