City Council - Regular Meeting

We are going to get started with our study session for August 24th, 2026. We have three agenda items. First is a discussion on our 2027 recommended supplemental operating budget. We've got an hour and a half slated for that. Then we will hear on Rochester public transportation, transit financial outlook, update and then we will have an update on economic mobility program. So with that, Administrator Zelms, budget.

Thank you, Council President, Council Members. I just want to start off the, well, this isn't moving. Do I need to turn it on?

Press this button?

Oh.

It just might not be clicked on that screen.

Oh, got it a little help from the crowd. Um, so I just want to start off the 2027 recommended supplemental operating budget by thinking a large group of people who it takes to pull this together. Um, even though we're in the supplemental budget, which isn't as much change as when we're in the 2 year budget process. Um, there is still a lot of work that has to happen in order to bring you the budget book, et cetera. So big thank you to Rachel Hodick, Josh Doerr, Esten Jostad, Brian Anderson, Aaron Parrish, the entire communications team who has to move back and forth and pull this together. You'll see that the presentation is ADA compliant, which was a feat in and of itself. And then also to all the teammates who work hard to make sure that their base budgets are reviewed and that we are able to be able to support what we anticipate within the recommended budget that we started creating about a year and a half ago in the two-year budget process. So with that, I'm gonna go fairly quickly through the beginning, as you have seen that before, but I think it's important framing for anyone that might be watching online that hasn't been at the prior meetings. First, we do try to look at this through the lens of your priorities and principles, so the strategic priorities which is how we focus our resources and initiatives, and then the foundational principles, which is how we try to approach every action and decision and how we deliver on those things on a daily basis, whether that's operational or whether that's coming forward with projects that sometimes take five and 10 years from their idea to finishing them. You'll see some of that outside of City Hall today. We have been through this process. As mentioned, we had factors influencing the budget in April, follow-up with the audit, which is what happened in 2025, and then again in July, the budget update with additional information. We have this study session on the 24th, another forthcoming on September 14th, depending on if there's more deep dive that we need based on the feedback we get today. And there are some other holds on the study session agenda, depending on if there's details we need to continue to work through. You do have the preliminary levy adoption on September 24th, excuse me, September 21st. That's planned at that time. You would be approving a levy that could go down or stay the same, but could not go up. So if there's something that you see here that you want to add, that's very important right now. And then the adoption of the budget is planned for December 7th at that public hearing. The supplemental process as I mentioned is not as rigorous as the two-year process. We don't have a new decision package process for new ideas or expanding programming, the RPU budget is included in this, but as we have been mentioning over the last year and a half, there's a lot of refinement that's been happening with changes there. General Manager McCullough will present that part of the slides, but we do have a lot more detail in this 2027 recommended than we've had in the past because we've wrapped up all of the work that many other people do in order to bring this to you. So what we're really looking for, and it's important, we've talked about this before, is getting any feedback on changes, adjustments, either reductions, increases, reductions to make other introductions of new ideas, and whether that 5.59% increase, which is not the tax levy rate, we'll talk a little bit more about that later, that's the percent increase year over year that would be required to fund the things that are in the recommended budget that are levy funded. Again, we've talked about the LGA before. We heard from you back at the last study session that that needs to be a significant discussion in the 2028-2029 budget process about pavement preservation, both roads and trails. So that will probably consume much of your time in 2027 early on. And again, we haven't been keeping up with the local government aid and the hold harmless fell off in this 2027 budget year. So to get down to the details of the budget, what we have here for all funds combined, and of course we would expect some of this to change with Rochester Public Utilities, is a $799.3 million budget. The vast majority of that is not funded by the tax levy, although we talk about the tax levy significantly, it's important to people who own property here. The total increase is that makes up is about $6.6 million in tax levy adjustment. The rate increases for sewer and wastewater, excuse me, for sewer are still trending at 1% based on the rate study and they will be updating their rate study for the 2028, 2029. budget year for electric the original recommendation was six percent but the recommendation that came through the rpu board is at four percent which will affect the average customer by about five dollars a month and water has not changed since the original recommended two-year budget that is about nine percent and a change on average of a dollar seventy eight a month Again, cost of service studies are going to be forthcoming for Rochester public utilities for both water and electric, and then also for sewer, as I mentioned. So those are things that are very similar to what you saw in the two-year budget process. You can see how that rolls up on the right-hand side of the screen. Capital Improvement Program is a significant part of that almost $800 million budget. Operations, though, is also not insignificant. Just a reminder that some of the operational budget for Rochester Public Utilities is related to some of that power purchase. So it's a little bit more unique than it has been in the past. And then debt service, again, increasing in 2027, primarily related to the sales tax debt. as well as some RPU. So the recommended supplemental tax levy is sitting at $124,900,000 approximately, and that is far less than what we had anticipated in the two-year adopted budget. The trend line there was at 7.4%, but again, we go back and comb through the budget and make adjustments as possible. The two things that are not included here, and let me describe these accurately in case we confused people, We did not make any increases in the tax levy to absorb the credit card fees that we're continuing to see forthcoming. What we had heard is that we should be looking at credit card fees, which we call either surcharge or convenience fee. Those haven't been finalized, but we're very close to being able to bring you that. And then the loss of street reconstruction funding based on that local government aid change, which I mentioned we would look at in depth for the 28-29 process.

You can see that the property valuation growth, that there's 1.26% in new construction, so that- And Minister Zelms, can you go back to, just so I understand, with the credit card fee considerations, the current, budget that you're presenting has no change in it or does not include anything on?

It doesn't include any increase in revenue for surcharge fees. If, for example, depending on how those get adopted, it's possible you might see a slight reduction in the tax levy that's currently necessary to absorb those. But if they weren't approved, then those would have to be absorbed within whatever budgets are approved that are tax levy funded. Got it.

Thank you.

I have a question.

Mayor Norton.

On the street construction budget.

