Rochester City Council Study Session - September 16, 2025: Budget, Fourth Fest, RPU Fees, RCTC Partnership, and Outside Agencies
Rochester City Council Study Session - September 16, 2025
The Rochester City Council held a study session on September 16, 2025, to discuss the recommended 2026-2027 operating budget, including Fourth Fest programming, RPU fees, the equipment revolving fund, the RCTC partnership, and outside agency funding. The session also covered the study session schedule. No formal votes were taken; instead, the council provided direction to staff on several items.
Discussion Items
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Fourth Fest / Fireworks Programming: Director Avital Rabinovich presented three options for the city's July 4th programming: Option A (multiple acts and fireworks), Option B (community band and fireworks), and Option C (patriotic radio broadcast and fireworks). Staff recommended Option C, which preserves fireworks on July 4th, partners with a local media broadcaster, and frees staff capacity for 17 other summer events. Councilmember Schubring inquired about attendance and the potential for a community partner. Councilmember Miller questioned radio audience reach. Councilmember Fredericks noted the community band's interest in performing at Cascade Lake for a $1,000 donation. Councilmember Wall supported the community band option. Councilmember Keene supported Option C, citing staffing challenges. Councilmember Palmer preferred maintaining the current model. The mayor suggested exploring a broadcast partner while keeping the community band at Cascade Lake. Councilmember Schubring proposed a hybrid: pursuing a broadcast partner and having the community band perform at Cascade Lake. Staff indicated that the community band is already planning to use Cascade Lake, and the council's direction was to move forward with Option C and the community band as a separate event.
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RPU Fee Updates: Tim McCullough, RPU General Manager, presented two items: (1) a $3 per transaction convenience fee for credit and digital wallet payments, and (2) a 9% increase in the water availability fee. The convenience fee is designed to offset rising credit card processing costs ($650,000 annually) and align with RPU's cost-based charter. Councilmembers supported the fee, with discussion on customer notification and auto-pay logistics. The water availability fee adjusts for inflation in water storage construction costs. Councilmember Palmer raised concerns about service availability in certain areas. Council consensus was to include both items in the 2026 budget.
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Equipment Revolving Fund and Electric Vehicles: Aaron Parrish, Deputy City Administrator, provided an update on the equipment revolving fund's health, noting $17 million in fully depreciated assets and challenges from inflation. He discussed the city's electric vehicle adoption (14 EVs, 6 hybrids) and the need for charging infrastructure. Councilmembers asked about vehicle procurement, the cost gap between requested and budgeted replacements, and long-term infrastructure planning. No action was taken; the information was received for budget consideration.
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RCTC Collaboration: City Administrator Zelms and Deputy Administrator Parrish reviewed the history of partnerships with Rochester Community and Technical College (RCTC), including the field house, dome, and outdoor fields. They highlighted $24 million in identified capital needs, ongoing operational costs, and the 365-day termination clauses in agreements. The council discussed improving community access, awareness, and the possibility of a short-term MOU to address immediate issues. Councilmember Keene expressed reluctance to invest without operational changes. Mayor Norton advocated for investing in the RCTC facilities to meet community needs. Councilmember Schubring emphasized starting with agreements, then operating model, then facility enhancements, then financing. Staff will continue discussions with RCTC and bring back a proposed MOU.
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Outside Agency Funding: The council reviewed the recommended budget for outside agencies, including a proposed reduction of $15,000 for Southern Minnesota Initiative Foundation (SMIF). Mayor Norton opposed the cut, citing SMIF's investments in local nonprofits. Councilmember Schubring suggested funding SMIF for one more year with a discussion on Rochester's priority. Councilmember Palmer supported the cut, noting SMIF's large budget compared to local agencies. Councilmember Keene supported the reduction but acknowledged SMIF's work. Administrator Zelms clarified that adding $15,000 would require adjusting the levy. The council also briefly discussed increases for Civic Theater (15%) and Rochester Fest (20%), with Councilmember Keene expressing concern. No final decision was made; the budget will be revisited at the September 22 preliminary levy meeting.
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Study Session Schedule: The council noted upcoming sessions, including a September 29 study session with updates on RPU power supply, communication and engagement, and a closed session for the city attorney's performance evaluation.
Key Outcomes
- Fourth Fest: The council directed staff to implement Option C (patriotic radio broadcast and fireworks) for 2026, with the community band performing at Cascade Lake as a separate event. The city will explore a media partnership for the broadcast.
- RPU Fees: The council gave consensus to include the $3 credit card convenience fee and the 9% water availability fee increase in the 2026 budget.
- RCTC Partnership: Staff will continue negotiations with RCTC to draft a short-term MOU focused on community access, scheduling, and operational improvements, with a report back to the council.
- Outside Agency Funding: The council will decide on the SMIF funding and other adjustments at the September 22 preliminary levy meeting, with the current recommended budget showing a reduction for SMIF unless the council directs otherwise.
Meeting Transcript
We're going to get started. We have a pretty packed agenda for this study session. Administrator Zelms is going to start us off. And then we'll hear on the agenda is some budget items. The fourth fast. We're going to hear from Tim on some RPU fees. And then we'll hear from Aaron on equipment revolving. And then we'll hear about the RCTC collaboration possibilities and then rapid wrapping it up with more discussion on outside agency. So hopefully we'll get out of here. Administrator Zelms said two hours. I think maybe two 50. But it's up to you. It's up to you, as I like to always say. Thank you. Councilmember Palmer is here, so it will be at least eight minutes longer. 30 minutes. Thank you, Council Council President, Councilmembers, Mayor Norton. I am just gonna, of course, as we always do, do a very quick recap. Um, obviously, we've uh really centered uh some of your strategic priorities and foundational principles in the recommended budget. Um, we are in our third study session on the budget, and um just as a reminder in honor of the mayor's birthday on September 22nd, we will be coming to you to ask you to set the preliminary levy. Um that is the time after which the levy can stay the same or go down. Um, and then your budget hearing and budget adoption is scheduled for December 1st. So very first day of December. Um, we will be coming again. We do have one other study session held. We will probably start adding some things to that unless we hear a lot of questions on September 22nd or today. Um but we do have a little bit more time held in case there's um anything that you um still need to talk about between the preliminary levy and the final levy. Um, folks will also get that um just separate awareness December 1st date when they get their tax statements um in early November. So that is probably our greatest form of communication is when people open up their tax statement and hear when the various taxing entities are going to be having their public hearing for the tax levy. And as the council president pointed out, um, we are going to start with uh a little bit more follow-up on the fourth fest and fireworks. Fireworks have always been planned to be part of your budget, just for clarity. Um, and uh director Avatal Ravedewicz will come up and share some of that information. So with that, I will turn it over. Good afternoon, council members and mayor. Thank you for reviewing my report. That is not my report. Uh-huh. The other left. Okay. So today I am asking you to select a delivery model for the city's July 4th programming. And as um administrator Zelms said, there will be fireworks. This is not a discussion of removing fireworks. Want to be super super super clear about that. So in recent years, the city has produced fourth fest as a concert with multiple acts and fireworks. That model is no longer sustainable without new ongoing resources. So the three options before you are option A, multiple acts and fireworks, option B, community band and fireworks. Option C, patriotic radio broadcast and fireworks. And the music department recommends option C beginning in 2026. Option C keeps the fireworks on July 4th itself, pairs them with a partner produced patriotic broadcast that reaches residents citywide, and right sizes public music's footprint. So our three-person team can sustain a full summer season of 17 events.
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