City Council - workshop

Good afternoon.

Welcome to our colleagues here at the tables, to the staff people, to our consultants, to the community who are gathered here. I am acting council president in the place of President Shubring, but we are surely welcoming back and Patrick Keene to the table. So thank you for being with us again this day. We have three really important topics, and we have some consultant deadlines, timelines to follow. So I will try to observe pretty closely the eight-minute limit for any one council member on any one topic. I will turn it over to Administrator Zalman's place.

Thank you for going back in time. So our first item that we have here is a presentation from urban three that you saw a little snippet of at the DMC city county joint meeting about a month ago. But this is much more information if you take a look at your packet. And so I will turn it over to COMMUNITY DEVELOPMENT DIRECTOR IRENE WOODWARD AND SHE WILL DO AN INTRODUCTION AND I JUST WANT TO QUALIFY THIS IS A LOT OF INFORMATION AND I DON'T THINK IT'S THE LAST TIME YOU CAN EXPECT TO SEE SMALLER SNIPPETS OF THIS BUT WE WANTED TO GIVE YOU ALL OF IT IN ONE FULL SWOOP TODAY.

Thank you. I'll just briefly say we're kind of doing both a revenue analysis. So the last time there was a revenue analysis done by Urban 3, it was about five years ago. In addition, there was also a fiscal analysis that wasn't previously done. I want to thank RPU Public Works and Finance, who contributed a lot of data to make that happen. And so really, Heather Worthington from Urban 3 is going to go through that entire presentation and kind of that whole analysis. And then we'll be available for any questions that we go through. So without, I'll turn it over to Heather.

Thank you, Irene. Thank you, Allison. Great to be with you today. Thanks for having us here in Rochester. I am Heather Worthington with Urban 3. We are located in Asheville, North Carolina. I am based in the Twin Cities, and so I just drove down this afternoon. I'm a Rust Belt kid originally, and I just want to introduce myself. I grew up in Lansing. I was always fairly skeptical, so this is an accurate photo of me. And my dad worked for the city, and so I went on to work for a city and counties. And my favorite thing as a kid was Schoolhouse Rock. And I really believe in deep curiosity and this Francis Bacon quote, knowledge is power. You might have thought Schoolhouse Rock invented that. They didn't. Actually, Sir Francis Bacon said it first. As a little kid, I loved my yearbook and my world book and my globe, of course. And I went on to work in various jurisdictions in the Twin Cities. So I was the city manager in Falcon Heights and the assistant in Edina. And then I worked for Ramsey County. And I ended my career in local government as long-range planning director in Minneapolis, leading the Minneapolis 2040 plan. So that's just a little bit about me. What we're going to cover today is really the full meal deal that we did for Rochester. And, you know, one of the things that we get asked a lot is, what is a city? Well, a city is really shaped by the people who live there. It starts out like this, though, as just sort of green land. And one of the things that we like to apply to our thinking about cities and how they grow is thinking about land production, right? So, if you're a farmer, and if any of you grew up on a farm or just maybe one generation from the farm, you understand that farmers apply a simple rule of land economics, and that's the yield of the land, right? So they look at land with water per acre, crops per acre, labor per acre, et cetera. And we think at Urban 3 that's a really good way to look at the same data for buildings in a city. And I'm gonna show you this example. This is in Ramsey County. So these two examples, one in Roseville on the left, the Walmart, and the Osborne 370, formerly the Ecolab Tower in downtown St. Paul. And we really wanted to see, how does land use regulation shape productivity of that land use? And you'll note that that Walmart sits on 19 acres. Spoiler alert, that's small for a Walmart in the United States. They're typically around 25 acres. Roseville actually negotiated the size of that parcel down with Walmart. I just like to make sure people know that. We typically use a Walmart as an example because it's a very consistent land use across the United States. And we've worked in 46 of the 50 states and two Canadian provinces, and they're usually same footprint of the building, similar lot size. The Osborne 370 building sits on just a half acre. It's a very tall, narrow building, but it's very productive in terms of the amount of revenue it's generating for the city. And it's also, oddly very productive in terms of the number of jobs that it produces for the city. So that's just a quick comparison of a sort of big box development and a more compact commercial development. So here we are in Rochester. I want to start out this evening by walking you through your tax systems. And you all are familiar with this. You do it for a living. It's helpful to kind of ground ourselves in this conversation because Minnesota, of the 50 states, Minnesota probably has the most complex tax system in the nation. And so what takes me seven or eight slides to explain here in Minnesota takes me two or three in other states. But it's worth digging into this a little bit just to understand it. So you start with market value, obviously. You're backing off any exemptions, and you get a taxable value in Minnesota. And then you apply a mill rate to that. I'm sorry, in North Carolina. Excuse me. You can see this is, sorry, North Carolina. And then you get a tax bill. So very simple, very straightforward. If we're looking at Minnesota, it's far more complex. We start with market value. We arrive at a tax capacity rate, which is a little bit unusual in the United States. In fact, We might be the only state that does it this way. And then you end up with a base tax bill and you apply various referenda, state general tax to that. So this is a commercial tax bill example, and you can see that in Minnesota we are taxing commercial uses differently than we're taxing residential uses. So about one and a half times higher, or half, I'm sorry, 50% higher than a residential use. So it's a significant difference. And then if you have a homestead exemption, it's an even greater reduction in terms of your tax bill. So this is what it rolls up to here. Commercial, again, taxed twice as much as residential in the state. We broke down your tax dollars. So this is where your residence tax dollar goes. in the city of Rochester and Olmstead County, and then to your HRA, and then a little bit to your school district. So that's your resident tax dollar, okay, breakdown. So you collect about 44 cents of every dollar in property tax paid by residential property. Your commercial breakdown looks like this. You're collecting about 36 cents of every dollar of property tax paid to a portion of the property tax needed to be paid to the state of Minnesota. So the state takes some of this dollar and then it's divided amongst the county and city and school district in your HRA. So that's a quick overview of how you collect your revenue. We looked at your general fund and we are mapping today these property taxes that you show here in your revenue. This Sankey chart, or butterfly, shows your inflow of revenue, your outflow of expenditures, and some of the categories that those dollars pay for. You can see them here. We like to conduct what's called an economic MRI on a city. We really want to understand where the revenue is being generated and how productive it is in terms of its comparison to other parcels. And so we looked at the whole of Olmstead County. Now the shape of Rochester, I want to give this disclaimer right now, the shape of Rochester does not lend itself well to being depicted north to south. And so we have you'll notice throughout this and it's I know it's confusing and I will tell you we spent hours trying to figure out how to crack the code on this one and we really failed because The city is just very long and narrow so you'll notice in the subsequent slides that we tilted the city on its side and And so, north will be to the left in those slides, okay? So, just orienting you to that right now. So, this is Olmsted. Just picking out a couple of assessed value parcels within this map. So, this is total assessed value. This is the assessment that Olmsted County and the City of Rochester make on these properties. This is the assessed value of those properties. And you can't see a big difference here yet, but we're going to get to it. Here, we're going to tilt it. So, again, north is to the left. And here we're going to look at Rochester isolated within the county. You can see that's starting to pop up on the map. You already know Rochester is a very productive area. But as we get deeper into the value per acre analysis, this is where you'll really start to see the most productive parts of the city and culminating in this three-dimensional image. The purple spike is the Mayo Clinic Guggenheim building. That is your most productive parcel. The purple spike doesn't necessarily mean this is a tall building. It just means that it's a very productive building. It's often a very compact building, but not always a tall building. So in this section, we're going to show you your top 10 value per acre parcels within your model. And there's a couple of clicks here to get the slide to populate. So these are the big 10, the top 10. These really wide variety. You've got a couple of commercial buildings. You've got some office buildings. You've got the UMR Student Life Center, et cetera. So you've got a kind of interesting array of buildings here that are very productive.

Mr. Keene, please. I'm sorry to interrupt. I know you're going through, but just to clarify the specific point, you went from tax capacity like per acre then to parcel. When we're looking at these maps, is that done on an acre thing or a parcel?

All of the analysis is done at the parcel level, but I'm showing you the value per acre.

But then when you're showing it per acre, you're doing the four or 22 parcels that make up that acre.

You're seeing all the parcels in that acre. Think of it primarily as a value per acre analysis, but we're showing all your data at a parcel level. So if you said to me, what's the value of my property, we could go into the data and pull it for you.

Right, right, right. But then when you're doing that map and I see an area there that's green and the other one's slightly different, that's all the parcels in that acre added together, divided by, and then the one next to it the same way.

It's just showing you the value difference across those different land use typologies or those different parcels themselves.

Okay, so it is, all the maps are parcel per. Parcel. And then the math just does the acre per.

Okay. Mr. Miller. If I might clarify, I think that that's not quite what Mr. Keene was asking. Okay. You're taking the value of the parcel and dividing that value by the size of the parcel, correct? Mm-hmm. You're not doing a separate calculation of a value per an acre, an actual acre?

No, it just rolls up in the math.

You're taking the value divided by the size of the parcel?

Yeah, so if it's a quarter of an acre, you'd multiply it by four for the value per acre. Okay. It's a clarification. I just wanted to make sure I was understanding.

Okay. Got it?

Okay. I think so. Thank you.

