Rochester City Council Meeting Summary (December 1, 2025)

The December 1, 2025, Rochester City Council meeting began with public comments regarding business licensure enforcement and property taxes. The Council proceeded to approve the agenda and consent calendar before holding a public hearing on the 2026 property tax levy, operating budget, and capital improvement plan (

Consent Calendar

• Items F1–F7 and F9–F10: Unanimously approved to be blocked and passed without separate deliberation.
• Item F8 (poll item by Councilmember Palmer): Approved as part of the consolidated block.

Public Comments & Testimony

• James Acklin: Expressed strong opposition to the proposed property tax increase, stating that local taxes are his largest expense and are aggravating the lack of affordable housing. He argued that public officials should adopt a "cost down" mentality similar to private corporations and expressed concern about major investment firms acquiring local rental properties.
• Molly Dennis: Expressed strong opposition to the property tax levy increase, citing a lack of transparency and details regarding wasteful spending, cronyism, and conflict of interest. She stated she was unable to speak during the initial open comment period and compelled the council to disclose exactly where every dollar is being spent before voting to raise taxes, noting the increase would disproportionately hurt senior citizens and working families.

Budget & Public Hearing (2026 Levy and Budget)

• Administrator Zelms: Presented the recommended 2026–2027 operating budget ($693.4 million total), the 2026–2031 Capital Improvement Plan ($1.1 billion total investment), and the 2026 property tax levy. He clarified that the $6.6 million increase in the tax levy represents a 5.95% increase in levy dollars, not a tax rate increase, and noted the net tax capacity rate is projected at 50.39%. He also outlined a 4% electric rate increase and a 9% water rate increase.
• RPU General Manager Tim McCullough: Explained that utility rate increases are driven by capital investments (advanced metering, power supply) and community growth, noting that unlike Austin, MN, Rochester is investing in new capacity and reliability.
• Councilmember Palmer: Proposed a series of amendments to cut costs by $1.1 million (a portion of the proposed 5.8% increase). He moved to: (1) use $500,000 from the 2025 contingency fund; (2) not fund an ADA management coordinator ($153,000); (3) delay funding for a North maintenance position ($134,000); (4) delay funding for an arborist position ($124,000); and (5) reduce the library budget by $245,000.
• Council Response to Amendments:
  • Mayor Norton and Councilmember Keene opposed the ADA coordinator cut, stating a single expert is required by law and necessary for compliance.
  • Councilmember Wall and others argued against the arborist cut, citing public safety concerns regarding tree maintenance and long-term city growth plans.
  • Councilmember Miller supported the original budget, emphasizing the need for service levels and noting that transit is not funded by the tax levy.
  • Vote: All amendments proposed by Councilmember Palmer failed. Mayor Norton and Councilmembers Keene, Miller, Fredericks, and Wall supported the original budget, while Councilmember Palmer and Councilmember Doring opposed it.

Discussion Items

• Mayo Clinic North Arrival Center & South Parking Ramp (Item H1):
  • Deputy City Administrator Cindy Steinhauser: Recommended approving a conditional site development agreement for the Mayo Clinic project. She explained that a "campus approach" is necessary due to the scale of the 2.4 million square foot project. The agreement allows construction to proceed before a fully complete site plan is finalized, with conditions requiring design completion and a funding mechanism for the city to build public site items if Mayo fails to do so.
  • Councilmember Palmer: Expressed confusion regarding the need for such a complex agreement and financial security clauses for a developer like Mayo, and questioned the necessity of funding a $20,000 study for Second Avenue.
  • Councilmember Miller: Moved to remove the $20,000 Second Avenue study portion of the motion. The amendment to remove the study was voted down.
  • Outcome: The Council approved the conditional site development agreement for the North Arrival Center and South Parking Ramp, allowing construction to proceed while final design elements are completed.
• Salvation Army Security and Rental Assistance (Council Initiated Action):
  • Councilmember Palmer: Moved to instruct staff to enter a micro-contract ($20,000) with the Salvation Army from the 2025 contingency fund to address security needs at their health/dental clinic and fund rental assistance.
  • Councilmember Keene: Expressed concern that this action sets a precedent for direct funding of specific nonprofit programs rather than supporting existing grant funds, noting the $20,000 will run out quickly.
  • Administrator Zelms: Clarified that existing CDBG funds for this year were depleted and the Salvation Army may not be eligible for 2026 funds due to prior receipts, suggesting this as a one-time stopgap.

Key Outcomes

• Budget Adoption: The 2026–2027 Operating Budget, 2026–2031 Capital Improvement Plan, and 2026 General Tax Levy ($118,284,623) were unanimously adopted via a six-to-five vote (Councilmember Palmer voted nay).
• Utility Rates: Approved electric rate increase of 4% and water rate increase of 9% as part of the budget package.
• Mayo Clinic Project: Approved conditional site development agreements for the North Arrival Center and South Parking Ramp to allow construction to proceed under a phased approval process.
• Salvation Army: Approved a $20,000 micro-contract from the 2025 contingency fund for security and rental assistance.
• Ordinances: First reading of text amendment CD 2025-001 TA; Second reading and approval of ordinances amending license fees (K1) and special events chapter (K2) passed unanimously.
• Adjournment: The meeting adjourned after the ordinances were approved and the final motions were passed.