Welcome everybody to our January 12th Rochester City Council study session.

We have two major uh agenda items on tonight's uh or this afternoon's uh agenda our Chateau Theater operating model and our uh Rochester public transit uh sustainability model.

Before we get to our agenda items, I did want to turn it over for a point of personal privilege to Councilmember Doring for a statement that he has to read.

Yep.

Thanks.

Uh since the middle of last week, there's been an increased presence of immigration and customs enforcement activity in Rochester and across the state of Minnesota.

This activity has understandably created fear and anxiety in our community, particularly among our immigrant neighbors who have chosen Rochester as their home.

For some residents, it has made even routine activities like leaving home, going to work, buying groceries, or seeking help feel unsafe.

It is essential that every person in our community feels comfortable reaching out for help and accessing accessing needed services without fear.

I want to express my gratitude for the professionalism and dedication of the Rochester Police Department and their commitment to serving all residents.

I also want to be very clear in this public forum that the Rochester Police Department does not coordinate or assist in civil immigration enforcement.

RPD will only respond to immigration related activity if there is an immediate public safety concern or a report of criminal conduct.

Officers do not ask about or document immigration status during investigations, except in extremely rare circumstances where it is directly relevant to a criminal case, such as certain human trafficking situations.

While our local authority over federal agencies is limited, our commitment to one another is not.

In response, the City of Rochester has compiled resources to help residents understand their rights if they encounter federal immigration authorities, including ICE.

This information is available on the city's website.

Rochester is a compassionate city.

We value the safety, dignity, and humanity of everyone who lives here.

I encourage our community to support our immigrant neighbors in the minority-ormed businesses that are being impacted right now.

These actions may seem small, but they matter deeply.

Let us continue to come together to ensure that everyone who calls Rochester home feels safe, valued, and respected.

Thank you, Councilmember.

With that, we will move on to our uh agenda.

Uh we have Mr.

Josh Johnson to present the Chateau Theater operating model and investment direction.

Mr.

Johnson.

Thank you, Council President.

Yeah, Josh Johnson, um, Oregon City Administration.

I'm here to provide an update on the operational report that we received and also uh get some feedback on the chateau.

Um so we'll jump right in.

Um Chateau's approaching its hundred-year anniversary.

Uh over those hundred years, it's seen a lot of different chapters and acts uh and it's in its iterations in its life.

Um now I'd say we're at another inflection point where um we're at a point where the current lease expires and at the end of 2026, uh and out of courtesy and respect and transparency for her and her booking and operations, uh, as well as trying to understand what um investments we should be planning for and operational goals we should be planning for.

Um we need to take the bulk of 2026 to uh start planning for that.

Um so that brings us to why we are here today.

Um we wanted to put these up just so council can start thinking about the questions and the feedback that we'd like towards the end of the of the presentation.

Uh, but these uh three requests are one feedback on guiding principles.

Um we'd like to get some input uh to frame the strategy or you know, create a decision framework for how we should be coming back to back to you with another um uh more big plan, if you will.

Um, also the operating model and cap capital funding support.

So the consultant uh identified three different model uh concepts, and we'd like to get some feedback on which concept resonates or which one do you think is more uh feasible uh to proceed with.

And then the third one is to provide direction on uh potential operating partner.

Um these are some of the guiding principles that staff put together.

Uh we utilize some of the guiding principles from the prior RFPs.

Um they're more strategic, or I'd say they're more aspirational rather than tactical.

Um, but these are the the principles that we've used to sort of identify what we're prioritizing in a potential funding model and an operating model.

Um but these are meant to, or we would like to get feedback on if these are the right, if they resonate, or if you have other suggestions.

Uh the chateau timeline.

So the city purchased the chateau in 2016.

We purchased it for six million dollars.

Uh that included a $500,000 contribution from Mayo Clinic.

Uh the rest of the $5.5 million was paid for through using DMC funds.

Um in 2018, we issued an RFP for an operator.

Uh, in 2019, we selected the first operator.

Um during that operation, we also spent about $1 million in rough repairs, interior repairs.

Uh, when we first bought the chateau, it it was a former bookstore.

It still had the second floor and it still had an escalator in the middle.

So we've come a long ways since we purchased it.

Uh in 2021, we issued another offer uh uh RFP for chateau operator, and then in 2022 we um came to an agreement and a lease with uh the current operator Threshold Arts.

Uh during their time we went through uh HVAC, a full HVAC replacement, and a complete bathroom renovation and added two more bathrooms.

That brings us to today where we're two today, where we're talking about the operator analysis.

So this just goes through the investments that have been spent on the on the chateau to date, as I mentioned, the six million dollars.

Um there's been about 4.4 million in capital improvements.

Um, as I mentioned, those the roof replacement, HVAC restrooms, um, those were also primarily paid for using DMC funds.

Um, and then operating costs, our holding cost, uh, they've been reduced over the last couple years because of the new HVAC.

Um, so you know, annual electrical and heating costs are a little under 50,000.

But if you take, you know, it was more expensive early on to operate it because of the outdated infrastructure is about 80,000 uh per year for a total investment of just over 11 million dollars in the chateau over that 10 years.

Um through those three years, we've had a proof of concept.

We've had a very successful and strong activation.

Uh, I want to give a lot of credit to Nora and Threshold Arts.

Uh, through those three years, they've had over 100,000 visitors through the doors.

And that occurred during times of uh a lot of construction and um you know, HVAC replacement, the bathroom renovations.

She's had to do a lot with little.

Um, it's been improved over the over the over the several over the three years, but you know, to start, she didn't have a stage, there wasn't fixed lighting, there wasn't good audio, um, and we've incrementally uh improved that.

Um, also just the diversity of events that we've seen.

We've had everything from Latino Fest to uh dancing downtown to the winter market to um high school students playing entrepreneurs during the pitch program.

So a huge diversity of events.

Um I just also want to call out that in no way is are these findings from the report or our recommendation reflection on on what Nora's been able to accomplish.

Um she truly has put her heart and soul in there and and um you know it's uh has done a lot with their own two hands, I should say.

Um so baseline facility needs.

No matter once I go through these three operation models, each model requires the same baseline facility needs.

So facilities team commissioned a facility facilities report in 2024.

Uh, and a couple of the items that need to be done are the exterior enclosures.

So that's tuck pointing the brick facade, making sure the building is enclosed.

Um, we did replace the majority of the roof, but that copper, a copper section on the very front still needs to be replaced.

Uh interior preservation.

We did have some water damage, so we have ceiling and stucco in the lobby to repair uh and other miscellaneous miscellaneous items like elevator maintenance, um just maintaining the HVAC and fire protection and whatnot.

Um, the report estimated that at 1.8 million.

I'd like to acknowledge that that's already two years old.

Uh, we also need to have uh like historic historic preservationists come in and give a more detailed quote on things like interior preservation.

So it's a baseline number to get us started, but we that needs more vetting.

Um so that goes into the context of of the study.

Um so we've known over the over the last couple years and learned a lot from the current operator and also working with other like teammates like the facilities team, civic music about what needs to happen in order to improve the functionality and the operation of the chateau.

Um, but we also wanted to go out and get an independent study to identify um what the potential funding strategy operation strategy mark marketing strategy could be.

So that's what we did.

We went out.

The uh consultant is a 30-year uh 30 years of experience operating a very similar uh theater in Minneapolis.

Um, and she created these three potential models and um renovation plans for our consideration.

Um these are the identified gaps.

Um just to note that these are the gaps identified by the consultant in the report.

I won't go through all of them, but a couple of of ones that I'd just like to call out um specifically are the you know, one of the main things is having a fixed or more robust catering uh program right now.

Caterers have to come in either pre-made uh food or have like heating trays and then serve all the food in the back.

There's just very limited.

We have basically a counter, uh, ice machine and a fridge.

Um so to really be competitive and uh you know more financially sustainable, we need to have better catering uh and more and better food and beverage infrastructure.

Um also the the capacity.

So that's gonna come up multiple times today.

The really limiting condition right now for the capacity is really the emergency exit.

We need three emergency exits.

Um we more analysis needs to be done, but with one of the models, we think we can achieve around 800 occupancy for certain events.

Um, and then just operational readiness.

Liquor license continues to come up in order to be financially sustainable, liquor plays a huge role in that.

We're still working with the state to get a carve out for the chateau to have its own liquor license, but we feel like there's some other options that we might be able to get around getting a liquor license in the facility while that's working through its process.

Um, and then just other things that are deficiencies, you know, the acoustics need to be improved.

We need more permanent stage lighting uh and all those elements.

Uh here's the operational concepts.

So I just want to identify that each model is um incremental or increases from the first one, or it's additive, I want to say.

So model two includes everything in model one, model three includes everything in model two and one.

So the total estimated cost for model three for all of the work would be five million dollars.

Um the first model is really stabilization.

Oh, do we have to do that?

Mr.

Johnson, can you hold for a minute?

Uh, council member Miller.

Uh so question about this.

Um this report was received at some point a few months ago.

Have these numbers uh about estimates been vetted in any way?

Locally, I mean, are these doable numbers as we look at these models for construction?

Not additionally from the report itself.

So these models are based off of the consultant's experience with renovating and operating, like I said, a similar theater.

So she took that uh and then right-sized it to the Rochester market.

Um, but all of the costs need to be further vetted.

I mean, even like I said, the baseline 1.8 million facilities cost.

We had a consultant or uh contractor come in and provide all those costs.

But once you start dialing in terms of like how do you what's the cost of putting in a new catering station?

Does that catering station need in the basement?

What's the plumbing, an electrical light, electrical light to get to the basement?

So I would say everything that we discussed today are high level, um, but it gives us a starting point.

Okay.

Mr.

Yetzer, you had something to add.

Thanks, Council President.

I think Josh answered it well.

All I was going to add is I think it's important to keep in mind that there's a thousand variables with each of these, and so it's important to look at these through the lens of this is how one person, one report looked at improvements.

And so certainly as we progress, we would want to fine-tune these.

So I would not go to the bank with any of these numbers.

This is to sort of wrap your head around a model, a concept.

Um, and then we would definitely need to fine-tune these once we receive a little bit of direction because there's just so many options on the table at the moment.

Okay.

I I just wanted to get that out on the record up front because I I think we have a history of consultants providing us optimistic financial protections.

Since council member Miller opened the door, that was my initial uh reaction to these numbers were are we creating expectations in the public that we can do this for 3 million, 4 million or 5 million?

And uh so what confidence do you have going in?

Should we just throw out these numbers or when you go back after this session, are you going to give us real numbers?

Because as council member Miller said, you know, we we don't want to create false expectations in the community that we can do the all-inclusive for five million dollars.

Yeah, I'm glad you asked that question.

I uh again, I would I would hesitate to commit to any of the numbers on the screen and just and just state that we are bringing these in in front of you to try to put some concepts on, uh, get get your mind thinking of that.

Once we receive some direction, we would bring a real number back to you once we've had a chance to vet that number with a contractor, those sorts of things.

This the person, this is the numbers that were in the report that we commissioned, and that person is not a contractor.

So I I would want to do more homework ourselves before we married ourselves to a number.

Councilmember Palmer.

Well, I I think uh Mr.

Schrewbring said it nicer than I could ever say it or would say it.

Um it's it's hard to see numbers like this and not have the word draft on it because it's gonna happen in six months is that some is going to come to me and say, you're gonna fix the balcony and put an elevator in for 250,000.

And and I'm not an elevator guy, but you can't do that.

And so that's really makes us into a hard spot when we see stuff like this and not be able to to um defend it, because as you know, our last effort with a consultant was horribly wrong in in it's been a headache for all of us here at the city council.

I I do think it's important to note though that some of these things, like the elevator, like the roof, like the interior repairs, were vetted in that facilities report back in 2024 by Kraus Anderson.

So there are some that have been vetted, but some of the things that the consultant specifically recommended to get to the 3.7 to 4 point uh to four number are have not been vetted.

So there's there's so you're a mixture of your 2024 numbers, they've guaranteed those and we can plan on those.

I'm not saying they guaranteed them, I'm saying they vetted them to ensure that that's an accurate number for what we asked for at that time.

And part of it's I I also say is right sizing what we think is necessary for the facility.

I mean, we could spend tens of millions of dollars on the facility if you wanted to, but what what should we prioritize?

And that's also what we asked the consultant is if we have a budget, let's say it's five million dollars, how do we prioritize the necessary changes that make the biggest impact in the facility up front?

Um because we know that money's not limitless, right?

Or unlimited.

