In the 2027 supplemental request and really helps me to finalize what I bring to you later this summer with the actual recommended budget with all of the adjustments in there.

And if there are any specific issues that you either have concerns about that you want us to look into, also that could be thoughts for a future year.

We are always budgeting in Rochester.

We are always open to budget ideas.

So did just want to sort of set the stage there.

We do have your strategic priorities and foundational principles at thought here.

Obviously, very important strategic priority is having that economic resilience and inclusive growth management.

We have to have capital projects and services to be able to provide for the housing access that we are looking for and fiscal responsibility and sustainability of the budget always in mind when we're thinking of what we bring to you.

As I pointed out, the team has been working hard on this.

So I do want to give a shout out to our friends at Finance, Rachel Hoduk, Josh Doer, Brian Anderson, Aaron Parrish, and then everyone across the team that works to make sure that they are they're forecasting the budget accurately, making adjustments as needed, and then of course managing their budget throughout the year to make sure that we meet budget.

So again, this kicks things off.

We have a schedule in July to be focusing on another budget update.

So the audit is what happened last year.

An important part of looking into the future is understanding how successful we were in the past year at meeting meeting budget and where we maybe have some challenges, and then hoping to bring you the fee schedule much earlier on in the process, often in the past.

We haven't brought that to you until close to when the budget's being adopted, but fees are an important part of our budget.

So if there are concerns about the fee schedule, be helpful to know.

We do have a draft in the study session packet today, and then that all helps us build out the final recommended budget coming in August 24th and September 14th.

And then we do have some deadlines to be able to meet the county's requirements.

So setting the preliminary levy after which the levy cannot go up, but it can stay the same or go down.

And then we have you schedule for a budget hearing on December 7th.

So again, supplemental process, and in this process, we do not update the six-year CIP.

So in the first year, you adopt a six-year CIP.

Obviously, as projects adjust, we might have to change some of the details within there, but we don't add the sixth year.

We do a lot of the lion share of that work in the two-year process on the front end.

We only look at revisions for things that are significant known that weren't known or that we know that we need to plan for that we weren't planning for last year around this time.

We have an opportunity for departments to put in a supplemental budget request in order to address a baseline adjustment that maybe we weren't predicting.

But we don't ask for new decision packages.

So that's part of trying to be planful.

We change our plan every year.

So right now, very early stages of the budget, we are sitting at the same projected levy as we had last year in the two-year budget.

Um, so 127 million dollars that represents a 7.4% increase from 2026.

So that's anything that's tax levy funded.

Uh library uh parks and recreation, the general fund, so police fire, a lot of the general services there.

Um, and then um we also are looking at a general fund budget that increases by about 3.6%.

I just want to point out that part of why this looks like a disconnect is because we also saw a lot of building permit fee revenue come in.

So it's sort of falsely lowering that percent increase in the general fund because we have revenue coming in, but we'll be transferring that for the specific expenses for uh whole board unbound and other projects like that.

So the 7.64% is a real number, and some of those general fund costs are muted by the fact that we have that revenue coming in for specific purposes.

Um we did review the action plan here around this table a couple weeks ago, um, and the next action plan update is scheduled for August.

And then again, I mentioned that the audit would be coming to you for the 2025.

What we did accomplish and how we did that financially coming forth here in the June time frame.

So you might recall this is our also our last slides that will maybe be quite this pretty.

These are not digitally accessible, but as of next week, we will need to be doing that.

So you might recall there used to be a chart here.

So the total budget sitting of that's all funds, including RPU, 742.4 million dollars of that operations is sitting at about 411.7 million.

Capital improvement for that year, 284 million again, just one year of that six-year CIP, and then debt service at 46.7 million.

So that all rolls up to that 742.4 million dollars, lots of different sources and uses of funds there to get all the capital projects, utilities, etc.

Um, working.

Our estimated reliance hasn't really changed, um, so we do not uh fund any of the uh DMC capital projects with tax levy, so those new projects that are going forward all come from resources that are related to destination medical center.

Um we do have a slight burden on internal service funds, so things like the equipment revolving fund there that require some tax levy, and then um capital improvement projects, about eight percent of the levy is going um to uh non-utility related capital improvements, um, primarily our road resurfacing um projects that we that we do.

Um so not a lot available there, about eight million dollars a year, a little more.

Um, the airport receives some tax levy in our contract.

We pay for utilities except for natural gas.

Um, so that is the only thing that the city um bears as far as the airport.

Uh and then, of course, I had mentioned debt service and then the general fund, municipal recreation and library are really um heavy, um heavily reliant on property taxes in order to operate.

A few economic factors here.

Um, our total employment has been increasing.

Um, so we are holding our own in the state of Minnesota.

Some of this you will recall from when we provided the KPIs on the action plan.

Um, so really important to have that growth.

Also, we have a lot of housing in the pipeline as has been shared to try to meet the demands of that growth in employment.

Um, so strong sector, we uh still have a very low unemployment, um, and we've seen some growth in non-medical employment as well year over year.

Um, so all of those things are great, great things.

Um, they put pressure on our service levels and our ability to provide that and the capital that's necessary in order to support the private investment needed to drive that employment.

Um, you can see that in our valuation totals.

Um, so 2025, we um went past a billion dollars in permits in a year, our permit valuation totals were up about 50 percent from 2024.

Not surprising, things are costing more, um, but we also have been issuing more permits.

Um the total permits again were up 56 percent, so um significant uh resources there from the community development public works RPU space to be able to keep up with that permitting.

Um, we also have positive economic indicators on lodging tax and um uh anticipate growth in the lodging tax, which we dedicate to the Rochester sports, the experienced Rochester portion of their budget is funded, but but that is a cap.

Um, and then the rest goes to reinvestment.

Well, we're paying off debt as well for the expanded facility from 2016, and then um the rest goes to reinvest in the facility so that that's not on the levy.

So when we're have approved projects over the last year for lighting and things of that nature, that's been coming from the lodging tax that uh any excess goes back into the the um civic center capital fund.

And then another indicator so sales tax has been holding steady despite the costs increasing.

Um, so probably not surprising.

Um, people are being more thoughtful about what they're buying, but again, we've been hovering right around that 15.5 million dollar mark with the amount of investment that's also happening on the private investment side.

I would expect that to hold true with the sales tax and the type of level construction that's happening.

And then airport passengers on that last slide.

Um is there any way to see something of 2026 a quarter on a quarterly basis?

We it's a look back, so we usually get these numbers 60 to 90 days.

I want to say after collection.

So it's a it's a lagging uh indicator.

Don't know when we typically get them if you have that answer, Aaron.

About two and a half months after the collection period.

So we can start showing it to you maybe in June.

Um with some indication, but I would say the lodging tax also drives some of this.

Um, people don't just pay a lot of the colours.

Council member Miller.

Just a question.

So the state provides the reporting on sales tax, correct?

Correct.

What additional level of detail by sector or is available if any of that reported?

On a quarterly basis, I don't believe we typically get a lot of information.

Um but so we've uh we don't get a lot of like sector by sector break out in the general state reporting.

However, I think Brian is really the only person that's allowed under a special agreement with the state where we can break it down a little bit more geographically and bisector, but it's not something that we're supposed to uh release to the public because they don't want to be able to track specific sales back to specific businesses for competitiveness purposes, so it's considered private data, but um we do have the ability to drill down into some.

It's not as easy as you think uh with companies located here and everywhere in terms of their home addresses, but we have another level of it that we can look at if there's something that we want to evaluate.

Well, I guess I'm curious because when I look at employment trends, the number of employees we see primarily growth in the health space.

I'm just curious if there are any trends to draw out of this, especially since the sales tax dropped just slightly in 2025 after 2024.

Is there some takeaway from that other than we're still around 15 and a half?

I think maybe two things.

One is we were using a pretty tight scale here.

Um when we've done our forecasting on sales tax, we were we haven't forecasted that above 15 million for quite a while, so we aren't ahead of our projections in terms of what we projected to collect within the existing sales tax.

Um but there is some variability, right?

Like this is one area that can go up and down historically, it's got a very nice trajectory, but your year to year can vary slightly.

Okay.

I was surprised that I went back looked at 2019 numbers and both uh sales tax and lodging are higher today than they were um in 2019, which I think is a good sign.

Ready?

Okay, another positive that is we aren't above 2019 at the airport.

Um, if you were to look back, but we are on a positive trajectory there.

Um, some scary days in the 2022 time frame also have some more flights coming online.

So most of the airport's revenue and and expenses are related to how many flights are servicing.

Um, they do also um obviously support cargo and um general aviation, so people bringing their planes that aren't a commercial flight, uh, but this is really important for um the airport and its financial viability.

Um, so something good to see.

And um, we do have some data from early this year from the airport commission.

So we have continued to see significant increases early in this year as some of our partners continue to adjust some of their requirements and um flying local, so that's really good to see at the airport.

Very positive.

Uh part that you were waiting for.

Uh this is the preliminary estimated market valuation that we received from Olmstead County, so very preliminary.

New construction, a little over one percent, the valuation adjustment at about 3.27% total growth in the estimated market value about 4.3% year over year.

Um, so still um probably not the numbers you want to see, but very positive compared to the rest of Minnesota to be able to see um both new construction growth but also growth in the valuation.

Um that has continued to be something that has occurred since um 2019 with some of the changes that happened on a permanent and commercial, and we'll start to see some of that evolution.

We don't have that level of detail yet from the county.

Um, but this is a big part of what drives people's property tax bills.

So even if you had a zero percent levy, there are any number of uh properties that would be absorbing that new valuation adjustment, so they would absorb more of whatever dollar amount remains um in the levy.

It also starts to push um different um, especially on residential component, um, starts to push people out of that homestead exclusion so they get less value from the homestead exclusion, the more valuable their property is.

So both of those things end up happening as well as the dollars that are necessary to provide um operations and capital.

Another scary slide.

Um, thank you to our friend Jim Minor.

Um we have continued to see growth in the sold price, so the average sold price of residential through the end of last year, um, not as large of growth as we had seen in some of those prior years, but still um continuing to see growth year over year in the average sold price of home.

So we as we have more new construction coming in the market, though, that may um start to impact that number, which can be good and bad depending on if you're trying to sell your house.

And then the median sold price, so probably one that's maybe more important to look at from like a data and trends for affordability.

So the median sold price is up again, up, but not as much as it has been.

It's been sort of getting less steep over the last few years, but definitely other than 2025 over the 2024 number.

So just something that we do keep in mind, and that is a part of what influences that total estimated market value of property.

Something else we look at is the CPIU.

So the consumer price index for urban areas is fairly flat.

We have a flip there where there was a government shutdown, so there's a reason you don't see any dots there.

But again, it's it's trending on all items and all items less food and energy, um, slightly down from uh about four months ago, but um it's kind of holding fairly steady, not a lot of movement like we saw back in um the middle mid-2022 time frame, um, but still is driving costs.

So we're still absorbing a lot of inflation, especially on the construction side of things.

A slide that you won't probably never see again.

It's the holistic budget stability slide.

Um, so this is the first year that we do not have any of the um CARES dollars going to buy down the levy as we were coming out of the pandemic, and we you will recall had frozen positions that need to come back online because we're starting to see the same activity that we had when they uh weren't frozen, and so this is a the budget that does not have any subsidies.

So you can see about 2023 that was a little bit that was about 2.5% of levy back then that was absorbed by the CARES dollars, and now we're kind of back to the years pre-pandemic where we would be between about a six and a seven percent adjustment typically within the budget.

Um, and um you'll just see that that is part of your general fund adjustment.

And I did want to just remind you that in around this time last year we were projecting um about a 10.7% increase in the levy.

Um, the team did a great job of trying to make one-time adjustments to bring that down significantly in a way that did not impact um services to the community.

Um, when we start seeing service level impacts, um that is when typically people say maybe I maybe I'm okay with a little bit more property tax.

Um, so I did want to bring up on this slide that one of the things that we discussed last year was to not have, and that has been brought up recently by many of you over the last few months, and that you all were a little bit uncomfortable with was the um entertainment leading up to the fireworks at 4th of July.

Um, and uh we were trying to also address a capacity issue for very small department who doesn't typically bring off like major events other than music.

Um we do have the fireworks budgeted, and those are all contracted for, and um we did, as the mayor had pointed out, uh leave 20,000 in the budget because I thought we might be having this conversation.

Um, and I did have a conversation with experienced Rochester last week, and they feel like they could pull off an event with music, etc.

They have a more flexible model, people that they bring in all the time to do events.

Um I do not know if I can pull that off within the 20,000, but if not, I would be coming forward with a contingency request.

And honestly, it's something that perhaps they should do year over year, and something that we should budget for.

Um, they do have that kind of flexibility.

They've provided the um New Year's Eve event, um, but they do lose money and their model in that because it's a free event, so it's something that we would probably want to support financially.

We're also um getting in quotes to see if we might be able to amp up a little bit of the fireworks.

Um, I don't think that would be incredibly cost.

We have quite a long firework show as fireworks go, um, but to be able to add a little bit more intensity at the end and throughout the middle.

So I did just want to bring that up that we were trying to cut the budget, we didn't cut the budget.

There was a lot of discomfort, some comfort, some discomfort.

Um, we also have already secured the Cascade Lake location and the rental for the community band, so a couple of different experiences.

So if there's any concerns with that, let me know.

But we're gonna move forward and try to plan it and bring it to you.

Um, and I'll know soon if I need to have any contingency for that for this year.

All right, and this is the trend going forward.

Obviously, we always try to mitigate that trend, but we're also trying to provide services for a growing community that's not only growing outward but growing upward and infilling.

So a lot of expectation there from community members.

Typically, we see about 5.5% of this is for maintaining the personnel that we have, and the many labor contracts that Mr.

Parish and his team work diligently to um work through every year.

So another way of looking at the long-range financial management plan.

Um, you can see from the current year budget that we're in, um, significant costs for the projected levy for construction.

We don't really change that very much year over year, considering the costs of um maintaining all of the capital that is not in an enterprise fund.

Um the general fund library and municipal recreation system again really do kind of um these are all levy impacts, so if you don't see something somewhere, it's because there's no levy associated with it.

Um, and we we do try to hold the line there as much as possible, but projecting some of those labor contracts out and some um anticipated costs.

And another favorite slide of folks is um comparing the local government aid and um the we have had to really kind of um focus locally on the revenues to be able to generate um revenue to be able to pay for local costs.

I did want to point out on this slide um that if you had taken if you indexed, for example, the 2019 local government aid per population and our population growth from 2019 to being at 125,000 today, we would have about 2.75 million more dollars coming from the state annually.

Not a huge dollar amount, but definitely would be something that could be helpful to the line that talks about construction improvement, things of that nature, um, and being able to provide service not just with some of our local revenue sources but with um state aid.

So um grateful to the team for putting this lab together and to Mr.

Parrish for pointing that out to me, doing the math.

Um but um I don't think we've described it that way before, but it is something that um is challenging.

So as costs go, we definitely have a declining resource there, especially with the cost of goods and the cost of personnel going up.

Um a few other things, and we're gonna start to get into the things we're thinking about.

Um we did talk about credit cards last year, um, primarily related to Rochester Public Utilities.

Um they uh have a pretty significant amount of uh fee that they were absorbing.

Um many cities do um not put this on their levy or their other rate payers.

Um all of these are slightly different funds, so parking is a different animal.

We do charge rates and fees there, um, but we could um talk about our our vendor contracts, but the big one is really um that that's hitting the levy is the building inspection services, municipal recreation, city clerk, um, and then some of that within within miscellaneous, so right now but basically what we've been budgeting for those departments isn't going as far because they're having to absorb those costs.

We do not we haven't been increasing the credit card um fee costs within the budget.

So we are hoping to, as RPU had rolled out, not do it exactly like RPU because we're not talking about a utility service, we're talking about sort of one-time transactions, um, but looking at different um scenarios of could we consider a convenience fee on the credit card similar to RPU, but should it be a percent, should it there be a cap, should there be a certain dollar amount after which you can't use a credit card, things of that nature.

Otherwise, we'll have to build them into the budget somehow.

Mayor Dorton.

Yeah, so if so, the one with parking is a little difficult if we don't take any other options.

So we're forcing them to use credit cards and then potentially charging them.

The other way are do we really want people to start going back to checks?

