City Council - workshop

indoor recreation financing options, and then we'll wrap it up with persons experiencing homelessness update.

So with that, I will turn it over to Jason Boynton, who is with Cohen Resnick, to discuss our audit.

All right, Mayor Norton, Council President Shubring, Council Members, Jason Boynton from Cohen Resnick, here to review the results of the 2025 audit of the city's financial statements. I've got a slide deck of about 50 slides or so here. I'm going to move pretty expeditiously through them. We're going to take kind of a real high level you know, look at the activity for 2025. But certainly as we go through, if you have any specific questions, don't hesitate to stop me and we'll address those at the point. I do have, if anybody needs paper copies, I do have those as well, if anybody would like so. All right, so. Advance the slide here. The clicker? All right, so we are issuing an unmodified opinion on the city's financial statements. Many refer to that as a clean opinion, just means that based on the work that we did, our team did, we feel comfortable issuing or saying that the financial statements are fairly stated in accordance with generally accepted accounting principles. Just a reminder for council, there are a couple elements within the city's financial report that our firm, Kohn Resnick, did not audit. That was the electric and water utility funds and the DMCC, which is a blended component unit by accounting standards. Okay, so they were audited by other auditors who issued unmodified opinions on their financial statements, and then we rely on that opinion, on the work that they did in issuing our overall opinion on the financial statements. The city does participate in the GFOA's Certificate of Achievement for Excellence in Financial Reporting program. So that was a program started by the GFOA many years ago to encourage governments to go above and beyond the minimum reporting requirements to provide more information, more detail in their annual financial report. And so the city participates in that. We are submitting that for the 2025 report, but we also did for 2024, we received the award, which I think it was the 54th year in a row that the city has received it, almost back to the beginning of the program, I think. So that just demonstrates, continues to demonstrate the city's commitment to quality financial reporting. In addition to issuing the opinion on the financial statements, we are required to perform a special federal program audit. So this is procedures that we have to do just on federal grant dollars based on the volume that the city gets of federal grant dollars. And a specific procedure is making sure we're in compliance with federal requirements. So we will do that in July, August timeframe, and then we'll issue that report prior to its due date at the end of September of 26. Lastly, we did sit down last week, last Monday, with the audit committee. We went over the results of the audit. We talked about accounting standards, kind of both current and future ones, that are coming and reviewed the auditor's responsibility letter. And I want to thank the people that participated in that audit committee for meeting with us. That's a quick summary of the audit. Everything went fine. We didn't have any issues that we feel like we need to bring to council's attention today. So we like to take this opportunity, then, since we've completed the audit procedures, to then, again, take a look at kind of the high-level review of the finances for 2025. So we are looking back in the review mirror, right? But I'll give you some context and, you know, some additional information as you move into your other discussions as we go on. So we're gonna start out with governmental fund types, and they're listed there. Your general fund, your special revenue funds, which have specific purposes for tracking them separately. Our CIP fund, and then our debt service funds for the bonds, servicing of the bonds. And then we'll switch over to proprietary funds, which are enterprise funds, which are the utilities, and the internal service funds. These are both accounted for differently. They're full accrual accounting versus governmental accounting on the governmental funds. And then enterprise, those types of funds are external customers. So the parking, electric are all providing services for external customers, whereas internal service fund, as the name implies, is utilized within the government itself. Just getting her to click forward here. Oh, I'm too far ahead. Okay. I'll trust it and you'll tell me if it's not. All right, so first chart we're looking at here, chart five. general fund revenues and expenditures. And just a little housekeeping before we start getting into the numbers. A couple things, most of the charts that you're going to see are going to be pretty similar. They're grouped by year with three different columns with multiple information in each column. And the columns are generally going to be your revenues or sources of funds, your expenses in the second column. And then the surplus or deficit in any particular fund would be the last column. Some of the charts we had a fund balance column on there as well. The other thing you might notice if you've been in past presentations we did We used to present about ten years worth of data, but we added you can see there's a table There'll be a table on every chart with the data underlying the chart So that's the information the numbers underlying the chart and to comply with the new digital accessibility requirements We had it add that but that took up a little bit more real estate on each slide so we decided to reduce our presentation from ten to five years and All right, starting out with the general fund, so looking at 2025 funding sources, we're about $133 million for 2025. That's made up of property taxes, which was about $76 million in the purple and the blue. is other revenues, things like intergovernmental revenues, grants we get from the federal and the state, license and permit revenue, building permits, charges for services, the lodging tax, investment income, those are all aggregated in that category. And then the yellow at the top of the bar there is in lieu of tax payments received from the utilities and that's detailed out in the third bullet there in the descriptions. So a total of $133 million revenues or expenses were about $126 million, and we had transfers out of $4 million. So we had about $130 million going out, left us a surplus then in that first bullet of about $3.6 million. The revenues did see an increase there in the second bullet of about $13 million. The primary revenue increases were property tax levy was a $7.8 million increase, which was about 11% increase over the year before. Overall, the levy increased by about 10%, but 11% went to the general fund. Charges for services revenue was up about 2 million. Some of the big items there were revenues received for off-duty security services by, I think, police officers, as well as plan check fees. License permit increase is primarily going to be building development building permit activity increase of 1.1 million and then counting standards We had a police department entered into a software arrangement a five-year software arrangement And when you make a commitment like that to pay those it's going to be paid out over five years But we're required to recognize the gross revenue and expense in the year of the signing of the contract or the agreement and so that was it's showing his revenue of two million dollars, but then corresponding expense of the same amount that's going to be in the expenditure section. The expenditures in that next bullet increased by $14 million. The largest amount there would be in public safety. That was up about $9.9 million, a combination primarily of police and fire. Fire was up $1.2 million, but police was up $8.5 million for the year. Part of that $8.5 million is that $2 million software contract that we are required to recognize. But then the remainder of that, a significant chunk of that was employee-related costs, which included normal wage increases, but we also did market adjustments during the year for those in the police department. And then public works was up 1.7 million. That was primarily maintenance related. And then general government, 2.1 million, which about a million of that was bolt forward unbound related costs. And then information systems and human resources were each up about a half million. So the surplus then for the year was about $3.6 million. That increased the fund balance then. Did click forward. You want to run it for me? Okay. Did increase our fund balance from 50, about 54 million to 58 million. But our expenditures with that increase in police costs and other costs increased at a larger percentage than the fund balance percentage. And so our total percentage dropped from 48 to 46%. On the 2025 expenditures our policy is 42 percent now less than five months or obviously above that But if we also look at another metric in that last bullet there If you look at the fund balance at the end of 25 compared to 2026 budget expenditures We're right out of that 42 percent. So if we're looking at it compared to next year's expenditures, I If you want to go to the next chart, one of the reasons we set that 42% range, there's several reasons, but one is for cash flow purposes. And this chart just demonstrates that. So property taxes, which is a major revenue source within the general fund, only comes in in June and December. So we have to fund all the operations of the government. And so this just shows you the cash balance within the general fund each month until the dollars come in for tax levy and start the cycle over again until levy dollars come in. So that's one of the reasons that we set that. 42% target. Moving on from the general fund, special revenue funds. Again, these are all listed here. We don't have a chart necessarily on all of them, just on the larger ones. If you want to go to the next chart. So we'll start out with the library. Library revenues this year were about $10.4 million. Expenses were pretty similar, so the library operated at a surplus overall of about $36,000. So their fund balance didn't change much, went from $3,621,000 to $3,657,000. The revenues for the library are primarily from tax levy. So in the blue there are property taxes, and then in the pink color, that would be county levy. And just in that third bullet, a reminder that the county levy is only levied on properties outside of the city, so we're not doubling up on levy for the library. And then user fees, so not a lot of user fees generated, but about a half a million dollars in the green at the top. So their fund balance ended the year at about $3.65 million, which is about 35% of their expenditures. Next up is municipal rec. Municipal rec includes all those activities in that first bullet there. So rec center Gulf parks, so this is all of it combined together Then we'll we'll break down into a couple of individual departments within there But overall for the fund for municipal rec fund we had revenues of seventeen point five million Which is about eleven point two million in property taxes and then six million dollars in fees that we charge for all for those activities and And then expenses were about 16.8 million in total. So we had a surplus then of about 627,000 for the year. That increased the overall fund balance from about three million up to almost 3.7 million. That worked out to be about 23% of expenditures. And so I think this was one we've kind of been monitoring. So back in 2021, after some years prior to that, where we did some transfers out for capital, purposes, we were at about 14% of fund balance. Well, we've increased about 9% over the last four years. So that's up to 23% at the end of 2025. So drilling down then within the next... Okay. One of the departments, excuse me, my screen's not matching up with that, so... Recreation department, so revenues. So the green are the user charges, so that's what we can charge for operating out at the rec center. The dark blue obviously is expenses, and light blue is property tax levy. So if you look at it, what we charge there doesn't cover the cost, so we have to allocate levy to help support that. So revenues were 1.8 million expenses, 1.7, so we have enough allocated levy for 2025, and we had about $99,000 surplus after property tax support. go on to the next one gray marina gray marina is a little different in that the um The shortfall if you will between user fees and costs are split equally between the county and the city Okay, so the city levies property taxes based on what they expect their contribution is going to be for the year That's in the blue the yellow is what we charge the her allocate to the county for the the deficit and then the if there's a Little shortfall there. That's again. The city contribution mean we didn't have enough levy to to cover those costs revenues were We did see an increase in user fees there, about $120,000 up to $842,000, but our expenses were up as well to offset that. Next up is Gulf. Gulf is, again, revenues in the green were about $2.1 million. We do levy about $274,000 in property taxes there. Expenses were higher in 2025, so our deficit was about $243,000. We looked at that expenditure increase. It was related to primarily employee costs. They implemented new software. They did additional advertising, and then the We'll look at this when we get to the equipment revolving fund, but their charges for vehicle and equipment charges were increased in 25 as well. Their revenues then, the 2.1 million, does cover about 80% of their costs overall. And then last in the municipal rec is park forestry and parkway maintenance. So their revenues predominantly, we don't charge a lot for using the park system, so property taxes help to cover the costs of maintaining the parks. And then we do get a little bit of user fees of about 500,000 there. But the amount of levy that we allocated was in excess of what we needed by about 999,000, you can see in that last bullet. So that's municipal rec. Next up is airport. Airport, so this is just the operating revenues that we generate out at the airport, okay? So the red represents commission revenues, which is primarily parking lot and car rental commissions. And it amounted to about 2.5 million in 2025, up from 1.6 million in 2021. But just for some flavor, if we go back to 2019, which isn't on the chart, but our commission revenue was about- Mr. Boynton, can you hold for a minute?

Council Member King, go ahead.

I had some questions on parks, if now's the right time or should we wait? Nope, sorry, go ahead. I want to understand just when you, if you go back to your original, these are subgroupings underneath the overall municipal rec, and then there is that fund balance there. But I don't think the individual subpieces have their own fund balance.

I don't know. Do they?

The individual subpieces do not all have their own fund balance. Golf would be the There's a few that are an exception.

Could you state that again, please?

Yes, I can. So the individual subgroups do not all have their own fund balances. Rec Center, Golf, Graham Arena, National Volleyball Center would have their own fund balances.

Okay, and then they show up in their own fund balance or are they reflected in this municipal rec balance?

They're all rolled into municipal rec system when it comes to looking at the financial report.

Okay, and management-wise, this is controlled at the park board and the park superintendent? and whether funds get taken out of municipal rec fund balance, that would be decisions by that board and by that, or is that, where is that controlled and when the spending is out of the municipal rec fund balance? What is the business control?

Mr. Whitman.

The few times that we do request fund balance, it is presented to the Park Board for approval.

Okay, I mean, I'm gonna note that it's really nice to see the fund balance come up over the years. It makes me feel like we're under better control than we were. But the one that I don't understand is Graham Arena, because this is an area where we are sort of like helping someone else run a facility. But then when we do deficit spending, I'm unclear how that works. Does that come out of our fund balance then? Or how does that work when it's somebody else's initiative that we're working with? I'm trying to understand the, I understand that there's nominal levy that goes into it, but when I see us running deficits, I'm unclear if that's above and beyond what the levy spending we're doing is, or where that comes from. Has it come out of the REC fund balance?

That, well, it reflects the agreement we have. We do, at the end of the year, we share the deficit and, If there is a, in many years we go beyond, we actually are profitable, and that's also reflected in the agreement, how that is divided.

Okay, let me, I'll step away from this. I'm just, I understand as we went through the different groupings, but this one feels different because this is not an area that we run and control. It's somebody else's running it, so this idea that it appears that we get revenue from the county, I can't get my head around it, but I'll leave it for separate. I just wanted to bring it up as just to make sure I understand it. And factually, I guess I don't right now. So I'll do a follow up with that. Thank you.

If I could just add, just real briefly. So the way we present the chart, we show what the actual tax levy was that we originally decided before the year even started. Okay, that gets allocated. So we don't show the city putting additional money in to cover their 50% share. We just show that as being We didn't levy enough, that's why you see the deficit. But that deficit is split equally between. Now, if we wanna go back to the agreement and have that discussion about why we're covering part of the deficit, but that's the way the agreement was written.

I guess my problem is if this is a program that's run out of the REC fund balance, then I could see us, that balance going up and down based on this agreement. What I'm struggling with is that is that I feel like it's the county property that's doing that operation and we're providing the labor or the expertise for running it. So I'm uncomfortable with that, how that ends up drawing money out of that fund balance where it's not levy spending, but it is city money going to there to run an operation.

Do you want me to explain more or not? Go ahead. I'm clear. There's a question but not an answer. This agreement and versions of it go all the way back to 1970s. I think before that. I think there is an agreement all the way back from like the 50s. So we jointly built the facility with the county and the Hockey Association or whatever it's called, Rochester Hockey. WE OPERATE THE FACILITY. THE COUNTY CURRENTLY PAYS ALL OF THE CAPITAL AND REINVESTMENT IN THE FACILITIES BECAUSE THEY OWN THE FACILITIES. THE CITY DOES THE OPERATIONS. WE HAVE CONTROL OVER HOW WE'RE OPERATING TO A DEGREE BUT WE ALSO ARE REQUIRED TO OPERATE RELATIVE TO THIS SERIES OF AGREEMENTS AND ALL THE FUNDING SOURCES FOR BUILDING THE FACILITIES. and we could jointly change the rates etc um to charge more but some of this is unrelated to like this is whether we were operating it or the county was operating it there i think they're one of these years has the purchase of the zamboni in it so some of those operational expenses and those are shared with the county when you go over so i appreciate your con NOT LOVING HOW IT WORKS. HOWEVER, IT PROBABLY IS MUTING THE COST BECAUSE YOU HAVE NO CAPITAL COST IN HERE AS FAR AS THE FACILITIES. SO LIKE IF YOU OWNED THE FACILITY AND OPERATED THE FACILITY, THEN WE WOULD ALSO HAVE CAPITAL COST UNLESS WE HAD SOME SORT OF AN AGREEMENT WHERE SOMEONE ELSE PAID FOR ALL OF THE CAPITAL. SO THAT'S PART OF THAT SHARING AGREEMENT IS THAT THE FACILITY INVESTMENTS HAPPEN THROUGH THE COUNTY. Okay, last question.

Would it be fair when I look at this chart and I see the negative $19,000, does that come out of the rec fund balance, and where does it go to? Does it go to, I mean, there must be some concept of a group that runs the rec center, and I think that's the county.

The city operates the rec center. Okay. THROUGH THE PARKS DEPARTMENT. THE COUNTY OWNS THE FACILITIES, SO THAT BLACK NOT LEVYING ENOUGH FOR THE TOTAL green, yellow, up to the big blue bar, it just goes to any of the expenses within the blue bar. We could probably isolate exactly what that was, like maybe cost of employee services. Maybe someone left and wasn't taking health insurance. We always budget for that, but there could be an employee payout because somebody retired, for example.

All right. I think I understand it as a unique beast, and I'll go from there.

Council Member Miller.

Yeah, just following up on these fund balances, I'm glad to see the balance going up too, but it does seem like the property tax support is going up faster than the fund balance. So I'm just curious, like some of the other ones, do we have targets for the municipal rec fund? How are we deciding how much additional property tax levy? I know it breaks down into other areas, but it does feel like we're just transferring property tax levy at a higher rate, which is making the fund balance go up. for the overall, I mean.

When the general cost of service goes up, generally the main source of revenue that you have to cover the cost of those services is tax levy unless there's an opportunity to increase the fee revenue and at some point the fee revenue has to also meet the market. So if the fee revenue is too much, for example, if we had a scholarship program for folks that the place where you would likely be able to raise funds for that is through the tax levy. So, or you would need to shorten the hours, utilize it less, have less employees, have less level of service, things of that nature. So as employee costs go, like some of that is probably just the cost of employment going up. Not saying that that's simple, but the reality is to mute that you would end up needing to have it less available, more fee revenue,

I guess looking at one of these facilities, the rec center, you see property tax support going up, customer charges going down, direct expenses up, and we still have an excess after tax support, but how do we look at the performance? How does the park department, park board look at the performance of these individual areas?

We look at the fees and programs that are going to be offered during the upcoming year and set our performance measures during that time. Generally, we present that in front of the park board. And we, as Administrator Zelms mentioned, we do take a look at the fees, but we're very careful to not outpace that above what the residents, what our community can offer to offset the cost of the programs.

And then I guess from a performance standpoint, do you look at subsidy per user in any of these areas?

Yes, we are working on, that's one of the things we're working on right now is to set a revenue policy as it reflects on every program and that policy looks at focusing on youth and senior programs as kind of the most subsidized activities that we offer as well as the park system in general, keeping that as, use fee free as possible. And then we tier upwards when it comes to golf, tennis, and other activities. Sure.

And as you develop those, would we expect to see just updates on kind of the level of tax support going in per user kind of understanding? And the reason I ask is because most of these graphs look fairly stable over time but it looks like golf operations is taking a dangerous shift upward faster than some of the other ones and i'm just curious again like how we're looking at levy subsidy per user of that area of rec yes it's not reflected in the information you've received thus far uh we do a report to the park board annually showing uh our um

All right. Cost per activity as it relates to the levy we receive.

I think it's just also important to note that 2025 is likely an anomaly because we had an employee that was out on an extended medical leave and then also a retirement. So there's a payout that's in there and there's also temporary positions that backfilled that position.

Okay.

Just to add to Councilmember Miller's point, or part of his point, which I heard, was from a council standpoint, if we're looking at the property tax support and we're looking at the customer's charges, and if we see an imbalance there, that's where we're going to dig in. And I think from a council standpoint, whether it's this fund or other funds that If there's some way that we can have a dashboard where we can see how much levy support we're giving and how much fees that we're getting for that, and if there's a disparity there, that's where we're gonna ask questions. So with that, I think we were on the airport.

