Eight weeks is it approximately.

And as the council chamber is uh is being renovated with state-of-the-art equipment.

So we're excited to be here and excited about uh things to come there.

So uh this uh setup just for my colleagues, this is the setup that we will use for our regular council meetings.

Uh if uh we have future study sessions, we uh may have a little more informal uh setup, but we wanted folks to kind of get used to the uh the council regular council meetings set up.

So uh if you have any suggestions for tweaking it, let our city administrator know or or Aaron.

Uh uh with that, uh we are here today to continue our discussion of our 2026, 2027 budget presentation.

So uh administrator Zelms, uh take it away.

All right, thank you, Council President, Council members Mayor Norton, members of mostly uh staff of the organization and community.

Um, I am just gonna kick off with a little bit of a brief reminder of um what we started with in the initial study session, as there might be people watching that um weren't part of that.

And for anyone that's presenting after me, you need to point the clicker this way.

So a little dancer.

Um so it's moved twice.

Um, so just starting off with this.

Um, we have adopted the new strategic priorities and um adjusted foundational principles.

And so when I'm thinking about the budget, um, first those foundational principles, we do a lot of things at the city that are continuation, and then how we layer on top of that the strategic priorities and balance the foundational principles becomes a little bit of dynamic tension when we're in the budget process because there are things that we need to continue to do year after year, and then there are ways that we can layer on top of that.

But of course, we also have this foundational principle of fiscal responsibility and sustainability.

Um, and that's probably where most of the dynamic tension comes in when we're looking at the budget.

Um, obviously, we've been working on this, and um the team here in the audience has been and and at tables have been working on this for quite a long time to bring you a two-year budget.

Um, and we are in this September phase of answering questions, and that's really what we're here to do today is to respond to some of um more deeper questions that had come up on the first uh study session conversation, and so be thinking about um if there's additional questions, we do have some things scheduled for you at your next study session as well, um, in order to be able to make good use of the time.

So, as a reminder, we're still sitting um with this uh tax rate um below 50% of our net tax capacity rate.

Um, that's been true for most of the last 10 years.

There's a few years there in the 2018 to 20 uh 20 time frame where we were bumping a little bit above the 50% net tax capacity rate level.

Um, but again, with some of the growth, both in valuation and new construction happening in the city, um, we are able to absorb some of these increases in cost and investment in uh community services through both the new construction growth and valuation adjustment.

And that's the biggest way that someone's tax bill is going to change year over year is based on the proportionality of the value of their home or the value of their commercial retail business versus all of the rest of the uh properties that are in that category, and then the larger piece of all of the property that is within the city limits of Rochester.

So just important to point out um as you can see, the increase in total levy year over year is just shy of 6.6 million dollars.

That's a pretty low number as um as the tax levy goes year over year over the last few years.

Um, and the team worked really hard to keep that as low as possible, um, bringing it down from about 10.68% in your final um levy that was projected at the end of 2024.

Uh, we also have some rate adjustments in sewer, electric, and water that we discussed, and as you can see, the total budget adds up to um just about six hundred and sixty-four million dollars in 2026 and 630, about 636 million in 2027.

There's some vacillations in the debt service in the capital improvement program when we're finishing a very large capital project and all of those expenses are hitting in one year, that can make some pretty um large changes in the total budget overall operations, as you can see in the gray um square uh to the left of that chart does uh increase, but it decreases again when you get into that 2027 year.

So some changes happening there across the entire book of business of the city of Rochester.

So uh council member Keene.

Just on that chart, I am interested, like just in the operations box.

It struck me that uh like that's the more stable part of the budget compared, but I noticed that we're doing like a nominal increase over 2025 into 26, but then we have a drop going into 27.

Can you talk about that?

So a lot of that is related to how the debt service is showing up and the power purchase agreements are showing up in the Rochester Park utilities budget.

So with all of the vacillation happening there, that's atypical to what you would normally see.

And um that explains the power.

No, I didn't expect to see that in the every 30 years or so, you see something like that.

And so it's just a bit different than how we would normally carry some of those numbers.

Thank you.

I understand it better now.

Sure.

Um, and you can see um decision packages are a portion of that.

We made some significant reductions in order to be able to bring that tax levy down almost in half.

Um, we are in our final year and absorbing um the holistic budget stability funds that the council wisely put towards um reducing what the tax levy would need to absorb as we were climbing back out of some of those pandemic changes, and then um just being able to really stabilize our equipment revolving fund.

We've been working on that for a few years and help get our budget in order and make sure that we have structural integrity to our operation and being able to provide services.

And the levy supported employee services costs, those are typically the lion's share of the increase of the levy.

Um, we do have contractual obligations to our labor units, and a number of those are levy funded positions, but not all of them.

So you can see that the general fund um is the lot the largest supported fund with uh with the tax levy.

That is where your 24-7 services of police, fire, and sometimes public works is a 24-7 service, are located.

Um, some administration, um uh some some of those typical departments that you see, but we also do have um parks and recreation and the library um receiving funds, about eight million dollars, eight to ten million dollars a year of our capital improvement program in the tax levy, and then a tiny sliver there to fund the utilities and customs at the Rochester International Airport.

The rest of those funds are paper with airport related revenue.

Um, and as you can see, what we're projecting out into the future years, and sometimes we're able to mitigate those as we were in this year.

Um, you're seeing uh on average about a seven and a half percent adjustment year over year in the levy, a significant amount of that is regular personnel costs.

We typically expect that to be about 5.5% adjustment year over year for personnel costs, which isn't just the actual salary, those are things like salary, health insurance, those types of things.

And of course, we're also absorbing uh some other impacts this year with the paid family medical leave and things of that nature.

And despite all of those things, um, the team did a great job of trying to bring this budget in um lower than had been anticipated.

So, with that, I'm only going to be part of the talking heads this evening, uh, this afternoon.

And so I'm gonna turn it over to Brian Anderson to talk a little bit about debt service.

Thank you, Administrator Zelms.

Uh, before Brian, before you get started, and uh I was not here at the last study session.

So I just want to say that one, I want to commend you, um uh administrator Zelms and your team on really the hard work that it took to get us to this 5.9 uh percent levy increase uh given a year ago uh we were looking at 10%.

I wasn't here, but uh the council was looking at that.

So hard work by everybody across the board and uh and look going forward from my perspective, I'm gonna be looking at one, you know, how are these budget packages aligned with our strategic priorities that we determined earlier this year, uh, and also how we are uh effectively and efficiently delivering the services that we deliver, which I understand is about 90 plus percent of the budget.

It's continuing the services that we do.

Uh, but I also will be looking at you know, where are those strategic investments?

Where are those places that we are planting the seeds for ensuring that the future growth of Rochester, the future thriving of our community across the board?

So uh with that, I will let Brian, unless other council members have anything to say.

Uh Councilmember Keen, go ahead.

Yeah, just two small comments on uh slide nine.

I just would suggest that when you're talking about the different impacts to the budget that when they're negative, they could be marked as negative.

I had a hard time following it.

It's just a chargemanship.

And then um uh I believe we have we're we're gonna do the C CPI review or CIP review in the next meeting.

Councilmember Keene, we actually did the capital improvement plan review in June.

Okay, so there's not and as far as these three budget meetings, we're not gonna review that again.

It's up to the city council to ask all that specific questions about that.

So the plan was that we did the June review and that and that will just carry it as the number in this budget.

That's what we would be planning on unless we have additional discussion questions about specific projects or requests for looking at something differently.

Uh no, no, I think I'm okay.

I just I wanted to bring it up because then I I was looking at these three meetings and seeing what was covered.

So that's helpful.

Thank you.

Thank you.

Since council member Keene asked that question, uh uh Ms.

Soums, could you just review what we will be hearing at our next session?

So that is a later slide, but we are planning to talk through there was a question about the equipment revolving fund and our vehicles.

Um, there was a question about um how we're providing additional um access and information to the public and working with partners about uh recreational programming.

Uh, we also will have additional uh conversation from Rochester Public Utilities about some fee adjustments that they are looking at that didn't make it into the fee schedule that was reviewed in June.

Um, and we will also be talking with public music about making sure there's clarity around what their budget supports for.

Yes, we still have fireworks in the budget, we still have everything in the budget, but they have concerns about um providing a full-on fourth fest for what has been budgeted over the last five years.

Right.

Thank you.

Sure.

Um, Mr.

Anderson.

Uh thank you, Council President, Council Mayor Norton, administrator zones.

So I have two slides to go over for the uh talk about the principal uh debt issuance.

The first slide is you can see I pulled it from year end 2024.

So you'll find that in the ACFAR.

Um it's almost dollar for dollar.

The one that I inflated simply because it will be there soon enough was the fourth line from the bottom, uh 72 million.

And that's what was approved late last year uh for the water reclamation facility.

And so the way that works is if you look in the AC for right now, I think it's like 9.8 or 9 million dollars because you draw up on that as you're using it as a project goes on.

Uh it will be at 72 million, and that's what the amount was for.

So worst case scenario, it's gonna be 72 million.

So I just put that in there right now.

Uh so you can see the amount of debt right there is 359 million dollars again, principal only as outlined.

And you can see how that is going to taper off.

I only did it out uh 2036, uh, simply because there's a lot of uh options in here, callables and things like that.

So things can change, but you I think you get the idea for now.

Um, and with that, too, it does not include any future debt.

So if we do the original sports and rec complex, it does not include that in there right now.

Um basically what that would be, that would be a 65 million dollar increase.

We can have a future slide that shows that if you want, and that would be uh about a three and a half million dollar principal deduction on an annual basis.

And with that, I'll go to the next slide.

If I could uh council member keen, go ahead.

Just one uh line two here with the sales tax authorization from 2015.

Uh again, it's uh maturity is this year, so that's good.

Yeah, I was surprised by the size of the balance.

It's still 10 million dollars.

I I can't, I couldn't understand how it was still that high.

Yeah, and I'd have to go back and take a look at the history on that one, but um I can give you feedback on that after.

Yep.

It's not too serious, but it's it would seem to me that since it's last year, it should be a smaller balance.

Yeah, your honor.

Just on that one, you know, we have the funds available to pay the debt, but sometimes there's calling provisions, so you have to wait until you know the appropriate payment time is.

But you know, we have received the proceeds for that, and we have the funds available to pay it.

Okay, so there's no there's no problem with the way you're it's all understood.

Okay, thank you.

And then so the second slide too is the same information that you see.

This is the way you'll probably find it in the AC for uh basically going down.

The other one was by maturity date, and this one is simply by uh category.

So you can see the general obligation bonds that are listed there.

Uh the second category is still a general obligation bond that but that is through the Minnesota Public Facilities Authority for the 72 million dollars.

So for the first group, uh 34% of the overall 359 or 360 million dollars worth of debt is 34%.

Uh for the second one with that 72 million, that's an additional 20%.

Uh the revenue bonds, then that's 39 represents 39%.

And then the lease revenue bonds, six percent, and then the last one on there is 0.29%.

So that gets you pretty close to 100.

Um, if you're doing the math, I just did some rounding in there.

Uh the ones that are highlighted, you can see those are the in the peach color, if you will, those are the ones paid through the EDA.

And then the additional item that I would add is one thing that we get asked about would be the two percent uh limit that we are all municipalities basically are up against, and what that is is a net debt limit of 2% uh compared to the taxable market value.

And so how that works is basically within the state law, they have uh deductions.

So you you take out those that don't apply or that can be deducted from our 19 debt issuances or now 17 because two of them are coming off.

So the ones that apply to that would be, and I don't have them highlighted here because I want to just uh make sure before uh the slide went out and get the information, but it's the there's only six of them.

Uh the 2020 C, the 2018 A, the 2024 A, actually have it marked down as B.

Um I apologize for that.

The and then going down to the lease bonds, the 2007, the 2008, and then the 2020.

So that is a total of 43 million dollars, 43.5.

So doing the simple math out here, basically, if you take our taxable market value, that is 18.9 billion dollars.

And if you take 2% of that, that brings us to 378 million dollars.

You multiply you subtract your 43 million from that.

That leaves our capacity at 335 million dollars that you can still borrow against, which is a lot of borrowing.

Um so basically that's again the two percent is 378 million dollars.

Uh where that 43 is, if you will, it's 0.23 percent.

So it's it's a less than a quarter of one percent.

So you can see if you have two percent and we're only at less than a quarter of one percent over our borrowing capacity is so um with that.

Our new if we uh go through with the regional sports and recreational complex, that's gonna be a geo sales tax revenue bond, and that will not go against that two percent debt limit either.

Um again, this was about the easiest graph I could put together to kind of show because some of the numbers get too small and they get lost, and others get so large.

So uh with that, too.

Just as uh another reminder, this was year end 2024, and the balances have already changed because we've already made two or one principal interest payment on everything and two interest payments on everything as well.

So, but I just thought doing it that way, you could tie it back and you can see the correlation on how it gets represented in the audit.

So with that, I can send for any questions.

Any questions from Mr.

Anderson?

Council member Keene.

I just want to I'm when I look at this, it implies that it's all external loans, like we took out and we go to the open market.

Are any of these internal loans like we have a enterprise fund borrowing from some other fund?

Uh no, that is not recorded in here.

That's not recorded.

These are only once we go out when we go external.

Correct.

Okay, thank you.

And if I made the only thing I would maybe add in looking at this chart, is you're providing yourself future capacity to be able to stay at that very low amount of borrowing and still be a city 10, 20, 30, 50 years from now for the needs that are happening there.

So a lot of great work over the last 25 years with borrowing for the city, and also we've defeased those when we can to make sure that you're paying less to interest, whenever that's that's an option.

Um, so just a quick overview in a slide that's difficult to read, um, is the decision packages.

We had an attachment as well to try to put those um in priority order.

As you can see, sometimes it's challenging to if someone had 12 decision packages.

I are if I had given them 12 opportunities to rank them number one, I guarantee you I would have had 12 number ones, depending on the department.

Um, and some of them go together.

So um we do have additional information on some of these based on questions that were asked.

So these are the 2026 recommended decision packages.

There were more that were requested than were recommended, but again, trying to um be judicious about that financial stewardship while still investing in um new capacity to be able to deliver services to the community.

Um, this is what's being brought forward as recommended.

Um, I would just also add that I try to recommend what I think is reasonable and would be valuable to the community and to um the questions and concerns we get throughout the year um from community members, sometimes through our city council and mayor, um, and not um inflate this into something that I that it that doesn't seem like a reasonable request.

There still may be things that don't align with what you're looking for.

Um but this was based on a lot of work from departments to try to really look at what are the calls for service they're getting, what are their capacity points where they have challenges and um true also in 2027.

Obviously, we have a little bit more pressure on 2027.

Some of the reductions that were made are things that you can't do every year, or you start impacting those service levels.

That chart that we've looked at a few times that not everyone has wanted to talk about, where we did not reduce things from the budget that would have a measurable impact on someone in the community realizing that there's a difference in how we're providing services.

Um those seem to be policy decisions that the city council and mayor should be weighing in on and making.

Um so these are that what we were able to adjust both in revenue and expenditure to make sure that we got that levy down and we're still able to invest um really was about things that are one-time opportunities that you don't get to do year over year, unfortunately, unless you're starting to affect those service levels and the experience that the community helps.

Council member Wall.

Thank you.