Because we could get the additional money, or people could say, I'm not gonna pay that anymore, I'm gonna run a check.

Is that the direction we want to go?

I think most people are used to paying a credit card fee.

And so we would want to make sure that we aligned it at something that wasn't so exorbitant that their fees were going up a lot.

But I guess the flip side of that is should the rest of the community be paying for you to use your credit cards.

So, like trying to find the happy medium of making sure we're not doing anything to overcollect, but we're just offsetting the costs of the use of the credit card.

Council member.

Yeah, I'm just gonna summarize.

I just as I'm seeing this happening in the community more and more places.

I wonder at what point do people say, okay, enough?

Um I'm gonna start writing checks again.

And I'm not sure businesses really want checks.

I think they like the convenience of the online paying, and I so I appreciate your like how do you hit the sweet spot that covers the cost but doesn't deter people to move in a direction that will make it more difficult for the city or a business to do that.

So just thank you.

Council members.

Are we learning from RPU in that if I read it correctly?

25% of payments are now coming in a credit card.

Is that different from last year?

Was it 50% last year down to 25, or is it been consistent?

It's still very new, but maybe um generally I only have annex.

Sorry, sorry about that.

I only have the anecdotal data at this point.

We see a few customers switch to non-fee payment types.

The majority of our payments are still coming in through credit cards, about 40% of total uh customers, uh residential customers paying the credit card as a convenience, and the fees have average about one percent per transaction there.

So most people are still sticking with the credit card out of the and absorbing the convenience.

And then there are certain things that we don't actually allow people to use a credit card for, we encourage them to set up a customer account.

So one of our largest um permittees, um, we collect all of that data and bill them monthly.

It's actually less intensive than they pay for the credit card every time.

We this would be a much bigger number um if that were happening.

So um there are these sort of guardrails that we're looking at um that do fit in with to a degree how we're already doing business because we pay such a large fee.

If someone say is making a fifty thousand dollar expenditure, that's a large fee that's being absorbed by any department that is that's doing that.

So it's a trade-off, but one that we already actually like encourage people to make depending on like their usage.

Is there an option with like parking for someone to use something other than a credit card or a debit card?

And I think about some of the like the park mobile if it's connected to your bank account, then you can um help me with my lack of knowledge on this.

Is there a fee connected to connecting to directly to a savings or checking account?

I would have to check on that to determine.

I believe that you can use a debit card, um, but part of the challenge with parking is that we have contracts to do these things, and so we would likely be needing to look at our contract there.

The bigger issues are outside of the parking uh fee structure because like they're not being offset by levy currently.

Um, but it's something that they could look into to restructure their contracts.

There already is a convenience fee built in for both park mobile, it's different for park mobile than it is for the parking ramps.

Um, but those are things that we could look at to determine.

So I don't know that all of these would happen at the same time, but the ones that are the largest um implication that currently budgets are absorbing, which means what's budgeted goes less far is in the j it are tax levy funded um departments.

Councilmember Miller, you guys, two questions.

One, is there any sort of best practice from other cities that the LMC or NLC are guiding on budgeting and absorbing this and balancing with trade-offs between recovery fees, tax levy, and the convenience?

There are, and those are things that we're looking at, but we wanted to like get a sense of whether you're we got a sense last year that you were comfortable with not having other customers pay people's credit card fees.

Um, but it's it's a little bit different when you get into these spaces where you're talking about like $50 permit for a uh a park reservation, which would maybe be fifty dollars and three cents, or even if it's true, those are much smaller, um, but many cities have already gone to this type of structure like 10 years ago, or in order to not, and some states require you to do it.

I'd say from my perspective, I think addressing the the biggest impacts that the highest fees makes a lot of sense.

I I see Mr.

Whitman sitting here, and I think about the pools on a busy day and thinking about the complexity of trying to accept multiple payment methods, cash, gift change, checks, and some of the challenges that that could bring to getting people efficiently into the pool.

I wouldn't want us to overcorrect in those areas.

Those are all things in the guardrails that we have to be thinking about in a policy that would work.

Council member keen.

I mean yes, council member keen.

I've watched this space for a while, and it's fascinating to see a lot of places going, like driving people back to cash and other people places like our Mayo Civic Center saying card only.

So it is interesting how it's bifurcating like that.

Um one point on the RPU thing that I think it's important to realize when you say what the goal was, was it to collect the extra fee, or was it to reduce the amount of credit card uses?

The real goal was to have the the costs follow the individual account.

And I think that's where the fee does a better job at this.

I I am supportive of it, but I but I do think there's so many different kinds of businesses.

When you list the difference of like the city clerk, someone doing a transaction there once every five years, it's dramatically different than what RPU trying to get things set up to be an automatic control.

You have no capability of doing that for those sort of things.

But when you have your bigger clients doing this stuff, so I think this isn't so much a one size fits all, but I think we should be looking at recovering the cost that the city's paying to use credit cards.

And that would be the intent.

One more really odd question.

Is a debit card and a credit card being treated the same?

I think it depends on how you utilize the card.

It's the person making the transaction making the choice, but I think typically if you're using a debit card, depending on the software, it's probably going to treat it the same.

Mr.

McCoy.

I can just add to that.

I think it also greatly depends on how the main processor vendor treats cards as well.

In the RPU case, they only run in this credit, and so there is a cost associated with that.

So I think that's being a processing of the wean, yes.

Thank you for the clarity.

I think that's important.

If not, you can talk about golf.

Um we don't worry, we're not talking about closing any golf courses.

Um but we didn't call it.

I think it was going to be off.

But um anywho, um, we have Paul Woodman here to just share some of the challenges that they've been working through with costs and um revenue, and that we are recommending to provide um operating levy to the golf courses, which is slightly different than what we had talked about in 23.

Sure.

Thank you, Alison.

Thank you, uh Mayor Count uh Council President, Council members.

Uh uh before I get to the challenges, there's some great things happening in golf.

Uh back during that time that Alison mentioned that we did the planning for golf.

We uh set out some of what we thought were very optimistic uh revenue targets.

We've exceeded those targets.

Uh golfers are doing exactly what we expected and asked asked them to do.

They're showing up, they're paying the fees, and they're having a good time on the courses.

That's what we want to see.

Uh we every year since that time we've broken uh revenue records in this past uh year 25 uh revenue is uh just right at 2.3 million dollars.

And that's uh daily fees, annual passes, and all our programs, concessions, everything that's uh coming from our user fees.

Now on the challenging uh side, uh we share uh uh this pain with a lot of departments in that uh fuel and fertilizer uh costs are rising.

Uh they were uh a concern uh a year ago, and they're definitely concerned now.

Uh so we're doing a lot to address that one is we appreciate the consideration of uh providing some steady tax levy.

Um you look over the past five years, we've uh been profitable.

Three of those five years uh had very good years, but then there's the years where like 25.

We had a lot of challenges related to weather.

Um weather is uh a big factor, of course, in uh running the golf operation.

We've had a couple of employee transitions.

The silver lining there is uh we received support from council to move to a full-time model, full-time employee model where we share the position across uh the the entire department.

And uh we can as we uh have turnover in uh future positions, we'll continue to consider that model.

We're also looking at uh standards where really doesn't matter.

Um places outside the playability of the course to maybe let the grass grow a little longer, uh be a little more tolerant of uh of the vegetation in those areas.

Um we're slowly getting our golfers on board with that.

Um that that is an expense that you know it doesn't really add to the to our revenue, but it's uh something our golfers have come to expect, so we're we're working through that challenge to uh get their support.

Um slide there kind of shares some of the things that uh we've we've experienced over the past few years, and as I said before, especially as we look ahead uh to 27, uh we'll definitely uh we we are concerned about fuel fertilizer labor uh supplies.

I I pulled those numbers from a variety of places, but I looked at what we're actually spending and not uh what we what we expect to spend in the following year, but uh what uh the market value of the uh fertilizer and and other commodities are in so we're we're gonna be challenged.

Like I said, we anticipate absorbing a lot of that and just how we manage the courses.

We're gonna keep it a very playable, enjoyable experience, but there'll probably be some things that are visible outside of the areas of play that we're gonna work on.

Council member Miller.

Just uh reminder, uh for my benefit from the fee increases, there were more uh larger steps up and fees for golfers, right?

Early on, are we past those?

27 is the last year that those uh the what the fees that we presented to council at that time, and we've held to that just because we want to be consistent, even though maybe the market might tell us we could be a little higher, and we just wanted to go through all the way through 27 with what we told the golfers we would we would do.

And so, yeah, we've we've uh ran that course, pardon the fund, but uh and uh we'll from here on out we'll be presenting fees to the board for for approval.

Okay, because I feel like if I I remember a high level of this discussion, part of it was really building up some reserves, uh not just increasing the revenue, but getting to a more stable place, and I understand that revenues have tracked, but doesn't feel like we're meeting the larger goal yet on this trajectory.

And I guess it's just a concern I am curious about like capital improvement projects or those delayed investments for the courses.

You know, obviously they're very large areas that have some deferred maintenance, but I'm curious if that schedule gets adjusted if the expenses per top rate are exceeding the model protections.

I I think we were very conservative on the expense side of things uh in 2022.

There are a lot of things we of course didn't know then as far as inflation and some of these other costs we talked about.

Uh although having said that to go have that and be profitable without tax levy for three of those years.

Uh pretty impressive considering any golf course is going to experience some loss over over time, it's over the long haul that the revenues are made.

So and we have put the CIP dollars to work.

Uh very noticeable improvements on the courses.

Entry road to Northern Hills is one of the big uh points of contention with uh golfers over the past few years.

We were got that resolved thanks to that support.

And uh Hadley Creek Clubhouse is currently getting some uh much needed repairs.

I would say that on the capital side is to be transparent about it.

We're putting in 200,000 a year.

We agreed we would be putting 400,000 a year into capital, so it's less than what we anticipated.

So while it you know sustaining operations, which it wasn't before, I mean, we were running deficits even you know, in that situation, uh the level of capital investment we thought we were going to do hasn't happened, and that number was set at a number less than what the consultant recommendation was, which was 750 per year.

725 is that name or anything.

I mean, that's probably more ideal, but uh we are sort of I think that's maybe the key message here is operational challenges trying to address those playability adjustments, and we still have to be thinking about capital in the future too.

Councilmember Doran.

As we think about golf, uh I'm gonna ask some numbers.

What percentage of the Rochester community in the golfing community?

Can you get back to me on that?

Can you get back to you on that?

Okay, the reason I'm asking is that we just discussed uh paying credit card fees for for uh for folks, um, and I'm wondering how much a taxpayer is subsidizing someone's golf uh golfing on a yearly basis.

It's it's the same sort of situation where someone who might not be golfing is is paying into a tax system to offset that golfing experience for someone else.

So that's why I'm asking about the numbers.

I think the overall budget for golf is a little over two million dollars a year, and so not super significantly when you think about like the library or other things like that.

Okay.

Um and then what percentage of what percentage does of the municipal recreation budget is golf?

Uh yeah, so of uh $12 million budget, it's $2.3 million rough numbers.

So about 20%.

And I think we need to remember that our trails and our parks, there's not nobody pays for those except our taxpayers.

Yep.

This is a uh members, you do have to ask the chair to be recognized.

Hi, Mr.

Chair, thank you for your tolerance.

Yep, Mr.

Government.

I understand that.

And then in our golfing system, I spent some time.

I'm not a golfer.

Uh I'm glad people enjoy the sport.

I just it's not for me.

Uh looking at the golf fees, um, are there subsidized programs for low-income folks who need to participate in the golf?

We uh well I we've tried to work through this question in 22 when we did the planning, and and the answer we gave, and and is consistent in municipal golf programs, is that municipal golf is designed to be uh low-cost option for people that want to golf as opposed to country clubs, private courses, and other options, even even talk golf.

Um we try to be an affordable option.

We do uh we're pretty generous in our youth programs.

Uh we have an outstanding first team program at Heavenly Creek.

Um we uh try not to uh go to wait lists every year, we try to get everybody uh on the course that wants to be part of that program, and that is very affordable uh as far as youth programming goes.

I think I recall golf is growing.

Overall golf uh is continues to grow.

We had uh the 80s 90s surge and then the COVID surge, and so far National Golf Foundation and the PGA has said that's uh still on a fairly steady climb.

And that holds true in Rochester too.

And then do we um do we um water our golf courses?

We do.

And what is that average water expense?

Um I would have to look that up.

It varies by the course.

Okay, and then uh pesticides, do we use pesticides on our municipal golf courses?

We do.

Okay, and I'd also be interested in that number too.

Okay, okay.

Council member can yeah, again, I I know there's a couple of charts in here with this, but I'm still trying to get it like a takeaway at a budget level.

That is this something like uh um deputy uh administrator talks about like capital up to 750, but I I remember a 250 number, but I think that was put into the golf program, it wasn't put into capital.

And I thought again, I I'm trying to step away and say, here's the delta from the the early uh early and early discussions on the 2027 budget.

So the early so what you see on this slide is 200,000 contributed to CIP, which we've been doing, yes, which was part of that 2023 decision, and then 150,000 versus 50,000 for operations.

So your 250 is correct, and they were segregated 200,000.

But of course, to council member Miller's point, there was also this intent that the revenue would exceed the rest of the operation, and that golf itself would also be putting in for primarily for capital.

But the costs of what was described also have been significantly increasing, not just at the golf course, also in the rest of the park system.

So again, if you could summarize for me, what does it mean when we say we have these issues?

What does it mean budgetary?

Like a hundred thousand dollars.

And and do I read that as a tax levy side the um that it would that it would be coming from tax levy, otherwise you would have to significantly degrade the the courses or increase the rates beyond what you are, which may impact your ability to cover the cost because if people golf, there's an inverse relationship.

So let me see if I could restate it.

We'd back in the 2022-2023 agreements, there was 200,000 towards CNRP and 50,000 towards operations, and now we're making it 150 towards operations.

Yes.

Well, 350, 350 total if you take the existing CIP, but maybe I look at the left side and say originally we were saying between increased fees and tax levy support, we were trying to generate 500,000.

The fees are good.

We've been generating that.

The levy's good, expenses are up.

So when we thought we were going to do $400,000 of CIP off of that model, we're only doing $200.

So we're subsidizing it a little bit higher on the expense side than what we thought $100,000.

And we are not investing the $200,000 in CIP like we thought we were going to.

We're using operation.

Yeah, what is that?

And that is $100,000.

Telling you we're a little off course.

We just want you to know.

I mean, there's a lot of enthusiasm generated during this conversation last time.

And we just want you to know equitable showing.

And at the same time, the works and recreation director is looking at ways to mitigate costs at the golf course, despite the fact that they're going up.

So there will perhaps be a different experience for different golfers, and at some point maybe different courses will have different experiences, and their rates may adjust accordingly, which may get to some of the affordability components too.

So like this isn't something that you overcome in it overnight, right?

It's something that they're continuing to try to stay on top of in order to be able to provide this.

And within this, we also have changed the model for operation so that year-round there's um instead of just having golf pros in the summer, we actually have year-round programming support for other facilities across the park system.

I I agree, and I but I don't think those expenses are being charged to golf.

I think they're being charged elsewhere.

Actually, we're not appropriately allocating them originally, but we're also making that adjustment with the I I guess I was just trying to summarize away.

And I think that I think that the idea here is this is sort of like a decision packet that the staff is recommending.

We add an additional hundred thousand dollars.

If that were my seemingly different decision than what was in the resolution in 2023.

Yep, yeah.

That's helpful.

Thank you.

Councilmember Palmer.

Well, thank you.

Um I'm not a golfer either.

Um I think it's a good sport, I guess.

Um, but I got a couple questions for you, Mr.

Whitman.

I think you said that the number of golfers have increased since we started the 2022.

Yes, we've seen increases across the board uh significantly in uh our young adult and youth uh uh passes and daily fees as well.

And your first T program is set up for children not just to learn golf, but etiquette and golf, is that correct?

Uh etiquette and but and uh character development as well.

It's a national program.

We use the curriculum provided by the first T.

Uh we are a subsidiary of the program in St.

Paul.

And that's been real successful, very successful.

Um we get a lot of volunteer support from golfers uh for the instruction uh equipment donated, that's where the affordability factors using for youth.

We have a um uh storage area for donated clubs for for youth that works out well.

And if I remember subsidy from us for the rec center is about $800,000 a year, is that correct?