Okay, so I was on chart 15. So I'll just kind of start over there. I think I was into it a little bit. But the red represents commission revenues, $2.5 million in 2025. That's primarily parking lot and car rentals. I was mentioning that in 2019, our commission revenue prior to the pandemic was about $2.5 million. So we've just gotten back to where we were pre-pandemic. But passenger traffic has not gotten back to where we were pre-pandemic at the airport. So that's just generating additional fee revenue. to get back to that point. Land and building rent in the yellow, that was 1.7 million. Landing fees in the green of 1.1 million. That increased from 23 to 24. They instituted a new general aviation landing fee, which they didn't have previously. And then the gray I just want to point out is other revenue, but it's primarily in that second-to-last bullet there. We got federal funding at the airport following the pandemic to help supplement costs there. It's been around $1.1 million each year. Well, 2025 is the last year that they're going to receive that funding. So next year when we look at this data set, it's going to look a little different there. The chart airport operations overall on chart 16, then, So revenues, again, the yellow is the operating revenues that we generated at the airport. I just showed you on the previous chart. We do levy about $600,000 toward the airport in that bullet there to cover the cost of utilities and customs. And then the pink on the top is the investment income generated on the fund balance reserves. The expenses in the blue, we did a transfer out of about $400,000, I think, for some hangar purchases. But we ended up with a surplus of about $1.5 million that then increased our fund balance on the next chart. And the airport currently has about $15.2 million in fund balance at the end of 2025. And this is just the operations fund. There's a separate airport-related CIP fund included in the capital improvement fund. So that was airport. Moving on to transit next. So transit revenues in 2025 were up slightly at $15.5 million in total. Our expenses were about $15.1 million. We had about $350,000 surplus. In transit, that increased the fund balance, so here's one where we added the fund balance in gray, to 5.6 million. If we look at the breakdown of the revenues, just a reminder, transit, there's no property tax support that goes toward transit. It's all funded through federal and state grant dollars, as well as rider fees in the orange, and then investment income primarily in the other income in the green. So about almost just shy of 90% of the cost of transit is covered through federal and state grants. Next up is the Bioscience Center. So this is floors four through eight. So the lower floors were TIF related. This is four through eight. So we generate rental revenue there from net operations, and then we use that to pay debt service for the construction of the building. So rental revenues were 2.6 million, roughly about the same as the year before. and expenses were up a little bit at 1.7 million, so we had a surplus before we transferred out, which is the orange section for debt service. We did increase that transfer out in 2025 by about half a million dollars over the previous year to help pay back an inter-fund loan between the bond fund and the parking fund when we did a defeasance a number of years ago. And so that'll happen, I think, I don't know if that's gonna be over three or four years, that that'll probably be paid back. Fund balance still, though, after that extra transfer was at $2.5 million at the end of 25. Those are the special revenue funds that we are covering. Next up is debt service. We're just going to look at these are all the individual bonds, just kind of the outstanding balances of those bonds. So the first chart, 21, is our EDA. So these are bonds issued by the EDA. They were primarily for the Bioscience Center. those top floors, as well as we issued in 2020 a bond for the Development Services Infrastructure Center in the North Precinct. And so we're paying those back with rents in the case of the Bioscience Center, and then through levy to support the lease payment between the EDA and the city for the other bonds. We owe in total, combined between the two, about $22.6 million. 2009 bond we issued, this was for the TIF portion of the Bioscience Center, and we were able to pay that off in 2025. The TIF bond of 2017 was issued for construction of parking ramp 6, and we're paying that back then in combination of increments as well as transfers from the parking fund. That's paid down to $15.7 million at the end of 2025. We issued in 2010 some Build America bonds for construction of the Public Works and Transit Ops Campus. We refunded that in 2020, so that's the bond we're looking at here. We owe about 13.2 million, and that'll be paid off in 2036. We have lodging tax revenue bonds for the Mayo Civic Center expansion that were issued in 2015. We paid those down. We owe 22.7 million at the end of 25. That reduction in 25 you can see was larger as we did have an additional principal payment that we made of about 5 million. Sales tax revenue bonds for the last sales tax authorization. They were issued in 2015 and we were able to pay those off in 2025 as well with sales tax proceeds. And lastly, we've last three years. We've issued abatement bonds in 2023. We issued bonds for park improvements at the pool soldiers field pool. Silver Lake and other park improvements and we're paying that back through that extra $2,000,000 referendum levy that the parking wreck gets. The 24 bonds were issued for the geothermal improvements that we did with the city buildings. And then the 25 bonds were issued to relocate the park maintenance building out to the public works and transit ops center. That was the only new bond issue this year. It was about $11 million. Sewer project has a big project going on, sewer fund. That is drawing more debt down, but it wasn't a new debt. It was already established. And then lastly on the obligation side is just an informational chart for the net pension liability. So the city participates in PERA for the employees. It's a multi-employer plan. All the governments participate, and accounting standards say that if they're underfunded or overfunded, we're required to show that on our financial statements. So it's our pro rata share. They do an actuarial study every year. But I'll just point you to the funding percentages in the last bullet there. They're based on their last actuarial study, which was last June. They think they're over 90% funded for both the general fund and the police and fire fund. Next up is capital projects, or CIP fund. This is just the fund balance, so the fund balance didn't change significantly. It was $311 million for both years, but there was a lot of activity that happened during the year. So some dollars were spent, some were brought in. So that bullet there lists out the, of that $311 million, this is kind of where the dollars are earmarked for, whether by council or whether restricted. So significant changes during the year. We spent about 14 million down in our infrastructure sales tax projects balance. We spent about nine million in highways and streets down. That's just the reduction in that set aside. Park and rec was down seven million, but they were all offset by DMCC, which had a $32 million increase in that balance there, and that's sitting at 152 million at the end of 2025. enterprise funds so we'll start out with parking so parking revenues you can see there were about ten point six million that's made up a user fees of about nine point seven million which was an increase of about one point six five million and that's in both ramps and in non metered parking so we had a change in our rate structure that occurred which was in part parcel to the increase in the revenues there. Expenses were up a little bit as well, 7.2 million expenses. They have their in lieu of tax payments of 800,000. And then debt service, as I mentioned earlier, they're transferring out to the bond fund to support the debt service on the parking ramp six construction. Surplus then for the year was about 1.4 million, which added to their unrestricted net position, which they have about 15.5 million at the end of 25. Next is electricity utility fund, RPU. Revenues there were 218 million made up of retail, wholesale, steam, and capital contributions. Expenses were 172 million, so they had a surplus of 46.6 million in 2025. There was a 4% rate increase, growth in customers as well. If you look at water on the next chart then, Water revenues increased quite a bit, but it was primarily in two areas. One is in the pink. There are other revenues. They received some settlement income during the year that added to there. And then capital contributions at the top, which is a combination of developers who pay for infrastructure and then contribute it to the water fund for them to take care of after that, or the city also does that where we pay for it in the CIP and then we'll transfer some of it to the water. Expenses were up a little bit. We had a surplus then because of that increased capital contributions of about $14.5 million in water. And then if you look at the next chart, their cash reserves, so the purple represents their unrestricted cash investments for both electric and water, which was $162 million. And if you want to compare it to their total expenses, they had $185 million. And of the $162 million in cash, about $146 is electric and about $16 million water but on the electric side they are building cash reserves I think toward the end of their contract with Simpa and the capital needs that they're going to have moving forward there as well as servicing their existing debt and I think they have some significant capital that's going to take place in 2026 sewer utility so revenues operating revenues in the orange other income in the green and then capital contributions again developer and city contributions expenses so total revenues were about 50 million expenses were about 23 and a half so we had a 26 million dollar surplus including those capital contributions and other income but if you go to the next chart and take a look at so the green represents our cash balances there and yellow is our operating expenses but the cash even though we had that surplus we didn't see it necessarily in cash because they have a pretty significant project going on there with the revitalization I think it's a $90 million project. We're issuing debt for about $72 million of it, and then we're going to cover about $18 million of it within the fund reserves itself. Stormwater, their revenues. Haven't had a rate change for a while there, but we get user fees as well as investment income in the green, which is in the primary portion of the other revenue, and then capital contribution again from developers and Citi. And so that fluctuates from year to year. But for 2025, we had about $15.5 million in revenue and a surplus there, about $6.7 million of that. Now, in their case, they didn't have as much capital needs. So if you look at the next chart, that surplus actually added to their cash balance as it increased from $32 up to almost $36 million. And depending like 2024, you didn't see they had a surplus as well. But their cash balance stayed about the same because they spent over $4 million in projects. But in 25, we only spent a little over $1 million. We'll wrap up our fund review with internal service funds. So chart 41 looks at equipment revolving. So the yellow represents departmental charges. So that's what the departments pay to the equipment revolving fund. So on the department side, that's an expense. It's a revenue over here in the equipment revolving. And then the green represents equipment acquisitions. So we spent 3.7 million in equipment acquisitions, listed out the major items and the dollar amounts in that last bullet. But our departmental charges, and I think this has been a concerted effort as well as we looked at equipment revolving and the reserves that we have there and the impact of inflation, and especially in public safety area and the cost of replacing equipment. So we've been adjusting our formula for how we're charging out the departments do two things. One, keep up with existing cost increases as well as kind of make up for getting maybe a little bit, I don't know, I wouldn't know if you'd say behind, but we just looked at where we were relative to what we think it's going to cost to replace and realized that we're going to need more there. So with that, we'll look at two charts from now. The net position increased then by about a million dollars. The next chart is similar. It's just covering information technology. Departmental charges weren't increased as much. They're at 3.4 million. Acquisitions this year was 2.7 million, so we did increase our fund reserves there as well. And then if you look at the next chart, that revolving fund balance, we've increased it from we were just above 8 million in 2021. We ended the year at 12.3 million, which is about a million dollar increase. And then ITRF ended at 9.3 million as well. And last, the self-insurance fund. And the green represents cash and investment reserves. And then the blue is the net position, which the difference is basically an estimate of what the accrued liabilities, accrued claims, and OPEB obligation are that are funded through that fund. But I'm focusing primarily on what are cash reserves that we have there. And that did increase by about $2.2 million this year, up to $38 million. If you look at the next chart then, departmental charges, In the yellow there, we're about $32.6 million. Our benefit expense was about $29 million. And so we did have a surplus, which increased that cash reserve. That third bullet there lists out the charges. So we've been annually increasing our medical charges. And by those amounts, it was 5% for 2025. A few charts left then. Market value, taxable market value. So we're kind of looking at revenues, overall expenditures of governmental funds on these last few charts. So I put this chart in here to just highlight what's going on with the city. Obviously, we're a growing city with development and so on. So the taxable market value is increasing. We were up 6.7% this past year. So keep that in mind as we look through the Revenue charts so this first one takes a look at all revenues at the government fund level so it doesn't include the utilities But the first one is property taxes we as I mentioned earlier We had about a 10% increase in the levy so that increased our collections from 100 to 110 million that does include the 2 million dollar park referendum levy Tax increments were 11 million dollars about 10% of our overall levy is in those projects until those are completed and Non-property and sales taxes, it's 37 and a half million, so about 25 of that is sales tax, about 12, 12 and a half is lodging taxes. LGA, it's a small amount, we continue to include it on here, but if we went back years, it was gonna be a more significant portion of the budget, but due to the formula and the growth in the city, we're getting less than we were in 2021, and I think it goes down again a pretty good amount for 2026 as well. And then in lieu of tax payments, which would be those utility payments, which are $15.4 million. Charges for services were $19.5 million in total. Again, that's across all those activities and departments. Federal, state, county, school, so basically all of our governmental revenues from other governments besides LGA, that was $108 million. It's run higher the last couple of years. Part of that's DMCC impact of dollars coming from the state as well as the grant dollars for the airport runway project. Investment income, so investment return has been better the last few years. This includes fair market value adjustments for the investment, but that was $18.5 million. And then other revenues are going to be things like assessments, building permits, the rents we get at Bioscience Center. and then other miscellaneous revenues. It's higher than previous year, but one big item in there were credits that the city received for their converting from their steam to their geothermal project. They were able to apply for credits and they received those in 2025. On the other side, our outlays or our expenditures on chart 49. So general government there was at 22 million. We talked about that in the general fund. Police, fire, public safety. If you add those three categories together, it's about $77 million we spend in public safety, which is about 43% of the overall expenditures, excluding cap outlay and debt service. Airport was $6 million, $14 million in transit. Chart 50 then, we have park and rec, $16.5 million. Culture, which is the library, but also includes music, art center, theater. It was about $12 million. Economic development and tourism was $10.5 million. That includes the cost that we paid to the Experience Rochester to run the Mayo Civic Center as well as other economic development. Public works was $19 million. And then community reinvestment unallocated was $1.3 million. Next chart. So this just takes a look at primarily property taxes here because LGA has become such an insignificant component to the overall budget. But we included it on there. It used to be a more significant component. But property taxes, so what we've done is taken the property tax collection amounts and divided it by the population estimate, and it is an estimate. We only do the census every 10 years. But estimate of the population increase and then the CPI for inflation. So if you look at, compare 24 to 25, we did see an increase there of about $70. So we increased the levy about 10%, but the population, estimated population growth is only about 1%. And then the CPI for the Midwest region was about 2.7%. So you can see the increase in the levy outpaced those two factors. Last couple of charts. So the city's required to report at the government-wide level, which is a full accrual for all activities. So all the fund stuff we looked at is a current measurement focus of accounting. And then the enterprise funds are full accrual. They said we've got to do it for all. So if you want to go to chart 53... There's a statement in the report that basically highlights the expenses, which includes depreciation of the assets that we've constructed and built and paid for on a full accrual basis. Then there's program revenues, meaning we get fees specifically for these activities. And then we'll also get operating grants or contributions or capital grants or contributions. It comes to a net cost or a net surplus. And then those are covered with general revenues, which is things like property taxes and and sales tax and LGA and so on. And so if we just go to the last chart then, chart 54. So if you look at the activities, the departments that we have, transit, airport, economic development and so on, those activities, transit and airport, either generate their own revenues or they get federal grant dollars or something to support those. So there's not a lot of local general revenues of the city that are going to support those activities. Economic development happens to be DMCC is grouped in that category. Then you look at the last five, and those aren't able to charge specifically users for those services, so we support those through property taxes. And so that's the dollar amount, the largest one being public safety, which is about a $56 million net cost. Just a note on Public Works, there was a larger increase in 2025 that was primarily related to a contribution that the city made to the county out of the sales tax authorization. There was a commitment there. I think it was even, was it the last one or the one before that? But there was about $10 million that was contributed to the county for infrastructure. So last chart summary. So general fund, looking at unassigned fund balance, we're in good shape there, 46% of 25 expenditures, 42% of 26 expenditures. Library fund ended at 35% fund balance. Saw improvement in municipal rec up to 23% as we discussed. Airport has 15 million in fund balance available for their local match for construction projects. Same with transit, they have 5.6 million for capital. The CIP, 311 million set aside as part of their CIP plan. We had the one bond issue for the relocation park maintenance building. Parking has 15.6 million in reserves. Electric and sewer both increased their reserves. They're servicing their outstanding bonds. Saw an increase in self-insurance cash reserves, about 2.2 million. And equipment revolving increased from 11.3 to 12.3. I guess we'll see if there's more questions.

ANY QUESTIONS? ANY QUESTIONS? COUNCIL MEMBER MILLER. COUNCIL MEMBER MILLER.

SO I KNOW YOU TALKED ABOUT THIS SO I KNOW YOU TALKED ABOUT THIS A LITTLE BIT AT THE BEGINNING, A LITTLE BIT AT THE BEGINNING, ABOUT THAT MORE STRIKING INCREASE ABOUT THAT MORE STRIKING INCREASE PARTICULARLY IN POLICE. for the actuals, where did the budgeted 2025 come out? I know in the past we've budgeted lower for overtime and then it's come out actually higher. So can you talk about like any impact from police overtime or unanticipated budgeted expenses?

So correct me if I'm wrong, but I think we've finished under budget in police overall. So it was a planned increase, but we, we had a couple of things like the Sabita, which was that subscription based it arrangement that was not really anticipated as part of the budget, because that's more of a accounting reporting entry. But I think over time, we may have been a little higher, but we did also get additional revenue sources to offset that from the off-duty security services that the police were providing.

And I guess a question for finance. Where would the 2026 budgeted bar end up in that chart? Is that like a new baseline? Where are we for the 2026 approved budget of that police bar on slide 49? It looks like it's around 46 million and 25. Yeah, so like is that a new normal or is that just going to be a blip when we look at it in future years?

I would say 2 million of that is a one-time increase, but the rest of it was employee costs. I mean some of it might have been overtime, but I think the market rate adjustments from what my understanding was in our discussions was fairly significant.

There was a $5 an hour market rate adjustment.

44 million is a new baseline reset, roughly.

I'm looking for that in the budget right now. It's a different document.

If you're looking at the budget book, it's multiple departments you gotta add together too, so it makes it a little bit harder, because we combine this for reporting purposes. But I think they could probably get that to you.

We can discuss that in the next item as well. Any other questions on the audit? Seeing none, thank you, Mr. Boynton. Great job as usual.

Thank you. Thank you very much. I appreciate it.

We will move on to our item A2, which is the 2027 recommended supplemental budget. Ms. Selms.

Council President, it would be okay if I sat here since we can't actually view it on that screen. I DON'T WANT TO STRUGGLE WITH BACK AND FORTH. CAN YOU HAND ME THAT? THANK YOU. TRY TO MAKE SURE I'M TALKING IN THE MICROPHONE. AND NOW I JUST NEED TO OPEN MY POWERPOINT. JUST GIVE ME ONE SECOND.

WE ARE FIVE MINUTES AHEAD OF SCHEDULE.

GREAT. THAT MEANS I CAN TRY TO GET US 15 MINUTES AHEAD OF SCHEDULE BY THE END OF THIS. IT'S A BEAUTIFUL DAY.

IT'S NOT JUST DEPENDENT ON YOU.