Correct, the remainder of that is offsetting the cost for your general fund. So all of the LGA that remains is going to offset your general fund which is a significant operational cost for the tax levy. So you can see when I mentioned that 5.59% is not the rate, you can see that over the last approximately 10 years, the actual property tax rate has hovered between about 46% and 52%. And what this current budget is showing is that the net tax capacity rate would be about 48.9% at this amount. So going down slightly from what was in the 20, Influenced tax bills in 2026 again, that new construction number that I mentioned is going to absorb the 1st, any dollar in 1st, and then the remainder would be absorbed by how people's tax levy changes based on their assessed valuation and of the rest of their property class. Again, the vast majority of the budget is actually not funded by tax levy. You can see the tax levy makes up about 15% of total revenue for that approximate $800 million budget. We have other taxes, special assessments, licenses and permits. Fines and forfeitures, the penalty section there. Intergovernmental revenue, still a very important part of our revenue structure. If you think about the airport and transit, that's a significant amount of that intergovernmental revenue, as well as the local government aid. Charges for service is a big one. So when you pay your water bill, your sewer bill, your electric bill, And there's a significant amount of fees, et cetera, with our recreational services, depending on what those are as well. And then prior year revenue is revenue that's been collected anticipating that we will have capital improvements that we don't necessarily want to levy for or that you don't want to increase your rates for, but have been built in with some of those rate studies. So it's revenue that we've collected that we knew that we would need to save up for in order to do a future capital project. Another way of looking at that is decision packages, which are in addition to the existing base budget. About 1.15% of that levy adjustment is coming from those. Again, this is after you net out from prior year where you maybe had some one-time expenses, and that's carried in the levy, so you don't need to absorb new levy for that. We had some reductions in revenue that we needed to absorb, and then we have the capital improvement plan that's necessary, the equipment revolving stabilization to be able to continue to buy vehicles at current rates. And we now have, we're in the first year where we do not have any COVID era funds coming in for the holistic budget stability that the council created at that time to influence the levy. And then our ongoing base budget for levy supported employee services cost increases about 3.27%. Obviously, across the board, that's slightly different, and we'll get to that in future slides. Public safety, significant part of the general fund. The general fund is very reliant on tax levy, as is the library and parks and recreation, but you can see general government, public works, and we have some other things there, like the outside agencies funding, etc., So significant amount of the tax levy is going to be able to support the public safety function. If you look at the property tax distribution, 70% of that property tax is going to the general fund. Again, that's where your police, fire, public works are generally located. Municipal recreation, it's about a little less than 10% of that. The CIP at eight, library at 7.5%. We have some debt service and internal service costs. That's also your equipment revolving. and the airport at a very small percentage of 0.6%. Part of the operation of the airport, the vast majority of that is coming from operations revenue that comes from the airport, but we do pay utilities less the natural gas and pay for the cost of customs. then the total expenditures you can see um many of these services are very reliant on the property tax because you you're not charging folks if you they call 9-1-1 you're responding based on the fact that that's an expectation i think from a city like rochester and another way of looking at this is how much reliance is there so if the library's got about 87 percent reliance on the tax levy adjusting the tax levy and expecting that to come from library would be fairly significant impact on the level of service there and vice versa on some of those other implications. The decision packages, so that 1.15% that I mentioned on the other slide, you can see on the left-hand side, these are the specific, I guess, improvements, if you will, that would be coming from those costs, and we did talk a bit about the adjustment for community services police officer and one community outreach specialist, so you can see those still reflected here on the left-hand side, and then there are a few decision packages that are non-tax levy in some enterprise funds. The expenditure categories adjust and fluctuate annually slightly, but you can see that miscellaneous is an increase this year and had been a decrease before. Some of those things are dependent on projects or things that were getting done in that year. But again, we try to adjust the budget as necessary. We don't just leave money in the budget if we don't need that project for that type of activity to continue on into the future year. And employee service costs, so I mentioned the overall tax levy related employee services costs on a prior slide, and not surprisingly, if you have 24-hour services like police and public works and fire, those are going to change. When you have more employees that are working to provide services there, they have larger changes year over year. So the total personnel expense, inclusive of RPU, is a $9 million increase for all funds. The general fund, which I mentioned, is 70% reliant on tax levy, is 5.7 million. About half of that is the police and fire departments. Then you have a bit from the library, a bit from municipal recreation, and then you have public works and other services. And about 2.5 million of that is Rochester Public Utilities, so water and electric employees. The salary and benefits, the net increase is about 5.3%. So we have the general wage adjustment. We have 19 bargaining units and we still have, I believe now it's actually one labor contract left. You did vote on one last week. And health and dental are trending at about 4% and 1.5% for 2027. So when we make adjustments and we have less folks that are taking family care, that actually reduces the overall impact of employee services across the board. In lieu parking wastewater and stormwater helps to offset the cost necessary for the tax levy based on right of what used, et cetera. And basically that if you have a parking ramp, you cannot have a tax producing property there. But it is important for some of those other services. So what's reflected in the budget is your conversation from the prior study session. And again, the same thing for the in lieu for Rochester Public Utilities electric and water. Community reinvestment funding and economic development recommendations have not changed from the 2026-2027 budget process. So you can see those outlined here on slide 33. A few questions came forward earlier today. SBDC is the Small Business Development Center. The funds provided there also help to offset or pull down federal dollars that are matching dollars for that. And the History Center, you can see there was an increase in a prior year that was primarily related to the cost of busing for school programs that they were initiating. Just as a reminder, as I believe that that happened kind of early on in your careers here, for some of you. And then the long-range plan, you can see this is all over the board. So the tax levy percentage, again, is so much different than the actual net tax capacity slide that you saw that was hovering around flat line for the last 10 years. This is the year-over-year increase. And so when we have new construction, more of that is absorbed by new construction. But also when you have new construction, you have additional pressure on your services and your service level. When you look at the long range financial management plan, you can see that we have projected out in the future that we might have higher tax levy adjustments, but again, we've seen in the past that we've been able to mitigate those where possible. We carry in the trend some capacity, that you could use to reduce the levy or for new opportunities for investment within the levy. We also assume some personnel costs are going to change about on average 5.5%. That could be less, but we're always sort of always negotiating. It seems like, well, I'm not, Mr. Parrish is and his team. And then did just want to point out in 2030 that we carried an assumption that that might be a year where you would be bonding to be able to build station six, which is the fire station in Northwest. So that may or may not happen in that year, but we want to project out that there will be a point where we need to be actually building that facility. and staffing it. So that is the construction and cost of that. Again, last year we anticipated 7.4% for 2027, and what the recommended budget is is a 5.59% year-over-year increase. Council Member Wall.