Roughly, yes.

Ballparking, yeah, yeah.

And we have pick a ball, we have tennis, we have what 90 different things you probably do in your your programs.

90 sounds long, yeah.

Very busy department, yeah.

And we don't always try to break even, we try to offer stuff to the community correctly.

Okay, and then most of the time this decisions don't come to us, they go to the park board.

Um the park board makes those decisions as far as well how much you mow and how much you do this and how much you do that.

You just happen this year having to ask us for a little bit extra.

Is that correct?

Uh that's correct, and the board is aware of these uh numbers and agreeable to their requests for making.

If I remember right, we're about 200,000 in swimming pools that we're subsidizing right now.

That's uh that's about right now.

Thank you.

Council member Miller.

Thank you.

I actually have a different question uh than what we've been talking about, but related to golf uh on the parks facilities that have outside food and beverage operators, how much revenue is coming in from those.

Uh well, let me just focus on golf.

Um we really base that on the quality of the facility and the potential for revenue for the vendor.

Uh we're charging more at uh Soldiers Field because of the location, not so much the facility.

The facility is okay.

We have a newer facility at Northern Heights or Northern Hills, sorry.

And uh we charge it's a simple lease and revenue uh approximately per course uh just under 10,000.

It's it's not a huge amount.

Um we're very we're very low at Eastwood because it is uh really golfers only as a potential customer.

There's not uh traffic coming in uh as we see off the West Circle Drive in one of these.

Okay.

I guess the reason I ask is because we when we talked about the chateau, we talked about the challenges of the liquor license and the higher margins on food beverage and some of the challenges financially for that facility because and I guess I I just bring this up because I think about it in the operating model.

Um and it does seem low, uh, but I obviously there are challenges.

Are those leases assigned through some sort of competitive bidding process or how are they coming to be?

I we have uh tried uh to get word out uh uh about openings before.

We we had Eastwood uh clubhouse without a vendor for over three years.

We had a vendor approach us and we did not make it competitive.

We we work directly with that uh vendor.

Uh and usually that's how it's happened as as we've expanded.

Okay.

Uh we try to find uh most all of our vendors right now except for Eastwood have uh uh operations outside of the the golf concessions, so that tends to work well well where they're not depending just on that revenue for for their livelihood.

And has there been any consideration of like a percent revenue sharing for like particularly some alcohol sales as a higher margin item?

We as we've seen uh the growth in uh the two courses I mentioned that are doing well.

Um we've looked at uh different models.

Um part of it is the accounting piece of it.

Uh uh it's I just be honest, it's easier for our team right now to focus on golf and not have to work at an accounting system for the concessions and it's easier to have that uh just consistent lease.

I'm the one then managing that and it keeps it out of the uh the uh golf proper a potential that we have okay.

I I just bring it up because I think it's an important part of how we've thought about other facilities having sustainable operations.

And then I I guess the last point I'll just make uh about like sort of the original intent.

I mean, when we think about our parking system, when we think about our transit system, when those reserves because of drop, that's really the trigger point of reevaluation, whether that's uh adjusted service in the case of Rochester Public Transit, which we go through about twice a year or in the parking uh world rate studies to make sure that we're keeping that reserve.

Again, they have different models about not going to the tax levy, uh, but I think that that's a more important indicator than where the revenues are tracking, especially if expenses are outpacing.

I don't just I don't know where my colleagues are, but that's more concerning to me if expenses continue to outpace even with increased revenues that we feel like we have a structural imbalance to meet in golf operations, even if there's always some implied substate there.

Council member Culmar.

Well, I'll go back.

My my understanding of your clubhouses is like Eastwood, we're just lucky to have somebody bid to have a service there.

Is that kind of your yeah?

We were considering uh just opening it up as meeting space.

Um we we are we're fortunate to have the vendor there that's um uh providing the service.

And uh just overall Eastwood Clubhouse is uh where we're trying to put some of those CIP funds aside for for an update.

And as soldiers, if I remember right, um we're lucky to have somebody bid and we were just trying to get somebody to start there and kind of uh get their feet wet and then and then see how their business is doing.

Is that am I remembering that correctly?

That is correct, and also there was an investment on the part of the vendor uh that was part of the lease agreement uh they put in uh uh beyond the kitchen.

It's usually we leave that to them, and then we're we try to partner on the the shared facility.

Uh that that vendor invested in the uh pretty much uh everything short of the check-in point of the clubhouse.

Uh the flooring for the dining facility, dining area, which our golfers use a lot, and um and so they came in with investment uh which uh that's probably I should have included that in Councilmember Miller's uh question as well.

That uh several of our vendors have invested.

And we don't have a vendor at Halfland, is that correct?

We don't.

Uh what we do there is we uh keep it uh pre-packaged goods and we share the revenue with First T program because uh they're doing the vending and it's turned out to be a good fundraiser for them.

Is having nine polls?

It is.

Okay, thank you.

Councilmember Fredericks.

Yeah, Palmer stole my note, so I don't have a lot to say now, I guess.

But uh first of all, I was just gonna say as well.

Is it fair to say that we're just happy to find someone to take the food beverage end on these facilities because it hasn't been what I would say a stellar opportunity, correct?

Well, coming from you, I think you you know the science of that location is everything.

Yes, and uh at our history of our clubs, people would go out of their way to you know to to have to eat it at our clubhouses, but even Soldiers Field and Northern, they're kind of off the beaten path.

Uh they're not visible from the road, and I know that means a lot.

Uh signage and convenience is what um uh that's been a challenge, and and so uh when we get people approaching us saying we want to make this work, we've got a good plan.

We we sit down and work uh work out the details, and uh it's turned out in both those locations it's working out rather well.

They seem to be happy with uh the uh business they're bringing.

And I can't let Mr.

Parrish be the only one to use a pun.

So it is a uh our courses are a above par experience uh too.

I just wanted to add that, you know, for a municipal course.

We have very nice courses.

Uh I went out with my sons and played at three of the four.

I believe we have a total of four, if that's right.

And uh I got to play the opportunity to play at three, and I was really impressed with how nice they are, how well they're taken care of.

I just wanted to add that.

And the other thing I wanted to bring up is I'm I'm very happy about the opportunity for our youth to get off a screen, get outside, uh learn a sport, learn etiquette.

I mean, that's awesome.

Etiquette for this sport can spill over into a lot of things that's beneficial to this youth.

So real real nice to hear you bring up the program and go over that a bit.

Thank you.

Yep.

Mayor Norton.

Just to wrap up, um, we've we've spent a lot of time since I've been mayor talking about golf, and it's been frustrating to me.

I don't golf.

I've never golfed.

I have family members of golf, but I don't golf.

But this golf course downtown is flat.

It is close to all the hotels where people come to visit.

It's good for people with disabilities, people of all ages and abilities.

And in the Soldiers Field area.

And I feel like we have this fight.

You have done what we asked you to do.

You have successfully and exceeded expectations with what we've done.

And I just want to remind this council as I won't be having this fight moving forward, but you will.

I personally think it is inappropriate to pick on one sport just because you don't happen to play it or don't think it's your thing.

When we subsidize hockey, we subsidize our parks, we subsidize our trails, we subsidize, we subsidize, we subsidize all these other sports, and yet no one has picked on those.

We have just been picking on golf.

So I would say in the future, I would ask that you all think about the other sports we're subsidizing, look at those numbers as well, and not just continue to focus on golf, which is a great activity for people of all ages to get outside in, even though I've never done it, and I never will do it.

So I just want to say thank you.

No, it's inappropriate.

I know we were having a fight.

We do have more presentation.

Yes.

All right, to transition out of golf, I'm gonna play through and try to speed things up here.

I know.

So I'll I was super fast, so uh other things driving the budget, things that we're looking at as a team.

And this is the core time for the council to say these are other things you want to look at before you receive the city administrators recommended budget in August.

So uh labor costs and health insurance, we're feeling pretty good about where we're at with that.

We've got a lot of multi-year labor agreements negotiated at 3% journal wage adjustment.

Um we are gonna apply that to mayor and council salaries beginning in 27 consistent with previous conversation.

We're also on a bit of a journey about looking at redesign of our health plans because that's a cost driver for us.

Um, but it's also a uh an attraction and retention item for us as well, so we gotta find the right balance on that.

No planned new debt issuance uh for 27.

We have been looking at fire station uh sighting options.

Um at least that's tax-likely supported debt.

There's certainly enterprise fund supported debt that's uh part of the conversation, but that is still very much fire fire station-wise still very much being evaluated.

Um things that we need to continue to think about.

Uh fuel, I mean, we have a lot of international things happening and inflationary pressures happening, so we're budgeted about a three percent increase in our fuel budgets.

Uh, if we get way outside of that, um you know, obviously the price gas prices are going up.

If we consistently stay there, uh that might be out of the driver in our budget that we're continuing to monitor.

Uh some of the impacts to liquid natural gas um can drive uh utility rates, um, but you know, there's significant disruption happening in that natural gas market.

Um, but you know, there's significant disruption happening in that natural gas market, so could show up on people's power bills with the you know with the with the adjustment there, um, but also you know, we're a utility customer, and so it could show up uh across the enterprise as well.

Um we have some water infrastructure as well as we look at the Northwest and trying to match the growth and development and plotting that's happened.

You'll see that in a future council meeting in order for us to effectively be planning for that.

We may need to think about some additional infrastructure there.

Uh air service needs, I'll still sort of you know laid out the needs there, less uh both in transit and in uh the airport.

We had you know some of that federal ARPA CARES funding that's kind of navigating away in those spaces too.

Um, but we still need passengers and and head count, and so you know, we have funds that we've retained to encourage that.

No uh outside agency process contemplated.

We had the funding recommendations identified last year.

Um, we're projecting to roll those forward.

Um, so just you know, I know that's also a hot topic at times in the budget.

Uh then we had 27 decision packages that were approved as part of the uh 2627 budget.

Certainly, there were a number of those that were not funded.

Uh these are the ones that were funded, so there are about two million dollars in those.

I'll just highlight a few of them.

I'm not going to go through the list, but ERP project contingency is the largest one.

We're still on the journey with the ERP project, which is rolling out nicely.

Um we have uh two police positions uh that were identified, uh, $320,000 in the budget.

Uh they have a revised their request in that space to go one officer, uh one uh outreach focused position.

So you'll see that adjustment.

There's a little bit of a net savings in that space.

Um, and then we have a couple of other positions, particularly in the IT GIS space.

Just as the organization needs grow, we have more needs, and we just haven't done a great job of 24-7 or you know, more round the clock coverage, and we have a lot of enterprises, a lot of operations that are not uh daytime staffing situations.

Uh councilman McComer.

I got a question.

You got the police department there.

You're asking for two community uh service officers.

Is it the CSOs you're looking for?

Are you looking for a there?

They are regular officers in the community services or the CAT team community action team.

So yeah, it's it's maybe a bad label for that one, but it's two licensed sworn officers, but that's switched to one and one outreach uh for our homeless outreach.

Now, so in the last report we got, we spending over two million dollars on the homeless.

Where's the county set up here?

Where is their responsibility?

Because we don't get any funding from the state for this, do we?

Um, you know, not material money for us that way.

I mean, obviously, I think your broader conversation not to be solved with this particular piece, probably, but your broader conversation in that space really is uh whether we invest in this or not, we incur the service impact of it.

And so it's part of the ecosystem.

We have to collaborate with the county.

I know Council Member Doring is obviously you know involved in the group that works specifically on that, but we will receive impact on this, whether we decide to do these positions or not.

I think the goal is to mitigate the impact and shorten that curve, get people into housing.

Um that's that's the focus there.

But yeah, we it's an ongoing collaboration with the county.

They certainly are the lead in the social service space, the outreach space, um, and the you know the action teams around getting people housed.

But we're spending some money investment twice with the police department that you should get some benefit of that.

So we're not always having to add officers left and right.

Um so that that's a little bit inquisitive about that.

So could I I think part of how we've discussed this in the past is that the county does provide those social services and they have been providing the warming shelter, which is a place that our police department is able to point people to so that they are not engaged in the type of activity in public spaces that create the concerns that require response from the police department, whether that's from regular patrol or these targeted positions that they're trying to get ahead of things and mitigate the impact, as um is Aaron pointed out.

So the two million is absorbed across the entire existing um police department budget with existing employees are just saying their calls for service if you equate that to the amount of time they're spending on outreach or responding for some sort of behavior that's related to someone experiencing homelessness, that it's a significant amount of their response time.

So, would you have that regardless?

Yes, I think what they're trying to do is mitigate how much of their patrol costs are going directly to that type of response and target and focus that to a group of people who is hopefully going to reduce the amount of calls for the same person over and over and over again, which over time should mitigate how much of the police budget, if you will, based on calls for service is going towards that type of response.

Does that help at all?

And then the county really I guess my point being is that you know the warming shelter six years ago the mayor pushed hard to get a warming shelter in Rochester, and then an overnight shelter, and the city threw dollars in there to help with that.

Now the county's paying for that themselves.

Um, the more that we do for them, and the more that we do for the seven counties surrounding us who who transport people here and say here, Rochester's a great place, they have services.

It's not helping us.

And so that's where uh that's where I'm having this problem.

We're hiring more people.

Councilmember Miller.

I guess in the interest of time on this topic, uh it feels like a broader study session topic, perhaps, and I don't see it on our calendar, but I know we've had RPD come and talk about uh both the numbers of calls for service, the resources going into that, and we heard that uh the outreach position was being very effective, so I'm glad to see that that's being recommended to scale up.

But I wonder if we could bring it back at a future study session, have a broader conversation about this.

Uh and I also will be with us to talk about um the fire department discussion about fire station six.

And I I know we had had a grant possibility that was maybe changing some of the staffing model.

I don't see that necessarily on the study session calendar, and I think both of those as being like high levy implication uh areas of city services would be I I would rather have a more robust discussion and not um cause our council president and stress about the fact that we're already over an hour on the topic.

Keep talking.

But I'm interested in this as well.

And so I I think it might be just an opportunity to talk about some of this um throughout the summer in a deeper way.

And we have not forgotten on the previous council meeting where I think we're councilman Miller.

You asked about public safety evaluation overall, and we continue to have staff a little conversation about what some options uh there might be for sure.

Okay.

So again, just to accelerate the conversation.

This is basically this previous slide with some policy crosswalk, so we can review that um at your leisure.

Uh notable other supplemental budget items will be navigating uh as that the city administrator's own prepares a recommended budget to you.

Uh talked about the police officer reallocation.

Um we do have a request that would allow for us to uh renovate public music space into an additional uh 104-like space uh that is closer and more public facing.

I think you'll note that at certain nights uh where we have a council meeting and we have a board of commission meeting in 104, but then we have a closed session, then they get pivoted up to 320.

So just a question on whether having a closer connected uh space uh for those types of things where we can do board and commission work as well as you know, navigating over for council closed sessions, and then this uh study session, right?

So you're this is uh the desire to meet around the table, um, you know, reconfiguring the room, you know, is this is as good as we're going to be in this space in terms of the experience we can create for you here.

Um, and this would just provide you an opportunity to rethink that.

Um, so we that's something we'd want policy direction on.

Obviously, we can make many, many things work uh in terms of how that goes.

Uh, it also walks back to your council rules of procedure conversation where you talked about you know, is there spaces where council members can meet with constituents and so on?

So uh that need could be met there as well.

That's let me uh uh since since I was an advocate of this and still am, I I would say one, I have a little bit of sticker shock from the the figure there.

So I think you know, seeing some itemized uh information on you know what that could provide, but just to speak to uh the a need, I think I think around the table we all feel, despite my stress sometimes in long discussions.

I I think we all feel that we are having a more robust discussion and really being more deliberative in these study sessions that are much more informal, and so I really sense a need for permanent space, whether that permanent space happens this year or next year.

I think it's important to have a placeholder and say from a better public meeting standpoint, having space where our constituents who are sitting along the sides can see us, where we we have uh the uh the the mics and and the ability to really uh provide that service uh for our study sessions, I think is important.

And then Haran did speak to just the need for space for boards and commissions and uh and um and other meetings that that uh uh staff have as well.

So I think it's I think it's important to that it be there and let's look to it, you know, see seeing what what those costs are.

Councilmember Wall.

Do we have an idea where Musik would be uh relocated and uh what will be highly accessible for people?