ALL RIGHT, WE ARE HERE TO TALK ABOUT THE 2027 RECOMMENDED SUPPLEMENTAL BUDGET. I WILL TRY TO USE A MORE EXCITING BUDGET VOICE THAN I HAVE IN THE PAST. I'VE BEEN TOLD BY SEVERAL PEOPLE THAT IT'S VERY TIRING TO LISTEN TO MY BUDGET PRESENTATION. SO I'LL TRY TO KEEP EVERYONE ENGAGED IN THE FIRST DETAILED LOOK AT WHERE WE'RE SITTING WITH THE RECOMMENDED SUPPLEMENTAL BUDGET. A COUPLE OF THINGS THAT WOULD BE HELPFUL FOR YOU TO BE CONSIDERING, DOESN'T MEAN YOU CAN'T CONSIDER OTHER THINGS, IS WHETHER OR NOT WE WANT TO CONTINUE TO FUND STREETS AT THE LEVEL THAT WE HAD INCREASED IT TO WHEN WE ISOLATED THE LOCAL GOVERNMENT AID THERE, ABOUT $1.2 MILLION, OR IT COULD BE ANOTHER AMOUNT. PEOPLE AREN'T AS COMFORTABLE WITH THAT. THAT WOULD BE INCREASING THE LEVY BEYOND WHAT IS REPRESENTED HERE. WE WOULD NEED TO KNOW THAT SOONER THAN LATER BECAUSE ONCE YOU ESTABLISH YOUR PRELIMINARY LEVY, IT CAN GO DOWN OR STAY THE SAME. IT CANNOT INCREASE IN THE NEXT YEAR. ALSO, WHETHER OR NOT YOU WOULD WANT TO IMPLEMENT A CONVENIENCE FEE ON CREDIT CARDS, WE DO NOT HAVE ALL THE DETAILS ON EXACTLY HOW WE WOULD RECOMMEND THIS. FINANCE IS ACTIVELY WORKING ON But if we want to absorb it in the general and the levy funded funds I would say that one of the things that increases the cost of golf for example is the credit card team Now it's gone completely. I don't know I THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. THANK YOU. BUT WE ALSO HAVE TO CONSIDER FOR EXAMPLE IF REVENUE INCREASES BEYOND THE MARKET YOU MAY ACTUALLY GET LESS REVENUE IF YOU HAVE LESS USERS OF A FACILITY AND BE UTILIZING MORE LEVY IN ORDER TO OFFSET BECAUSE WHEN THERE IS A MARKET FOR ALL OF THESE THINGS AND WE HAVE TO BE COGNIZANT OF THAT. Just a reminder, we've been working on this, and a big thank you to Rachel Hodick, Josh Doerr, Esten, to Brian, Aaron, and all the department heads and budget gurus that have been working on the budget since February. Really, they've been working on this budget since February of 2025 because this is the second year of a two-year budget. The last time you were here talking about budget was on April 13th. We did cover a few of these things. AND THEN WE'RE HERE TO REVIEW THE AUDIT AND THE BUDGET, TWO WONDERFUL FINANCIAL TOPICS ON THE SAME DAY FOR THOSE WHO LOVE IT. AND WOW, THIS IS GOING TO BE INTERESTING. DID JUST WANT TO REMIND YOU WE CURRENTLY HAVE SCHEDULED FOR YOU TO HAVE SEVERAL MORE STUDY SESSIONS SO WE HAVE TIME BUT IT'S HELPFUL TO BE ABLE TO DELVE DEEPER IF YOU WANT MORE DEPTH ON THE 24TH OF AUGUST AND SEPTEMBER 14TH AND THEN AGAIN I MENTIONED APPROVAL OF THE PRELIMINARY LEVY IS SCHEDULED FOR SEPTEMBER 21ST AND A BUDGET HEARING TO ADOPT THE FINAL BUDGET SCHEDULED ON DECEMBER 7TH. SO THE SUPPLEMENTAL BUDGET PROCESS REALLY FOCUSES ON THINGS THAT WE EITHER WEREN'T PLANNING FOR OR THINGS THAT WE NEED TO ADJUST, MINOR THINGS. SO REALLY REVISIONS, NOT SIGNIFICANT CHANGES, ALTHOUGH YOU ARE ABSOLUTELY ABLE TO MAKE SIGNIFICANT CHANGES IF YOU LIKE. THE SUPPLEMENTAL BUDGET REQUESTS HAVE BEEN ALL REVIEWED. THERE ARE NO NEW DECISION PACKAGES INCLUDED HERE, ALTHOUGH THERE ARE SOME SLIGHT ADJUSTMENTS THAT ARE REPRESENTED THAT WE TALKED ABOUT ALSO IN APRIL. AND THEN WE DON'T UPDATE THE SIX-YEAR CIP. SO WE TEND TO STAY WITH WHAT THE CIP WAS AND WE DO THAT EVERY TWO YEARS. So what you can see here is that right now, in the recommended supplemental budget, we have a tax levy of $124,901,338. That is a year-over-year increase, not a property tax rate, of 5.59%, which is less than what you saw in the trend. The trend that we were looking at last year was 7.4%. SO WE'VE HAD SOME POSITIVE CHANGES WITHIN OUR BUDGET ASSUMPTIONS, BUT NOT ALL OF THEM WERE POSITIVE. THE GENERAL FUND BUDGET, WHICH IS VERY RELIANT ON THE TAX LEVY AND HAS MANY 24-7 SERVICES IN IT, LIKE POLICE AND FIRE. OFTENTIMES PUBLIC WORKS CAN GET WRAPPED UP INTO 24-HOUR SERVICES TOO, DEPENDING ON THE WEATHER. THAT IS SITTING AT $141,609,000 AND CHANGE. And that is actually a pretty small increase, about 2.94%. Part of that is because the actual changes to employee services were less than what we had anticipated based on movement within, we budget for a position at the rate that it's AND SO IF SOMEBODY, FOR EXAMPLE, RETIRES, LEAVES, IF WE HIRE A NEW PERSON, SOMETIMES THAT CAN HAVE POSITIVE IMPLICATIONS, AND WE ALSO HAVE BEEN HAVING LOWER COSTS RELATED TO SOME OF OUR HEALTH INSURANCE. SO WE'VE HAD SOME POSITIVE THINGS, BUT THAT ALSO CAN SWING THE OTHER WAY IN THE FUTURE, SO JUST ALWAYS GOOD TO KNOW THAT WE WOULD TYPICALLY BE IN A TREND OF ABOUT 4 OR 5% FOR THE GENERAL FUND, BUT SOME POSITIVE THINGS HAVE DEVELOPED. THE ACTION PLAN, WE HAVE REVIEWED THAT ON FEBRUARY 23. THE NEXT UPDATE IS ON AN AUGUST STUDY SESSION, SO IF YOU'RE LOOKING FOR SOME OF THOSE PERFORMANCE MEASURES RELATED TO THE ACTION PLAN FOR YOUR STRATEGIC PRIORITIES, AND AGAIN, THE SUPPLEMENTAL BUDGET HEARING AND ADOPTION SCHEDULED FOR DECEMBER 7. So the tax levy, year-over-year increase, so the dollar amount needed if all of these things are funded, is about a 5.59% increase as compared to what was collected in 2026, the current year. They don't reflect those discussion items that I mentioned. So if you were going to continue to absorb the credit card fee, we would need to adjust the levy slightly for the levy-funded accounts, or people aren't going to be able to POTENTIALLY COMPLETE ALL OF THE PROJECTS THAT THEY INTEND IN THEIR BUDGET. LOCAL GOVERNMENT AID IMPACT TO STREET RECONSTRUCTION IS ALSO NOT INCLUDED IN THAT 5.59%. AGAIN, THE PRIOR TREND WAS SHOWING THAT WE WOULD BE ABOUT 7.4% UP IN THE LEVY, BUT WE'VE HAD SOME POSITIVE DEVELOPMENTS IN BASICALLY HOW YOU WERE DOING YOUR FINANCIALS. YOU MIGHT RECALL ALSO THAT THIS IS THE SECOND YEAR WHERE WE HAD ADJUSTED THE ALLOCATIONS, SO THAT'S A POSITIVE TO THE LEVY. WE DID LEAVE PARKING STORM AND SEWER AT 2%. YOU DISCUSSED THAT WHEN YOU WERE TALKING ABOUT YOUR PAYMENT IN LIEU AND THAT MAYBE THEY SHOULDN'T BE THE SAME FOR ALL, BUT WE ALSO HAD INDICATED WE WOULDN'T BE IMPLEMENTING THOSE UNTIL 2028. So we've had positive development on some of our medical side. And it does include what you discussed in April, which is a max of $150,000 for golf operations. There's also $200,000 that goes for capital at golf. So it's got the max there. 3% increase to temp salaries. We do not always adjust that every year, and that creates challenges over time to be able to actually have the number of hours worked that are necessary for our temporary and seasonal work that happens. The Heartland Training Facility, we have some costs we need to absorb in the near-term property tax payments that will fall off but are currently going to be assessed, and then some adjustments for being able to maintain the facility. um this third assistant city attorney too is an adjustment that is a correction from a prior year when we made some adjustments but actually didn't include the position in the budget building automation specialist and facility supervisor reclass and in addition of a position those are funded through energy savings so offset by by savings and utility costs and then you will recall that we also talked about the decision package from police THAT ADJUSTED FROM HAVING TWO OFFICERS TO HAVING ONE OFFICER AND A COMMUNITY OUTREACH SPECIALIST. SO THAT'S ALL WITHIN THAT DOLLAR AMOUNT. SOMETHING THAT YOU COULD USE AS A DASHBOARD, BUT YOU DON'T HAVE TO, IS THE FUND RELIANCE ON THE TAX LEVY. THESE ARE NOT IN PROPORTION TO ONE ANOTHER. FOR EXAMPLE, THE AIRPORT FUND IS ABOUT $6 MILLION ALL IN FOR THE OPERATIONAL FUND AND THE CITY FUNDS ABOUT $650,000 OF UTILITIES AND CUSTOMS. But you'll recall the general fund is much larger, about $125 million of tax levy in the general fund. So these aren't in proportion to one another. They're just in proportion to the total fund that you're looking at here. So DMC projects do not have tax levy towards them. Library is very... ON PROPERTY TAX IN LARGE PART BECAUSE LIBRARIES ARE GENERALLY FREE. SO TO FUND THE OPERATION, IT'S GENERALLY GOING TO BE FUNDED THROUGH GENERAL PROPERTY TAX. AND YOU CAN SEE DEBT SERVICE ON THERE, ABOUT 34% OF THAT IS RELATED TO TAX LEVY. SO THE REST OF THAT IS FUNDED BY SOME OTHER REVENUE SOURCE, IF THAT'S HELPFUL. HOW DO YOU ROLL UP TO 5.59% INCREASE YEAR-OVER-YEAR? YOU CAN SEE THE EMPLOYEE SERVICES IS MUCH LESS THAN IT TYPICALLY WOULD BE, IN PART BECAUSE WE HAD POSITIVE DEVELOPMENT THERE. AGAIN, THAT COULD CHANGE. IF MORE PEOPLE START TAKING HEALTH INSURANCE, THEN WE WILL HAVE HIGHER COSTS. YOU HAD A REDUCTION, I WOULD SAY, IT WENT UP BY ABOUT .24% BECAUSE WE NO LONGER HAVE SOME OF THAT HOLISTIC BUDGET STABILITY FUND. YOU'LL RECALL THAT THE COVID DOLLARS TO BE ABLE TO MITIGATE THE COSTS OF SORT OF COMING OUT OF A PAUSE IN OPERATIONS AND A 0% LEVY. THEN WE HAVE THE EQUIPMENT REVOLVING STABILIZATION, SO WE'RE TRYING TO CONTINUE TO SLOWLY INCREASE THE AMOUNT WE'RE PUTTING INTO THAT FUND BECAUSE EVERYTHING IS COSTING MORE. WE DO ALSO CHARGE DEPARTMENTS FOR SURPLUS VEHICLES THAT WERE NEVER PURCHASED THROUGH THE BUDGET PROCESS, SO TO ENCOURAGE FOLKS TO REALLY THINK ABOUT WHETHER OR NOT THEY NEED THAT VEHICLE. CAPITAL IMPROVEMENT PLAN, SMALL, VERY SMALL INCREASE THERE, AND THEN other which i think i had written down in the powerpoint but we'll have to phone a friend if anyone asks me what that is and then the decision packages that you see on future pages are about 1.15 percent of that year-over-year increase in levy amount SOMETHING POSITIVE, WE DO HAVE NEW CONSTRUCTION THAT'S ANTICIPATED IN THE ESTIMATED MARKET VALUE. SO ANY INCREASE OR EVEN IF YOU JUST HAVE THE SAME LEVY IS FIRST ABSORBED BY THE NEW CONSTRUCTION. AND THEN VALUATION ADJUSTMENT, WHETHER THAT'S COMMERCIAL, RESIDENTIAL, APARTMENT, MULTIFAMILY, IS GOING TO ABSORB THE REST OF THE INCREASE BASED ON THE VALUE OF EACH PROPERTY. SO IT IS JUST ALWAYS IMPORTANT EVERY YEAR THAT THE PERCENT INCREASE THAT WE TALK ABOUT WHEN WE TALK ABOUT THE LEVY GOING UP IS NOT THE RATE THAT YOU WILL SEE ON YOUR BILL. IT WILL PRIMARILY DEPEND ON HOW MUCH YOUR VALUATION CHANGED RELATIVE TO EVERYONE ELSE IN YOUR CLASS OF PROPERTY AND THEN WHETHER OR NOT YOU'RE ALSO HAVING SOME OF YOUR HOMESTEAD VALUE FALL OFF BECAUSE YOUR VALUE OF YOUR PROPERTY IS INCREASING. SOMETHING ELSE THAT'S POSITIVE IS THAT WE DO HAVE TWO TIF DISTRICTS THAT WE WOULD ANTICIPATE BEING DECERTIFIED AT THE END OF THE YEAR, SO YOU CAN SEE ABOUT $470,000. THAT ALSO WILL IMMEDIATELY ABSORB ABOUT $470,000 OF ANY INCREASE TO THE LEVY BECAUSE IT'S NOT JUST NEW CONSTRUCTION, IT'S SORT OF LIKE HAVING NEW CONSTRUCTION, BUT THE COUNTY DOESN'T KNOW THAT YET, SO THE PRIOR SLIDE DOES NOT INCLUDE THAT. SO ABOUT A LITTLE OVER A QUARTER OF ANY INCREASE IS GOING TO BE ABSORBED BY NEW CONSTRUCTION OR THE DEED CERTIFICATION OF THOSE TWO TIF DISTRICTS.

ADMINISTRATOR ZEMES, CAN YOU CLARIFY? SO THE 466 THAT'S ANTICIPATED FOR TAX LEVY BECAUSE OF THE TIF DISTRICTS BEING COMPLETED, IS THAT INCLUDED IN THE TOP LINE

IT'S GOING TO ABSORB THE INITIAL TAX. IT'S GOING TO HELP OFFSET ANY IT'S GOING TO HELP OFFSET ANY IMPACT TO EXISTING PROPERTY IMPACT TO EXISTING PROPERTY OWNERS. OWNERS. IT WILL MUTE THE IMPACT. IT WILL MUTE THE IMPACT. THIS IS THE LAST YEAR YOU WILL THIS IS THE LAST YEAR YOU WILL EVER SEE THIS SLIDE. WE DID DECIDE TO PUT IT IN JUST BECAUSE WE THOUGHT WE SHOULD GIVE IT A GOODBYE. SO OVER TIME, OVER THE LAST SIX YEARS ALMOST, YOU HAVE BEEN ABLE TO OFFSET THE COST OF THE LEVY WITH THOSE FUNDS. SLOWLY GOING DOWN OVER TIME, BUT THAT TIME IS NOW OVER. SO YOU WON'T SEE THIS SLIDE AGAIN. BUT JUST KIND OF GETTING TO SOME SPECIFICS HERE ABOUT THE LEVY AND WHETHER OR NOT THE 5.59% IS WHERE YOU WOULD WANT TO STAY OR WHETHER YOU HAVE CONCERNS ABOUT THAT, IS WHETHER THERE'S SUPPORT FOR IMPLEMENTING A CONVENIENCE FEE ON THE CREDIT CARD USAGE OR INCREASING THE TAX LEVY BY ABOUT $175,000. WE DO HAVE CREDIT CARD FEES THAT ARE NOT LEVY FUNDED, BUT REALLY WE'RE CONCERNED ABOUT THE LEVY AT THIS POINT AS WE APPROACH SEPTEMBER. THEN ALSO A LOCAL GOVERNMENT AID, WHETHER OR NOT YOU WOULD WANT TO FUND A LITTLE OVER A MILLION DOLLARS OF BITUMINUS WITH A LEVY ADJUSTMENT OR PERHAPS YOU WOULD WANT TO GET THERE OVER TIME OR NOT. WE DID BREAK DOWN THE CREDIT CARD FEES SLIGHTLY DIFFERENTLY THIS TIME SO PERHAPS ONE OF THE MORE IMPORTANT PLACES TO LOOK IS THE TAX LEVY LINE WHICH IS THREE LINES FROM THE BOTTOM. A MIDDLE SHADE OF BLUE. YOU CAN SEE THAT THE BUDGET THAT WE HAVE IN 2027 IS ABOUT $81,000 BUT THE ACTUAL COST OF THE TAX LEVY IS ABOUT $243,000. SO WHAT THAT MEANS AND A LOT OF THIS HAPPENS YOU CAN SEE IN BUILDING AND INSPECTION SERVICES AND IN MUNICIPAL RECREATION IS THAT THE LEVY IS ABSORBING THOSE COSTS. THEY HAVE TO SPEND LESS OUT OF THEIR PLANNED BUDGET BECAUSE THEY'RE PAYING MORE CREDIT CARD FEES THAN WHAT THEY HAVE ALLOCATED IN THAT LINE ITEM.

I SEE A HAND UP. MAYOR NARDIN.

So I know this is happening all across the country. You go to stores now, and there's often a credit card fee. My question is, we also don't take cash at many places now. So we're in this weird place where we've sort of pushed people into doing ARE WE WANTING PEOPLE TO WRITE CHECKS INSTEAD? HOW ARE PEOPLE, BECAUSE IF WE DON'T COVER THIS, THE PEOPLE CONSTITUENT IS GOING TO. WE MAY NOT CALL IT A TAX, BUT WE'RE SAYING YOU'RE GOING TO PAY A FEE TO COVER THE COST OF YOUR CREDIT CARD WHEN WE'RE GIVING THEM LESS AND LESS OPTIONS. YOUNG PEOPLE DON'T EVEN HAVE CHECKS. THEY DON'T EVEN KNOW HOW TO WRITE ONE.

PERHAPS MS. WOODWARD COULD RESPOND, BUT FOR EXAMPLE, THE BUILDING INSPECTION SERVICES, WHICH IS A PRETTY LARGE FEE ABSORPTION, THEY DO ALLOW PEOPLE AND ACTUALLY ENCOURAGE PEOPLE TO SET UP AN ACCOUNT, WHICH YOU JUST NEED YOUR ACCOUNT NUMBER FOR. YOU DON'T NEED A CHECK, IF I

AND WE DO ALSO ACCEPT CHECKS SO PEOPLE CAN DROP OFF AND PAY THEIR FEES VIA CHECK. MOST OF THEM PAY ONLINE AND USE THE CREDIT CARD PROCESSING BUT THEY CAN PAY AND WE ALSO WORK WITH SOME OF THE LARGER TO SET UP TRUST ACCOUNTS FOR WHEN THEY NEED TO PAY FEES.

AND THE ALTERNATIVE IS THAT EVERYONE THAT LIVES HERE IS HELPING TO PAY FOR SOMEONE TO USE THEIR CREDIT CARD OR PEOPLE HAVE THE CONVENIENCE OF THEIR ABSORBING THE CONVENIENCE FEE FOR THEIR CREDIT CARD.

And unless I didn't hear correctly, most of us have the ability to bill pay directly out of our accounts without, that's no extra charge.

Yes, that's correct.

And I would have to ask Mr. Whitman if, what they do at parks.

Very similar. Okay, all of our participants have the option to pay in cash, check, or credit card. Most of our participants in activities prefer the online. They're willing to pay the credit card fee. We do have for picnic shelter reservations, quite a few groups show up in person just because they quite often have to do business with both Parks and Recreation and the Clerk's Office, and we get a lot of checks for those services.

Well, we have Councilmember Miller first.

It's fine. It might be the question that Mayor Norton is asking too. I know we've gone through some of this, but line by line, which of these would have an alternative to a credit card payment? So parking, building inspection services, yes. Municipal recreation, yes. But then the other ones.

I BELIEVE THE CITY CLERK, YES. BUT THE CITY CLERK IS SITTING BEHIND ME. THE CHALLENGE WE HAVE WITH PARKING, AND I BELIEVE PARKING TICKET HAS THE OPTION TO PAY WITH A CHECK OR CASH. THAT'S ALSO CITY CLERK USUALLY. AND THEN THE MAIN ONES THAT ARE MORE CHALLENGING WOULD BE PARKING, BUT WE ALSO HAVE AN ARRANGEMENT WITH A SERVICE, AND IT'S NOT FUNDED WITH LEVY FUNDING. THE PRIMARY THINGS THAT WE HAVE MOVED TO ONLY USING CREDIT CARDS ARE THINGS LIKE THE PARKING ROOMS.

WE ALSO SUBSIDIZE QUITE A BIT OF PARKING BY FREE HOURS.

HAVING CERTAIN HOURS BE FREE, YES.

I WAS JUST LOOKING FOR CLARITY WHEN WE WERE TALKING ABOUT PEOPLE PAYING ONLINE. WHEN YOU'RE PAYING ONLINE, YOU'RE STILL USING YOUR CREDIT CARD OR GOING THROUGH YOUR BANK. ARE WE NOT OFFERING FEES FOR THOSE? IT'S ONLY LITERALLY A TRANSACTION AND A MACHINE THAT

IT'S IF YOU USE YOUR CREDIT CARD, WHETHER THAT'S ONLINE OR IN PERSON. IF YOU USE A DEBIT CARD, THAT'S A DIFFERENT SCENARIO. IF YOU PUT IN AN ACH ONLINE, THEN THAT ALSO DOES NOT HAVE A FEE. FOR EXAMPLE, WHEN ROCHESTER PUBLIC UTILITIES, BUT EVERY CREDIT CARD IS SLIGHTLY DIFFERENT. SO THIS IS, I THINK THERE'S LIKE 30 AGREEMENTS THAT MR. ANDERSON IS WORKING THROUGH. WHICH IS WHY WE DON'T HAVE A DETAILED RECOMMENDATION FOR YOU TODAY. HOWEVER, IF WE DON'T INCREASE THE LEVY FUNDED ACCOUNTS FOR THOSE CHARGES, THEN THE MAJOR IMPACTS ARE GOING TO BE BUILDING INSPECTION SERVICES, NOT HAVING, REALLY HAVING THE BUDGET THAT YOU'VE APPROVED. NOT REALLY HAVING THE BUDGET THAT YOU'VE APPROVED AND THE CITY CLERK PARKING TICKET COLLECTIONS AND WE ALWAYS LIKE TO HAVE MISCELLANEOUS SO I HAVE TO PHONE A FRIEND. JUST VARIOUS CHARGES THROUGHOUT THE CITY WHERE SOMEBODY MIGHT COLLECT A FEE.

COUNCIL MEMBER POMER.

So RPU has a fee and they need to set that themselves. But there's a cost to us to have me show up at building and safety with cash or check because then somebody has to count it, somebody has to drive it down to the bank and deposit it at the bank and then come back. And so do we know the cost of doing that? Or do we just assume everybody's gonna have that and it's just an added cost if more people write checks?

Mr. Anderson.

Yes, thank you, Council President. We're aware that there's a fee for dealing with cash and there's, you know, a fee, a telecheck and for processing checks. So there's basically a fee for everything. One thing that we are taking a look at or what, you know, my initial analysis has found out that even if we are able to pass along, so say there is about four major vendors that I'm currently taking a look at for the processing I was able to speak to one and they said well we we only pass along a three percent that's it we don't go any higher than three percent even though the state law says five percent but I think our fees that we are absorbing are closer to like five five and a quarter percent so even if we do pass along a three percent fee for again my initial analysis I think we're still absorbing some of the fees

I guess my point is there's at least five departments that probably somebody has to add up the checks and the cash and take it to Wells Fargo and deposit it and come back. Correct. We don't have cheap employees, and so there's a cost to do that.

For a lot of it, I think there's a service that does that for us, though, too.

They do that for free?

A security service.

No, not at all.

And I haven't had time to look into that one yet, but. I'm aware of what you're talking about, especially when it comes to parking and dealing with the change in the money.

Yes, we're still looking at that. I'm all for charging the fee. I mean, everybody's used to that in restaurants and businesses, so I'm fine with that.

Council Member Miller.

Yeah, I'll just provide feedback. I think this makes sense. I'm in favor of it, especially for these areas that have alternatives that people could avoid the fee if they choose.

Council Member Fredericks.

Actually, I was pointing to Keene.

Oh, Council Member Keene.

Yeah, yeah, again, I wanna just, I think the goal here isn't so much to have them pay a different way or it isn't to whether they absorb the thing or not, it's that the fees go away and that we don't have them anymore. I think right now, the way I understand what RPU, they didn't try to collect the extra 3% or $3 to offset. They said, do what you wanna do, whether you wanna pay with the credit card, that's fine. We're not trying to change your behavior, We're just trying to make sure we cover our costs. And I think we're doing the same thing here.

That's what our intent is, is that we don't pass along 600 and, well, I guess I have to take parking out, about $300,000, a little over $300,000 of what is the convenience of using your credit card to every other taxpayer.

Yeah. The one that I'm still getting struggling to get my head around, I know it's a enterprise, but parking, where that transaction that's happening real time, I don't know what kind of, I thought that is really, it's almost like the MCC saying we only want credit cards because we don't have a method of handling the other ways.

Correct. That's why we're not recommending it for non-tax levy funded. And we're also in a five-year contract with IPS. So, and the way that they apply the fee is very different and whether they would be able to do that with their current system is a question mark.