Uh, through uh the procedures that we'll go through in the next months, are we being asked to also approve the 2027 decision packages, or we're suggesting that's what's going to come to us in a year's time.

Uh, council member, council president, I would say that if you have strong feelings about a 2027 decision package, it would be helpful to know that now.

You are not approving the tax levy for 2027.

That will you will still have a supplemental budget process.

But if there's something you have strong feelings about, concerns about, um love it, don't love it.

Um, those would be helpful for the team to know so that they could be prepared for what that might mean for their operation going forward.

But it's still likely they'll come back as decision packages in 27.

They would most likely come back as recommended decision packages in 2027 with typically we don't see many changes in a decision package level, but there could be something that that comes up that we weren't expecting in 2025.

Mayor Norton.

Thank you.

And uh council member Wall hit on one of the things I was curious about.

You never know what a year will bring.

And uh that we're not going to be approving those this year yet.

Uh, and and we're still going to leave at least the idea open that if something comes up between now and then we can reprioritize or and also look at um uh receipts, I guess as well to see if the amounts have changed.

Um, on this year's budget, I want I wanted the built building expect inspector, it has a negative of 71.

So I was hoping you would address that.

And I did want to say, you know, I know I'm not the only one, but I certainly um do get calls about services that people are looking for.

Some of these things are addressed in here, and that's and I particularly wanted to call out um the uh the parks issue.

Um we do have considerable calls about restrooms and our parks, and people really would like to see that improve.

So I'm and the Arborist falls in there as well.

Um those are amenities, um, quality of life issues that this community feels strongly about, and I hear about quite often, as well as the community service officers.

So those are things that I get calls about that community is telling me they want that I see in the decision packages that I wanted to just say.

Thank you for adding those.

Um but I did want to ask about the building inspector because I thought we had approved one earlier this year.

So I was yep.

So the building inspector that you're seeing right here is specific to making sure that we are going to be able to meet the requirements of the roofing siding and window inspections that will now be required to have a permit.

And so there is offsetting revenue to that.

Um, so um that will go towards the cadre of building inspectors and um it's not just building inspectors that are part of that calculation.

There's also um teammates and staff that take intake calls, um, make sure that paperwork is working smoothly, all of those different things.

And if you had any detailed other detailed questions, I'm sure that Ms.

Woodward could also answer them.

But that's one that ends up with revenue associated with it.

Councilmember Miller.

Thank you.

Just a quick question about the decision packages and prioritization.

This was my request to see them in this way.

Uh looking at the 2026, for example, I see three decision packages related to admin as a department, none in 27.

And the three are prioritized five, nine, and 10.

Are there others that would have had one, two, three, four?

I believe some of the challenge there is that we broke out um some of the departments, some of the department that used to be part of administration.

But since I don't have my computer in front of me, I'm gonna phone a friend and Aaron Parish.

Yeah, um, council president members of the council.

Um admin's a difficult one to do the prioritization on because we have you know subsets within that.

You know, we have the project management team, we have the you know, the general admin theme, we have communications, we have DEI and so on.

So, you know, I I wouldn't put a lot of um thought into the ordering there.

I think some of them are things that you have to do and are important to advance, but we're we're we're ranking disparate areas.

So I would just say it was a challenging one.

I wouldn't put too much thought into that.

You can compare what wasn't funded, and sometimes there's just some offsetting things that you had to consider.

And so I appreciate the difficulty.

I I appreciate you putting this together.

I I just again, I know it's come up of making sure that all the requests that are coming through were transparent and coming through to us.

And so I I understand some of the numbering, but this is a complete list of anything that came through as a decision package request.

That's correct.

And I would maybe add a caveat to that that we have a whole baseline adjustment process, which is how we reduced significantly um the overall levy request, and we also did that for non-levee departments and went through that exercise.

So that looks at ongoing revenue that looks at ongoing expense for that 90 plus percent of the budget that's ongoing costs, and maybe we change our mindset or how we do things.

Um, so there was a there's always a significant review of the existing baseline budget as well.

And so that was really where we were able to maybe a way of looking at that is make some room to have additional investment without impacting the levy in such a drastic way as what we've seen in some other years.

And depending on the person, they would argue something should be baseline, like maybe a reclassification of a position, but sometimes they add up when you have multiples of those.

And so it's really an the art and science of the council process and making sure you're seeing what you're resourcing.

And I think I I've got a question on uh and not specific on uh we've got facilities vehicle and we have an unbound vehicle request at roughly 60,000 a pop.

My question is more general on what is our strategy when it comes to our fleet and uh and as far as the the lifespan of vehicles and uh also just I want to put a pitch in there as far as you know, uh transitioning to more uh environmentally sustainable EV vehicles.

So kind of two questions in there.

Sure.

Council president, I will start off by saying um we are fortunate that we are about 90% of the way um into a centralized fleet uh process, which only started about 18 months ago.

Um, so that's really helpful in being able to really look at the whole fleet with we had multiple different softwares, et cetera.

Um we still have a couple of softwares that we are working to integrate.

Um but we do have strategy on the interrupt just a second.

Does that include RP RPD?

Um it includes it includes Rochester police department.

They also have entered into through the council process an agreement with enterprise, the rental company also has the arm of their business that does leases for businesses.

And so there's we're we've been working through that process with enterprise.

So we're not buying all of those vehicles.

So we have the ability to depreciate them if we need to, but the way that we've been um redeploying the police fleet in a cost effective way is utilizing that enterprise contract.

So every piece of equipment isn't exactly the same.

A heavy piece of equipment is likely gonna be you're looking at the hours that you've used it for, not the miles miles because you don't drive it very far.

But if you put 5,000 hours on a skid loader, that's a lot of hours, even though you drove five miles.

I don't know how far they drive.

Um, it's not a thousand.

And then if you are looking at a light duty or medium duty vehicle, you're gonna have a different lifespan for a public works vehicle that's a light duty vehicle or a community development vehicle than you are for a police cruiser that's running 24-7 and you know, all types of weather and potentially chasing someone if they need to do that, um, things of that nature.

So there's a lot of variables to that.

Um, we also have surplus vehicles that we are working on um addressing helping people decide if they really need to keep a surplus vehicle.

Um, we do have we do plan to deep dive that a little bit more on the 15th, but I don't know if Mr.

Parrish has anything else to share.

Yeah, reemphasizing the intent is to go deeper on this.

Um, with regard to um at a future study session, is that we're gonna speak or next next study session that's part of the budget um ask and request.

I would just say, you know, we have all kinds of things to consider with the EV component, um, whether we have the infrastructure at different locations to support charging, there's a cost differential, and then can we, you know, do we have the capacity as a staff level to maintain them?

Um you know, so those are all factors that we'll look at.

But part of this is a resource issue.

We're gonna we have about twice the requests for equipment replacement than we have money to allocate.

Um, and so we do have that prioritization exercise.

But I, you know, we obviously do want to get to a point where we are able to consider investing in EV if they meet the needs, right?

Like there are certain things, you know, there's not a great uh EV plow right now.

And so, you know, we're looking at you know the areas where we can make progress, um, and so on.

So I think that's that's cued up for next meeting.

Well, I will look forward to that discussion.

And Mr.

Parrish will present that.

Great.

Um, but with Mayor, Mayor Norton.

No, I would just say over the past since I've been here, there have been studies done, um, evaluating our whole fleet.

So hopefully you'll have I know they need to be updated, but you know, um bring that forward too, if you can, a little bit about um what the I think uh Kevin Bright when he was here, did one or had an interwork on one.

So we've we've done a little bit in the past, probably needs to be updated.

Um, but but we have been working on this for a number of years, and hopefully we'll see what the next meeting, what they have to share.

And and I would just say, like the city councils over since I've been here have been good about trying to get on top of the equipment revolving fund.

And so making sure that we're properly reset resourcing the base where where those are supposed to revolve is an important step to being able to look at what kinds of vehicles are we purchasing, because when you haven't reserved enough for the vehicle that you need to replace whatever kind of vehicle it is, it's challenging to it it starts challenging your levy if it's a levy funded expense.

The only other thing I would point out, um, back to a prior question, and we can talk about this more on the 15th is the facilities vehicle and the unbound vehicle.

Not like I know we talk about the levy lot, um, but it those are not levy funded vehicles.

Um, so what would happen, for example, with the unbound vehicle is it would shuttle through the system of vehicles.

And since unbound is not intended to be a forever resourced um entity, it would end up replacing an older vehicle within the system that otherwise would have maybe been a new purchase.

And so it will move back within the the vehicle system when we are not in the space of having those um you know five-year unbound positions anymore and be able to be a resource within the large fleet of vehicles that we have.

Thank you.

Any further questions on this one?

Moving on.

Good, you save them all for Karen.

Um, so we did have um some questions about library services, and with that, I would welcome Karen Limke, director of the library to provide a much better overview than I did.

Thank you, uh Council President Schubring, Mayor Norton, members of council, administrator Zelms.

I appreciate the opportunity to be here to talk a little bit about um our ask and how it all really fits together and is really meant to be a strategic long-term um vision uh that we can um come to fruition here.

So um just to kind of explain the library has been unique for a long time in having um really two types of part-time employees, um, traditional um temporary um part-time.

They work 13 and a half hours a week or they work on a temporary basis.

Um, and then we have this other type of part-time that does receive um some paid benefits, and that's I I inherited that.

So we've had that again for a very long time.

Um, as you can imagine, we have some greater longevity with those part-time employees that have um and receive some benefits.

And um, those folks have been very all folks have are essential.

Um, but having some continuity in a person that um is able to do more than just one role.

Um, the 13.5 unbenefited part-time employee really focuses a lot on doing that shelving work um or some kind of uh more repetitive work and a single task type work.

Uh, whereas the 18.5 benefited role, they could do things like um assist on the bookmobile, assist at the public service desk, do some shelving, assist at a program.

So um, they really do uh greater variety of work.

Um in early 2023, we really had uh a hard time actually recruiting uh for those part-time um uh 18.5 roles.

Um, and um, and we were struggling a little bit.

Um and so we did come to council at the end of 2023 with this idea to smoosh together some of those part-time hours and create one full-time position.

Um, and so we had a combination of 18.5s and 13.5 hours that we we pooled together.

Um that pilot was really successful.

That teammate's still working at the library, that um person is um able to do a lot of variety of tasks.

They're working 40 hours a week, so they um there's some efficiencies in that instead of about you know five or six people, we have a supervisor managing, you know, one person.

Um, and that teammate is now in library school and um going on in there in their journey, but it's still with the library.

Over with a benefited part-time role, there is some cost in that, right?

Um in 2024, we spent over 100,000 in paid leave for those that that middle tier employee, that 18.5 benefited employee.

So we've really taken this long-term vision of having the temporary part-time employee work being done by part-time 13.5 unbenefited teammates.

And with the caveat that we really would like to have to separate this out now as best as we can.

Starting at 2023, we had 40 of those 18.5 roles.

We have not been refilling them as they have been open.

In right now, we have about 21 that are remaining.

So you will see that moving forward, what we're looking for is this um, you know, one-time increase of four FTE with the plan to continue in this path of not refilling those 18.5 employees.

Um these are union um contracted employees.

So we would need to um let go all of our part-time time employees to fully um and you know, not have them at all, or do this through attrition.

So we are asking to do this through attrition over time and have four full-time employees instead.

And then again, moving forward, having those shelving roles covered by 13.5 not benefited employees.

Um, so you'll see a significant reduction from 2025 to 2026 in our part-time budget.

Um also there is an increase in our full-time budget.

I I acknowledge that as well.

Uh separately, so this is separate from this.

Um, if we need to do some cost um optimization, budget optimization, um, these were the options that we had presented.

The library really is people and uh books and services.

And so for us to be able to make any kind of reduction in our overall budget, it really is about um you know affecting um teammate hours.

So this is a a separate um piece of the budget process.

So if if uh we do not have um support for those four full-time positions, it will affect our services because we already have this reduction in that part-time temporary salaries budget line.

Um meanwhile, we have an increase in circulation, increase in library visits, increase in our programming.

Um we continue to year over year see this increase in the number of folks that are have returned back to the library post-COVID and are really seeking the library out to make those connections, um, to provide an opportunity to bring in their family for uh story time or to access our materials either in person or uh digitally.

Um so uh again, the to really summarize, we're looking for four FTE.

That's why we're requesting these to have that greater um um flexibility in how we utilize those folks and then have that reliability in our budget.

When we come to you and ask for four FTE, we know that we are asking for a commitment um from you.

Um these entry-level roles will provide us an opportunity to um have folks that are really focused on being um really available to pitch in wherever we need, um, whether it is at the desk or the bookmobile or doing that shelving because it is an entry-level role.

This um allows us to kind of grow our own leaves in that entry-level space.

Um also it will help us position ourselves as we uh move forward on library study recommendations, which we won't dig too deep into that today, but um, this really is meant to feed into that uh as well.

So with that, I open it up to your questions.

Councilmember Palmer.

Thank you.

A couple of questions for you.

Go back to your slide 21.

So option three, you're telling me if we close for one day for 52 times, we're only gonna save 111,000.

Um, so we were asked, we were tasked with um how we would um reduce the budget by 2%.

Um and uh that what this really was is not having staff service points, um, a combination of also reducing bookmobile hours, um, because we're people, it's people funded.

Um because we're people, it's people funded.

So it's reducing those hours and not having that work covered um for that day.

Um otherwise we would need to get into even further um um cuts to service.

So um this yes.

Um a lot of we're people.

We the money that that you that's okay.

I get that you're people and you have a nine million dollar budget that we just hand over to you guys and you divvy it up and you spend it how you want.

We don't have any oversight on that.

Um, but but you're telling me that that if I close one day a week, I'm gonna save basically 100,000.

So just simple math would say for 700,000, I should be able to run a library.

If you're all people your math doesn't make sense to me that if I close a day, I'm only saving 100,000.

We we did the the the bottom line of you know what would we be able to to save?

And it would be not covering those service points.

So, you know, nobody able to come in and utilize and interact with our staff on that day, nobody accessing the bookmobile.

We would also be reducing the bookmobile hours.

Um there were some other smaller things like um our you know, library at home.

Um but but you you you if you closed, you wouldn't be open, so you wouldn't have staff there.

Right.

There's a lot that happens, not just at the service points, but behind the desk.

So uh can we stop here?

Uh maybe uh if you explained it in the number of hours that are not going to be opened and the number of staff members, then that may help uh give it a little different perspective.

Your honor, uh maybe also just to add, I I think it's not as easy as just dividing, you know, the budget by days.

There's a number of fixed costs that you end up dealing with.

You your facilities are fixed cost and relatively unmovable.

Your collection she's saying that the personnel is the biggest part of the council member.

Can you let Mr.

Parrish finish his answer?

Your collect your digital and physical collection doesn't you know change, you know, by reducing a day per hour.

I don't think they factored in the adjustment of any full-time folks, they would spread to different days.

I don't think that level of that is not reflected here.

Um I think there's just some fixed costs that you have.

This really just says we would reduce this, our temporary salary costs for folks on those days, doesn't contemplate any other full-time reductions or adjustment and other fixed costs.

You maybe get a little bit by you know downcycling the energy, but generally speaking, there's a bunch of fixed costs that don't change.

Right.

We're open 10 hours.

We have nine service points, and then we have our bookmobile service point.

So we really looked at the not covering those service points, but all of that other work that we are contractually obligated to continue to provide and pay when we have our staff who are full-time staff.