You explain a relatively small bump in 2030. What's the larger bump in 2029?

Oh, someone told me that, and that's already slipped my mind. Ms. Odek is looking for that, but maybe Mr. Parish remembers. I recall that there was something in there. I think it was the way that we had some one-time expenses that were falling off, so it's sort of the way that that shows up is because we're carrying less one-time expense falling off. I should have brought my notes.

Yeah, it's not standing out to me either, so wait for Rachel.

In the meantime, I have a question. So you mentioned that the anticipated long-range budget for 27 was 7 point? 7.4%. What was it for 2026 prior to that? 2026? In the long-range plan before that, it was much higher than the 5.95%.

I want to say it was in the 8% to 9% range. 8% to 9%. but we were hearing that there was concerns about that, so that was a year where we made a lot, we were very tight on the baseline budget.

And my point is, we've anticipated higher, and now for previous year and for the supplemental budget, we're coming in under.

Correct, and there are also a lot of different priorities that the City Council has adopted that, depending on how you implement them, may have implications for the capacity that's carried here, whether that is reducing the amount, increasing the amount, or maybe a combination of both, depending on what you're looking for. So that conversation about pavement maintenance, there maybe is some cost that's already carried there that you wanna allocate towards that versus other decision packages. So that'll be an important part of our discussion early on in the next budget process. I think that Ms. Hodduck has the answer. Oh, there's an answer.

Thank you all. If you noticed on that slide where Allison had mentioned that the decision packs were at 1.15%, but yet we had 2 million in decision packs that we were funding, that is the same thing. We don't have the one-time reversals to reverse out of 29 yet, so it is the full amount of DPs that are included in there at that time. So once we get 28s and how many are one time, we can back that out, but that's an unknown at this point.

So for example, if you added a police officer, we carry a number there, but you could use less of it, or you could use more of it, or you could use none of it. And so let's say there's $1.5 million worth of police officers in there, and that comes with five cars. You're going to have a much higher one-time cost for the vehicles, and then after the fact, you're going to be carrying whatever the annualized cost is within the... Within the equipment revolving fund, so that's going to reduce the, you don't keep adding that to your levy.

Council member Miller sure this is a related question since you've mentioned a couple of times that new evaluation absorbs increase in tax levy. 1st. We had a presentation earlier this year from urban 3 that implicate that can. contemplated some potential strategic investments or strategic directions to improve the efficiency of our tax base. How might we continue to think about engaging with that process as we look forward into the projections of city needs?

Sure, I think a couple of ways. Some of that is being very thoughtful about growth and expansion areas, which you have a growth management plan that tries to consider that. You had a presentation also from Rochester Public Utilities about the water component of that and trying to be strategic about that. Also, there was some discussion on the same day, not exactly Urban 3, about whether you might be able to carry some of, basically create a citywide project for housing, utilizing the tax increment financing district that is the DMC district. So that may have some implications, good or bad, depending on the way that the investment might happen. But of course, if you have tax increment financing, then that's not absorbing. But you do have a few tax increment financing districts that are decertifying at the end of this year that will also absorb some of that increase. So again, this is just a numerical look at the graph that I just showed you. So we carry these across the various different tax funded funds. And you can see how the changes in this occur across whether that's the general fund, the library fund, municipal recreation. Again, it's a trend line. This is trying to be a little bit predictive for you so that you can early on in the process say, no, I'm not comfortable with this or we don't want to do anything new this year. We should be focusing on police or fire or those types of different things. And so we also have the construction improvement fund. That's where you would see some changes potentially related to the local government aid. And then also the debt service there, you can see that jump up in 2030. So just another way of looking at the projection forward, again, not a guarantee, but something that we try to do to understand both internally for teammates to be able to say, you know, this is going to have to be a lighter year where this is when we're I don't think the council's gonna be able to feel comfortable carrying a new facility and a bunch of new decision packages at the same time. Our major revenues, again, the tax levy and tax abatements is recommended at a little less than 125 million, 124.9 million. Local government aid you can see going down in the major revenues and then again down farther in the part that was allocated to the CIP. So to the mayor's question, what we had done with the one time Hold harmless funds was to isolate those into the capital improvement plan which was focused on pavement maintenance so that you would have a longer runway to be able to make decisions when the formula to hold harmless fell off and Then looking at the hotel motel tax you can see that continuing to trend up I would say that's probably actually a low number but we don't want to get comfortable with construction related hotel activity and then be surprised by that later and We continue to analyze that. There's more information later in the presentation. And then down through the information here, you can see significant adjustments in Rochester Public Utilities. They have some major construction projects coming forward, so they will describe that a little bit more in the detailed section for RPU. Again debt service summary here this is our existing debt service and you can see that in 2030 we would expect that to go up a bit if you are if that's the year that a new fire station funding for that would happen and then some adjustments there across the board for non-debt supported funding we tried every year we have debt that falls off and some of that is small and some of that is larger But again, that's just our general depth profile doesn't really change that much each year. You have a pretty low depth profile for a city of 125,000 people and with the growth that you're foreseeing. So some operating indicators, we've grown a lot since 1980, both in the, maybe to Council Member Miller's question, as the city has grown both in geography and also in population and number of properties. We have seen significant growth there, but we've done what we can to mitigate the impact on on how much personnel We're hiring to do that and taking advantage of technological advances contracting etc And with that you will not have to hear my voice anymore for a while. I