SO I'M TRYING TO UNDERSTAND THE DIFFERENCE IN THE 2027 BUDGET, ARE WE TALKING ABOUT $81,000 OR THE TWO OR 300,000?

WHAT WE'RE SAYING IS IF YOU DON'T CHARGE A CREDIT CARD FEE, WE'RE $175,000 SHORT OF LEVY IN ORDER TO BE ABLE TO FUND ALL OF THE THINGS THAT ARE LEVY FUND, LIKE THE ACTUAL BUDGET THAT YOU WOULD BE APPROVING FOR BUILDING INSPECTION SERVICES, MUNICIPAL RECREATION, CITY CLERK, PARKING TICKET COLLECTIONS WHICH DOESN'T HAPPEN IN PARKING. And miscellany, whatever miscellany, all the other little things, which is maybe not as big of an issue, because it's probably across multiple departments, then they will not act, then they're going to be overspending their budget by probably more than $115,000, because people are paying by credit card more and more and more. So they're either over, but we don't let them overspend their budget. So they have to not spend on other things that they were anticipating, sort of like shorting their budget by the dollar amounts in the third column.

Okay.

The thing that I thought Council Member Palmer was trying to get towards is there is this other side of this, and this is why places like MCC have said no cash, no checks, credit only. Is that an option that we've looked at for some of these things and then just set our prices accordingly?

It's something that you could look at.

Yeah, I'm not suggesting it, but I'm trying to, except my view is we already have those methods in place. We're just using them at 20% instead of 50% of the transactions. And I think that's where we get to. I think most things would go towards a bank transfer, which is what our PU has moved much more to do.

These are also not things that you pay monthly, typically.

Right. That's what bothers me about these, that they're not things that you set up on a reoccurring basis, like a monthly charge. A lot of them are one-time fees for, like, the clerk's office's parking tickets, where those are harder on me.

I would say it's not like we've hired a cadre of people to, other than having a security service that takes the actual bag of money, we're not hiring people to, like, handle that. It's a piece of some other job they're doing that means they can't do something else. I'm not saying that's good or bad. It's just somewhat of a cost of doing business.

The process is already in place and being paid for unless we stop taking cash. I do think that is an offset. I'm still trying to get comfortable with this because I do find it to be... And I think we have to be telling them that we're charging them this fee. And we had trouble with that. We're getting people to hear that before the fee started showing up. So I think if we do this, we should expect some blowback of people saying, like, what are you charging me for? I don't know what's happening here. So again, I understand the logic behind doing it. I think there should be some sort of communication associated with it. But yeah, I do support the idea of not absorbing the credit fees across the entire levy payers and focus the fees on where they're coming from.

Council Member Fredericks.

If I'm hearing that we're eating five and a quarter percent and we're going to ask for three, that doesn't make a lot of sense to me. I mean, ask for four because they have the option to ACH for nothing, correct? There's no fee for that?

There's a limit with one of the providers that we have, and again, I haven't had access because it's under a previous person's name, so they said they only go up to three, so I can't tell them to go to four because they won't.

Generally speaking, though, you have the opportunity to ACH or use a checker. and you don't have a fee, correct?

With U.S. Bank, not our primary for Wells Fargo.

I feel like we're dancing right now. Well, I don't have all the information to present it to you, so. Well, the point I'm making is it just seems like typical government fashion. Oh, we're losing 5.2%, but we're going to charge three, and we're going to make up for it in volume. But it just doesn't make sense to me, so.

I think the concern is if you have a credit card provider, you either have to not accept that type of credit card if they are unwilling to pass through more than 3%, or you have to have multiple different fees, which seems very confusing.

Yes, it does. That's why I'm saying a 4% makes more sense because you see that very often.

Then you'd have to not allow people to use the type of credit card that only allows you to recover three.

Hmm, fun.

Council Member Palmer.

I'm not particularly sure what you're actually saying, but I don't want to, this is not a profit center. This is just to cover the cost to make it fair for all people who actually pay. So that to me is what you're trying to do. It's not to make a little extra money. No, I'm not trying to cover. Okay. That's my point is. You know, in building and safety, I know there's some guys will use their, some people will use their credit card only because they get miles. And they'll do that. Or if you get a building permit for $100,000, I don't particularly want them showing up with cash. And so, you know, I mean, you know, they can write a check.

I believe there's a certain amount where we don't allow them to provide cash. And actually, maybe even most of those folks set up a customer account.

Okay. On this, I am comfortable with the convenience fee. It sounds like a reasonable decision. Any more on the convenience fee issue? We do have the other issue that staff is asking us.

I'll just show you this slide and move on.

about and which I think is probably has a little more impact.

So yes, Councilmember Keene. Just on the convenience fee, I want to just to clarify, RPU didn't charge a percent, they charged a flat fee, which is a little, it's much simpler, but it does have the bad effect for the lower bills paying a higher percent. So that's something that we should be aware of. The percents are probably more, are things better, but they are more complicated to explain.

Yes, and some of these fees are like $25. So if you have 3% on a $25 bill, it's very small.

If you have 3%. Thank you.

A chart that Binance made that's beautiful. Local government aid since 2019. It's just moving along. I told you I was going to keep you awake this time. Yes, you can look at it online. It will be there forever. So since 2019, this is what the local government aid has looked like. So wild vacillations in how it has changed, but that is direct relationship to the formula. I guess one positive is we don't do well in the formula because we have a lot of development in Rochester and not every city has that. So not every city has that new construction. Not every city has had new construction for every year since 2019 or even since 2000. SO IT IS SET UP AS AID. WE DID HAVE THE HOLD HARMLESS THAT HAPPENED IN 2024, AND NOW WE ARE GOING BACK TO 2023 BECAUSE THE HOLD HARMLESS IS OVER, SO YOU CAN KIND OF SEE THAT IN THAT CHART. SO WHAT WE DID IN 2024 WHEN WE HAD THE UNEXPECTED DOLLARS COME BACK THROUGH THE LEGISLATIVE PROCESS WAS ISOLATE THE VAST MAJORITY OF THAT TO INCREASE THE AMOUNT OF BITUMINOUS PAVEMENT THAT WE COULD PUT FUNDING TOWARDS EACH YEAR BECAUSE IT'S A CAPITAL PROJECT. IF YOU HAD PUT THIS TOWARDS TWO POLICE OFFICERS, TWO CARS, MAYBE AN ASSISTANT. now you have this new way of doing business and it's more challenging when it's an operational cost. Is this important to our operation? Yes. Is it, we did not have the same amount of funding going there before 2024. So that was about the total LGA reduction is a little over $1.2 million or 24% of the LGA. But WE HAD ABOUT 1 MILLION, A LITTLE OVER 1 MILLION ALLOCATED TOWARDS THE CIP PROJECT FOR ANNUAL BY TWO MINUTES STREET RECONSTRUCTION. THE REMAINING 166,000 IS ABSORBED IN THAT 5.59% LEVY ADJUSTMENT IN THE OPERATIONAL COST. THE 2007 CIP ALSO HAS 910,000 ALLOCATED SO THAT'S HOW MUCH WAS GOING IN BEFORE WE MADE THAT ADJUSTMENT FOR LGA AND TRIED TO ISOLATE THAT TOWARDS THE PROJECT SO WE MORE THAN DOUBLED HOW MUCH IS AVAILABLE IN ORDER TO BE ABLE TO PROVIDE THE MILL AND OVERLAY. THE STREET RECONSTRUCTION LINE.

CAN YOU HOLD A MINUTE, MS. ELM? COUNCIL MEMBER PALMER.

EXPLAIN TO ME HOW THE SALES TAX EXTENSION, WHICH IS NEW MONEY, IS ALLOCATED TO ROADS.

So the new sales tax is for reconstruction. This is sort of the annual maintenance of the roadways. And the way that that was worded, I might have to phone a friend because they don't have it in front of me, but it talked about reconstruction of roads. So you can't build a new road with it. And I would, I think the intent is that that's for major reconstruction projects, for example, center street.

Yeah, it is actually similar funding. I mean, again, you'll see in subsequent slides that we're still significantly behind our annual need in this space. But both are for street reconstruction. The sales tax, obviously, you're prioritizing projects. Some are larger reconstructions on state aid roads. There's a lot of emphasis on state aid roads for that. This is really emphasizing more residential road reconstruction. So areas that are in the 80% of our roadway network that don't have a funding source for reconstruction. So this basically brings your residential road reconstruction budget to zero. You don't have another funding source for that. Your state aid and your sales tax are predominantly focused on your larger streets. Not that you can't use your sales tax for collector streets, more residential streets, but it was designed to be more regional in nature when that was approved.

Well, the LGA, my understanding, if I remember correctly, is that a couple years ago we said don't put it in the budget because it's undependable, so we're going to throw it at the roads. That doesn't mean we're going to throw it at the roads all the time, but we have this reconstruction for sales tax extension. That's where that should be going to, and it shouldn't matter if it's a state aid road because we're getting state aid, and it should be for the residential jobs. And we're not building new roads with it. I mean, most of the developers build 90% of our roads. So I don't know why we would even consider adding more to the tax levy.

Yeah, Your Honor, this is for the existing residential roads that are due for reconstruction, that at some point, you know, the developers gifted us these 30, 40, 50 years ago, and there is a need at some point to reconstruct those roads. But, again, sales tax can be relevant here. It is helpful. That's a new funding source since we allocated this originally. And as City Administrator Zelms indicated very correctly, like, this was designed to not be impactful to operations when or if it went away, and it has gone away.

you

I'll just follow up. I mean, 36th Avenue out in northwest Rochester at Country Club Manor hasn't been rebuilt, and it's 65 years old. So at some point, we've been paying property taxes for that. We mill and overlay. Typically, what we're really replacing roads with is when the sewer or the water goes bad. And so then we're going in these neighborhoods, and they pay a small percent. But so I don't understand where the confusion is or why we'd want to add... More property tax.

Yeah, Your Honor, I'd maybe defer to the Public Works team on specific projects, but yes, utilities often drive reconstruction, but at some point, streets need to be reconstructed. Multiple factors in play for that, but at some point, you do have to ensure reconstruction, whatever the time frame is.

So just to clarify, Council Member Palmer's initial question. So are you saying we cannot use the sales tax funds that we have for streets for our mill and overlay in our residential streets?

Or do we not know that? Yeah. I mean, again, the team is prioritizing those funds. And they've allocated and recommended projects. And again, you still have a finite pool of resources there. But could you? Yes. Mill and overlay is generally well supported in the budget. Mill and overlay isn't a reconstruction. So you can't mill and overlay forever. At some point, you've got to reconstruct. But we have significant state aid dollars and other dollars in the CIP that are allocated for a fairly well-developed mill and overlay problem. This is, again, street reconstruction. At some point, you're going to need to do that, and you'll need it more and more in the future. Thank you.

Thank you. Mayor Norton, and then we have Councilmember Wall and Councilmember Keene.

So I'm glad we're having this discussion, although I didn't think we'd be having it quite in the detail we are today. Our road health has been a significant concern of mine, and I find myself agreeing with Councilmember Palmer, which he'll probably run from the room screaming because of this, but I actually think we have a huge city-wide problem with local roads. They are in horrible repair. Mill and overlay, in my opinion, has not been working well at all. I watched it on my own street and about one year it was a complete mess again. And the gal that was here from Urban whatever told us that we should consider not doing mill and overlay, that we should spend the money on reconstructing the street and then you've got another X amount of years. She made the comment that we might want to look at mill and overlay as not a good investment.

Yeah, you do need to do mill and overlay. It's a critical part of extending the life of a road to 50 to 60 years. So you actually, there is a whole formula for how you should do mill and overlay, fog seal, those kinds of things in order to push out the reconstruction. The issue is at some point you do have to reconstruct.

Because we have been doing mill and overlay so long and we're not doing the reconstruction on roads and instead we're waiting until... we're at a point where there are roads all over this community that are crumbling that need to be reconstructed. And that sales tax money that we collected In my opinion, when I went up and talked to the legislature, it was not about any major roads. It was about roads. And I think I thought, and I think the community thought, that meant their roads, too, that are crumbling and need work. And so I really hope we can get to the bottom of this and not just continue to rely on mill and overlay that just push the problem down further and further and further without really repairing it.

I don't want this to sound combative, but you have to do mill and overlay in order to maintain your streets. It is a critical part of the street maintenance program, and you have to fund reconstruction.

I understand that, but when we spend money on a mill and overlay again and again, and then you're in tearing up streets because of, as was mentioned, sewer and all the other things that are happening underground, we have spent a ton of money on roads that could have been used on a reconstruction project TO FIX IT ALL AND BE DONE WITH IT FOR 50 YEARS AND THAT IS NOT HAPPENING AND OUR ROADS ARE CRUMBLING AND PEOPLE ARE TIRED OF IT. I GET CALLS ALL THE TIME ABOUT THE ROADS ON PEOPLE'S STREETS.

I DON'T WANT THERE TO BE SUCH INACCURACY ON THE RECORD. YOU HAVE TO MILL AND OVERLAY IN ORDER TO MAINTAIN YOUR ROADS.

I THINK WE ARE NOT HERE TO DISCUSS THE MERITS OF MILL AND OVERLAY. WE ARE HERE TO DISCUSS WHETHER OR NOT WE WANT TO MAKE SURE To add to our levy, $1.2 million for the... reconstruction of roads however we do them and so the question and i think i'm hearing from the mayor i heard from from uh from council member palmer and i would agree myself is i would like us to look at that half cent sales tax road reconstruction fund and whether that is a place for us to go for this rather than tax levy so with that i'm going to GO TO COUNCIL MEMBER WALL AND THEN COUNCIL MEMBER KEENE AND COUNCIL MEMBER MILLER.

HOW MUCH ROAD RECONSTRUCTION OF 1.2 MILLION GET US?

And to clarify, we're looking at bridging the shortfall of $1,076,000. I'm not saying you have to do that. But I would need to have, I don't think Public Works is here.

Well, yes, they are.

Sorry.

So that's a great question. I don't know off the top of my head how many miles that will get us. But generally speaking, you know, again, this would cover what had already been.

Can you get closer to your microphone there?

Try and lean in.

There you go. So to answer your first question, I don't know exactly how many miles this will get us. I can talk to Dylan Dombrowski and get back to you on that. What this will cover is what has been covered by the LGA It's largely used in those projects in which there are assessments being applied and then the utilities are covering their portion of it and the remainder of that is what this fund is used for there are some limitations as Aaron had mentioned with the the local sales tax and trying to find the regional nature of that Recognizing it's not just strictly limited to regional but that does come into play as we evaluate that and so it would cover the existing portion of that keep in mind that based on the 2019 report we had a 16 to 20 million dollar annual shortfall this further makes that that even worse adding another million on top of that those numbers do consider the the local sales tax so it helps a little bit but it doesn't get us nearly as far as we need to to cover that gap

I THINK I CONFUSED THIS. THE $910,000 IS WHAT HAS ALWAYS BEEN IN THE BUDGET FOR THE MILL AND OVERLAY. THE $1 MILLION WAS ALLOCATED TOWARDS RECONSTRUCTION. SO I SORT OF BUNGLED THAT SLIDE AND I THINK I'VE CREATED A PROBLEM. I JUST WANT TO CLARIFY IT. THANK YOU.

AND IF I HEARD MR. PERISH CORRECTLY, WE HAVE ZERO BUDGETED DOLLARS FOR THIS ITEM BEYOND THIS $1,076,000.

Council Member Keene.

Yeah, I'm struggling with this one. Maintaining our streets is critical responsibility for infrastructure for any municipality. But I agree that when we had the hold harmless and we moved this into streets, it was so that it wasn't critically into the budget. Now we're using the activity of losing that and then putting it critically into the budget forever. I'd rather do this as more of a decision packet in 2027 when we're doing a full thing and lay it out against our other responsibilities and make sure it's that I don't like this feels like we're doing it as a one off.

Yes, I could appreciate that. And we wanted to make sure that you were aware of it. It is a policy item that we need a decision, like we don't want to make the decision for you, I guess. And so it also could be that you want to consider later on, whether during this budget process or in the future, that you would slowly get up to the million dollars or some other amount. So I mean, you don't have to replace the whole million dollars considering it wasn't there before 2024. You could consider whether, Mean you don't have to but you could consider whether you want to get there in four years or whether you want to get you know Wait till 2028 and then and move from there. Yeah

So that's my input that I would, but as far as this partial and things like that, I guess the other thing I want to throw into this, most of the reconstruction we do is through the enterprise things, the assets underground with be it storm sewer or water delivery or sewer. But right now we have an algorithm and a process that we share costs across those groups. And it's sort of bothersome that Public Works takes the lion's share of that because they have the finishing the road on top. Even though they're not generally the ones saying these are the roads that need to be reconstructed And I think there's some fairness there that we probably need to work out to be if you're the one saying This road needs to be reconstructed because we've had four water breaks in the last three years You shouldn't just have the responsibility of paying for your water line You should take more of the cost of driving this project and I think there's a right now there's a policy that exists across and it's across the enterprise funds like sewer and stormwater and And they pay a smaller percent. And I think this is one of the reasons why we do have roads that we look at and say, hey, we want to get to those. But we don't get to them because we only have enough budget work to do the work with the utilities that are driving. And those need to be done too. I'm not saying they don't need to be done. It's just we don't get to the other streets that we want to get to. And I think those are bigger sort of policy things that we need to work out. And I don't feel right approving this or giving the go-ahead that we need to move a new levy money into this for the 2027 supplemental budget because it's a supplemental budget and it doesn't have the rigor of all the other compares.

Councilmember Miller.

Yeah, I largely agree with that and I would also point to the fact that we've had a conversation about our trail networks and not having a sustainable funding source and I would like to look at this a bit more comprehensively of understanding how we're developing sustainable transportation funding sources for maintenance. I do think the urban three report is is helpful here because we have to understand our long term liabilities. We talk about annexation when we talk about new development. How are we generating sufficient tax base to pay for the ongoing maintenance over time? I WOULD WONDER EVEN IF OUR ACTION PLAN GIVES US AN OPPORTUNITY TO TIE SOME SORT OF MEASURE OF INCREASED TAX CAPACITY, NEW DEVELOPMENT, SOMETHING TO UNLOCK FUNDING AND PHASE THIS IN OVER TIME, BUT I WOULDN'T BE IN FAVOR OF JUST SHIFTING THIS TO THE LEVY RIGHT NOW.

ANY MORE ON THIS ISSUE? SEEING NONE, MR. LUKESTEIN, GO AHEAD.

I just have one quick clarification. I pulled up the quick budget. We still do have 910,000 in reconstruction that would be available. This is the million that was going to be covered by LGA. So there's still a small amount, approximately half that is already built in there that we could still advance some projects, but not as much as what we would like or had been planned. Thank you.

uh... councilmember palmer go ahead so if you live in a newer neighborhood in in they didn't do the inspections correctly you have a road that is standing water and people don't like that and so somehow we've got to go backwards and fix that from ten to fifteen years ago Superior Drive is an example of that. They had to re-dig Superior Drive up. They went down about four feet to get to good soil. And again, I'll go back to 36th Avenue. Literally was built the year I was born. And they haven't done anything but millinore relay and chip sealant. And so there's some problem with some of our roads. And some of the worst roads we have are roads that we inherited when we did the sewer project down in southeast Rochester. and they were annexed in and they have no sidewalk. They are very small roads. So not all roads are the same and not all the problem is the same. And so I agree with Mr. Keene. Let's look at a policy position next year and let's come up with a policy that works. And Mr. Miller's right. Our infrastructure on trails, it's 90 miles of trails and some of them need to be rebuilt.

So if it was built the year you were born, it must have been cobblestone, right?

It was dirt. Helpful discussion. So I'm hearing comfort in us continuing with the convenience fee for credit cards, but we will wait until 2028 and do work in between to talk about pavement overlay, both funding for streets, for trails, and also housing. WHETHER THAT'S ALL HOW MUCH IS ALLOCATED TO THE UTILITIES WHO YOU HAVE TO BUILD THE ROAD BACK ON TOP OF.

ALL RIGHT.