Great. And then the Berkman and 2 Discovery Square, just slightly less productive than your peak parcels here. So, just to finish that slide out. This is your total assessed value for Olmstead County This is Rochester and you can see I'll just go back to Olmstead for a minute about 4% of that land area in Olmstead is exempt and In Rochester about 31% is exempt now. We see typically across the country anywhere from I'd say 20 to 30 percent exempt parcels within within a city and You're not outside of the bounds of what I would call kind of a typical community. St. Paul, for instance, is 46% exempt. It's a capital city, though, so that's a little different group. And then I want to show you Destination Medical Center. This is in your core downtown here. This is the district, the DMC district. This is your land area, taxable and exempt. And some of this is the hospital. There's a rather large parcel that is St. Mary's. And hospitals are generally tax exempt in the state. So just grounding you in that a little bit. The next one is just wanting to show you three counties just so you can get a sense of kind of where you rank. Hennepin, 22% exempt. You again, Olmstead, 4%. Ramsey County, 34%. And the majority of that exemption is in St. Paul proper. Now I'm gonna get into a little bit of the math behind the data here. So we take your total value of your properties in Rochester and we divide that by the total value of Olmstead County. So that's the first measure. And then the second chunk of the ratio is we do the same for taxable acres. So Rochester's total acreage divided by Olmstead. And this is where we get a productivity ratio. What we're looking for here is six or better. And nationally that indicates to us that it is an economically sustainable community in terms of the overall financial health of the community. Rochester does very well, 11.8% productivity ratio between the city and the county. So that means that Rochester's total assessed value is 11.8 times greater than the amount of county area that it takes up. So again, it means that your area, the city's land, is very productive in terms of its position within the county as a whole. And then this graphic is depicting the relationship between total assessed value and the land use used for those buildings. So this is the DMC district's total assessed value and the amount of city area that it takes up. So this is 16.6. This is an incredible number for any city in America. This is the relationship between the DMC districts total assessed value and the amount of county area it takes up So we're just kind of zooming out a little bit here. And this one is phenomenal This is 195 point three times higher than the amount of county area it takes up again It's indicating to you how productive your land use regulation is. That's the simplest way to put it the zoning the setbacks the all of the limitations and regulations you place result in a certain amount of productivity, and that's what Rochester looks like. I want to walk through this slide because I think this is kind of an important kind of grounding slide for any city that's really looking at taxable value per acre. And we use just a big box store. This could be any large commercial store with lots of parking around it, okay? And again, we're looking at about 21 acres. It's pulling about a million dollars per acre as a use. And that's what it looks like in terms of its current layout. If you add land to that, you add some parking, you are diluting the value of that parcel. You're making it less productive. If you take out a little bit of parking, you're actually increasing the taxable value per acre for this parcel. And we see this all over the metro. I live four blocks from a Target that has significant amount of parking and outlots that's never used. And so this is a really easy thing to understand. You drive around, you see this all the time. And Walmarts are a great example of this, as I said earlier, because they're fairly consistent in terms of land use and building area and parking. And so we wanted to look at your Walmart here. This is 25 25th Street Southeast here in Rochester. Again, a pretty typical Walmart. I would say 600,000 per acre is a very sort of median number for the United States. And just kind of keep that in your mind as we walk through some of your other values within your model. Just orienting you to what missing middle housing is. This is our friends at Optikos who developed this graphic that just shows you anything from, you know, a duplex, triplex, up to a small-scale apartment building. That's what we're talking about for missing middle housing. And there's this first sort of tier called gentle density. That's a duplex to a fourplex, and then this medium density. And you'll see a breakdown throughout the show on these different uses. So we'll start with your single family residential. You're generally generating somewhere in the range of about 1.4 million per acre for your single family. For your missing middle residential, so these again are duplex, triplex, fourplex. These are generating somewhere in the range of up to about 1.7 million. Your missing middle, so these are a little bit more dense. These are a little more compact uses, a little higher number, so anywhere from 4.3 up to 12.3 million. And then your multifamily, so again, these are apartments, both smaller scale apartments and then like Fontaine Towers, something a little taller. is anywhere from 1.6 million up to 27.8 million. So this is what your roll-up side looks like. Your multifamily, very productive. We'd expect to see that. But I think that one of the takeaways for Rochester is that if you add more of that sort of high productivity missing middle, you will drastically improve the average value of all of your missing middle. So those are some opportunity areas for you when you think about infill. It's a relatively small input, but it has big benefits in terms of revenue generation for the city. This is your commercial chapter. We looked at your Home Depot, Menards, Cub, and Hy-Vee, and you're pulling, again, kind of in that Walmart range, 600,000 to a million per acre. I know your Hy-Vee is part of a larger development. It has probably fewer parking spaces, so that's probably why it's a little bit more valuable. We also looked at Apache, and this is how Apache Mall is doing. And I will tell you that throughout the country we look at malls, and the lowest number we've seen is 100,000 per acre. The highest number we've seen is Southdale, which is 3.1 million per acre. So you're kind of in the sweet spot for most of the U.S., about 900,000 per acre. I'd say that mall is doing decently. But you can see it's got a lot of parking and I don't believe correct me if I'm wrong I don't believe there's very much structured parking out there. It's all surface lot So lots of opportunity is one of the things that I think I showed to you I might have showed you at the DMC presentation was that Southdale has developed its out lots And that's why their value is so much higher So they went from 2.1 million to 3.1 million in about a five-year period just by developing three parcels pretty significant increase pretty low investment This is some of your shopping centers. So we would call these auto-oriented uses. They usually have parking kind of at the front, the building at the back. You're pulling $900,000 up to $18 million for the Galleria. And the Galleria is a little bit of an unusual. It's not quite the same as the other ones. It's like a kumquat and a bunch of apples, right? So in your Miracle Mile, that's a very respectable number for an auto-oriented shopping mall. The next one is kind of your small scale commercials. So these range anywhere from, you know, like the Broadway bar and pizza up to Kathy's Pub. So some of these are kind of in your downtown. Some of these are kind of on the edges of the downtown doing very, very well. These are your one- and two-story office buildings. You've got a lot of this, like most American cities. And then your dense commercial, these are non-medical uses in Rochester. These pull 2.2 up to 36.7 million. So you're probably looking at, you know, different classes of office here, but none of this is medical. We also looked at dense medical uses within your model. Now, remember your hospitals proper, St. Mary's and Mayo Clinic, Hospital Methodist, those are tax exempt, just like other hospitals we've modeled in the state. But they have a bunch of clinic buildings and office buildings. Those are taxable. And so you can see those on the right, and the Guggenheim is your peak parcel. And we just wanted to throw these in as an example, so we pulled St. Paul Regions, Robbinsdale, North Memorial, and Hennepin County Medical Center, just to show you those non-taxable uses. This is your peak parcel, the Guggenheim, as I mentioned a couple of times, pulling $167.5 million per acre. It's a really productive use. And then this is the roll-up for this section of commercial properties. Again, your dense commercial non-medical is kind of winning the race here, but your dense commercial medical is right behind it. Very, very productive uses within your model. And you have a lot more opportunity to do those, especially in your kind of walkable, more dense, more compact downtown areas. We also pulled out mixed use buildings. So these, you know, these can be a variety of uses. Often it's a retail space on the main floor, and then it has housing above it, or like the twins hair studio. Looks like the studio is actually maybe in the basement, I'm guessing. Kind of a fun one. But you've got People's Food Co-op and the Hue. These are all pulling very, very good numbers for you. 66.7 is a really great number for mixed use. And then I just did a quick roll up here, again, to show you those different properties. Then this section is really about this comparison of average value per acre for all the property types within your model. And I just want to note that the colors indicate different jurisdictions. So Olmsted Residential is the darker orange. Your Rochester Residential is the lighter orange. And then Olmsted Commercial is kind of the darker pink. And the Rochester is the lighter pink, just to give you a... sense of how that plays out for you. So again, your dense uses are your most productive. Your multifamily uses are your most productive in terms of generating revenue for the city. And then you've got some really great, what we call lasting value parcels within your model. And, you know, Typop is in an older, like, it looks like an early 20th century, late 19th century building. You've got the Rosa Parks Pavilion and 330 Broadway. These are all incredibly productive uses that have been here for a long time. 1875 for Typop and 1856 for Broadway, which is pretty remarkable. So that's one of your original buildings there. Really quickly, I want to walk you through a scale and use comparison. So here we took the Galleria because it's such a great productive parcel for you and it's a retail parcel. And we compared it to Walmart. So Walmart here in Rochester sits on 16.9 acres. That's a smallish Walmart. And Galleria sits on just under an acre. But they have very similar values. In fact, Galleria is generating more value for you in terms of its productivity than the Walmart is. Same value, different footprint. And then we just like to show this quick roll-up slide. So this just gives you an example of kind of what are some typical parcels within Rochester producing in terms of revenue for the city. And again, just showing you your higher density mixed use is your most productive land use. We would expect to see that. That's what we see generally across the country. It's sort of the odd outlier where we don't see that. And then just wanting to kind of do also a quick roll-up on your assessed value per acre. So showing these different types of uses. You've got everything from those smaller scale apartments up to those older apartments, the Manor at Med City. You've got Apache and Mayo Clinic, Guggenheim Building, et cetera, and just showing you how those kind of compare out throughout your model. Now we're going to dig into the destination medical center. And before we dive deeper into this section, I just want to acknowledge that in the last five years, between about 20 and when we did this work, the parcel geometry changed at the county level. That is basically what's happening is that the maps look a little different than they did for you in 2020 because the data was collected differently. So this is what the data looked like in 2014. And then when Olmsted changed some of their parcel delineations, it looks like this. And what they did was combine some parcels. And you can see that they've merged those into larger shapes. Some have split into smaller shapes. I just want to orient you to that. This is incredibly common everywhere because we're always learning and changing how we Collect data and how we utilize data. So we just want to make sure you're grounded in that This is the older version of this slide. So this is the 2014 and 2025 the 2014 data is kind of that green kind of olive green color and the 25 data is that light blue color and so you can kind of see how those 10 years of the DMC district have changed that area in terms of value per acre assessed value per acre and And this uses the 2025 parcel geometry as the base. Now we're really getting into the weeds here. But there are more holes visible because of those smaller parcels that were merged into several larger parcels. So again, this is the parcel geometry, but you can still see the growth between 2014 and 2025. So this slide is describing what happened in terms of your assessed value per acre over those 10 years, those first 10 years of the DMC district. So you started out in 2014 with about 1.3 billion in total assessed value. And there's been an increase by about a billion dollars in that total assessed value and more than double the times of tax capacity in this 10 years. So some of the increase in values is between these two models can be attributed to values increasing over time regardless of development opportunities, right? Buildings and your home, everybody's property increases in value over time generally. It's a good thing generally. It's important to note the variety of development that's occurred in the DMC district. So for instance, look at this surface level parking lot on the left. So that was valued at 1.7 million per acre in 2014. And that is now developed into two Discovery Square, which has a VPA of 49 million per acre. So a really significant increase in value just for that one little parcel. The next couple slides are, we just removed the maps. We're just going to show you some bar charts. So here we're highlighting the change over time with some just simple two-dimensional bar charts. And you can see the total assessed value and the tax capacity of the DMC has really increased over time. And if we look just at tax capacity, we see that growth a little bit more clearly. And it's just, it's important to note that this is not just a reflection of an increase in paid taxes, but rather that a higher tax capacity indicates more property tax revenue for you. Again, back to that primer we had in Minnesota tax. A really quick comparison of location and cost. So we compared West Circle Drive and DMC District. And the West Circle Drive quadrant may not have that much larger of a city road liability when we get into analyzing your road liability and your utilities and everything. But the combination of a substantially more land use is being used and less connectivity, for instance, like dead-end streets, cul-de-sacs, curvilinear streets, right, in that area, make the area harder to financially sustain in service, because grid networks are significantly more efficient in terms of service, both in terms of maintenance, like snow plowing, and in terms of Compactness of development and leveraging that infrastructure and so this is just a quick comparison to show you The property tax revenue that each of these is generating and the city road liability they're generating so significantly higher road liability for West Circle Drive quadrant and This chapter really gets into, we're going to use a combination of tree charts, which is this image on the left, and we're going to use maps to show you some of the land use categories on the map. And here we're just showing you the percentage or the area that's devoted to those different land uses, okay? And so you've got a lot of single family uses in Rochester, like most cities in the United States. And then you've got this other property, which is like your airport and parks and that type of thing. Some of your parcels are actually vacant, and so we did pick those up as well. And if we look at the tree chart and we look at the revenue generation corresponding to those land uses, you can see what that breaks down for. And here we just want to isolate out housing. So, we looked at single family, multifamily, and missing middle uses. And the tree chart on the left shows you the number of units per acre, okay? And here we're just gonna compare your single family, your missing middle, and your multifamily. You can see your multifamily is about 3.9 times more productive in terms of its use of land and the amount of revenue that it's generating for you. Again, that corresponds back to those earlier slides where we saw that your multifamily uses are very productive. We also did a couple of growth projections for you, and we mapped some different scenarios. The key here is really when we talk about land use, we really want you to think about your land uses as a portfolio. And the analogy I like to make is if you're nearing retirement, you're always thinking about how am I invested, right? Is it a high-risk investment? Is it a low-risk investment? What's my return on investment? And so we want you to think about that portfolio of land uses and typologies, in other words, the types of buildings you're building on them, and make sure that you keep your higher density, more compact uses in balance with lower value, lower density uses like single family, okay? So your land use portfolio is pretty broad. You've got this whole range of residential uses. And that's what gets you to your balance sheet. You have a wonderful riverfront small area plan that you've been activating over the last several years. And this is one example of that small area plan. And we just did a quick projection for you. So we showed you, here's what you could do with the surface parking lot, which is now generating zero revenue for you. And you could do something like 318 Commons or the Maven on that parking lot. And this is what you would generate in terms of property tax revenue for the city. So your potential is quite good for these areas. We also looked at your sales tax analysis. Now Minnesota is a partial access state when it comes to sales tax. And so we sometimes have to assign revenues to parcels. Again, we're looking at this at a parcel level. So some of the data will correlate directly to a specific parcel or address, like a Home Depot or a Walmart, right? But much of the sales tax associated with online sales we assign to parcels using a somewhat synthetic approach, which is to say we have to kind of guess where it goes. And this is just a quick breakdown of your outside and inside the DMC district sales tax revenues. That miscellaneous category, I want to explain that. We use what are called NAICS codes, and those codes classify businesses based on their primary economic activity. Some of those don't line up with anything we can see in your model, about 5% of them. And so that's kind of a miscellaneous category. It's a little bit of inside baseball, but I wanted to make sure I explained that. So this is your destination medical center district. Here we're showing you your sales tax spatially. Then we layer in the property tax. And so you can see that the DMC district is very productive, both in terms of property and sales tax. And this extrusion here, this three-dimensional extrusion, the big mountain here, is proportional to the amount of revenue generated by sales and property tax combined. This shows it a little bit more clearly. We're showing you total taxes collected, property and sales for the city as a whole, and the DMC district itself. Again, taxes per acre generally higher in the DMC. We would expect to see that because it's more compact. And again, wanting to compare sales tax productivity in West Circle Drive and the historic district. Your historic district, very productive. It's a pretty tight, compact area. It sits on a relatively the same amount of land as West Circle. It's generating a lot more city sales tax per acre and more property tax per acre. And then we just wanted to look at your local sales tax revenues indexed over time. So to 2015, we looked back and then today with the DMC district in 2025. And you can see a significant increase in terms of your sales tax collections over that period of time. I'm going to go through this section. This is a fiscal review that we did for you. So this is not a full return on investment calculation, but we do a kind of lighter touch and do a fiscal review for you. And really, we're looking at your city. We're looking at just a little bit of your city, what sticks up above the waterline. We're not going to get into fiscal mapping today. But we did look at your all funds budget. And here on the butterfly chart, we're seeing your inflows for revenue. Primarily, we just looked at your property tax, and it shows how that's flowing out into special revenue funds and capital improvement funds for you. Now, GFOA defines an asset a little differently than we do. They think roads are assets. We believe they're pretty significant liabilities for a city. You can't pick it up and sell it to Austin, right? And so you are kind of stuck with it. And so we consider those to be liabilities, and we want to make sure that our clients understand that, and pipes as well, and are always managing against those utility and infrastructure liabilities. We think in life cycle cost, and most cities think in capital planning costs, right? So they look at a capital improvement plan, and it's maybe a five to 10 year period, it really depends on the city, there's quite a bit of variation across the country. But we really want you to understand how much do you have today, How long will it last? And what will it cost you to maintain and replace it in time? And so this is just breaking down Rochester's local roads by your pavement condition index rating. And thanks to your public works department and your finance department, we can estimate the road rebuild schedule. And your first wave of roads are built, you know, yours were built in the 1940s, going back that far. And of course, they're subject to a wave of replacement that has to happen eventually, right? And especially in Minnesota with our weather. That first rebuild cycle brings us to today, but will only continue to compound. So it's, I always make the analogy that it's like painting a bridge. You get done, and you're at the end of the bridge, you start over and start painting it again, right? Your roads just kind of constantly have to be maintained. And we're only looking at your local roads here, okay? So this is your road rebuild schedule, and we're right there right now in that kind of terracotta color. This is a general slide, but we really want to emphasize that if you know the revenues, you can apply some geospatially relevant costs to this. And we can get a picture of return on investment by subtracting the costs against revenues. And so if you're maintaining your roads in a preventative maintenance cycle, you're really spending fewer dollars to do that than you are if you wait for full reconstruction. I'm just going to click through these really quickly. All these points on the line graph represent a maintenance input. So you're doing something like a seal coat or an overlay. You might be milling it and just doing some simple curb work, right? But option two never goes into the red zone. You're never into the poor, very poor area. And so you're actually keeping your head above water. You're maintaining these roads at a level which will end up costing you quite a bit less. You'll save about $3 million over the period of that asset or liability. This is your PCI, your pavement condition index for the city. And you have about 27 miles that did not have a PCI. So we just put those in the good category. And so that's how this cycles out. Yeah, well, that's an opportunity area. Yes, exactly. But, you know, you have quite a bit of lane miles that are considered very good. Of course, consider that those are very good today. They will not be very good forever. And so when I see a city that has a lot of lane miles in the very good category, I always think, well, that's all going to come due at once, which is its own kind of challenge, right? And remember that a road is forever. I know, right? So we also looked at different infrastructure types, and you've got 57 square miles or so. You've got about 615 lane miles, 626 miles of water, 500 miles of sewer, and 196 miles of stormwater. So it looks like this when you break it all out spatially and get a sense of where your infrastructure exists. This is a really great tool for economic development because now you know, ooh, we have water there, we have pipes there, we have roads there. Let's leverage that, right? This is current and needed spending in terms of your roads, so this is your 615 lane miles. Like most cities in the United States, you are underspending on road maintenance. You are not alone in that. I have yet to see a city that spends enough money on road maintenance. Your water is a little bit better, or sewer, excuse me, is a little bit better. You're a little closer here. And I will just point out that these are typically enterprise funds that do better in terms of the current versus needed. And this is your stormwater, which is very healthy. If we took your infrastructure, we could go all the way to Windsor, Wisconsin on your stormwater, all the way to Kenosha on your two-lane roads, all the way to South Haven, which is lovely this time of year, I must add, for sewer, and then all the way up to Sable Point, which is gorgeous if you haven't been there, on your water system. So your water system is quite significant. This is what it looks like in the roll-up. So you're earning some small deficits in water, sewer, and stormwater, and a more substantial deficit in roads over time. And these are annualized spending. So this is upkeep versus lifecycle need. And again, just wanting to orient you to this idea of lifecycle versus capital improvement cycle. So if you looked at it as a per capita cost, this is about what it would roll out to per resident. An additional $0.17 per resident, $11 for water, and about $33 for transportation.

Monthly?

Mm-hmm. One last kind of dot connection for you. Again, we're back to West Circle Drive versus the historic district. And because roads are your most significant liability, we want to show kind of how you're netting out in these areas. So think of it like showing a balance sheet for the city, right? And in West Circle, you're generating property and sales tax of about $3,500 per acre. And in the historic district, you're generating about 174,000 per acre. So you're much more above water in the historic district in terms of your road liability at this time. West Circle Drive could get there, but it would have to do a fair amount of intensification of land use. So you're underwater on West Circle Drive, you're net negative, you're net positive in the historic district. So now what? Good news, this is the last few slides. I know it's a big deck. Your small buildings are generating a lot of productivity for you. And so think about these infill opportunities. You've got the classic small-scale apartment building on the lower right pulling $12.3 million per acre. But even this newer building right above it is pulling $5.8 million per acre. And then you've got these row homes, townhomes use. Create some lasting value in the community. You've got lots of great opportunities to do this. These are in your most productive parts of the city. They are very walkable. They're adjacent to a lot of infrastructure assets that you have and a lot of investments that you've made in things like your bus rapid transit system. So these are great opportunities. Think about those old things you have that are really productive. As we like to say, rebalance your land use portfolio. If you're out of whack, consider how you can use some of those surface lots. You have a lot of surface lots, just like most American cities. They're typically not productive at all, or they're taxed at a very low rate. And so those are really important opportunities for you. You can really increase your potential revenue growth in those areas by doing things that are more compact. They don't have to be super tall, but think about that. And consider your spatial consequences. When you spread out, it's really expensive. Cities like to spread out. We like to do bigger lot developments. People want more land. But it's extremely expensive for you. And it is not negative for you. And just important to remember this in your overall balance sheet. Those larger lot developments may pay higher taxes, but they also utilize a much higher amount of road infrastructure. You have great regional partners here. Working with Olmstead and with Rochester and with your utility commission has been really great. You've got a lot of good people working on your team here. And of course, like Senator Paul Wellstone said, we all do better when we all do better. Pretty simple. We recommend that you read this book. This is by Chuck Marone, Minnesota resident and recovering engineer. And we invite you to always do the math. So if you would like to, you can find more information at that QR code, and I will stand for questions. Thank you.

Thank you. I think we have about an 18-minute window for a consultant, so I would encourage questions to be brief and to the point. Any questions?

Mr. Miller. Thank you for this presentation. The original one that you guys did for the DMC district several years ago has been one of the fascinating points that I go back to over and over, so I'm glad to see an update and an expansion so we can have broader policy considerations. My only question is actually about a non-hypothetical, but I'll ask it as a hypothetical. Imagine we have a roadway that's currently four lanes, six lanes of right of way. How might we think of that? like a decision to mill an overlay and right size it in this lens.

I think that's an opportunity for the city to consider how you might think differently about that right away and its future use in terms of needs. I think one of the really interesting metrics I've seen just recently is the strongly correlated gross domestic product and vehicle miles traveled over the last, say, 50 years that it was measured. But just in the last 10 years, those two data points have begun to diverge. and GDP is no longer tied strongly to VMT, which means that a couple of different things. It could mean that people are, there's better transit uptake in your area in those areas immediately adjacent. It could mean that there's a stronger opportunity to do economic development in that corridor that would sort of lighten the load for you in terms of road maintenance. Those are all options for you to look at. I think many cities are looking at that type of thing because That's a lot of right-of-way to maintain. What is it, about 120 feet, probably, four lanes with a center median?

We have six lanes of right-of-way.

Six, yeah. That's a big piece of right-of-way, yeah. So, yeah, those are all options that I think you have and can look at.

Second question. For a resident who doesn't live in the DMC district, who doesn't spend any time in the DMC district, How would you answer their question, why would we invest in the DMC district?

Great question. I think it goes right back to our analogy about rebalancing your land use portfolio. Cities want single family uses. They are always net negative in terms of the amount of revenue they generate for a city. And so you are providing an incentive for single family uses. And so in order to provide that incentive going forward, It's important to more densely, more compactly develop other parts of the city to help rebalance that.

To offset the costs.

To offset costs, exactly.

Final question. How should we think about annexation? Should there be an ROI? Should there be a performance target for the value generated?

So we generally would recommend an ROI for annexation policy because it can be very helpful to just understand where you are net positive and net negative. But generally, I would say, spoiler alert, that annexation is almost never a net positive situation. I have yet to see a city in America where it is

Could you compare Rochester to a place like Woodbury with a newer housing stock but no downtown core like we have the advantage?

We certainly could model Woodbury. It would look very different than Rochester. I would hazard a guess that your commercial uses are probably much more productive than Woodbury's. And Woodbury, I live not too far from Woodbury, I would say Woodbury is kind of a classic auto-oriented city. So they've got larger shopping centers that have a lot of parking in front of them. And so those are lower value in terms of productivity. So your downtown core is incredibly productive.