Yeah, and I I think that's the important part of this conversation is it's like a relocation of a music, likely into the 320 and third floor area.

So again, within City Hall within our facility, but also trying to manage some of their fairly substantial storage needs, maybe in a different way than you know, currently the in and out that they're doing now, whether that's in the garage or through a trailer, so looking at some of that.

Um, and then we're I mean the cost driver is that relocation, the retrofit of the space, but then the A B.

You know, I think if y'all experience the RPU community room, it would be a similar A V setup to that, which it's just not an expensive, you know, kinds of things.

But that those are like your kind of your three anchors in terms of what the 688 is uh costing.

Councilmember uh Palmer.

Well, I think 688 is a lot of money, but I think room 104 to me is a better room for us to meet um than we are here.

And so I've said that for a couple times, but I think that's set up as far as having other committee meetings on Monday night.

That's interesting.

If you just change that calendar and have them meet on a different night, um, there's four other nights that they could they can um meet up.

Um thing that we skipped over that I'll talk about here is that uh I don't see a need for a council race, and so I would not be in favor of that.

Um I am in favor of the credit card fee.

Yeah, and I would just speak to the scheduling.

I think it it can be um except the fact that with this building we are Monday, Wednesday, and every other Friday here.

Um because we split this space with the county.

Um so we start talking about like planning commission, etc.

Like we have limited times we can be in this room.

Um and you know, we're just have a lot more folks that are interested in meeting, you know, obviously at City Hall.

And I think part of it is just when we're having like the bike and pet committee meet, like if the council has a coal session or something, which is often a conflict, um, they're going to 320, which it's not as intuitive for people to navigate their way there.

And so I just there there are some of those robots, not impossible things to deal with, but I just thinks I'm onto the radar if you think about that decision.

Uh oh, sorry.

Council member, we have two more.

Council member Keene.

Yeah, I I I was kind of cutting through to the end here and trying to say, like, what are the bigger things here when you're doing a supplemental and kind of looking at it?

But the one chart that jumped out to me more is over the next five years, we're we're projecting seven and a half percent increases every year with just without knowing the fire station, without knowing what other kinds of things are gonna come.

It doesn't feel good.

It feels like we're not in a controlled posture.

If our if our you know our our labor costs in that on current things is more of a four and a half to five and a half percent increase.

I think that's the starting point, and then we have to deal with because I'm looking out there at 2027.

We're gonna start talking about taking on debt for a fire station.

Well, what does that do to 7.5% then?

So I I think we've got a step back as opposed to talking about what more we can do.

One example on the supplemental budget is I mean, I just think we've done enough with our meeting rooms in the last couple of years.

We've spent it RPU, we spent here, we spent in 104.

I I just don't see it.

I think right now we need a moratorium and saying leave those things be.

Uh, and and maybe there's some operational things that can be handled within budgets.

But this idea of like saying, and that's something else we can do.

We we really do need a different mindset.

7.5% for the next five years.

And I and I know we've got a four percent increase in proper, you know, the in the taxpaying group, but but three percent of that is just uh appreciation on our properties.

It's not new taxpayers coming in.

So I I just think in the bigger picture, the starting point here should be we can't be talking about what else we need to be doing.

We need to be talking about how can we contain or constrain this because the average households right now, every I know there's uh the ability to go through a 7% increase, and we can do that every once in a while, but to say this is the new bench, the new starting point, it's it's disturbing.

Councilmember Miller.

Yeah, I largely shut up uh point.

I I actually think that the conversation we're gonna have at the end of the June on the study session calendar about the growth pattern and the urban three and TIFF analysis will be an interesting starting point for this.

We had one percent of new construction related to the increase in estimated market value this year, which was uh significantly lower almost half of last year's.

So I think how we're looking at the development and what style of development uh gives us additional financial productivity versus what puts additional strain on our budget.

I would I I share council member Keen's concerns, and I I wonder how we track targets towards NFL redevelopment as we talked about in the action plan and the KPIs and setting some other benchmarks to be able to think about some of these service increases.

Uh I would rather tie to that and show people that we are making progress on financial sustainability at the budget level before we project all these increases.

I know it's part of this conversation, but I I do share those concerns.

And on the meeting room, I mean I see the benefit of it.

I think we may, I think staff have made good improvements to this room, and I've also understood that there are also maybe with wireless microphones additional capabilities.

So I'd rather weigh those and have maybe a longer glide path to quote council president should bring on the meeting room change.

And I've also heard that many of us have talked about getting out more into the community and investing in those areas rather than expecting that the community just comes to find us here or across the hallway.

So I'm I'm hesitant on that spending, at least in the supplemental year.

I would rather talk about it when we go through the strategic planning again next year with a you know start of a new council two-year budget.

Um so I'm hesitant on that expense.

Mayor Norton.

Um, I have a question.

So to I think there's been some good discussion here, it's been interesting.

Um when we talk about projecting when we settle our union contracts, we know what we're getting, and we have significantly voted right as a council and this city to move forward with those increases over the last couple of years, and they're they're typically three-year increases, so we know what it's gonna be.

Have we figured in the growth cities growth in projecting what impact that will be on our budget?

So I think that's uh to thank you for the question.

I think to council member Miller's point, we're trying to do that and understand also the prior city growth that sometimes we hadn't maybe projected the impacts on service levels, and you all get to be here now for that, plus the new growth that's coming.

So I did want to just point out that there's time between now and August where we look at all of the different employment services costs, things of that nature.

The way that we have budgeted here traditionally is we we budget for like the number of people that are going to be on family health insurance.

When that changes, that was a significant value last year.

But then I can't guarantee you those types of things will continue going forward.

So we'll be looking at all those things.

So I don't think that this will be a higher number, um, but we want to be able to come to you and explain these were the things that were there, helpful to get the feedback that we did today in order to continue to look forward.

And it is a much more complicated long-range financial plan outlook when we can bring into effect where we think there's going to be development, how we've really not talked about how some of those increase new construction values would work.

Um that's not projected into this forecast because the forecasting gets challenging and all of the operational things come to bear, but we wanted to be able to get your feedback on some of those things, like the meeting room.

So that's helpful for us too.

And so I asked that because I it makes me nervous when I hear what council member Keane said, which is we have a seven percent increase, and everybody's gonna panic over hearing that.

But that's part of the story, and it has to do with salary increases, it has to do with inflation that we do consider moving ahead, but we do not yet consider growth and the impacts on property taxes and those other things.

And so it doesn't necessarily mean, so I'm trying to say this up front, that there is a seven percent increase in everybody's levy for the next X amount of years.

That is how much our expenditures are gonna be.

We don't yet know what our revenues are gonna be.

And we do try to forecast, but it's not like a super finesse forecasting type of system that we're using.

We build in some costs that we think we might need to be able to have additional capacity, um work capacity or capital capacity, but obviously those are all things that get mitigated if there's not like the political capacity to want to be able to do those things either right now or we could look at doing them differently.

We do have some constraints based on our our labor situation, and so that any time those um things can be looked at as well.

For example, the ability to have experienced Rochester due to some of the events when they flex up and down and utilize the lodging tax potentially if that grows, um, but want to make sure that if we want to continue to have some of that programming that we like a different model for doing that programming, right?

A model where they always are bringing people in versus having them there throughout the year.

And there's the outside influences of inflation and tariffs and all the other things that are happening, you know, price of fuel right now, which is impacting our budget.

We just don't know what'll be next year or the year after that.

So anyway, just want to mention that.

Okay.

And for sake of time, I accelerated to the last slide here.

Let's get let's get council member Fredericks in.

One thing I hesitate to say out loud, but I just got to be said.

We don't very often talk about cutting staff or cutting programs that aren't being utilized, maybe to the best of our dollars worth for lack of a better word.

So I I think we can't be afraid to look at things that are just maybe not the top and look, Councilmember Goring said earlier, you know, what is the who is benefiting from it and how much is it?

I mean, looking at looking at our bank for our buck and making those tough decisions because staffing is our most expensive um item on our budget.

So I think looking at that to make sure we're utilizing all of our staff and all of our programming to its full potential, and then looking at things that maybe you know what?

Maybe we have to cut some things, and that obviously helps the bottom line or not, you know.

Thank you, Council Member.

I I'll just add that um I think that I think council member uh Miller really set a bar when if we see a structural imbalance in something that we really should be looking at that, but we can't forget that we are in a growing city and the needs are becoming greater, and those needs are becoming greater at all levels, and so we as council, while we have to be very strong stewards to the funds we use.

We also have uh have to push that envelope as much as we can, and you know, a small thing, uh community engagement or engagement at the council level, it's not the most important thing we do, and uh I think the staff has done an amazing job this year of really getting us off the dais here, and I think this is a good model that we can uh we can continue to uh make better.

I think uh staff also is uh creating opportunities for us to be out in the community with uh material so that our constituents who are around us here today uh can meet with us, and so I think we're in a good place, but I I want to have us keep growing in that community engagement realm because the they're gonna come to us and uh and uh that's what we're here for.

So uh, but I I think uh good report and looking forward to continuing the discussion through August.

With that, we will move to natural gas franchise fee community engagement, and we have the other Aaron and Kayla, I think we're gonna see that's the next one.

Sorry, don't get away.

Evening council president, council members mayor Norton, uh Aaron Luxtein, Deputy Public Work Director, and with me tonight is Caleb Betzel, our sustainability coordinator, and we're here to give you um follow-up with the results of our natural gas franchise fee engagement session.

So we'll kind of I'm gonna well here, I guess I kind of end the slides nice.

Yeah, um so what we're gonna cover in the next uh handful of minutes here is we'll uh briefly uh talk about the project background, provide some context for the discussion and refresher.

Um Kayla's then gonna go through the engagement overview of all the different ways that we engaged with the community, the engagement results um, and then our staff recommendation and what to expect for next steps.

One of the things I would want to emphasize right up front is with the packet was also our full final report.

There's a lot more information in that report than what we're gonna cover tonight in this presentation.

So just to uh kind of provide a refresher, what is a natural gas franchise fee?

It's a fee collected through our natural gas company, which is Minnesota Energy Resources for the Rochester area here for the use of the public right-of-way.

So they see it on their natural gas bill.

The Minnesota Energy collects that and then remits it back to the city.

So that's how that process works.

It is authorized under Minnesota Statute 2016 B.36.

If you want to read that, it's a pretty brief statute, but it talks about the authority to do it and then the conditions that need to be met by implementing the cities get to determine whether to implement a fee.

It is optional.

How that fee is structured, and then also how the funds are used.

Those are all local decisions.

Just to refresh or reminder on why this was explored, what it is in the council action plan.

And so as a means of looking for funding to be able to support the city council strategic priority around environmental stewardship and some of the projects related to that.

Looked at as a potential local stable funding source to help not offset grants.

We get a lot of money from grants and uh or from federal and state to implement programs, but to help accelerate those even through matching funds and things like that to open up additional opportunities, but it also does provide a stable funding source when we're dealing with fluctuations within available funding that is out there.

So with so just to provide a little context benchmarking against Minnesota.

So one, there's a little more, a little over 200 cities that currently are implementing natural gas franchise fees.

There are about 800 cities of Minnesota, so about 25% of them have a natural gas franchise fee.

We did uh a deep dive into 90 of those cities as part of our our research.

What you see on this slide is 31 of them.

It was hard to show a graph with all 90 on there.

Um these are 31 of them.

The average residential flat fee commercial is always a little bit different.

There's a lot of variability on how you handle commercial, but the average residential fee is three dollars and fifty cents per month.

Um, 55% of the communities that were researched use a tiered flat fee, so um it kind of ratchets up based on your use.

So you have uh several tiers primarily within the commercial um sector, and then there's a wide variety of how the revenue is used, but uh predominantly within environmental programs, uh infrastructure investments such as like street programs or um using instead of a using assessments um for for projects like that, or just general services that goes back into the general levy, so wide variety of how how that fee is used.

That we'll have Kayla.

Hi everyone, thanks for having us.

Kayla Betzel, sustainability coordinator.

Um I'm gonna talk a little bit about the engagement that we did over the last few months.

So the engagement period after we came to City Council in uh November at the study session and kind of presented our engagement approach was um really from no uh December of 2025 through March of this year.

Um we had over 50 engagement activities, so these were things like direct email lists, um, community meetings, presentations, small group discussions, uh, in-person and virtual open houses, um, and we reached over 30,000 community members through these efforts and received over 200 survey responses.

And so we really designed the community engagement to both be accessible with in-person options and virtual options, and for all of the different forms of engagement to reflect one another so that we can kind of look at the results and report them out.

Um, we also focused on quantitative and qualitative aspects to kind of all of the engagement that we that we moved forward with.

So this kind of shows the in-person virtual website, and then our the community feedback feedback form is the survey.

Um this photo here kind of shows what one of the poster boards at um one of the in-person events looked like, and then again the virtual opportunities and the survey mimics the exact questions that a resident would see in person.

So that was done intentionally.

So again, the in-person and virtual options, um, in-person with DOT voting, um, virtual polling, and then the online survey questions, quantitative and qualitative feedback.

Um, and we're really looking to you know educate the community about this topic first, and then you know, ask for their feedback on different aspects of the project, kind of understanding that it's a mediator topic.

Um, and and so we found that it worked really well to kind of you know both have the opportunity, I think, to explain the concept more in these in-person um engagement sessions, and then also I think really the strong piece of this is all the uh smaller group discussions that we had.

So we had over 20, I think it was um over 20 small group conversations and presentations, yeah.

And so that was really where we were able to gather some great feedback from the community.

Um we did also want to recognize that you know, well, I think our efforts were were broad with this with this project.

There were external influences, so we um you know have to you know mention that there was increased ICE activity both locally and regionally, and so that did impact certain community members and their ability to engage with this project.

So I think we would just note that you know, if there were future phases of these work, we would need to you know focus on continued outreach and more inclusive engagement.

So now I'm going to jump into some of the engagement results.

And so again, um, this is kind of combining, and in the report, we do break it down.

So if you're interested in seeing the differences between the survey, the in-person and and virtual, we break all of that down in the report into quantitative and qualitative, and then we kind of put it together and then show the overall results.

So when we combine the survey responses and the in-person and virtual, more community engagement, small group discussions, we see that there was overall 61% of respondents and participants in this project said that they would be willing to support a fee in some form.

The strongest support was for using the fee to expand programming, but the support wasn't universal, so we saw about 39, so about 40% preferring to keep the current approach, so no fee.

Um and this this will likely come up with a few different times, but throughout the engagement, we really you know noticed that people wanted to connect the fee to clear practical outcomes to programs that deliver community benefits to tangible results and community facing benefits.

So that's kind of a theme throughout this.

Um so looking at the residential side, and how there on the residential side, a majority of uh participants said that they would support some monthly fee, but the willingness to support the fee was definitely on the lower lower dollar amount.

So we saw the most concentrated support in that one to two dollar per month range.

Um, you know, we felt like this really you know told us that it balances kind of that affordability and that impact piece of it.

Um speaking about affordability though, that was one of the largest pieces of feedback that we did here throughout the engagement period, and that's reflected in the report as well.

Um affordability is really the primary, you know, I think barrier to more broad support for this type of fee in the community.

Um residents raised concerns about um rising utility bills, property taxes, and overall cost of living, and so that's definitely something that we heard and that we wanted we wanted to mention here.

So that's kind of why you know we think that it did does make sense that we saw that support on the lower end here.

Oops.

Okay, moving on to commercial, um, the commercial feedback that we received was definitely more cautious and a little bit more mixed than on the residential side.

So overall, 37% of uh commercial respondents and the survey and the in-person and virtual engagement supported some level of fee, whereas a majority did not.

Um we also heard you know different pieces of feedback from the business community around you know, competitiveness, um, business development, economic development concerns, passing the cost through to customers of the businesses, um, and just the administrative complexity of this type of fee.

Um, I do want to mention here that we some so the business engagement was a little bit more nuanced, so it was more briefings, uh presentations to the chamber.

So not all of the business engagement resulted in you know, dot voting or survey responses, and some of it was was more qualitative.

So that's just important to mention here as well.

Uh looking at the fee structure, this one is kind of all across the board as well.

So the biggest takeaway here is that there wasn't a clear consensus from the community on what type of fee structure the community would prefer.

There's a slight, I think, preference for the per therm or the usage-based fee, more on the residential side.