JUST A FEW MORE. I THINK I STILL MIGHT BE ABLE TO GAIN TEN MINUTES. BUT IT'S UP TO YOU. SO WE DON'T HAVE ANY CHANGES TO OUTSIDE AGENCIES HERE. YOU'LL RECALL THERE WERE SOME ADJUSTMENTS BETWEEN 26 AND 2027 AND WE DIDN'T DO A PROCESS THIS YEAR TO THAT IS INTENDED JUST TO BE SUPPORTIVE FUNDING FOR THESE AGENCIES. IT'S NOT INTENDED FOR THEM TO FULLY RELY ON IT. THE 2027 DECISION PACKAGES, WE HAD TALKED THROUGH THAT. ALSO, BASED ON THE CONVERSATION IN APRIL, WE DIDN'T ADVANCE ANYTHING REGARDING PUBLIC MUSIC. THESE ARE THE DECISION PACKAGES THAT ARE WITHIN BOTH THE LEVY AND NON-LEVY FUNDED FUNDS. THE SPECIFIC PACKAGES AND YOU CAN ALSO SEE THAT THE COMMUNITY SERVICE POLICE OFFICER AND ONE COMMUNITY OUTREACH SPECIALIST, THE FUNDING AMOUNT AND THE INFORMATION ABOUT THAT CHANGED THERE. I DID JUST WANT TO POINT OUT THAT THERE WAS A QUESTION EARLIER TODAY ABOUT IF YOU DIDN'T FUND ANY OF THE TAX LEVY SUPPORTED DECISION PACKAGES IT WOULD REDUCE THAT YEAR OVER YEAR LEVY INCREASE BY 1.94%. I DON'T KNOW WHERE I WAS GETTING MY MATH FROM EARLIER TODAY. BUT I GOT THIS FROM FINANCE AND IT'S RIGHT. AND THEN I ALSO DID WANT TO POINT OUT THAT WITHIN THIS, IF YOU LOOK AT THE THIRD LINE, THERE IS FUNDING THERE OF $700,000 THAT'S TO COMPLETE YOUR PROJECT WHICH IS CURRENTLY UNDERWAY SO IT WOULD BE CONCERNED IF WE CUT THAT. IF YOU DIDN'T REMOVE THAT, IF THERE'S ANY DESIRE TO REMOVE ANY OF IT, THEN YOU WOULD BE REDUCING THE LEVY ADJUSTMENT BY 1.35% IF YOU TOOK, IF SOMEONE, IF THERE WAS FOUR OF YOU THAT WANTED TO REDUCE ALL OF THESE DECISION PACKAGES.

I do, and I don't know if I should wait until Chief Franklin comes up at the fourth item here, but I did have some questions on both the community outreach officer and the officer position and kind of my, I'd like to have some clarity on currently I believe it's a part-time community outreach officer. And so are we adding a full-time to that? And my question is, you know, is that enough or is there more? And then I did have some questions on the issue of overtime that we heard earlier and what the department is doing to deal with that issue.

There you go. Council President is certainly willing to answer that now, or you can wait for the presentation. Why don't you go for it now? It's a budget issue. Okay, so in reference to the community service police officer, community services is just the division it's assigned to. So it is a full-fledged police officer. In our original budget request, we had two police officers requested to be assigned within our community services division, to be assigned to our community action team, which one of their primary functions is handling problem properties, but mostly one of their primary functions is dealing with people experiencing homelessness. As a result of hiring our embedded homeless navigator, Terry Dose, within the organization, I think we've more than proved concept, proof of concept of the value of that position alongside of police officers working hand in hand together. So we're gonna cover some of that in the presentation, but what you see in front of you is an adjustment downward from two officers to, we still feel we need the one officer to sustain the level of work that we have in front of us, but we are also asking for budgetary funding for that embedded homeless navigator in our organization currently that position is is funded through public safety funds that will expire at the end of the year so short of a budget allocation that position actually goes away in 2027.

So to clarify, so are we getting additional time resource for that role that... that's been filled so valuably?

It's a great question. So what this is reflective of, it would be a net neutral for the community outreach specialist because we already have that under the other funding source. So it's either fund that or that goes away. So that'll be a net neutral. But it would be a plus one FTE police officer assigned within the community services division to the CAT team.

Got it. And the other issue that I brought up, the overtime issue, which came up earlier too, I know there's some work happening in the department on that front. If there's anything you can share.

Yes, certainly. We're pilot testing internally. We're taking a very aggressive approach to trying to manage our overtime, understanding that overtime, just like other entities, public works, fire department, us, when we're short-staffed, we have certain minimum staffing levels on the street. We have seven officers currently in our academy. So technically, and we still have one opening. So technically we're eight officers short. We don't fully realize those officers, even though we've hired them until they're fully trained. And it takes about six to eight months to get them fully trained and on the street, fully functioning as police officers. So there's always kind of that gap that has to be maintained in reference to funding, or excuse me, staffing the street, rather. But with that, we're testing really a pretty innovative training model. We're trying to utilize on-duty time to train our officers and do our in-service training with legal updates, use of force, things like that, in reference to buy down some of that overtime, whereas last year we paid officers to come in on their off time. We're trying to leverage downtime on duty time to kind of spread out the training. So it's smaller increments of training rather than kind of bulk training on days. So that's one of the ways that we're managing the overtime. And again, we're just being a little bit more judicious in that and saying, When do we really need the staffing and how can we staff it? We still need those minimums and we still have to maintain those minimums. But who could we possibly pull? Maybe there's a detective that we could pull out of the Bureau that maybe has a little bit of a lighter day and put them on the street to help plug the gap. Council Member Miller.

Yeah, I appreciate the information, and yet I feel like I'm still struggling to get my head around exactly sort of the long-term strategic operational analysis of what fully staffed is. I mean, one of the things that I continue to hear in the community is why is there not more enforcement for traffic? And I know that's an area that's been talked about here and there, but I've asked about this before for just operational analysis of all public safety. I feel like gotten a clear plan that we've talked about with fire, like a long term plan to open a, you know, an additional fire station move an engine that feels more tangible to me than this discussion. I just wonder if we can bring this back at another time to better understand some of these challenges. I am definitely interested in how we're managing overtime, how we're budgeting for overtime, where that actual to budget is coming out. But I'll just say I'm struggling with sort of management level discussion versus like where we are at a policy level.

Happy to come back at a later time. If I could briefly address your traffic enforcement concern, the way it works operationally right now is we do not currently have a dedicated traffic unit or officers that are dedicated to that, short of the one grant-funded officer that we have, but they're assigned primarily for DWI interdiction, which is a state DPS, Department of Public Safety, grant. That's their primary role. Certainly there's some traffic enforcement mixed in there as that's related to DWIs. So we do have that one position. As we continue to grow as an organization in trying to meet the demands and needs of the city, I agree we do need to look at a dedicated traffic unit as that continues to be concerns, and I hear concerns from you and other citizens as well, but So traffic enforcement is done in between calls for service when time permits. Council Member Palmer.

Well, thank you. I mean, obviously, safety of public and the officers are most important. And my understanding is if you're short of staff, you're saving money on that end. So then your overtime budget goes up. And it's kind of a balancing act of what you're trying to do. And so it's not like we're just fully staffed and overtime is overtime. Am I getting that correct?

Yeah, and I apologize. I cannot remember the gentleman's name that presented, but he kind of touched on that a little bit, that at the end of the year, it balanced out fairly close. Yes, we were over in overtime, but we had some employee services savings that helped balance and offset some of that out. You are correct.

Okay, and then I know I've had a discussion before, but to me, we use the drone approach. Program a lot and and I would like to see some savings on that to say, you know, I did the drone so I didn't need to go into overtime or or some kind of a policy in there that we know that not just for first public safety, but also for saving some money. The last question I had or. That was a statement, I guess. But a question for you is, last time you were here, I think for the homeless, we talked about, I think about $2 million out of a budget handling the homeless population. Is that about the right number?

I'll do some math real quick. We have a couple slides on that. Why don't we hold that one for that?

Presentation, yeah. Because it's not just your department, it's also Park and Rec who sends their people out there to clean up camps, which is very expensive.

So we'll hold that until our other...

If you wish, I believe Mr. Parrish has the numbers from the question during the audit about year-over-year differences for PD. What's the 2026 budget?

Go ahead, Mr. Parrish.

Yes, Your Honor, and agree. We do try to look at the employee services as a whole. I mean, I know you can look at the line items, but as referenced here by the group, we're looking at regular salaries. If we're understaffed there, sometimes we will have overtime, but we do look at that to make sure it all nets out appropriately. And then this reimbursed overtime is a very significant issue. We're paid for that. It's a benefit to the community. You can see a lot of the traffic control happening with the clinic right now as a benefit to our residents and patients. So that all is looked at on a monthly basis to determine if we're on course there. From a budget perspective, in 25, and we've tended to hit budget as we net all these things out very close. In 25, the budget was $39 million. In 26, it was $41.8 million. It would have been more substantial of an increase in 26, but when we went through our reduction exercise, there was a fairly substantial adjustment in the PD budget by about $2 million. But for that adjustment, the growth would have been larger that particular year. So again, $41.8 million in 26. And then 27 were 45.1. The vast majority of that is about $2.4 million in employee services growth. Again, this happens across all the enterprise. We have adjustments in health insurance. We have adjustments in para and compensation and all that. But that also reflects the decision package to adjust to positions as well. So that's the trend there. We have been discussing the potential for a broader evaluation. I think we can have more conversation with that in the council in the future. Certainly committed to doing that too.

Thank you, Mr. Parrish. Other?

I was going to land on this slide and say, do you have any other feedback? I think we had a very solid discussion about the LGA discussion, and we will work on that for the future. And then the convenience fee. Council Member Palmer.

I'm not in favor of the funding the decision package that I see right now. One of the things on there is a contingency for the ERP project, and that's contingency, and we may or may not need that. And that's why we have an overall contingency fund. But if I can say $1.4 million, I'm more than willing to do that.

Councilmember Miller, you look like you had a question. Councilmember Keene.

Yeah, again, I think these are things that we approved in doing our work in 2025 for the two-year budget, or these are, that's how I'm reading this chart.

These were presented in the 2026-2027 two-year budget, but you still have to approve your levy every year, and so you get to decide if you want to continue to keep these here.

Right, but in the numbers we've seen so far, these are assumed in.

Yes, those are in the 5.59%.

And I, too, had that same question that I'm surprised. I mean, I know what the ERP project is. I know these things are unwieldy and there might be need for contingency. But I am surprised to see contingency as a decision packet, because then it's in there. into perpetuity. Maybe Mr. Parrish could answer that.

Yeah, I mean, contingency is probably a bad way to say that. I mean, we developed an overall project budget that we felt would be necessary to deliver it, but there's also some reconciliation of the annual licensing costs that we're going to have going forward, too. So I would view this as a collective need of the budget. It is not set up, I believe, as a one-time package, but we can confirm that for you and get more information when we bring the recommended budget back in August. BUT GENERALLY, THAT IS PART OF WHAT WE HAD CONTEMPLATED FOR THE OVERALL ERP PROJECT, WHICH WE FUNDED AND ARE ADVANCED THROUGH AT THIS POINT.

THAT WAS MY COMMENT. MAYBE IT IS A TITLING PROBLEM AS WELL AS A SPENDING PROBLEM. AGAIN, WE CAN REVIEW THESE AGAIN, BUT I WANT TO MAKE THE POINT THAT I THINK THESE ARE BASELINE CONSIDERED IN, UNLESS WE MAKE CHANGES.

THAT'S TYPICALLY HOW WE APPROACH IT. YES, YOU WOULD BE TAKING THEM OUT, AND I DID JUST WANT TO CLARIFY THE ERP. MUCH LIKE MR. BOYNTON SHARED DURING THE AUDIT, SOFTWARE AS A SERVICE HAS ONGOING LICENSING COSTS THAT YOU NEED TO PAY FOR, SO YOU WOULD HAVE IMPLEMENTED A PROJECT THAT YOU CAN'T USE.

COUNCIL MEMBER MILLER.

Yeah, it's not an item here, but we've talked about it in the past in the budget process, and so not for today, but hopefully during the August or September discussions, how we support community festivals, both through the Community Building Fund, what the right level is, how that has functioned, because we talked about what level to support it at last year, increased it. It does seem like that was quickly still used up early on in the year. It's how we're managing that in the 27, but also community festivals like Rochester Fest, 4th Fest, what the level of support is and how those are supported by the city.

WE CAN BRING YOU THE INFORMATION THAT'S ABOUT THE OUTSIDE AGENCIES FUNDING. THAT'S TYPICALLY WHERE WE PUT THAT, ALTHOUGH THEY DON'T ALL HAVE AGREEMENTS AND THEY ARE ALL CONSIDERED OUTSIDE AGENCIES. FOR EXAMPLE, ROCHESTER FEST IS SOMEONE OF A LEGACY FROM CELEBRATION OF A CITY, BUT WE CAN BRING SOME OF THAT INFORMATION TO YOU. I DID WANT TO POINT OUT THAT THE BUILDING COMMUNITY FUND, THE THAT MISS MUTALA DOES HAVE PLANS IN THE FIVE-YEAR UPDATE, WHICH I THINK IS MAYBE AT THE END OF THE MONTH, TO SHARE INFORMATION ON SOME INTENT TO ADJUST AND TO HAVE THAT BE OPEN LIKE QUARTERLY SO THAT THEY'RE NOT CONSIDERING GRANTS AS THEY COME IN, BUT RATHER LIKE YOUR DISCUSSION, CONSIDERING THEM MORE IN BATCHES BECAUSE THERE'S SOMETIMES THINGS AT THE END OF THE YEAR THAT THEY'RE LIKE, WELL, WE PROBABLY WOULD HAVE FUNDED THAT OVER THIS OTHER THING. SO THEY ARE LOOKING AT CHANGES TO THAT AND THE CURRENT FUNDING LEVEL FOR THAT IS $100,000.

Maybe even just a little bit more specific following up on Mr. Miller's comment. To fund the 4th Fest this year, I think we used contingency funds and went through Experience Rochester. Is there something in that budget for the coming years?

The way we actually ended up doing that is that we never actually took the dollars out because there was a lot of, I couldn't quite tell if I was gonna need to figure out the 4th of July during the last budget. So there was about $20,000 in public music, but we also have access funds from when we were having to put the stage up AT RIVERSIDE IN THE PUBLIC MUSIC BUDGET, SO IT WILL NOT REQUIRE CONTINGENCY, BUT NO, WE DO NOT HAVE FUNDS BUDGETED, BUT WE COULD REALLOCATE SOME OF THOSE FUNDS IN ORDER TO BE ABLE TO SUPPORT THE, IF THEY WOULD LIKE TO CONTINUE TO PUT ON FORTHFEST, HAVING EXPERIENCE ROCHESTER DO THAT. I DON'T THINK IT WOULD NEED TO BE AN INCREASE. COUNCIL MEMBER PALMER.

Well, I, I would agree with Mr. Wall that we need to do something for experience Rochester, or I thought they did a great job, but I think we need to continue that. And if that comes out of the music budget, that's, that's one thing. Um, but I don't know, maybe we need to look at Riverside, um, on Sunday nights and see if, if they can do it cheaper or better or differently than we're doing it currently.

if you wanted to look at that, I think you'd be looking at a pretty wholesale change to public music, which is fine. I just want to make sure that if there's comfort level with the rest of the council doing that, I'm comfortable doing that. I just want to make sure I'm not running down a rabbit hole. I will say that experience Rochester is on your study session agenda for I should probably have this in front of me. Coming up in the future to talk about Chateau Theater. And that might be a good discussion to have there also with them actually with us because I don't want to speak on their behalf. That is coming on July 27th.

Did Council Member Keene?

Yeah, I'm just going to react to the discussion going on. I want to kind of speak of that. I don't want us to get into micromanaging other department budgets in these sort of discussions. Like you say, there might be a good reason to look at the downtown events or the music events, but to do this like in a budget meeting on the fly without the staff involved, I don't want to support that. And maybe by being silent, I felt like I was, so I wanted to speak up.

Council Member Miller.

And I guess just to clarify my position, I'm not necessarily, I'm not endorsing Mr. Palmer's recommendation. I'm saying I would like to look at our budget support of summer festivals, summer programming across multiple departments. And that's why I brought community building fund in there as well through Ms. Motella's office, because I think all of those things are supporting cultural and outdoor public events. And just to understand how we're comprehensively supporting that and how we're modifying that so it's relevant for the community going forward.

Council Member Doering.

Yeah, I would agree that I would appreciate these conversations based in data and not just theoretical abstracts. So I would love to see the information that both Council Member Keene and really Council Member Miller has requested to come back to us for further discussion.

Any further feedback for the recommended supplemental budget, which we will hear again in August? Seeing none, we will take a eight-minute break.