We need to we need we need to establish some budget and then refine those numbers as we figure out an operating model.

Um so thank you for those questions.

Um just to give you a brief overview of these.

So the first model is really stabilization.

So it's keeping the current occupancy, but making some minor improvements like a permanent fixed stage.

Currently, our stage isn't even AD accessible, so we need to like rent a ramp in order to make it ADA accessible.

Uh and then other things like we have uh temporary um light trusses in the middle of the room, just makes it wonky and funky for for operate for operating in and events.

Um model two includes everything in model one, but it also starts looking at enhanced backstage for production capability.

So that's that, you know, a more robust catering uh kitchen, uh, more uh fixed food and beverage stations in the event space, uh, as well as looking at how do we get that occupancy to 800, around 800, and that again is really contingent on that third emergency egress.

And then uh model number three, all inclusive.

I also want to uh note that the all-inclusive model is the one the consultant is recommending.

Uh city staff is recommending model two.

Uh and then the report, uh the consultant also recognized that model two, if you're not gonna go with model three, is also a very viable option.

Uh but model three includes the all-inclusive option.

Uh biggest changes here is there's a daily cafe, um, more usage of that skyway, and that would require some type of uh personal lift or staircase in order to get people up and down uh that so that would require much more analysis in terms of the viability of that.

Um and we also looked at the cafe.

There's a lot of benefits in terms of organic marketing, getting people through the door, event awareness, um, daily revenue streams.

However, that also carries more risk, more employment, which I'll show on the next uh on the next slide.

Uh and we also don't want to compete with other downtown markets.

So we we sort of looked at that and decided this is not the right model for this space.

Um, so we're recommending model two.

Uh this is just a side-by-side analysis of uh of the things I just mentioned.

Again, the revenue projections, high level.

Uh, we need to determine what is the operating model and then dive deeper into those numbers to bring them back at a future um study session or or city council meeting.

Um but the one thing I will note here, going back to that uh FTE, model three you know, suggests 45 to 55 FTV FTEs, which it's a difficult workforce, and it's a just a whole different operating model managing that many FTEs uh and that many daily operations.

Mr.

Johnson, can you just just as a baseline give us what threshold hearts uses as far as the FTE in their current model?

Yeah, the current model they had uh at towards the end of 2025, three full-time FTEs, and then they they utilize uh part-time um services for certain events.

So it could add up to that six to eight.

Yeah, I would say six to I I'd say Nora would be ecstatic to have six to eight uh people to help with each other.

Yeah, yeah.

Good.

Um, so this just goes into the why the model two uh compared to model one versus model three.

Um model two, you know, the biggest thing is really trying to increase that occupancy.

And when I say occupancy of 800, that doesn't mean 800 for all events.

That's the maximum occupancy for for certain events.

Um other events like dance halls have a higher ratio of um uh lavatories and um uh fixtures than like let's say um uh a wedding or a um uh those types of things.

So anyway, that all needs to get vetted.

Um also uh we believe model two will establish a more long-term approach rather than you know these small incremental investments into the chateau.

We would really like to take the time at one shot to make these improvements um so that whatever whoever the operator is can hit the ground running um right away, um, and then we can get out of their way.

Um we feel like model two has more benefits than model three.

Uh much the points that I was making of we don't need to invest in a full commercial kitchen, we don't need to invest in the workforce to operate a restaurant every day.

Um we don't need to compete with the local businesses.

Um we feel like model two has um similar advantages but without the unnecessary risks.

The other thing we feel like model two is more of a complementary use than a competitive use.

Do we have another question?

Uh Mayor Norton.

Thank you.

Um before you go on, and and we're we're talking about these models.

I guess I'm wondering um how much involvement our current operator had in working with the folks because if you look at even the small group of numbers that you showed at the beginning, um a lot of those are free events, and so I'm guessing and I'm wanting to know.

Um, they've been generous enough to try to activate the building with very little staff and compensation for folks working there.

Um are we looking at all paid, or are you still talking about 50% free events with this new model?

Thank you, Mayor.

I think that's exactly the kind of feedback that we we would like to receive.

And that kind of goes into what are the guiding principles, like how much do we want to have you know, daily free to or free events or just daily visitors walking through the facility to look at it.

Um currently on that slide for activation, I believe it's 50%.

We're free.

Uh, is that the right ratio?

Um, that does require a bit more subsidy and and and less revenue generation, but I think we just need we would like feedback on on how we should prioritize that.

And I appreciate that.

And I'm worried about these numbers for for that too, about self-sustainability.

If in fact they give away as much free use as we are now, and if that's what we expect, and I don't think we know yet.

Yeah, I mean it says it is act for a warming shelter during uh social ice and other other events downtown.

So the doors have always been open, and that's been a huge benefit for downtown.

So I think we need to find that balance.

Um this just re-emphasizes some of the benefits or our model number two outcomes.

Uh what I want to say here is as we're going through this, and we've had a lot of discussions through the past year uh of like what should the strategy be?

Who should the operator be?

I mean, there's a plethora of options that we can think about, um, but there's always that chicken or the egg scenario where do we make improvements, you know, kind of if you build it, they will come and just hope that whoever the operator is can utilize those proof uh improvements to the best of their capabilities, or do we select an operator and then go out and make improvements, uh, which then delays our timeline and and causes other uh problems.

Um, so what we did is we we sort of went through this, we looked at the venue restoration, uh, the catering potential, the operational capacity for an experienced operator to market it, uh, to book events, to tick it, and to manage it, um, the event flexibility, like how do we make it flexible?

So we do have local arts groups, so we can have an occasional wedding or or a corporate event, um, and then just a balanced experience of blending the heritage with a modern guest experience, but also um, how do we how do we ensure that whoever the operator is maintains the same level of customer service that we would expect as a city of Rochester?

Um, so through those conversations, it sort of occurred to us that we may have someone underneath the city umbrella currently that can offer all of these uh aspects.

So that brings us to the one roof concept.

Um, so we already have a facility that does events, it does catering, it does marketing, it does promotion, it does uh downtown um you know, um experience and visitor bureau uh type stuff in their in their booth.

Um so what if we approach them and and the city did approach Experience Rochester and asked to see what would their interest be and potentially collaborating as the operating partner.

Um some of the other advantages that we see are efficiencies and um reducing redundancy.

So we already have a facility that does events, it does catering, it does marketing, it does promotion, it does uh downtown um you know um experience and visitor bureau uh type stuff in their in their booth um so what if we approach them and and the city did approach experience rochester and ask to see what would their interest be and potentially collaborating as the operating partner um some of the other advantages that we see are efficiencies and um reducing redundancy so they've already got furniture and equipment they've got the tables they've got the chairs they've got the scissor lifts if we need those for uh for putting up an event um they also have the workforce to to put uh put things up and take things down after event and and cycle through um they also have internal marketing they've got the the ticketing experience um so it it seemed like this was the logical strategic um recommendation from a council perspective um just a couple more advantages of the one roof um it would it would it'll allow us to solve that chicken or the egg problem where we start working with experience rochester uh and I would just wanted to uh say right now that we have not had robust conversations uh those have to come in terms of what is the operating model look like and we need feedback to sort of make sure that our collaboration is mutually beneficial um but we wouldn't need necessarily an RFP process so we could start working with them now so that we can in early 2027 start making those capital improvements so that you know early in quarter two potentially we have someone operating the chateau again um also there's a lot of synergy between the Mail Civic Center and the Chateau if you think about conferences and events that happen at the chateau they often want to have offsite happy hour or uh events for you know vendors um male civic center can manage that calendar to make sure that when the conference comes that they have that availability and just sort of more spin-off events and revenue um like I mentioned they can coordinate all the bookings um there's that craft promotional there's that joint um you know city customer experience and service um so this brings us to our next steps um as I mentioned we would like to get feedback to select which operating model you you feel is more most sufficient so that we can do more analysis bet those numbers um and then create a plan for um you know construction bidding and then bid advertisement and potentially um you know construction in 2027 um confirm the programming and use priorities going back to the mayor uh what what have they changed since we um um put out the RFP back in 2021 in 2021 a lot of the priorities were keeping the door open uh diversity of events um uh free events um things like that so is that the right model um define the capital investment and funding strategy so you know we need to understand like what we feel like the funding strategy is so that we can go back um and create the funding capital stack uh to to put forward but also would like recommendations on on how you see the the funding strategy and then uh finally just establishing the overall project timeline uh when do we expect um to come back in front of council with another recommendation more vetted recommendation uh when do we look for creating a uh a lease or operational agreement and and what is the uh construction strategy so with that uh unless Ryan I forgot anything we'll take we'll take questions thank you well first I just want to say say thank you for bringing this uh before us I I know uh about nine months ago we said we'd really like to see kind of three models a maintenance model a you know medium uh set model and then a uh a more uh uh fleshed out model or all inclusive model and so uh uh my initial set of questions had to do with the financing and really making sure that we're not setting expectations for our community uh overall I believe that the chateau is a unique facility it's a jewel in the middle of downtown I also believe that it does uh with its location really speak to the initial uh uh objective of the destination medical center which is to create uh that experience outside of the Mail Clinic uh facility uh in Rochester so there's tremendous amount of opportunity there and uh I also do uh like the uh the one roof model the uh experience Rochester I have some questions on that uh but uh thank you for bringing it to us and I'll listen to my colleagues and uh maybe have a few questions in the uh at the end council member Fredericks oh I thought you raised your hand you raised it for him I'm gonna keep listening okay uh council member Palmer well thank you on slide six if you go to slide six you have what your goals or what you think that we're going to end up doing how's that not being met now are you referring to the like guiding principles price uh I I to your point I think they are being met I I think um as I have already said uh I think Nora's doing a great job activating activating the theater um the for to inject another you know amount of funding into the into the building

How's that not being met now?

Uh are you referring to the like guiding principles?

Price.

Uh I I to your point, I think they are being met.

I I think um, as I have already said, uh, I think Nora's doing a great job activating activating the theater.

Um the for to inject another, you know, uh amount of funding into the into the building.

Uh, we do understand that our partners are going to require a long-term strategy.

Um, Threshold Arts has been a great, I would say, interim strategy, and they knew that was an interim strategy.

And I'm not saying that couldn't be another long-term strategy, but we need that feedback.

Um, otherwise we would we just need to determine who to work with uh in order to create the long-term funding strategy.

Okay.

And I didn't realize how much DMC has contributed to this building, and we need to thank them for that contribute because it's it's a huge amount of money.

About 95% of it, yeah.

But 95% of 11 million dollars.

Um, the other question I have is is this partnership that you could do with Experience Rochester?

We've got the Arts Center, which is under the one roof.

How often is there a commercial kitchen used?

How often is that space being used with with um collaboration with with um Experience Rochester?

That's a great question, Councilmember Palmer.

I might look for a lifeline.

I don't think we have the answer to that off the top of our head, but we can certainly do some homework on how often they're tapping into that partnership.

I mean, if they were at 105% or 95%, I could see, well, maybe venturing out um doing something differently um would make sense.

But to me, uh keeping them in the one roof and trying to get that to really work well and then using a chateau of something separate, um, is is kind of where I'm I'm looking at.

Um the the problems I have with the study that was done, and and it seems odd to me, but it almost looks like it's generic or cookie cutter.

It's it's like I just took it off the shelf in Old Boat Lad Rochester.

Um, you know, they're talking about 30% of corporate use.

I'm I'm not sure where you'd get 30% corporate use in Rochester.

Yeah, and I the consultant was just looking at what are the market dynamics for our for our local net uh market.

And I would say that each of the different funding models would um uh would have different outputs in terms of percentage of usage.

Um that was sort of the the middle outline of you know, corporate events, and that doesn't just include like corporations, it it just means like more private events.

So uh that's the model that she felt was sort of that you know sweet spot, I guess, for our market, but that doesn't mean that that's what we need to aim for from a local but but she also puts in there about wanting to be a coffee shop and and catering.

Did did we have a market today that we need more coffee shops downtown?

No, we would have to do it uh if if we if we thought that was the right direction to go, I would recommend having some type of uh retail, you know, restaurant, coffee shop market analysis.

We have not done that.

Um I think that's just looking at the market that the consultant operates in, which is even a more competitive landscape than Rochester, it's just a way to differentiate your building and create other revenue streams.

So at Mail Civic Auditorium, if I want to do catering, let's say I'm gonna have an event there, I have a list of caterers where they cater for me versus at the chateau.

Isn't my understanding that almost anybody could be a caterer there?