Um, but really, I think you know, there was kind of a mix across the board between a flat fee, a tiered flat fee, and then that usage-based fee or per therm.

Um, a lot of the conversation around the type of fee, I think it came to again affordability, also equity.

So, how would either a per therm or a flat type of fee affect different income levels?

Um, and how would it affect commercial customers?

So, I would say this is one of the main points of this project that we feel like we don't have you know clear consensus on.

Um moving on to revenue allocation preferences.

So, this was the question of the 50-50 split of revenue.

When we came to you in November, we had kind of presented the project in this way, and that was one of the things that you all had said that you wanted us to ask the community about.

So, on this one, the feedback was much clearer.

Um, about 60% of the the feedback across the community was for more funding to go towards community facing programs rather than city or municipal projects.

Um, 31% supported the 5050 split.

There was some conversations around you know, investing in the municipality, kind of reinvests in everyone in a sense, um, because it brings down costs for the city within 9% um preferring more funding for city projects.

So, again, I think this you know kind of speaks to that fact that um respondents in this project were really saying that they want to see those direct and visible benefits, so reinvestment back into the community into programs and services that help homeowners, renters, um, neighborhoods, local businesses, things like that.

And I'll interject one thing just on this, because it could be a little confusing.

So if you see it's still close to the 6040 on the quantitative side, but this is where qualitative, like the feedback was much more strongly, and we want to see it come directly back to those paying that.

And so when you look at it, again, keeping in mind the quantitative versus the qualitative, needing to package it all together.

Um, it may not come across as strong, but we certainly heard it on the qualitative feedback side.

So this slide helps to answer that question of if there were to be revenue, what would the community like for it to be spent on?

Um, and so across the survey and the in-person and virtual engagement, the strongest priorities again were those practical investments back into the community, lowering long-term energy costs through efficiency, home rebates, um, and and improving housing.

So by far the number one response was home rebates, followed by uh support for our local businesses, community-led projects, and then support for multifamily housing.

So, kind of um taking all of these individual graphics and kind of combining them into what were what was the overall feedback from the community engagement?

Um, we really saw that you know, there is general support for a fee, however, it is conditional.

So it depends on affordability, depends on program clarity, demonstrative demonstrated value and benefit to the community.

Um the willingness to pay is really on that lower end side.

So again, seeing support for the one to two dollar per month on the residential side, um, and then affordability is really the biggest barrier that we're seeing right now to broader support.

Um we also saw some pretty strong um feedback on what would build trust in the community.

So we heard from participants that they want to see clearly defined programs, um, specific examples of how the fee would be used if there were to be one, measurable outcomes, regular reporting, accountability, and transparency.

Um there was also a lot of conversation around that equity piece.

So, how does this work for renters?

How does this work for low to moderate income folks, not just homeowners?

Um, so that was definitely a big piece of it.

Um, and so I think overall we felt you know that the community um through our engagement didn't reject the concept outright, but was asking for more clarity and for more guardrails and proof of concept and value around the topic before supporting a long-term funding mechanism, how to that I will turn back over to Aaron to finish this off.

I have a slide out of order.

So it was on the side.

There you go.

That one.

Okay.

That's one.

I'm gonna ask the process question here.

How much time do you have in your presentation left?

We are almost done.

Yeah, we're almost done.

Okay, yeah, okay.

Because I was going to say the council, we can once you're done, we can take a break and then come back and have the discussion if that works for council since we're close to our break.

Okay.

Okay, okay.

Um, so yes, so based on uh the overall feedback that we had heard that in order to build more support and kind of get rid of that conditional piece of where people were generally supportive but apprehensive that any sort of policy moving forward as Kayla had indicated would need to have clear program design, very specific examples and projects of how the funding is going to be used, what's the overhead, who's gonna have access to it, those types of things, um direct and visible community benefits, so tying that um again the transparency and reporting, so feedback to the community on the success of the projects, how the funds are used, what are the the benefits of that attention to affordability and equity, so being mindful of some of the other influences and and not just having a fee that stays flat independent of what is happening around, being mindful of some of those types of things, and then the equity and access piece, making sure that people have access to the funds.

So tying that, again, the transparency and reporting, so feedback to the community on the success of the projects, how the funds are used, what are the benefits of that, attention to affordability and equity, so being mindful of some of the other influences and not just having a fee that stays flat independent of what is happening around, being mindful of some of those types of things, and then the equity and access piece, making sure that people have access to the funds.

So making sure that something that gets set up is easily understandable for them.

And then simple consistent communication again, as we talked about it becomes a little bit meatier topic, and people got a little lost in the details, so keeping it clear and concise as we move forward.

So with that, our recommendation is to not pursue a natural gas franchise fee at this time.

And then there's still questions remain on that.

Really that equity piece.

Again, there was more leaning preference towards Port of Thurm, but at the same time, that's the most challenging for our commercial customers.

And so you have a direct conflict right there between the residential and commercial.

So trying to set up something that uh lessens that that conflict is going to be important.

So instead, um, our recommended next step is to develop one to two small pilot programs that are going to be specifically set up based on the feedback that we heard uh through the engagement.

The focus areas would be on energy cost reduction, you know, housing improvements, um, or the community-based um initiatives with looking at renters and and kind of the broad range of residents.

We haven't fleshed those out right now, just to let you know, so that we'd need time to build those, uh, what a pilot program would look like.

Um, we would keep the funding request.

Our our initial thought is keep it at least below 100,000 um dollars and make it uh scalable.

Um, so I'll talk a little bit about that on the next slide.

Um, and the the reason for this pilot program is to kind of debate a test it a little bit, give us time to to uh demonstrate what um a project could look like, how there's community benefit.

We can track that and we can test it to make sure that we understand what the outcomes are and the benefits.

We can build trust with the community on how this would look, how it's gonna be implementable, um, and then use that information to inform future decisions.

So what the next steps would look like is again in 2026 here, uh develop uh one to two um pilot programs, bring those back to council with a funding amount that is scalable, so you can kind of see what could happen based on on the level of investment.

Um, and then if we receive council approval uh for that, it would be then implement those pilot programs, track participation, the cost, the outcomes, um, gather community engagement feedback throughout that.

Um, and um we would, and so that would roll into 2027.

We would provide regular updates to the council, primarily through the action plan updates and and the other uh communication tools we have to update council.

Um, and then it would also give us time to further evaluate what a potential natural food gas um fee structure could look like based on the community input and try to find more of that sweet spot, I guess, to address all of the concerns that we heard to build a little bit more support around that.

Um, and then yet to be determined timeline once that's been complete, returned to council with those pilot program results, um, what a refined fee structure could like could look like, and then based on the success of that recommendations for whether or not this should be pursued further or um stop the project at that time.

So all right, on that note, we are going to take a break, break, and uh four or seven minutes.

Alright, we're back together, and uh council member Wall did grab me right before the break.

Can you be first with questions?

Thank you.

Uh I'm actually uh lending at 545 for another function, so I'm the one who asked that we move this up to number two uh and so that I get the speak and I'll try to use my eight minutes efficiently.

Uh I have a lot of you ready?

Could be.

Okay.

I uh I have a lot of observations, and those observations can all be challenged to be sure, but my reading of uh the situation.

Uh first I think uh, and I said this uh last September, uh that it's misnamed in my view, it's not a uh natural gas franchise fee as if the franchiser is somehow going to be paying this fee.

Certainly the one uh feedback session that I was at live uh was talked about as a tax uh quite clearly, and that's my uh uh view as well, and even if the government requires of its citizens uh will be a tax and it's a tax support projects within uh the community.

Uh so I just don't think it's a a franchise fee as much as a tax.

Uh some statistics that were used that says more than 200 cities in Minnesota use it.

There are 863 cities, meaning more than 600 are not.

I think we need to balance that information and say uh by far more are not using the fee than uh.

Uh the flat fee.

Uh we've talked about equity uh that seems terribly inequitable to me.

Uh the same prices paid uh by uh all renters and homeowners.

I did some research with a considerable uh landlord uh here in town.

Uh the lowest rental fee that that person uh uh charges is six hundred dollars a month.

The person who rents that apartment would pay the same as the person who bought last year's most expensive house in Rochester, 2.43 million dollars.

Seems terribly inequitable to me.

On the per therm side, uh it seems like that's going to be just as inequitable.

Uh and uh uh I think that Aaron talked about uh the challenges of commercial, you know, a pizza place or a bakery or a cafe is going to use lots of therms.

And uh a jewelry store is not and they may spend on similar uh um income.

About one is going to pay the price, and others are not.

I've talked to two uh food uh vendors suppliers on uh North Broadway.

Uh one told me that his taxes went up uh this year eighteen thousand dollars.

The other uh Saturday told me that his taxes went up 400%.

He didn't tell me what that uh meant in the way of uh sheer dollars.

Both of them are in the food business, both of them use a bunch of therms.

Uh boy, it just again that seems inequitable.

Another uh part of the inequity for me in therms is uh someone living in um turn of the century house.

Not this century, but last century, 1904.

Uh is going to be using a lot more therms in their home uh to heat, no matter what you do to uh tighten it up, uh, because it's always going to be two by four construction with uh not great opportunities to thoroughly insulate, like modern homes.

And so that person who's living in that kind of uh much older home, often a less expensive home, is going to pay more than a person who buys a home that was built in 2025 and is relatively tight with good insulation.

Um slide 10 on the willingness to pay uh 61% uh support.

However, on a previous slide, the average flat fee was $3.50.

$3.50.

38.7 said zero was the correct answer.

28.6 said $1, 27.7 said $2.

A different reading of that slide 10 would be that 95% of the public do not support the average of $3.50.

Just a different way of looking at the statistics.

That depends upon the method used to build people or tax people for their contribution.

I saw that big spike, went to their website, $8 a month.

I suspect if we uh started out at two or three or four or five, that we would not be there forever.

They are at $8 per month per household.

Additionally they're a highest but for the high volume accounts, it's up to $468 a month.

And I don't know that those are you know the big commercial ovens that are being used.

It doesn't uh break that down.

But that's uh that's a lot of money.

Uh finally the pilot projects, uh, you know, I'm not against pilot projects, but I would really want to know uh what it's going to be used for, and you have said that clearly.

Uh you know, if if all you're doing is weather stripping some things, maybe you can get you know spend a thousand dollars each uh and uh get to uh a hundred homes.

If you put a heat pump in somebody's home, uh that can be eight thousand dollars, it'd be twenty-five thousand dollars.

So that the money doesn't go very far if you replace uh uh inefficient uh appliances uh that gets to be uh costly as well.

So uh I think we would really want to know uh precisely what the project before and how many households are intended to benefit from uh those pilot projects.

I don't know if I burned my eight minutes, but just summing it all up.

You got two more.

Two more.

I'll just sum up and say, you know, for all those reasons, and probably some that I haven't even thought of yet, um, I will continue to be a really hard sell on an additional tax for uh the people of Rochester.

Thank you, Councilmember.

Council Member Folmer.

Oh, thank you.

Thank you, Mr.

Wall.

You did a nice job there.

Um things that bothered me was that I talked to three people, came up to me and said during the housing meeting at Rochester Area Foundation, not one nonprofit was for this.

Not one.

And I think that that shows the equity problem that you're going to have with this program.

Um I personally um have fixed a house built in 1947.

I used RPU program, I used a gas company program, um, easy to do, um, it's already there.

Uh it's not uh income-based, but I put $3,000 of insulation into a home and got some rebate on it, but I got a lot of comfort.

Um I've been a certified billing official for the state of Minnesota since 1985, and we have since 1991 the most stringent energy code in the United States.

No one tops us.

We're the best since 1991.

And I would say that uh a lot of our homes have been built.

We were building 950 houses there for quite a few years.

We have a lot of homes that are energy efficient.

Um, you know, it's 39% opposed some kind of fee.

I go with Mr.

Wall's business or um statements, but 63% of the business is opposed to.

And I think you're trying to redo something that we already have.

That's with RPU.

I think they have a great program.

They work hard at what they do, and so does people's natural gas, whatever gas companies need they're using.

Um they have a great program also.

Um so I think one of the users, the largest users would have been RPU, because they're probably one of the largest users of natural gas in Rochester.

One of the questions I have is is what makes it accessible to renters.

What is a landlord going to do, or what is the uh renter going to do uh to make this program work?

Sure.

Well, and I think so, keep in mind we have them built out what a pilot program would look like.

So that's what we need to look at in terms of are there limitations that can be placed in terms of um what can and cannot go back to the renters.

Um there's you know, some income qualified type things we could look at, so there's we need more time to flesh that out to see what that would look like.

Okay.

Do you have any other okay?

Well, and to me, I I don't want to spend any more staff time on this.

I think it's it's it's a done.

I don't see the advantage to Rochester.

I think I don't know how well you looked at the RPU project our uh program or the natural gas companies program, but I think they have great programs for us if it's available to any of them.

Uh council member Keene.

Yeah, thank you.

Um, yeah, from my perspective, I almost think of two different things coming together tonight.

One is that uh uh a year ago or 14 months ago, this council had a strategic priorities meeting, and one of the things we did come up with was the this idea of like uh responsible environmental stewardship, and we've been trying to come up with some ways of doing that, and one of the problems is we don't have a good funding source.

That's one thing that's kind of coming together.

The other thing is it's a good six years ago we first started talking about natural gas franchise fee in a very different way.

We were looking at at the time that the benefactor was as a method of funding our streets.

So these two things came together a year ago to say you know, this is an option we have to do something, and then we try to do this outreach, and uh, like some of my peers.

I went to two or three or maybe even four of those early on meetings, and they were very interesting, very dramatically different depending on which group you went to.

Um, one group viewed it as a way of getting natural gas out of our community, like they were the bad guys, and I I had not even thought of that going into it.

I understand um natural gas is the most efficient heating method in a place as far north as we are.

So I didn't see it coming that way.

But I also attended a meeting, and it was uh at the uh uh housing alliance where there was this uh you know RPU talking about kind of impact that in their business, the other thing.

So there was a lot more emotion than what we're talking about here with this.

So I mean I watched that go on.

Um I do like the way the staff kind of came away and say, hey, based on this stuff, let's step back.

And here's my reading that there is this idea of let's get some cases where we've done something.

I think this is what we mean by the pilot project.

Um let's go and show that we can do some things.

I don't think we can get any more information on the gas franchise fee that the therms is the better way to do it, or or this is the the better way to do it.

But um what I think would come together most when I think of the priorities that the council put forward and the staff is trying to act on them as I think we should use some of our council um contingency for 2026 to fund these sort of pilot projects, and then set up some things to work in 2026 into 2027, and then come back and say, here's what we can do and have more solid things on that.

I would support uh um uh you know, kind of a uh a program like that in order for us to get these sort of pilots off the ground.

Um, and I know you mentioned uh 100,000.

I I I kind of cringe about this a little bit because it it is hard to do a lot.

I my my sense is our administrative uh uh execution of the program really comes out of the funding we've already put aside by having a sustainability office.

Um, and this would only be for how we do the payments or how we do these things.

Um, so I'd be open to that, you know, 100 to 150,000 of contingency, and I I don't know where that would go.

This is a study session, but I just want to put it out there for my peers and for the staff to hear.

Council member Frederick.

Yes, thanks, Gayla and Aaron, for your work on this, and I think your recommendation.

I was in only one room during a very vocal and I was with Kayla actually.

Well, the very first one you wasn't there.

I was sitting next to you.

I remember you.

Okay, there was about two people in that room out of about 35 that were for it, and for the obvious reasons, you know, they were for it.

I I understood what they were saying well.

I also understood what the other 33 people were saying very vocally, and you know, we set a we set a uh uh uh a plan to how we want to or what what our objectives are um within our city council, but maybe maybe we uh maybe we just need to look at our priorities a little bit, maybe not look at them, but at least at least what I'm saying is maybe we tweak those a little bit versus trying to find money to support something that we can't get people behind, you know.

We're we're not getting people behind it, you know.

Do we need maybe need to look at how we are going about our priorities or our priorities in general?

So I heard very vocally, no one wants to raise raise their taxes.

I was actually surprised to see uh the number what I seen it be two out of 35 that wanted, and all of a sudden I seen 61% of the people surveyed wanted it.

I was very surprised.

I was sitting in a room at the uh 125 left, which is a pretty good cross-section of our whole community, I feel like.