of 25, the council asked us to evaluate options to do phase two of the regional sports and recreation complex, which we're now calling the Rochester Sportsplex. That was really with the desire to meet some indoor recreation needs that we felt were unmet. Subsequent to that, there's been a lot of evolutions in our community since this has happened. Of course, we had the YMCA. We've had private facilities close. We've had the Dome announce that they weren't going to be reopening this fall. So we've had some conversations with RCTC. Weren't able to really advance an indoor option there given a variety of constraints that you've all heard about. And then we did get confirmation in 26 that the Dome will not be reopening this fall. Just really want to talk to you about the policy considerations. Really, this is just an ask of you to say, do you want to consider utilizing any of these financing authorities to continue the conversation on indoor rec? This is really just an opportunity for you to say, one of these is the right idea at the right time. Maybe it's the right idea at the wrong time, or maybe it's just the wrong idea all over. So just really want to get your feedback on that. Also just want to emphasize, coming out of our previous conversation in June, that we have made as many changes as we can to the Rochester Sportsplex site plan that would allow for a future dome installation. But there are many that are not cost neutral and that we continue to advance the original design for that project. And we just have to pick up those items in the future. A lot of evaluation in the indoor rec space. We've talked about this. But really just want to emphasize those continued key shared themes. Of course, affordability, community access and flexibility. Opportunities for casual recreation, flexible scheduling, better communications around what we have were all themes that we heard in the four or so different efforts of outreach that we had on this topic. One option to meet indoor recreation needs, of course, is the notion of a dome on the Sportsplex site. I'm not going to go through that. We've talked about that. But for context, that could be up to 250,000 square feet of indoor turf space, six indoor or eight indoor basketball courts, sport courts, indoor pickleball, indoor play area, significant amount of square footage. By contrast, with the original facility that was discussed on the SportsPlex site, that was about 130,000 square feet, no indoor turf. Again, subsequent to all of this, the indoor turf that people have grown to utilize and enjoy in Rochester is no longer available. There are obviously costs to this. The request at the previous meeting was to consider pursuit costs or evaluation costs. And again, we wanted to pause on that. with the understanding that you wanted to have a better community conversation around financing if you wanted to go down that road. So we're here to kind of have that conversation tonight. So again, not going deep diving on that because you've seen that. At that previous meeting as well, there was some conversation around Our arts investments, and are we doing enough there in that space? I wanted to just highlight some of those because I think you go through the budget processes and we sort of live year to year on these things. But really, sometimes when you take a step back, what some people might think is limited investment really is substantial investment. So Civic Center, and again, I'm gonna say these can cut across a variety of things. They're not all easily categorized into one bucket. But if you look at our Civic Center investment, which does bring a wide variety of arts and cultural options to the community. We collect about $12 million plus or minus of lodging tax. There's three different buckets. We'll talk about that later. But we do provide about $4 million per year to the Mayo Civic Center for operations. And out of that, you get events, you get Bob Dylan, you get comedy, you get a variety of these other things that come in to the Civic Center. You also have a lot of venues in that facility that can host people. So in the arena, for example, you can host up to 5,000. I'm not trying to give you perspective on what people view as the user experience of this, but I'm just giving you headcount numbers. You can get 5,000 in the arena, 3,000 in the auditorium, and a little over 1,000 in presentation hall. So we can accommodate large numbers of users in those groups, in those areas. As well, about a year or so ago, you received the facility condition assessment for the Civic Center. There's about $38 million of deferred maintenance needs there. About $15 million of that is just basic roofs, HVAC, plumbing, mechanical work. $10 million of that or so is interior renovation work that would want to happen. All sort of prioritized and color-coded. But that's the 10-year projected need in that space. So I just want to kind of level set with you that we have ongoing requirements in all of our facilities. And the Civic Center at over 200,000 square feet is a major facility in Rochester. Looking at, you know, one of the things I know there's obviously this larger community conversation around, you know, can we do presentation, quality, orchestra, and other sort of large stage events. One of the big gaps that's been identified is the stage space with the existing Civic Center. One option for you, if we really want to compare $70 million, which is the current estimate for the facility at Grant Park, at 160,000 square feet, which I think 70 is probably a light number, at least with the numbers we're getting for those kinds of project costs, is can you have some opportunity to reevaluate stage configuration, whether that be in the auditorium, or we just did this in presentation hall. Again, a nice facility, but lacks the right amount of stage space. And just, you know, obviously users, you know, want to be able to use it in certain ways and there's, you know, operational things, but just don't want to look past what you have on these things. So there is, you know, some rethinking if you ever wanted to go down that road of, you know, What could that look like as well? This is just a quick mock-up by our team saying the presentation hall or presentation stage could be adjusted. Other areas that we talk about in terms of arts and culture, here we certainly have the Art Center, Civic Theater, and Chateau Theater. Just operationally, with the One Roof, we have $379,000 per year of investment there, a little over $100,000 on the Chateau. But we've put substantial money into the acquisition and subsequent renovation of the Chateau. I mean, that's probably in plus or minus $10 million. You think about the previous investments we've made through sales tax and civic theater and the art center as well. And we've, at times in the history of Rochester, made substantial investments in those spaces. you'll have more opportunity to consider investment in the Chateau at your July meeting as well. So I wanted to talk also, I mean, we at the operational level fund fairly significant arts and cultural activities in the library, in public music, in the community connector grant program. So the library has an annual budget of over $10.5 million. I think plus or minus $9 million of that is tax levy supported. and maybe a little more about that with the county contribution. Public music is at about 1.1 million, which is something that you don't see nationally. Our investment in public music is somewhat unprecedented. I have not come across another public music department. And so at a point in Rochester's time in history, There's a community decision to say, we want to have this, we want to do these things, and we want to be able to promote it. But those two are very substantial. Then the smaller investments in arts and cultural programming happening on the Community Connector grant program are also meaningful. It supports things like Latino Fest, et cetera, and have had really great wide range of smaller activations that are done privately, which are meaningful as well. Again, this is where you can start to see things cutting across a variety of areas. So if you think about our 125 live investment, we funded that for construction, certainly active senior living or active senior work happening there, but also lots of arts and cultural programs that happen at that facility as well. There's lots of groups. There's pottery that happens. There's a pottery studio. There's a variety of other clubs and et cetera embedded into that. And the History Center is more of a heritage provision, but we fund that as well. So between the $47,500 for the History Center and $450,000 in annual operating expenses to 125 Live, which that's both our utilities that we cover and our operational contribution, we make substantial investments in that space as well. And then just across our public construction projects, we have a variety of public art that's incorporated in. So anything from the four or five international artists that were incorporated into Heart of the City at a $20 million project, which is more of a public realm. But again, four anchoring international artists with that. you know, Cascade Lake to Arts for Trails, which we don't necessarily fund, but we provide, you know, spaces in parks for, and think of anything with like the North Broadway construction. I mean, we're integrating public art into a variety of our construction projects going forward in the future. So just wanted to kind of level set that just for awareness. But then on to financing options. So that's really what we want to talk about tonight. Certainly, anytime you have these conversations, property tax is always an option. You all just had a great conversation about property tax and the competing priorities for that. This isn't recommended, I'm just giving it to you for reference. I'm not even gonna go through all these numbers for you, but like you can see at different debt issuance levels, what you would need in order to support debt in those areas. So again, just wanted to provide that for reference. Maybe the more notable area of emphasis for this evening is there is a Cities of the First Class sales tax legislation that applies to Minneapolis, St. Paul, and Duluth. and Rochester. That allows you to do a couple things. I'll just say when you asked us in February of 2025 to look at options for financing indoor rec, this was not something that we knew about. This was something that came up in the course of our due diligence in this topic. And so from that perspective, we weren't aware of that in the sales tax vote when we went through the legislative process, the vote process. This is something as we were looking for options at your request that we came across. This does allow us to collect for the full duration of our sales tax. So right now our sales tax is authorized for 24 years. This allows us to collect for that full 24 years. I'll talk more about the projection about that that the finance teams put together in a moment. However, it is limited to really two items. So the second highlight there talks about it being eligible for sports facilities, which again, indoor recreation options certainly eligible for that, or convention and civic center. So I would say at a very basic level, that would qualify for what you have across the street here. I guess you have a great view of it out the window. That would qualify as right now we consider that our convention and civic center in Rochester. What kind of revenue opportunity do you have there? So really three points of reference. First, our existing obligations. The current sales tax was approved at 205 million plus any interest costs we accrue. With the issuance of the regional sports and rec complex debt or Rochester sportsplex debt, Our estimated obligations are 241.5. The other areas have been contemplated as pay as you go. So 241.5 million is that. That would probably be satisfied in 13, 14 years given the current level of collections. If you go out to the full 24 years, we would project that you would collect about $394.5 million. I think this projection is very conservative. So you can see that on the right side of the screen. Two things to note there and why it's conservative. We only do 1% escalation of that sales tax. So again, sales tax can go up and down. Generally speaking, 1% over 24 years is pretty conservative for us in terms of what we've seen historically. I'd also say for years 26 all the way out to 2032, we're projecting at less than we're collecting right now. So last year we collected over 16 million. We don't get back to that level until 2032. Just again, another conservative way we projected. So again, I think you can come to this with some degree of confidence. With this conservative model, this would still give you $153 million to think about what you wanted to do, whether it be a sports center or convention slash civic center. This just shows you a cash flow for how you could maintain the four categories with the existing $205 million allocation plus the potential for a phase two for indoor rec. I'm not gonna go through this detailed basis, but again, it does allow you to work pretty effectively through all categories. So that's your Cities of the First Class authorization that if you so choose, you can further explore. Don't have to, but you have that option. It's available within the existing law. We also just wanted to highlight, because there was some discussion about... Again, what can you do? And just wanted to bring this to your attention just so you can start thinking about it. It's a little bit more operative in a few years. But our lodging tax legislation does also give us some flexibility. So we have three buckets of lodging tax. So I'm going to try to go over that quickly. There's a little bit of a misprint on the bottom, so I'll talk about that in a sec. But our three buckets of lodging tax, we have 1%, which is for destination marketing or is designed to go to Experience Rochester. 3% right now currently goes for, we'll call it Experience Rochester and Civic Center operations. And then we have an additional 3% that is focused on debt service for when we did the MCC expansion a few years ago here. With that, in 25, we collected about 11.67. So that shouldn't be just the 3%. That is actually all of those put into one. So that's the total numbers. We're projecting for the 3% that I'm going to talk about in a minute here, that is for the debt service, that's about $5 million per year. So think about that when we move on to this next slide. Also in our law, when we got the lodging tax extension done, and there was a rewrite of this around the DMC era, it's allowed for debt service for the Civic Center, and we can use it for pay-as-you-go investments in the Civic Center for, we'll call it rehab, landscaping, Skyway, and again, around the Civic Center, but also just think about Any physical investment in the Civic Center we can generally cover with this $5 million per year. As the auditor previously mentioned, our debt obligations are going to be satisfied in about 2034. So in 2034 on, it might be earlier, but 2034 conservatively, you would be able to use that $5 million for capital reinvestment in the Civic Center. to redo a stage, or to upgrade the arena seating, or those are all policy conversations that you're going to want to have. But again, you have a fairly significant amount of deferred maintenance there too, so balancing all that off. We also have other funding in the current agreement. About a million is going to capital, so it's not like we're investing zero in capital in the Civic Center either. So I wanted to just make you aware of that authority, but really sort of land you on the concept of You know, is this an idea that you'd want to consider? If you do, how do you want to have the community conversation around that? I mean, certainly there's another level of this conversation that wants to happen with community feedback and engagement. If you're interested, we would bring you back a strategy that outlined how that could happen and make some recommendations there. Also, I just want to emphasize, I think you all received an email today just based on some questions. I think there was a question around CUB. Could that be used for indoor rec? You can do anything with the right amount of funding and investment. I'm not sure, and right price, right? And it's not actively on the market this minute, but we certainly have done our fair share of adaptive reuses of buildings, some successful, some not. But there are some challenges with that. It's 80,000 square feet. So in the context of this discussion, the existing dome, the existing turf space is just under 100,000 square feet. You're not doing turf in that building. You could do some gyms potentially at that square footage. However, ceiling height's not great. It's not ideal. You're probably 18 to 20 feet on ceiling height, which would be more recreational in nature. You wouldn't want to do anything competitive. It wouldn't be a good fit for volleyball. The other part of that is there's columns all over that thing. So you've got about 13, 14, 15 columns, whatever it is. configuring gym space within that. So the shortest distance is like in the 20 foot range or 23 foot range. Longer is 30. For gym spaces, you want conceivably 50 to 70. So your gym configurations, your court configurations wouldn't be ideal in that situation. So just want to lay that out. Certainly, we can always do more evaluation, but on its face, it seems very challenging. Yeah.

I've got a question, just a clarifying question on the lodging tax to start off. So first, we have a 3% lodging tax, but then you talked about 1% for marketing, another 3% for operations. So I'm unclear as to what is our lodging tax. And then as kind of follow-up questions is, is it a legislative initiative if we were to... ASKED TO INCREASE THAT TO 4%, AND WOULD THAT THEN, WOULD WE THEN MORE RAPIDLY COVER OUR DEBT?

YEAH, SO THE CORRECT ANSWER IS THAT ALL OF THOSE AUTHORITIES ARE CREATURES OF LEGISLATIVE ACTION, AND WE HAVE ONE OF THE LONGEST CONTINUOUSLY OPERATING LOGGING TAXES IN THE STATE, AND THEY ARE BUCKETED THAT WAY. If we wanted to go to four, we would have to request that authority from the legislature and certainly can do that. There is sort of a, and then, so I'm getting off topic here, sorry. So yes, on the 4% you would go. The 1%, if you think about a lot of experienced Rochester-like organizations, they're called CVBs or Destination Marketing Organizations. that 1% would go to fund their operations, and not just for the Civic Center. We think about it a lot because of the way it funds the Civic Center now, but a lot of communities really just do it as, Heads on beds, marketing your community, total promotion, total marketing, no real operational considerations for facilities. That's probably the vast majority of communities in our state use their CVB slash lodging tax money that way. We have this other authority then that allows us to go 3% for experienced Rochester and Civic Center operations, and then the last is 3%, or about $5 million is for that debt service.

And the total local lodging tax is 7%, bucketed in that way. It is, seven. Total is seven, three, three, and one with different authorizations for use.

Council Member Palmer.

It's my understanding that our lodging tax is the highest in the state, is that right?

I don't know the answer to that. It's higher than most, but I don't know if it's the highest.

And one of the reasons we don't usually like to raise it is because it's basically male clinic patients and we're trying to keep it as reasonable as possible. So let's... Let's go back to what you're suggesting here. Cities of the First Class, $40 million project, is that correct? It has to be the minimum?

That is also correct, and I did not mention that.

Okay, so if we wanted to do a $65 million extension, would it take us about six years to pay for that indoor sports, the phase two of the indoor sports?

Yeah, certainly the debt service associated with the indoor sports at 153, you have a lot of room. You can go at least 65 million if you wanted to go that high. But again, we don't have the exact number, but you certainly could do it if you were trying to save up for it. You have construction escalation you have to deal with, of course.

So you have 153... million available if we went to the full 24 years. If you took the Chateau Civic Center that we have in Rochester into the $40 million project there, would that also qualify? I mean, do you just put the name Civic Center on it or is there a definition for Civic Center?

Yeah, I mean, ultimately, the council is going to be the arbiter of that, but you have to withstand the scrutiny of public opinion and legislative perspective on that. So I would be somewhat judicious about calling everything a civic center when you have one, but certainly that's part of your policy conversation.

But the other problem on that would be, and I'm just asking the question, is how would you spend $40 million at the Chateau? Because I think the need right now is about $15 million, isn't it?

Yeah, I mean, I'm sure there's people that could think of ways to do that.

But being reasonable and prudent with the taxpayer dollars, I mean.

Yeah, I mean, it would be an expensive investment that you'd have to want to maintain in perpetuity.

Mayor Norton.

So a couple things. When the newspaper articles started coming out about this, I got calls from several people. And one of the calls pointed out to me, and I'm just going to reiterate this as a fact, we said we were going to build the sports complex, regional sports complex, for $65 million. And now we're talking about over $100 million on a sports complex that the community is did not anticipate and was told it would be 65, and they aren't getting what they want for that 65. I think we have all sorts of problems just within that bucket of issues. You're doubling the price, nearly doubling the price of a sports complex you said you could do for 65 initially, granted things change as you moved along and decided what you wanted to do with the baseball diamonds. The southeast location, again, no accessibility to kids on a easy basis, so that came up. I want to remind people in the administration and at the table here, I will not be here to give you my unsolicited advice in the future about legislative matters, but our legislators are interested in and also would be willing to make changes to the language in the law. So just because today it says the things that we have written in front of us, and that we were told, all that can be changed, as well as a determination about whether a performing arts center or whether some other center would be considered civic in nature or not. Maybe you can't justify in your head that it would be. The legislators are ready to go forward to make changes in the legislation to try to help us. just like these were put in for initially Duluth and Minneapolis and St. Paul and then Rochester became a city of the first class, all that legislation can be changed in a session with the help of our local legislators. I also wanted to add the item of community engagement. Yes, I think we are jumping the gun assuming the community wants a hundred plus million dollar sports complex. I think We could ask if we're going to make any sort of changes with another 55 million or more. We should ask the community what they want just like we did with the initial four items. And I think whether it be a ballot question, maybe that's the direction to go since we did that for the first time about the options for spending this. I think the community deserves to weigh in. They feel like they haven't been heard to this point and I think this is an opportunity for us to weigh in, but I feel like there's a real mismatch between what the recommendation in front of us is, and I know it's just a concept and idea, and what this community initially wanted and expected, and what you're proposing now. I think it's a mismatch with this community and what this community wants. So I just We turned down an opportunity to add a fifth item to the sales tax extension when we could have done it the second time we went forward. And I feel like that's a little bit about where we are now. We're talking about adding something else, either adding to what we currently have or a whole other concept. And I just, I think we need to be really careful about assuming what our community wants and think long and hard about how we move forward on this. So I'll just end it there.

Council Member Miller.

Just a question. So if we do nothing and we're collecting at this rate, when we collect the $241 million, the authorization ends. Is that correct?

That's correct.

Or could end.

Yeah, it could end. What we have typically done historically as a community a couple years ahead of that, we've discussed what the next sales tax extension might be and then tried to get the legislative approval and then position it for voter approval. Like in this case, we started this conversation for the original sales tax or this one that was just enacted in like 2019, 2020, because it takes time to navigate all the steps.

And so assuming the conservative projection, that point would be reached in what year?

You know, I think you're plus or minus 13 or 14 years from now. Yeah.

So in about 10 years, we could be going back to the community to envision what sorts of projects we would go and say the community needs these things. Could be street maintenance. Could be flood control again. Could be other things. But really do an intensive process. So we're potentially... Considering a legislative authority that would allow this to us to extend this And extend that process farther in time. So I just want to note that this is not 153 million of No impact money right it does impact future projects for future councils for future community needs and The other thing I just keep going back to is when we did the strategic priorities process, we changed them somewhat. And my colleague Councilmember Keene was adamant that we add transformational capital projects, noting that we have a lot of projects going on right now in limited capacity, and we really have to focus on delivering what we've committed to. And then the other one that several of us advocated for reframing was inclusive growth management. And I think of both of those in this timing question, and I just don't feel the community behind us saying, go ahead and do this too. And so I think it's really interesting. I'm glad that it was discovered. But short of finding a way to sell this project or ask the community a version of What would investment be meaningful? Should we invest now in an expansion of civic convention center facilities? Should we do a sports complex phase two? Is there a way to do that as a ballot question? Just asking based on existing authority to go and say option A, option B, option or nothing.

Your Honor. Yeah, I wanted to address that with the mayor's comment as well. And I don't think you have the ability to do it as a ballot question. I mean, in order to do a ballot, you have to have a specific authority behind that. And it has to be something that is actionable that way. And I don't believe there's a specific authority. You can't do what we call an advisory referendum on a topic. If you could imagine if that was permissible, you'd see those all over the place, right? I think the real option, if you really wanted to do something similar to what you're talking about, would be to consider a statistically reliable survey like we're doing with the community survey now. And we've done this before on other topics. If you recall, we did it on golf. We've done it on other other topics that have generated enthusiasm in the community. That probably is your best option, and you could lay out a range of ideas, see where folks land. I think you'd want to be somewhat constrained in terms of what also aligns with your priorities, but certainly a statistically reliable survey could be part of your engagement strategy, and that's something we've talked about at the staff level, if we were to bring something back to you.

Can I just interject for a second? To that point, we have the community survey that's going out. Are there recreational activity questions in that survey that is ready to go out in the next few weeks?

Yeah, it's out now. And at a high level, we did some last year, sort of trying to inform the process that we were in last year. But this would be a better standalone effort, just so you could go deeper. We will have some high level things, but you also have to remember the community survey we're asking, I don't know if it's 60, 80 questions, whatever it is on all categories of city government. I think it'd be better just a good investment. It's probably $30,000 plus or minus to do something like that as a...

Back to Council Member Miller.

And from a timing perspective on this legislative authorization, there's nothing special about the time period we're in now. It's during the authorization. Is that correct? We could exercise this at any point, theoretically?

Yes and, though, here's what I would say to that. Instruction escalation costs. No, yes on that. But I'd also say legislation changes all the time. And people may change that. In the future, they may say, well, Cities of the First Class sales tax legislation isn't something we thought we wanted to have forever. It was a creature of the time when this was created. You've seen significant changes in the local sales tax legislation landscape since you've adopted this. And we had a major point of consternation when we went through this process. In the past, we did 12, 15 projects. The legislature limited us to, well, three, I think it was. We went four, if I remember right, or somewhere in that nature. And it felt different for people. So we're just coming out of a sales tax moratorium. No sales tax provisions adopted in this year's budget. So the future can be uncertain in these things, for sure.

Definitely. And I guess where I would just say I am at this point is when we go to the legislature for sales tax authorization, there's a lot of effort, a lot of community engagement, a lot of refinement of the council to then devise this series of projects. And then because we need the community to vote, should the legislature authorize us to go to the ballot, we then have to sell these projects to the community and tell that case. And so if we were to move forward with something like this, I think without that robust community selling the project, making sure it's refined and meeting the needs of the community, I would not be in favor of advancing any series of $40 million plus projects under this authorization. I would also just note, again, with the transformational capital projects, we have a lot of stuff going on right now with construction. And in this particular period up to 2030, I continue to hear from the community that are kind of tired of new things, wondering what else is changing. And I wonder about this rate of change and progress and how we're keeping people engaged. And so I just don't feel the urgency to do it right now. I think it's a very interesting authorization. I think it's a great opportunity. But looking back to our priorities for those two reasons, I would want to do it as a more intentional public engagement process and make sure that this is the right project for the community.

Council Member Wall.

THANK YOU, MR. MILLER. I THINK THAT YOU PROBABLY JUST SAID WHAT I WAS GOING TO SAY, PARTICULARLY THE QUESTION ABOUT, AND I APPRECIATE AARON'S ANSWER, COULDN'T WE CONSIDER THIS IN FIVE YEARS OR EIGHT YEARS AND LEGISLATION CAN CHANGE, BUT IS THERE AN IMMEDIACY TO THE DECISION THAT WE HAVE TO MAKE IT HAPPEN RIGHT NOW? I am in the same camp as Mr. Miller that I would find it difficult to put forward any kind of large project in the tens of millions of dollars because I don't think the community is ready for it. I've already knocked on 1,200 doors, and it doesn't come up very often, really, but I think more often in social media it comes up rather than in personal conversation, at least for me. I... when we had the disappointment of the 65 million not going as far as we had been led to believe it could, I was of the opinion at that point and maybe I'm coming back to that opinion that we be as responsible as we can with the 65 million and we show the community how this can work for the community and then as we find success in that, perhaps a community is more willing TO TAKE A LOOK AT EXPANDING INTO DIFFERENT KINDS OF OPPORTUNITIES, INDOOR, DOME. THAT'S GOING TO BE A PAIN FOR OUR COMMUNITY FOR SURE, AN INDOOR DOME. BUT MAYBE IN ABSENCE OF TWO OR THREE YEARS, WE'LL CHANGE SOME COMMUNITY SENTIMENT. I DON'T KNOW THAT. BUT I WOULD BE HAPPY TO WAIT ON THIS KIND OF DISCUSSION.

Yeah, I had a couple questions first, and I think on the sales tax extension and this idea of the cities of the first class, is there an example of one of the other cities using this in any big way?

Yeah. Yes, I'm not going to recall the project specifically, but it was one of those things at the time that came out of the US Bank legislation. It was written for a very specific purpose, but as can happen, a city of the first class benefited at the time in 2012 when this happened. They made it available to others. We now have the potential to benefit for it as well.

So there was a specific project done in St. Paul or is that in Minneapolis?

I believe it was St. Paul, but I'll follow up with the group.

I didn't know it was used. I just thought it was there. And then on this discussion with lodging tax, I might have read too much into it, but it looked like it was less of a sportsplex sort of thing and more of a community performing arts function. Is there language in there that sort of drives it one way and basically keeps it from the other side?

Yeah, I mean, I think it really keeps it within the confines of the Civic Center. Yep. And I just wanted to forecast the idea that if you ever thought you needed to make renovations to that to accommodate community need, you have some potential source of funding for that.

Okay. All right. Up front now, I know I want to just go through these. Like on the you give the three options with the property tax thing, it really does not make sense. I mean, even when we were doing the sales tax, I viewed there was two projects there that were but for only we're only going to do if the sales tax come uh but the other two were really those were city you know the thing with uh flood control and with uh streets those were things that we would have to come up with new ways of doing but i don't consider this something that belongs in the uh to be weighed in on the property tax As far as the discussion on lodging tax, it's interesting, but at the same time, it does sound like there's legislative things, and it almost takes us off this whole sportsplex discussion in a different direction. And I think it did come up in our discussions in June, so I understand why it's here. As far as the sales tax extension, yeah, I just do not feel the authority based on the votes that we had that we here in a group or that I as a member of a group could support that with the idea that, don't worry, it's legal. So I don't think I would go that way. And I do like the idea of like... as much as the escalation of construction, let's do what we've got on the plate right now and do it well, and then find out where we're at in 2031 and see what kind of successes or failures we've had and what the next things are to do.