Yeah, there's a preferred list, but I believe that um their uh whatever the event person hosting the event can select their own catered or caterer.

Um I do know that there's experience good experience and not so good experiences where the current operator will guide people on where they think they should go with the caterer, but it is open.

The sound system you talk about, the sound bar, that's supposed to be hung from the roof.

I know that we have an estimate on that.

Do you know what the cost is to raise that up and get the floor to be bigger?

Yeah, we've done uh we've we've engaged.

I'm not gonna remember the engineering consultant, uh, but an engineering um firm to help explore what the current load is on the roof.

Um it's been a bit perplexing on trying to understand, like after we added the new HVAC and and with the other with it with the other stuff we're at.

So further analysis needs to be done with that.

I know our facility, our facility team Zach Wood was managing that would have more information, but it has been a challenge getting the a definitive answer on can the rough support X amount of uh additional weight.

Okay.

And then the the mezzanine upstairs, we're not using the mezzanine.

It seems like a pretty simple fix to that.

Why aren't we exploring that prior to this report?

Uh the mezzanine in the front or the mezzanine in the back.

The back.

Okay, yeah, the mezzanine.

Well, the back is the front of the as you walk.

Skyway, skyway.

Skyway, Skyway Mezzanine.

Skyway.

Let's go with that one.

The challenge there is we would currently without egress or ingress off that off that mezzanine area, we would need to establish a agreement with an adjacent building in order to allow us to use their stairs, elevator, escalator bathrooms.

Um, which is an option we can continue to explore that option, but it's it's kind of a stopgap in order to make it fully functional.

Um I mean, if that's an agreement to get to use that space, it seems pretty simple to go to one or two buildings and say, can we have this agreement?

I can't imagine that they wouldn't want people walking through their their facilities.

So that seems to me to be kind of an easy thing to fix.

Yeah, I I don't I think you're right during business hours, but non-business hours security becomes somewhat of a concern.

But we could continue to work.

Yeah.

Okay.

And then um the liquor license.

It's confusing to me why they need to have a separate liquor license or why they can't borrow one or get one or I know we're trying to do it through the state.

I don't really understand how the state's not allowing us to have a liquor license there.

Yeah, I've met with uh Mr.

Cartwright uh probably a dozen times, and it's still confusing to me.

Um the the easiest answer is to have a special carve out like the theaters and event centers in in Minneapolis and St.

Paul have.

Uh so that the chateau itself carries it and it's it's regardless of the operator, it stays with the building.

Um we were close last year during the legislative session.

Unfortunately, some other things got put into the bill and and it didn't go our way.

But um, we're continuing to look at that.

Uh otherwise how the buildings being utilized or classified dictates what type of liquor license it can even be, you know, it could even apply for, um, which are all things that need additional infrastructure.

Like if you need to sell food in order to sell liquor, then you have to have an oven and a fridge and plumbing and everything else, so that you can do that.

Um otherwise, you have to have uh off-site caterer hold liquor license, and then you're sort of beholden to them, and and all of the liquor revenues are going to that entity.

So it's just walking out the door.

Um thank you.

Council member Keene.

Uh yeah, thanks.

Um, I sent some input to staff today, but I'll try to summarize here.

But I have just some high-level things.

I do like the way you organize this into gap analysis, like what should it be and where are we at?

And I think that does help people understand it.

The same with operating um uh model and uh uh the simplification of options A, B, and C, even though there we're as we're talking now, there's also the old Brie study, and then there's also the other operating model of what we've been doing.

Um, I think underneath that though, and I just want to say it straight out well, a lot of this work came about because we needed a plan for how to go forward before DMC money should flow to this again.

And I think the problem with the current operating model is when you come up to a 1.8 million dollar bill, there's nobody to pay it.

And what we're really dealing with here is who's gonna finance this, and if if it is it going to be financed through running it as a business and not in the community events that it's been done before.

Is that really the question in front of us?

Yeah, I think you you summarized it more plainly than I did, but I wouldn't disagree with any of those points.

Okay, because that that's how I'm looking at it right now.

That um I I actually was really confused going through this because I thought we were actually making some good progress on activation and some of these goals that we live we drive, you know, uh community center downtown activity.

Those things were are starting to happen.

They're not they're not the kind of things that are gonna fund a two million dollar project, though.

And I think that's the core of what we're dealing with here.

Yeah, and that's how you prioritize it.

Um is it a community asset that we're okay with that generating a loss, or are we looking at at least a break-even point?

Yeah, yeah.

And then when you're dealing with these old buildings, we've had other downtown businessmen here telling us they're expensive to maintain, and we have this now.

So let me go over to your three points, your feedback on the guiding principles.

It's awful hard to be against the guiding principles when they're preservation and activation, they're good high-level things.

They're just hard to come to balance.

Um, and I I actually too that I was kind of appalled going through some of the things in the recommendations when they start, you know, 40 full-time equivalents.

These sound like crazy numbers to me that I if if if it is something that I I have to sign up to agree to those, that that just can't happen because that's just not a realistic view of what could happen in the chateau, as far as I'm concerned.

Um, it reminds me of the numbers I looked at seven years ago for the exhibitors that they were gonna, you know, 14 million.

It was just nuts, and we just walked through it.

Uh, and I don't want that to happen again.

Um, your second one is operating model and um the uh you know, as far as the capital stuff.

And um, again, in this case, I think the simplification is the enemy because in this case, I I too am worried about the outside groups looking in and saying, Oh, good, we can do this for this amount of money, and then we're gonna have this.

And I I don't think this has been vetted well enough to on both the expense side, but even more so on on the revenue side.

million it was just nuts and we just walked through it uh and i don't want that to happen again um your second one is operating model and um the uh you know as far as the capital stuff and um again in this case i think the simplification is the enemy because in this case i i too am worried about the outside groups looking in and saying oh good we can do this for this amount of money and then we're gonna have this and I I don't think this has been vetted well enough to on both the expense side but even more so on on the revenue side uh I I oversimplified here to say something like oh if you instead of giving us 1.8 million you give us 2.9 we'll give this many people in there and now you're gonna be making this much money every year and it just it did not ring true um it seems the city is happy with the activation right now is when I say city I mean both the what I hear from the council but also the staff uh when I talk to people like RDA um but I think that does bring me back to the question but that doesn't pay the bills and we don't have a way to pay the bills unless we either make the decision up here to say we want to activate this and try to figure out what's going to cost at uh at a reasonable rate um and I I and that's going back to the operating model that's still I still think that should be one of the options more than it was listed.

I think you've said it already but let me ask on the operating model was the assumption when you start talking about what the revenues are and things like this on option one two and three was it that we have the operator has its own liquor license and that is now part of the pro forma that was the assumption that's the assumption yep okay um and then direction on operating uh provider I I I don't I really did struggle with this because um it it's a city report coming to me that says here's an option but I didn't get any feedback from that provider and I see a very different mission of what's going on at at MCC not not all I mean I know exactly uh experienced Rochester is bigger than MCC but I didn't know if this was a different mission for them and was the assumption it was free.

So uh I I didn't know how to respond to that.

Um I I know the staff is coming back with the middle level investment feels right sized uh and I'm glad we've had this public discussion about this idea that we don't want to communicate these numbers as engineered numbers um we we want to talk about these is this is not even 10% like vetted these are just things that help guide this is a method that the staff is using to draw opinions from the council so they don't want to go off on a tray up a path that we're not going to support down the road absolutely um and I think you know there could have been different strategies um but you know showing you a 10 15 20 million dollar budget estimates also didn't feel good I think I think we're trying to figure out like where's that somewhat middle lane and and get feedback from there.

Yeah as far as the then I'll just leave listen up but the both the operating model and the provided direction is I think what we're trying to solve for is how do we upgrade the building right now and whether that's the 1.8 to 2.5 million dollars um we that's that's the problem at hand and I think that I think the um the way we're trying to do it is through these different operating models but I guess I want to open up the discussion that maybe there are other ways to solve those problems.

Council member Wall thank you my questions have more to do with uh the longer reports than with the presentation or perhaps most of the questions offered thus far when I first started reading and said there are going to be three options uh I expected a much wider range of options than say 2.7 to 5 million those are pretty pretty close in cost.

Uh whatever happened to that uh like 20 to 40 million dollar dream uh that would uh completely alter the chateau uh and restore it to some uh magnificence of the of the past yeah that's great question um that uh so we did provide the consultant with all those prior reports and and and studies um so she was aware of the 20 to 30 million dollar uh proposal i i believe it was um without any prompting or any guidance from the city she she felt that was overshooting the mark and and unnecessary for for the amount that you're would be receiving in return so creating an addition creating um i forget what they were called but uh movable stairs for for different events and theater um was uh I don't I don't know her exact terminology but I'm just gonna say the word overkill uh for what we could what we can invest in the chateau and still make it operable and and activated for a variety of users and events.

Okay.

So going back to the uh report itself is it common for uh the city to take one person's experience 30 years worth uh one person's experience and uh uh base uh uh a huge project off that one person's experience absolutely not I mean it's one input in a hundred inputs um you know I I think I don't remember if it was Ryan that said it but there's endless possibilities you could ask a hundred people what they wanted to see in the chateau and you'd get 200 different responses.

So it's it's it's just one.

I I'd say it's it's one report that acknowledges or are rather um you know, um blanking on the word, but it it it sort of tells a story of of what we've already heard from the current operator and other users of the chateau on things that are necessary to happen to make it functional.

Um it's the more strategic goal, not necessarily the aspirational goal.

Okay.

So uh the report itself, uh, the long report, not your presentation, uh, just created a more questions than answers for me.

Um it uh had uh comps, uh like 12 comp theaters, mostly in bigger cities than us, with no figures attached, no data.

Uh so I mean, what what are we comping on?

It uh talked about competing venues here in uh Rochester and the high 20s uh without identifying who those venues are.

Uh, to go back to one of Mr.

Palmer's points.

I I thought I just kind of plucked percentages out of nowhere that under this model 45% will do this or 50 or 25 or 30.

Um the report more read uh to me like uh like uh uh a business venture that I'm not gonna quite say plug and play, uh but um didn't give me confidence, which brings me to my final point.

Uh and the you and others have talked a lot about the fuzziness of this.

It just seems to me like this is going to be a boatload of work for uh staff to uh try to come to any kind of real uh real numbers and possibilities.

Um I think like Mr.

Keene, I would certainly love this uh to carry its own weight, so it would not be uh uh any kind of call for public funding.

Uh certainly we subsidize many things uh in the course of city work, but uh the city needs to agree that that's a value uh for the city.

Um I like uh I like your presentation a lot better than I like the report.

I I just don't know what you I don't know.

I'm just frustrated with that, so I'll I'll stop there.

Council member Fredericks.

Thanks, President.

Uh before we talk numbers, Josh.

Do we have a uh a clear use for the space?

Uh other than how it's currently being operated and used.

I mean, that's sort of our um, as I mentioned, that's the case study to date.

Um, but we don't, and that's what we're really looking for feedback on.

So you just said other than we're current what we're currently doing.

Is there anything wrong with what we're currently doing?

No, I mean so why spend two and a half to five million dollars.

If I could chime in here, I I would just say uh again the the main reason I think that we are looking at this is what is a model that is self-sustaining and sustainable.

And so that's really what the investment we hope would bring is increase the type and the ability to have venue or to have um experiences that make this model self-sustaining.

The and and again, uh Josh said it well, the current operator has done outstanding, and that doesn't necessarily mean the current operator couldn't also do that.

We but we do need to at some point establish some path to bring back a lot of what you folks are asking about of how would you use it and what are the real numbers?

And it you can't do that unless we make some sort of bookish.

So what I'm hearing you say is it's being subsidized right now at what level?

Yeah, if Josh, if you you could go back to the slide if you want, but about 80,000 a year.

80,000 a year.

Yep.

Well, that sounds a lot cheaper than trying to recover out of five million.

Because I I know how uh government works in business, it doesn't work real great, and uh it's obvious.

I mean, we kind of laugh about it, but it's true because a lot of things get involved in it.

And I think business is best left to private entities.

And you know, we haven't even discussed, you know, it's unheard of in the in the private business sec to have somebody do a full build-up for you and say, here you go, go ahead and rent it for this much a month, and let's hope like it works.

I mean, that is a rotten plan.

So having having a clear directive for the thing, I understand certain things are subsidized, like we're gonna provide public use of the space for free and stuff.

I get that.

If that's the direction we're gonna go, then we have to have clear direction what that's gonna be.