So in terms of health, are we better off than Woodbury in the long run or they have found other ways to compensate?

I think cities like Woodbury, which Woodbury was one of the top 10 fastest growing cities in the US, I believe, for a long time. They have grown very fast and they have grown out into their growth boundary area. So Woodbury had a jurisdictional boundary as all cities in the Twin Cities do, but they have kind of expanded out into those greenfield areas over the last decade. They likely are facing a scenario where much of that is net negative. Again, just based on our work in other cities in the United States like Springfield, Missouri, Rancho Cucamonga, California, Fayetteville, Arkansas, all of those cities that have massive annexation or greenfield development programs are typically net negative.

Mr. Keene.

Yeah, I do appreciate going through this thing that I've gone through the church, but hadn't heard that farm analogy. I think that really does help. Good. Kind of that idea of like, how is your property working for you? At the same time, doing the 2015 to 2025 compares, I just bristle at that because of all the inflation that's happened on homes and land during that same time. And just an equated DMC doesn't feel... uh an accurate way to manage the assets we have in front of us um as far as uh um the uh the idea of like the capacity per acre um and then what i you know what our capacity is we also have the thing in minnesota that we don't ask for a percent of the um tax we ask for a dollar amount and it's calibrated so we always have the trade-offs going on between commercial and residential and during covid we had probably downturn in values on commercial that without housing prices going up, our real estate taxes were going up because we were just carrying a bigger burden of the capacity. So I do appreciate having this lens to look at it. But in your work, can you name one or two other ones? Should we look at our community by income per job? Should we look at our community by leverage of parks and how much usage we get in libraries and other things, quality of life indicators? I think it's important for us to understand what our property has the capacity for generating, but I find it to be a very narrow

Absolutely. And I mean, our data is your data. We take your assessed value data from the county assessor and from the city assessor. That is one very, as you say, very narrow definition of success in terms of the city. There's a lot of qualitative measures that cities apply. And because I was a city employee for many, many years, absolutely, you could look at parks, you could look at educational attainment, you could look at relative economic stability of a family. There's many, many inputs there. You could look at public health outcomes. We are increasingly asked to correlate public health data to value because there are parts of the country where people live adjacent to uses that are polluting or otherwise harmful. And people want to understand the impact of those uses, just like freeways, not even big factories. So those are things that we do correlate. So we can look at qualitative data. And I mean, I think this is, as you say, one narrow little kind of snapshot of what is happening in Rochester. We do think, though, that the economic measure is important because it helps provide a foundation for the conversation around land use and development. And that is helpful because if you continue to grow in that negative direction, you will not be financially sustainable over time. And so that's also important for a city to consider. We know after looking at several cities in the last two years, there are many American cities that are facing bankruptcy, that their long-term economic picture is very dim. So we think that's also a very important measure.

And I think it's important to keep in front of us. But I also, I want to see if I can get your reaction or your insights into this sort of conflict between the residents who feel like we as a council and we as a city administration spend all of our time on downtown and on places that are not important to me because I live on these edges of town and we have our own restaurants and we have our own parks. And your message coming to us is, Those people, that downtown property is like supporting the housing on the edge of town, where the people in the housing on the edge of town feels like they're the ones supporting the downtown.

The numbers would suggest that it is the first. That downtown is supporting the city as a whole and the county as a whole. That those are the most productive parts of the city and of Olmstead County. Single-family uses in the United States do not pay their own way. My home, which sits on just under 5,000 square feet, it does not pay its own way. And my taxes have tripled in the last decade. It's a hard pill to swallow. I'm with you.

But I'm looking for more insight than that, because it's a fact. Because like you say, I'm interacting with people who have seen their tax bill go from $3,000, and that's their tax bill, not just the city or this other part, more than double. And they don't live on a bigger street, and they don't get any more plowing or anything. So help me out how that is true to them, that they are being supported by the... by the higher valued buildings downtown?

There's a lot of different inputs here. One is just the compactness of the land use. So if you have a single family home on a quarter acre, that is taking up a lot more land area in terms of the amount of revenue that it's generating compared to the downtown commercial building. We could do a level of service analysis for you and show you police and fire. We can look at all the different inputs in terms of service provision. And what we see generally, and this is actually a study that St. Paul did a couple of years ago, commercial uses use about 87 cents on every dollar they pay for public services, and residential uses use $1.30 for every dollar that they pay. So we know there's an imbalance. Even if you don't look at tax productivity, we know there's an imbalance in terms of service delivery. So we could look at a lot of different measures. And again, it's not to say that single family uses are bad. I live in a single family home. You live in a single family home. I love it. I'm just not quite paying my way.

I appreciate that perspective, because I do, there is that view that, because you can have the same discussion on the people that live in the, what I call the suburban neighborhoods in Rochester, comparing to the townships just outside that thing. And are they carrying a burden so that the township people can have the big city right next door? And again, I'm not trying to have that discussion.

Oh, that's an interesting one, though, isn't it?

It is, and it ties back to Councilmember Miller's question about annexation. I mean, there is very much a cost thing about as you annex in and have a 50-year view on that, are you actually spreading costs to the existing residents to bring these in? But there's also a very environmental view of looking at those townships and making sure it's not built as five-acre lots compared to a city building. So there's other trade-offs there too.

Yeah, so many trade-offs, yes. I mean, we want everything, but the reality is we can't have everything. So yeah, it's a question of trade-offs.

Thank you. Mr. Palmer.

Thank you. Everybody at this table is a single-family home.

Mm-hmm.

Not true. Not true. Most normal people. Awesome. And so when you say they don't pay for themselves, the math that I've done is road maintenance and road upkeep for 50 years costs us about $300 a month or $300 a year, and we take in about $1,200 in property taxes. If you look at the downtown area, they don't pay for the sewer upgrade. Every road we've ripped up, they don't pay for those. We pay for that. If you look at the DMC area, we still aren't recouping any of the TIF money. They're usually 15 years out, and so they were incentivized with a lot of TIF money to go in there. Our travel time, 68% of our people in Rochester travel less than 10 miles. So if you go back to a road, yeah, you can single lane a road, but it's going to take you twice as long to get somewhere. People's time costs money. They talk about sprawl, and the Twin Cities is a much more sprawling area than we are down here in Rochester, and you hear that differently from different people. And this is from the Maxwell study, but we've grown our rental in the last five years, 41%. We've only increased our home ownership 5.5%. So, I mean, home ownership has a lot to do with it. But I go back to balance. You know, you all can't have big skyrocketing, Housing because it just doesn't that's not what people want and you need to have a balance I think Rochester does a good job of balancing between that missing middle the high-rise and the in the single-family Kind of what mr. Keene is getting at is that you go out in the county and see three and five acre lots and they come in here and use our Facilities that's that makes it tough but you know I look at the Maxwell study and that was well done and THEY ARE TELLING US WE NEED MORE SINGLE FAMILY LOTS. THEY ARE TELLING US WE NEED THAT. THAT'S WHAT I'M LOOKING AT. THANK YOU.

MAYOR NORDEN.

I DIDN'T WEIGH IN BECAUSE I PULLED AWAY MY QUESTION THERE BECAUSE OF THE CONVERSATION WE'RE HAVING RIGHT HERE. IT'S REALLY HARD FOR ME TO HAVE THESE DISCUSSIONS ABOUT WHEN WE JUST LOOK AT THE VALUE FOR THE CITY PROPERTY TAX PAYMENTS OF THE CITY, HOW THE CITY functions. And it's important and we need to do that. But it's hard for me to have that discussion, which what feels a little bit to me like in a vacuum, rather than balancing that with, I think, the conversation here, which is the quality of life for the people that live in the community and what they want out of our community. And, you know, we talk about growing density. Well, we know density is better for the city and financially, but if it isn't giving families home ownership and their personal lives aren't able to be their personal value and wealth isn't able to be grown, then how do you strike that right balance between this is cheaper for the city and this is better for the populace that lives here, or maybe... whether you use the word better or not, maybe what they want. Downtown businesses, you know, flat parking, yes. But we hear from businesses every day that if people don't have a place to park, they're not going to come to our store. And then we're paying more taxes on a building that no one is coming to. And so how do we strike the balance? I think that was the word that was used between the quality of life and what people want and what's more reasonable for a city to fund or, I don't know the right word for it, but that takes into account what money we have and how we're gonna spend it here as a city. It's really a philosophical discussion and it really, in my mind, does weigh into quality of life and how do you value that, how do you count quality of life in this type of discussion.

I'll just say that when you generate more revenue for the city, you are providing potentially a higher quality of life for people. So without that additional revenue, you cannot address the things that your residents want. And I would also just say that single-family housing is not the only owner-occupied option for cities. ensuring that you allow for the construction of shared wall owner-occupied housing is very important. And again, that's part of rebalancing your land use portfolio. So owner-occupied housing is very important for wealth creation in this country, absolutely.

I would also argue that our multiplicity of housing opportunities all support the downtown. That is, those people are coming in and the only reason the Guggenheim building can produce as it produces is because we have people who come from

I WAS JUST GOING TO ADD, LISTENING TO COMMENTS FROM MAYOR NORTON, IT SOUNDS TO ME LIKE WE'RE TALKING ABOUT THE BASIS TO THEN HAVE A CONVERSATION ABOUT THE APPROPRIATE LEVEL OF SUBSIDY FOR CITY SERVICES, RIGHT? I MEAN, WE DON'T EXPECT OUR POOLS TO PAY FOR THEMSELVES, OUR GOLF COURSES TO PAY FOR THEMSELVES. THOSE ARE SUBSIDIES, OUR FREE PARKING NIGHTS AND WEEKENDS AND AN HOUR ON THE RAMP. OBVIOUSLY THAT IS A COST THAT WE SUBSIDIZE, SO I THINK THAT The earlier conversation and the point I heard from you, Ms. Worthington, is that we are not in a situation where we should be looking to create a trend where we go bankrupt, right? We should create sustainability so that we can provide quality of life through city services and discuss the appropriate level of subsidy. But a more productive city allows us to have a more robust conversation about city services.

Absolutely. I couldn't have said it better. Thank you.

Thank you. A good closing word. Any others before we move to our second presentation? Thank you very much for being with us this day. We move to tax increment financing, please.

Thank you, Acting Council President Wall. Maybe as the group comes forward, I just would say I think that the initial conversation that you just had about Urban 3 probably blends very well with the conversation about tax increment financing. And what I think we're hoping that you take away is it's also not just about subsidy, but how do all of your other tools that you have UNIFIED DEVELOPMENT CODE, WHAT YOU ALLOW, THOSE TYPES OF THINGS ALLOW FOR MAYBE MORE NATURAL INVESTMENT AND THINKING ABOUT ECONOMIC DEVELOPMENT AND WHY YOU MIGHT INVEST SOMETHING IN DOWNTOWN SO THAT OVER TIME YOU COULD PRODUCE ADDITIONAL REVENUE TO DELIVER for some of those life cycle costs that were talked about. And we do, just so you know, in the midst of this, may have someone leaving, as we have lots of consultants here today. But appreciate your time management to get us here at 431. And I would turn it over to Josh Johnson, whose title escapes me.

SENIOR ECONOMIC DEVELOPMENT SPECIALIST. YES, THANK YOU. WE'VE GOT ANOTHER REALLY INFORMATIVE PRESENTATION FOR YOU TODAY. I'M JOINED BY TODD HAGEN AND LIZ DIAZ WITH ELLERS GROUP. WE ENTERED INTO A CONTRACT WITH THEM ACTUALLY FOR OUR FINANCIAL CONSULTANT SERVICES JUST GENERAL LIKE TIF AND TIF ANALYSIS REVIEW I THINK LAST OCTOBER. AND THEN FEBRUARY WE APPROVED A CONTRACT TO HAVE THEM LOOK AT OUR ENTIRE TIF portfolio to provide an analysis. And as of like two weeks ago, we're still collecting the last bit of detail that we need and information from the county in order to do the full executive summary. But this is a preview or a snapshot of what we found. The other thing is, you know, TIF is often very misunderstood and there's a lot of different elements to it. So we really want to kind of narrow this one in on some of the opportunities that we found with the Ehlers analysis. So focusing on that, I would say Todd's going to start. He has to step out at about five to get to a bond hearing. So Liz and I will be here for the remainder of the presentation. But the other thing we just wanted to have is any clarifying questions. These are the experts that can help answer some policy level discussion. We'll wait till the end until we sort of reiterate some of those items. So just jumping in, where's the, there we go. So the agenda today is first we're gonna do a little bit of brief refresher on TIF fundamentals, TIF 101. Then we'll review the current status and performance of all of our districts. We have about 40, a little over 40 active districts. We'll then discuss policy opportunities that we believe we have identified that still meet state law. And then finally seek direction from council on some strategic direction for the future usage of TIF. The other thing I'll just add is I believe we've done an exceptional job of identifying, capitalizing on opportunities, being creative with our TIF districts, but I don't know if we've necessarily looked further out in mid, long-term sort of planning of what we can use TIF and how TIF can be a tool. for not only private developers, but also in the city. And I think following the Urban 3 presentation, they obviously identified a lot of those potential opportunities. One of them is how do we make economic development be a tool to reinvest in our aging infrastructure? Also, how do we create a mix of development that offsets some of the other development, but that might not pay its fair, you know, equal share and are overall tax base. So these are just some items of why reinvestment is important. You know, obviously it improves their tax base, supports long-term economic development, expands housing opportunity, improves infrastructure, attracts private redevelopment. So it's very cyclical and it's sort of an ecosystem that feeds into itself. And then I'm going to hand it to Todd to do a bit of TIF 101. You got a mic?