Um, we that all of that work is still being done.

So books are still being ordered and collections are being curated.

We're still planning programs, we're doing outreach to um the um to uh a school or a program.

We're um answering reference questions, we are digitizing items.

There are uh paying invoices.

There's a lot of stuff that does happen not at the service point um that to make a library be able to provide the services to the community and to result in over two million in circulation.

And so if you look if you look at other communities in Minnesota, and they're not open on Sundays, you know, and you go from Sioux Falls, Cedar Rapids, Lacrosse, to Luth, Mancato, St.

Cloud, Fargo, those are just ones that are not open or not open eight hours a day on a Sunday.

And I know in the 90s we decided to open seven days a week.

Why would we why couldn't you close one day and save and save some dollars?

So um we are why is Rochester unique that all these other cities don't have to be, but Rochester has to be.

Um I would be very curious what their hours were for the for the full week.

Um we are open about 64 hours.

I I imagine Cedar Rapids is also open 64 hours.

They're just not open on Sunday.

Um I would be very curious to see.

I mean, I think there is, you know, when I looked at other libraries between 58 and 64 is a general, you know, number that other libraries open, some are even open longer hours.

Um so for us, we intentionally made the decision to be open on Sundays.

And yes, I know it's a more expensive day.

We do pay time and a half on Sundays.

Um, it is a day that community members really wanted us to be open.

So um, and and our numbers see that.

I mean, we have more visits per hour on Sundays at our library than we do on Mondays or on Thursdays.

So the other question I have for you is that you want four more full-time employees, but we're not saving any money if we're getting uh getting rid of the the part-time people.

So if you're getting rid of eight part-time people, why isn't that not a wash?

So it is 200,000, 214,000 reduction in our temporary salaries.

So we did come to the table with a 50-50 split.

So we're asking for half of that and providing half of that.

So maybe if I could add the number that's in the decision package chart, that's like 192,000.

That's not what you save if you don't add the full-time positions.

That is the netted out dollar amount for full four full-time positions if you reduce the number of temporary salary hours that were reduced.

So that's what Ms.

Lemke is getting at when she's talking about if we weren't gonna have the full-time positions, we likely need to add back the temporary hours unless we are going to have a change in the operational service that people are experiencing at Rochester Public Library.

Yes.

Thank you.

Council member uh wall.

Thank you.

My uh my first question is on uh that same page, and you partially answered it.

Um I was hoping to see some data as to how many people actually come in on a Sunday.

I just did uh math earlier today, about 670 people per day visit the library if you take the total attendance and divide it by 365.

Um how many come through on a Sunday?

So on a Sunday, um, and and you need to remember that there are at least 12 days that we are close for holidays.

Um, so it is a little bit higher than that.

Um we see uh I think it's over 12 an hour that are coming over um on Sunday.

So what is that that number?

I know I have that somewhere, but um yeah, it's close to a thousand or more that come on Sunday.

Saturdays and Sundays are are busy, they're gangbuster days.

And when you talk about a half a day, is it the earlier part of the day or the later part of the day?

Or it's the earlier part of the day.

Um, so between 10 and 2.

Um, so if if um council were recommending a half day closure on Sundays, uh, I would I would campaign for either a 10 or 11 a.m.

start time.

That is where we absolutely have our busiest time.

And my second question is on your long-term strategy for reducing the 18.5% folks, you uh reduced almost half in two years.

What would you expect that to be in another two years?

Uh my question, I guess is are there people ensconced in those positions that really hope they do this for the next 10 years, or do you expect it to really phase out?

I think we have a couple.

I mean, we have one of our longest term employees has been there for 30 over 30 years.

I can safely say for over 30 years in a shelving role, an 18.5, and I can see this person staying in until they're ready to retire.

Um, others, the others that that left, um, quite frankly, and I and some of the challenges for us filling those positions, um, we find these really great people that really want a full-time role.

Um, so four these positions, four of them would be filled internally.

So four of them would go to folks that four of those part-time positions would go to the four full-time positions at the library.

Um, we may have a couple that I think would hang on for uh for a very long time.

Um, but others we do see a higher rate uh turnover rate than um than our um full-time positions.

And you indicated the full-time folks uh generally do have greater longevity.

Absolutely.

And there's there's so much benefit in having that institutional knowledge, having that, you know, being in and kind of seeing the change in your community.

You're able to respond and adapt to your community because you are you've been part of that community.

Um, so there's there's some things that's really hard for us to put a number around as far as what we are saving, but when you're not doing six, you know, six people are aren't attending a meeting versus one person attending a meeting.

I mean, there is some you're getting some cost benefit over time.

You know, and having read a long article in the newspaper about uh the staff uh at the library this week, seems like 1998 was a really good year to uh to hire folks.

Seems like 1998 was a really good year to uh to hire folks.

So they stay around for a long time.

Councilmember Keene.

Uh yeah, thanks.

Um again back on these same charts on um chart that number 19 when you talked about the if third or 18.5 and 13.5.

It they are odd numbers.

Did that have anything to do with adding up to 32, which is like the equivalent of a full time?

Or is that just weird coincidence?

Um, your honor, there's just certain levels uh for being determined as a public employee.

If you work more than 14 hours per week, you're considered a public employee, less than that, you're not.

Okay.

And then we have the the other is really a creature of our bargaining contract.

Certain benefits start kicking in at 18 and a half hours and up.

All right.

So there's some there's some reason that they're gorpy kind of numbers like this.

Yes.

Yeah.

And my looking at it said, like if you went from this, I can't remember, let's say 40 to uh 21.

Um, that would have saved the equivalent of like I think it's eight points FTEs, but since they're lower paid, it doesn't pay enough to create four positions.

And it's the benefits.

I mean, the benefits, they are they're pricey.

I will be completely honest.

We had 19 people getting benefits, and now we're gonna have they did not receive medical benefits.

Oh, okay.

And there was a lot of um all right, it's not a full benefit.

Yep, yes.

There's yes.

Okay, that that's helpful to know.

So I think I understand that page better.

So there's two things in front of us.

One is the the uh part the part-time to full time, and I I want to support that.

I think this is I think I think we're on the edge of a management decision on how to run a library versus a policy thing.

And but since it needs the extra money, it become it has to come to us.

So I would support doing that based on the recommendation that the librarians are telling me it's a better way to run the library.

On the second one, boy, this idea of having this nine million dollar library this asset and then closing it, you know, one eighth of the time.

It just seems like uh a silly way of saving money.

Um, especially when we hear Sunday is this like active day.

So I I can't imagine the spin that could happen that would make me want to support that.

So those are my two positions on there.

Councilmember Miller.

Oh, you didn't have a question.

Mayor Norton.

Well, I don't have a question.

I'm just going to do a point of personal privilege and acknowledge Kim Edson who is retiring.

I think if this isn't her last day, it's one of her very last days after how many years at the library.

So I just want to acknowledge all your years of work at the library, and thank you for your service while you're here.

Thanks for being here.

Thank you, Kim.

Councilmember Doring.

Yeah, I um I agree with my uh colleague uh council member Keene.

Uh I think it is a sound strategy uh to uh move towards more full-time employees and and reduce the part-time workforce at at the library, uh trusting in in the in the guidance from our librarians there.

Um, and I see um I see no reason whatsoever to reduce the hours that the library is open.

Um not only is it a uh uh a public treasure here in our community, but I think of those members of our community that are unhoused who have no other place to go uh when weather turns bad, whether that is an extreme heat or uh whether it's really um uh frightening cold outside who who seek the library as a place of respite, um, who go to the library to apply for employment, who go to the library to learn how to read, um, who who gain um just other uh other aspects of knowledge at our library.

I it it just seems ludicrous uh for the minimal amount of savings that we would achieve as a city to to even consider closing the library for for a day of service.

So uh I would not support that in any way whatsoever.

Councilmember Miller.

Thank you.

Uh so I agree with Councilmember Keene, Councilmember Dorring, I don't see a reason to pursue these options to reduce hours.

I trust that this is a good management strategy.

I did want to ask though, because you mentioned the library master plan.

I don't see it on our study session calendar.

When might we expect to hear an update uh now that that's wrapped up?

We really wanted to get through this budget season before coming.

Because there is a, I mean, this is longer term.

This isn't to the the master plan is not tomorrow.

It is a it's our marathon, and I wanted to show up for our sprint.

So um, I would expect in October, November time frame, whenever Ellison tells me.

Okay, thanks.

Any other questions?

Ms.

Selms, next topic.

Thank you.

I guess I will end up thank you, um, Director Lemke.

Nice job.

I would invite up, I don't know if it I Zhang, our uh director of parking and transit to uh provide some information uh that was requested about evening and weekend parking.

So Director Zhang.

Good afternoon.

Um, council president, mayor, council members.

Uh the question that was brought before um this was uh what was the um subsidy or value of the evenings and weekends for free parking.

So on here is the 2024 um numbers.

These are the ramp usage.

Uh you'll see that uh it's broken out by the ramps, and then the big uh pie chart is the total usage.

It's the number of um usage, it's not dollar values.

You'll see that it's broken up with free exits at 437,651.

Um the next slide will tell you what that breakdown is.

So of that, you'll see that number up there on the total uses of the free.

One of the things that we don't have is the aggregation of these free usage.

There's different types of free uses.

The first hour is free, and then also evenings, week weekday evenings, and then uh weekends.

And so we made a lot of guesstimates um for this uh spreadsheet that you see here.

Uh we broke it out into the three different categories.

Um, you'll look at the free one hour free.

Uh assuming um want to point out that we have here a two dollar, but that's not a rate that is approved, as we're just assuming that that would be the rate if we were to charge for the one hour.

Um, and then the total uses so you'll see that also for free weekends and um the free weeknights, the hours were also guesstimates.

We don't have it aggregated, and and um the dollar values that are approved in our fee structure right now, and so the total amount was about 1.8 or 1.9.

So just to clarify, the total usage is uh those are the accurate number of parkers for people that are using the ramps and the uh the the uh the the times and the charges are estimates.

Actually, the broken out uses are also guesstimates.

Um the total the number you see up there at 437,651, that's the number that we know, and then it's broken out into the three different free categories.

I see.

Yeah, and those were were guesses or estimates.

Councilmember Keene.

Uh yeah, thank you.

I appreciate this.

And um, I I want to make sure I understand the numbers on the one-hour free weekdays.

I want to understand that if someone stays like less than an hour, they leave for free.

If they stay for two hours, do they get the first hour free?

Correct.

So in our rate structure, you'll see uh zero to one is zero dollars, and then one to one and a half is two dollars, one and a half to two hours.

Now you're checking, get but that's it's broken out that way.

Okay, so I mean it doesn't just apply to people who are coming in and leaving quickly, it's actually uh a rate that applies to all of our like if someone's there for five hours, they're paying for four and a half or something like that.

Correct.

And so what what you'll see in the fee structure is the four and a half to five hours is a rate number.

Yeah, so I was the one I think that sort of asked for this, and this is what I want.

This is what I was looking for.

I wasn't looking to change how we do it, but I think this data gives us something that says there's a real asset that we're using to support um our downtown business.

And the idea that it's 1.88 million dollars is helpful for me to know.

And um, I think I want to make sure some of the people who want all kinds of other things from us will know that these are these are things that we've decided to give away uh in support of Mayo Civic Center in support of downtown restaurants and support of a lot of like uh in uh activating our downtown.

Um I'll I'll point out that I found articles about uh years past which city councils voted to stop doing this and started having pay for downtown because they were trying to figure out a way to uh to support the the parking as an enterprise.

So I'm I'm glad we're doing this, but I I like having the facts of what we are doing, and uh I uh if you tried to solve all these other problems, it would be way too much for what I need.

So I wouldn't suggest we try to do that.

Thank you, Ms.

Song.

Next up, looks like we have budget follow-up increasing community building fund investment and scholarship request.

Mr.

Winman, are you I believe I'm taking this one?

Good.

So I believe on the next slide.

The information that was requested.

Just want to uh council president, uh mayor and and uh council members, uh just want to acknowledge this is the first time I've been asked to provide information for something you want to add to our budget, and uh it's uh a unique situation.

So uh uh it comes from a really good.

I'll just let you know I'm the one who asked appreciate that.

And uh the request is or the the proposal is should we establish a scholarship fund for uh uh the programs that are offered by our community partners?

And it it is a great it comes from a great place, and it runs concurrent with some activities we're having internally with the department and discussions we're having with the park board that we've had ongoing for several months, and uh thought this would be a great way to uh really handle this request is to continue that work.

And what I did is for anybody that reads this, I know uh uh you are familiar with how we provide programs through uh program partnerships, and uh that uh allows us to operate with a very staff.

In fact, we have one staff member who coordinates all the programs throughout the city uh that happen on our fields and in many of our facilities, and that's in addition to other responsibilities that uh they conduct on a daily basis.

And uh we work with uh organizations in the in the community that uh lead their programs with a volunteer uh workforce, and uh it it it's uh we're proud of that system.

It it provides access to many members of the community.

However, when you have fee-based activities, uh you there's an assumption that there are barriers to uh access to those uh programs, and we recognize that and we appreciate the request.

What we would like to do, uh we are uh in the process of uh uh doing a lot of outreach with our partners, just finding out how are what their numbers are, what what their participation levels are, what they are seeing as uh a need in the community.

We know many, if not all of them offer some uh form of reduced uh fee access or free access to the programs.

We would like to uh come back with a metric of what that looks like and what the need really is.

And besides the fees, there could be other barriers to uh participation that we would like to address in in this uh question that we're trying to answer here.

Uh so with that, we uh I I believe at the last meeting uh was brought up by uh um city administration.

Could this be done uh in the interim with a contingency request?

Uh we feel strongly that that would be uh um uh uh recommended.

Uh that would allow the park board to come forward with a recommendation for something ongoing after we we get an idea of what the what the needs really are.

So that is our response to that, and we very much appreciate the consideration and just looking at uh just how we can provide more access to these uh great programs that we offer her through community partnership.

Thank you, Mr.

Whitman, and uh I really appreciate the work that you're doing and uh uh and the the park board and and your staff hearing what we're talking what we were asking for, and just to expand a little bit, and it doesn't necessarily mean a uh a supplemental budget request.

So uh one of the the how I framed it when I talked about it was to do the assessment of the partners, the groups, the clubs, and find out what they're providing now, but also to look at as we move forward with those partnershipships and with any contracts with those that we also look at is there a uh a uh a guideline that we have from the city and parks and rec that they give a certain percentage of their uh schedule time or uh or uh memberships or what have you to scholarships or free uh free uh free access or uh or sliding fee schedule schedule.

So a little more nuanced than uh finding out just what the gaps are and the city filling that gap, but is there an opportunity to maybe have the the clubs fill that gap and uh and uh just the knowledge of finding out what they're doing, I think will be very beneficial to uh to our decision making going forward.

So thank you.

Um Mayor Norton.

Thank you.

I think that's certainly worth studying.

And also, I guess I had a question about the the Rochester Parks Foundation board and the type of giving that they do if it's more large scale purchasing of land and things in parks as opposed to scholarships, but is that also an avenue uh moving ahead that might be able to be tapped as well?

So just wondered if you could clarify what they currently do and if that's a possibility.

Right.

Uh the park foundation is uh uh they are uh provide a great service to the community and and to the department.