But in in a in the business world, the way it would work is somebody would sign a long-term lease on that and build it out themselves.

And if we want to be nice to them, we can say, hey, you don't have to pay rent for so long to cover some of your costs.

You know, that that's an option.

And it was there was a private business ran out of there that I believe was profitable for quite a while.

I know the whole business con uh landscape out there has changed a lot, especially in the retail world.

But there is options we're not talking about.

We have three three uh we don't have we have one option on the table dressed up three different ways.

That's what we have.

So it's just I I just if we in order to put money into something, we need to have a clear directive where we want it to go.

Yeah, uh, and just respond, I think those are all valid points.

And you know, to the point of the current operating model, if there were to be a long-term lease, um, and not to speak for threshold arts, but I believe there's still a base level investment that would need to happen.

We can't have a temporary stage, temporary lighting, but you know, poor acoustics um for another renewal for a long period of time.

So I'd say even model one is the minimum they can get away with.

On top of that, you would still need the 1.8 million dollars of baseline investment.

So you're still looking at a sizable investment, even to continue operations as they are going today.

Um, to the to your other point, totally agree.

Um, whoever the operator is, we need to sit down and work on an operating and lease agreement where the um the build out is is acknowledged, who's paying for what?

What are the lease terms?

What are the revenue sharing parameters, all those all those things?

And that would need to be you know uh worked on through through this year to bring back for uh some type of lease agreement.

And if I just I think over a 12-month period, if we only have an $80,000 shortfall, I feel with a little tweaking we could come up with a way to get that to stabilize councilmember Miller.

Yeah, thank you.

Um I appreciate the presentation and the opportunity to have this discussion because I feel like it is a little more cohesive than we'd had about nine months ago.

So I think we're we're moving forward.

But I guess to comment on the first uh point of feedback you're looking for.

What I see in our council strategic priorities and foundational principles is this idea of inclusive decision making.

See many uh downtown stakeholders, including those who host events and program that space beyond uh threshold arts here today.

And I don't necessarily get a sense of what they would make recommendations for as um stakeholders in downtown.

And I think we have made that really clear um in our last year's discussion of strategic priorities that we want to hear from the community, and we want these to be community centered.

I see those points in this list of priorities or vision for the Chateau Theater, but I don't see it in this presentation, and it feels hard to make a recommendation about an operating model when I don't feel like I I have anything other than what the consultant gave us.

And I will note that she's not here today, which feels a little odd that she's in Minneapolis and not here to answer some of these very questions that we have about her process.

And so I feel like I don't necessarily have the trust um to rely on that to give you feedback today, other than to say I still want to hear from the community, and I don't hear it enough for me in this presentation.

Uh on the I think it's reasonable to say we should be able to have an operator be able to program the spaces that exist within the Chateau Theater.

So I think it's reasonable to expand the capacity and work on um providing egress, ingress, bathrooms, lift, whatever that means to be able to fully utilize the space because going in there does feel somewhat empty, and I would agree with the uh the report and some of the comments that have been said, you you look at the the balcony areas and it feels strikingly unavailable.

So I think that that's a no-brainer, and in my mind moves us towards uh better sustainability financially and also just utilizing the space.

Um, and then provide direction on operating partnerships.

I I'm open to the idea of uh one roof, but I would very much like to see um them present it.

Um, and so perhaps an RFP process is more appropriate so that we could ask questions and uh vet alternatives, because while I agree with uh decreasing complexity, I wonder about the complexity of operating two facilities where they're largely operating one cohesive space that has different spaces.

Um, but I will note that I brought up several times that Broadway, as it's currently configured as a barrier between two parts of downtown, and I wonder how that uh works with their current staffing and and operating models to be able to program a space that's not contiguous with their building and has difficult access points and as a facility that they have not operated before.

So I would I'm curious, but would like to hear more and am not ready to move forward with recommending um that we just lump it all into the one roof model council member Doring.

I agree with many of the points that uh Councilmember Miller just made and and would seek to have even further clarification before recommending uh anything going forward.

Um I think that we need to do our due diligence to get actual tangible numbers for those baseline improvements.

Um whether that's the expenditures of dollars to do that or not, I think is essential for this conversation so we understand and have a more holistic picture of the financial obligation we're about ready to take on.

Uh I appreciate that those numbers were provided in 2024.

Uh, but the world again is different now than it was in 2024 in terms of of um of building expense.

Uh I also am troubled by the fact that the consultant is not here to answer questions being in that space for multiple types of activities.

Uh I am very curious about how the occupancy is going to double uh without massive massive renovation.

And I do not see that uh provided in uh either the full report or in the presentation today.

Um so I have a lot of unanswered questions uh that unfortunately the consultant here isn't um isn't um here to answer.

So I'm not comfortable stating a preference for a path forward at this point.

Councilmember Doring, and and um I try to choose my words carefully when it when we're talking about where we're at in the conversations and where we're wanting to proceed to.

So we we definitely want to proceed with further discussions.

In no way are we saying, you know, reach an agreement with Experience Rochester.

We there needs to be a lot more conversations and community input on the types of programming.

We have, I've also heard from the arts community of um a fear that it's going to impact our our local arts and their and their access to the space.

So um just for what that's worth.

Councilmember Palmer.

Thank you.

Um, I'm a little troubled with the idea that we have to break even for everything, and I think arts brings a lot to the community, and some of that just a cost that you provide for the for the betterment of all the community.

Um I think there's a few things that we could do simply.

Um, and I think the mezzanine, the liquor license, and sound bar are things that can be handled right now, and and let's get that done.

Um I would like to see it just continue with the current operator and and and move ahead with that.

Um, and then I think we should go out for an RFP for a sale of the of the building with deed restrictions.

And I I think one of the things that that helps us with is if we had a friends group out there that says, you know, let's work with the Chateau Theater.

Believe it or not, people don't want to give money to the city, um, but they're be willing to give to a nonprofit that that's working that.

So I think it it kind of covers both bases for us that we can do an RFP that covers most everything that we want.

We all know the building's gonna stand, we all know we can do deed restrictions, but there are some things I go back to my original statement.

There are things that we can do on the mezzanine, the liquor license of sound bar that pretty simple to do, and let's get those done.

Mayor Norton.

Um I'm I hesitate repeating, but I'm just gonna let you know kind of where I'm coming from.

Um, and there is some repetition.

I I think a lot of um what I heard and what I read is that that liquor license and dealing with the food issues is going to be key.

Um I I don't want us to just repeat everything that we have at the Mayo Civic Center where people don't have choices about vendors.

I think that's something that's really nice about that facility and something that people really like.

So I'd like to keep that option open.

And we have to nail down the liquor license ASAP because that's a lot of the revenue and um and if we don't have that, it seems and we can't get it, that it seems kind of not wise to move ahead um spending money if we're not gonna be able to recoup it.

So I had that first.

Also, I I have to say watching the community embrace the chateau as they have has been really exciting to see in the past few years.

The community events grow and and those are done at very little cost or free.

And so while I understand that we want to break even and I support that, I also think, and and we have a little bit of that already with Experience Rochester, where they give us some events for you know, for free.

I think the one roof has some events for free for nonprofits and whatever.

I would like to see that kind of model and thinking continue and not just shut it off only for for profit.

Um I kind of like the the one roof concept.

Um but to the points that have been made.

We need the community input and not just the community at large, although you know that's fine too.

I also think we need RDA and the current vendors to really have a say and explain what they're doing and how they're doing it so we understand what we're what we're changing from and to.

Um they may have ideas about if we you know if this type of work continued, but we could charge this or not charge that or whatever.

I just they have the experience, three and a half years experience.

We need to be having that as part of our decision making.

And so two other pieces I I just wanted to mention.

One is um the reason one roof is interesting to me, and maybe it's and it's adding staff, certainly, but also maybe some of the experienced staff that are already there would be a nice addition and partnership rather than starting from scratch.

We we do have concerns from the music.

Um the folks, uh Councilmember Doring and I just met with a uh gentleman.

Uh we do the music there they're concerned that there aren't enough people to keep music going.

I think there are.

I think we need serious marketing and work being done in that area.

And I don't know the current model, you know, isn't set up to be that, you know.

I think of C4 and some of the things that we had in the past, right?

Where people were together and they were working and there was this common excitement and goal.

We somehow have to get that back.

And I think the One Roof model has the marketing experience to be able to do the promotion that maybe isn't being able to happen right now and won't be able to happen if we don't have someone super experienced in marketing and reaching people and getting them to these events.

So I just add that.

I'm, you know, I'm I guess I'm not endorsing anything other than yes, I think uh we should do more work on this in the coming year.

And um, you know, maybe two is where I'm kind of leaning that you know, that model, but I really think there's just more work that needs to be done before we can, I'm hearing at least from the folks at the table before decisions can be made.

Councilmember Wall.

Thank you.

Uh this may be a little bit unpopular.

Uh and uh it may uh spring off of something that Councilmember Doring said about kind of a massive uh redoing of Chateau.

Uh we hear lots of talk about weddings.

Uh I've done, I've officiated about 600 weddings uh in my career.

Um most of them in churches to be sure, uh, ballrooms, boats, a frozen pond, maybe a dozen barns.

Um in its current configuration, and here's the unpopular part.

I just don't see families or couples choosing uh chateau uh as it is currently set the way it looks to be either the elegant place that they're hoping for or the real kind of uh outside the box stuff, you know, like sitting on hay bales, uh uh the whole thing is boy.

I just why why would the a corporate client uh spend $10,000 a day uh to go to that space in its current figure?

I don't know.

Uh that I'm I'm sure experienced Rochester would have a great deal more uh ideas on why uh a corporate client would come, but uh I think I think it's just gonna be hard for for us.

Thank you, council member.

Uh just a few things.

I I think what I am hearing both here and in the community is one uh we have uh in the last four years with Nora and the Threshold Arts team really made it a community space, and I don't want to see us lose that.

There are uh opportunities to to whether you're there for Latino Fest or or social ice to go into the chateau, see that facility.

And uh I'm gonna disagree a little bit with my colleague on uh that facility.

It is an example of an atmospheric theater, it's what we have.

It was uh uh a leading example of architecture in the 1920s.

There aren't that many left, and and whether you like atmospheric theaters or not, it's ours.

And so I think we need to embrace it.

Uh also I think there is this sense that even though we uh threshold arts and the community focus has been working and we've been able to maintain it and a little bit subsidy, we're really not maximizing its potential as a I'm gonna say it because it's set in the community, a jewel in our community.

And I think what we want to see is getting to maximizing that jewel.

And uh, and I think I think what you've given us, even though I agree with everything that's been said at the table here that the the uh the consultants report isn't giving us a lot, it's giving us numbers that we don't have any confidence in.

Uh, but it's really saying this is what you could do to get to the next step, and I think that's that's a good place.

I uh I do want to see a little bit more like council member Palmer has talked about as far as the the capital and what what is it really gonna look like with 800 seats in there?

That facility.

I know it it had 1500 seats in the 1920s and 30s.

Uh what does that 800 seats look like and how much of the mezzanine is being used?

And are we able to uh still have the skyway go through, or does the does the balcony go above the skyway?

Those logistics, including getting back to the original stage, are we able to use the uh the infrastructure that we already spent for lighting and acoustics uh and sound?

Are we able to move that back to uh to the original stage?

So a lot more details on that capital uh uh construction project.

And then from uh from a um operational and uh maintenance going forward, like I said, up front, I do like the one roof model.

I think that uh the uh the organization that we have here in town has shown that they uh uh can, as the mayor said, market uh our community and uh market what we have.

When I think about the potential of the uh of the uh chateau with a base of community, but also bringing in unique uh concerts, unique uh I heard uh the use of touring Broadway shows.

Is that a possibility with that?

So um so I think a lot more thinking, a lot more kind of detail for the council is what I'm hearing.

Uh and uh and also as council member Miller said, I do I would like to see the um experience Rochester before us to answer some of these questions as far as how what that operating model looks like.

Is it a you know 30% community uh uh 20% corporate and and uh 50% events, whatever that model happens to be that is going to be the best to maximize uh that facility.

So with that, Council President Schubert, if I may, um I'm just gonna try to summarize what I think I heard uh so that we have clarity because one thing I want to highlight is I know Josh mentioned it on the onset, but there is some decision that's gonna be needed here sooner rather than later.

Our contract is up at the end of the year.

We do have to make some decisions on whether we continue with status quo or whether we uh make some construction improvements or those sorts of things.