Yeah. Thanks for the mic. And thanks for the business, everybody. We really appreciate it at Ellers. We're located downtown Minneapolis and a western suburb of Milwaukee. So this is all we do. We bond, bonding, tax increment, tax abatement, tax subsidies. financial management planning utility rate studies too, so kind of the whole gamut. I'm just going to kind of go through the basics. I know Heather kind of talked about this a little bit with you two, but it does obviously tie into tax increment financing is taxes, right? So what goes in kind of comes out basically. And, you know, what is tax increment? So the building blocks of TIF is kind of what this flow looks like. It's really the ability, like it says here, to capture and use most of the increased local property tax revenue from new development within a defined geographical area. So, this is a really nice slide. It kind of talks about, you know, we've got the creation and the time and the termination sort of the valuation of a piece of property, right? got its baseline property value, and then sort of the new taxable project comes online right after we create the tax increment district. And then we want to, like Josh says, we really want to stop that as soon as possible, right? So there's all sorts of different ways to do that. Usually get to an amount first or a term. And in our office, we actually do sort of an internal analysis to kind of find the sweet spot, so to speak, of where to stop that and just kind of let it go, right? Because that's the whole idea. I guess what tax increment financing does, here when you look at this slide is that it does affect that baseline property value in a way it would stop it from further declining, right? Okay, so when we certify a TIF district, we are certifying that baseline net tax capacity. We just got talked about what that was. as well as the city's local tax rate, right? So it's kind of frozen, right? So the plus side to that is once we certify, it kind of stops that from, if it is sort of depreciating, it stops it from doing that. And then of course the county and the school and the city retain that, right? So that's a positive for you. So we've stopped that decline in value. And then the new value comes on, right? And so that's captured for a while, right? Like I said. either until the developer hits a dollar amount that they need in their proforma to make the project work or a time, and then again we want to terminate it as soon as possible so we can all, right, all three taxing jurisdictions can enjoy this new property tax value that came on. So, next slide. What it can be used for, right, so there's a whole laundry list of what it can be used for and then what it can't be used for. So, you look at that list and it's basically, well, in our company and most attorneys would say that We just want to keep the tax increment at or below the footings and foundation, basically. We don't really want to use it to build a building. You can in a housing district because there's some affordable sort of aspects to that, so you might need to kind of, you know, maybe we're kind of done exhausting all this laundry list of what it can be used for at or below ground and might have to kind of go up a little bit to make some of those units affordable. But that's basically what we're looking at too. And it can also benefit the city as well. Once you sign a development agreement, you enter into a development agreement, you too can put in what you wanna see in that development as well. In keeping with the neighborhood, bearing power lines, streetscapes, all that kind of good stuff that you've kind of got a stake in that. And then what it can't be used for is we really, I think the long and the short of this is it can't be used for governmental building in the general day-to-day business of government, basically, and social recreational facilities. This list on the right, basically, most of that would probably be tax exempt anyway, but We'll get talk about further like what else we can Sort of use what our opportunities are once for the developer has been their obligation has been paid and What what more could this be used for before we decertified district for for the city right and so that that's where it could go but it can't for these types of projects basically So the next slide is the building blocks of TIFF. And we have an example from Broadway Plaza Development, what it kind of looked like before. And the next slide, of course, will show you what it looks like afterwards. I'm sure you're all familiar with that. But basically, prior to the assistance, I said that the property does have a base value that is still funding local units of government, right? And TIFF can kind of stop that from further declining. It can kind of lock it in. So what that is, is like what Heather said too, is like there's original tax capacity, and we're gonna talk about how that's calculated and sheeted as well, but let's say it's $14,890,000 on the base value, right? And it's either, maybe it's going up a little bit, maybe it's kind of stagnant, maybe it's going down, whatever. But the property's been sitting there and needs to be redevelop, so how do we attract a development to that, to build something of value that is beneficial for the city, right? So the next slide says, hey, you know, we'd like it to look like this, right? And there's a developer, right, that, says, hey, we can build that, or we've got other ideas of what we can build there. And that's your decision, of course, as a city of what you'd like to see there. But once we're into that point where we would think about giving them some sort of assistance, this is what it could kinda look like, right? So it's pretty basic, right? The original net tax capacity is just the original tax revenue, and then of course the total is, let's say, over $400,000 or so, and that's really what the increase of total tax capacity is. Then the next slide basically is how we calculate the tax increment. So it's kind of the Minnesota two-step, so to speak, is we, We basically have a net tax capacity, and that's calculated by the market value times the tax class rate, right, of what sort of is gonna build there. The use rate could be 1.5% for commercial, could be 1% for single family housing or whatever, or 1.25% for for multifamily rental or what have you. So that's kind of how we get to a tax capacity value. And then we subtract the original net tax capacity rate because that kind of is gonna stay around, right, for us, for all three taxing jurisdictions. We're only gonna capture the difference, basically, is what we're doing. And then we multiply that by the tax rate of all, the whole tax rate of every, every taxing jurisdiction, right? In an abatement situation, it would maybe just be the city or something or the city and the county or what have you. This is capturing, multiplying by all three taxing jurisdictions and then some. And then so what spins off of that is the annual tax increment that's available basically for the project over time. And so where does that, you know, where does that get collected from, right? How does this work? And we talked about destination medical center development district, and that's something to kind of keep in mind. We've got the next slide kind of will show that, but kind of in a basic slide, What this would look like is we have a tax, different tax increment districts and they go by use basically, right? A housing district has different rules, we'll talk about that. A redevelopment district has different rules and they're all within a larger geographical sort of project area, right? And that's, so the TIF districts basically capture the value and generate the tax increment. and the project area is kind of our area of operation. We have to have an area of operation, whether it's a city or an EDA or a port authority or what have you. So it can be many tax increment districts within one larger project area. And so, for instance, in the DMC area, and again, Heather showed that as well, and hey, our map tracks, so we're good. So this is kind of an idea of what this would look like. And most of your districts, well, I would say all of your districts, probably outside of the DMC, are kind of one-offs, we call them, right? It's like the tax increment district is coterminous with the project area and we establish them as we move forward individually and they're kind of in and out type districts. And this district is really almost more common for For cities, let's say that's a whole city there in the DMC. And so you can have many different tax increment districts within that project area. And we'll talk about some of the benefits to doing that. So the next slide on that as well. So the types of districts here we talk about, they go by use. So a redevelopment district, which is, there's a lot of that going on right in the city and in the DMC area is, has a 26 year, it's a 25 year maximum term after the first tax increment, 26 years. So that's a lot of years, right? And we always, we talk about, you know shortening that up for only what the developer needs basically and that's kinda the the point that's got its own qualifications too so it's mostly kind of blight findings we know that substandard buildings would have to have more than one at least in an area and it's gotta have sort of an occupied test too of of uh... there has to have been something uh... built like gravel roads foundations uh... footings uh... can't just be like a cornfield or whatever, basically. It can't be just green space sod. So a redevelopment district really has to show that there's sort of a blight there. You can say you have many of those type of districts and one that's not certified yet as well. And a housing district, too, is the same sort of 26 years of tax increment financing. So again, we want to try to chisel that down and stop it as quick as possible as far as going to the developer. And we talk about opportunities later on of what maybe the city could use it for as well. And that's usually for affordable housing type purposes. It has income limits on it for kind of the life of the district, mostly for rental and first time home buyer for for single-family residential. And you have many districts that are in that category as well. And then there's economic development districts. These are pretty short. They're nine years of increment, you know, eight-year type, nine years of increment. And they basically promote economic development and job creation. So basically it's... or a type of manufacturing, warehousing, distribution type facilities. Not much analysis needs to be done on these if a developer shows a need because they do go away pretty quick, you know, after nine years. And you're basically all decertified, it sounds like, on most of those. So, the next slide here kind of shows about, talks about the DMC district as well, and that's got kind of a special sort of designations. It's got, under special legislation, too, we talked about, and you have many districts, most of them are in the DMC district area, And so the special legislation really, as long as it's a redevelopment district, really the districts don't have to have that blight finding, right? And some of those restrictions as far as regular redevelopment districts, would need. And so that's a pretty nice thing to have there as far as in that DMC district. And later on in the slides, you know, we'll talk about sort of some of the opportunities for that as well as far as after those districts are kind of done with their obligation that, you know, what could we do with that increment afterwards, basically. And that authorization expires in a while. It doesn't go forever. So it's got kind of a term limit on that as well. And so that's just the basics of tax increment financing and how it's calculated and what you sort of have going on in the city already.

Thanks, Todd. We're going to transition to me and then I'll transition to Liz. Just wanted to pause and see if there's any questions for Todd for any of the sort of the TIF 101 redevelopment. Not seeing any. For redevelopment, there's still 25 years, so same term.

Yep, good question.

All right, so this is kind of what I call the celebration slide. So I think when we analyze TIF, we're typically analyzing it on a project by project basis. And I don't think we've done as good of a job as like celebrating, reflecting on what has been produced through the use of TIF. So here on this slide, you'll see that we've invested, and this includes all open and approved TIF districts, so around 40 or so. But total investment, we've invested about 120 million in total increment to private projects. which have produced in total development costs around $1.5 billion. So that's development costs. That's not market value. That's basically the building permit value. So produced a lot of investment through the tool of TIF. That includes just over 4,000 residential units. Of those residential units, 46% of them are at 80% AMI or under. some level of affordability. So almost half. We've also produced just under 900 hotel room keys, just under 800,000 of square foot office lab space, and industrial of around 97,000 square feet. And I believe most of that industrial is the Pepsi project, which was our one economic district that we recently decertified. And even with, I'd say, pretty large metrics there, we've managed to do so while keeping our percentage of tax base wrapped up in TIF marginal. And you'll see here that bottom row is projecting out the anticipated percentage of tax capacity wrapped up in TIF over the next couple years. And this is basically two functions. One, the total tax capacity within TIF districts are decreasing or being decertified over time. And then two, Rochester's total tax capacity is projected to increase, and it's at a pretty, you know, I'd say conservative 2.5% each year. We know what's happening here locally, and I anticipate even larger increases in that. But what you can see is we're currently at 4.3% of our total tax capacity wrapped up in TIF going down each year. Benchmarking this then to other communities, we're kind of right in the middle. So if you look, we're lower than St. Louis Park and St. Paul, we're right in line with Bloomington, Duluth, St. Cloud, while also retaining our AAA bond rating. So we've managed to incentivize developments through TIF, but we've also had a lot of non-TIF projects help increase that tax growth, tax capacity growth annually. Now, I'm going to hand it off to Liz, and she'll talk about some future decertification and some options and opportunities that, you know, I think we need to make and bring forward a future policy discussion on some of these items.

So, I get to talk about the fun stuff with Tim?

Yeah.

So, what this chart shows us is it shows us when these particular districts will decertify and go back to the taxing roles. What we're calculating here is that if we've got two districts that are decertifying at the end of 2026, that tax capacity is available to you in 2027. So if 900,000 of tax capacity gets returned to the tax rolls, we can apply the city's rate for 2026 and we can determine that you could levy about 460,000 in additional property taxes without affecting your property tax rate. So this is a pretty important chart to take a look at. And what we would suggest is that this becomes part of your budgeting process. And so what you can do is if you think that you can levy an additional $450,000, you can figure out what your needs are as a city and you can wrap it around that additional tax capacity and you can leverage it. Any questions on that one? Yes, this is just a snapshot just to give you a flavor of what could be available for you.

Mr. King, yeah, I think you're looking for reaction. I again, I understand the decertifications, but I'm afraid the recommendation is to be ready for those and find new ones to give him to again. Is that what I'm hearing or do I'm hearing you wrong?

These are potential policy choices that you can make. So these are different TIF levers that you can pull so you can decide what you want to use them for for the betterment of your city.

I'M SORRY. I'M JUST GOING TO SAY IT. I'M JUST GOING TO SAY IT. THESE ARE DECERTIFYING. THESE ARE DECERTIFYING. AND THE CHARTS WE SAW EARLIER, AND THE CHARTS WE SAW EARLIER, WHAT WE ALWAYS THINK, THEY COME WHAT WE ALWAYS THINK, THEY COME BACK INTO THE PAYING. BACK INTO THE PAYING. AND THAT'S GREAT. AND THAT'S GREAT. AND THAT'S THE WAY IT SHOULD BE. AND THAT'S THE WAY IT SHOULD BE. BUT YOU'RE SAYING, ARE YOU GUYS BUT YOU'RE SAYING, ARE YOU GUYS SUGGESTING THAT WE LOOK AT SUGGESTING THAT WE LOOK AT THAT AMOUNT OF MONEY AS SOMETHING THAT AMOUNT OF MONEY AS SOMETHING WE FIND SOMETHING ELSE TO DO WE FIND SOMETHING ELSE TO DO WITH IT THAT YE

So we're not making the recommendation that you should do this where we are laying out the different policy options that you have as regards to TIF the use of TIF and when districts decertify.

Okay. Yeah, Council Member McKeon, not to bury the future lead but one item and we'll have and we'll work with others to analyze each district individually to understand like what the cost-benefit is but one of those like later in slides you'll see retain and reinvest available income. Yeah. So as long as our eligibility costs that have been paid off or eligible TIF costs have been paid off or obligations have been met, we could use that increment for other governmental purposes. If you decertify, the county portion goes back to the county, the city portion goes back to the city. If we don't decertify and we find something else to utilize that funding for, we can still capture some of that county revenue and city revenue and apply it to governmental expenses. Is that correct, Liz?

Yeah, so you can think of it as a basket of policy options. You can think of it as do we decertify the districts when the obligation is done? Do we keep the districts open for future pooling? And we'll go through some of those examples are. Do we return increment from the district strategically in order to leverage those funds for governmental purposes? So that's kind of the umbrella over which these next few slides that we're gonna talk about.

Very good. No, that's helpful. I did look ahead. I see the pooling options. But I think the unstated policy is they go into the general fund as was always projected. And now these other discussions don't seem to be saying, and now they won't be going into that general fund. And I just wanted to get it stated.

Okay. So is there any other questions on this chart? Okay, so on the next slide, so this is where we get into some of the finer points of when you decertify a district and how you balance that with your pooling. So remember, with pooling, you can take increment that is generated inside the district and you can use it for like redevelopment costs or you can use it for affordable housing. So that's increment that you can use outside the boundary of the district, but it has to be within the project area. So your prime example is your destination medical districts. And so what this chart shows is how much do you have to pool for redevelopment purposes if you decertify the district when the obligation is paid. And so even if you might have like a 25 year district, the obligation might get paid in 15 years, right? So do you keep the district open for those 10 years and do you pool? So this chart shows you what your potential pooling for redevelopment purposes would be if the policy choice was to decertify the district when the obligation is done. And so just running that out, it's about $14.5 million. Okay. So what this next chart shows is that this is the same idea except we are keeping the districts open after the obligation is done. So this is your DMC district and this has special legislation, which means that much of the restrictions of TIF do not apply. So you have pretty much 100% pooling in your DMC districts. Right, so an obligation could get done in 2032, but the district could stay open to 2043. And then this chart shows you what is the potential for pooling for redevelopment purposes if you make that policy choice. And a rough estimate is about 65 million. pooling. So that is a substantial difference between decertifying the districts when the obligation is done. So this is kind of something that you're going to want to weigh and balance as you make your policy choices. Okay, any questions on this slide?

Mr. Palmer.

That would be 65 million extra every year.

Cumulative so what this chart shows you is it shows you a yearly total so for instance in 2026 you would have about 2.6 million and then if we run this out to 2041 it would be a total of 65 million over that time period And the only downside would be our partners in the county in the school district would not get their increment, is that right? So the offset is if you decertify the districts when the obligation is done, that captured tax capacity goes back to the taxing role for you and the county. So school funding is different. And if you hang on to that tax capacity then, the original tax capacity for those districts goes to you for your general taxing roles for you and the county, if that makes sense. So if we looked at that slide that had the building block, say that there was 10,000 in tax capacity and then we did some blight, right? We had to fix blight and we have our tax capacity goes up to 100,000 or something like that. So you've got the captured of 90, right? So if you don't decertify those districts, that original 10 gets distributed the way that it always did, as if the development never happened. Okay.

Thanks, hon.

Okay, so this slide shows you, for 2026, it shows you the change in taxable market value between all your districts, and so they had original value of about 53 million, and it is increased to 506 million, so you've added about 45, $450 million in market value across your districts. That's 862% increase. So, it's nothing to sneeze at, right? Okay. So, what we wanted to talk about next is some of the ways that you can maximize your use of TIF. So there's a statutory authority where you can use a percent of tax increment to pay administrative costs, and that is documented staff time, it could be consultant time, it's the time to prepare the TIF reports, it's the time to publish the disclosure. And so to the extent that your staff is being paid by the general fund, the use of admin could reduce your reliance on your property tax for that staff time. So it's a way to fund staff, not entirely, but a portion of staff to relieve the pressure on your, on your general property tax levy. Okay. So you can also maximize your use of TIF through pooling. And so again, what that is is that there's a percent of increment that's generated inside the district, depending on what the district is, that can be used for purposes outside that project area, or outside the boundaries of the district, but within the project area. And so one of the things that you're going to want to think about is Most of your districts that are not the DMC districts, they have their own project area, so their pooling is limited. With housing districts, you can use that pooling within the entire boundaries of the municipality. And the only ones really that you can pool in a project area are your DMC. So one of the policy considerations that you might want to consider is do you increase the project area to be coterminous with the area of the city? So if you did that, that would allow you to take that otherwise increment that you couldn't pool because it's limited to the district itself. You could pool that for redevelopment purposes elsewhere. And so the next slide just kind of reiterates what is pooling. So it is a percent of increment that's collected within the district that can be used in the project area. And so for redevelopment districts, you can pool for redevelopment purposes, for housing districts, you can pool for affordable housing. And so if you decide that you wanted to keep those districts open, you could maximize your pooling ability. If you decided that you wanted to increase your project area, you can maximize your pooling ability. Any questions?

I do have a question about that. When we talk about, when we, I'm sorry. Go ahead. When we sit at the table and we have discussions about TIF and we say this is a TIF for eight years or 20 years, that's kind of setting an expectation for people. Is pooling violating that?

No, so pooling is a statutory ability that you have to use tax increment. So I don't know that necessarily you would consider it to be a change of direction, because it allows you to use tax increment for that purpose.

Maybe another way of thinking of it is when we do the budget every year and you need X number of dollars in order to provide operations that are paid for with tax levy, if something was decertified, it's going to the bottom line and everyone would love to have more money for their department. But in this sense, you could be very strategic about which districts, which pooling, follow the rules, and you're sort of Self-constraining how you're going to use those dollars that have been generated by economic development and tax increment financing is one of those ways you do that. And so it would be more of like a financial modeling to say rather than put this in to all of the tax levy funded operations, we want to continue to gain the value of what was a much lower value parcel and continue to reinvest to deliver on some of those things you talked about in your first presentation about needing sometimes to incentivize a certain type of development, sometimes not. So I think it's really more of a financial mechanism to say are we just going to like put this into the bottom line and like do what we normally do, continue to operate, or do we wanna be more disciplined about how we look at these dollars? And there's still a lot of other policy considerations on top of the pooling or the district or the project area or the entire city for the housing pooling. Even within that, there's a lot of decisions that Ehlers is still working on giving us on district by district.

And could I add one thing to that, too, just to get, yes, just to get directly at Mayor's question. Josh maybe can think of an example off the top of your head, but Mayor, there have been times where we have laid out, say, a 20-year district, and we actually end up paying off the TIF in 15. So the question could be, rather than decertifying it early, do you stick with what we told the community and collect it in this way for that five years?

Mr. Miller. So my question is about the flexibility of drawing a project area. You mentioned that it could be the entire city. Could we draw a different unique project area, perhaps around our Rochester public transit primary transportation network to incentivize development near our transit lines, which is an investment we've already made?

Yeah. So the project area doesn't need to be with the boundaries of the municipality. West St. Paul has a strip in the middle of the city that's their project area. So it would be up to you on where you wanted to draw those lines.