So since I was sitting next to council member uh Fredericks, I had a different view of that route.

And uh it I my feeling of the room was yes, there were a lot of vocal people that were against it early on, and those that thought this might be an idea worth uh exploring started to pepper in later.

So that's where I'll leave it now because we have a couple council members and the mayor that want to speak, but I'll I'll speak to it later.

Uh councilmember Miller.

Sure.

Uh well, Mr.

McCoy is still in the room.

I I'm just looking at slide 14, and I I just want to recognize the great work that you guys do through the conservative safe program because it feels like something that's tangible to people is the highest support.

And I just think that that's an interesting fact out of the survey result is that people who would probably use that program are more than likely to be able to understand the personal benefit there.

I'm curious of the 200 cities in Minnesota, though, as a question, are there any cities that do ongoing uh surveys of those residents or utility ratepayers to gauge interest in the program, or perhaps I mean, there's been the suggestion that the fee would go up.

Surely those are requiring some additional public engagement.

Is there anything that we should know or that could be followed up on?

Or is there a change in uh acceptance or support over time for cities that have adopted it?

You know, that's not something that I ran into in my research, but that's certainly something we could look into a little bit more.

Um serving communities that have existing programs.

Okay, and then I guess similarly, I I would just wonder about the folks that are using the conservancy program if there's any sort of data or survey or feedback that's that's captured about how that program's working, or statistics on which of the rebates are being used more frequently or how that those are changing over time.

I feel like we have these elements that it would be interesting to know, and I appreciate Councilmember Keene saying tying this back to some council priorities and past uh legislative action.

Uh and I similarly, I think uh when we look at the support, perhaps increasing with more information or an openness to support increasing with more information, it does feel like we have an opportunity to tangibly pilot something and then get real feedback because it so much of this discussion feels abstract because of tax.

What is my benefit?

What is somebody else's benefit?

I think Council Member Palmer mentioned the age of the house that he's within and invested in insulation by houses built in the 1930s.

We recently had an insulation project done, and saw the tangible result that when we had a lower door test done, our air loss was reduced by about 35% from that project.

And so now we are seeing lower utility bills, and the energy auditor was quite impressed that we could get a 1930s house up to roughly 1990s new construction standards.

We do have uh new houses, newer housing stock than average, which we know in the LGA formula uh penalizes us in many ways, but that's not all of our city and we do have a lot of older houses, particularly in our core neighborhoods that likely suffer from this, and some of those houses are the naturally occurring affordable houses that we want to keep people in, and utility costs are key part of people's monthly budgets.

So I guess just to not to in the interest of time, I share Council Member Keene's interest in seeing how we pilot something in a tangible way, how we survey the uh support for those programs, and I I think that there are many ways to structure this.

Uh, I mean, uh, I've mentioned before other communities that use revolving loan funds, lower interest rates to help people make uh a longer-term financially beneficial decision about an appliance, uh furnace replacement, something like that that has a higher front cost, um, but maybe has downstream community benefits in addition to that.

I mean, technology continues to increase.

Uh I feel like he pumps are popping up all over the place despite the fact that we live in a cold climate and people are making that decision, um, and the technology is clearly working, and how we help people accelerate that in the interest of equity and broader community benefit.

I think we have huge opportunities.

I'd also be remiss to not mention the the number of cities that have done some version of an e-bike rebate in a time of increasing gas prices.

Every one of those that I've ever read about in the city or at the state level, Minnesota included, has been oversubscribed, wildly popular, and that is a potential way that people are able to have a lower cost um investment that generates immediate impact for them on a monthly cost.

Mayor Norton.

So I'll just say my first response was significant disappointment, which I shared with the staff.

And I wondered what the sustainable sustainability and resiliency commission's position was.

Yes, um, it was in support of adopting that branches.

Okay, so I wanted that general general support program.

No, sorry, I just wanted that on the table first.

We do have a citizens committee, and that's what that was what their position was.

Um and I'm disappointed, partly because since I've been here, I ran on energy and environment back in 2018-19.

It was my number one priority.

We finally got it on the council's agenda, and despite a number of different ways we've tried over time, um, it's going to struggle the whole the whole way.

So I was thrilled that we were doing a study.

I'm thrilled about the results, which I respect council members uh Frederick's uh comment about sitting next to people who feel that way.

I find people who feel that way too.

But we have a survey that says the majority of people don't feel that way, and we have to weigh those things.

What the survey is showing us and what we might hear from friends and neighbors, and if you believe your district feels that way, then that's your vote, and I totally respect that.

But I want I want to just point out that the citywide position is somewhat different.

Um and the franchise fee issue.

Um it frustrates me when we call it a tax when every other of the 200 cities that do a call to franchise fee, and we call the franchise fee when we do um uh charter.

Uh what was what's it called?

Cable franchise.

It's not charter anymore.

I know it's like change its name.

Uh, we do have franchise fees, it's not new, it's not different, and we've been talking about it as I think someone said for five or six years now for different purposes.

This one makes more sense because it's taking money from the same pot of energy and environmental issues and keeping it in that pot of energy and environmental environmental issues.

Um did have a question for about the programs.

If he's still here, I'm sorry, I can't turn that way very well.

Tim, thank you.

Um, do we ever use up any of those fees?

Which fees in particular?

Any of these um conservative conservatives or any of those?

Do you ever max out on them?

Like run out of money.

Uh all of our programs are funded through utility rates, specifically in the electric rate fund, and so we have not um stopped program.

We seek every year to move the one and a half percent savings goal.

I can't recall that we have capped any programs in the past.

Okay, because I recall a couple years where like the solar panels were we had used up all our money and they had to wait till the next year to do it.

So I'm going back a couple years, but I do recall us not having enough money to support during those high years where solar was a fund.

So part of the interruption, you are correct.

I'm looking at Josh Mason across about the capital and solar mediation.

Okay, so I did remember that.

Um so that might be an area that maybe isn't fully funded that we could look at.

Um, and if we can show or prove, as I've heard here from Councilmember Miller and Councilmember Keene, if we can demonstrate something and show that we can reduce the energy savings for that home so that they ultimately save money for a dollar or two, you know, a month investment, they're going to make up that and actually come out ahead.

That's the whole goal of this.

It's not to punish people, it's to say we're all gonna pay in a little bit and you're gonna get some help and your your cost will go down ultimately over a period of time.

Um, and I think that that this is an opportunity in the way you're proposing it, much as I would rather just do it.

If we're not going to do it, I think trying this with a hundred or 150,000 pilot is is better than nothing in a step in the right direction.

Um, so again, I just I think there's community support for this.

We you know, I wouldn't have run on this as being a uh a community priority if the community wasn't telling me all these years that it's a priority, and all these years for the last nine years, people have said this is a priority to do something.

So I do think it's a priority, and yes, people don't like to pay more taxes or fees, but if we can do it in a responsible way so that ultimately it benefits everyone in the community, it's a win-win, and I hope that's the goal we're heading toward.

Councilmember Glory.

I am in full agreement with the staff recommendation to develop some pilot programs to set up a proven track record for exactly what the mayor was just saying that that ultimately paying a smaller fee will have a longer term impact, right?

So go forward.

And I'm excited to see what you come up with.

Thank you.

And we are looking at a city where we are the city for health, but we also want to be a healthy city when it comes to our environment as well.

I look at the um the uh the great uh community engagement that you've done, and the numbers don't look close to me.

And this community does want to see us uh really move into this space, and I would say I I agree with the the pilot uh programs.

I would add to it though, you you did um say that you would come back after the pilot programs to refine the fee structure.

I want to see a little bit more on that fee structure up front.

Uh are uh the the engagements that people really are prefer the per therm.

And uh there's the flat fee, which is uh the most used uh throughout the state.

Is there a mix?

Is there a hybrid?

Is there are there models for that?

And then uh and then what you know what we expect to get.

Uh council member Wall did mention the one million to 1.5 million that you gave us uh last fall.

You know, what what is that fund that uh that we would get, and then I would also really and this is more from a uh a sustainability programmatic approach for the city.

I've been asking for this uh for the last year and three months is we need some kind of dashboard on what we are achieving here, so that we're not just like saying, Well, we think this program will work, and that dashboard, whether it's you know, this is the number of homes that we have uh uh had better insulation and reduce their costs.

We're we're going to see that come down, uh emissions, uh water usage, whatever it happens to be.

I'm really really eager to see a dashboard on how we what so that this council can say these are the goals that we're shooting for across the uh sustainability spectrum, and this is where we're seeing some movement of the needle on that.

So I really thirst for that, and I uh I will support the the pilot project, but when it comes back as a uh if it comes back as a contingency, I want to see some movement on that, some proposal that this is how we're gonna uh measure what we're what we're doing.

With that, thank you very much.

And we will move to transformational capital projects update and those pen collaboration.

Um rapid fire.

Okay, great.

You have all of 10 minutes in my do it to make it fit.

Ready?

Okay, great.

Thank you.

Um, so tonight here to present on an update on transformational capital projects.

So what we heard when we did a um study session update a month or two ago was that you primarily wanted to hear um about where things were at with both forward unbound.

Um so the agenda for today is we're gonna spend a lot of time.

Irene's gonna spend a lot of time taking talking through about how we got to where we are today in terms of um the uh the project, the review and the approval of the project components, what that looks like, what informs it, um also some time on the current renderings.

But we also think that there's value in giving you some brief updates.

We'll do a slightly deeper dive on two major capital projects that are transformational, as well as really quick hits on other transformational capital projects because it's happening throughout the community.

And then what we'd like to do is get in the conversation and how Rank that you were just talking about data and a dashboard.

We want to understand, we heard that also at a prior study session, and so we want to get into a conversation with you about understanding what would be important data for for us to bring back to you when we think about these transformational capital projects and our partners over at DMC are an important part of that process.

So I'm going to so when we get to that discussion later in the presentation, I'll turn it over to our colleague Carlson, and she will facilitate that.

And so really we're gonna turn it back over to Miss Woodward, who is managing the review process for both forward and bound as it comes as it relates to the building design and site plan approval process.

Great, thank you.

So just as a reminder, I'm sure everyone has seen these slides a few different times in terms of some of the images, and just a reminder it's kind of predicted to be that $5 billion project and 2.4 million square feet of new space and trying to move along to have some of those buildings open by 2030.

Um, and really what I want to do is I've heard lots of discussion about the different elements of the review process and spend a little bit of time of kind of explaining where we're at and how we kind of got there today, um and hoping that context also helped understand part of that review process of what happens going forward.

So I kind of started with this timeline of backing it up to when we first established the medical institutional campus special district was created in 1991.

And this was really a separate thing that was done when we're looking at the land development manual as a way to look at the construction and realizing there is this campus in the downtown and how do we look at it as a whole and provide some of those guiding of what does that look like and what are the requirements to be.

Um, and on top of that, part of the requirements that came from that was a five-year plan.

Um, and really the intention of that five-year plan is to both document future projects and identify as long as there are similar uses to what is happening there, but also really to start and allow the city to plan for infrastructure and to really create that collaboration between the two entities of understanding where Mayo Clinic is going at the time and where the city might need to respond and how we can get ahead of some of that as part of that process.

So you can kind of see this has gone on.

Um, there was an update in 2003 that added not just the downtown, it added kind of out on West Circle and Neo 41st Street.

So those those weren't included in the initial, it was really just downtown with St.

Mary's campus and the main campus, and really looking at what does that look like.

Um, and then so that was incorporated, the five-year plans kind of continued.

Um, and then when we adopted the UDC in 2022, we recognized that as we were both looking at an update to the five-year plan in 2023 and bringing that forward that included some of these identified buildings for Bolt Forward Unbound.

We really need to take a look at the language within that.

Um, and so that was when we established the medical overlay district.

Um, we worked with Don Elliott and brought him back in to kind of really look at what does this ordinance look like, how should it be constructed, and then also incorporated it into the UDC.

So it used to stand alone outside of it.

So when it got incorporated to the UDC, it also brought in the requirements of the UDC as well.

So one of those key things is building design.

Um, prior to that, if they were in the five-year plan and part of this overlay, it would just in get approved in terms of not really looking at some of that building design.

So that was a key component of being able to incorporate those two things, um, is being able to kind of move forward with that.

Um I wanted to kind of show this is one of the diagrams in the five-year plan update.

This has been always an ongoing of kind of back and forth.

It's both a look back of like what has Mayo accomplished since the last five-year plan was updated, and also what's in there going forward, um, and really starting to focus on where does that public-private, the subway, skyways, parking distribution, um, both where for parking for visitors and employees, and how do we handle all those things, and really looking at that campus-wide approach.

So you can see all the buildings that are identified and green that are Mayo Clinic owned.

And then any of those, it's probably hard to see a little bit, but any of those red text on there is identifying a potential future project.

So everything within that five-year plan is starting to identify.

Here's where we might see projects.

Um, there was an addition in this last five-year plan of approval to plan, um, project approval, and those are some of the criteria that Mayo has in terms of their planning process.

We also really pushed to get additional information in that five-year plan to really be able to plan better and really understand the direction of where Mayo is going and what does that look like?

Also, what has been completed before?

So all of these elements kind of come together as in terms of like how Mayo is planning that allows us to plan, and then also kind of know if these two things align, and that's where Mayo starts too.

And I wouldn't know I say Mayo, but with the medical overlay zoning, it could be any where we get into anyone that for instance OMC could take advantage of medical overlay.

So it is not just for Mayo Clinic.

And that was part of the update and incorporation in the UDC.

So I also kind of wanted to.

Can I I have a question about the five-year plan and as someone who helped compile that in 2022 and 2023, which was compiled it for our major employer, I should say.

So 2028, we should see.

There would be an update there.

Okay.

Yeah, and that was part of their update was making those some of those changes in bringing that forward.

Thank you.

So the other component, I feel like we've we've talked a lot about iconic building alternatives, and also kind of wanted to spend a few minutes explaining this part of it.

So as we really talk about the UDC, and we were this really falls within the building design portion of the UDC.

So this isn't necessarily saying everything shifts, and there are these regulations that need to be followed.

The key things were that the development sites need to be larger than five acres for primary structure containing a public institution or civic use.

So that 360 dedegree architecture, building materials, transparency, etc.

When we look at this, this is a section up.

So you kind of have where you know Mayo is located in an MXD, which is a mixed-use downtown district with a medical subdistrict.

So that's their base zoning, and then you have the medical overlay on top of that, and then iconic building becomes an element of the building design within the UDC that kind of gets referenced.

The purpose of you know the iconic building alternative was created and put into the UDC of recognizing that there might be buildings that we weren't expecting.

I think we use the US Bank Stadium a lot as the example of how do you accomplish some of these larger things that you might not normally plan for, and so that was really where this kind of generated from.

And so as we were having discussions and looking at the medical overlays, really also looking at a campus and recognizing all of these buildings together, really were the perfect example to start to look at the iconic building alternatives and how that it all works together.

So I have a question on the 360 degree architecture.

So I'm assuming that means also the height of buildings and their airspace and uh their uh shadow on other buildings.

Are those all things that you and your team look at when an iconic building is proposed?

Yeah, there is no height restriction within that, but when we look at 360, we're looking at how does that building look from every angle.

So the it can't just be we're looking at here's my our main address, we're only gonna look at that facade.

We're gonna look at each of the different ones, which is why I have a few elevations of a couple ones we've looked at.

I didn't put in all of them because that would probably be too many.

Um but so we're really looking at each side of those buildings.

And if I could just add, we we see that there's in downtown there's no back door, right?

And so understanding that we recognize there's going to be loaning doc and delivery and so forth, but it's still not a back door, it still needs to have a visual appeal.

Council member Palmer.

So I'm reading up here any adverse impacts that's rowing properties created have been mitigated to the maximum extent practical practical.

Most of the neighborhood of Kusky doesn't think anything is been done.

So who to judge of that that has been done that's practical?

So that is where we look at all of these different building design requirements, and that's what we're looking at when we're looking at to the maximum extent practical practicable of really looking at that.

Ultimately, um the community development director has to sign off on that.

So that is within community development that is reviewing what is being proposed, hearing feedback that we've taken throughout the entire process that we look for, and then making that determination.

So if 10 people decide that they want the building painted orange, do you just say all those 10 people want it, or do you how do you so we would look at it that we don't require specific colors for paint in that example?

So we was like that.

I we hear you, but we can't also make those requirements too.