So um what I what I heard or what I think I heard, and I'm gonna look for some reactions here, is uh to to talk with Experienced Rochester and get a more sort of vetted um how they would utilize the space uh bring and bring that back.

I also heard some interest to to further understand from Threshold Arts if we were to extend with them how they might utilize the space.

So um that's sort of the the majority of the commentary that I heard.

There was lots of uh difference.

Can I add another piece to that?

Can you also look to experience Rochester talking with Threshold Arts uh together?

Is there an opportunity there?

Yeah, we can have those types of things.

Council member Miller.

Well, and I'll I'll just add that I also heard and will reiterate that I think no matter who the operator is, they need access to be able to book larger events.

So, what is that capacity of utilizing them as a need in other spaces to increase the building capacity?

Yeah, the the temporary stage is not a workable solution for any operator, and we need uh like a plan, real numbers to be able to fund that.

Food and beverage and alcohol are going to be missing pieces no matter who is operating that, and that needs to be fixed.

So I think I like those critical components to make it a more robust usable venue, independent of the operator.

I I I heard at least some consensus on making a plan for those things and and bringing back a recommendation with real numbers for what it would cost.

So I I would just add that to our conversation here.

All right.

Thank you very much.

Thank you.

Next up, we have our transit model.

Oh, is it this?

Yeah.

Rochester public transit sustainability.

Go ahead, Rachel.

Good afternoon, Mayor, Council members.

Rachel Fauch, interim director of transit and parking to discuss the our Rochester public transit system and sustainability over time.

So just a brief overview.

We have upcoming three modes, but two functioning modes right now within our transit system.

Our fixed route has 36 routes, and that is reduced from our fall service changes with over 650 annual rides.

Um we cover 75% of the city population, and 93% of jobs are within half a mile of a transit stop.

We also have link bus rapid transit, probably heard of it coming up with uh anticipated 11,000 rides per day.

And our para-transit system, or commonly referred to as zips, as over 50,500 rides in 2024.

So really high level, let's just talk about how transit is funded currently.

And that is through min dot grants, um, FTA grants and appropriations, and um a local share.

And our local share is covered by rides and it's covered by advertisements.

So probably the most common way you've seen RPT advertise is the buses being wrapped.

Um and that is uh our our modes of of revenue generation for for transit.

So we are not covered um by the tax levy or uh subsidized by the general fund.

So in 2024, um the share for MINDOT in our operations funding went to 5%, and that was to help with COVID relief.

So in 2024 and 2025, our local match for operations funding was 5%.

So 95% of our operations funding was covered through MINDAT and FTA dollars.

Our CIP funding remained consistent, that was 20% before 2024, it remains at 20% after 2024.

And so that's the acquisition of vehicles or construction projects for the transit department.

Effective just a week and a half ago, as 2020 2026 started, our local match has now gone to 15%.

And we anticipate this to not be a permanent match either.

We anticipate this going up.

We don't know when that date is, but for right now, at least for 2026, we know that our local match is 15%, and our min dot and FTA for operations is 85.

Our CIP again remains consistent at 20% uh for our local share and 80% for min dot and FTA funding.

So what does this look like in kind of broad generalized numbers?

So if we anticipate or assume an operations budget of 12 million dollars, our local match just a couple of weeks ago was $600,000 and now is 1.8 million dollars.

So this obviously impacts our financial outlook for the transit department.

Um let's just have a quick conversation about why revenue is down again.

Just to reiterate, our local match has shifted from 5% to 15 for operating.

Zips paratransit is typically close to um close to zero.

Sometimes it's it's um covered by the fixed route system in excess revenue, sometimes it generates a little revenue.

This this uh year for 2025, we anticipate zips making um a small amount of revenue, but it is not enough to cover their capital costs.

And um probably the biggest point of conversation today is our fixed ridership, our fixed route ridership and the efficiency of that system.

So as you can see, and this doesn't go back, but in 2019, our ridership was actually over two million, and in 2020 it dipped down to just under 900,000, and then it had a steady decrease up until this year, which our ridership is actually increased about 20,000 from 2024 to 2025.

So what this looks like in terms of projections.

Now, this is if we do nothing.

If not, we do make no changes to the current system, we don't shift how our operations looks.

For 2025, we do anticipate going around half a million into our transit fund or our um, which is at 5.29 million.

So we do anticipate going into that fund to cover the costs of um some capital expenses for 2025 for 2026 with that shift from 5% to 15% match.

So we do anticipate going into that fund to cover the costs of some capital expenses for 2025 for 2026 with that shift from 5% to 15% match, it will go from half a million to about 2.4 million dollars that we anticipate having to dip into the transit fund for.

And we do think we can cover a portion of those expenses with CARES dollars, but those CARES dollars will not be able to be utilized past next year.

And then in 2027, I just want to uh do that because that does feel like a little bit of a jump, but we will start to accrue link expenses in 2027, but we don't have those grants under agreement yet.

So some of those link expectations, so we do anticipate that being a little bit lower, but since we don't have grant agreements for that right now, it's reflected as a potential loss.

So what are we doing?

Um the answer isn't nothing.

Um we're working for service changes.

We already uh did the fall service changes, which were a big shift in kind of realigning our system, and I'll go over that in a few slides.

And we have our spring service changes coming up in just a couple of months.

One of the biggest conversations here is collaborations.

So, what can we do to collaborate internally and externally?

So, not only collaborating as a transit team and most of the transit team is here today, but working together to ensure that we're sharing information and sharing knowledge and being a successful team to move us towards the ultimate goal of uh revenue generating, um, but also working with other departments within the city met today with the library in ways that we can encourage the users of the library utilizing the transit system to get there and increasing that level of collaboration.

And uh, I would be remiss to not talk about potential collaborations with Mayo.

And so we are entering into a strategic and um high coordination for those collaborations, ways to align our goals and in terms of employee access, system reliability, and long-term sustainability.

We do uh recognize the the opportunity that having such a successful partner and such a large workforce that we can we can provide service to will benefit our system only, and so we just need to ensure that we maintain and grow those partnerships.

We meet with um the transit and parking team sometimes multiple times a week to assure that our goals are aligned, and then uh finally looking at our CIP budget, and I think this is a good opportunity.

Um, one of the I would say one of the public criticisms transit gets a lot is why are these buses empty?

Why are these buses driving by and they're not full of people?

Um, and a lot of that has to do with we don't have the availability within our in our fleet to reduce the size of those those vehicles, and the purchasing of CIP would be adding additional dollars right now, and it's also not a short system.

So some of these grants are one to two years in advance before we'd apply for them, and then the acquisition of those vehicles can take one to two years, and so when we're looking at shifting the fleet within a transit system, it's not it's not um one year to the next, it's sometimes two years, four years, five years, ten years in advance that these decisions are made.

So we're working with the fleet that we have, but we're always looking for opportunities to be more efficient within that.

And one of the ways that we've done that is to take a good look at our CIP budget, which I'll go over in a second.

So, how did the fall service changes make an impact on our transit system?

So we reduced a lot of overlapping of routes, we reduced some of our routes.

We also took a good look at some of our stops that had very minimal boardings and departures.

Some of our some of our stops were costing uh the system 43, 4500 a departure.

And so that's not a self-sustaining model, and so we have to be really thoughtful and responsible as we look at that.

And so all of these fall service changes have actually in this one month of data that we've gotten, have increased our boardings from seven to eight.

Our goal is 11 boardings per hour.

Um, so we're close to that, and so as we look in the spring service changes, we'll be evaluating any of the routes that are performing under eight, eight is our current average.

So let's look at the ones that aren't meeting at least what we're we're doing on average throughout the system.

Um, and that translates directly into a decreased cost per boarding, and so it's our opportunity to really um cut back the the cost of those trips, and then um trip performance has increased, so that's how many trips have been completed from 97.7 to 99.8%.

And you might be looking at this and thinking, oh, that doesn't feel like a lot, that's just uh over 2%.

But that um in December we had six missed trips in October we had 120.

Um, so it's a it's a it's a substantial increase.

We we um right now on a weekday, most weekdays have 536 trips a day.

So these small numbers add up over time, but that's why it doesn't feel like a big jump in that percentage, but it is moving in in the right direction.

So our on time, our um trip performance for December was actually 99.9%.

And then looking at our spring service changes, and so this is gonna be where we're we're gonna see a lot of moves in what we do.

Like I said, we have 26 current routes, 13 of our routes are currently underperforming from that eight trips per hour.

So we're going to evaluate all of those those routes and figure out ways to increase efficiency along them.

Um, maybe it's um reducing the amount of stops to increase frequency or kind of realigning them even further, or evaluating the the time of operations that those routes run.

Um again, address declining ridership.

We have to have a reliable system.

We have to have a system that people are going to choose over traditional transportation.

And how do we do that?

We we work with our operator.

We work with our operator to ensure that the blocks, which is a really uh technical term that doesn't sound technical, which is when the driver comes in and grabs what they're running for that day, it's that's their block.

And so that block is not, they're not running the 550 for six routes for six trips.

They might be running the 550, they might be running the 102.

So it's a variety of those.

So, how do we ensure that that is efficient and effective and use the tools that we have and work really closely with our operator?

And so we've already started those conversations with them.

Um, and also maintain and enhance our high performing routes.

So we know express routes perform well.

So, what can we do to add more?

And express routes are not um, they're not cheap, they're they're fairly expensive to run.

We're looking typically around a million dollars to run an express route for a year.

But if you have the ridership to support that, you can you can offset the cost of that.

And so looking at the potential of adding some of those routes, but I think one of the biggest things we can look at is transitioning away from this loop system, um, which will build into rider confidence.

So, our um if it's a loop system, that means you would only get on on one side of the road, and then the bus goes all the way around the city and comes back and drops off on that same side of the road.

So, in a two-way service, the bus goes up and the bus comes back down, and it provides um pickup and drop-off from both sides of the road, and so it's reducing a lot of rider, like that's what you would typically experience when you go somewhere.

You can, I know I'm going east, so I'm gonna get on the east, like the east side of the road, and then if I'm going west, I'm going on the west side of the road.

So it's kind of reducing that that um that confusion and increasing rider confidence.

It can be overwhelming to decide to start riding public transit.

And so, what can we do to make that more efficient?

Um, but additionally, it will reduce the time that a trip takes.

Um, some of our loop services, that trip is 68 minutes long, and that's not an efficient way to run a system.

That means if you get on in the beginning and you need to get off close to the end, you're on that bus for an hour.

Um, and another thing we're looking at is a reduction of holiday service hours, and this would be like Christmas Day and Thanksgiving Day.

Um, both of these holidays this year we had 100 rides uh each around.

And so can we look at reducing the hours of operation on holidays, not removing it completely?

We still want to provide people access to get to their families and their friends on these important holidays.

But can we can we tighten up those hours of of service to still provide access, but um kind of cut those dead times off of the ends.

And let's take a look at CAP.

This is like a really high-level look that the team and I have done, but we've already made cuts uh totaling over um $600,000 over the next two years to reduce uh increasing the fleet and only look at necessary purchases.

And so we still have opportunities to cut this even further as we move into 2026 because some of these projects are construction projects, and so we're still at the preliminary phase, and so the numbers reflected are the numbers budgeted, but I think we can can reduce those even further.

But it is reducing um the purchase of new fleet vehicles.

This is only representative of the purchase of like fleet vehicles that have reached the end of their useful life.

And for a bus that's generally around 12 years.

Um, so we and again, as I talked, we have to do a lot of planning.

So if we were to let those buses expire now, we could be uh forecasting a four-year wait to be able to get those buses.

So it's important that we still we can't run the transit system without buses, and so we need to uh continue to purchase those, but we can be uh thoughtful on what those are.

And another thing we've done is um kind of a non-essential software upgrade.

We have the ability uh to collaborate more with Mindot on software that they have, and so we don't need to make that purchase in the future.

So what's next?

Um radical and innovative thinking, it's something we talk about really frequently on our transit team, but also common conversations that I'm having with our current operator, transdev, um thankful for some of our um union reps and members to be present today to support this, but really focus on rider comes first, but also how can we provide the most efficient and effective service in a way that makes sense for the system?

It's time for us to re um re-release our RFP for advertisement.

And so is there an opportunity there to look at a different split on what our um our um payback is for the advertising, or their opportunities to advertise in other locations, benches, bus stops, and things like that.

Um incidental and joint usage, which is a really fancy way of saying innovative ways to collect funding in non-traditional means.

And so one of the recommendations FTA makes um do you set up a do you lease a space next to um a park and ride location for a coffee shop?