Okay. Could you help me with the difference between a project area, a pooling district, and a TIF district?

Yes. Okay, so let's go back, if we can, go back to slide nine. Okay, so what this slide shows us is, so at the heart of it, tax increment is just a redistribution of property taxes, is what it is. And the redistribution of property taxes allows you to pay for correcting blight. So if without the use of TIF, the but for clause with TIF is without the use of TIF, this project would not have gone forward. Okay, so what this is, so the box there is your project area. So if you can imagine that to be your DMC district right now. So you've established several districts within the DMC area and they would be their own parcels, right? So what you could do is a redevelopment district could pool outside of those, that yellow boundary, but within the box for qualified costs. And so if you have a project area that is the same size as your redevelopment area, your redevelopment district, you cannot pool outside that. So that's what it is. It's geographic if you look at it, that this is your box where you can spend TIF, this is the box where TIF is generated, and you can pool outside the boundaries of the district but within the project area.

So to Mr. Miller's point, why wouldn't we make the entire city boundary our project area. What? It wasn't your point. Okay, I'll take that as my own point.

Can I, council, can I chime into that? So I think what Ehlers would maybe suggest that we have to consider is do we want to make the entire city the project area so that we can potentially pool any TIF that's extra in the city? But I think council member Miller was getting at is should the council consider a policy that says we will only spend the dividends of that pooling on transit lines to sort of incentivize money that we are collecting extra to put towards projects on the transit line. So slightly different than what your point was, I think Councilmember Miller, where you were saying maybe we set the project areas along transit lines. I would suggest against that because you're limiting to where you can collect. What you might instead consider is setting a policy that says we will only spend our pooling dollars along those transit lines.

Other questions at this point? Mr. Dorian.

I'm just curious if you could highlight for me a disadvantage of not making the whole city the project area.

Well, the disadvantage, obviously, is that you can't pool. So if you determine, like with the West St. Paul example, if that narrow area that goes through their main commercial area, if they wanted to pool outside of that, they wouldn't be able to do it. So that's your disadvantage, is that you are geographically limiting yourself on where you can pool.

I would say, I mean, this is all, we can skip slide 27 now because we're having a discussion. But I would say there's not, you know, I would weigh the disadvantages. I think we have to think intentionally about where's the localization of the impact of the development? So I mean, there's different ways we can slice it. It could be a transit corridor, it could be a riverfront network, it could be a sub-district, it could be a neighborhood that's seeing excessive gentrification and we wanna prioritize more affordable housing to that neighborhood because they're being impacted by other economic development. So I think in some cases, maybe this whole city makes sense, but I think other cases where maybe we wanna put investments to transportation and street networks because of high density of development. Or do we have a third avenue where we have an entire small area plan that needs to have an upgrade in utilities in order to service that site? Maybe that becomes the project boundary area. So I think there's just a lot of discussion and consideration.

Mr. Keene. Just to follow up on Council Member Doring's question, should we also consider that the other downside is it's not going into the general fund when the project, when the thing, I mean, I don't want to skip over that point. We're not doing what we originally said of incentivizing, using the TIF to get the project that we want done, but then getting the value into the general fund on the, whether it be a 10, 15, or 20 year, it's not happening now because we're doing something different.

TO USE A LESS SOPHISTICATED TO USE A LESS SOPHISTICATED QUOTE THAN HAPPENED EARLIER QUOTE THAN HAPPENED EARLIER TODAY. TODAY. EVEN WITHIN THIS CONVERSATION EVEN WITHIN THIS CONVERSATION SOME OF THEM COULD DECERTIFY SOME OF THEM COULD DECERTIFY AND SOME OF THEM MIGHT NOT. AND SOME OF THEM MIGHT NOT. YOU COULD ACTUALLY DO BOTH. YOU COULD ACTUALLY DO BOTH. THE QUESTION IS HOW MUCH DO YOU THE QUESTION IS HOW MUCH DO YOU NEED TO GO WHERE IN ORDER TO NEED TO GO WHERE IN ORDER TO ACTUALLY ACHIEVE YOUR GOALS? YOU DON'T HAVE TO DO ALL OR NOTHING. YOU HAVE TO SET UP POLICY THAT CONSIDERS ALL OF THESE THINGS, INCLUDING HOW MUCH WOULD YOU WANT TO DECERTIFY IN ORDER TO CONTINUE TO FUND OPERATIONS.

MR. MILLER? I HAVE A SPECIFIC QUESTION FOLLOWING UP FROM THE PRIOR PRESENTATION WHERE WE HAVE THE SMALL AREA PLAN FOR THE RIVERFRONT. IT HASN'T MOVED. AND SINCE THE PLAN WAS, HOW MIGHT A POLICY CHANGE LIKE THIS FURTHER INCENTIVIZE THAT, GET IT MOVING WHERE IT'S BEEN STUCK.

I THINK IN ONE CASE, AND LIZ, CORRECT ME IF I'M WRONG, BUT IF WE HAVE, IF WE PLAN OUT, SO LET'S USE, IT COULD BE DISTRICT REDEVELOPMENT PULLING IN A PROJECT AREA FOR INFRASTRUCTURE, IT COULD BE RETAIN AND REINVEST WHEN THE OBLIGATIONS ARE PAID OFF, BUT IF WE'RE AWARE OF A $12 MILLION UTILITY INFRASTRUCTURE PROJECT THAT'S COMING UP, WE CAN PUT THAT IN THE TIF PLAN OR MODIFY A TIF PLAN IN ORDER TO USE SOME OF THAT I don't want to use surplus because it might be wrong, but surplus increment to pay off some of those expenses that otherwise maybe go to the tax levy. Is that correct, Liz?

Yes. And I guess then if we were to do something like that, to Mr. Keene's point, we're choosing between putting money back into the... capturing that value for the general fund for property tax levy or... or in balance we're looking at opportunities to further increase the productivity of land and invest that so that on the longer term we come out ahead for the residents of Rochester rather than that short term giving it away. We're not strategically reinvesting it. We're just letting it go back.

Yeah, and I don't want to get too far over my skis here, but I think there's another opportunity cost is once it goes back into the tax levy and it's not, the levy isn't increased or offset, it's gone, right? So if you have a project and you increase the tax levy and utilize TIF resources, am I saying that correctly, Liz?

Yeah, so it goes back, it goes, I'm sorry.

Mr. Parrish has something to add when appropriate.

Go on, I'll go when you're done.

So it goes back to the idea, thought just went right out of my head. So it goes back to the idea that if you decertify a district and you get that tax capacity under the tax rolls, you can increase the tax levy without moving your rate. Okay, so that's one way that you can use it. And I don't know, do we wanna go to door number three?

Your Honor, maybe before they do that, I think the opportunity cost, maybe to just be simple about it, is you can decertify these districts at about a 50% discount in terms of the impact, right? So you can decertify it, we'll receive half of those dollars for operational expenses, or you can use this at 100%, at least in the DMC districts, to advance your, and all of your existing strategic priorities really fall into the types of eligible uses of funds here. So housing, economic vitality, et cetera, you can all use this and that spaces to advance your strategic priorities. So just think about that 50% discount, because when you decertify, you no longer have agency in that other half of the revenue. So just think about that. It's that type of spread you're talking about.

Thank you, Mr. Parish. Liz, maybe we jump to some of the pooling housing opportunity that we've projected out to date.

Sure. So what this next slide shows us is similar to the redevelopment slide in that if you keep these districts open and you use the increment for pooling for housing, you would get a cumulative $10.3 million that you could pool for affordable housing. And so in order to do that, it would require that those districts would remain affordable even after the obligation is done. Okay. So another use of TIF is that you could return increment strategically, and this would help your general fund. And what happens is that when you return Sorry. So when you return increment from a district, it goes to the county and then you receive your proportionate share. And that share can be used for any municipal purpose. So if you return, in the example, $450,000 of increment, you would get $200,000 back that could be used for any governmental purposes. So you could use public works vehicles, you could pay for that. that kind of thing, where you have the general prohibition against municipal use for TIF. And so these are the tools in your toolbox that you can use as you go through your budgeting. So you can strategically look at how you want to use tax increment, tax capacity, returning tax increment, and how it all relates to your general fund and your property tax levy.

All right, some of this is going to be just re-emphasizing. There is a slide that has all of these kind of objectives in one slide, so I'll try to move through relatively quickly. The first is just level setting. Everything that we do, we try to align with the strategic priorities of city council. So when we're reviewing these policies, just even the general TIF policy or our TIF matrix in general, we're trying to look at it through the lens of these city council priorities. Policy discussion number one, I think we've talked about this at a pretty good length. We'll come back to some recommendations, but at the end, we would like to hear more input on how you see this potential opportunity. District pooling, we've covered this as well. I'll add that whenever we use housing pool dollars, they have to meet certain affordability standards. So the standards are either 40% of the units have to be at 60% area median income, or they have to be at 20% at 50% area median income. So whenever we're deploying pooled housing funding it has to be used for affordable expenses and it can also be used for For sale housing could be used to pay for the infrastructure on an affordable housing development. So there are other For sale opportunities that I think we can utilize with pooled housing TIF and So just something to think about, especially after the last urban three and the importance of providing for sale housing for equity building. The next one is. Mr. Doering, please. Yeah.

Can you quote those percentages again of AMI?

Yeah, so per, I think it's Minnesota Housing and Finance, they require affordable housing to either be 40% of the units at 60% AMI or less, or 20% of the units at 50% AMI or less. So it could be 20% with 30%, but it just has to be less than 50. The admin fee discussion. This is something that we have not been utilizing. It is a policy and operational decision. In order to either code staff time, there is a pretty regiment, you know, specific way you have to code it. So when you're working on TIF district, it has to get coded to that specific TIF district, unless you're doing a broader review like this that can, you know, just sort of prorate what you're spending this use it using the TIF admin fee collected is how we paid for this analysis so you can you can hire outside consultants I think going forward it would be beneficial to have you know more tracking dashboards you know those stats that I named earlier about the number of housing units to have sort of an annual update where we're providing like not only what's the obligation of our TIF, but what's the benefit and impact of the TIF that we're investing in. So I think the admin fee has a lot of opportunities both internally and externally for some of that analysis. Then the fourth policy discussion is that do we, don't we decertify or utilize it for something else? So this is to retain and reinvest the available increment. Sometimes this might require an amendment of the TIF plan. So if we didn't include some of these expenses initially in the TIF plan and we realize that something's coming up in three years, we might have to go back and amend it, but that's to be strategic when the date of the decertification happens.

So that's I kind of want to open it up for additional feedback if you have any have anything else that we haven't talked about yet Mr. Mr. Palmer So my understanding if we have state or federal money We have certain requirements and then we have city requirements for certain TIF projects. Is that correct?

Yeah, there's, yeah.

So my example is prevailing wage. So if it's just a city project, we require TIF now, we used to not, and then we did, and then we didn't. So that's a city council prerogative to say we want prevailing wage or not on those projects, is that correct?

Yeah, and just to clarify, that would be not DMC or other state or federally financed projects, but just state only, or city only, yes.

Okay, and when is that, when do we have that policy discussion?

That can certainly be something we bring back. We'll be interested to hear if like the majority of Council is interested in analyzing how our prevailing wage policy works. We actually typically look at the the agency that's providing whatever the assistance is for for the prevailing wage requirements unless there's unless it's just straight like a city TIF then we'd have our own policy.

I think it would be a good discussion. I don't know if everybody would be, you know, I think you have to have the facts before you can make a decision. So I would like to see it brought back.

Mr. Keene. I wanted to confirm here early on, we went right into TIF, but our TIF agreements are usually for a certain amount of time, but very specific to a dollar amount over 20 years. This amount we're talking about now is that when we under, when we conservatively estimate that the increment, and the increment ends up being larger.

I think it's if it's paid off sooner than anticipated.

But the increment is usually like figured to be if it's a $2 million TIF thing, it would be $100,000 for 20 years. It would be that amount. And we end up getting higher than now we're dealing with that gap that we're done with our commitment, but now we could continue it on to the 20 years. I'm just trying to establish that that's what we're talking about and I'm not thinking about it wrong.

I might look at lit.

Yeah, that's correct.

Yeah, I guess I might use the TIF words, like you would continue to keep the increment. You'd still collect all the tax, but you'd be collecting it, the increment, and allocating it in accordance with whatever the rest of your policy said.

That's helpful, but our agreement with the person that's getting the original TIF is either or. The agreement is for a dollar amount of TIF. It's not for whatever the increment is for 20 years. It's for a dollar amount.

Correct. I mean, I'll just jump in here quick. So we do a TIF plan that estimates what it will generate basically for those 25 years. Then we do a development agreement with the development as far as how much assistance are we going to provide the project because we're only going to provide the project what is needed to make the project work. So that could be eight years, 10 years, 15, or it could be 25 years of assistance, but we We do an agreement based on the dollar amount that it will take the project to proceed.

I'm trying to make sure I'm establishing the idea that the TIF amount that we do in the years is based on the but-for clause. And what we're dealing with here is the new pooling, is that we have a history of getting done with that commitment earlier than the years. That is correct.

You aren't giving any more to that specific development.

That's right, and that's how I'm understanding it. And the other thing I want to ask, these are just very factual, the TIF increment, the mechanics of it is the taxes are paid and then returned to the person that we have to deal with. They do actually get paid and actually get returned.

That's correct, Council Member McGee. So we really only do pay go TIF, and that's pay as you go. So the developer pays, and they pay the taxes, and then the county reimburses on a biannual basis those increment payments.

Okay, and this again, this is probably a little more difficult factual question here, but I'm of the impression that there's been some changes in state law for how taxes apply to affordable housing, and they have basically reduced the value of TIF to some of our affordable housing.

That's a great point, and I wish I would have hit this, so I'm glad you brought it up. So another way of looking at TIF pooling is because affordable housing, the classification rate is so low that it really generates very little. So with the pooling amount, if it's an affordable housing project, we could actually utilize pooled increment to help support that project rather than setting up a new TIF district for that project.

Okay, um, okay, thank you. I'll just say that we've. Done that twice we've used pool tip for 2 housing projects. 1 was the. Trail side project we took pooled tiff off of the river walk project. And then last year we did pooled tip for restoration Glen project where we're taking pool tip off of the. 1102 project to provide that developer assistance to get their affordable housing project to work.

Good. I've been closer to some of those. I'm going back to the key policy discussions and it's one to five, but I am still a little bit like, I still have the view that my first priority is getting the INCREMENT INTO THE GENERAL FUND, AND IT SEEMS LIKE THIS GIVES US MORE OPTIONS, BUT IT ALSO CREATES MORE BUCKETS AND UNKNOWNS, AND I'M NOT COMFORTABLE WITH THAT AT THIS POINT, BUT AGAIN, I DID WANT TO GET BACK ON THE ADMINISTRATIVE COST TO BE UTILIZED. I REALLY DO WANT TO TAKE ADVANTAGE OF THAT, AND MORE ON THAT ACCOUNTING SIDE, THAT THAT SHOULD, RUNNING THOSE SORT OF PROGRAMS SHOULD BE PAID BY THOSE PROGRAMS, SO AS BEST WE CAN DO THERE, I WOULD WANT TO SUPPORT THAT. And as far as the sort of like citywide things, again, I probably will have to look to staff experts here, but I also don't want to create this sort of, lack of a better word, this sort of new slush fund that we're going to have to be able to work with. And it just, it doesn't feel right right now. So that's where I'm at today with the discussion.

I think Mr. Yetzer has something to add, and then Mr. Miller.

Yeah, two quick things. One, the last comment there, and Councilmember Keene, point taken, we have some work to do to help the council understand how that would be utilized, because I do think there's a benefit that we're missing here, that it actually reduces the general fund without it going to the general fund, because you're able to capture money that otherwise would not go to the city at all. And so I just want to point that out and point taken that we have more work to do there. But I also, in a couple of slides, Joshua mentioned some next steps. And one of the things is bringing back some policy recommendations. And Council Member Palmer brought up one that's not on our list. And so I just want to put that out there to Council Members as they're making their comments here that We had intended to bring policy recommendations based on these. If the prevailing wage is something that Council wants us to bring back, I heard Council Member Palmer interested in that. It would be helpful for us to hear if there are others so that we can dig into that and make a recommendation. Otherwise, it was not on our list of ones we intended to bring back, but we certainly can if that's the will of the group.