All right, I'm gonna transition to most of the other funds here and then walk through some of the policy conversations. I'm not gonna go through the general fund in detail. Alison did a great job sort of summarizing all that, so just kinda know that that's, you know, something that's been well taken care of here. But just to note, you know, we are, with the budget you have here, as well as just our historical practice, we are forecasted right now in 20, or have actual revenues over expenditures of 46% for our general fund fund balance. Remember, our target's 42. We always want to be a little bit above that because when expenditures grow, the number to get to 42 grows, so we tend to be a little bit higher than that, and so that's been good. to have positive revenue over expenditures. Just talking about the special revenue funds, parks generally, most of the increase here comes in two. So there's about $3.4 million of additional park investment. A lot of that is really loaded in to the sportsplex. Again, revenues and expenditures, you've seen sort of the operational profile there. There is an additional arborist in this calculation as well. And so just note that and the rest is staffing contributions. Library-wise, a very de minimis adjustment here, just a couple hundred thousand dollars of additional spending. So this is very much focused on base operations, primarily attributed to employee services. Moving on to the airport, a slight increase in the airport, just over $40,000. Again, really focused on supporting baseline and capacity needs. There will be some fee schedule adjustments that are discussed, particularly in the parking space, but we're constantly looking at our leases and how those can be sort of pro-social and beneficial to the airport. to enhance the funding available there. You received some additional information today around employments. So employments or passenger activity has been up, certainly not to pre-pandemic levels. All that enthusiasm around the United flights still is there, but there's a delay in getting that into the system with just some broader federal airport capacity issues that we're continuing to struggle through. And again, a lot of our costs there are fixed, so irrespective of the number of employments or passengers we have going in and out of the airport, we still do the runway snow removal, we still do all the things you have to do to successfully run an airport. But also note that passengers is one marker of the airport, but I imagine you all get deliveries from time to time and the other kinds of things that are important for people. And that's certainly a growth area, but just not a metric that we track. We really kind of focus on the employments. Transit, this is a big difference. Of course, you have BRT amortizing in here. We have the operations associated with VIA coming on board, which I believe that's like this week, right? So you'll be talking in a minute. I'm super excited about that. But there was some expense there. There are some costs associated with that contract. and then we have the BRT operations, and we have some temporary funding there to support the local share. Obviously, Mayo's got a very strong portion of the local share, but that is something you'll hear about in our legislative platform later in the year on your study session in terms of the work we need to do to get dedicated BRT funding. On to the enterprise funds.

Can you hold a minute? Council Member Miller.

Sorry, just before we move on to enterprise funds, could you go back to municipal rec? And I just wanted to ask a question about the first bullet point to start. One of the assumptions and concepts of how the pro forma moves forward with that is that it's largely tax levy, not relying on the tax levy. Does that continue to be the case? And how is that 2.7 million increase for the regional sports complex fit in with that philosophy that had been part of the discussions of

Yeah, generally speaking, there's revenues and expenses. So the performance that you saw earlier, I mean, you know, those revenues obviously are offsetting some of the expenses. So the net to the budget, you know, is much less.

But someone's seeing this, right, who said these weren't supposed to cost the tax levy anymore. Is that still the assumption?

That's generally what we're striving for. We obviously have some non-revenue generating activity happening now as they ramp in and all that, but But yes, it's revenues and expenses, and the lion's share of the $2.7 million is offset by revenue that's coming in.

And then a question about the increased monitoring and maintenance of picnic shelters and restroom facilities with RPD. Just curious about why other areas of the park aren't part of that focus of the parks. Like maybe those are recreational facilities, parking lots. I mean, how does that factor in? And maybe this is a question for RPD.

I mean, this is new. And I believe you all received an email around this from Chief Franklin not terribly long ago, maybe a couple weeks ago. I think the emphasis there is just highlighting the core purpose behind bringing on some of the park rangers or park-focused CSOs was really to make sure we had the ability to do bathrooms well and maintain some of the outdoor assets that we have. We're predominantly scheduled in the summer you know for that work and so for indoor year-round recreational facilities would be sort of gap coverage there but i think we're learning through it and so that probably as we think about the 28 budget process we could certainly say like is this going well are there enhancements but this was really sort of this pilot year where the this is the first implementation and overall i think we've seen good outcomes i've heard a lot less about bathrooms this year which has been great

I have as well, but I've actually heard more about parking lots and some dangerous activity, particularly at Soldiers Field Park, cars driving through the track, driving through other places. And I just bring that up because there's been a lot more activity in the tennis courts, basketball courts and other areas, which is great. But there have been additional complaints or issues that I've heard arising from some of that activity. And I just want to make sure that when we talk about what we're focusing on, that we're not missing an opportunity to be just present in the parks generally and not necessarily just focused on shelters and bathrooms.

Yeah, I think it may be all that. Chief Franklin's here. I see he's noting. I don't know if he has any comments to make to that effect. Otherwise, we certainly can consider that moving forward here too.

We need a microphone. council member i think i can answer that um the the park cso's have been a force multiplier and think of them as an augmentation of our current patrol services again i can tell you that we have not reduced our footprint so it has not replaced sworn police officers in the park area but it's been a force multiplier in fact again that report that i provided you guys a couple of weeks ago showcase that hand-in-hand relationship and the fact that they have called us, kind of that first eyes on the scene called us and helped us be that force multiplier. That's the best way I can answer that question. And I can run a report on calls for service that we've had at parks, but I don't have those numbers right off the top. I can say that we have had a few, like you said, a few, you know, maybe higher profile incidents at Soldier's Field, but I can't sit here and say that there's been this huge uptick

I wouldn't suspect that there is either. It's more around the erratic driving and sort of car culture perhaps of some use of some of the parking lots in the evening hours.

That continues to be an issue that we're doing our best with. Yes, sir. Thank you.

And just quickly to go back to your original question, we do have the sportsplex in its own fund so that we can measure the over-under relative to the conversation about any subsidy. Council Member Keene.

Yeah, I just wanted to clarify while we're on the special revenue municipal rec, I see we make a reference to the new arborist position that was in the decision pack. But again, I wanna make sure that's not funded through the special revenue fund, that's levy funded position?

Yes, so the municipal recreation funds, all of those collectively are significantly funded by tax levy, but it's held as a special revenue based on how the charter works. So once the funds go to, whether that's Parks and Rec or whether that is the library, it stays within those funds and then they hold their own fund balance.

Okay, so from my perspective, the decision package was approved, so the levy goes up a nominal amount, but that money is put into this municipal rec, and then the salary is paid out of there, and if it's over or under, the balance stays there. Correct.

Okay. Yeah, and you can see on this, the long-range financial forecast, you can see the amount of levy that is allocated to each of the special revenue funds, library and parks included, so. You can see of that $12 million in parks, some portion of that is the new arborist position.

Okay. I just didn't know how commingled the different sort of rec things are with forestry.