I I would say they've kind of grown from a grassroots organization to a fundraising organization, uh spending a lot a lot of time seeking grants and uh alternative funding sources to come back to parks and recreation.

But this would be uh uh a really good role for them to play in in seeking community funds for for this uh purpose for this effort.

Uh councilmember Palmer.

Well, last week um the idea that that I was was talking about was um the city council taking some of the contingency funds and and putting it in a fund for scholarships so we kind of put our money where our mouth is that we want to have that.

Um we have to wait till the park board kind of comes back with their report, but you have you know the running club has for 50 years is done Tuesday nights down at the soldiers field for free.

And so, you know, they're running down there.

The running club uh help pay for the the track to be rebuilt and pays for maintenance on that.

Um, and so you how do you take that versus a soccer team?

And it's not just the the dollar amount that they have to sign up to be a fee to do it, but also for the equipment.

And and so, you know, for me, I think if we could find some way of of of starting that fund for an up two dollar amount to say, hey, the city council thinks this is important to offer scholarships also to help out our nonprofits um who are also probably doing a lot of fundraising that we don't know about.

And just to that point, councilwoman member Palmer, I I agree with you and and I'm very open to the contingency fund for city funded scholarships, but also one of the other points and maybe in your uh in your uh assessment of the groups, if you can talk about how much marketing they do regarding these scholarship funds, because I think if the word isn't getting out to the communities that can use them, I think then that's a that's an issue we can address as well.

Councilmember I'm I mean to follow up on that, the city could also do that if we have contingency funds or we have a fund set aside, we could say through the park and rec you come ask for these dollars.

I mean, we have a um a great resource here with with um um building or community fund and and it's been a really good resource, and is that the place that that goes?

Does it go to park and rec and they have good outreach and and and I've been very very impressed with the community building fund and and so I I really want us to to look at that, but we as a city could advertise to say, hey, Park and Rec has has scholarship funds.

This is the recommendation and or or this is the the fee schedule.

Good point.

Uh Ms.

Salmson, and we do have council member Miller on in the queue.

I just wanted to, if I could make provide a little bit of perspective that builds on what everyone is saying, and um we've had a lot of conversations across the team about all the different ways that there could be gaps or barriers, and so I think the robust look at it um is probably the best way to get the most robust programming.

Um but I just wanted to point out that as of today we have $627,000 of 2025 contingency left, not saying that's how much you should use, but there's a fair amount of room.

Um there is a small request on Monday's meeting, um, but you would still have um if that's approved, $600,000.

So it's not as if you don't have a fair amount of room to work with when we're talking about operations and programming and being able to build something for 2026 that then could come forward in 2027 or years beyond in a variety of different ways.

Councilmember Miller.

Sure.

Uh my question goes to Councilmember Palmer's mention of the community building fund, but you also through the park board have the community engage resources fund.

Is there an opportunity to give us an update on how that program's gone?

It was still listed on the website as a pilot program, but it's 100,000 per year that's set aside from referendum dollars, correct?

That is correct.

And uh just uh I believe it was uh uh uh not our most recent meeting, but the prior month's uh park board meeting in August.

Uh we we uh had a brief discussion about uh kind of regrouping on that program.

Uh what we're finding, the original intent that came uh before the board was uh just making sure we had a fund for uh as a request comes up mid-project for an amenity that was not thought of at the beginning or similar requests that we would have that fund to to address some of those needs.

It kind of evolved into more of a public facing, give us some proposals, and uh we we've we've we're we've not completed this discussion.

I'm not speaking for the board, but that's the question that's before them that we're we're working on is uh should we uh when we have so many unmet needs that we're trying to work on, it seems a little a little odd that we're uh opening up to the community for additional uh ideas.

And so we're trying to find the a balance there of how to how to address that.

But uh some of these needs uh would would also fit into that category of I appreciate that.

I just think to the point of where potential funding comes from and who gets to administer it and what the role the council has.

I would love for to contemplate that partnership with the park board, especially because there are already referendum dollars set up, especially if we were to establish a pilot scholarship fund.

That seems like an interesting place to consider if there are funds available party through referendum dollars, it wouldn't be an ad to you know the levy or other supported places.

Council member Keene.

Uh yeah, first I'll just say, you know, thanks to my peers who are sort of championing this.

Oh, Councilmember Palmer has been bringing this up for over 18 months, trying to say how can we open up the schools and uh council president.

So it's it's good to see it being like started, but I am also glad to see we have work to do.

We can't just say, you know there's money and they I mean we when I worked with the YMCA, we had a hard time figuring out what the qualifications were, and we ended up using the county as the correct way to do it.

But I don't even know if those things work anymore.

I I would be I I would be worried as we get into something like this that we um work with some group that has a very informal way of giving out uh um scholarships and doesn't have any sort of tracking of it.

So I again I I really think it's a good thing to be trying to do uh to try to knock down these barriers and I uh and I think it is a reasonable sort of expense, but I it is not like uh it's it's it's not easy to do.

Thank you.

Appreciate that.

I just uh one quick comment.

Uh we're getting some really good feedback from this very question uh from our uh program partners.

Uh of course, we've been at uh working with them for years, but uh really having this intense look over the past few months.

And uh most uh what we're finding is very positive.

That there's there's a lot of outreach that we don't know about that we're very going to be very excited to report when when uh we get all the information gathered.

Sounds good.

Thank you.

All right, thank you.

Next up, we have a budget follow-up on three level allocations.

Oh, I'm sorry, am I did I miss one?

Oh, I tried to take over here and I will turn it back to administrators.

I think Director Martello is ready to go with community building fund.

See, I was looking at the major futuristic, yes.

Uh graphics as my roadmap.

So I apologize.

Community building fund, Miss Mortella.

No problem.

Council President Mayor, council members and community that have joined us.

I'm also here like Director Whitman because there's a recommendation to increase funding.

And so if that's the question, I'll say yes.

Um, but otherwise, I would like to just provide an overview.

I think we've discussed this a couple of times.

Um, the community building fund was established in 2024 when the diversity console sunseted uh in an effort to meet the needs of community members who had great ideas and are wanting to meet needs based on their lived experiences, but also based on maybe idealistic ideas that they have.

A lot of these community members do not have a 501c3 and not able to apply for other grants.

So in that fast year, we did not start dispersing funds until about mid-year.

And those were um dispersed in about five months, so they went by fairly quickly.

Our initial allocation, that base allocation was for $50,000, and folks could apply for up to $5,000 in funding.

So to clarify, um, someone could apply for $300 or all the way up to $5,000, depending on what their need was for their idea.

Ideas ranged um from food access to art and murals to programming festivals, that type of thing.

But what was amazing about that is there was so much participation that um there was a CIA brought forward to say, could we have additional funding halfway through the year for 2026, 2025?

So in 2025, we had a base allocation of $50,000 for the small grants, as we started to call them, those that could be awarded up to $5,000, and then an additional $50,000 for large grants that could be awarded up to $20,000.

Um there's a little bit of a more uh comprehensive overview and application process for those larger grants, but that was one-time allocation.

And so I think just providing that brief overview, noting there that to date we've dispersed up to $150,000.

Um, we do have city teammates that are part of that review team.

We um alternate those teammates so that we're having a broad number of teammates who are able to uh participate in that experience.

And I think the ask here is is there a possibility to add additional funding?

And it is not my decision about where that would come from, but really to provide you an overview and answer any questions that you might have for me.

Councilmember Palmer.

Well, thank you.

And and I appreciate the community building fund.

And and I like one of the things I like about it is that it's a committee that does decides that.

And and for me, the I think um the larger grants, you know, we did twenty thousand dollars, and I don't know if ten thousand dollars is the dollar amount or what what is the upper amount do you think would be a good dollar amount to have she's a reasonable person.

Well, I do think if the allocation was the same, a total amount of fifty thousand dollars for large grants, but a maximum of ten thousand for each, that would be more reasonable because we did allocate four of them, and I think um most of them were in that nine, ten thousand dollar range.

And I think I'll ask in this case for the larger grants is we want people who are also supplementing that funding from additional resources, and so to allocate twenty thousand dollars, I think is quite large and reducing that to ten thousand.

That would also allow us to award more people on that larger grant than we initially did.

Okay.

And last year, the gospel this February, I guess the gospel one was our big one.

Yes.

In in that was well attended.

It was very well attended.

Um, and then we do require them to provide us some feedback um from that particular event or any event that's held back, but there was really great attendance from it.

Is that for your large grants?

You asked for the feedback for all grants.

All grants we asked for feedback.

There is more robust feedback required for the larger grants, but we ask for feedback from all the grants and then generate a report at the end of each year.

Because I saw the numbers from the large grants, and and I was impressed with the with the comments and the and the ability on those.

So yes.

I'd be supportive of um going down to 10,000 for the large grants and that.

I have another question though.

I know in the mayor's budget that she has an initiative fund.

That's $36,000.

If we move that over to you, would that help you out with your committee to be able to take those funds and redistribute them through a committee?

Councilmember Palmer, I think that would be a question more for the mayor because I think that's a budget that she is in charge of and probably has some work that she does from that funding.

So I'm not quite able to speak on whether or not that funding can be moved over.

Okay, thank you.

Uh councilmember Keene.

Well, again, I I this is again my peers bringing this up, and I actually support the idea, but I I think Councilmember Palmer couldn't come up with a dollar amount.

So let me let me try.

Um, these were fifty thousand dollar.

I know that the ten thousand dollars is the limit on the thing, but um, I'm gonna make the suggestion that we go up um 50% of what the two funds have and have them at $75,000 for the small applications and the uh large applications.

Um, and that is a $50,000 uh add-on to the thing, and now we have to decide whether that's going to be a trade-off, or that's something that we go as uh almost like a decision pack and add it to the decision packs.

So let I'll let that be can I ask for clarity on so are you suggesting a total of $75,000, or are you suggesting $75,000 for the small grants and the additional $25,000 being for the large grants of up to $10,000?

Well, I use the dollar amounts because I thought they both have $50,000 limits right now, and I was raising the limits to $75 for each other.

The budget right now is a total of $50,000.

Okay, it looks here like there's a small and large that was the one-time funding.

So I just that's why I'm looking for clarity.

All right.

No, I administer ourselves.

Can you clarify for us what is in the budget now for this program?

And then what's uh then we can get to what the proposed the annual budget that is in your current recommended budget for the program is fifty thousand dollars annually.

Start from there, yeah.

So start from there.

I I again I can you break down which part is the large and which part is smaller.

There is no large.

There is no large, that was a one-time pilot.

Okay.

Um then I I my proposal would be to add 50% funding to this and you add with the $10,000 limit, and it would be a $25,000 cost to the budget.

Did you is that understood?

I I heard add $50,000, but a $25,000 cost to the budget.

No, I I take there's only one fund $50,000 to add $25,000.

Which is $25,000.

I see.

Yeah, I was like, where are you subtracting out that other $25,000?

Yeah, with the $10,000.

Okay.

So you have more to add to your no, I understand.

It's good to, I mean, I appreciate uh you putting some uh something on the table.

Uh Councilmember Miller.

Yeah, I think Councilmember Palmer in the last meeting suggested we keep it at the 2025 level or 100,000 split between the two programs, cap the large at $10,000 each.

That was the recommendation, and that would be adding $50,000 to your recommended budget.

So I I would be in favor of keeping it at the $100,000 level from 2025.

I think again to Councilmember Palmer's point's been very successful in the drawing the applications.

Obviously, learning about the average ask, it makes sense to lower that cap to 10.

Um, but I again I I don't see a reason, especially as we've moved to inclusive growth management and inclusive decision making to limit uh the access we're giving to the community to help distribute some city funds to programs that are emerging from the community itself.

I just want to clarify for everyone that would be increasing the recommended budget by $50,000 of tax levy, which is virtually nothing in what you're actually levying across the entire city since your tax levy uh for 2025.

I probably don't have that.

That would be too easy.

Um is is recommended, I believe it's 118 million dollars.

Correct.

That that would be my proposal would be to increase the 2026-27 recommendations by $50,000 each to keep the funding level for this fund at $100,000.

Thank you.

And uh administrator Zelm or Ms.

Martella, could you uh remind us why we had a hundred thousand uh this year and we're going that it's budgeted at 50,000 now?

The initial allocation was fifty thousand dollars because that's the amount of money that we would fund or share with the diversity council when those supporting this type of programming.

And so that money moved over to the community building fund at $50,000 as the base allocation.

And then council member Palmer um brought forward a CIA, I believe it was August of 2024, requesting an additional $50,000.

I believe that was from contingency.

It was one-time contingency dollars.

So it didn't change your baseline of tax levy.

Right.

And that's why we ended up with the $100,000 in 2025, but really the base allocation is only $50,000.

Thank you.

Thank you for that clarification.

Uh council member Keene and then Councilmember Wall.

Yeah, again, I I understand the the goal here.

I'll my con my my concern here is that when I was watching this, the small grants were gone.

Did we say by June?

Yes, in about six months.

Yeah, and I was trying to increase that one too, because I think that's a big uh more of an impact.

So I I'll just add that to the discussion and see where we go.

Council member Wall.

Oh, do you were you gonna respond?

Council member Wall.

I would stand with uh Miller and Palmer and say go with the 50-50 in large part because of what Mr.

Keene just said, the grants were used profitably this year almost immediately.

I can't imagine that it will be any different in uh years to come.

Councilmember Dory.

Yeah, I would I would agree with raising the entire budget to to that hundred grand with the fifty-fifty split or even a sixty-forty split with sixty and in small and forty and large, uh with depending on on the amount of applications we get for the program, right?

So many stricters.

And I was just gonna clarify that I think it's important um what director Motella was saying is that it's up to it's been up to a certain amount.

And so as the team is they have a quite a rubric that they go through, and even if someone's up to 5,000 if they request 5,000 and they feel like $3,500 seems more appropriate.

Um there's a variety of different amounts.

And so I if if we have the trust that um they would move through that process and maybe we can be doing a mid-year report, something of that nature, which would um provide you some perspective about how that's shaking out um as far as sometimes they're very small grants, um, but they're very impactful.

Um, even some of those three and five hundred dollar grants that go out.

Yeah.

Council member.

Thank you.

I I just add also given the prior discussion about scholarship fund and perhaps the community engaged resources and engagement with the park board.

I just wonder if there's an opportunity to share some of the rubric and process that you've gone through with city teammates to create this successful program.

And is that program is uh kind of in a rethinking phase if maybe there's an opportunity to share your success with the park board because they think about um you know ways to engage, especially as we talk about park activation and all the benefits that come from there if if there's a way to collaborate.

I know that's obviously a totally separate board, but um I think you're doing a great job and would love to see this program continue to grow and best practices offered throughout the city.

Councilmember Keene.

I I just want to weigh in a little bit again on my thing with the small and large.

I really like uh council member Doring's idea of maybe a 6040 split or something like that.

I don't know where how other people feel, but one of my goals here was to have more of those small micro things as opposed to the big 10, the the bigger awards.

Uh, I think those can have more uh groundswell impact.

So I I would I would wait in for that and I just want the staff to hear it in my peers.

I I guess what I would just add on to is I think I'll ask Director Motel if she would be open to coming back with maybe maybe there's like a micro small and large that comes back and based on looking back at things, there's an opportunity, or maybe it's just providing flexibility um within that to make sure that we're meeting as many needs as possible, recognizing the dollar amount, the time of year, et cetera.