Mr. Miller. Thanks. So first I'll answer that. Yes, I would be interested in looking at this comparison of what impact prevailing wage has on that labor versus the impact of providing a lower cost unit in that project development. So how do we balance those of more wages to the worker employed for that project versus what is the long-term implication for that unit of housing? But to go back to the urban 3 analysis I mean, I'm just stuck on this slide early on that says the DMC's district total assessed value is 195 times greater For the amount of land that it uses compared with all of Olmstead County. So if we can look at surface parking lots within that district that are really under productive pieces of land and steward along that development I think that that would be a really strategic use of these tools, especially when we develop small area plans and then wait for them to be implemented. We're working on a Sixth Street bridge connection to connect a new site that also has a small area plan, and I worry that Those are major investments in infrastructure, and then we need some additional tools to incentivize that. I also brought up our transportation network. I think our comprehensive plan is quite visionary in establishing primary transportation networks. But then we don't see housing necessarily developed along that because the land is cheaper on other corridors. And then we have residents frustrated that they don't have access to our bus lines and then ask us why we're not providing bus service there that we can't sustainably continue to provide. So I think just aligning these investments strategically so that we have productive land as we're already seeing a very healthy pattern, but maximize that. We've also talked about infill development as a key priority of our action plan. I have defined that as R2. I still think that that's the wrong definition because we have such limited R2 zoning in the city. But looking at those places where we already have infrastructure, we've already made that investment, it can support additional infill development and that benefits everyone else who doesn't live in that infill district because it lowers the pressure on that property tax levy increase. So I think it's that question of do we give Do we look at the short-term impact of returning everything to the general fund and then losing part of that increment to the county? I don't think that that's one of the best decisions for the long-term health of our city, but I think it is balanced, right, of managing expectations, providing good communication to both us and the community of why this is a good stewardship opportunity for public dollars, and just being very, very clear in what we're doing. And I don't think that we have the communication yet. I doubt that people are going to watch this presentation and stick with it for the hour. But I think that there is important information here that is understandable to the average resident if we trust them to learn to understand that and give them the right information in the right format and communicate over many attempts. Mayor Norton.

So I think this has been interesting, and I've been talking about TIF for many, many, many years, and I've never heard this discussion before, so I think it's great that it's being brought up. My question is, you're asking about should we bring back policy choices? We're having this discussion. Should we bring back policy concepts? So since we've just heard that we have done this on a case-by-case basis already, I guess my question is, will a policy decision that then gets put in writing limit us rather than give us more options than a case-by-case recommendation based on what's happening in a community. Our community's growth rate right now, we have lots of housing to go in, it makes sense for today, but it may not make sense in the future, and do we want a policy, or do we just want to understand as a council the options and utilize them as it's appropriate at the time? Which we've apparently done, and could we continue to do that? I just think we have the strategic goals and we have our baseline foundational principles as a city and all of that's important. And I don't want to just focus on a couple areas like housing when we have a whole city of things and the priorities could change. So it's really about policy versus case by case that I'm questioning.

Well said, Mr. Palmer. And let's make it quick because it's 531.

22 seconds. The one thing about parking lots to me is that the owner owns them, and they're putting them together. And probably one of the biggest examples is UMR. They've owned property south of 6th Street, and they've held it for a long period of time because they're planning. And so a parking lot may be not today a good idea, but the owner owns that property, and they can do what they want with it, and they're planning, and it takes a lot of time to make those plans. So I just want to make that comment. That's my 22 seconds.

With Mr. Palmer and Miller, I'd be interested in the prevailing wage discussion. With Mr. Keene, I'm a little uncomfortable hearing this new discussion of pooling, which wasn't my understanding and would need more information. And Mr. Doering?

Yeah, I would also be interested in the prevailing wage conversation.

Any other contributions? Thank you very much. Appreciate the feedback. We'll be back with more recommendations. Thank you. Adjourned for four minutes and 22 seconds. We will begin. Thank you for being here.

Yeah, thank you. Next topic is Eldon Hills Drive Northwest. So I'm Sam Budzina, city traffic engineer. Dylan Dombrowski is our city engineer. He's here as well to help answer some questions. Got our consultant from Alliant Engineering, Nick Grage, is here to present on our traffic study. So I'll kind of talk through how we got to this point. We updated some analysis from 2019. I want to make sure that you all have the most up-to-date information to help you make an informed decision and get into some recommendations and hopefully narrow down our choices. So going back all the way to 2012, our Rochester area bicycle master plan was adopted. This was back when we had a joint city county planning department. Eldon Hills Drive was identified as a major city bikeway. In 2016, we were all set to do a mill and overlay project. So we submitted a pavement marking plan as part of that, which the council at the time pulled out and denied it and approved the rest of the project. And at the time that included, it was keep the four lane undivided road and just simply mark the parking lanes as bike lanes. There was no traffic study, there was no public engagement. So in 2019 there was a council initiated action. They said we want to go ahead and move forward with that 2016 recommendation. And I didn't know what it was. I started working here in 2017. So I had to look it up and really was not a big fan of mainly the lack of public engagement. So we went back to council and recommended like, hey, we really need to do a traffic study, really analyze this, do some public engagement, figure out what people want, and then we'll bring it back. So we brought that back to a study session and it just kind of fell flat and we didn't do anything. No action, like I said, study session, no vote. We just deferred pavement maintenance again. 2022, active transportation plan was adopted. Elton Hills Drive identified as a top 10 all ages and abilities network near term gap. And what that means in the context of that document is that they identified it as, it's something that could easily be, a AAA facility could easily be implemented through payment marking changes alone. So it was a top 10. So now in 2027 we've deferred payment maintenance enough. We really need to do a mill and overlay project So we're planning on taking off the top couple inches of asphalt and relaying a new surface and that's going to eliminate all of our pavement markings and We need a plan to move forward with what do we put back? So that's what we want to decide So this past fall, we said we wanna update our traffic study again. A lot has changed in that time, right? COVID has changed traffic patterns throughout the community. A lot more kids are driving or riding, getting driven to school rather than riding the bus. And even with all of that, we're seeing traffic volumes on Elton Hills are lower than they were in 2019. So I'm gonna hand it over to Nick Grange to talk about our traffic study.

Thanks, Sam. So the study that we completed looked at a few different things, and that was attached to the council packet. But I'm going to just cover the overview of kind of the nuts and bolts of what we actually analyzed to kind of work towards our recommendations that Sam will touch on a little bit later. So the first thing that we look at is corridor characteristics, what's out there today. And this is kind of a look back, a historical look back at the performance of the corridor. The vehicles that are out there, we collected new turning movement counts as part of this project, so we aren't just relying on the 2019 ones, although we have that data. We looked at not just passenger vehicles, but trucks along the corridor, pedestrians, bicyclists. or the city did, updated speed counts, which we had done with the 2019 study. So we have two sets of speed data along the corridor. And then we also leveraged Streetlight, which is a software that allows us to look at origin destination data. We looked at that for a couple of different reasons. One, to verify the speed data, and two, to also look and see where people are going when they're using Elton Hills. The safety analysis, again, we're looking at 10 years of safety data, and I'll get into some more specifics with that in a second, but that's all the crash reports that have been documented by law enforcement. We review the data and the law enforcement narratives to try to understand what happened with those crashes. We complete an operations analysis. We leverage synchro sim traffic software. The sim traffic portion is a micro simulation software, so we're kind of modeling how the cars would behave. There are a lot of pros to doing that, but there are some limitations to that analysis. And then working through different typical section alternatives, and that includes a lot of different qualitative and quantitative pros and cons to the different alternatives that we looked at. So just to speak to some of the corridor characteristics, the average annual daily traffic along the corridor ranges from 9,000 to 11,600 vehicles per day, depending on which end of the corridor you're on. Towards Broadway Avenue and some of the commercial buildings, properties down there, there's a little higher volumes. Like Sam mentioned, pre-COVID to 2026, The volumes are either lower or they plateaued significantly based on the growth that we were seeing before COVID. And there's a range of factors that are influencing that. Average speeds are about 31 miles per hour near Assisi Drive on the west end and 34 miles an hour near West River Parkway. 85th percentile speeds, which we often use as a kind of reference point for whether we need to slow vehicles down or whether speed limits are appropriate, are 36 miles per hour near CC Drive and 40 miles an hour near West River Parkway.

Mr. Mueller. Just a quick question. So for the speeds, I know on volumes you mentioned that they've plateaued or fallen. Have the speeds changed over time from prior studies?

Yeah, so the speeds, I don't have the exact numbers, but the speeds have increased over 2019.

So just to say that clearly, volumes are down and speeds are up. Yes, correct.

And that's something that we've seen throughout the state really post-COVID is there was a reduction of volumes on the roads during COVID when there was a lot more people working from home. The lack of vehicles on roads that were a lot wider and larger allowed people to speed faster than they had been before. And those speeds, even with the reintroduction of vehicles back to those roads, has not necessarily returned to before COVID speeds. One of the things to note, and this was something that we discussed at our neighborhood meeting, is that when we're looking at those 85th percentile speeds, one of the interesting things is 20% of vehicles on Elton Hills are driving at the speed limit or lower. That means 80% of vehicles on Elton Hills are driving at the speed limit or above. More specifically, 40% or roughly 40% are traveling at 35 miles per hour or higher. It's not just the people coming through Elton Hills cutting through it's the people that are using the corridor every day You know whether that's keeping up with traffic or however you want to explain it or how someone that's driving Faster explains why they're driving faster than the speed limit the the data shows that the speeds are faster. Mr. Keene The speed limit is 30.

Yes, correct I'm shocked that they're as good as they are to be honest

I had a question just on the annual traffic numbers there. I know they're more complicated with rush hour and these other times of day, but what is a capacity on a road like that? Is it near 20,000? Is it 25,000? Does it make a difference if it's four lane versus three lane?

Yeah, so there's a difference between the capacity between a three lane and a four lane roadway. Depending on the nature of the corridor, whether there's a lot of driveways, which in this case there are, or intersections, it factors into that. The individual movements also factor. A four-lane corridor such as Oaten Hills with a lot more left turns has a lot lower capacity than one that doesn't have as many left turns. So similar to a four-lane roadway that's just not through a neighborhood, but it's just a commuter road, that capacity would be a lot different than in Elton Hills. I would say generally both are probably in that kind of 18 to 22,000 range, so both a three lane and a four lane. In terms of capacity, just capacity numbers are feasible with the AADTs that we're looking at here.

I thought that would be, you know, kind of the answer, but could I use where this road is less than 50% capacity, or that doesn't sound right?

Yeah, pretty close to that, yeah.

I will allow two more questions since their hands have been raised, but I know we have one council member who would like to have a substantial conversation, so we'll limit our questions until the presentation is finished. Mr. Miller.

Just a question about the background slide. I'm sorry that I walked in just a minute late and I got in towards the end, but I did want to mention this. In 2025, there was the elementary school Safe Routes to Schools plans, and there are two elementary schools that were studied along this corridor, both Hoover and Elton Hills. I just want to note that in the Hoover Elementary School, the top priority recommendation was conduct corridor study to reduce speed along Elton Hills Drive, implement corridor traffic calming and safety improvements, consider roadway reallocation. Would you say that this presentation is in line with realm of possibilities of implementing that highest priority?

Yeah, absolutely. Like I mentioned, a lot has changed since 2019. A lot of plans have been adopted, including the elementary safe rest of school plans. ROCOG has a safe streets for all safety action plan that's just been recently adopted this year. Our comprehensive plan has been updated. Just a lot has changed, and so one of our goals with this project is to align with our current planning documents as well, including that one.

OK, I just want to note that on Elton Hills Elementary School as well, the one of the highest priority recommendations was opportunity for corridor traffic calming. So just thinking about those two schools and there's a third school that was not studied as part of Safe Routes to Schools.

Mr. Palmer. Thank you. Just real quick. West of 19th Street, Assisi Heights, 7th Street by the pool have all went from four lanes down to three lanes. So the before and the after traffic accidents in speed, what's your results on those?

I did not have those memorized. Well, can you furnish them before it comes to the City Council meeting? Yes, I can do that.

Thank you.

Please continue with the presentation. So touching on our safety analysis, like I said before, we did 10 years of crash data. There were several parts of this. We looked both at intersections and segments, and we typically compare that to statewide averages. Intersections performing worse than the statewide average included Assisi Drive, 15th, 9th, and Northbrook Lane. Segments performing Worse than the statewide average included nine segments. This is between intersections and then the three that are bulleted there. So 12 total segments were performing worse than statewide averages. The three that we've called out here are above the critical crash rate. Typically that's based on the statewide average and something that's, you know, basically statistically significant in terms of whether it's, you know, enough crashes. along that specific segment. So there's definitely safety improvements that can be made, whether that's full typical section change or spot safety improvements at intersections or locations along the corridor. The average is the average mathematically, but if we're above an average, we definitely want to trend more towards the average or even below the average. Operations, we looked at existing year 2025 and then forecast year 2050. We looked at this both from a four lane and a three lane just to do a comparison. All intersections in both scenarios as well as the majority of the intersections in the existing year and the forecast year perform at overall level of service A. Level of service is based on vehicle delay and it goes, it's a scale from A to F. Assisi Drive and West River Parkway are two intersections that have a little bit more volume, and then obviously with the traffic signal causing them to stop, they don't quite perform at level service A, but they still perform at level service C or better. And then, like I mentioned, we did this for both the four lane and the three lane. Some delay increases with a three-lane alternative, but we're talking seconds, not minutes, whether that's on a side street approach or traveling through the entire corridor. We looked at travel time for the entire corridor and between a four-lane and a three-lane section. Depending on the peak hour that you're driving, it's a range of 10 to 20 seconds. And that is really looking at the peak hours. We take turning movement counts throughout the entire day. And then we typically analyze the highest AM peak hour and the highest PM peak hour. So if things perform well during those two peak hours, they perform even better throughout the rest of the day. And then finally, and this is what a bunch of the study focused on in terms of pros and cons and different alternatives, but we looked at various four-lane and three-lane alternatives. Some of the things that we focused on for these different alternatives are both qualitative and quantitative with the operations and the safety previously mentioned, parking supply that's provided with those, whether we can provide any pedestrian or cyclist facilities, and then long-term cost and maintenance of those facilities. We mentioned this in the neighborhood meeting with the residents. Each alternative has trade-offs. There is no perfect solution. So we are, you know, it's a give and a take by location along the corridor. And those are all things that have kind of been documented at some of the most significant locations in the study. And this was alluded to a little bit before with some of the elementary school studies, but one of the things that we're trying to do, whether it be with four to three lane conversions or just in general to address speeds post COVID is to implement whether it's corridor improvements or spot safety improvements to reduce speeds. MnDOT recently did a complete street speed impact study that looked at various Solutions and the effectiveness of those solutions and kind of a before-and-after study roundabouts had the greatest reduction We did look at a roundabout potentially at West River Parkway, but constraints don't don't necessarily allow that to be an option raised medians are Something that see a lot of reduction in speeds on street parking does have a reduction But if the the parking is provided, but it isn't utilized it doesn't necessarily result in a reduction And then there's other things that aren't as impactful, crosswalks, curb and gutter, two-way left turn lanes. We've really, from a traffic engineering perspective, with a lot of different both local and national studies, identified that it's really changing the environment and the geometry that gets people to slow down. It's not changing the signs or putting law enforcement out there. Those are not the things that have long-term speed improvements. I'm just gonna run through a few of the alternatives. These are not all of the alternatives, but we have a few four lane alternatives. The six that we're walking through were the ones that were presented at the neighborhood meeting. Again, these are not all of them, but some of the more feasible ones. Alternative one would just look at adding left turn lanes at the intersections. It's still a four lane typical section, but the left turn lanes would effectively make it a five lane option. That center left turn lane could be carried through the entire corridor though. By providing five lanes with no parking, we are likely to see speeds increase even more than they are out there today. Alternative three as it was labeled in the study looked at curb extensions at the intersections while maintaining that four lane section Constricting the intersections would would hopefully reduce speeds where you're most likely to see pedestrians and cyclists It would also shorten those crossing distances it might result in some speed reduction, but it definitely wouldn't result in speed reductions across the entire corridor and Alternative four would provide on street cyclist facilities in replace of the parking Speeds again would probably increase without the presence of parked vehicles It would provide space for the cyclists But it's not necessarily a protected facility and there's definitely weaving concerns that are out there today. That wouldn't be addressed. I Three lane alternatives that we included in the neighborhood meeting. Alternative two was no cyclist facilities and parking on both sides, just with the four to three conversion. This provides safety benefits for a lot of different reasons that I'll get to in a second, and some speed reduction, again, due to the limited parking along the corridor. Alternative 3a would repurpose one side of the parking for bike facilities There were a few different combinations of alternatives that move the bike facilities around But this one would have them split on the other side of the road It is a balanced typical section for all roadway users. It doesn't eliminate all the parking. It keeps some of it It does provide space for bicyclists and it tries to slow vehicles down. I And then alternative 6A, which would provide a two-way cyclist facility on one side opposite of the parking. There are a lot of benefits to this as a long-term improvement, just for what we can do with that bike facility on the north side. And then the buffer that we were able to provide both of those lanes versus them both being adjacent to through lanes. benefits of a four to three lane conversion. So there's a lot of both local and national data studies that show the benefits of four to three lane conversions. I do a lot of work either with existing roadways or intersections and trying to make them safer or what should we put out there, continue to put out there. And then I also do a variety of work where we're putting out new roadways. We do not see a lot of four lane undivided roadways being installed today. A lot of residential areas, like the one that we're looking at for Elton Hills, more have a tendency to figure out which intersections or accesses they want to restrict through medians and select left turn lanes, or they look for kind of three lane segments that we're looking at. A lot of the reasons for that is the safety of those designs, reducing conflict points, whether that's at intersections or at access points. reducing vehicle interactions and crash severity. As you can see on a couple of the diagrams to the right, there's just more conflict points, but there's also a weaving that occurs with a four lane roadway with different left and right turn vehicles slowing down to turn. It also, from a pedestrian cyclist perspective, eliminates multiple threat crashes. So that's thinking that one vehicle has stopped for you and not seeing the vehicle in the next lane as you start to cross. And then just the reduction in speeds that we've noted before. Mobility, so separating those left turning vehicles from through vehicles actually adds a lot more capacity than just a four lane undivided roadway. Like I said earlier, for corridors that have a lot of access points or intersections where you have more left turns, that four lane capacity number isn't necessarily as high as just the estimate usually is. And then getting those left turning vehicles out from the through lane is just inherently safer. Easier gap selection from the side streets. In the neighborhood meeting, I discussed this with several residents. It's not necessarily fewer gaps with the three lane, it's different gaps. So when you're crossing a four lane roadway, you have to look at four different lanes to figure out whether you actually have a gap. Sometimes easier said than done depending on the time of the day with a three lane cross-section There's two lanes to look at perhaps there's more cars in those lanes but what we see out there through our data and our video analysis of the turning movement counts is that a lot of vehicles are Kind of using it as a pseudo three lane already like you see lines of four or five cars all in one lane They're not necessarily grouped up and staggered across two lanes. Um, so the gaps are just going to look a little bit different. It doesn't mean that there's going to be less and then quarters with high access density. And I've alluded to this a couple of times, usually see the greater benefit of a three lane, just because you're able to, to kind of get those random events in a four lane removed. And then looking at this from a perspective beyond just the vehicles that use the roadway, but everyone that uses the roadway, multimodal quality of life, easier pedestrian crossing and refuge points. At intersections with that center two-way left turn lane, we're able to add median refuges to make it so that you don't have to cross all the lanes at once. You can cross one direction, stop, collect your thoughts, make sure there's a gap in the other direction. It also provides opportunities to consider cyclist facilities we can reallocate the roadway with to other users, whether that's transit stops or safer unloading of existing transit routes. That's helpful too. And then just lowering that speed differential. You can't necessarily speed up and weave and pass vehicles as much when there's only one through lane. And with that, I'll turn it back over to Sam.