That's a roll-up. There's four different divisions of the rec fund, but that's a roll-up of all four in the way the special revenue fund is presented.

Okay. Thank you.

So moving on to enterprise funds. So again, parking, most of the adjustments here are well known from the rate studies that you've all talked about as well as some of the ongoing capital and operational analyses that are happening. So nothing particularly notable to share here other than I believe we're super excited about the Center Street ramp opening up again here. So that's good, good news. Sewer utility, as Allison mentioned, 1% rate increase. Generally, many, many projects happening here on the capital side. Again, these are predominantly intended to be reflections of the operations of the department. Most of the $800 or so, $1,000 of increase here is really attributed to staffing and some operating supply types of items. CIP tends to happen a little bit differently. Stormwater fairly base here, 0% increase in the proposed rates here. So no material changes on the enterprise funds. That way they continue to work through sort of the evaluations that you've all heard updates on as well. So with that, any other quick updates on enterprise funds before we transfer to water and electric? Welcome Mr. McCullough to the meeting.

Good afternoon, Mayor, Council President, Council. Happy to be here to help support the budget conversation. Start, just spend five to seven minutes to explain the water and electric budgets. No change to our strategy. We maintain cost-based rates. We work closely to not have intrafund or interfund rate class subsidies back and forth. and maintain key financial ratios for bond rating stability and long-term financial stability. Total budget shows $245 million across both the water and the electric enterprises, but there's a very different story between the two funds, and I'd like to dive in to that very briefly. Related to the original recommendation was a 9% general rate adjustment in 2026, and then again in 2027. We are recommending to hold to the 9% general rate adjustment that was already approved in the 2027 budget, but that's not without some additional pressures that are being managed with some short-term debt issuance, which I believe we've talked about earlier at the study session, as well as the other capital pressures that we may be facing in the water fund as well. That is a net impact of $1.78 per month per water customer. The average water bill, or at least the water portion of the bill in Rochester is about $20 a month for an average consumer as well. Here you'll also notice there's $6.5 million less grant revenue in 2027 as originally anticipated. That's due to the throttling, I would say, of the lead service line dollars coming from the state. We were notified that the remaining balance in the lead service line pool for the state is oversubscribed, and we expect the current balance likely to be exhausted by the end of 27. So we're still continuing to make good progress there, but we've adjusted our outlook in 27 to about a million and a half dollars of what we anticipate may still be available for lead service line funds.

in 2027 so that's the downturn of the six and a half million there as well uh councilmember miller uh related to that lead service line program do you plan to come back to us with a a modified plan to address those lead service lines that would then not be eligible because the the funding is less than we anticipated that's a great question um i think our pathway there would be continued state and federal advocacy for lead service line funds

These are largely, well, all private infrastructure since the lead service lines are owned all the way to the water main. So this is an expense that's grant funded and it wouldn't be appropriate to use public funds or utility funds for that. So we would be working, I think it'll be present in our legislative priority list that we'll be discussing later on as well. Stepping into water capital, this is the really significant part of the story here. The growth in Rochester in housing and land development I think is a good news story as far as trying to meet our housing demands, but it's creating pressure on the water utility fund. The fee structure that we've had in place for water development fees largely contributes only to tower storage and some level of trunk oversizing for water transmission. Other water supply, well pumps, booster pumps are funded through base rates. Therefore, with the expanded growth, that puts rate pressure there. Our strategy there is, it's already been recommended by the board, it'll come to the council in September to issue short-term debt to manage those capital pressures where future customers would then pay for that capital expansion. And that is a combination of advanced metering capital the what we're calling the Kalmar Booster Station, which will be meeting the new Northwest High High Pressure Zone around the Pebble Creek, I believe, subdivision area where there's a new pressure zone and Meadow Lakes and Del Webb Water Main Extension. So those three projects are anticipated to be need debt issuance in twenty twenty six and also show up in twenty twenty seven there as well. Even with that financing, we're anticipating ending twenty seven with ten million in cash reserves. which is still above minimum recommended cash reserves. The eagle eye on this slide would notice a missing parenthesis in the bottom right cell. That should be a minus 2.29 million. The first and second columns are correct. It just was missing the parenthesis there to show a downturn in cash reserves. Electric is a more favorable change in this supplemental budget. I sat here a year ago and would have told you and did tell you that we needed about 6% general rate increases, not only in 27, but through the end of 2030, so four years over and over. That was largely due to capital pressures of our firm capacity, our reliable capacity investments, the Mount Simon Station, the gas turbine fire. We were anticipating needing approximately $241 million of debt issuance to fund those capital items. We've had favorable variances in both of those projects, and we're anticipating a debt issuance in the realm of $141 million. $100 million less is a significant change in debt service obligations. So our recommendation is to reduce the general rate adjustment recommendation in 27 down to an effective 4%, and not only in 27, but the five-year pro forma shows it at 4% through the end of the decade. So we had some very favorable results there, and I'm happy to report that.

Councilmember Palmer.

I got a couple questions here. You've got 1.3% customer growth and then you've got 3% reduction in use. How do you figure that out? And then on your customers, what percentage basically is commercial and which is it residential?

I'll attempt all three parts of that question. So we use a 20 or 30 year history to project forward what load growth is. It's a combination both of new housing starts, industrial loads. And so our overall customer growth is anticipating about 1.3%. This is mostly residential housing starts, a combination of multifamily and single family houses. But every new customer comes at less consumption and The new growth on a per capita basis is lower energy use. And so this reverts back to our 30 year forecast and we budget conservatively on revenues and usage. So those two numbers are slightly decoupled. More customers, but each customer is using less on average. And the forward forecast always is based off of not last year's results, but a 20-year average. So you're seeing a combination of those factors there. Would you remind me the third part of your question?

You'd have to remind me. Next tab.

A mixture of residential and commercial. Our top 10 industrial and large customers account for about 30% of our load. And then I would say about two-thirds of our remaining energy and customer accounts are small business and residential. So it's... It's about equal thirds industrial large customers, small business, and then residential on a load basis. A third, a third. A third, a third, a third. Thank you.

Roughly.