And I would add that it is true we do get many more applications for the smaller grant.

And I think then maybe we could tier it somehow to make sure that people within certain amounts have the opportunity to apply.

So that's something we could come back definitely and present to you.

Right.

Thank you.

Thank you.

Next up, we have a budget follow-up on three uh three three one one.

Uh thank you, Council President.

Council members.

Um, there was a question about cost allocation for the um, I guess it's a year old now, almost a year old 311 um service that um was implemented uh last year and has um had significant upticks every month that it's uh been been in place.

Um so we did cost allocations um for some longer time departments.

We also just split out some of the communication engagement and 311 um from administration to house that in its own um administrative category so that we can look at the budget more clearly.

So we did not actually cost allocate for 311.

It is quite a new service, but we would intend um each year going forward to revisit these cost allocations.

They they could adjust upwards or downwards depending on the support we're providing to the non-levee funded um entities.

So um they do recommend that we be looking at that on a regular basis, and there's not really a one size fits all cost allocation method that is recommended from the government finance officers association, which is a group that we look to for best practices.

Um, so we would plan to continue to look at that and where are we seeing um the distribution of calls?

Um, and I guess another question that maybe comes up about 311 is you know, how is it imp impacting our services citywide?

It's still quite a new service, and there is a decision package that requests adding a call taker.

Um, so right now we have two call takers and a working supervisor, and the goal of adding the third call taker is that the working supervisor is working a little bit less on call taking and more on streamlining those processes with the departments that we're supporting so that their technical staff that's got great skill sets in specific areas and delivering the outcome that a community member is looking for is able to move forward and actually deliver the service while um routing the calls, providing the answers and the customer service um in a way that's coming from that call center.

So I guess a simple answer from a cost allocation perspective is that's not contemplated um in the current cost allocations that are that are being ramped in through the 2026 and 2027 budget, but those are things that we will continue to look at, not just for 311, but um across all of those um services that are listed there, administration, city clerk's office, attorney's office, finance IT and human resources, and if there are other um new or adjusting services that come on board, I could think of things like the community connectors um or utilized across the organization.

Again, that's a small amount, so it would be negligible negligible impact if there was cost allocation for a cost that's about 70,000.

But those are things that we're we would be looking at long term um for the structural integrity of the budget and how cost allocations should work.

Thank you.

Any questions on three one?

Moving on.

Oh, Councilmember Palmer.

Is there any any thought or a cost that if we extend it from just business hours to like 12 hours a day?

Oh, 12 hours a day, you'd be looking at something opposite of what you were hearing from the library.

Um so um there's I mean, we could look at something like that.

I think that would be a pretty significant cost because you would be looking at based on the types of labor contracts that we have with different employees and overtime that might be necessary, things of that nature.

Um over time, I just said overtime over a period of time.

Um, we it might be something that you would want to look at.

I don't think most cities have 311 operating 12 hours a day, but some operate sort of a uh early morning hour and a later in the evening hour with a more limited call set, like less calls for service sometimes come in during that time, at least in my experience, um, in another community that operated a 311 system, they were open from 7 a.m.

to 6 p.m.

and the 7 a.m.

to 8 a.m.

and the I guess here 4:30 to 6 p.m.

would it typically there's less calls that come in during that period of time.

Um, but those are things you could look at.

Um, 12 hours a day would seven days a week, did you say, or just 12 hours Monday through Friday?

Well, I'm I'm just significant.

I'm just trying to get it better for the residents out there, and and a lot of them have questions that are not eight to five.

And and and you know, I've had experience with man cato, and it's a great system.

And at seven o'clock in the morning, if you're a building contractor, um, that's the time to do it.

But if I have to wait till eight o'clock, it kind of goofs things up.

So I'm not I'm not saying 12 hours.

I'm just saying some hour difference.

The other one is there's gotta be some cost savings that you can pull out of other departments that uh you know that that take a lot of phone calls and they should be and we did pick up some of that.

The thank you for the comment and question.

We did actually pick up some of that cost savings in the initial implementation of 311.

We brought a teammate over from another department.

So those weren't all new positions.

Um you referenced another community.

I believe they have seven call takers and a supervisor, um, where we currently have two and a supervisor.

So that maybe gives you a and they they're open an extra hour on each end of the day.

Um, and they have a little bit of overlap in their schedule.

They also don't have 20 bargaining units.

Um, they have 11.

But um, so there's just some nuances that that might exist there.

But there are there are opportunities over time to lean into that 311.

And I would suggest that adding that uh call taker would really free up a wonderful employee.

Um George is excellent at working with departments to make sure that the inputs that we're getting when someone calls for um a concern about something that the answer that they're getting, sometimes that comes from the department, um, isn't you know closed out necessarily, but we're closing this, and this is what we're going to do about it.

So a lot of that back end is is something that you build up over time as you learn um how to how the different departments are utilizing it and how they could be utilizing it.

So great point.

I I think it's something that uh we would intend to be leaning into more over time, um, but we want to make sure that we're scaling that at the pace with which people are able to accept change and change is really hard.

Um, for some departments, it's definitely an adaptive change where there's a feeling of loss when you don't control something.

Um but I think over time the community will see that it actually is providing them a lot better information because even when we provide them information, if it's you know, yes, we will get to the concrete sometime after March 30th is when we would expect there to be weather where we could address this issue.

People know then when to call back again.

And so some of those little things they seem really little, uh, but they're really helpful to people to understand what's happening with the requests that they've put in.

Thank you.

Thank you.

Moving on to uh budget follow-up city council budget.

That next, but ours were next.

I think it's city council budget, but I can't change it from this far away.

Can you change it for me?

There you go.

Thank you.

Um unless you want to send some park board uh money to the city council budget.

Mr.

Nigeber will be presenting the council budget.

Um, so this was a question about what is in the council budget.

Um and so this is one page of your budget document.

So if you've um been in the flipping book, by the way, the flipping book is actively working on our website.

Um, or you can do the old-fashioned PDF.

Um, we there's a number of different things here.

Obviously, the um cost of the salaries for and and other related expenses related to um city council and um the stipends that you receive.

Um, there is uh cost there.

Um, some of the less obvious things that are here, contractual uh maintenance and repair.

Um you can see um on the right hand side is primarily related to um granicus, which is how we're housing all of your agenda management, as well as um Zoom expense to make sure that you have um different opportunities for people um to zoom in and multiple ways for them to view uh as well as the cable um view that exists.

I'm gonna go to the right and left because that's where the boxes fit.

If you move down to expert and professional services, which is the next line, um that's primarily going to be your annual audit um and the expense of that and having and that's something that we're required to do um for your charter and also state law.

Um communications, so those cell phone stipends um are there in the communications line, um, travel and training.

Uh that uh maybe is self-explanatory, but I just wanted to point out that that's returned to the 2024 level of travel and training.

Um subscriptions um and uh and memberships that is almost entirely uh League of Minnesota Cities and National League of Cities, and then a very small amount for Minnesota Transportation Alliance, and I think 50 for the Southeast Minnesota um Southeast Minnesota League of Municipalities.

Um so that's the lion's share of the dollars that are in um the city council budget, and happy to council member Miller.

Yeah, thanks.

I was the one who requested this.

So I appreciate being able to dive in a little deeper and uh several of us being in the first year.

I I'm curious about a couple things.

Advertising, publishing, and printing is well short of the budget, and the 2025 budget is well in excess of the 2024 actuals.

Has that been spent in the past?

Do we have access to more printing, publishing, mailing, some communication service that is not being used?

I believe the primary cost for that is the required public notices that go out for the agenda, and also any printing that we do of the packet, but I didn't actually get details on that item.

Okay, just curious why that was uh seemingly budgeted well in excess of actual expenses.

Um and then for the subscriptions, uh, does that cover the entirety of the League of Minnesota City's cost, or is it allocated?

I mean, like because the their services that are provided through the league, correct to just the city generally.

Is that true?

That's the entire amount, and that's just always been put budgeted in the city council budget.

If you moved it to another budget, it would have no change on tax levy.

No, thank you.

I I just trying to understand where where some of these costs end up going.

And then uh like for Zoom and Granicus, again, we're using Granicus for all agendas, not just the council agendas, correct?

Correct, but that's the lion's share of the line of Granicus and Zoom.

And then uh yeah, okay.

I'm again just trying to think about um because I know questions have come up about like support and how the council best does the role.

And so I'm just trying to make sure that we have clear sense of what resources are available um as far as communicating with the public.

And so I'm just curious if somewhere in that advertising publishing, if there's so the advertising and publishing that the city does comes out of the communications and engagement budget primarily or within certain departments that maybe have other publications, but we don't generally have individual, we don't provide individual advertising and publishing for any individual city council member.

Okay.

Or we haven't, and I think that might be a question for our city attorney.

Sure.

Just curious about communications resources and um I would just point out though that in 2024, the actual um costs for maybe I'm reading the long wrong line item of publishing was a bit higher.

Okay.

Oh, I was reading the wrong line item for the entire time of that conversation.

Okay.

Uh last question.

What was the uh roughly $10,000 decrease in subscriptions memberships from 24 to 20 or the budget decreased significantly for 25 from 24?

That was the decrease that the are you in travel and training?

No, subscriptions memberships uh from 24 actuals, 72,500 to 2024.

We don't know what the reduction was to that unless we maybe moved some of the I mean, I okay I that was two years ago, three.

Okay.

I could find out.

We probably were adjusting the baseline to what we've been spending.

All right.

I appreciate council member Palmer has a question, but I I also I did I was not here last time, but appreciate council member member Miller uh bringing this forward.

Uh just for my clarification.

So you said that our uh uh audit services are under expert and professional services.

Correct.

What is contractual maintenance and repair, which is a contractual maintenance and repair is your Granica, like the Granicus platform?

That is and okay.

All right, I see that okay.

Councilmember Palmer.

Thank you.

Um how many of our budget or of our packets are we um printing?

I believe we print a certain amount for the public, which is required.

It's mostly just the agenda.

We got one at the front and one at the library.

Is that what we print?

One.

And then some like agenda, just the like line item agenda at the council meeting.

Okay.

And the bugaboo for me is the training and travel again.

And I don't see why we're increasing that.

Um we we voted last time not to.

It doesn't seem to be a problem this year.

So I'm not sure why we're increasing that.

Um, Councilmember Palmer, Council members, I adjusted that back to the 2024 level because that was a discussion early on in April when we talked about factors influencing the budget.

And there seemed to be consensus that a majority of council members felt like it should return to the amount that was in 2024.

Yeah, and I I would be one that would be in favor of uh putting it back to the 2024 figure.

Uh, from what I recall, I was not on the council, but the council uh in uh with the levy that uh you had last year, we're looking for uh decision packages to reduce that budget under 10% or that levy under 10%, and that's uh where 15,000 was taken.

So I I think it's uh helpful to the city of Rochester and us learning from other communities uh that uh travel and professional services is a benefit to the council.

Mayor Norton.

Well, I'm gonna delve into an unpopular topic here, and that's salaries.

Um, one of the things that I learned when I first got here was that the council um is put in a horrible position of having to vote for their own salary increases, and it's uncomfortable in the community balks at that.

Um, and so it wasn't done for many, many years.

And then it gets out of whack.

And I thought one of the things that we had done as part of the conversation was say that we were going to set it as a percent of the average median income of the community, knowing that we still had to vote on that amount every time it came forward each year.

And it doesn't look like that concept has been put into the budget.

And so I just I'm worried that we will get in the position again.

You know, maybe folks are fine this year, but in the future, if we if we have this attitude that we never raise salaries, then when it happens, it's a large jump and everybody screams.

And it's very uncomfortable for the council to have to vote on it anyway, but it's way more uncomfortable for them to have to do it when the amount has gotten to a point where it seems too large for the community to stomach.

So I'm I'm just raising that issue because I see it looking the same every year, and I thought it was tied to the average median income.

And Ms.

Elms has a question.

I have an answer.

Council president, uh mayor.

So the reason that we haven't included that is because the last time the city council voted to increase the the salary, which does have to be voted on every year, and tying it to the average median income is challenging to do in the budget, is because that last vote said that the and the city staff should not bring it forward unless the city council recommends it.

So we were not to budget for it per the last vote, and that's the last vote that applies, even though we have a new council unless a new vote happens.

One way that cities do this is that they start at some sort of base and then sometimes they'll approve a resolution, which still has to get approved by ordinance every single year with the budget to adjust by the same cost of living adjustment that other labor contracts are adjusting.

Obviously, you don't have a labor contract, but those are ways, some some ways that you could think about doing that that wouldn't be as variable as like you've you got to an average median income of 80, 100 and 120 percent in a year, and so from there you could make an adjustment and adjust moving forward, but there was clear direction that I was not to bring this up unless the city council directed me to and um uh city administrator and Mr.

Chair.

Uh the reason I brought this up is because we have a new council who wasn't part of some of that discussion, and I want this issue on the table so they know what happens should they choose not to address it, and they can choose not to address it.

I'm not saying they have to, I'm just saying if you don't, we get to that position again where you have a huge jump and it's very unpopular in the community.

It is much easier to do what I thought we were going to do with my request that every year it would be whatever the cost of it's not really the cost of living, but whatever the average median income is of a resident in Rochester based on that resolution we passed.

So I just bring it up so they're aware of what we did, why we did it, and give them food for thought, maybe not for this year, but in a future year to think about.

Any other questions on this topic area?

Moving on to uh uh budget follow-up for the Arborist decision package.

Council president, members, council, mayor, Minister's my apologies for jumping in earlier.

I was just so excited to share this information.

So really it's not that exciting.

But I do want to start off with two things that were not on this these slide deck here, the two slides we have forward for you.

Is this morning on NPR?

There's actually a segment on talking about the health of trees and natural areas about how that benefits our community and individuals alike.

And again, very pertinent to our conversation today.

That's why we're doing things from a sustainability standpoint for the health of our community, etc.

The second item today that came forward was we were just served as a notice to uh for an insurance claim on a tree that fell on private property from our one of our parks.

So again, very pertinent to what we're talking about today is that sustainability of our of our urban forest.

On the slide in front of you, you've got several categories of kind of fun facts of what we're doing and why we've done things, how we've done things in the past.

So 1975, we had you know, arborists intact, we did a certain number of trees, and we've had only two arborists added since that point in time, and a lot more trees, a lot more growth in the city, etc.

So, not unlike what you've heard elsewhere about the size of the city growth or the water mains of the streets growing in in numbers of sizes over the years as well, with the same issues that are outstanding for us.

Along with that, though, we've got things that are happening where as the city grows, trees grow along with that, creates other issues for us, liability-wise, and backlog when you don't have staffing to support the number of calls coming in through 311 or other means.

So, right now we've got a backlog of activities going on with our our tree system that we want to help starting to address.

When you start addressing those things, you start addressing the liability issues that go are out there, both our public trees and our public boulevards as well as on our public park lands.

It really gets back down to what we're doing right now.

Again, right now we're under a current cycle of about a 20-year pruning cycle.

And again, when you have that long of a cycle between prunings of trees, things can happen.

People get upset, you get the calls, we get the calls.

We're just trying to avoid that by going forward, bringing staff on to better account for these activities.

And the other thing that we can't control is the storm activities that are happening out there right now.

Climate change.