Council Member Fredericks.

Sorry, yeah.

Oh, did you have a follow-up question? Well, I wanted to get a reaction.

Yeah, and I also just, I wanted to see if like, is that what you're hearing from others or is that, do you?

Yeah, Your Honor, I'm just trying to navigate through this conversation. And this is a discretionary project. But I also think from a policy perspective, from your seat, having clarity on the fact that this is an option that we're not pursuing. And so people understand that we won't have a dome next year. So the soccer landscape will change. The indoor senior softball landscape will change for people. Parks will make decisions based on what they need to accommodate in other areas for facilities, et cetera.

These are quality of life discussions, and I'm concerned about them, but the other thing I wanted to talk about again, and if someone can help me with this today or another time, this idea of reliable surveys and what the community really wants. Through this whole three-year odyssey, it's a really difficult thing for me to get my head around, even to the point that the sales tax, we had like under 55% approval and we say, oh good, we have this like authority now to do this. That's less than, you know, we're just above half of the citizens saying this. So when is it that you really have this, like what we use this term, what our residents want? And unfortunately, many of us have our own set of people we talk to or don't talk to. And so I really have struggled with getting my head around that. And the last comment is, I still think we've, We've sort of simplified this discussion down to indoor and outdoor, but I still think we're not talking about the same things. When we talk indoor, there's a group of us talking about community assets that can be used at a certain level. You brought up, it doesn't come up as a main driving force, but the YMCA closing. And that conjures up in people a sort of asset that's dramatically different than an eight basketball court that also has two gyms. And we seem to have simplified the discussion down to indoor or outdoor. And I think it's a lot, I think we have a lot more tentacles in the community with different opinions on that than what our discussion is representing.

Council Member Fredericks.

I like the idea of anything that gives our weekend economy a shot in the arm Friday through Sunday. We see a large difference in traffic in our community, and I like the idea of having the sports community action in town. It's a good, vibrant crowd. They bring a lot of great things. They spend a lot of money. They do great things for our economy. I like that. This particular project, I just don't feel good about it right now. I don't feel like we have a Well thought out plan. I don't feel good about the way it presents myself. I don't have a great idea what it should look like or anything like that. That's not my expertise. Yeah, and I'm sitting here thinking, when are we going to run out of workers to get this stuff done? It's like crazy what's going on in our community. And I am very comfortable walking down the hill slow and drawing an easy breath. If it's a little bit more in a few years and we get a lot better product, it just makes sense. It just makes sense. Rather than do it quick and be like, oh, we should have done this, we should have done that. Why didn't we do this? Why didn't we do that? I just don't think we need to do that. Just use a little common sense and take our time and do it right if we do it. I don't know, and I will add this comment. I don't know why I'm saying all that ever came into play. This was supposed to be tournament facilities. This was supposed to be a revenue generator for this community with some benefit to the community when not in use for those things. It's not supposed to be our leader. It's not supposed to be what we lead with. That was my understanding. And I don't think that's really changed. So I do want to see it be something that with a secondary benefit being facilities we can use when it's not being used for tournament play and things like that.

Council Member Doering.

I also am not ready to move forward with this project, which is hard for me to say because I have heard overwhelmingly from the community for their desire for indoor recreational opportunities. I appreciate Council Member Keene's last statement about there seems to be a disconnect between from the community that I'm hearing from primarily that wants a place for recreation rather than a tournament-built facility, right? So I appreciate the hard spot that you're in. You've heard our feedback throughout the course of this process about the community wanting indoor recreation opportunities. You've presented a project to us. You've done your due diligence that way, and I'm sure it's not the easiest thing to hear Us kind of say, yeah, we're not quite ready with that. I don't think I don't, based on the conversations that I hear in the community, I don't think that there would be support to build a project of this scope or magnitude, just throwing it on the property levy. property tax levy. That's a no-going for me. I also agree that the lodging tax stuff is interesting to me, but I need to do more due diligence to understand that. I appreciate you bringing us forward the options of continuing to collect the sales tax beyond the current scope of what we promised the community that we were going to collect it for at this point. But I think I've said before as well, just because we can do something doesn't mean we should do something. And that's kind of where I'm at with this without increased community conversations, making sure that this community understands the ramifications of moving forward in that collection of sales tax. So I'd be willing to wait for a while to ensure that those community conversations could happen in a very robust way. But at this point, I'm not ready to move forward.

Thank you, Councilmember. And I guess just to kind of wrap this up, I would say we're kind of in a place where we're sports complex fatigue. I feel it from the community. And I think just kind of picking up on what all of my colleagues have said, I think I think what we need is something real to show the community and we do have the facility being built and it is opening next year and success for that will be the best thing for any future extension on that. I would go back to and one, I appreciate Councilmember Doering really giving the staff cred on this because you did do what we asked. This has been an issue that we've talked about, this council has talked about for over a year and a half. And part of me is I am really fatigued with relitigating that 2023 vote. The majority of us here were not here at the time. But what I can say is that our staff listened to us when we said, We do want, the community is interested indoor. And you folks were very creative. We worked for months and months with RCTC on looking for options there. And through that process, this was discovered. I also wanna say that, What we've also talked about is really looking at increasing the visibility and marketing of our recreational facilities holistically. I think that's what we need to focus on in the short term, in the next year, and that includes visibility of our partnership with RCTC. That still is a partnership. We will see some kind of impact with not having the indoor turf field dome that RCTC decided not to put up after this year. So that we will feel that effect. But I do want to keep drilling on let's get back. TIGHTER ON WHAT THAT VISIBILITY CAMPAIGN IS FOR ALL OF OUR RECREATIONAL ACTIVITIES AND TAKE A PAUSE ON THIS FOR NOW. WITH THAT, COUNCIL MEMBER MILLER, DO YOU HAVE ONE SHORT?

ONE CLOSING COMMENT IF I MAY. I APPRECIATED THE CONVERSATION AND PRESENTATION ABOUT HOW WE SUPPORT ARTS AND CULTURE IN THE COMMUNITY. WHAT I WOULD JUST NOTE THOUGH IS THAT WHERE SPORTS AND RECREATION FALLS CLEARLY UNDER ONE DEPARTMENT OF PARKS AND REC. I think public music holds part of it. And then there's a gap on the other support. And I think that's something we're going to have to figure out over a longer term of how do we support arts and culture from an official government perspective. And that might look like an evolution of public music. It might look like an evolution of another department. But I do think it is a missing piece of official support.

Thank you for that. With that, let's move on to Chief Franklin and persons experiencing homelessness. And unlike our first three topics, Chief, you only have half the amount of time.

Well, good evening, council president, council members, mayor, city administration. Thanks for this opportunity. This was your request for us to come back and report on all of our efforts. Really, the purpose of this presentation is really just to illustrate what we're doing from a police perspective, the type of outreach that our officers and our Rochester Police Department homeless navigator are doing with individuals who, quite frankly, require really the greatest level of service within our community. I am incredibly proud of the work that these individuals are doing, and I'm excited to present this to you today. I'm just going to do a quick opening here, and I'm going to let Captain Jennifer Hodgman do most of the speaking, but I also brought Lieutenant Greg Gerdau, who, in my opinion, probably knows more about people experiencing homelessness in this community than anybody I've met before. Greg, in my opinion, is a subject matter expert. He has dove into this issue head on and with courage and professionalism. I appreciate that. Captain Hodgman heads up our community services division, which houses that community action team. Before I turn it over to them, just real quick, I do need to go back to Council President Shubring's question, now that I kind of have further clarification. You are correct, sir. Terry Dose right now is funded as a .5 under a contract. If this is approved, this budget request is approved, that is a net .5 gain as an FTE position. So I just wanted to offer that clarification.

Thanks for that clarification, Chief.

Appreciate that. With that, I'll just kind of jump in here on the first slide. Again, I'm incredibly proud of the work that these guys are doing on an absolute daily basis. I think you're going to see that as we engage this population within our community, a very difficult, complex issue that, quite frankly, cities our size struggle with across the country, as we do. But we do it with compassion and respect. And I think you're going to see that reflected in this presentation here. And with that, I will turn it over to Captain Hodgman. Thank you, Chief.

All right. Thank you again for the opportunity, Mayor, Mr. President, Council Members, Administrator Zelms, for this opportunity to come before you and give an update on our response to homelessness here in Rochester. I'd like to begin by acknowledging what everyone here knows. Homelessness is a very complex issue, right? And as Chief Franklin said, our approach is guided by compassion and respect, while we also recognize that accountability and enforcement remain necessary components of an effective response. So what are we doing? Our role is much broader than just simply responding to calls for service. Our officers are regularly engaging individuals experiencing homelessness. We're providing information about available resources. We're attempting to connect people with services, and we're working collaboratively with our city, county, and community partners. One thing that I want to emphasize here is that our response to homelessness involves more than just one person, one unit, one division. It's not simply the responsibility of those people. Patrol officers are responding to calls every day involving homelessness. Our community outreach specialists are dealing on a daily basis with those individuals in our community who are experiencing mental health crises. Our CAT team is addressing chronic issues, problems, problem locations, camps, and since March of 2025, our contracted homeless outreach navigator, who you all know as Terry Dose, as you will see throughout this presentation, has added another important layer for us in our response to homelessness here in Rochester. So together, all these resources allow us to be much more intentional and strategic with our resources. So here, for the police department, we use what we call a 3E approach, and our approach begins with education. We want individuals to understand what the laws are, the services that are available, what resources exist in our communities, and what expectations exist regarding ordinances and the use of those public spaces. Whenever possible, our first interaction is always to educate about providing information and creating opportunities for voluntary compliance. The second approach is encouragement. This is the second step for us. We provide someone with a resource guide is one thing, right? But successfully connecting someone with services is completely different. Our patrol officers, our CAT team, our homeless outreach navigator, they all work to encourage individuals to accept services, make referrals, and conduct follow-up. The persistence is important because we know that someone might not accept services that first time or even the 10th time. The last step in this is enforcement. And enforcement is used, obviously, when education and encouragement have not been successful and when officers have probable cause to believe that crimes have been committed or activities have occurred. We are intentional about the sequence of this approach. However, compassion and accountability are not mutually exclusive. There are circumstances where enforcement is necessary to protect public spaces, protect community expectations, and address criminal behavior that we're seeing. So the next video that we're going to show you is a success story that we have by the name of Matt. And Matt is an individual who we've dealt with for several years. He was an individual who you've all heard us talk frequently about the top 10 list and kind of how you go on and off the top 10. It's really all related, and I'll show you here in a couple slides, related to contacts and hours for service. And again, it's our most resource-heavy individuals, the ones that are requiring the most attention from law enforcement and from Terry. And so Matt was one of those individuals. And a couple weeks ago, he sent a text message picture to Officer Van Tyker, and it was just him with this huge beaming smile. and it showed a full set of brand new denture teeth that he was so excited that he was finally able to get. Now Matt is now in housing, he has a full-time job, he's successful, and he's hoping to continue that momentum. And have we stopped our contact with Matt? Absolutely not. So this contact, this relationship that was built has gone on for a very long time to the point that, hey, his number one contact when he gets his new teeth is to send the officer a picture of it. I will say that he's very soft spoken, so hopefully the volume is turned up enough that we can hear him, otherwise we might have to restart it.

I was living on the side of IB. 37th IV in the tent, and the DART team decided to show up.

I think that was one of the times we started really getting brutal and tried to accept some help. Yep, we're right back in that corner.

I was sitting in my tent. They walked up. They were talking to me. It was minus 30 degrees outside, but it wouldn't show up.

When we'd go out and visit Matt, his only request from us would be to bring him hand sanitizer because the hand sanitizer starts a quick little fire which would keep him warm during the winter months when it got to those brutal temperatures.

I tend to isolate myself from everybody, from the whole world. That's just the way, that's just what drugs did to me.

We let him know how much it meant to us for him to do better, and therefore he would do better. He didn't even care about himself enough anymore to overcome. But I think with knowing that it mattered to us, that changed and made a difference.

I think coming from the perspective of a police officer showing that compassion, We do care about individuals, and we want to see them succeed. And we can offer them everything that we can, but we need their assistance to also help with that transition. So for him, it was just that constant contact, building that friendship, that relationship.

I live in an apartment now that I pay for. I got a job that supports me enough. to have enough food and be saving a teeny bit of money. That's not much, but hopefully it'll be enough for me to buy a car and actually get my life back together.

You should be very proud of what you've accomplished over the last, call it, year and a half, right? So, I mean, you have some speed bumps, which everybody does, and you got over those and you continue to push forward.

i wouldn't be anywhere near where i'm at right now if they hadn't come out and tried to save me thank you

All right, so that's one success story. Going forward, what does that top 10 list look like? Here is just representational of the amount of people that have the most police contacts in one particular month. So you'll see the range of this particular month's top 10 ranges all the way from Some people have 29 contacts, some people have 10 contacts. Now these contacts are calls for service. These are not the contacts that the CAT officers are having with these individuals. These calls for service are coming in from dispatch, they're coming in from citizens, these are quality of life issues, these are people being disruptive, it's public nuisance, it's trespassing. The next slide is the amount of hours that some of those individuals are taking of officers' time. These are, again, our most heavily resource-dependent individuals, all the way from 22 hours down to 11 hours. You guys have seen some of... some of these brief updates, if you will. And this is just kind of a snippet of what Teri provides to leadership about who she's been dealing with this month on the top 10 list. And what I want to emphasize here, and you can read from all these different paragraphs of people, is that it requires persistent relationship building. It's Teri getting out there on a daily basis. It's the CAT team officers getting out there re-engaging with officers, reminding them of the services that are available. It's not always a linear progress, right? The success is gonna look different depending on that individual. And you can see from some of these summaries that they're not all individuals that are even originally from here. And I think that's a trend that we're gonna continue to see as some of the outlying communities surrounding us don't have the resources to address some of these issues. We're going to start getting those people who are coming here from, like one of them is Winona County, and so there's this kind of conflict going on between is this an Olmstead County individual, is this a Wabasha or Winona County individual, and who pays for those services that they're going to be getting in terms of treatment and stuff like that. The other thing that's very important to point out here is you'll see from some of these summaries is these are messy. These lives of these individuals are messy. And it's not just as simple as placing them into housing. It's ensuring that they have substance abuse treatment. They have the resources necessary to get into mental health help. And sometimes that comes from being placed in jail. So everybody can kind of level set and get started from ground zero. And that's where Terri also will do a lot of her work is getting into jails, our jail here, and connecting with these individuals who maybe now are ready to go to treatment, or maybe now are ready to have Rule 20 evaluations done.

Can you hold a minute? Council Member Miller.

Just for clarification, can you define what a Rule 20 evaluation is?

So Rule 20 evaluations, and correct me if I'm wrong on that, are quite complicated. But it requires a court to determine that somebody is not mentally capable of providing some of those decisions for themselves and therefore kind of takes the court system will take that over for them. And most oftentimes it is placing them in maybe a facility or putting restrictions or conditions on them remaining in the community. Now the difficult thing about that is the amount of, and we had the number, I apologize, I can get it for you as well. We had the number that Olmstead County recently had seen in terms of Rule 20s where If it was like approximately 75, the amount that maybe actually went through were like five or 10. And the reason for that is because if you're allowed the opportunity to stay in the community to make sure that you're doing this, this, and this, and you actually do it, you're not gonna get committed. So there's kind of that, that loophole there for us. However, one of the great things about us having Terry Dose in this position and having that social worker in that position is that gives us a seat at those tables where they're having those discussions about these are the people that need the Rule 20 evaluations and here's how we're going to get them services because I see them every day. I'm out there, you know, making sure that they're doing. There are a couple individuals who will have summaries here that need it, that are living in the community, that are doing what they need to do in terms of what the court expects of them, and so they're being allowed to stay here in the community and not being committed. Great question. So this slide here is probably one of the most significant data points of the entire presentation. And this highlights really that from January of 2025 to May of 26, 81 different individuals have cycled through our top 10 most contacted lists. Through our persistent and focused outreach, 54 of those 81, nearly 67%, they've all transitioned off the list in one month, which is pretty amazing. Even more importantly, though, is that 41 of those 54 individuals have remained off the list. Okay, so that means nearly 76% of the individuals who initially transitioned off the list have sustained that progress. And that's not just because we drop away and allow them to do things. It's because we're continuing to have that contact with them. Terry's continuing to see them. We see them out and about. We're continuing that dialogue and we have that relationship that we've built. So, like we said earlier, this isn't just dependent on the CAT team and isn't just dependent on Terry Doe's. Patrol also has a part in what's going on in the response to homelessness here in Rochester. AND THIS SLIDE HERE HIGHLIGHTS THAT IN MAY ALONE PATROL OFFICERS APPROXIMATELY 760 HOURS WERE SPENT WORKING WITH THE HOMELESS POPULATION. AND AGAIN, THIS IS GOING TO BE CALLS FOR SERVICE THAT ARE GENERATED FROM THE COMMUNITY. THIS IS GOING TO BE TIMES WHEN MAYBE WE DON'T HAVE TERRY HERE OR OUR CAT TEAM MEMBERS ARE GONE. maybe the weekend, this is on holidays. To put that into perspective, though, that 760 hours that those officers could be responding to other calls for service within the community, that they're not able to do that. In May, we had 536, or 538, sorry, incidents involving homeless individuals, and that represented a 2.67 increase for us just in the month of May. We recognize, obviously, that incidents are not the full story. That's why we look at the number of contacts, we look at the location, we look at the officer hours, individuals involved, and we look at the outcomes.

Council Member Miller.

Just for clarification, 2.67% increase compared with May of the prior year, the prior month. What is the increase from?

April. Yeah, April. April, okay. Previous month. We haven't had the numbers yet for June. So what else is the CAT team doing? So again, we have a continued presence that we're maintaining in the skyways. This slide here kind of highlights the reason that it's important for us to maintain that presence, because the last thing that we want is for everything to divert back to the way it originally was, right? And so if the concern is that if we completely just walked away from that skyway presence, that these conditions could return. Greg's here and he can maybe talk a little bit about the camping response if there's questions about that. But I wanted to bring this up because there always seems to be questions or a misconception about once a camp is reported that it's like immediately removed and that's not actually what occurs. There's an entire process that we go through and a lot of it again goes back to those three E's. We're educating them. you know, we're encouraging them and then we're enforcing it. So it gets, you know, a camp gets reported and then our officers, then the CAT team will go out and take a look at it. And then we're posting the cleanup time and then we have to come back and clean up whatever's left. And that's not just a burden that the police department shares. You know, we're sharing that with public works and with parks. Anything else you wanted to add on that? The camping ordinance, as you guys know, the camping ordinance is prohibitive of camping on city property and city right-of-ways. The number of detected camps that we've had has been decreased significantly since the ordinance went into effect. So, in general, the camps that we are seeing are smaller, they're cleaner, and they're more mobile. This slide here shows that it illustrates the difference between where we were and kind of where we are today. So, that's what the pictures on the left before the ordinance, this is what most of our camps used to look like, and now this is the recent stuff that we're seeing. Terry wanted to be here, however, she's in Iceland this week with her daughter. So we got a video that we had her record on what she does.

I am a social worker. I am the homeless outreach navigator currently for the Rochester Police Department. I do a lot of walking in the streets, the skyways.

This was a very popular place in the winter.

We go to places where I can find folks. that are unhoused and try to help them get connected to services and resources. Housing, substance use treatment, food. I get a lot of steps in. I sometimes hit my 10,000 steps in the morning. I usually walk, I would say, two, two and a half miles in the morning. between the skyways and outside when it's nice out. I try not to be outside too much when it's really cold, but I do bundle up and head outside because I know some spots where folks like to hide out and stay warm. The beauty of the work that I do is if I need an officer to go with me, I've got one. I can grab somebody, we hit the streets. So some of those folks that are a little bit more difficult or that struggle a little more with mental health and substance use, particularly the substance use, I have access and I can take officers with me as needed and that has been a very well received and useful tool for me. We've worked on building those relationships, the officers and myself. A lot of them are business people down in the Skyway. There's also the security guards in the Skyway have been very helpful as well. They have eyes where we don't have them all the time. You know, we do our walkthroughs in the morning, but they're usually there all day, and so they usually tell us if someone's struggling, if someone, if they know someone is hiding under the stairwell or if they need some help. By building those relationships with folks in the community, it has helped us to find people and access people and build rapport with those unhoused folks. I met a gentleman down in the subway, actually. We were down in the subway. And I have been trying for months, probably, I'm gonna say almost closer to a year, to gain some rapport with this guy.

I don't know if he'll consent to talk or not, but I do need to have a chat with him.