Okay, we are recommending accomplishing the rate adjustment, the 4% net effective by making an adjustment to the power cost baseline. So the rate schedule would have no change from last year and we would adjust the power cost adjustment to bring an effective 4% rate adjustment in lieu of the 6% recommended. Moving on to electric expenses, capital and debt, probably most important slide here on the electric side. Baseline expenses show a 7.7 million increase of additional interest expense. That's the new debt issuance, primarily anticipated in early 27. We plan to have that conversation with the board council October, November timeframe this year. Two major developments I think I've touched on these recovering the Cascade Creek gas turbine one for a modest capital investment that may not be insurance related but largely we believe that can be recovered with no additional new capital outlay and then the Mount Simon station is coming in much less. The 4% recommendation doesn't mean we're investing less in reliability or efficiency. These are really just reflections of the capital program on the electric side. Talk about some key outcomes.

Nicole, can you go back? I just have a question on the incremental FTEs, graphic design and digital communications. Is there any... synergy that RPU does with city communications? Is there work together or long-range planning to be a joint communications under one umbrella?

I would say yes and no. There's strong communication that happens on a day-to-day basis related to the work of specifically the RPU utilities in the broader city, coordinated press releases, coordinated programs, but largely there is still a dedicated communication specialist already embedded within RPU that handles our plugged-in publication, direct customer communication, extensive communication on The advanced metering, we're touching 100,000 endpoints in direct customer communication. So there's resources dedicated to the work of utilities there that are not embedded in a centralized division there. This recommendation was in the two-year budget as a placeholder, so it's already in the approved budget as far as a headcount there. The purpose of that one is to offload some of the outside contracting that we're doing for the plugged-in publication, and some of the accessibility work that still is yet to be done on the visual side. So it's a combination of yes and no. This is an area where I believe it supports core business on supporting utility customers directly, and the funding should come from the utility revenues there for those services. Got it.

Thank you.

Um, key outcomes, um, coming to the end here very quickly on the power supply resource plan, uh, largest bonded program, uh, you'll see a decline here from 76.3 million to 55. That's just a matter of timing the five-year, uh, multi-year capital plan, uh, It just changes the timing of those expenditures. Similarly, on the Grid North partners, you'll see an increase, what is an apparent increase from 1.7 to 19.6. Again, that's a timing issue of sooner than anticipated, but the five-year multi-year capital shows a slight increase to 32.5 million there. As I stated earlier, we're maintaining our investments in tree management, day-to-day reliability, and some other technology and contingency work. On the water projects, the Kalmar Booster Station is one of the larger investments that will start this year. We anticipate bid award coming in late September. We're anticipating a budget amendment for 26 necessary in concert with the debt issuance and the budget amendment to get started on that work. It wasn't anticipated of needing the new pressure zone starting in 26. That also has implications to 27 expenditures.

I'm sorry, I'm one slide behind.

Thank you. And then the Meadow Lakes and Del Webb water main transmission expansion will be another capital pressure. Council Member Kee.

Just on these specific things, General Manager McCullough, I'm trying to understand like on the and also on the Meadow Lakes. These are driven by new developments, but it sounds like they're being worked into the rates thing, which almost sounds like the expenses are being spread across the customer base and not carried by the new developments. Is that like a policy or that just sometimes happens with the way the work happens?

I would answer that the developments are paying for portions of that infrastructure, specifically with the Kalmar booster station. There's a developer contribution in kind land and a cash contribution there, but that booster station will serve the entire full extent of the growth area. And that land has not yet developed. And so we need to build the infrastructure ahead of the other land development. And yes, if we would not issue debt, it would have to be borne by current ratepayers. The plan of issuing short term debt is so that the future growth can be the future customers can pay for that as the debt service is paid off. And we do intend in concert with the water system master plan to come back with a recommendation on water development fees, because as it is now, some of that is not borne by future development, it's borne by the rate base.

Right, and I didn't want to get into the complexity of teasing those apart, but I do appreciate the goal of trying to drive the expense to where they're being driven from, and to have them paying it, as opposed to just absorbing into the system.

Similar story on the Del Webb, the Meadow Lakes expansion. There's some direct contribution from those, but the trunk oversizing is an expense typically borne by the RPU, other water rate payers. And so there's a portion of that that could be collected by future water main connection fees for other developments that would be served by that. that's another mechanism that we have there but the reality is is that historically and currently we have rate based some of that water system expansion on the water supply side thank you Get my glasses back on to see my notes. I believe I am at the end here. So in summary, the water remains at the 9% recommended. Electric comes down to 4% for 2027. Net impact of $1.78 and 5.17 a month total for residential customers.

All right. Any questions for Mr. McCullough? Thank you.

All right, we're doing amazing bottom time, so if I jinxed it there, I apologize, but that way. So we have a focused conversation. These are things we've sort of picked up on. Mike. These are things that we've sort of heard from the council that you've wanted to talk about. We've tried to frame them and give you some information just to have conversation around each of these. I'll go through a few of these areas. I mean, some of the slides work together. Pause briefly for some feedback that you all have, and then continue to move on to the next area. So previous council meetings, you've talked about better public meetings implementation. This really tries to give you some framing around the email platform. Of course, we have a GovDelivery platform now, Jenna is available for any questions in this space as well. We're evaluating our relationship with Granicus right now from a web service provision, et cetera. And we have many products that we're considering whether they're the best fit. They haven't been as forward facing and advancing in the digital accessibility space. So I just wanted to kind of note that. But here's just a range of different products that I think you all have had some level of conversation on, in terms of customer relationship management. Are there better ways to do outreach? At a broad level, just to know, each time we do a new technology product, we have a fairly robust technology review process, just from a cybersecurity perspective, public data, risk. you know, they run through a variety of different testing, et cetera. So, and we also look at that to say like, are we doing this elsewhere? Oh, you know, we have a system over here that does something similar. So we don't proliferate technology that we have to support. So, um, there's the platform, there's various costs with that.

Um, we also have, uh, can you hold a minute? Mr parish, uh, council member Miller.

I guess I have a question about this slide on the third bullet point, which says an opt-in approach is generally preferred for building an engaged and sustainable subscriber list. Is that a best practice among governments or is that just in general with communications and marketing tools?

Maybe ask Ms. Bowman to take a run at that.