Mr. Miller. Just a quick question before we move to engagement. Earlier you said you were going to talk about cost differences in both maintenance and long-term lifecycle. Considering our initial presentation from Urban 3 and the cost of our infrastructure and the gap we have between what we should be spending on roadway maintenance and what we are, could you talk about cost a little bit of how these two compare, like a four-way, a four-lane versus a three-lane? maybe even just in general, like how, how should we think about costs of maintaining a four lane roadway or five lane roadway versus a three lane?

Well, in this case, we're not doing a full reconstruction, so the cost differential is fairly similar. Okay. Because we're putting the same amount of pavement down regardless. It's the striping that's nominal. It'll come down to how much curb do we want to remove and replace as we address intersection safety. So, that's probably on this specific project where we're going to see any sort of cost differential. But obviously, you know, long term, if we're building a roadway that's narrower, it's going to cost less both initial construction, but then long-term ongoing preservation work.

But I guess even thinking about snowplow, how many lanes are being plowed, have to be plowed, what is the wear and tear to the pavement surface under those different allocations?

Yeah, the wear and tear, we would design it based on the traffic loadings projected. So it's, you know, we're going to design it to last the same number of years, you know, assuming we do the correct preservation work like our team's been doing. Narrower street, you know, less passes by the plow. They can get to other areas, you know, as we compare roadway width. So there would be some savings, you know, as a road narrows from just winter maintenance.

Okay. So we are going to get into a little bit with the different alternatives, but if we are putting up barriers to have a protected cycle track, there could be additional costs with that if it's getting damaged or if it's something that we have to take down every fall and put back in the spring, which we would aim to not have to do that, but there could be additional costs with things like that. So over the last few months, I've had a lot of conversations about this corridor with a lot of people. presented at the Pedestrian and Bicycle Advisory Committee and Citizens Advisory on Transit. Those are our two transportation-related advisory committees. I'll talk, each one of those has a slide. I was invited to 125 Live twice by two different groups to talk about this. And at those, so had some good conversations, addressed a lot of concerns and answered questions, but directed them really to our online survey. And before we even came out with the survey, we were telling people to email us and So then we had our neighborhood meeting which again gave people a link to the survey. We got 180 survey responses and 43 emailed comments and every single one of those is in the packet, the meeting packet here tonight so you have all of them. We did have to transcribe the paper ones but we tried to get it as accurate as they were written. So Pedestrian Bicycle Advisory Committee, they did vote to support a fully separated two-way cycle track with a on-street as an alternative if budgetary constraints do not allow for separation with this project. And I will tell you, budgetary constraints do not allow for separation with this project. So we are talking about an on-street two-way cycle track. If it was a full reconstruct, that is absolutely something we would try to do is get that cycle track up at sidewalk level and move it back behind the curb, maybe even behind a row of trees or something like that. But we are staying within the curb lines with this project and only removing the surface of the pavement. They did support our overall project goals of improved pavement conditions and increased safety for all users and also added a couple more about increasing neighborhood connectivity and increasing safety crossing Elton Hills Drive, really focusing on those pedestrian crosswalks. Uh, cat, they did not have a quorum for a formal vote, but we did have some good conversations. They are hoping to get a vote at their July meeting, which will be prior to the council meeting. But we talked about prioritizing access transit stops, both for the buses getting to the stop, not being blocked by parked cars, and also for the riders getting to the stops, as well as crossing the street to get to the stops. The routes that service Elton Hills that actually have stops on Elton Hills, they're out and back routes. So you get on the bus in the morning and it drops you off in the same spot in the afternoon, you're gonna be on the other side of the street. So one of those times, you're gonna have to walk across the street to get to or from the bus. So from the traffic study, I think that this traffic study had 13 alternatives, somewhere around there. For the neighborhood meeting, we had that narrowed down to six. And based on all the feedback and the results of the traffic study, we tried to narrow it down to two for you here tonight and get that down to one by July 20th. So we broke this into some key decision points. Having gone through this in 2019, it is, I will say, this is not about trying to cram bike lanes in there or not sacrificing a lane in order to get bike lanes in there. It's not just about bike lanes. So I want to talk about the number of lanes and then we'll talk about bike lanes. The alternatives that you just saw, there are three lane options with bike lanes and without bike lanes. There are four lane options with and without bike lanes. We might sacrifice a parking lane to get some bike facilities in there, if that's what we decide to do. So we'll talk about parking lanes as well. And then we also asked a question to people about the traffic signal at 14th Avenue. It's right in front of Elton Hills Elementary School. It's getting pretty old, and when we were looking at it, we were wondering if it wouldn't work better at 15th Avenue. The traffic study showed it could work at either one, so we kind of left it up to some public engagement to see what people thought about it. And then some open-ended questions that we ask people about locations for other safety improvements. So number of lanes. So these are the survey results. And I put the numbers in here for transparency. I will say I do not administer elections. This was not a public vote. We really looked at the content of the written comments that people provided and the conversations that we had. that weighs into some of the other ones later, but so key decision point number of lanes, we asked people, given the results of the study, do you prefer three, four, or five lanes? I don't have the percentages on here. I think it was 40% were supportive of the three lanes. I'll say if you think of the three and five together, that's 75% that support some sort of center left turn lane on this corridor. So bike facilities were not very popular in the survey. About 68%, sorry 62%, 108 responses said they don't want bike facilities on there. You do have your pedestrian bicycle advisory committee that did support the option with the bike lanes. It is in alignment with our planning documents, but of the people that do support bike facilities, slightly more favored the two-way cycle track on one side of the street rather than one-way lanes on each side. Parking options. Almost half say do not allow parking on Out in the Hills Drive in our survey results. From talking with the people that live along the corridor, there's a lot of medium-sized houses out there, and a lot of them have single-car garages and single-wide driveways, and that parking is important to a lot of them. There are side streets where they could park. I will say there is a lot of space out on that between the curbs. So we do have to do something with the space. And parking is a good option. And it is important to some of the people that live out there. The traffic signal at 14th Avenue. So pretty split right down the middle. You know when we looked at it, 15th Avenue is a T that serves the north and it actually serves the parking lot of Elton Hills Elementary School. So all the parents doing pick up and drop off will typically, I mean they have to do it off of 15th Avenue. The intersection at 14th where it is currently is a T that serves the south. It is a better pedestrian crosswalk. If anybody's walking from the south, they'd have to walk over to 15th and then double back to get back to the school. So when we were talking to people that actually cross the street there, they didn't really, or really anyone at the school that uses either of those two intersections, they didn't really that it didn't serve the parking lot. They were really more concerned about that pedestrian crossing. And everybody that lives south of Elton Hills were very adamant. If you live south of Elton Hills, you have to use Elton Hills to get out of your neighborhood. If you live on the north side, you have other ways out. But it's very important for them to have a safe place to make a left turn out of the neighborhood. So that's what we heard. And ideas for other safety improvements, a lot of people commented on 9th Avenue Northwest and that intersection. West River Parkway was another one. And that's one that we heard back in 2019 as well. So one thing that did happen after 2019 was we did budget in our six year CIP project to improve the intersection of West River Parkway. And that just happened to land in 2027 as well. So that is a budgeted project that we're gonna lump in with this. And Nick mentioned, we did look at if a roundabout would fit in there. with the grades and the curves coming into it it just really doesn't fit so we are suggesting a traffic signal a new traffic signal west river parkway with some ped bike improvements to increase the connections when you're when you're biking north on west river parkway you get to the intersection uh you're kind of sitting right where cars turn and then you go through and there's no bike lane so you have to kind of merge in the middle of the intersection so trying to address some of those kind of safety concerns. And then people had a lot of comments about curb extensions and medians and select locations to improve crosswalks and calm traffic as well. So I've got like three more slides, so I don't want to get stuck on this one, I'll come back to it. But all things considered, the traffic study, our planning documents, the public feedback that we got, Those key decision points, when we talk about number of lanes, we as staff would recommend three lanes. Nick mentioned he doesn't see a lot of four lane undivided roads being built. We really don't build them like that anymore. They're just not as safe as a three lane facility. Bicycle facilities, we were kind of split on this, right? Because the public engagement, they're really not super popular. Again, we do have the PBAC recommendation and it does align with our planning documents. So either have a two-way cycle track or don't have any bike facilities at all, parking on both sides of the street. I can tell you no bike facility would be a lot easier for us to implement. With a two-way cycle track, we need to do that a lot more intentionally and think about how do we create that barrier, that protection that people are looking for to make it a true all-ages and abilities facility and make it a comfortable place to ride. Without it, you know, we'd still plan to implement it in the future with a full reconstruct, but with a mill and overlay project that we're pushing that out at least 20 years from now, so. Parking lanes are I would say keep it on at least one side so I'm sorry another traffic signal 14th Avenue 15th Avenue It's not part of our mill and overlay project But we can I would budget a future CIP project just to replace that traffic signal sooner than later It's not a special separate action that you all have to take. We'll just roll it in with the next round of budget requests So putting all those puzzle pieces together, as we see it, there's kind of two leading alternatives, the three lanes, no bicycle facilities, parking on both sides, or three lanes, two-way cycle track on one side and parking on one side. When you look at these together on the same page, you can kind of see The first option there, the lanes, especially the center turn lane, the parking lanes are quite a bit wider to take up some of the space that's out there today. So that's where it might not have a lot of the traffic calming benefits that we'd be looking for. It would probably make it a more comfortable place to park your car. More people might be willing to park their car out there with wider parking lanes. And this is something where we could still do medians at key locations and also curb extensions at intersections where we don't want people parking too close to the intersection anyway. I mentioned 14th and 15th are both T intersections. So one of those directions, you don't need a left turn lane. So those might be good locations for a central median where you can create sort of a pedestrian refuge. So people just cross one lane at a time. I'm looking at the bottom alternative. You can see the center of the road kind of shifts over a little bit, which can create some issues for us. We need to make sure that our traffic signal mast arms are long enough to get a traffic signal head all the way over there. And then I mentioned we need to come up with a solution for some sort of barrier that we don't have to take down every year. And that provides the comfort that people are looking for that would encourage them to use the corridor. The, the buffer here is about six feet wide, the cycle track, I think 10 feet wide, and then you got the two foot gutter. So there's, there is a lot of space there. It is actually wide enough. We could drive a snowplow down that. So we wouldn't have to remove the barrier as long as we can find something that again, provides a level of protection people would be looking for. And last slide, and we can come back to this. But next steps, we're looking to narrow this down to a final alternative that you all would be willing to approve on July 20th, because we need to get into final design so that we can start construction as soon as school gets out next spring.

Mr. Doering, go.

I have lots of questions. Are you surprised by that?

No.

No. So I am the council member that drives this corridor every single day. And residents of the Elton Hills neighborhood have been reaching out to me pretty nonstop. So I'm just going to ask some specific questions. And if you can't come up with those answers this evening, if we could have them before we take action on that. Later in July, that would be very beneficial. I think. Can you just talk a little bit about the parking utilization along the corridor? Is it do people utilize on street parking a lot or do you see those number? Yeah. Just what percentage would you say that that is being used?

I don't have a percentage specifically. We could look at that, but I think it's less than 20% for sure and maybe even less than 10%. One of the things we've heard in terms of feedback from a lot of the neighborhood residents is that they don't feel comfortable or safe with the speeds along there, having to park and then get out of their vehicle on the roadside. So it's something that they would maybe utilize if speeds were lower, but it's not something that they utilize as frequently because of the speeds.

And then along with that parking question, if the idea is to put a cycle track on the south side of Elton Hills Drive and allow parking on the north side of Elton Hills Drive, would the north side of Elton Hills Drive be given an exemption to the winter parking ordinance if you're expecting those residents to only park on one side of the street?

I think you've got the sides flipped. We would allow parking on the south side. No, that's great. With a two-way cycle track on the north side. Yep. Yeah, the schools are on the north side. But yeah, to Nick's point, parking is generally underutilized. It can definitely all fit on one side of the street. So yes, with winter parking, within the seasonal parking restriction ordinance, it does not apply to streets with parking on one side. That said, all winter long, there is only parking on one side of the street. So all winter long, every other day, somebody is crossing the street to park their car. So we do want to provide some parking, but also make it more comfortable to cross the street to actually get to your car as well.

Okay. Next question. How can you assuage the fears of the neighborhood south of Velton Hills Drive that they will be able to enter and exit their neighborhood with ease?

Well, some of that comes back to keeping the traffic signal at 14th Avenue. I did have one conversation with somebody that said they tried to exit at 22nd Street when they can't get out near Valhalla. And I asked if they ever used 14th Avenue. I said, well, no. I said, well, why not? I said, oh, I'm going to try that. So it is important to have a way out. But as far as increasing delay by reducing the number of lanes, we're talking about a handful of seconds. We're not talking about minutes. It does still meet our traffic service standards. It will not be total gridlock out there.

Yeah, so I think earlier someone quoted that The average longest delay someone might experience of driving the entire quarter was somewhere between 10 and 20 seconds, according to the study. I have that number correct? Correct. Right. So again, we're not talking about minutes. We're talking about seconds for delay. Can you talk a little bit about the rationale about traffic lights? I've seen a lot and gotten a lot of questions about why not just throw up more traffic lights to reduce the speed on Elton Hills Drive? I think I know the answer to this, but I would like you to share that answer.

So a lot of things we see related to traffic signals is that people try to kind of game or beat the signals. So knowing that the signal might change to red, you accelerate, especially once you see the yellow. Or because you had to stop at a light that you didn't feel like you should have stopped at, you accelerate more quickly to make up that time as you're continuing through the corridor. accelerating abrupt you know quick more rapidly or trying to run through yellow lights and actually going through on a red light those are just safety risks especially for pedestrians and cyclists so it's it's a safety compromise and they don't necessarily reduce speeds along the entire corridor if anything they increase speeds at spot locations

And could it also be assumed that then it would also increase delay that someone might experience along the corridor if you're continually stopping the flow of traffic?

For sure. And there's signal timing coordination that takes place, but that's never perfect. And especially with so many intersections and access points turning off of side streets, it's hard to make sure that there's a platoon of vehicles always going through the corridor.

Thank you. Can you talk a little bit about not deciding to implement speed tables or roundabouts along the corridor to reduce speed or to better provide traffic flow?