And then you can generate revenue from that leased space.

And so this is an opportunity that we're actually collaborating with our CAT committee, so the citizens advisory on transit and working with them to come up with maybe some innovative ideas as they're out um uh using the system in ways they think that we could potentially um increase our incidental and joy users throughout our system.

Again, our spring service changes are coming up, and I'm really uh excited about the things that will happen with that and really um proud of the work that our team has been been doing to really be forward thinking and not be afraid of of making uh big changes.

And then as discussed um a few times this year, our transit development plan is up for review, which is our five year plan document on um implementation strategies for for the system uh year by year.

Um, and then additionally, our RFP for operations is out right now, so we'll be executing that operations contract in which a portion of that evaluation is on value ads.

So, what can this operator bring to us that provides and supports um our trajectory over time?

We had a really successful um prebid meeting last week.

Um, 12 individuals came and five different potential operators showed up.

So we're um enthusiastic about that process as well.

And you know, lastly, looking at a conservative CIP.

So the next year is really busy for our transit team.

Um, and you'll see us back here for that operations RFP award, um, the RFP for advertising and the TDP RFP as well.

So are there any questions?

Councilmember Palmer.

There's lots of questions.

Yeah.

Um so when did you find out about this cost sharing was going to go different?

The 5% increase.

We've known we've known for 2025, which is why we implemented the fall service changes as the first step towards making that shift.

I want to be clear as a reminder, it was 20% prior to 2024.

So 2023 was a 20% match.

Then it went down to 5% for COVID relief funds.

So we were aware um in 2026 it would go.

So the last time you were here, um, I asked these different questions, and and and I wasn't told that that changed.

And so I'm I'm kind of shocked that that all of a sudden we're finding this out.

Um it still the male employees ride for free.

Is that correct?

No, well, mayo employees are compensated by mail.

So mail pays for every male rider that comes on and we invoice them micro.

Um, you know, you talked about big trips, you know, a missed trip.

That's a big deal to that person that you miss.

If I have to be to work, now you become undependable.

Right.

And and and basically I believe that that's what's happening is that we become undependable.

So I'm looking at the numbers, and your 2019 ridership numbers were over two million.

Okay.

So we hit COVID, and everybody says, well, everything's gonna fall, we hit COVID.

But in 2022, your numbers were 907,000.

That's over COVID.

And then you had 704.

You're falling every single year in ridership.

There's no explanation for that to me.

Is there one to you?

There are a lot of things to look at, right?

And I think you hit one of them on the head.

Reliability and frequency do make an impact on people wanting to ride the transit system.

Um, you know, and there are multiple things that happen in that space.

The removal of the IBM parking ride lot is one of them that impacted that ridership.

But through those increased collaborations with Mayo, we've definitely seen an increase from 2024 to 2025 numbers.

I know they're not huge, but it is a 20,000 ridership increase from those for between those two years.

So from 2022 to 2025, you lost 237 um thousand trips, and not just because you lost the IBM lot.

There are a lot of variable factors in that, and I um unfortunately don't have that data in front of me, and we don't have the ability to go back and ask each rider why they chose to stop writing the transit system.

But um But but really shouldn't we?

Shouldn't you ask the people?

And in you know, we lost the mill clin the IBM lot, but we put one up at 65th Street or 75th Street.

75th Street.

So we have a new one at 75th Street, so I can't imagine that everybody just left IBM.

So I I guess where I'm I'm frustrated and I'm frustrated for a long period of time.

And I brought this up last year, and it was now you're coming to us and we're gonna fix a little bit of this, a little bit of that.

Um last time you were here, your proposed changes were 1.3 million.

Um, and this is a huge amount of money that's gonna go away.

And like I've said in the past, the state is gonna have problems and they're gonna pull back on funding.

The feds are gonna pull back on funding, and we're sitting here with a system that basically is deteriorating and going away.

And and you're sitting here telling me, well, but we're gonna do this.

The other problem I have is we have the BRT system coming on.

That's a huge investment.

That's 190 million dollar investment.

And I'm not hearing you that that when you do the the rapid bus, whatever you're doing, that they're gonna go to those ends, that they're gonna go to the new park and ride that we're building at at the recenter.

And if if the IBM wants the same, the Shopco one or the old shop goes away, are we just gonna lose riders?

Um I mean, I don't I don't see this as being, hey, we're really doing something new.

I think you're up here telling us, well, we're gonna you know change the the blinds on the house and we're gonna maybe put a new front door on.

We we need to do something huge.

You're down from two million riders to 669,000 riders, and you don't have an explanation.

There's not a way to quantify those exact numbers that we can we can say the impacts of the system that we're aware of, um, but also the return from work, like we have work from home to take into consideration.

But I will address this point, and I think it's good to uh be thoughtful of is we anticipate a high integration between the fixed route and the BRT system.

We want people to to come to downtown, jump on the BRT and ride up and down.

We anticipate having a fixed route stop at West Transit Village.

We also anticipate having um the ability to be near a BRT stop.

So there's a high level of integration on that.

And we we are fully aware that the success of one is the success of both.

If like if fixed route is successive, there's a high probability link will be successive and successful.

And if link is successful, and there's a high amount of integration with fixed route, we're increasing awareness and knowledge and and um comfortability with the transit system.

So we hope and um anticipate individuals will ride the fixed route system as well.

As one of my colleagues always likes to tell me, is that hope is not a plan.

Um, we're down from um 2022, 237,000 riders.

That's not with COVID.

Right.

I mean, this is amazing to me that we're sitting here.

We find out today that that oh geez, the share is going to go from five to fifteen percent.

We knew that last year.

Right.

The council didn't know that.

So I will say that is why we brought the the fall service changes, and I believe that was part of the council presentation on why that was necessary uh to make those.

And that was the first major shift to the transit system that has happened in multiple years.

And so we've already made those initial steps towards making big shifts and dramatic shifts within the system.

Count Council President Schubert, if I could just chime in.

Uh go ahead, Mr.

Yetzer.

Thank you.

Um just to your comments there.

I um I certainly hope that nobody takes away from this that we are just changing the window dressing.

I mean, the the the items that are on the screen before you between the operations RFP, the spring service changes, and then a transit development plan, those are opportunities to change really big things that have a really big impact.

Um, so I I hope that we're prepared to have those conversations because the things you're bringing up are the exact conversations we are having as well.

Um, and we intend to bring those things forward.

They do take time.

The RFP is out currently, the fall or the spring service changes takes analysis.

So I I understand the frustration, I acknowledge the frustration.

Um, but I just want to I don't want to leave here with this sentiment that we're just making small tweaks here and there.

We're prepared to make some significant changes to try to address this shortfall.

I brought this up in March.

We brought it back in the fall time, and the proposed changes are 1.3 million dollars.

That's not a lot of changes.

Understood, understood.

And I'll that's why I bring up window dressing.

That's the reason.

I mean, this is not something new from me to bring this up.

And we're just kind of dancing around it till today.

We're gonna do the same thing in six months, and they're gonna say, oh, geez, we need money from the property tax.

And I know there's people on the council who do not want property taxes going to the bus system, and I'm one of them.

Councilmember, I think I'm gonna just pick up on what council member Palmer said.

I think that and you have a tough job, and I know you're a new in that job, but the tone of this conversation last time, I think you have got to realize where we are as a council.

And and so I share some of uh council member Palmer's frustration on this.

This is a hard job, and you got to recognize we're waiting for the meat of this.

And I do see radical and innovative thinking on there.

Uh given where we were last time, you can't just tell us you're giving you radical and innovative thinking.

We want to know what it is.

And I really appreciate your answer to uh to uh in increase uh in uh incorporating the fixed route with uh the BRT.

That's the kind of information we need to see.

We need to hear transparency on what those discussions are and where we are, and uh because we all care about this, we all want to see this succeed.

And I know you, you know, your you are a uh a breath of fresh air from me.

I I see that and uh but understand where we've been.

So with that, council member Miller.

Yeah, thank you.

And I'll say that I just as staff, I do recognize and and Ms.

Fouch, I I I do hear elements of radical thinking.

Um you mentioned, and I don't know that it hit us enough of moving from a loop route route to a out and back.

Um, because what I was going to say is one of the earlier slides in your presentation talks about 93% of jobs being within a half mile of a transit stop.

I think that's the wrong measure.

How long does it take somebody to get to a transit stop?

How many jobs are within 30 minutes of a transit ride?

Because that's the point of how people are making considerations.

How long does it get me to take me to get to work?

And what are my options?

I could drive, I could walk, I could take a bike, I could take the bus.

But if that job is within a half mile of the transit stop, I don't think that's really my consideration.

Because how long is it going to take me to get there?

When does the bus come?

And am I going to get on a route and go on a 68-minute journey around the city as a leisurely start to my day?

So I think that looking at partnerships per even with the University of Minnesota, they uh uh operate the accessibility observatory that looks at access to jobs, access to recreational spaces, access period by that that time, and how many people or how might we look at mapping that gives us a sense of what people or what areas of the city have access to the amenities of daily life by different modes, including transit?

And I think that that is a conversation that we're not really having of is our transit system functioning for for daily needs.

Um but again, like moving from a loop system to a two-way, I think is is a radical change.

And I just want to acknowledge that uh for you and for my colleagues here, because I do hear that, and I don't want us to just jump over it and say, where where do we get to the BRT?

I also get the sense, and please correct me if I'm wrong, that we're in this pre-BRT launch planning of what can we do in these fall service changes, spring service changes.

We don't have the BRT system up and running um for perhaps 18 more months.

So that's great, and let's plan for it.

But this local match is has changed now.

And I I want to see that radical change around a new spine of high frequency, fare-free, all day reliable service that you don't have to pull out an app or know a route schedule to say I could walk to that stop and I'm gonna uh a bus is going to come.

So I I think that that is not something we can do today, and it takes time, and I I am glad to hear that there are collaborations happening.

Uh I I wonder about collaborations with other partners, not necessarily because they have huge budgets, but Rochester Public Schools has a huge population.

Uh many, the majority of their population cannot drive themselves, and seems like an opportune uh partnership to understand whether our system could or might not work for one of their highest cost areas after staff, which is transportation.

Um and I think that they could help us understand where people are trying to get to and from and whether or not, again, if we think of school like a job, I mean, we're having a similar conversation of can people get to where they spend most of their day.

And I don't know that we understand whether our system can support uh and potentially in a different financial state for the school district, be a potential collaborator.

Uh I I don't hear and hear any conversation about fares, um, which I will just acknowledge might not be popular, but as a is a lever that we're not necessarily considering here.

Um is is $2 the right fare.

I don't know.

Uh and then we have a comprehensive plan that li lays out a primary transportation network.

And again, we have we're we keep talking about coverage and our comp plan keeps talking about high frequency access to transportation spines.

And I just feel like we're a little out of alignment there.

And then finally, I I would hope that we're having uh collaborative conversations about commuter programs, because even if the bus works 95% of days, if you have a situation where you get a call, your kid needs to be picked up from daycare or school is sick.

Well, the bus doesn't run as frequently in the middle of the day.

And perhaps that person has a bad experience because there's no other resource.

And I know that other communities, other metropolitan planning organizations are looking at commuter services that include these guaranteed ride homes, what happens when the bus doesn't work for you?

What what are the supports that make it easier for you to say, hey, the bus works, and I'm not afraid that if something happens in my day, I won't be able to get there because I took the bus.

And I would hope that we're also having these kind of programmatic conversations with ROCOG with Mayo Clinic, and even as the city of Rochester, who employs a city organization of making sure that the transit system could work even for our own employees and what might be the gaps in the service offerings beyond what are the routes, what is the fare and where do they go and how long does it take?

But what are the other barriers to choosing uh public transit?

Right.

So I'd like to kind of address some of these.

I hopefully grabbed um relevant notes, but uh we are in conversations with RPS.

Uh we're working on collecting the data necessary for us to be able to plot that out.

We anticipate that being part of our transit development plan.

It allows us to evaluate that and allow a professional to evaluate that in integration with RPS.

So those conversations have started.

We are sharing data back and forth on a on a pretty regular basis to see what the feasibility of us providing additional service to them is.

Uh in terms of fares, we've had conversations, I guess, internally with the transit team on what that looks like.

If we were to increase our standard fixed route fare, we would be the highest cost transit system in the state.

But I do think there are another opportunities to look at, and something that the Metro does is they charge 25 cents more for an express route.

So if you're choosing to ride a more expensive route, there's a slight increase in what that can be.