Uh, thank you council member. Uh, as far as I, I can't say that this is all of the research would back this. Um, it is in the research that I have done so far, you know, you imagine if you've opted in for something, the chance that you will open it or engage with it, um, in in the research that I've done just indicated that. It's not meant to be in opposition of the opposite, or an alternative, but just noting that that was a point to consider.

Okay. I'll just say from my perspective, and I know this has been said before, but I think that I would feel that way in general. If I were making a purchase at a local retailer and they started emailing me, I might feel one way. But when I want to hear from the city, and I've heard the same from residents, that proactive city communication that is actionable, relevant to the space, and contextual geographically, I think is a service that many residents would appreciate that I wouldn't expect to fit into that assessment. I think that's true. I've given money once to a nonprofit or something. I don't want to keep hearing from them unless I've opted in. But I think when people want to hear from the city, information that's relevant, timely, and contextual falls out of that assessment for me.

Understood I think the thing I would say as well just to consider is likely if that was the path we were going down awareness building on the fact that folks would have been Subscribed and to be checking their spam that was the one thing that was noted is given the various filters that occur and through email platforms, be it a Gmail or something else, of just wanting to ensure someone wouldn't inadvertently be unaware that they were getting those by being subscribed. So just to note that that's a piece that we'd want to ensure is clear that folks are knowing what they're looking for as a part of that rollout. The other piece I just wanted to note there, I know there was a question in regards to the opportunity for an elected official to decide if they would like to. And so just to note in that annual cost of the 21808, that that is, it's approximately $2,000 per user. So if not all elected officials wanted to participate in it, that is just the cost per user is $2,000.

OK, I think that's a fair point. Are all of these tools able to geographically understand where people fall in the city, understanding that some communication is relevant to an area versus citywide communication? Does opted in or a topical opt in?

The geo fencing, any sort of geo piece to it, that would largely be the IndiGov because otherwise you are doing more of the opt-in. There are opportunities even in our existing platform for folks to identify what types of content or information they are interested in. I will say we are doing less of that today than even our current platform would allow us to.

Okay, thank you.

Can I just level set here? So we're in a supplemental budget discussion, and I see in front of me like one, two, five options, and I'm not clear on the granicus and kind of we're evaluating. I don't know when we're... sunsetting that I guess what I'm looking for is a recommendation from staff that says this is a Community engagement tool that we that we believe is fits with what the council members are talking about, the next step for our community engagement. And so I guess my question is, are we going to get a recommendation and will there be a recommendation that will then impact our budget for 2027?

Council President, Council Members, what we have talked about consistently is that what my recommendation is is it's very important for you to have the best practices for elected official communication and city-wide communication. Depending on the tools you use, it's really more about any individual use of those falling within some sort of communication strategy that does not actually dilute the city communication strategy. So that's what we had talked about before. I think based on all of the costs that are recommended here, you would have capacity within your budget or between communications budget administration and that you if you aren't using granicus anymore would have whatever's budgeted for that fifteen thousand dollars in capacity you might have some one-time costs which i know we've talked about this recently you could absorb within your contingency but in the grand scheme of what the general fund budget is it wouldn't be drastically different but i think it is really important that you have some of that policy conversation about typically we do not have individual elected officials have separate a capacity to for city tax levy funded support do different things from each other there could be something here where if after all of the valuation came down, IndyGov was the choice and you weren't opting. I mean, that's a policy question. Do you want to, as a local government, opt people into all of your communication when they haven't chosen to get communication from you? And the way that the contracts for IndyGov have worked in other communities is you start paying based on email subscribers. So like at some point you're getting charged based on how many of these you send out. So it could go up over time. I mean, I think that's a real policy question. Do people want us to reach out with, like find out where they are, how they are, and assume that they want certain information from a local government? That's a question for the council as a whole. And at least recently what we've talked about is moving forward in some sort of pathway that talks about what is your communication strategy as a group? What are the starts and stops from being an individual elected official and citywide communication and what is your policy consideration for that? So I would like to say we would come back with a recommendation as fast as possible, but we're also trying to do active communications through a significant amount of construction and things of that nature. and I do think having some of that policy framework is important for whatever tool may come forward.

Mayor Norton.

Yes, this has been an issue that we've talked about and I will give just two quick examples. that have happened in the last week. I've had people say, gee, I wish I'd known about your town hall and transportation. I would have loved to have been there, but I didn't know about it until after the fact. So that's one example, and that's one of the reasons why being able to reach out to constituents in a personal way via email as opposed to hoping they see it on social media would be helpful. The other is literally today, I responded to hundreds and hundreds of emails hundreds and hundreds of emails, and the first one I got back was, how little you care for your constituents because it was so impersonal. Because we don't have a way to personalize Our emails, I spent, I can't tell you how many hours, putting together a very thoughtful note that I thought would explain something to constituents. It was viewed as too impersonal because it was dear friend, because I was sending the same letter to hundreds and hundreds and ultimately through thankfullychange.org. 3,000 people, they did it for me in their way. I don't have a way to do that. So we need to improve our methods of communication, not necessarily what the city is doing, but how we as individual elected officials have access to and communicate with our constituents. And I think whether it's through a pilot or additional research, I would love to see you all as council members have, and the next mayor, have ways to communicate effectively with their constituents, and it is harder and harder with all the new technologies and different methods of communication that are being used, and frankly, the lack of one source media that we used to have in this community that we don't anymore.

Council Member Miller.

I just add, I mean, to the question of opting in, I mean, we send mailings to citywide, Summer of Fun. We opt people into receiving that. We send postcards for neighborhood information meetings. We opt people into receiving those. And we hear from people who have reduced postal service or other access or change of address forms as reasons they don't see that physical mailing. And I don't suspect that this is a catch-all either, but as we see communication tools modernized, it does feel like an area of opportunity, even at just the staff level, to be able to work on more modern electronic communication tools. And when I talk with people, they expect that I already have a way to communicate with them, know where they live and other things. And except for running for election and getting the Secretary of State voter data, I think it's a misunderstanding from people generally that we don't have an up-to-date list of where they live and who is at that residence, because we don't opt into these data sources.