Climate change is real, whether you want to account it for one activity or another, but it's really happening.

And as we've seen over the last seven years or so, those calls come in.

We've got a staff of six that respond to that.

And again, supportive staff that help out in those evening calls as you know, groundspeople or whatever.

Um, but these people that are in the in the buckets cutting trees at nighttime.

It's a dangerous situation.

And again, having a few more staff on on board, taking care of vacations or or while they're out sick or whatever, help support our team to do that work properly and safely.

That storm response is a big deal.

And again, we called in for uh by EOC stand up, we're getting ready to go out.

There's a big storm coming.

We're one of the first on the scenes for those windstorms and tornadoes that are out there responding to the trees down and roads blocked, along with our other partners like RPU and public work.

So we're out there just along with them.

With that, though, you know, we've made a good case, I think, for support of an additional arborist on our team.

We're small but mighty, and I think we could do a better job with more team members.

So with that, I'll open for questions.

Any questions on this one?

Uh council member Palmer, go ahead.

My my understanding, and you correct me if I'm wrong, is that your position or the department's position is the only person that can touch a tree in Rochester on the Boulevard is a arborist.

That is not correct.

Okay.

So I'll clarify.

I know the homeowner can take a test and do their own.

We have we have several programs where homeowners can participate in in maintaining some boulevard tree activities, but we have uh other landscape technicians that maintain helps maintain our tree system as well from the ground.

They're not using saws, uh, they're not up in the buckets, uh taking down trees, like in the picture up on the screen right there.

Yeah, we're talking a different skill set than most people have.

And it's it is dangerous work.

I mean, we have these people certified for a reason because of the quality of care they provide for our urban forestry and for our public that are out there.

So again, it's not for everybody.

We do have people do tree work uh on their own, and sometimes it's an issue that we have to go back and correct and charge for because again, they've damaged the tree to a point where it gets removed, or it takes a lot more work to correct that.

Okay, and I understand that it's dangerous.

I'm not I'm not discounting that.

Um, but do we have to hire employees to do that?

Couldn't we go out and say to contractors out there that we have this many trees and we want you to come out and take care of them during the year?

We we can, and we actually do have a contract services, a fairly good sized budget for contract services that are out there.

Again, we do stump grindings, tree removals, tree prunings as part of that activity.

And again, tree prunings is less so, but the tree removals are out already out there doing contract services work.

Uh, we also hire contractors for work on private properties when we get calls that it's a dangerous or hazardous tree.

We bring those folks out there to take care of that private property activity.

So again, we hire contractors in a in a great scheme across our our organization, both in parks and in forestry both.

But but couldn't you do a balancing act here and go, you know, 153,000 dollars for an arborist?

How much can we contract and how much more work and how much more can we get done that way?

Um that's that's where I look at at doing it.

Um I spend a lot of time on sidewalks and trails, and and I know you have a lot of trees in the parks and a lot of your trails on the uh the trees on the um sidewalks, you know, are um six foot two.

So I mean, um you you don't do a great job all the time on and keeping them trimmed.

So um you know, so that's that's where my my bugaboo is with this.

So it's a fair question.

I would say that you know, inherently with city staff members, we don't have a profit margin that we build into our budget.

So when you hire a private contractor, they want to make money on it and they bid for the projects and they do want to make money.

So again, they want to account for the cost of their labor, the cost of the equipment, the cost of the gas, and profit margin on top of that.

We don't have that part of it in our system here.

While we do have good benefits and good salaries, it's not even close to offset of what they're making in in the profit side of things.

Yep, thank you.

Uh Mayor Norton.

I'm just gonna jump in on this one a little bit, and because it's it's something that Mr.

Nigber hasn't mentioned, which is when there is an emergency in our community, like some of those weather events, um we as a community have to respond.

And sometimes they do contract work.

I've seen that.

And one of the things that we have seen at times of emergency is that the prices that are charged actually go up at the time of emergency and it costs more.

And that was seen very clearly at a time we were trying to fill out a report for FEMA reimbursement.

And FEMA told us you're paying way too much for your tree service.

So I understand businesses can make money at times of crisis, and I can't blame them for trying to do that.

But if we have our own arborists who can respond, uh, rather than just completely relying on contract services, we actually might save a little bit of money.

So that was just from my experience this past year.

Thank you, Mary.

If I may, I would just point out that our arbors don't just do tree removals or tree cutting, they do plantings, they do education, they do inspections.

So it's it's kind of a gamut of what they do.

And again, we can hire lots of things out, but again, there's a skill set there that you can't really replace easily in one fell swoop for one person across the entire uh organization.

Councilmember Miller.

Yeah, thank you.

I and I appreciate you mentioning education because I imagine that that's something that gets pushed to the backlog or a different priority when you have um such a big backlog of tree work.

And to council member Palmer's point, I also have noticed that along many of the trails and sidewalks that there are trees overhanging or branches overhanging.

And I wonder how much of that educational piece can be used to empower the community to get a better benefit from being able to staff up to the level we need.

And I think it's always striking to me when I see how much our city has grown in square miles and how little we have grown in staff.

And I think it's a major risk because when we do have to go out and contract work when it does become an emergency, we have no control of that cost.

And so I I think this is a good smart decision.

And I I am supportive of this decision packet for all those reasons.

Thank you.

I'll just say that from an education standpoint, we do a lot of education, both from uh when our our members are out in the field talking with the neighbors talking about how they do the trees, what the goals are going to be, et cetera, but also through SAC programs, et cetera, our team that participates in those activities.

You know, our day is a big factor that with we work with RPU on that on a on an annual basis, again, education-based.

Um, but things like that are a lower priority than taking care of the high risk trees or the emergency trees or those things that um need to get done right away.

The prunings low hanging over the sidewalk does drop down in that priority, but we get lots and lots of calls on that.

Councilmember Dory.

I agree with uh council member Miller's sentiments here, and I have a constituent question that I promised I would ask, and that is how is an arborist not seasonal work?

And why are we paying 155,000 for non-seasonal work?

Great question.

We do the vast majority of our pruning during wintertime.

And again, removals happen during summertime, but our prunings take care of um almost entirely in the winter time.

In that chart up there on the screen, you know, 2022 and 2023 and 2024, that vastly increasing stormwork.

Last year, as basically what we did was stormwork.

We couldn't get the out almost anything else.

So again, that's where that time goes.

Councilmember Fredericks, thank you.

Um just a two-part question.

Uh I don't remember the exact number.

If it was 153,000, is that just cover that can covers his benefits and his wage are two people?

Is it one or two people?

We looking at so this that's for wages and benefits for the employees, yes.

For each one, and you want to hire how many?

Um it's two employees.

I don't remember exact numbers.

It's for one in 2027.

Okay.

And then do you have the support for them in the field, meaning equipment, all that?

Is there going to be other additional costs to put them in the field?

Or do you have everything you need?

We've got everything we need.

So when you look start looking at a six-person staff, you know, inevitably you're going to have one or two people gone for whatever reasons, whether it's there could be injuries, vacations, sicknesses, et cetera.

So when you start running a staff that's you know five people or four people, there's equipment that is available, or you should team up then with that of the person, bringing them back into the fold using the same equipment.

Can we make sure we hire healthy people that want to work then?

We do.

We do.

Okay, good.

I have a uh constituent question as well.

And it has to do with kind of the philosophy of uh the forestry and arborists.

Uh, when it comes to removing a tree or saving a tree, are there priorities given to trees that maybe long lived here in Rochester, for example, like a hundred-year-old oak?

Yes, in fact, there's a whole list of criteria that we look at from a tree, keeping a tree or not keeping a tree.

You know, health of the tree is first thing.

There's trees that are less um structurally sound than other trees.

There's trees that are more long-lived that like what we call legacy trees that we want to preserve as much as possible.

So, yeah, all those factors come into play when we start saying yes, we want to remove a tree.

Um, our friends at public works, they've got a real tough challenge when they do a street project, they go through some of these old neighborhoods and they they bring us in, our team members in and say, okay, how can we try to save these trees, especially these legacy trees?

So we'll work together saying, okay, these trees are valuable, these trees are less valuable, and trying to preserve those legacy trees are really important for us anyways.

And they appreciate that as well.

Thank you.

Any other questions for Mr.

Neighbor?

Thank you.

Thank you.

Moving on to our uh budget follow-up for maintenance service center facility and BRT structure maintenance.

Who's got this one?

Mr.

Wood is coming forward.

Welcome.

Good evening, Council President, Council members, Mayor Norton, Administrator Zelms, uh, Zach Woodward Facilities here to review our uh maintenance staffing requests for the new maintenance uh center facility and the BRT vertical operations.

So with the new maintenance center coming in 2026, we are replacing two existing facilities.

There is the parks maintenance facility, which is currently not maintained by the joint facilities department, and the traffic operations building, which is currently maintained by the facilities department.

So we're going to be adding about 90,000 square feet to our maintenance team's managed space.

On top of that, the new maintenance center facility is significantly more complex than the facilities that is replacing.

So we're adding um geothermal heat pump systems, um, significant uh high performance building automation systems, lighting control, gas monitoring, emergency backup systems, and all those systems require significant more significantly more maintenance than our existing systems and these facilities have.

On top of that, when the BRT system goes online in 2027, all of the assets being maintained are going to be distributed over that 2.8 mile route.

So our maintenance team, if they're gonna have to pull these assets into their existing workload, are going to have to significantly reduce the service level that we're delivering now to our facilities, or we're gonna have to look at significantly increasing contracted services budgets to offset the work that will be happening as we take on these new assets.

Um based on best practices and their past practices.

Sorry, we looked at some of the prior service contracts at fire stations before joint facilities became in service in the city, and we were doing some of these contracted maintenance services at those facilities based on those costs and the size of the facilities.

We would expect contracted maintenance services to exceed the FTE budget that we're proposing.

On top of that, we wouldn't have any response from our staff for emergent issues as they arise.

Um, the next portion is we kind of looked at industry standard staffing levels for facilities.

So we currently have three maintenance FTEs for joint facilities serving with these facilities a little over one million square feet.

So looking at the International Facility Management Association's 2022 report for that square footage, the average staffing is about 5.5 FTEs for about 221,000 square foot per FTE.

With our current level, we're sitting at about 337,000 square feet per FTE.

And that doesn't quite equate to the actual square footage our staff are maintaining.

For example, the transportation center, former PWTLC is larger than that square footage for that facility alone.

And just to make sure we have all of our essential assets maintained, we kind of divide up fire stations with city hall, uh library maintain some of our other downtown assets to ensure we have coverage for all of our critical buildings as issues may come up with those assets.

So with that, we're about 2.5 FTEs short of kind of the industry standards.

So we're kind of proposing bringing that up to four FTEs to get a little more equitable workload for our staff and ensure we have the staffing availability to properly maintain these assets and respond to emergent issues as they arise.

And with that, I can take any questions you have.

Any questions for Mr.

Wood here?

Uh council member Palmer.

So one of the things that you're talking about is geothermal.

We have Giro Thermo downtown, we have geothermal at the at the new facility.

It's all done by computer.

So I mean you don't have a person standing there looking at it all day long.

Yeah, so it's not just watching the system operate.

We have building automation that monitors that and alerts us to issues that arise.

It's the maintenance of the equipment.

It's doing the daily checks to make sure that everything is running properly, checking equipment, pumps, fans, air handlers reviewing that building automation.

Because as we see these higher performance sequences coming in, there's a lot more potential for things to get out of whack and our energy use to start crawling up.

So there's a lot of logic that happens in there that our staff monitor to see if temperatures are running within set points.

We have alarms where if our heating and cooling systems, for example, get more than two degrees away from set point, they start alerting our staff so they can go see what the issue is.

So we are getting ahead of issues with our energy use.

Okay.

And then you you have listed here the BRT.

The BRT, isn't that a separate funding source and then being paid at completely different?

Yes.

So once the BRT comes in line, currently in 2026, this position is proposed to be fully levy funded when BRT comes online.

We estimate about 25% at minimum of this position will be charged to BRT and not be on the tax levy at that point.

So the the park maintenance building, for lack of a better way of calling it, when is that going to be completed?

Uh summer 2026.

So you don't need them for the whole year.

It's a brand new building, which I know is going to take some time, but but can't you just hire somebody for that last half of the year when the building's built?

That is an option.

There is some benefit to getting staffing on board early during construction to get them familiar with systems, work with contractors.

But yes, that's definitely an option to bring them on later in the year.

If I may, I would just point out if the desire would be to bring them on later in the year and lower your baseline tax levy, it just increases the amount of tax levy that you would have in 2027.

So not that you can't do that, but at the end of the day, the same amount of baseline tax levy would be expended.

Except that when the BRT comes online, then they would absorb their portion of the cost.

And how did you come up with 25% for the BRT?

We just looked at the number of assets and kind of estimated how much time would be required each month for preventive maintenance, and then an estimate based on the number of assets and size of the facilities, how much um on-demand work orders we would see based on our other buildings.

But is is your your international or your your your numbers are they done on square foot?

Is that what I I heard?

So it's a mix.

So the square footage is done for the FTE projection by the IFMA guidelines there.

Um that's based on square footage.

When we looked at the time for BRT, we were looking at our work order system because we have a lot of the similar assets right now.

We have snow melt, heating systems, cooling systems, ventilation, all of that.

So we just kind of looked at what those require for maintenance and estimated how much time will be required of staff.

Well, when we've done tour of the public works building, it's just a big garage.

I mean, it's a cement floor, some some, I mean, there's not a lot of it is a big garage, but it is there are significant uses going on out there that do a lot of that have a lot of taxing wear on our equipment.

So that is actually our most utilized FTE right now, is our PWTLC.

You know, those plows are going in and out every day.

We have to deal with, you know, 40 garage doors.

We have heat pumps, heating and cooling the whole building that need maintenance, um, emergency backup systems, and you know, it's 340,000 square feet, you know, throughout any given day, there's things going wrong in the building that require our maintenance staff's attention.

One one last question.

So I'm assuming if if public works used to do this, and now these guys are doing it, that we just swap the budget.

Am I wrong in that?

This is an addition.

They parts of public works' job was to do jobs that are probably not the best utilization of their skill set.

We have been centralizing facilities.

I would say part of my job was to take my trash out.

I'm not sure that that's a dollar amount, hourly dollar amount that you would want to pay.

So I still take my trash out, but I do that at seven o'clock at night.

But there's we're trying to optimize the people that we have.

And when they're out in the plows, we need all of the public works operators to be out in the plow and the sand trucks.

They are not available to maintain the building when the alarm is going off when we have a storm event, uh, whether that's a winter storm or a summer storm.

Those are things that just don't get done.

If folks can gather, we are going to get started again.

Council members, if you can uh make your way to our beautiful dais here that does has for Michael on top.

And I just wanted to say to Councilmember Palmer, while we're here, you know your legs are visible to the audience.

And Mr.

Parish is going to start this one off.

And the budget is one way, and your policy making is another way, and there's a lot of other opportunities to do that.

So we'll start off just at a high level.

So again, realize that some of this information is a bit dated.

But what this was in twenty twenty-three was an opportunity to say how do we live out our sustainability value and foundational principle.

Um, but again, snapshot and time.

Uh least we can't, you know.

No.

Okay.

Slide a hand.

Uh, but but that was I'm not gonna go through all those, but again, an effort to address a similar conversation.