So Elton Hills Drive is a state aid street. So a speed hump would not meet the vertical deflection requirements required. established by state aid so it would impact our our state aid funding long term that doesn't align with the function of a state aid Street as a regional important corridor for travel so okay can you talk a little bit about how

a reduction in lanes according to the study. And at the neighborhood meeting, it was stated that a reduction in lanes is not going to have a significant impact on congestion. Can you talk a little bit about the data

regarding that sure so the the analysis that we do as I said before establishes levels of service this this is based on delay either incurred at the an individual intersection or along the entire corridor so we are we are still in within the similar level of service as before and as Sam mentioned they meet the city's service standards so the the experience will be different Um, you won't necessarily have the option to pass someone that's slowing down to turn right. Um, but that's part of the appeal of a three lane is to slow vehicles down, slow speeds down and reduce the kind of friction of different passing movements.

I have three more questions if that's okay.

You have one minute and then we'll move on.

What is the cost benefit analysis of increasing enforcement to decrease speed? Did you do the cost about added enforcement versus reduction in lanes?

We have not done a specific cost benefit analysis, but I can tell you generally adding enforcement permanently is not a good long-term solution. just keeping staff out there all the time, maybe pulling a few people over here and there. When you have police out there, they're generally very effective as long as they're there, but as soon as they leave, the speeds go right back up again.

Have we talked to business owners about the reduction in lanes and anticipated any of their negative feelings about that or negative impacts?

We did not go into any businesses to talk with them, but we sent postcards about the neighborhood meeting and invited them all to provide input.

Okay, and the last question, schools. Have you talked to the school administration? Are they in favor of a reduction of lanes from four to three, or would they rather that four lanes remain?

I did. I talked with the school district's transportation director, as well as the principals at the elementary schools along there, including Rochester Lutheran School. I would say they are in favor of safety.

Thank you.

Mr. Miller. Thank you. Just to step back, just because I feel like there's been a lot of conversation, I even saw this in the emails I've received or in some of the public engagement. We have six lanes of right-of-way basically along this corridor, right? We have a speed and safety problem, and the recommendation from a traffic engineering perspective is what? What to address that? From a travel lane perspective.

Yeah, we definitely would recommend the three-lane option.

So three lanes within a six-lane right-of-way then gives us the option to consider what do you do with the leftover?

Right.

At the extreme end, we could just give it away, right? We do that sometimes with easement vacations. Just saying like I'm not suggesting we do that I'm just saying that if we don't need six lanes of right-of-way, it would be cheaper to Not maintain it as as travel lanes, correct?

Correct. Okay, I could add just a little more So yeah, I mean in the future as Sam noted we have in about 20 years We we will need to reconstruct the corridor utility age and the payment will be ready again That's when we would address that we wouldn't want to necessarily give the right-of-way away but we could add wider boulevards and calming effects and just being able to, again, address speeds and safety.

So on the other hand, if we wanted to prioritize speed and throughput of this corridor, we would need to move it towards functioning much more like a highway, limiting access, creating additional gaps between people and the roadway so that there's almost no opportunity to turn off of this, right?

Correct. Yeah.

So we we can choose safety or we can choose speed, but the hybrid doesn't achieve either. Is that true?

Yeah, absolutely. I mean, human bodies are pretty squishy and they don't do very well when they get hit at high speed. So, yes, it's a direct relationship.

So if we have six lanes of right-of-way and our priority is for safety of users, all users, we have two elementary schools, third elementary school and middle school with neighborhoods, frequent driveway access, frequent intersections, we can't really turn it into a limited access highway to prioritize speed and volume. So the question then is what do we do with the other three lanes of right-of-way, right? And so my question then is, it seems like looking at these two alternatives, we basically have a very similar configuration just in one you're parking cars and one you're allowing bikes. Could be kids going to school, could be neighbors going to 125 Live, Broadway, West River Parkway, et cetera. How long would we be committing to a striping if we're 20 years or so away from a full rebuild? If we were to choose one of these two options, decided it's not working and we need to restripe it differently, how frequently is a restriping happening or how might we think about that timeline?

Well, the restriping, I think the next opportunity that we would have, every time we do a mill and overlay project like this, we come back in three years and we'll do a chip seal project. So as far as restriping, we'd have another opportunity in three years. Okay. I will say if we establish where the lanes are now, if we do implement things like medians, those might have to slide over. Curb extensions may have to be trimmed back if we're having a narrower or wider parking lane, things like that. So it may not be 100% striping in three years if we implement additional safety improvements at this time.

But if we were to make the wrong decision here, and pilot it for three years, we're not committing to this design for 20 years. If there's gridlock 24 hours a day, seven days a week on the street, and we choose a design that creates that, we have other opportunities, right, to adjust it. We're not moving the curb. We're not giving away three lanes of right-of-way. We're still maintaining six lanes of right-of-way. And what's defining it is the striping and what's on top of that preserved pavement.

Yeah, that's mostly correct. Like Sam noted, we've made some, you know, added some curb extension at some intersections that would need to change. With the bike option, he mentioned the signal heads. If something were to change there, we would have to do a modification and move some signal heads. So there's some cost, but primarily it's the restricting.

Okay. Thanks. And then just from the comments and public engagement, I also.

heard that automated enforcement was something that some people wanted is that a possibility today so it's it's not here in minnesota there is a pilot program going on at the state legislature and but we can't do that correct we are not part of that okay all right mr palmer thank you um i have an appointment at 6 40 so i'll be leaving um

We went out to the public and we asked them what they thought about this. We had over 200 people show up. We ran out of surveys, which I neglected to say is one of the groups that you talked to at 125 Live was WeBike. We're talking about green paint that's sitting there. I don't know what the cost of the green paint is. I know at 4th Street Southwest that we had to buy a truck to be able to plow the bike lane. We're all for safety, and I could see doing curb extensions. I could see doing some of the other things. I know that you've said before that parking on both sides keeps the traffic volumes down. I go over the bridge. I'm a council member who drives that all the time. I go over the bridge, I go to 19th Street, And you cannot, it's very difficult to make a left-hand turn from the rack. It's very difficult when you have to wait for two stoplights to get through because of the school buses. I have no idea what you're gonna do when the garbage trucks are there, that they're gonna be picking up garbage. But I go back to the public engagement. We asked them a couple years ago what they thought. This is what they told us to leave it alone. Now you come back and you do the same thing. It's overwhelming that people do not want to go less than four lanes. So to me, going down to four lanes, figure out what you want to do with curbs, what you want to do on 9th Avenue, which I think is something we need to do differently. But. those numbers are overwhelming and that the public does not want that. And I have the businesses down in Elton Hills have told me that it will not work for their businesses. And I think that's something we need to keep in mind. But I go back to one simple fact and I'll be done. you go past 19th Avenue heading west, that road does not work well, and you are, it's not seconds, it's minutes that you're being delayed. And that's not an exaggeration. So I've sat through that stoplight twice to go through it, and that shouldn't be in Rochester. And that's not during the rush hour. So that's my point. So be interested to see what the public says.

I guess I can take that, Council Member Palmer, appreciate the comments. As far as that segment west of the highway, it's a little bit different. There's no center turn lane, so if someone does want to turn left, definitely there's a delay there and you're waiting during the higher peak periods to turn. The through movement has to wait for that left turner. I would say with looking at the feedback, I don't know that it's overwhelmingly four lanes. I think it's overwhelmingly we want a safe way to turn. It's having that center turn lane. You saw that the the five-lane section and the three-lane section, which can introduce that turn lane, it seems to be most important to people to be able to safely turn along the corridor. And I think you heard from the traffic engineering team and Nick, you know, our consultant. The corridor is not, the delay is going to be marginal, marginally increased. There will be gaps. We reduce the conflict points. And that's why our team is recommending a three-lane section. Again, we still have options for what we do with the rest of the space, but if you're gonna ask us what's going to be the safest, we're always going to tell you and the public that the three-lane section is going to be the safest based on the volume and the context of this corridor.

Well, but I asked for that information. We don't have it. I do have it. And number two, if you look in front of the rack, it has the suicide lane in it. And so it makes it very difficult for either from that other lane or the other lane to move.

I do have, if we have a moment, the safety data that you had requested. I did pull that up. Slightly different these weren't corridors that were were lane reductions. They were restriping to introduce 6th Street Southwest up by fall wall 19th Street Northwest by the rack And then that that one actually is for four to three and then 14th Street Northeast by Silver Lake Foods going over towards Jefferson all a little bit different all of them were mill and overlay and And on 6th Street, crashes went up slightly. On 19th Street, they reduced. On 14th Street, they reduced. And we can send this out to the council after the meeting. The good thing to note, like on 19th Street, fatal and severe injury crashes went down, which is why we propose these sort of projects for you, because that's really why we're doing our job, so that that's not happening on our roadways.

Thank you. Mr. Keene.

Yeah, I'll try to skip the ones that have been asked, but again, Council Member Palmer's right. When we go to ask the residents, I mean, I think it's just troublesome that it's another case where our experts are in one position and the residents are in another position, and I've been trying to resolve that with the communication stuff. So some specific questions on when you look at the street, is this a collector from neighborhoods or is this an arterial to get from the center or from Broadway or across town? Or are we treating this as a collector for these neighborhoods or are we treating it as an arterial to, like if I were going from downtown to get to Northwest, I should take that route?

So if you look at the ROCOG functional classification, it is a major arterial. So it's not to the level of expressway strategic arterial like 37th Street and Civic Center Drive. It's a step down below that. So mostly a through street. But I will say that the three lanes, will handle the projected volumes.

Okay. I'm looking at, when I look at even the public safety discussions and other stuff, to me, the people that are on this road are there specifically for the schools and for residential. I don't see this as, I mean, I see so many better ways to get from Broadway to the west side than going on Elton Hills Drive and the curving and all that stuff. One of the reasons with the bike lane stuff, I'm kind of, why would you use this when there are better ways to go? But then you have the residents that live off there, and they have no way to get out without that infrastructure. As far as the questions already been asked about the 20-, 25-year design and that idea of what can we back out, I've noticed in the drawings I see a lot of 11-, or I saw some 11- and 10-foot-wide buildings. lanes, which I think are traffic calming sort of things. Is that something we're going to do no matter how we're using the 66 feet across?

Yeah, definitely. We'll try to use the width of the lanes to calm traffic.

I would think that the travel lane should be tighter and the turning lane and the parking should be wider. And that's how it would be a better use of our space. Because I think that when you look down and your lanes are tightening, I think it does have that psychological slowdown in there.

It does. And that's what we would do. I mean, you're still going to, the roadway is still going to feel wide though. So, I mean, that's always going to be our challenge.

I hear you, but I'm still thinking of though that I am looking at the lines and... I don't want to get into this whole thing, but three and five years later, and it's a wet night, and how often do we restripe these things so that we do keep them visible? Because that's another sort of thing. Council Member Doering already asked about that idea of this helping talk into residents, which feel that they see this as a huge change that's going to impact their daily commutes. Then I come to my experts and they tell me, nope, this is going to work out well. So I'd like to get some help with that, but I've heard the answers. Before we get into the specific designs, I mean, the policy considerations first and foremost have to be road safety and pedestrian safety. And I think I've heard that from, but traffic throughput is also, when you're doing this, and access to the roads left and right. We're not doing any sort of limiting of left turns, so we still have to be able to do this. And the design points of crossing one or two lanes instead of four should be dramatically better. And I've seen some of this stuff, but then you get into the point of then how do you use your lanes. When I talk about safety, this pedestrian safety width... Two public schools, a private school, and these other things, really, I'm surprised we don't have, that our statistics are as good as they are. But I think that goes back to some of this, the number of cars that pull up to schools now versus... bicycles and walking. But then the other thing is anything we can do to reduce the speeds on these streets, like with the design of lanes. And the other kind of policy thing is we do have a complete streets policy here. So when we get these opportunities, we're supposed to be looking for more than moving traffic in individual cars. We're supposed to be looking at We're supposed to be looking at alternative or active transportation. So those things all come together. As far as when I'm looking at the options, the thing with three versus four lanes, it appears that the three lanes should be able to carry the volumes and still maintain the safety requirements. As far as the recommendation on the two-way cycle track, I think of it as a good way to use the space on the north side and then still have the parking on the south side. But again, I don't know how we buffer that. I saw in one of the drawings the crossed painting. I think that does help keep people from feeling like they shouldn't be able to drive on there. And this idea of deferring the light work to the light replacement and doing our street work without doing that right now and having a CIP in the future. Because I do like that idea of the light being on the south side so that it helped people get out of that neighborhood with no other way to get out. I see that as helpful. And I think all the streets back there would connect back to that point. I haven't done enough of analysis, but it seems that way. Yeah, so that's kind of where I'm at right now.

Are there other comments from council? Any other questions?

Yes. Mr. Miller. Just a comment because I feel like it's undefined here. Could you bring us back some options of how you potentially create safety? I mean, it sounds like using a two-way cycle track on the same side would fix the plowing operations because it would be wide enough to use a plow and not have to buy new equipment. but could you bring us some opportunities for what that could look like in the division? I know I've heard different options at different projects and they're often posed as not being feasible because of the plowing operations, but if we could leave something there year round, what that might be?

Yeah, so part of what I'm looking for tonight is how do we bring this back in July? I could see bringing it back one of these being the preferred option or the request for council action being to approve one option and then the other one listed as alternative action.

I guess the feedback then I would give is I feel like that two-way cycle track is kind of undefined at this point because it's unclear how we would separate it because I think just putting paint If that does feel like a wider shoulder, probably doesn't achieve the traffic speed goal, but understanding what options there might be to define that. The other feedback I would give, I know we often do quick build projects where we trial a certain design and then we measure the impact. In this, it feels like a good opportunity to measure Is the parking fully utilized? What are the changes in volumes to the street? What are the changes in speed? What would the counts be of children bicycling to and from school or along that corridor to the trail system to 125 live to the rec center to other destinations? I would also just think about what's different in this discussion 2026 and prior years is now we have The North Broadway section from the bridge up to Elton Hills Drive now has multi-use wide trails on both sides of the street. And so when we talk about a network, that's a new network access point. And I don't know what the projected volumes might be, but I think if we were to do something like this, we should intensively measure it, report it back, and make sure if we're at that three-year checkpoint, we understand what impact it had, and whether if we're at, again, this three lanes is a safer version than four, the ROCOG Safety Action Plan also recommends this as a preferred strategy to remove undivided four-lane roadways. So, I mean, Council Member Palmer voted for that as a member of ROCOG. I would just want us to think about how we measure this and communicate back the throughput, the safety, and the speed changes. Because when I also went to the open house, I heard a lot of opinions about what the right configuration of the roadway was. But what was universal was that almost everyone I spoke with said, this is an unsafe street. There's too much speeding. And then I didn't speak with a single traffic engineer that night. I spoke with people. And so then we come to this place of... how we're engaging our experts to understand from other cities, to understand from the work being done across the country to address these problems and making the right solution for the residents and for future residents of this corridor. So I would be in favor of either of these, it feels like probably we don't have enough parking demand to do parking on both sides and achieve the speed goals. So if we were to do the two way cycle track, I would just want to make sure I understood how it was protected. So it felt usable. And then how that resulted in measurable data over a, you know, two, three year period, to confirm that then that was the right thing to do for the next 17 years until we got to rebuild.

Yeah, certainly with the option with parking on both sides, I said it would be easier to implement. We'd probably be spending our project budget on those bigger curb extensions and median islands to help achieve the traffic calming effect. With the bottom option, that budget would be spent more on the barriers and making sure that that's a good place to actually ride a bike. So if we do bring the bottom option back as the first option for your consideration, it would definitely come with how would we make sure that that is going to be successful and meet the community's expectations?

Yeah, I would also just acknowledge, like, because we want to have this conversation, we haven't started drawing things up and looked at, you know, because the other challenge is there's a number of driveways. So we can't be just putting barriers in front. People need to get to their properties. You heard about garbage tonight. So those are things we have to think about. And so we can make, so we aren't creating other safety issues along the corridor.

To honor public input, in July I would like to see a four lane with safety measures implemented as an option. Are there other comments from council members? Thank you very much for a long and involved discussion. Ms. Elms.

Thank you, Council Member Wall. We'll put you back into council member after this. SO UPCOMING ON THE 13TH OF JULY, YOU HAVE THE AUDIT INFORMATION FROM 2025. SO YEAR END DATA FOR THAT. FINANCING OPTIONS FOR INDOOR RECREATION. WE TALKED ABOUT THAT A LITTLE BIT EARLIER THIS YEAR. SO REALLY KIND OF ISOLATED INFORMATION THERE. THE 2027 SUPPLEMENTAL BASELINE BUDGET. YOU SEE WE'RE GETTING INTO MY FAVORITE TIME OF YEAR. TODAY WAS NO LESS. And then an update on people experiencing homelessness and activity in that space.

Thank you very much. The week of Rochester Fest, the Rochester Fest parade on Saturday, in which we will march and have fun. We are adjourned.