But he sees us and he darts away, you know, and I've tried and tried, but just recently, for whatever reason, he has chatted with me a little bit. And when we saw him today, I asked him not to go down there because I didn't want to scare him away with the camera, but he agreed to meet me at the library. So what time do you usually head to the library? About 10? Yeah, 10 to 10. yeah i'll meet you over there a little bit later and we'll sit down and get that filled out okay terry remember terry and he was there at the library at 10 o'clock this morning i sat with him for an hour i got i did the coordinated entry paperwork he signed some releases for me he agreed to see a doctor he agreed to have a diagnostic assessment, which these are all tools that we can use to help him get help. Catch a lot of folks over at the Salvation Army. I'm over there, I would say, daily, lately. I tend to go there late morning or close to the lunch hour. because a lot of people go there to eat. I have had good luck there. Staff have been super helpful. We just work together to get folks some help. And then at the very end of the day, I come back up to the north station at the end of my day. I make phone calls. I do any referrals. I refer people a lot to the DART team for the county, Olmstead County Housing. I refer a lot of people for mental health help for case management. I just feel it's been a big effort by RPD, too, to really work on this. And the officers that, in particular, from the CAT team that work on this, they are a lot of heart. They don't go at it from a legal or punitive view. They go at it from, we want to help you. And here's Terry. What can she do for you? It's just been a great combination. We've accomplished a lot.

ALL RIGHT.

COUNCIL MEMBER FREDERICKS.

I greatly appreciate the proactive approach versus the reactive. It's incredible. And relationships is what makes change happen. And I just really appreciate that aspect, that that's the avenue you go about it. I witnessed it firsthand. I went out with one of your officers early morning, went through the skyways. Where my patience would have ended, I mean, his started. It was unreal. I could not believe, calling everybody by first name, going through things with them, helping them pick up their stuff. I was amazed. And that sort of compassion goes a long ways. And that is how you get through to people and get them to let their guard down, build some trust and make some change. It's impressive. So I just wanted to ask, is there anything more we could do to help you out?

Yeah, I think that plays into the next slide, Councilmember. First of all, we don't want to lose the momentum that we have. You know, I think as Captain Hodgman said, we feel that if we do stop walking the skyways, we do stop engaging, that we'll kind of lose the hill, per se, if you will. So I think we need to keep our foot on the gas in reference to this. It's why we need the additional officer and why we need this FTA position. That's why we're asking for it. Understanding that we've provided, I believe, proof of concept and the value of having this navigator embedded alongside of the police department has been incredibly valuable. It's why we pivoted from two police officers to our current ask in front of you today. I think there needs to be further analysis of the different resources in town and how we can work together. and the potential impact that those resources are actually having on the town, particularly any new additional resources that are brought into town. I think there needs to be kind of a collaborative discussion in reference to those. And then, you know, with that, the second lens there is accountability for all the services being rendered down here and how we, again, come together for this holistic, collaborative approach of solving probably one of the most difficult problems out there for most communities.

Council Member Miller.

Sure. Just a question logistically. If Terry Dose is currently .5 FTE and you're asking for a full FTE, What is the additional capability of that additional 0.5? Is this a single person? Is this that that person would be able to talk with the top 2050? Some other like number? Is it an ability to engage with providers and partners that is not within the scope of ours today? Is it something else? Some combination?

Great question. Actually, we did actually apply for a grant for another contract navigator. Unfortunately, we were just notified I think a week or two ago that we did not get that grant. Part of the discussion that I had with the city administrator was well, if you get that grant you still need this FTE position. The best way I can answer that question is yeah, we need them both. The bottom line is there is actually more, there's enough work there for probably one and a half, two FTEs above and beyond just the 0.5 that we have. There's more work in front of us than Terry can actually do as a 0.5 employee is the best way I can answer that question. So we would just continue the same efforts, just more.

And I guess as a follow-up, and you don't have to commit to this, but when you were last here, I asked, well, how soon can you scale this up? And so I'm glad to see that the request is to scale this up. Does that mean keeping Terry in the role and then moving her to a full-time role?

I would prefer if she never retires. At some point, you are correct. We need to figure out how do we duplicate that.

Sure.

And just to add maybe a little bit more context, too, is part of this, certainly Terry Dose is the magic sauce. I mean, she is wonderful. She's a gifted individual that has the ability to connect with people, build trust. then and then help guide them into services but the strategy behind the top ten is you know is really is a pretty smart strategy and the fact that we have to have a targeted approach not targeted from punitive but targeted from hey you know you're coming across our radar the most and and these again these are the people that need the greatest level of service within our community that the most service resistant and how do we get to them, and that's part of the strategy, the brilliance behind the top 10 piece. And again, as the captain said, we're very proud of our success rate. And again, is it gonna hold? We'll see, we'll see. And if people come back on the list, 100% they have.

And I would add too that if you, at any given time, I think within the county and the city of Rochester, there's a couple hundred people that are unhoused or waiting to get into housing. We are focusing right now on the ones that are creating the most social harm for our community members. And that's what makes up the top 10.

Okay. And I know we've talked a lot about the homeless navigator or this homeless outreach coordinator position. What is the capability that an additional CSO offers in this space? Or how should we interpret this pairing of the request?

So it's not a CSO, it's a police officer. This one is for the, so we modified the decision packet from two officers for the CAT team to Terry as a full, that position as a full-time, and our CAT officer. And the CAT officer is, if you maybe want to speak to that, all the different things that we have planned for that person.

Yeah, in this particular role, as with Matt, what you'll find is when you go out and you're talking to some people who have lived some pretty rough lifestyles and had some pretty bad things happen, you'll have to end up where they are. And when you can go out and you can connect with that person and bring them back, it'd be very similar to you going to your doctor, and the next time you have to go see a new doctor and you have to tell a very personal thing about yourself to person after person, you're going to be frustrated very quick. That's where we put the right person in that spot, like Matt and I have done, and some of the other officers on the CAT team, is you get to know the individual. And like I said, you know how to build that person back up, like Matt Short. He didn't always like us. But he's very happy that we kept pushing and pushing on him to get to where he is. Like he says, he wouldn't be in the position he is without us. But you're not going to get that by sending a different officer every time and somebody having to start over their story because they're just not going to start the story over. They're just going to walk away and leave. That's the importance of having that designated person and to pair them with somebody like Terry who has the ability, the resources where she can make things happen right now that we just don't have that ability. And she has the time to work with the jail and get down there when people are sober and work with them at that point and work with the courts and help work with commitment processes. Those are things, police officers, we just, we struggle. That's where this was really kind of helpful. So when we started this and the top 10, it's not like a top 10, literally what it was is the chief came to me and said, we got a problem, like help me out, like fix this. So I looked at it and said, okay, it was, we were having our numbers, our contacts, it was like 30, 40 contacts per person of the highest ones. And I said, OK, well, how do you tackle a big problem? Like, how do you eat an elephant one bite at a time? So that's really what it was. I was trying to, how do I narrow it down to a bite amount? And I said, what if we just took the 10 people that are causing the most social harm at any given time, and we focus on helping these people? And that's where there's a lot of people, if you've been downtown over years ago, you would have seen the same people every day over and over and over. And that's what we were seeing. And the chief said, what do you need? I said, chief, I need a missing link. I need that social worker who's right there with us to help me navigate this, that I can get that person, the social worker, to help make connections to which treatment facility might be right or which service might be right or if get them connected to Commitment if possible if that's the appropriate approach and that's where we got Terry involved and our numbers started go down and from 30 and 40 contacts per person We were very close one month. I was really excited. We almost had single digits as our top numbers and

Okay, we have a full dance card here. So we have Council Member Palmer, Wall, Doering, Fredericks, Keene, and Mayor Norton. So Council Member Palmer.

I'll make it quick. Thank you. I got three things real quick. Camping ordinance. I'm assuming is working well, and we need to keep the camping ordinance going Number two. How are you working with the county? I've always been critical that they haven't done much a compliment the mayor because she got us to have a Evening shelter in the summertime where the county didn't want to do it Is the county stepping up and doing what they should be doing or do we need more help from them?

I would say that we have since we have started working with this kind of a model with Terry, our collaboration with the county and external providers has increased exponentially. We are having success and other people are noticing that too and they're getting in on some of that as well. And so again, we're asking maybe social workers to handle things a little bit differently, to do things a little bit differently, to maybe focus on outreach and the county is stepping up and we're getting a lot of those resources. From from them to be able to do so so so that has increased going forward With the increase of FTE for that position I would I would expect that we would have greater collaboration and we would have the ability to participate more with collaborative meetings Planning things stuff like that that right now there just isn't the time of the day for her to be able to do that stuff Council member wall

I simply add my thanks to RPD for treating everybody with respect and compassion. Thank you for all you do. Absolutely. Council Member Doering.

Yeah, I just have a few clarifying questions and a statement as well. According to the Any Path Home by Name List, there's 300 individuals who are single adult individuals who are experiencing homelessness in Olmstead County with the vast majority of those living in the city of Rochester. Earlier in the presentation, you put 538 contact hours with individuals experiencing homelessness. I'm wondering if you could tell me what percentage of those hours was allocated to the top 10.

I can loop back with you and get that data. I'd have to, I'd have to, I forget that.

Okay. I'd appreciate that because sometimes there's the perception that all of our homeless population is causing homelessness. immense problems in this community. And that, that reality is simply is not true.

That is the top 10. Okay. Okay. And I would agree with you. That is not accurate. Yes. That all of them are by far and large. No, they're not correct.

And I just want to get that narrative changed in the public sphere as well. And then chief, you had you at the end of your statement, you talked about the impact of additional resources and what impact that could have on the community. in terms of reaching people in this space. I was wondering if you could unpack that statement for me a little bit.

Are you talking about the budget ask?

It was on that slide, or you had said something like, we want to be more collaborative to fully understand the impact of additional resources allocated to serve this population. Were you talking about additional service providers, additional capital expenditures? Can you just elaborate on that a little bit more?

As you look at the different service providers, it's not just issues, concerns, problems are not just isolated to inside the four walls of those buildings. So whether you're talking about the landing, the Salvation Army Catholic Charities, sometimes those issues spread out into the parking lots, into other neighborhoods. And I'll be flat honest with you, we have significant issues in and around, you know, the landing, the warming center, as their people kind of funnel in there. And so there's downline, downstream issues that fall to us based on these service providers. And I think that's where we need to start having some of those more collaborative conversations of how can we collectively deal with those issues outside those four walls.

Okay, thank you. Council Member Fredericks.

My mind goes right to solutions, of course. And I'm sitting here thinking, training two people while we have this rock star, having her train the next two in line, so to speak, because obviously we can't do that. A typical police officer probably can't do that. We need her to train in her predecessors.

That'll definitely be part of the, you know, if this is funded, that'll definitely be part of the equation is, you know, how do we sustain this?

Yeah, heaven forbid we lose her, then we got this.

Vacuum.

Our unicorns.

Council Member Keene. Yeah, thanks. There's interesting stuff. I did want to go just on the educate, encourage, but on that enforcement, are we using the enforcement and on the camping ban? I know I checked at one point a year or two into it, and we hadn't made arrests on that, but when you use enforcement, I want to clarify, what does that mean? Does that mean arrests, or what does it mean?

Let me jump at that. I think you are correct. The camping ordinance is working to significantly reduce the number of camps in this community. And as the picture showed, it's reduced the size and scope and complexity of those because they're realizing that once we post those camps, they need to move. And that ordinance gives us that authority to move and sweep those camps. Not dissimilar, quite frankly, if you've read any of the news recently, the city of St. Paul is doing a major camp sweep. uh in in the near future and so having those rules having those boundaries are absolutely essential same with the skyway ordinance that we talked about that has made significant diff that has made a significant difference and again so we certainly do take the compassionate approach but we also need the rules and the boundary otherwise uh people are less inclined to cooperate and uh and

No, I agree. And again, I was able to support the camping van, but I want to understand, I think we're using the word enforcement. Maybe we're using it as what we're really, we're having the authority to come to bear. Or does it really mean, no, we are retaining, we're pertaining people and holding them for 24 hours. Are we doing things like that? Is that happening?

If there's criminal conduct, yes, we're certainly dealing with that. We're taking appropriate law enforcement action. Okay. But I don't think year-to-date we've, or have we written a... No, that ended up being dismissed.

There was some miscommunication on the understanding of the officer that wrote that. Okay. So that's been dismissed. But I will add that we have a lot of collaboration and communication that goes on with the city attorney's office. regarding these individuals who are really needing to get some assistance. And sometimes it is this person needs to be arrested so they can have some time to sit in jail, detox, whatever it is. And Terry will have that conversation with the city attorney's office. And we've had a lot of success in doing it that way.

Okay.

So it's not necessarily just a decision we all of a sudden make. It's kind of a collaborative decision.

Yeah, no, I just want to understand that enforcement, and I think that I wanted to clarify that, that I think enforcement doesn't mean arresting and going to court and things. Those things I think we know they're not going to, that is not the solution. I want to follow up on Council Member Palmer a little bit with the county. I expected to hear a little bit more about the Any Path Home and this new initiative. And I know this is really an update from our police force about what we're doing. But I think I just want to clarify that this is like bringing these different groups together. I don't know. I'm looking forward to bridge some of these problems with the things that happen around the landing because they're a part of this or some of these other groups here. Is that helping or is it? Just a group that we try to inform.

We're doing or is it we it really is collaborative That's a complicated question so if you look at any path home as more of like a clearing house right of kind of like this is where everybody goes and from there people get dispersed into various different housing options so it Exists yes, and it is being successful and it's great for tracking those numbers and for being able to show us that out of that number, these are the people who are maybe homeless with families and they need to go into a specific kind of housing. That's what they're going to be doing. They're not necessarily going to be dealing with the people that we've highlighted here on a monthly basis. They may know them, but these individuals might never rise to that point where they're going to be available to get any kind of housing through Any Path Home.

And I appreciate that everyone's in their lane. And as the city side of this, we do have some of the enforcement and some of that like feet on the street. So I appreciate that.

Council Member Keene, I'm going to allow Council Member Doering to fill in since he is our representative on any path home.

I would say that one of the interesting interactions with RPD and any path home is in public spaces work group that's really working on addressing the effects that some of our more some of our homeless population that requires more effort, the ramifications of their presence are having in our public spaces. So there's lots of discussions about how to clean up, how to light places so folks aren't congregating in places. So there is some beginning work and collaboration in that particular task force with Any Path Home. I don't know if that was what you were looking for.

No, no, I think Council Member Palmer touched on it of saying like, do we have those, are those connections being made? And I think the answer is yes. But like I said, we're still in our own lanes too. I don't expect this group to become, you know, to be reassigned into something else. We have to stay in our lanes. My last comment is just on my admiration for, and I think some of this comes from leadership, but it's amazing the touch some of the officers have in this because going through this in the Skyway or in these other neighborhoods, it really has to be difficult. And I'm really impressed that especially these younger guys can have that sort of outreach to people who need that at the time but are not always treating our people with respect back to them. I think that reflects leadership, but also the character of the people we're hiring.

I couldn't agree more, and thank you very much. I appreciate that comment. We are very careful and selective in who we pick for the CAT team, and they have to have a true, genuine desire to want to help those individuals be successful. Yeah, thank you.

Thank you. Mayor Norton.

So I think a lot has been said, but for those of you who were not here when we started this path back in 2018, 19, it was a very different looking situation. We literally, those were easy pictures showing the housing in the skyways. They were filled with people living in our skyways. It was a very difficult time. And it was new to the city. and we didn't have any path home. I'm so grateful that the county and that we have a representative here that's working on that because for people who are unhoused and they simply have fallen on hard times, could be personal, could be financial, whatever, sometimes it's easier to, and we were from the very beginning, finding more success getting some of those folks housed. What we're talking about today is kind of a different population of people who were resistant as the gentleman that was up there, but sometimes you have to keep being there for someone until they're ready, which is one of the things I think that the police officers have done is being there. There are folks who have issues maybe so significant that finding housing is very nearly impossible until they're ready to get the help. And this is what this has done. You know, it's hard to hear the top ten or whatever. Sometimes I know I think that rubs some of us the wrong way. But they are the ten most challenging persons experiencing homelessness who are in legal trouble quite often. And that's who we're talking about here and I really appreciated Councilmember Keene's comments because having watched this evolve over the many years I've been mayor, it is night and day difference and truly the compassionate folks that have been hired by RPD and that have been assigned to these roles have made a huge difference in the outcomes that we're seeing and why that group of 50, 80 people, I don't remember how many it was, something with a one at the end, have, are no longer on the list who are able to get help, who are in chemical dependency treatments. I've seen, you know, sometimes they finally are like, I'm ready today, right? And then you're able to help get them where they need to go. It is a night and day difference. So it's been a challenging path, and I felt really fortunate to have been a part of the change. Because literally at the beginning, it was, does anybody in the city deal with the homeless population? No one. Does anybody in the county deal with the homeless population? No one. No one was focusing on it. No one. And from that start to where we are now is a night and day difference. And we haven't solved the problem 100%. I'm still waiting to find the community that has. But we're on a much better path. And I think between any path home and the compassion that we're seeing for our toughest folks experiencing homelessness is going to continue to make a big difference. And thank you. Appreciate it.

Thank you, Mayor. And just one point that I wanted to add, taking off on what the Mayor was talking about, is also I want to commend you on the work that you're doing across jurisdictions. You were at, Chief Franklin was at our OCJC earlier last week, and challenging, we talked about Rule 22, cases and just that there are a lot of challenges working with major health providers and the county and really the chief is taking a lead on really building those partnerships and getting answers for these individuals who are struggling, whether they're Rule 20 or close to Rule 20. And one of the things that I really appreciate you sharing is that we've heard a lot about the top 10. And what you presented to us today was really showing how people, it's not a stagnant top 10. It is people that are moving off of that. And that really says progress to me. So thank you very much and keep up the good work.

THANK YOU.

AND NOW I ALWAYS PUT ADMINISTRATOR ZALM'S ON THE SPOT. NO, SHE'S GOT IT UP THERE. THAT WAS THE CLERK.

THANK YOU. THEY KNOW THAT I CAN'T DO IT MYSELF. SO, UPCOMING ON THE 27TH, WE MENTIONED THE SHOT TO OPERATING MODEL AND CIP UPDATE AND YOU ALSO HAVE RPU WATER AND POWER SUPPLY PLAN UPDATE. I ALSO WANTED TO NOTE ON HERE IF WE CAN GO TO THE NEXT SLIDE. I'M HOPING THERE IS ONE. NO, THERE ISN'T. THAT'S OKAY. IN YOUR PACKET, THERE IS THE REST OF THE YEAR OF STUDY SESSIONS, SO I DID JUST WANT TO NOTE THAT WE ARE WORKING ON GETTING A FINAL SORT OF UPDATE AND FEEDBACK FROM BETTER PUBLIC MEETINGS, AND SO IF MR. VLAJOS IS AVAILABLE ON AUGUST 10TH, WE DO HAVE SOME TIME AVAILABLE ON THAT MEETING. THAT MIGHT BE A GOOD OPPORTUNITY FOR HIM TO BE ABLE TO PRESENT. BUT WE WILL CHECK AND SEE IF HE'S AVAILABLE. AND THEN, IF YOU LOOK FORWARD IN THE YEAR, ONE OF THE THINGS THAT THE GROUP HAD TALKED ABOUT WAS USING A FIFTH MONDAY, MAYBE TWICE A YEAR, OR AT LEAST TRYING IT, TO NOT HAVE A STUDY SESSION, BUT TO DO A TOWN HALL. AND ONE OF THE THINGS WE'RE TALKING ABOUT FOR YOUR CALENDARING IS POTENTIALLY DOING THAT ON NOVEMBER 30TH. THAT IS A FIFTH MONDAY. AND SO, I REALIZE NOT EVERYONE MIGHT BE AVAILABLE. IT WOULD BE IN A SIMILAR STYLE. YOU, ON THE 9TH OF YOU ARE GOING TO HAVE THE YOU ARE GOING TO HAVE THE FEEDBACK FROM THE COMMUNITY FEEDBACK FROM THE COMMUNITY SURVEY AND SO WHAT WE HAD SURVEY AND SO WHAT WE HAD TALKED ABOUT IS HAVING THAT BE TALKED ABOUT IS HAVING THAT BE A TOWN HALL ABOUT THE COMMUNITY A TOWN HALL ABOUT THE COMMUNITY SURVEY. SURVEY. SO YOU WOULD HAVE BEEN PRESENTED SO YOU WOULD HAVE BEEN PRESENTED THE INFORMATION DURING YOUR THE INFORMATION DURING YOUR STUDY SESSION EARLIER IN THE STUDY SESSION EARLIER IN THE MONTH. MONTH. YOU WOULD ALSO TALK ABOUT HOW YOU YOU WOULD ALSO TALK ABOUT HOW YOU MIGHT WANT TO CURATE SOME OF MIGHT WANT TO CURATE SOME OF THE MEETING. THE MEETING. WE WILL NEED A MEETING SPACE

All right. Thank you. And we are adjourned.