More recently, you've been engaged in you know, our action plan, which is really sort of the roadmap for how we're gonna try to live out the environmental stewardship strategic priority now that you uh have adopted.

You'll actually see the action plan at your uh next council meeting.

So that's you know, yet to be ratified.

So I just want to acknowledge that as we walk through this.

You still have opportunity to weigh in on that.

Um, these are the different goals uh to achieve uh and live out that strategic priority within this two to four year period of time.

Um, and again, not going to go through all these.

You've spent some time already at a study session doing that, but you know, if we talk about you know how we're living that out in the environmental stewardship space specifically now, uh active transportation, you know, we're hiring a mode uh court shift coordinator that's really designed to think about alternative means of transportation.

The county is starting up with their trail planning in 2026.

We want to be actively engaged in shaping you know what that means for active transportation and recreation and in Rochester.

And so, you know, we don't do all these things, but we want to be engaged.

And you very distinctly said you want this to be a community priority and an organizational priority.

So we're always trying to live in uh both of those uh spaces.

We are going to talk later about city fleet electrification.

We mentioned that earlier when that question uh came up.

Um, there's a lot of just money questions in there.

I mean, that's at the end of the day.

Um, we'll talk more about that at the next meeting.

Uh, you're talking about transportation electrification, the community.

How do we have community level charging?

The team has brought you that information in the past, and you're working on finalizing policy in that space.

So, again, not a budget item, but a policy item, and you can influence a lot in this space through smart uh policy and smart land use policy.

You have your comp plan update uh also on next month's agenda.

So also be thinking about that building energy, another way to make progress in this space.

I would say this is like the signature anchor initiative, though, um, and how we're going to accomplish and make progress on greenhouse gas emissions.

So RPU and they are on your agenda later in September is going to be talking to you about the six percent rate increase to get you to 2030 um with you know renewable energy by that point.

And there's also that discussion about you know, might it be a little bit later than that uh with a different rate trajectory?

They're doing surveying around that and doing excellent work there.

Um, but at the end of the day, if you move forward with that six percent rate increase over a number of years, um, you're lowering your uh greenhouse gas emissions related to electricity by 70 to 90 percent.

So major investment, major accomplishment, well ahead of many other communities in that space.

And so if someone asks you how you're living out your environmental stewardship priority, this is maybe the first thing I would talk about.

Um also uh the RPU uh team has invested 34 million in advanced metering.

That's an active live project right now to help people at the individual and at the organizational level uh manage their own energy use and you know provide more active management of that through metering.

Uh, we're continuing on with some of the legislative requirements around commercial benchmarking at 50,000 square feet or more.

Uh, we have funding from the state to extend a limited term uh position in that space.

Um, but again, trying to get you know more people thinking about well, how can I manage my energy well in the building ties back to what Zach you know was just talking to you about also.

Uh then lastly, again, this is sort of like some of the things we do in the framework that we you know already operate in, but beneficial electrification as well as um energy efficiency investment that RPU makes up to $3.2 million a year.

So just uh looking at how that also weighs in uh to things you talked, just talked about Arboris.

I won't belabor that point, but we believe that reflects your environmental stewardship priority as well.

And then we're going to uh transition, you put it in your work plan to talk about the natural gas front, uh natural gas franchise fee.

We'll talk about that momentarily.

Um, and the uh the uh sustainability team has really done a lot of great work in sort of prepping uh that.

So before we transition into a bit of a deeper dive on natural gas franchise fees, are there any thoughts or questions or reflections on how we're walking in the action plan space?

Uh council member Miller.

Yeah, thank you for providing some of these.

I know I asked for a lot of these updates at the last meeting.

Um but I I guess one overarching comment is one two things I don't necessarily see uh thinking about this, but have been adopted or the energy action plan and the sustainability and resiliency community work plan.

So, how much how does that inform some of these actions?

What's driven from those adopted documents into this versus our discussion in this strategic priority setting?

Yeah, I think that's a how do they interact?

Yeah, your honor.

I think that's a great plan.

So this is a great plan.

A great question.

Um, but it does really get into sort of this layering of plans, right?

We have a lot of things that flow in from you know, getting us to the point of the action plan.

So you've got the comp plan, you've got the mayor's work the for the 2050 work, you've got the sustainability and resiliency plan, the energy action plan.

You know, we're trying to take pieces of all that and say, what can we do right now to make those happen?

So in a short level, I think that's really how we how we look at it.

And I appreciate that.

And I also want to just highlight like this 2023 overview of uh environment economy, social equity.

Like we're we see that in December 23 and we see it today, and it's I just don't see an opportunity where we're really tracking these.

Like again, the sustainability and uh the energy action plan has goals, community work plan has some goals, and I just don't see like the reporting of how we're tracking that over time.

And to the point about RPU, and I'll uh talk about this too, but like how are we talking to the community about that that carbon intensity reduction?

I know like Excel has some interesting dashboards about their grid carbon intensity, but like I just wonder how communication gets built into this and how we track this over time and measure that progress towards the goal versus hey, in 2025 or the 26 and 27 budget years, environmental responsibility is now a priority of the council, but like it's also been adopted in ways in the past by prior councils.

Yeah, your honor, I I really think that um when you see the uh action plan come forward to you next week.

Uh, one of the things is how do we measure progress toward these goals?

And you know, I think we're gonna definitely have some you know dashboarding that happens with this.

I mean, clearly in this area, it's you know what is happening with greenhouse gas emissions and how are we measuring that?

And so to keep that more front forward, I mean, these it's great to say like, do we accomplish what we talked about in 2023?

I don't think that was really the intent of that exercise was like snapshot and time, what are we doing here?

Um, but over time it really is like what's happening with that.

And so each of these key goal areas has an indicator that we're trying to walk with, same with housing, same with you know, all the other strategic priorities that we have as well.

I appreciate that.

And final comment on this, and I know this was a comment that I made at the last study session as well.

But looking at this at like even in the 2023 document, I mean stormwater management, whether that was a priority or not, we would be doing stormwater management and understanding what's like a city service versus a responsibility that we have to our community and to planning uh sustainability and our environmental approach.

I think there's a nuanced difference there, and I know that quality services we remove from the council priorities, so maybe that just makes it harder to neatly fit things into buckets, but uh just look at the services that any city is providing, and then what are we doing based on the conversations that we had earlier this year?

And like, how do we just create a little bit of separation there and what we would do anyway versus what how this process is interacting?

If I may, I I would just maybe push back a little.

Not any service is providing the level of stormwater management that we're providing, the level of treatment of wastewater, the level of energy reduction in our wastewater treatment processes, the level of energy reduction in RPU's ability to provide energy to the community.

So I don't know that we can measure ourselves against most communities.

Um, and so the amount of dollars that we're putting into stormwater management in order to be able to offset the impacts on the environment, which is a big part of stormwater management, is not insignificant when you look at both the capital and the operating model, and they're also layered together in such a way where we don't just have a stormwater management team, a wastewater management team, a streets management team, a parks management team, they all come together to provide those services.

So it does become challenging to report it in buckets because it's not how city work gets done.

When somebody has a spill or report something on a street, that's the inspection that happens is often a wastewater operator.

The street sweeping that happens is often in the streets department, and some of the support that happens on a major scale is coming from directly from stormwater fees.

So we if we were going to put them all in buckets and show them, it would be very difficult to keep your budget in a reasonable level and to operate in an efficient way.

I think we can show some of them to deputy um deputy city administrator parish's point in your strategic plan, action plan.

I'm not sure they're all gonna be measurable from a dollar and cents perspective or bucketable that way, unless um, well, it would we would have to really change our budget management.

No, and I don't want us to re do our budget process.

I I just again want to make sure that we're tracking and communicating what we're doing because of some of these council priority resetting conversations we have and and also just generally when plans get adopted that have contemplated metrics that are being tracked, like how are we making sure that we are tracking those and reporting back to both the council and the community?

Um and I appreciate the the level of service that we provide from stormwater, and absolutely that's part of our environmental responsibility.

Um but just want to make sure that we're clear in the the services and where the the city service is expected versus what we're doing in addition to on some of these things.

I think is and again, not to track in dollars and cents, but just I guess that's also just maybe a conversation that we continue to have with the city council because I adhering an art to the science, and I think it's in the eye of the beholder how someone would necessarily track what is a baseline requirement for any city versus additional support for any of the different services that we provide.

If you asked uh somebody in parks, they would say they could never have enough forestry people.

So their baseline is real different than somebody else.

So I appreciate the comment.

And I think that some of that is requires more dialogue to understand what counts and what is the majority that counts as a baseline versus additional.

And it probably goes into my question, which I'm looking forward to the future analysis of the city cost of services and how we factor that into the development patterns and some of that analysis of per revenue or per park per acre property tax and and cost of service allocated over the city.

So I appreciate the discussion, look forward to more, but just want to make those comments.

Councilmember Keene.

Yeah, again, I appreciate again what you tried to show as part of 2023, just this long thing.

Because I think part of the concern I have with this discussion is that umbrella of sustainability and how big it can be.

I could almost cringe a little bit, seeing our first two goals are greenhouse gas oriented, but I think those are some of the big things we're working on.

I I also take issue with this council member Miller's view of like if you have to do these services, you shouldn't take credit for them because you must do them.

And the fact is we're doing them differently because of some of these values we have, and I think we should be leading with those.

Um I you you've talked of things that we point out, some things that aren't there, but um this the work that's starting up now about water and long-term sustainability for water, these are really important things going on, and we're doing them different than other people are doing them.

Um, I I've had people call, and their biggest sustainability issue is litter and plastic bags and things like that.

And we're not doing much with that, but we have a little bit better, and we have these things that we're doing in the community.

So I want to say we must continue to talk about sustainability as a bigger issue and not just uh a department that's doing four things.

Um I so I I'm kind of counterbalancing there.

There'll always be things like rebate assistance that we just aren't getting to or aren't successful with, or you know, the amount the electric fleet getting built up really quick.

I I don't think we should let those things to get us to the point of saying we're failing in the sustainability.

The sustainability goal, again, it is one of these things too that's in conflict in many cases with um affordable living and things like that.

And we have to work through some of those things.

And my take is the city of Rochester is doing that responsibly.

Other comments.

I'll I'll just weigh in.

I I agree with the approach that uh both council member uh Miller and uh Keene suggested.

I think what uh what I'm hearing from council member Miller is that we need we'd like to see where, as I mentioned earlier, where these seeds are happening that are moving the uh the uh priority or the strategic priorities, uh, namely here uh sustainability and whether that's a budget issue or if it's the objectives of the FTEs, are they moving their their job focus?

Uh and also I think kind of to pull in what council member Keene said, and and uh what I heard in that is that that there is a lot going on, and uh and I think that from a from an uh overall standpoint as a council, what I want to see is kind of where is this culture change happening that people, everybody, whether they work at RPU or public works or community development or uh in finance, that they're thinking how can I do things better that that are either uh focusing on sustainability and kind of that future look and and making Rochester a thriving city uh for the future uh when it comes to sustainable environment.

So that's kind of my way of kind of pulling that together.

But thank you, Mr.

Parrish, and uh I is uh Mr.

Parrish is continuing, Mr.

Parrish is continuing.

All right, your honor, thank you.

So just a little table setting for this.

Um, I'm gonna present this, but I want to also acknowledge uh uh Mr.

Luxtein and and uh uh Kayla Silvia, thank you.

Um they've done a lot of work in this, uh a lot of work in this space.

And uh they're certainly here to also you know offer any perspective and questions uh that you might answer any questions that you might have.

A little table setting for this.

Uh, we've talked about natural gas franchise fees a handful of times over the last few years.

Um most recently in the context of how are we going to fund and invest in streets?

Uh it was sort of uh as we were contemplating sales tax and we pursued the sales tax, you know, with the street funding, you know, we're looking at like what if we don't receive that and what are alternatives uh in the future to invest in streets.

Um I'm sure you know, our public works director would say we still have a long way to go in streets, and I think you know, there's still a lot of unmet need.

Um, we still have a lot of unmet in facilities.

We have a lot of unmet needs and liabilities throughout the city.

So we just all acknowledge that.

Um, so I'm gonna try to present this in sort of an objective way here.

Um, and just acquaint you with the conversation.

Um, what are franchise fees in general?

For those that haven't been acquainted with this, it really is a charge for the utilization of our right-of-way in general.

Um, private entities are making profit over the use of our right-of-way.

Um, you might not be surprised if we go and ask to use private property, we generally pay for it.

Um, and quite handsomely, uh, to add that.

Um, but really it's uh that and then just the ongoing management of all the work.

There's some privileges extended to folks that have a franchise agreement um where they have access to manage their asset in our right-of-way in different ways than others.

Um, so just uh thinking about it uh ultimately that way.

Uh, there's a lot of different ways to think about it.

I would just say natural gas really is the outlier here.

Um, we have what is in essence is a franchise fee for almost all other uh we'll say utilities um in the city.

And so you think about stormwater, wastewater, water, electric, parking, they are all paying you pilot, which is in essence the government way to say franchise fee.

And so they're paying for the use of right away um to deliver something that you know you could either be publicly or privately delivered um for some economic benefit.

Uh right now, all the proceeds of those funds generally hit the general fund, and you've seen that in your budget presentation.

Um, it's they're generally realized as a revenue uh to the general fund at this point in time, they're not dedicated to something specifically.

Uh, options.

If we were to look at options for a natural gas franchise fee, how might we do that?

Um, and I would just want to set the table on this a little bit.

We're giving you the baseline information here.

Um, the intent if you were interested in pursuing this would be to have a more robust engagement process, talk things through the business community will have feedback for you on this residents will have feedback to the point earlier from council member Keene, you know, you have to balance affordable living and other values with these types of fees.

Um, these are fees generated off of heating in large part, and so some people don't you don't get to decide you know whether you want to heat your home in the winter, it's part of you know what's important, um, obviously for just general living and quality of life.

Uh three kind of ways to look at how you could do a fee like this.

Uh, one is a flat monthly fee.

So you just say you have a meter, a natural gas meter, you pay.

Um we ran some scenarios.

Uh one version of this would say you could generate one million dollars.

It's pretty easy to explain, you know, you two dollars uh for a residential account, five dollars for a large commercial account.

Um, I would also say however you do these, you know, we have entities we pay natural gas as a city, RPU is a fairly substantial wholesale natural gas purchaser, so things might work their way into rates otherwise.

Um, so you have to also recognize the way we do this impacts other parts of the of budgets that you all are responsible for.

Um, but it is very simple to talk about like a you know, everybody pays two bucks.

Um, it's very easy to convey.

You can navigate um your revenue here by increasing the amount.

So maybe large commercial users at five bucks a month is too low.

You know, male clinic would pay five bucks.

Um, some other large user would pay five bucks.

So these are you can generate more revenue by having more of a conversation about your rate structure here.

Uh per therm.

Uh this is really just saying like you pay based on your consumption.

Therms are just how you measure natural gas.

Um, in this case, if you went with a 0.015 per therm, you could generate 1.52 million.

Again, you could charge more per therm, generate more revenue.

Um, the one good part of this is it does tie it to energy consumption, right?

So if you decide to use more natural gas, you pay for more for natural gas.

So the idea is like you know, water rates where you're paying more for summer watering, you want to discourage that so you pay higher.