So there is kind of this what we have authority to kind of require, and then there might be others that are um that the community might want to see, but then there's also you know, the the developer or the property owner that can hear that feedback and also decide to make changes as well.

So I think sometimes that's where some of the community meetings and the neighborhood informations are really important, so that the community is sharing their feedback on design and being able to provide input to the developer that they can incorporate or hear through that process, and then we also receive that as well.

So I receive emails all the time about the garden on the or the park on the on the west side of the old lures, and then nobody seems to be happy with it.

Now they're using blasting and their blasting sites, which the neighborhood didn't know anything about, and they're all upset about.

So are they are they just being irritable or do they have something to stay in that?

So I think there's been some conversations about the the linear park on the near where the West Logistics are now believed is called the Granger Building, um, and really looking at that, that landscape plan has not been submitted to the city.

I think there's some Mayo that said at the last Cutsky Park neighborhood meeting that they were going to take that to them and show some examples.

I believe it's tomorrow evening, um, and walk through and share some of that and probably get feedback before we actually get before it gets submitted to the city.

So we have not seen the full submission, it hasn't come through that process.

So the feedback you're talking about is this is this I don't like cherry trees, but I want an apple tree, or I mean, what kind of feedback are you expecting to get that the mail's gonna say, oh yeah, we're gonna do that.

Well, I think ultimately what we're going back to is looking at within either the building design or the requirements of the UTC that determine so within a landscape plan, there could be elements as we kind of move forward of like how they look at those building design elements.

So if they're not able to meet all the transparency or some of those, are they mitigating that with other landscaping?

And so that is something we're also going to be looking at.

Um generally, we we have certain guidelines.

I'm not gonna tell, I'm not gonna go and say you have to have this type of tree necessarily over another one.

Those are to an extent that we just wouldn't provide, but I think there's generally um consistency across what they're looking at.

So the elements, the elements that they they took off the old lures.

Let's let's just pull the number that they took 10 elements off, and they're only using two.

Is that appropriate, or did you expect them to use all the elements they pulled off the building?

I think we just heard that they haven't submitted that yet, and it's going to be uh shown somewhat tomorrow night.

So but there will be some feedback both from the neighbors, but it's just to kind of kind of complete council member Palmer's question.

Will there be feedback from your team that the this meets what this council had uh designated to uh do with that those artifacts?

Yes, there will likely be back and forth every even after there's a submission.

I would say for most of it, there's a lot of back and forth that goes on in terms of what is being proposed, how does this accomplish, does it meet our UDC requirements, and then we have gone through multiple iterations with all of that as part of this site development plan process.

Um, and so I think that is also one where I think there's a little when it's an administrative review with a site development plan.

I think sometimes it thinks that it comes in and we just stamp it.

Um we still have all of the different departments review it, and there's multiple comments that go through that process until they have met all of those requirements.

So I would also expect for the linear park that there'd be once we actually receive it and review it, there will likely probably be comments and some back and forth before anything is approved.

And just to put a finer point on it, this council in making decisions on that site said these elements will be used, there will be a linear park, so that is correct.

Making sure that what the council had asked for in uh 2021 or whenever that was, I think is important to on this topic.

If I could just say it might be worth going back and reviewing what it was said.

Oh no, I'm just on this topic.

What was set at the council meeting?

Go ahead.

I mean, we have done that, right?

So and we would we was sorry to I I we would certainly go back and make sure, and we have heard the council in terms of the elements from Lourdes being incorporated into the park as being a priority, along with there's also some neighborhood that you know, desires and feedback that have been given to Mayo specifically.

So they are going to have to balance those different needs within this larger park.

That's what I was just going to share.

We this team very much says show and puts it on the onus on the applicant.

Show us how you are meeting what has been raised by the council, what you're meeting in terms of the concerns raised by the neighborhood, and then as Irene indicated that gets vetted internally.

I would also note things like no, we're not going to tell you what kind of tree, but we're going to say this kind of tree doesn't do well in a four-weather climate.

You're proposing this.

So there is, I think it's important for the public to understand that there is that kind of professional vetting by the city teammates, and it's really guided by what we hear not only from the council but from the at the neighborhood meetings.

Council Member.

Yeah, thank you.

That was not the question I was gonna ask, but I think on that point, to the extent that we can add some transparency to those processes, and it's come up with a better public meetings process of how we're closing the loop on whether somebody's coming to open comment, raising an issue.

Are we communicating that you you were not only just heard, we listened to you, you had your time what came of your comment?

And I think that with those processes too, obviously very technical, but how we think about making that a bit more transparent, especially when there's not a public hearing or council level approval after the fact where those can be surfaced would be helpful, I think, in those and other situations.

My question was actually about maybe I missed it, but could you define what is the rubric for determining an adverse impact?

What is that technically within the iconic building?

So this is kind of the languages of understanding, like depending on what is being proposed, are there potential impacts?

It is there isn't necessarily very specific criteria with that, but it's also really recognizing like depending on what someone may be proposing, what you're we are evaluating within our staff determined.

It is a staff determination and review that we would be looking at like is this having an impact on something else?

I think the other level we'd be looking at is all of our other criteria and all the other departments that review to make sure that there aren't other impacts that come from that process as well.

So, not that we're not we're going against the building design and we're making those changes, but we also need to still address all the other requirements.

Yeah, I guess my related question is I'm also assuming that the staff determination is what is practicable.

That is correct.

Because with more money, I mean, right, at some point anything could be practicable with no budget, but you are working with a developer to make that reasonableness determination.

And that's a little bit of where the back and forth happens as we're starting to look at like transparency and like okay, can you do this?

What is this?

And it it becomes the back and forth in terms of what becomes practical to do that.

And I would also say it's not just about they don't have a big enough check to write to you know achieve it.

It it is also about construction impact, disruption, what's coming on down the pike.

So it isn't just the dollar, which is an important piece of it, what's the budget to make this feasible, but there are other things that are part of that, what makes it practical.

Thanks.

I just wanted to clarify what that language means to this process.

Thank you.

Continue.

Thank you.

Um, so this is kind of looking at and this is part of some of the SDP agreements that you saw and reviewed.

Um, and this is really looking at how do all these things work together, which really became part of what we're looking at.

Um, and the other piece I just wanted to note was part of our the normal site development plan process would not normally come back to council.

The reason that we brought agreements back to council was that we were kind of going away from our typical process by moving forward with a conditional approval, knowing we needed to try to kind of keep some construction going forward, but realizing some of the building design and such as landscape plans as well were not finalized, which is why some of that was also seen by council.

Um, and this is also just really recognizing this specific was related to some of the landscaping and just like where that's going to happen overall.

But what we were also really looking at when we've been evaluating is how do all these buildings really work together and understanding how they're placed and where they're placed and what does this really look like, and also the elements of starting to see ones that are identified within the architecture and how does that translate to other buildings and being able to have some of that consistency across.

So with this, I we were trying, I was trying to pull up some different examples to kind of fully understand like what we see and how we evaluate it because I feel like there was a little bit.

Um I only I brought some elevations from North Arrival, um, which this one is which might be kind of hard to see.

Um, but this is at Center Street and Fourth Avenue Northwest.

This is the corner.

You can see on the right-hand side is really part of where you can see going up it was the stair tower.

This was initially submitted in August of 2024.

So this was our first look at this.

When we looked at it, and I'm just going to talk about from kind of the design perspective in terms of that, not necessarily all the other comments that we probably had across.

But really, we started to look at the methods of screening and what is showing.

You could see the internal ramp, and it needed to look like flat floors.

There were other features that weren't really prominent.

So when we first got this, we said you are not meeting the intent of some of one, the basic UDC requirements, and then if we're looking at this at a higher level, those requirements aren't being made with this elevation.

And so we provided this feedback, met with them and kind of went back and forth of understanding okay, what does that look like?

You can kind of see on the very right hand corner, the the lower two are kind of like dark gray.

Those were kind of blanked out, which means there was no way to see kind of into the building at that point, and that is a primary corner where pedestrians are going to be moving around.

And so then what came next was this is still North Arrival from the same area.

The building completely changed.

And so then what happened is we went we went back to kind of the start and reevaluated the entire structure again for the building design.

You can kind of see where some of it was open, and then that change in terms of how the screening was.

The upper floor that's kind of like that light gray, that became just a solid structure.

But then you can also see that they started putting in glass on the first floor, so you could start to see there was a corner entrance put in and to be able to see into the building and make sure that people were able to go.

So this was kind of the next phase of okay.

Here are these comments.

The other piece I would note is there's actually on the kind of left-hand side, there's actually a building right there in front of it that you don't see on this elevation that's an existing structure.

So part of this is seen, and this is kind of how we go through and provide feedback on that.

And then it shifted again.

Um, and so we kind of started again and reviewed of what does this look like in terms of okay, what can you see?

What is the screening?

And as these kind of evolved, it got more formalized in terms of how the materials show up for the screening above, maintaining kind of that pedestrian access and those open spaces on the first floor, and then how do you kind of break up the space so you kind of um so it just doesn't become one long horizontal, so you start to see some of the vertical elements so that it starts to break that up for everyone to see.

Um, so this was kind of the first take on this south elevation, and then I also brought a couple from this is the north elevation, so this corner, and I'm gonna make sure I give it the right um, is center, it's the corner of First Street Northwest and Fifth Avenue Northwest.

So it's kind of the opposite corner, which many might consider the back door, which was also probably where you can see the initial concept was on the far right, you can see there's a door kind of out, and then completely gray, so you couldn't see anything, and then a full kind of blocked out on that corner.

Um, and so we were like, nope, these don't meet our requirements in terms of like being able to see, and also some of that glass helps people wayfinding or be able to access.

So we continued to kind of go through this process, and then ultimately as we move forward, we were able to create a glass step uh stair tower all the way up the building on the back area, and then started to look at you can kind of see the other is where areas that might not be able to be accessed, and part of it was they're gonna be zero lot line against another building.

There were certain restrictions that we had to kind of take into account.

So, how do we account for that with materials and color so that it starts to break it up and how does that get created over time so it's visually interesting for a pedestrian?

And then the other element to some of this is the landscaping of how do you also incorporate landscaping around this whole area so that it helps drive that pedestrian experience.

Council member have a question about uh the rectangle there because artwork comes up quite a bit.

So the text as I read it says proposed location for future artwork hanging in front of tube screen facade.

Yes.

Is there a timeline on that?

Because this whole room could be potential future artwork.

We could propose that someday we're gonna put a statue here or something.

How do we hold those standards to any like actual implementation?

So it's part of the reason it's documented in the site development plan because that also allows us to when we get down to certificate of occupancy, that is something we can hold up.

Um it's also something that we've had continued conversations with with Mayo Clinic on what does it look like here?

They are very aware that this is a component of it, um, and also how they're planning for artwork across the campus.

Um, so this is one element of a larger thing that they are working on, but we've had discussions about timing, but also recognizing that is part of the reason it's documented in the site development plan, so that allows us to hold them accountable.

If I might also add um it's also uh where the potential artwork is, is where development could occur in front.

So that also needs to be part of the balance of acknowledging what's reasonable and appropriate, not only for the developer, but also recognizing that it's a development site that sits in front of it eventually.

That artwork could be removed.

Sure.

It could be moved to it.

Yeah, we had those discussions.

Could it be moved somewhere?

So that's part of that, but I understand that that makes total sense.

But I just bring this up again because I know it's come up before the council.

We've seen a lot of maps with little red triangles that this could be art, this could be a pocket park.

Wouldn't this be so nice?

And then we come to East Logistics, which still has a fence travel lot next to it, which was a potential pop-up park.

Well, and I know and I know that that's in progress, but it it does feel hard to hear the nice visionary plan, but then when the the essentials are built and the nice to have public space isn't yet, or maybe it's coming in the future or when we have enough money.

I just want to make sure I understand how we're holding that accountability to to reasonableness to reasonable time for putting it in.

Yeah, can I I know I I'm gonna let Irene answer to that, but I I will say part of that give and take also is to acknowledge if um we didn't let them use that for staging, staging would have to happen somewhere and could be an even greater disruption.

So totally appreciate and understand that frustration, but also recognizing where would staging occur then that would be likely more disruptive.

But I think you have an update on that.

Well, and I was just gonna note that I think that was one of the conditions that was approved by council to use that as a staging area and gave a timeline as to the other development that needed to be completed to go back and do that.

And I think they that is discussions right now that we're finalizing with Mayo of what does that look like for construction?

I think there's actually a meeting this week to be able to then provide enough date, and the anticipation is the construction would start this summer to finalize both of those spaces.

Okay.

Um so the last slide I have, we kind of I kind of moved through fairly quickly.

Um, but wanted to kind of touch on some of the permits that have been issued, and I also recognize I think I missed two on there, but some of these that have been issued as prospect utility plant and the construction that is happening there, the East Gonda entrance to be able to move and close down the one to go forward, um, the North Arrival and then the South Parking, uh, both of those are kind of have their building permits and moving forward.

The other two that I I realize I missed when I looked today, um, the there's a utility tunnel for Osman that was approved along with the foundation for Osman and the below slab plumbing.

So that is moving forward.

Um, currently in review in plan review right now is the Waterman Foundation and then the geothermal for Osman.

So both of those are in plan review right now and expected to go out in probably the next month or two.

So I'm gonna ask a very specific question.

Is Waterman is that the former gaming parking ramp?

Yes.

Okay, so number three.

So I'm looking at the overhead here, and it looks like that Waterman building basically just blends into the uh mail building and the plumber gunda building and if you go back to your third slide.

This one there.

Now there I see a very airy connection where you have skyways that are at maybe the seventh level there, and I have seen uh some elevations now that close that airy um space there, and that to me would mean a an impact on the shadows to the church to both churches, and so how was that reviewed if that if that um connection is making it one mass building?

So I think the the plan, and I can I can stay on this one to kind of explain.

I think they're showing the overall footprints of where it goes, but then I also think there is an this is an early rendering, which is also why we generally don't review the renderings.

We that's why the elevations are included because they're the more technical of what's actually going to be built.

There is kind of a utility core that is in between those that is within the watermen that kind of connects watermen to Ghana.

Um, and so those buildings will connect and be able to do that.

It doesn't mean that it's completely um, but there is an element there, there is still you can still see those connections across the skyway as well.

So there are those horizontal elements across, but there is a kind of another element in between where watermen is sticking up in Ghondda.

So there will not be airspace and there.

There will be some.

Because this is universal.

We've been watching.

Looking at that elevation for three years now.

And so if there's a drastic change in the way that's going to look on our skyway skyline, I think we should have to do that.

So I we have elevations that look like best, and that they are public, and I can share that for the Waterman building because that is part of the review process that came in.

We don't necessarily we don't require renderings for that.

We only would have the elevation.

And I can certainly share that.

We don't have a rendering yet.

And we're hoping that we will have one.

Perhaps we're going to be able to do that.

Because I've seen it.

I think with that, if it's all right, then I will turn it to Steve.

Go ahead.

Thanks.

All right.

So good evening here to just touch on two transformational projects in the downtown area that our project management teams working on.

So the first is Sixth Street Bridge, Riverfront and Neighborhood Improvement Project.

So we've been making good progress of late on this project.

This is just under a three-quarter mile stretch on 6th Street South.

Going two blocks west of Broadway to all the way to the Bear Creek Bridge on the east side of downtown.

Note says here that we're at 90% design phase in two days.

On Wednesday, we'll be at 100% design phase.

So that's a major milestone for the project.

Again, our total project cost is staying consistent at the $36.8 million budget level for design right-of-way and construction.

We've recently been working to acquire property for that pro for the project.

We're about 70 to 80% through that process, working with final uh negotiations with final property owners.

And then we are working actively.

We have a uh Minnesota DNR uh public works permit that we're working on and just about have that completed.

We have two permits with U.S.

Army Corps of Engineers.

We're we're expecting to wrap up in the next uh two to four months, and a permit with FEMA.

And then we're also uh directly engaging with the Canadian Pacific Railroad that owns the rail spur just east of the river.

Uh and we're working on a construction and maintenance agreement with them, uh utility permitting for the below ground utilities that will go under the rail spur, and also uh easements, easement rights for to accomplish the project.

For the next project that we're gonna touch on is the uh South Broadway project.

Uh so this is the uh originally when this was um live for this was the uh or this is the bill grant, excuse me.