And when you say 25 cents, it doesn't feel like a lot, but when you're looking at potentially 350 riders a day, that actually jumps about 100,000 or 80,000 of potential revenue that we could generate just by increasing that that by 25 cents.

And then in terms of commuter programs, those conversations have started.

And so I um work with our mode shift coordinator, Matt Lynch, um, a rocock representative, um, Mayo and uh Bike MN to talk about opportunities, and those conversations have just started.

Um, and we're in the initial mapping phase on uh where our needs, what is high cost, high reward, low cost, low reward, and everything in between and things that we can implement.

So, and in terms of where we stand on some of those collaborative programs, we're started.

Um, and hopefully we'll have things that we can implement soon.

And so I know in the conversations I've had with some of our partners is you know, we can't wait a year, we can't wait two years for some of these plans to come to full fruition.

We have to be able to, what are the the stop gaps or short implementations that we can make now that can make a big difference?

Okay, thank you.

And I'll just add, and this is not directed to you, but I know this has come up in the past with Mayo Clinic, uh, just acknowledging that they are operating a private transportation system that competes in ridership with our system.

And I would love to see them take seriously what their commitment to the city's services are and their city uh their own employees as a collaborative partner in this space, and I hope that they see that radical and innovative thinking brings them more to the table as well.

And then just a minor point on our fare structure is just uh something I've experienced in a different city I lived in, was having a daily maximum fare so that after somebody has ridden a certain amount of time, that that automatically uh guaranteed them that they would not be charged anymore.

So if that was two round trips a day, so say you hit four dollars, well, suddenly you can continue to ride board.

Obviously, that requires some software that we probably don't have, but thinking about ways that we make it easier and and sort of make the transportation cost a bit more predictable for people because we have monthly fares, but I don't know that we're um necessarily there in a system that and I think electronic payments were a major step forward.

Um, but I I do wonder about even just the the payment ease and predictability of the cost of how we might think about some programs beyond just a every time you get on the bus, here's the standard fare.

Yeah, and I'd like to to kind of add to that fair conversation, and I think we need to have a proven reliable and efficient service before we can have some some really considerable conversations and increasing the fare.

It's not um, it's not fair to increase the fare to our riders as a way to cover the costs of the system.

Council member Keene.

Um yes, thank you.

Um yeah, again, it's good now that we are aware.

I I guess I'm a little surprised.

I've been going through some of this stuff with transit, and I was aware of this upcoming change from the how we're being funded through MINDAT and and F FDA.

So I and I realize what a problem it is.

I'm also aware of the those rider numbers, and I like you say, I don't think you can come down to the it's because of the mail parking lot or it's because of the IBM parking lot, but all these things and work from home and a plethora of other things that go on got us to where we're at, and that's where we're at.

And I think that's the important thing right now.

Um, I guess I I want to, you know, I I'm glad to hear us talking about like, hey, there's 13 routes that are above a below our thing that we've got to look at.

But I I don't take any solace of that.

I mean, that means we're getting smaller.

That means, I mean, this is how people go out of business by trying to save their way out.

Um, and it's it's not good.

I mean, I I attended the meetings last fall where we were going out to uh you know at Riverside telling people that these routes are going away, and we are losing business by doing that.

So there's nothing good in this.

I mean, it might feel more efficient, but it's less usage.

Um, so I yeah, and I'd like to add to that, like it's looking at those 13 routes, but it's not looking to cut those 13 routes.

So it's looking for opportunities.

Is there any more um overlap between another route?

Is there a way to increase frequency to increase ridership on that route?

We fully understand that if we are to cut routes, we are cutting our client base.

Um, and we'd be into this same situation and expecting people that aren't current riders to increase exponentially to be able to cut be able to cut that.

The other point, and I just think it's a point of learning for me.

If you would cut uh like service and like we did in the fall, and the system saves a hundred thousand dollars.

Do we only save 20,000 of that because we only fund 20%?

Yes, I would say yes.

And I like I think it's really important too as we look at those numbers, those are projected over an annual impact of those service changes.

Um, so as as we've discussed, like as we were discussing those numbers with me and the transit team in the past couple of weeks, I really don't think that's the best way to look at it.

Right.

Because it's anticipating a shift in ridership based and to reach that projection off of the current ridership, but it's also indicating that you're making no other changes for that entire year.

Yeah.

Um, so past that, what would how would you know what the impact of that ultimately?

But I wanted to bring up that point that if we save this much, we don't get it all.

And that's that's that's why the looking at the revenue side, the advertising side, things like that are more.

I I wanted to understand when you show um our transit like funds that we that as an enterprise we have aside, we have three businesses.

Do the three businesses share one fund or are there three separate funds?

They all share one fund.

Okay, and we'll share one fund.

Uh parking does not share that fund, parking has their own.

Um, but the three modes do all share that transit fund.

And so that's why when you're looking at these numbers, fixed route can generally generate enough revenue to cover the expenses of the others.

We're not in that situation right now.

Fixed route did generate revenue this year.

Um, we're estimating that to be just over 200,000.

Um, but that wasn't quite enough to cover the expenses or the capital that was already um planned for.

Okay.

Um I did take note of radical and innovative thinking.

And I guess I'm when you're in cost cutting and that, that doesn't really sound radical and innovative.

No, no, it's I it sounds ugly.

Um, so I know council member Miller brought up the partnerships and you have it in your charts too.

Is that where this radical and innovative thinking comes from?

Because I feel we've lost some of our riderships to like responsiveness may always try and do what it's employees um that took away from our ridership.

Is that what we're talking about there, or is it something totally different?

Some of it's increased collaboration with external partners.

I think a lot of it's increased collaboration with internal partners.

Uh, we we are not an island, we're not behind a door.

Um, and really what we're looking at is increasing the relationships with the people that are running our transit system.

And we are running that, but the people that are driving our riders every day.

Um I will like, and I will say this on a on a personal note, probably the highlight of my year.

I know we're only a couple of weeks in, but uh this afternoon I was crossing um civic center, take it over here to the government center, and one of the drivers saw me on the other side and waves um and opens the door and and yells hi to me.

And I don't know if that's a relationship that's been there before.

Um, and so this is how we like it's all starting on like in a grassroots way to build the confidence of the drivers and up.

And and maybe that's not radical the most, but it's not radical in the words of cutting cutting funding.

It's radical in the terms of growing relationships.

Okay.

Um, and the and one of the things I've been impressed upon are our current operator, transdev is what that looks like in terms of those connections with the staff that they have.

Um, and one of the hyper focuses that I've asked all of those safety meetings, which they have a monthly safety meeting and all the staff come to them, um, is to really focus on this is a rider first organization.

Um, and I've now been hearing them say this, and I've been answering questions how do we increase ridership?

And the answer is always you have to increase our confidence in the system.

You have to stop missing routes.

We have to be on time.

We have to be responsible.

No, I appreciate that.

And I appreciate that attention.

As far as uh this sort of industry talk, though, I don't want to pretend that I know something about loops versus two ways.

And I mean, we have your staff here, let them make those kind of decisions.

But I guess I I do want my from my bigger view here, there's some talk about radical changes coming with BRT.

And you know, probably 14 months from now, it's going to be running, something like that.

Um, and then you've got these other contracts going on, not just the advertising, the new the new operator, all these changes are coming as we try to get into 27 with still having a transit fund and stuff.

But I think that's the time for the radical thinking then when, and I my focus would be get BRT right first, um, stabilize our our numbers right now.

But the radical thinking, I think comes after BRT is running and successful, and all of a sudden we have this public transit spine that we can now leverage for what our fixed routes could be.

Yeah, and and I hear that.

Um there are some changes that are gonna have to be made before then, um, just because of our availability of funds and and what that looks like in our system.

And I do recognize that any one of these things is not gonna get us there.

It's a combination of all of them.

Um we're looking at the transit development plan, you know, but that's not going to be our our savior.

It's not gonna bring us to the finish line, but what it is going to do is help us plan what this what the integration in those those potential big shifts um that can happen within our fixed route can be and will be once BRT is up and operational.

And just if I could just in close, I just want to thank your extended team that's here with you.

I did go through some of those things last fall, watching how we rolled this out.

It's painful stuff.

Um, so I think we're, you know, we'll get on the right path here, but we've got a lot of work to do.

I I I want to pick up on a little bit of uh what uh council member Keene talked about it, and it does have to do with radical and innovative thinking.

I think it's important, and I'm glad you're doing radical and innovative thinking now to capitalize on what we're going to see with BRT.

We're gonna see a whole bunch of new riders on that route.

And what I'd like to hear from your team, not today, but um uh in the next months, is what are you going to be doing to uh capitalize on that usage to get them to uh to use some of the fixed routes that uh that are uh on the spokes of of the BRT route or near it?

And so that's where I want to hear about radical and innovative thinking to maximize the usage here.

And uh I know a couple of my colleagues want to uh speak again, but um I wanted to ask you one more question on uh maintaining and hand and enhancing high performance routes.

We talked about the loop and the two-way uh and the express routes.

It are there other things that you're looking at to enhance those high performance routes.

Yeah, so it could be something as are all of our stops appropriately placed within those express route systems, so really taking a good look at that.

Is the frequency appropriate?

If what if we shifted from 15 minutes to 10 minutes instead, what would that look like on the system?

Could it increase ridership?

Um, so anything we can do to maintain the riderships and grow the riderships on those routes are the things that we're we're looking at.

Are the hours of operation for that appropriate?

You know, one of our express routes starts at five, 10 in the morning, I believe.

And so are we um are we hitting the right right individuals within that system?

Got it.

Thank you.

Councilmember Fredericks.

Thank you.

Well, congratulations on your new job.

It's pretty fun to come under fire right away.

I'm having a great time.

You're you're doing you're doing an impressive job, huh?

Um, so good job on that and hanging in there.

Um, I just want to know, you know, this stuff isn't like directed at you.

We're just trying to come up with solution.

Um, so we talked about reliability being a big issue.

If we're gonna build ridership, and would you say right now that our past problems has it been the bus?

Has it been the help?

Has it been the management?

What has been the the reliability issue?

The biggest issue with our reliable, well, I would get say the two biggest issues with our reliability are missed trips and on-time performance.

Okay, so what causes the mischiefs?

What causes the missed trips?

So that is a shortage of drivers.

You need a CDL to drive one of our buses.

And if we have, especially the it's uh flu season, so we did experience a lot of call-offs, and I think our shifts in the fall service changes reduced that number from kind of that outstanding 120 missed trips in October to just six in December.

Um, and that was uh to be honest, those were were just accidents.

Um, those were I accidentally overslept, and so I missed the first two trips of the day.

Um, and so and you know, understanding that individuals are humans and uh and accidents happen.

Would we anticipate that hopefully being zero in the future?

100%.

Um, but that shift at the reduction of the needed amount of drivers to help us run the system that we have right now has dramatically improved that that shift in missed routes.

And then on time performance, um, a lot of it's we have we can see a notable difference when construction opens up in an area, especially the construction on Broadway.

A lot of our routes go up and down Broadway.

And as the as the lanes opened up, our on-time performance increased.

Okay.

Um how has how has your electric fleet been running this winter?

So um as of right now, one of our electric fleet buses is in operation.

The remainder are not in operation, and that's due um in some situations to a battery recall.

In other situations, um, the doors are malfunctioning.

So we're we're working with our maintenance team and new flyer to ensure those buses are back in operation.

Okay.

How many you say one's operational?

How many are there?

We have four.

Okay.

So we have riot reliability issues with the electric buses.

And are we going down the road of converting our whole fleet to electric?

No.

Just the go ahead.

Yeah, currently, right now in the CIP that I showed you, there is a zero purchase of electric buses within that CIP budget.

Okay.

And how about the bus rapid transit line?

Is that gonna be all um electric or is there gonna be diesel involved in that as well?

Right now it is 100% electric fleet.

Um, and that's through an agreement with both our um our partners in in Mayo, our partners in DMC.

Um, it's also uh currently how the grant reads from FTA and MINDOT.

We are actually um going to New Flyer tomorrow to look at their facilities and um create more of those connections to impress upon them the importance of the the functionality of that.

Okay.

So what I'm hearing you say too, then correct me if I'm wrong, bus rapid transit is going to be funded exclusively through those funding sources, no property taxes will be being used on that line.

We're talking the already existing lines that are using more reliable buses, is where the property tax we're looking at funding auto-locally, because I have I told constituents for the last two years that property taxes don't go towards running our bus lines, and now we're flipping that script a bit.