With that being said, some of our folks that live in more modest homes uh don't have the weatherization to the homes, they might be paying more or have more utilization, more therms, um, because you know, their their homes aren't as energy tight uh and and as efficient.

Uh another option, um can you hold there, Mr.

Parish?

Uh council member Miller.

And you're probably getting to this, but often these funds are used by cities to fund exactly the programs that help those customers who have poor weatherization, fund the improvements that reduce their energy costs.

So, again, thinking about affordable living and how these things interact.

It is a broader system than gas use is fixed.

You got to heat your home.

Got a leaky old home.

But exactly this point is often contemplated of how do you fund these programs.

So just to bring in the intersection of these.

Yeah, we are absolutely going to get to that.

So um, and then lastly, you can just say um, much like we do for our city entities or some variation.

Again, there's a lot of different you know, ways in which we charge our folks uh for uh pilot and franchise fee, but you could just say it's a straight percent of revenue, a very normal thing to do out in the marketplace.

Uh, Merck is not particularly a fan of this, uh, but if you did five percent of revenue, um, which would be on the low side of what our city um folks are paying, uh, you could generate 2.4 million uh for that.

Um, the natural gas provider will let their folks know that this is a charge by the city on the bill.

Like this is, you know, there's not like this isn't blend into the bill like they you know, call it out and let people know that this is being charged that way.

Uh so again, some pros and cons.

I kind of went through some of these, so I won't be repetitive, but some of the pros and cons are articulated uh more specifically there on the flat fee model.

And you know, I again I'm not gonna read these to you, but I think I covered them generally when we just uh talked a moment ago.

Um same same thing for the uh you know per therm model with no inflation.

Um, and then uh again, uh you you can start uh you know, and graduate yourself into a per therm model.

Um so here you could just project some escalation as you move along.

Uh therm usage again.

Your goal for therm usage would that be going down, but that's not exactly what's happening right now.

Um, so much like our charter revenue um or our spectrum revenue, it's a declining enterprise every quarter, it's less.

Um, you know, in some regards, if your policy objective is to reduce the use of natural gas, like that would be you'd be accomplishing your mission there.

Uh and then percentage of utility revenue.

Um, again, uh their revenue can go up and down.

So there would maybe be some potential for variability there.

Um, and it doesn't necessarily tie as strongly to some of the other conservation focused goals.

Um, but generally utility revenues go up.

And so I would say generally you could expect your um pilot or your franchise fee to go up here in that model.

Uh now this is I think to getting to the point that was talked about uh before.

Um, if you do such a thing, how how might you invest the funds um to the betterment of the community?

Um, and so here are your options.

Uh, you and again, there's other here.

So if you have other ideas, here's the opportunity to do that.

Um again, just add it to the general revenues of the city.

Uh, in essence, you could lower your property tax levy.

That's in that's generally what's happening with your other franchises right now.

Um, you could direct it to some other need of the city.

I put a couple in there because you've had conversations about those, but it could be anything, could be parks, could be anything else that accomplishes any other strategic priority uh that you have.

We'll spend more time now though, uh, talking about investing it in your environmental steward strategic priority because again, natural gas does have that linkage to you know, fossil fuel utilization.

How are we going to encourage people to rethink uh their use of natural gas?

Um, and so we'll spend some time talking about how it could be used in this context.

Uh, working idea is you'd have two buckets of investment.

One is uh at the community level.

Um, I think there's a notion here that it would be proposal focused.

We would work with partners, you'd have whatever ultimate revenue you have here, um, and and invest that.

I I think we would you know talk about like you know, we have some overhead with how this would work and could this be, you know, would you take 10% to invest it in our overhead and and management of of these programs and the infrastructure needed to get the money, you know, out to where it's going to be most beneficial.

But uh Councilmember Miller's point earlier, this is about weatherization.

You could target that to you know, in you know, uh lower income levels, uh focus on energy efficiency, weatherization, uh, getting people to beneficial electrification for vehicles, et cetera, and appliances, um, thermal energy network pilots.

Um, you know, with some of the tax credit environment change, you know, there's still opportunity there.

It's not totally closed off, but like, you know, it does require investment uh to you know get those things to work.

Uh organizationally, again, we talked earlier.

You know, how could we do better with EV uh fleet?

Um and I'll just say I I get to work on the fleet allocations, which is maybe not the most fun thing I do all year because it can be disappointing uh to folks at times.

But you know, we we haven't been with the funding we have available, we haven't been able to make that next step uh in the EV space because we just we're so far behind.

And to Administrator Zelm's point earlier, the cost escalation is so significant.

We just haven't been saving enough to replace what we have.

So we just haven't been putting enough money aside.

So we've had to recalibrate uh that uh green infrastructure projects, tree planting, active transportation investment.

These are all things that could be uh invested in.

Uh so again, a recommendation uh on how this could happen.

I think there's a general orientation toward per therm for all the reasons that were mentioned.

Um, but it might be a hard start, right?

Hard to explain, hard to socialize.

So I think uh looking at it and saying we'll start off with year one to three with a flat monthly fee just to get it onboarded, get revenue sort of stabilized, and then transitioning to per therm after you've had a little bit more time to socialize it and think it through.

Um gives people time to uh I think this is a really key point that the team came up with.

It gives people time to think about what's my energy utilization like what can I do differently?

So it gives people some time that uh to the point you're seeing a number of folks now enact natural gas franchise fees that are very targeted, like this.

Um, so from a city best practice perspective, you're seeing more of that happening, particularly in the Twin Cities uh area.

Um, and then again, it ultimately gets you to that conservation mindset and linking it to greenhouse gas emissions overall.

So we're saying half the money goes to community uh competitive community generated projects, half for organizationally focused environmental stewardship priorities, um, and then really just kind of thinking about what is the strategy look like for you know what people would find to be meaningful for the investment of uh these funds with you know, if this is something you're interested in entertaining, of course, not doing anything is always an option too.

I didn't put that up there, but it you know, it is always an option.

Um, but before we go out and engage around something, we want to have some perspective from the council that there's license to want to work in in this space.

So with that, it would I think we're all happy to answer any questions, yeah.

Council member Wall.

Thank you.

Uh while I think this can be a valuable uh discussion, I don't think this is the time.

Uh if I thought that this were actually a franchise fee and a franchisee who's actually paying a fee uh out of uh their earnings, uh, I might be for this.

But the fact that it's a tax and a regressive tax at that on uh each uh homeowner and business owner in the city at a time in which we're saying, you know, we'll add six percent or or four percent to your electric, only an average of ten dollars a month.

Uh we'll add two percent on water.

Uh those things just add up.

And so uh this would be a hard no for me at this time.

I can see the benefits, just uh I just uh don't think that we need to levy uh another tax on uh the citizens of Rochester right now.

Council member Palmer.

Well, I'm in favor of it, and there are a few reasons for it.

I think um to take the dollars and take it off our our um property tax, I think is the number one issue for me.

It could uh reduce people's property tax, which I think is a good thing.

Um, I think the per therm way of doing it is the best way to do it because it makes you want to reduce your your energy bill and allows you to do that in in Mr.

Wall's 100% correct, it's a pass along, you know, as Mr.

Perr said it's gonna say gas franchise fee right there from Rochester.

But I think you said it's going to go to your property tax.

The nice thing about it is that it exposed all over every everybody who uses gas in Rochester pays it.

Not everybody in Rochester pays property tax.

The other thing I'd like to see us do, and I think you could do it pretty easily is um I don't see um putting in an RPU and having that exemption for them so you're not double whacking um our our our homeowners with that.

Um so that that's where I come from.

I think it's a good way of reducing your budget.

It's a good um uh thing to incentivize um people incentivize people to uh um be energy efficient and save it, um, save money.

Councilmember Miller.

Yeah, thank you.

I I really appreciate the presentation uh because I think this is a key area of how we do the longer term planning, particularly for how we help people reduce that cost ultimately, because I think to the the point that council member wall is making, I completely agree.

Like there are rising energy costs, they're rising costs all over the place.

And I would just point out uh Excel Energy had a full page ad as required in the post bulletin this weekend advertising that for 2025 they are proposing to the public utility commission nearly a 10% rate increase this year and then another 4% increase next year.

So energy costs are going up, they're federal changes, and I think to the extent that we can help people reduce that energy cost for the long term, whether they're heating home or home and gas, electricity, some combination thereof, we're helping people reduce that energy burden.

I think that's an alignment with our strategic priorities to reduce greenhouse gases, but also understanding that affordable living, how we're helping people get to a better place, a more sustainable place, both financially and from an environmental perspective.

So I think that to the mayor's point about council salaries, like we can keep pushing this off, and the problem doesn't go away.

Um Mr.

Nigber earlier said we're seeing the effects of climate change over and over and over.

And so we could say, yeah, you know, like let's not push this into the the near term, but we cannot avoid these rising costs in the long term.

And I think that many cities are showing this is a best practice, and I I really look forward to further discussion on this.

And I think it's it's an issue that we have to take up.

And so I appreciate Mr.

Palmer's perspective too.

I wouldn't necessarily look forward to it offsetting property tax levy directly.

I would look for funding those programs that make it not a regressive tax that'll help people reduce their cost.

Councilmember Keene.

Yeah, just uh one question in my comments.

Uh, when you have a franchise or franchise fee like Metronet or somebody else does, is there any access they get uh cheaper or easier to the right of way because they're a franchise?

Or is it the same cost whether they're a franchise or not?

I believe that's the case, but I'm gonna defer to Tyler.

Yeah, when we're talking about general costs, um, typically if they have a franchise agreement, their access to the right-of-way specifically is not charged, right?

They're they go into public spaces or they go into existing uh public utility easements.

However, um they are charged for the permit fees and yep and items like that to review the routes and as part of their submittals.

Yeah, I guess here's where I'm at with this right now.

I I uh generally would not like to do something like this because I do consider it regressive.

Um, but I'm trying to, I'm open to it for a couple of reasons for a couple of reasons.

One is to find a funding source to be able to do some of these environmental initiatives that we want to do without having that go onto the uh onto the levy.

And I I do like the idea that since it is contributing to greenhouse gases and we do it through therms, I think it would be defendable as uh a franchise fee that's funding environmental uh stewardship.

Uh but but I think the the devil's in the details.

If we're going to you know uh have them collect this money for us, but we're going to then get less uh funding for working our right-of-way, and we're gonna have a bigger expense in RPU.

I don't think we did ourselves any favors.

So I think that there's a lot of details to work out.

I so I am open to this, but at a fairly minimum thing.

This is like we're looking at this as like a one 1.5 million right now, but as it grows, um, and I think this is there's probably 40,000.

This mirrors our water meters uh pretty pretty clearly.

So um so I again I'll I'm trying to be open to it, but uh you know, I'm not there depending on the details.

Councilmember Wall.

Yeah, right to what I was talking about.

I was looking this way to see if there were others.

I was I thought he was looking that way too.

Um I think uh uh council member Palmer is living in hope uh as regards the the levy, and I think that uh Keene and Miller have more accurately said this is likely to uh fund things that we aren't currently doing.

So uh I I would not uh go I I don't believe.

I don't believe uh it would uh uh reduce our levy in any way.

Again, I think it's a valuable discussion.

I think we're already as a community and as taxpayers investing heavily in clean energy uh over the next many years with the increases that are already uh proposed for uh for our uh utility bills.

Council member.

I definitely believe in being environmentally responsible, but I do know this about uh I'm pretty sure vast majority of my constituents, they're not real comfortable saying, hey, we as a government entity or an entity are gonna take your money and we're gonna do what's best for you.

They're just they're not comfortable with that.

Uh they if they want to make improvements to their house to save energy and such, um, they're gonna do those things on their own.

Um, I'm not so sure they're gonna file through all the programs and do all the stuff that you need to do to sign up for said program, this and that.

I just I just think it'll be solar grapes for people if you say, hey, we're gonna take your money and do what's best for you.

I just I don't I don't I'm kind of on the walls camp on this one.

Councilmember Doring.

Yeah, I'm very much in favor of pursuing the franchise fee uh for natural gas to uh to incentivize um uh combating uh climate change and and and for funding uh uh more robust um initiatives uh uh for environmental stewardship.

So I would I would be excited for further conversation.

I think there are a great many details still to be to be worked out.

So I do have that same hesitation uh that uh council member keen has uh as we uh continue to to move forward, but I would encourage us as a group to continue to move forward and work out those details um so that we can implement uh a franchise fee on natural gas.

Uh just to uh so that we all have weighed in.

I I also am very intrigued by the discussion and want to continue to the discussion.

I am particularly interested in the community focused uh on uh the residential commercial new construction and really giving back what we're we're going to get uh with the franchise fee uh to uh to our residents and uh and property owners.

Yeah, I believe administrators.

I'm gonna go to Mayor Norton and then administrators.

Thank you.

So a couple things I would mention, I agree with what I think is the majority that this is interesting to look at, and I hope we can continue the discussion.

Um for the eight years I've been on, this suggestion has come up time and time again as almost an unfairness in the community that there are folks that have access as was described and pay a franchise fee, and then there's this one that doesn't, and that there's an unfairness and the ideas come forward for years that there are things we can use it for.

And I think that's part of the important discussion that we do with what we do with that money.

It's not just collecting money to collect money, it's collecting money to offset you know, it to deal with climate change and greenhouse gas emissions and to offset the costs on the on residents who are struggling as well.

So I think that's a discussion we have to have moving forward, and I I hope we do it.

Sounds like maybe we have interest to do that.

So I look forward to moving ahead with the discussion.

Administrator Zowns.

Uh thank you, Council President.

This might be repetitive based on what's been said, but I was a little concerned towards the beginning.

This does I don't think this would implluence your 2026, 2020, maybe 2027, but just even the franchise fee implementation process outside of engagement and inside of statutory requirements.

Um it's not a short process.

So additional discussion important.

I just want to make it clear that I don't think this will influence your 2026 budget, maybe 27, but even then it could end up being something that ends up needing to be um like a budget amendment or something like that, depending on your public engagement and then just the franchise fee process that that is in place for the state.

Okay.

Anything else, Mr.

Parrish?

Yeah, I think we have some direction to bring forward a process to you to consider and how you might advance the conversation.

So great.

Administrator zones.

What's up next?

Um, we will just go back to the beginning, which is September 15th is your next study session.

You will be in this room in some configuration.

Um, we will have a deeper dive into the electric vehicles and equipment revolving fund, um, whether that's EV charging, EV vehicles and the equipment revolving fund, um, just information about how that's continued to evolve.

Um, the collaboration on um how how we've been collaborating with Rochester Community and Technical College um facilities there, um, potential evolution.

We have some discussion happening there.

Just understanding for the city council um what you've inherited and what opportunities might exist.

And then as I mentioned, Rochester Public Utilities has some fee proposals that they want to bring forward that didn't make it into the discussion that we had in June for the fee schedule.

And then although it says other, we will name it as public music.

Patriotic music.

We don't always do only patriotic music.

But did just want to point that out.

And then your next, so you have your next study session on September 15th, and then your voting meeting on September 22nd is when you would need to establish your preliminary levy.

And for those who aren't aware, the preliminary levy is the levy amount that you cannot go above any time further.

And so lots of great discussion today, helpful as we move through the 15th and into the 22nd.

So if there's any final feedback, questions, discussion, happy to take that.

Mayor Norton.

September 22nd is my birthday.

So I would like