So uh again, we have 2.5 million dollars in funding uh in federal jargon, they call it a planning grant.

What that really means is it covers the planning phase and the design phase of the project.

Uh our team has had several rounds with federal highways who are administrating this project in terms of uh scope of the project and language.

We feel like we're in good alignment uh with the federal highway administration.

Uh again, this project will focus on the South Broadway corridor starting at 9th Street Southeast and moving north and just to the uh lower end of downtown at 4th Street Southeast.

Uh it's a complete street project, so given um Broadway being the former state highway, the goal of this project is to create a complete street, calm traffic, and increase uh comfort for multiple modes of transportation, both in the north-south and east-west directions.

Uh, just about in the middle of the page, we'll be going through the new Sixth Street Bridge.

So uh, if you consider the engineering department's work on the Highway 14 interchange project, which will be under construction in 2027.

Uh this whole corridor in the south end of Broadway, we'll see uh a big chip turnover happening and how it looks and feels in the next two to three years as we move through.

Again, for this particular stretch, we only have uh design money, but our goal would be to apply for uh construction dollars after the design is completed.

Uh we'll be having a two-step process that was dictated by federal highway, so they want us to do uh original planning and go to about 60-70% design, go completely through the NEPA process, and then come back with a second phase of design, uh, which will get us to uh 100% plan completion.

Council member Palmer.

So 9th Street South to 12th Street.

Is that not, or is that with uh on the on the intersection?

Uh the intersection is in this scope of work, but just south of the intersection is the uh highway 14 interchange project.

So from 9th to 12th, is are we doing anything?

Well, that'd be a better question for I don't know.

That's Dylan's team working on it, I don't know, Tyler, if you're yeah, there'll be significant investment in there that's tied to MINDAT's project with reconstructing that intersection.

Okay, so so we're gonna close that basically close that intersection.

Are we then going to do this project at the same time?

Are you telling me we're gonna close the intersection that we're gonna close that road two years later?

This road we don't have construction dollars for currently budgeted, so there's no plan to do any construction work on this particular grant being showed.

This is just design work.

Well, what make more sense to combine it and wait with the with MIDA and tell them to wait a year or two?

Uh well, I mean, MINDA has their own prescribed formula for funding that that project's been in the queue.

I don't know if Tyler wants to add to that answer.

Mind that's also seen significant delays with that project, I think.

Originally, that was probably the earliest data I can remember is 2025 originally proposed.

Um so it's been sliding up Mind Us, let's get ready.

I don't think they'd be agreeable to sliding that further and wait for us to get grant funding for this next stretch.

So our hope is to get this design and ready so that we're ready to go all for additional funding opportunities to move this to construction and then phase it not only with Mendouts intersection, but everything else that obviously is going on in downtown.

And if I also may add the sixth street bridge process project will be uh under construction later this calendar year, and they're gonna need to use the right shoulder Broadway to stage for the bridge construction.

So that project will be tying up a portion of this roadway segment.

So we wouldn't want this project on Broadway and the Sixth Street Bridge happening at the same time because those construction staging areas would overlap.

Is that not our busiest intersection?

12th Street and Broadway?

It absolutely is.

And you're gonna close it for three years.

Well, you're gonna close it one year for the intersection, you're gonna close it again for 9th Street.

I don't I don't know the durations of the full closures.

I'm uh directly engaged with the project team, but you know, detours for that level of traffic will be like the duration of any detours that are involved there will be they'll attempt to limit them just because of the volume of traffic, right?

There's going to be portions of that intersection that'll be under construction while they let traffic through the other side.

There'll be phasing involved in getting that intersection completed.

It's not gonna be a complete closure for years at a time.

That's not gonna do what we did in North Broadway, but close the whole thing, we're gonna do half and a half.

It's likely.

I don't I don't know off top of my head the phasing plans, but so you're hearing council member I'm hearing his concerns.

Strong concerns.

Okay.

Thanks.

Okay.

We also have to get funding.

Just we can use the very well that work.

No, okay, here's the thing.

Yeah, so very quickly just maybe very anxious.

I mean, we can stay over, but yeah, no, this is I was just gonna show this, not go through anything.

Here's just a quick snapshot.

Transformational capital projects are happening across the entire community.

Here's just eight that we decided to showcase for you where they're at in terms of a quick milestone.

There are people here to answer specific questions if you'd like.

Uh council member.

It's a request for more information.

Uh the service line replacement.

My understanding was we were gonna be going out to the early we where are we on the first future?

I will have to get from Rochester Public Utilities.

None of that.

Um other comments on these projects?

See none of that's okay.

So then talking about dashboard, we included this because one, it's a really great example of how public investment is leveraging private investment, but it's also a dashboard of data that you receive every month that talks about how we're community volume department in this case is doing.

And so that's the segue into our conversation with uh our partners at DMC on measuring impact of these projects and what would resonate most closely for council as we come back and report on it.

All right, well, I will wrap us up with a wonderful data discussion after three hours of talking.

But uh Brooke Carlson with DMC, really pleased to be here with all of you, Mayor, uh Council President and Council members.

Uh, we are here to talk about this is not that slide.

We are here to talk together about how we do understand the impact of these capital of transformational capital projects in the DMC district.

So we are wanting to develop a new approach in doing so.

And as part of this process, it is obviously critical to come back to speak with all of you and connect about what's really most important to you as city council.

So our goals for this new approach are to establish a set of project-specific key key performance indicators or metrics that reflect and feed up to the council and DMC's strategic priorities and our overarching metrics.

We would like to collect data before, during, and after significant infrastructure investments, and then provide updates back to all of you throughout the process to inform your decision making and understand impact, which of course has been a theme throughout this conversation tonight is how do we use data to make these decisions.

A reminder that the DMC just went through a uh development plan update that all of you were part of and established three new strategic priorities of ours collectively, uh, which two of them are relevant for our discussion today.

So I pulled out design for well-being and drive purposeful growth and a few of the overarching metrics that fall under those that are relevant to our infrastructure projects.

A reminder that we also have accelerate health uh tech innovation as our third priority area.

Less um for our discussion today, but always a discussion to have with you all.

You recently reviewed a set of KPIs for your own strategic priorities.

I believe that was in February.

I reviewed that.

I know that there are some relevant KPIs under that uh already established set that staff have been working with you on that we would pull from as well, but this is really an opportunity to talk more broadly about what's specific to infrastructure projects and specific to DMC investment.

Okay, so really that is my presentation.

It's about having a discussion with all of you today, so this should be uh just a chance for all of you to weigh in.

And we I I would just like to frame it as we know that there are concerns that come up from your constituents all the time related to these projects, and this is a chance to talk about what types of issues, what are some regular questions that come up and how we might make sure that we are tracking uh impact against those concerns, as well as other concerns that you have or uh other issues that are really important to you that will help you make decisions when we have a significant budget item before us for in within the DMC district, and then also how do we really tell the story of our impact in a way that matters to all of you that matters to your constituents?

So that is the discussion for today.

But I thought uh an initial question would really be around what sort of questions do come up for you related to your constituents.

I know some of them, but I want to give you all the space to share.

I can I could start uh how it's going to impact our neighbors, our neighborhood, how how we are going to mitigate the change, how are we going to make sure that we are communicating that change in a way that uh isn't uh totally disruptive in one shot.

So I think those things are important from a neighborhood standpoint, and I think it also really relates to that on your previous slide.

You uh talked about the authenticity Rochester's authentic culture.

It's uh really making sure that we're not growing so fast with all of these iconic buildings that we crowd out the neighborhoods that are built here.

Councilmember.

Sure.

Uh I'll talk about my constituents, but one uh comment I hear somewhat frequently in the community is DMC is forcing my property taxes to go up.

So I think how we communicate return on investment, how we tell the story of um how investments of the DMC district do or don't offset property tax increases outside of that district would be an important one to understand the value of those investments.

Uh so I think ROI and I also think we looked at some per capita numbers earlier in the discussion.

Understanding the cost of city services uh per capita in different districts.

Are there more efficient areas?

What is it cost per resident and work to Cutsky Park, whatever to provide snow removal versus outside?

Are there is this investment area strategically setting us up as a city to be more financially resilient in the long term or not?

And how do we measure that?

No, I've mentioned the urban three analysis coming out in the TIFP policy review, but I think both of those are really important.

Uh understandings and we'll have some visuals particularly that help communicate that story in a very clear um easily digestible way, uh not necessarily for some of the accessibility requirements of the website and complex visuals, sure.

Uh but I I think of those tools as how they tell a very complex story in more digestible ways.

And then I I would just say I think some of our discussion from the KPI uh session are like what are the number of housing units, are the occupied to help track or are we on a net gaining or losing ownership occupy opportunities in these adjacent areas?

Great.

Maybe even like progress towards our crop plan, like there are been defines primary transportation networks.

Are we making progress towards creating those connections?

What else related to specific projects that council member keen?

Yeah, I I'm just I'm actually struggling with this chart because there's uh communicating projects and the projects are Mao projects, not DMC projects.

We are talking about DMC funded projects.

Right.

And I'm looking at like when Councilmember Miller mentioned how are you driving?

I think that's much more directed at Mail than it is at DMC.

If I could clarify, I mean, we're literally we're talking about as we do the $38 million of downtown infrastructure investment.

Yeah.

What does that look like in terms of measuring impact?

As we think about the $8 million in Cutski Park, what does that look like?

In addition to but I guess the bridging is does the person sitting in you know the South Rochester neighborhood know that there's 33 million going on in this place, or do they just see major upheaval?

I mean, do they really and that's when it says communicating project impacts?

Because I I really I think a lot of people look at like I mean, I I still communicate a fair amount of like the improved economic viability of the city is driven by mail and it drags this other sort of quality of life things.

But I I might my take would be is male people are looking out for mail, and the city should be looking out for other than mail, and I think that's a thing that's hard on me to uh that you know the design points of saying, like, yeah, we know that people are coming to the North Arrival.

Well, what about the people who are coming but aren't going to mail?

And and is somebody looking out for that life and whether it be because I'm looking there at improved quality of life.

Um if you if you go on the like driving up taxes, I think that's a big concern.

And I think part of the DMC aligned with the recovery from 2008 where housing values were going up as DMC was getting circulated in the community.

I think it did lead towards uh um belief that that was hurting, you know.

Maybe it's proving their property values, but it's hurting their their up yearly tax rates.

Um but the uh the same thing with the quality of life, there's this kind of um heartbeat going on right now that everything's good for and the construction is very difficult on local businesses and going downtown is difficult.

Um but is is there light on the end of the tunnel?

And I think that's part of the communicating project impact, but it's also communicating a viable future.

So you may whether you intended to or not, you named several metrics that are really important, and I think that being able to either collectively describe or differentiate in some way what was a DMC project or funded impact compared to what what are the sort of larger influences from the changes mail is making is critical.

Council member Palmer.

I just want to point out.

I mean, if you look at the transition of DMC from early on being like uh public discovery square and then moving towards public realm and moving right now, the idea of transportation and infrastructure, they're a little hard, they're not as visible, but I think this idea of communicating this idea of the these are transformational trend transportation changes coming in.

I mean, this might be a major investment done to improve mail's ability to get employees downtown, but at the same it can also be a major change to how people move within this community.

Um, and and I I'm looking more for that quality of life stuff that that really could be uh uh something that could maybe an indicator, maybe a measurement, but to me it's more of the marketing of that as a uh a value to the community is uh important.

Okay, thank you.

Council member Paul, thank you.

I I guess I I take uh I don't think that it's that difficult to get downtown and shop downtown and go to mail for for your appointments, but I see the DMC investment of the underground that we don't have to upgrade sewers because we have state money that's providing for that and we have infrastructure that's being paid for by uh other people that that could be used other ways in Rochester.

And so I I I see this as being huge, but I also see the 190 million dollar BRT coming, and that is going to change the way we do transportation in Rochester greatly, and I think that that we just have to wait for that to come into play.

But uh Steinhouder, you brought up the the the one million dollar question is we have eight million dollars going to the Cusky Park area that's not in the DMC area.

So uh where is the strategy on that?

So uh part of that strategy is to um engage with the Kutsky neighborhood on how they would like to see those dollars prioritized and ultimately bring forward that strategy that would ultimately have to include a boundary modification for both the city council and the DMC board to approve an order for those dollars if there's part portions of the Kutsky neighborhood that are not in the DMC district, and so if there are um uh requested improvements that fall beyond those boundaries, we'd have to do boundary modification, and we would bring that forward.

Well, we we've asked for Bobby uh before, and that's what kind of people mine is is the north uh parking lot by the rec center, and we said no, we're not gonna increase the boundary.

You have our friends at Almsty County that wanted to be extended down to the fairgrounds so that they can they can get some of that as you dilute it, it it dilutes it.

And I look at the Cutsky Park neighborhood, it's it's I believe I get my numbers right, 70% rental right now, and in waiting to be invested as far as apartments and stuff, and we just need to there's very little single family dwelling.

So I'm I would not be in favor of both.

I've been taught that we're not in favor of extending the boundaries.

So I would think before you made your offer of eight million dollars, you would have said, geez, this is what we change the boundaries.

So uh again, boundary change is going to be, I think, a difficult thing for anybody to do member.

Council member, uh other comments.

I hope this has been helpful.

Uh Councilmember Miller, just one final comment.

I think we've been thinking about the community and telling the story.

I also think about how we're telling the story to the state of Minnesota to the legislature who made this investment as we talk about LGA.

It feels like sometimes that conversation is well, Rochester already has state of Minnesota public dollars through the DMFC legislation.

So there's no need to reform LGA.

But I think how we tell that story of what investment in Rochester means to the state.

Also is the county as an audience of the beneficiary of uh from a property tax perspective and thinking about all the audiences and framing that information at a high level that's uh actionable and digestible to each of those audiences, making sure that we're not just focusing on one type of uh user of that data.

And the city, the ongoing owner and funder of what ends up here in perpetuity.

Absolutely.

I I just have one additional comment, and and council member keen maybe think about it in terms of I don't think of Mayo and the city, and even if you add DFC as distinct entities, I think we all drive each other better, and I think our role as a city is not is to also help our largest employer communicate their needs and their uh construction to uh to us, and and part of it is also, and I know you folks do this on a regular basis is also to hold their feet to the fire on you know what's best, not just for uh Mayo Clinic, but also for the city as whole, a whole and the DMC district as a whole, which is uh state-funded area.

So council member Dorian.

Yeah, and I want to piggyback a little bit with what Council President Schubert just said as well.

You had asked what we heard from constituents in Ward 6.

I do not hear uh I hear about uh the DMC district, Mayo and the city being as very distinct entities and that there's not doesn't seem to be a lot of collaboration or a lot of benefit between those two those three entities working together.

So I would appreciate being equipped more uh with information or the story to tell those folks about how they will benefit from this vast investment in a small section of our city uh that they don't have daily interaction.

Thank you, Council Humber.

Thank you.

So with that our do you have one more slide?

Just this, just um just to let you know our May 11th study session is a walking tour.

Um it's gonna be a great opportunity to show collaboration among the three entities and kind of the success stories out of it.

So these are some of the things that are going to be highlighted.

We're working on the route right now, and um the various speakers, but just so you know, it'll be a fair amount of walking.

May 11th study session next.

But before that, you will have the April 27th study session where we are preparing to present where we are at this point with the RCTC and City of Rochester Regional Sports Center of Partnership, uh comprehensive surface water management plan.

So you'll be seeing Aaron, other Aaron again, we call him Aaron Longstein.

Um then um in advance of that may allow us walking tour um an update on the University of Minnesota Rochester campus expansion vision and plan and some things that they will be coming forward to the city council with.

Um so to uh higher education and stormwater.

And then just very quickly, I did just want to highlight that on your April 20th City Council meeting, um, we do have um a couple public hearings primarily um to appoint ethics boards member ethics board members and a couple text amendments, one related to the flood um flood maps and one rate related to the housing code, which um we had um spoke with you at a prior study session regarding that.

And then on April uh 15th, the city and library websites will be transitioning to the new website, and on the 20th, we'll plan to have a report for you to kind of explain what's been changing with that, um, where we are on our digital accessibility and um how your that's going to show up both in your packets but also uh on our website um which you'll see go live on the 15th of April, just in two days.

Great.

Thank you.

We are adjourned.

I don't know.