So that's I no uh who wants to take this uh uh first shot.

Others can chime in.

Mr.

Yet sir, go ahead.

Thanks, Council President.

Um, no, our system is not tapping into property tax dollars.

The deficit that we are showing that this year, we have reserves that can cover that.

Where does the reserves come from?

Access revenue, gotcha from from previous years.

Perfect.

I just want to clear that up because as a person sitting at home watching this or is it written on it?

You know, you hear property taxes, you assume that bucket comes from are you here taxes, period.

You know, either we're paying it federally, we're paying it state, or we're paying it locally, whether it'd be property or um such.

So that's what I just want to be clear on that.

Because if I'm if I'm starting to get confused on that, yeah, you know, I'm glad you asked the question so we could clearly answer that.

That the goal is the the system has been, and the goal is to have it continue to be self-sustainable.

Okay, with federal and state aid and local share, right?

Through revenue sources like buying bus passes, advertising, those sorts of things.

Thank you.

And and I will say that federal and local share is how the vast majority, if not, I don't want to say 100%, but most um public transportation systems are that same percentage.

I'm just glad that you proved my information.

I told people accurate things.

Well, good, well, good.

Um just to expand upon that and and you know, hopefully dispel any um misinformation when it comes to the the payment of the BRT system.

Um, we all um if if I get this incorrect, I'll let Cindy jump in.

But uh we do have an agreement with Mayo to cover the operations costs, which would be considered our local share.

And so we'd still be pursuing grant funding as I I noted in the previous slide to cover the operations um and capital for that, but then we'd be utilizing the Mayo agreement dollars uh for the local share.

So in terms of is this coming again, like where is it really fare-free?

Where are those dollars coming from?

Those dollars are coming from um from the Mayo agreement to to cover the local cost share.

Okay.

In closing, then I just want to make sure going forward, and and uh you're doing a great job, by the way, in your in your beginning stages of this new chapter, but uh I want to make sure that the boots on the ground were getting their voice heard, uh, whether it be the drivers, because they're out there every day seeing the things that they're being heard well, and same with our same with our mechanics, listening to what they have to say about reliability issues and such.

They know what's going on, and uh they're the people that are in it around it every single day.

And I can't agree more, and I guess I could invite up um our our um ATU president as well.

But one of the things is I attend the safety meetings every month.

And in those meetings, I collect anything that we need to look at.

And so a great example of that right now is the the turn light on um 16th Ave and 2nd Street.

It's not long enough to accommodate the buses to turn right and pedestrians to walk across there.

And there is a high amount of pedestrian traffic there.

So I'm currently working with our with with our transportation engineer um to retime that light so that those buses can make that turn and be on time.

They brought that request up to me and that allowed me to make that connection internally.

So a lot of it's breaking down those barriers.

Thank you.

Councilmember uh Doring.

Thanks.

I thanks for remembering my name just for a second.

Um bypassing council member Palmer who asked first, but you haven't spoken.

It's okay, and I won't go long.

I really think a narrative that needs to be shared publicly is the is the improvement in reliability.

Um, and I'm wondering what your team is doing to share that story publicly.

That's a great question.

And we've already started the the conversations with our communications team and in what it looks like, what our next year looks like.

Do I think it's billboards?

Do I think it's wrapping our own buses?

Do we think no?

I think it's creating those personal connections, opportunities that we can to do like safe city nights or attend other events and table and interact with the public and really share that message of reliability.

Um also we've um I'm really impressed with our our CAT committee, and they've been asking how can we advocate what do you want us to tell the public about our transit system?

And those are the things that we're giving them and kind of fueling them with so they can be advocates for the transit system out in the public.

That's good to hear.

I would encourage you to even think further out of the box, right?

So the constituents that I talk to who are no longer writing RPT, it's based on reliability, right?

So they are willing to spend to take an Uber uh, which is exponentially more expensive to get home than writing RPT, and they're making that choice simply because they do not have trust that the system runs on time and is predictable.

So you know, I would I would I would encourage your team to spend a little time more time focusing on how to share that narrative publicly.

And then uh you had mentioned that part of the rebile reliability issue was uh um kind of the lack of drivers because of I'm wondering what we're doing as a uh city entity to retain drivers, if that's a if that's if we're putting that on the operator, if we are taking responsibility to that as Rochester Public Transportation.

So can you talk a little bit about that?

Yeah, and and I would encourage anyone that's interested, that's actually the presentation that Transdev will be giving to the CAT committee next month.

Um so we have actually I'll just backtrack a little bit.

CAT committee used to meet quarterly, um, we now meet monthly on the second Thursday of every month at 5 p.m.

in 104.

Um, and we're providing um a program for each one of those to help um promote those things and the they the committee requested Transdev to come in and give a presentation on um driver recruitment and retention.

Um and so a lot of it has to do with what are those relationships look like.

I think I don't think it's it's a misplaced statement to say that if you don't enjoy the people you work for, you don't enjoy where you work.

Um and so working with transitive to ensure um through our current contract and through our future contract, um, the city has final approval on on people that get put into those management positions.

So working collaboratively with our partners to ensure that the right person is in the right place and not just hiring somebody to fill that role.

Um a lot and truthfully, it's been a lot of difficult conversations and a lot of conversations that are probably past due.

But how can we work better together to we're both running businesses, right?

They're running a business and we're running a business, and we both need to be positive in the end.

Um, but a lot of it is just ensuring that the relationships are good and true.

Um, because again, in the end, we're all just people and they have a choice to work where they want to work.

Um, but that's why we've been more present.

And I have a firm advocate, I say like I'm gonna take these doors down, or I'm gonna take we have mirrored film on some of the glass.

I was like, I'm taking this down because like that, there's no separation between um the our transitive operators and city staff in my mind.

Okay, and one final question.

I know that we're gonna have we're gonna see some significant changes uh happen to some uh a large number of routes, right?

So um when can we expect to see that plan and how quickly is that plan going to be communicated to writers?

That's a great question.

So next week, um uh me and our the transit staff um will be riding those low performing routes and having conversations with our riders.

Um, why do you ride this route?

What are the reasons that you um sometimes choose not to?

What are some ideas that you have?

If we if what are some shifts that we can make in the system?

So we're gonna be riding the system with our riders um and really getting that one-on-one feedback.

We'll be putting out a traditional survey um to accommodate uh accommodate that as well.

So we're not only saying if we interact with you on the bus, that's the only way you can give us input.

But that is step one, and we'll be doing that for two weeks, and then um then we'll be able to put together a plan.

And we do have um kind of the basis as I outlined on that previous slide of what are we looking at.

So that allowed us to narrow in on those 13 routes and really look at what those potential shifts and changes can be.

Yeah, I'm just worried about uh and I I appreciate that, and it sounds like it's it's proactive, right?

I I'm just concerned about citizens who use RPT as their primary mode of transportation and them having adequate amounts of time to adjust to a new reality.

Yeah.

And I guess I'll even add to that one of the the biggest complaints we currently get about our system that's not reliability or on time performance, it's um our transit guides and our transit books.

And so we will be converting back um to a booklet or some version of that and not into the quadrant system, which I do understand and we understand.

You know, there's whenever you make a big change, you have to give it an opportunity for adoption.

Um, and it isn't it's not um being well received.

And so we'll be shifting back to a more user-friendly approach for that.

Excellent.

Councilmember Palmer.

Yeah, thank you.

Thank you, Mr.

Doran, for bringing that up.

Uh, I think advertising your your strengths is be a good idea.

I know when I've ridden the bus, it's clean, it's safe, it's it's it's nice to ride the bus.

And and um, and that's nice to say it's interesting.

Mr.

Miller brought up um um lowering fees or figure out where the fares are.

Right now, two thirds of the riders of male clinic riders pay nothing to ride the bus.

And so I it's escapes me how you can get less than zero.

But I mean, if you got people riding the bus for zero making that decision, um, that's pretty good.

And you know, Mayo Clinic has made that um available to us.

And so I think that they need to be thanked.

And I would think that what I've been told is one of the reasons they run such a big system is our dependability problem.

And that's what I've been told, and you're shaking your head, yes.

Um, the other idea I have is you have 237,000 riders you've lost in the last four years.

You might want to figure out who they are and why why aren't they back?

And um, but so the those are my comments.

Thank you.

Do you uh since uh councilmember Palmer brought it up?

Do you have any insight that you can give us on the conversations that you're having with Mayo Clinic and uh and uh moving forward?

Yeah, I I think they're very positive.

They're very focused on us having a proof of reliability.

So we're looking at the potential um to work with them and and partner with them.

We are um thoughtful of their current um contracts and responsibilities, but where are their opportunities that we we can show Mayo that we can provide the service that they need?

Um and so those are what the conversations are revolving around and they are moving forward and not only show them that we can provide the service that they need, but potentially provide it at a rate that's more affordable than what they're paying currently.

And can you spell out that um on the fixed routes?

Uh councilmember Palmer said they're paying nothing, but Mao Clinic is paying uh the city.

And how what is that model?

Yeah, so if a Mayo um employee gets on one of our fixed route systems, they show the badge to the driver, and the driver, our system is called equons, and they have uh a number pad and they they hit the number associated with Mayo ridership at the end of every month.

We pull those numbers and invoice Mayo directly.

So each one of those rides is paid by Mayo.

Um and it is a shift.

If you were familiar with the Mayo system previously, they purchased passes for some of their riders, and so this alleviates that need to like kind of transition passes back and forth between the organizations and allows us to just be able to punch that number.

Councilmember Doring.

Just uh the mayor has uh her hand up as well.

But just uh is Mayo Clinic playing full fare for each ride.

They are currently paying a reduced fare.

Um and so we we pay $2 a ride for our fixed route traditional service, Mayo Clinic pays $1.80 a ride.

Okay.

Thank you.

Mayor Norton.

Just quickly, I I want to say um this has been I feel good.

Um I really want to just say thank you for what you're doing.

Um stepping in to a difficult role at a very difficult time.

I know I'm I'm watching the faces um around the room, and I I'm seeing appreciation for the change and the work that you're doing.

And so I just want to acknowledge that.

Um, I think the things that I would have said have been said, and that the people that I talk to, it is about reliability.

And and I just I cringe when I hear we have to cut routes because those are riders.

And when I've ridden the bus and I do the ride thing every year and you know, get to meet my neighbors, chat with them.

They're all there are people who do not have any other way to work.

And so the reliability is vital, not only to get people to their jobs and their daily living things that they have to have in a way that they can afford.

Um, but yeah, I guess I just want to say um thank you, keep up the good work, keep the relationships.

It is about people and relationships, and it sounds like you're you're breaking through to that, and that was very necessary.

So thank you.

And I'd I'd like to add, and it's like a difficult conversation that I've had multiple times with with my team.

Um we look at these numbers, we look at 659,000, 100,000 rides, and each one of those numbers is a person, and we are fully reflective of, you know, we look at eight boardings an hour and what that looks like, but those are eight people that got on that out in that hour.

And I will even add that it is a section that we added into the introduction of the RFP that it is so important that these aren't just numbers or dollars, that these are humans that are getting to and from um their their day.

Thank you.

And just one last thing, keep up the radical and innovative thinking.

We like it.

And just be transparent with us though as well.

So thanks.

Thank you.

Administrator Zones, what is our study session schedule look like?

Well, continuing on the vein of radical and innovative thinking, your next study session is we are finalizing a location, unless magically someone tells me it's been finalized for city council training.

So that will be um an experience with Bethany von Steinberg's and um strengths in leadership.

Uh so we will as soon as possible let you know where that's going to be.

I did just want to also um share that we do have set up behind um the clerks um an idea for if you wanted to radically get around a table to have future study sessions.

Um we do think that um the setup um in the annex to the council chambers would be a good one.

We would flip the chairs a bit so that there could still be room for um the community to attend and hear you.

Um it would be recorded by an owl camera that would be in the middle, so it would be recorded and then uploaded.

Um, but just something to think about.

So if you have a moment, if you wanted to take a look, um, provide us some feedback.

I've gotten a little bit of feedback from folks.

Um, but if that's something that you're interested in, we also are talking on February 9th about your council rules of procedure and code of conduct.

So a great opportunity to say maybe we do that around the table.

Um so if that's something that you're I know that we've been interested in that, but also some council members have vacillated between between that.

So if it's something you're interested in, it would be helpful to get your feedback and um let us know if that would work for you.

That's all I thank you.

Anything else?

If not, is uh we are adjourned.

Thank you.

All right, good.

Thank you.