I'll just add, when we started this discussion on increasing community engagement by all decision makers, including all eight of us that are at this table, and that was a part of the Better Public Meetings discussion back in February, and we said, We want to increase the visibility of all of us as council members because our constituents want to know who those decision makers are. And we've started that process with the passports that are great. That increases our visibility. We're not engaging everybody. really substantially with the constituents, but it's increasing. And there is increasing numbers of constituents that do want to reach out and hear from us. So I'm looking for a product, whether it's Indigov or another one that has helps us to be able to maintain that communications, to personalize it in some ways, and also to reach out to those that geographically or demographically uh want to connect with us through uh through uh email communication or through town halls or through coffee engagements and uh and talk about issues so i'm looking for a recommendation a few recommendations so that then we can have a more robust policy discussion on which one fits uh, our needs best. I'm not, I, I, I'm in a place where I want the communications division to be able to have some, some, uh, guidelines around that and that we as, as elected officials have some guidelines around our ethics around it as well. And so looking for the framework on that.

Yeah, I think that's a nice transition point. If we're going to do it, and really, IndieGov is the only tool on this list that isn't an opt-in situation. So that is the one that is actually actively trying to bring in data for you to use. the next step really is to say, what's the policy around this? I mean, we can do the technology evaluation, we can do that, but I think you all have to develop some form of consensus. This is, of course, the budget meeting. As Allison said, City Manager Zilm said, We'll figure that part of it out. I mean, there's certainly ways to do that. But maybe your next step on this one is really to think about, what does the policy look around it? Clearly, when we're in election season, this doesn't seem like it wants to be an election-focused tool. But then that's like, what is your self-governance when someone goes outside the policy? Yeah, I mean, what's your, yeah, exactly. What's your self-governance in order to do that? And, you know, probably rules of procedure, council rule, you know, kind of conversation as well as something you'd want to probably walk into that type of document. So working through the ethics and the governance piece, the tool sounds like it could be a fit, but just, we all know something will come up here that's problematic and we just want to be ahead of that before we get there.

Council Member Keene.

Again, I appreciate trying to shut this down in the supplemental budget discussion, but I'll add one thing. I hear the discussion between the tool side of it versus the policy. I also think there is a style side of this. What is an elected official's job? And some want to do it one way, and some do it a different way. Some view it as their responsibility to communicate to everybody, where, to me, I'm always trying to direct them towards the communications group. And the communications I do is one to one, I don't try to do it a blast. So I think there's a style part of this too, and I haven't heard from all my peers, I don't plan to throw myself into this, although clearly there's other of my peers that do approach their job, and I think it is a elected official style discussion. Maybe it floats towards the age differences too, but the newer people, the social media stuff is big. This is not social media. This is direct marketing tools, and I think that's different than social media.

Council Member, I think you and I are in the same age group, so I don't know that it's age. Any more on this? So a good discussion to start. We'll see more on it.

And we don't need to spend a lot of time here on POCO. You all know what that is. It's really anchors in our community survey. You're going to be seeing that here this fall. But it's also our other surveying platform that we use. And again, tools can direct you to that, et cetera. But we have the ongoing relationship with POCO principally for our community survey. Elected official budget funding, I just wanted to kind of talk through that. You all requested this topic to be on the agenda here. Certainly your travel and training with both the mayor and council's information here rolled forward. Business meals, that's again, money you have available. Mayor's initiatives is a larger number here at 36,000. That's something the mayor's office has the ability to sort of provide us discretionary investment opportunities. I'm sure Mayor Norton, if you want to learn more about that, can tell you what she's done with that in the past. From a staffing perspective, there's one FTE assigned to the mayor's executive assistant, and then temp salaries, which traditionally has supported an intern for the mayor's office. So with that, you do have the general wage adjustments applied here. I know it's a popular perennial topic for you all to think about, but just wanted to kind of anchor you in some of these things and there's sort of the amounts and then there's the how and what types of services are provided within those amounts as well that you may want to talk about.

Well, I'll start and this has nothing to do with the current mayor's initiatives. I have no questions that they're all valuable initiatives. and I know a lot of them are very important to our community. My question is more from a policy standpoint as far as so the mayor has a $36,000 budget line that actually the mayor can use at their discretion where the council, if we have an initiative, uh, and I know council member Miller had one at our last council meeting. Council member Palmer has had some in the past. We have to get approval on all of those. Uh, and so I guess my question is what is the oversight to mayor's initiatives?

COUNCIL PRESIDENT COUNCIL MEMBERS I CAN START AND I MEAN I THINK THAT YOU ALL ARE AWARE THAT AT LEAST OUR CURRENT MAYOR IS VERY HAS VERY HIGH IN RESPONSIBILITY AND SO ALL OF THE FINANCIAL POLICIES STILL APPLY TO THAT AND THERE IS ALSO THE PUBLIC PURPOSE DOCTRINE THAT APPLIES SO IF THERE'S FOR EXAMPLE AN EXPENSE THAT'S RELATED TO SOMETHING IT NEEDS TO GO THROUGH A MICRO CONTRACT PROCESS OR SOMETHING OF THAT NATURE. We review those things. There's multiple sort of checkpoints through facilities, but facilities, well, another finance word, finance, F word there. So those types of things are important. Also, you all have access to be able to bring forward ideas for, we do carry a million dollars in contingency. each year that's already built into the baseline of the tax levy that has been utilized either by coming forward with city council requests, with staff requests, or sometimes there has been some costs related to mayoral requests. If there needed to be a match for a grant or something of that nature, that's been much rarer. So those, There's not oversight in the sense of it coming to the city council beyond the budgeted amount. So a budgeted amount of $36,000 needs to meet the financial policies and the public purpose doctrine, just like if there was $36,000 budgeted for communications outreach or something of that nature.

Mayor.

And all of the expenses that we use in our office go through, we fill out all the paperwork, they go for signage, they go to finance and they're,

you can you have access to them at every meeting that they show up on the finance report could you do that differently that would be i mean that's really so then i know that it has come up at this table on uh potential staffing for for council members, whether that's a halftime FTE or part of the current staff support that falls under the mayor's budget. Can you talk a little bit about that, options in that area?

But sure, council president council members, this has adjusted over the years. So, before my time, there actually was a mayor and council budget all combined into 1 budget. And so I'm not exactly sure how that works, but my understanding is that there was a fair amount of support for me or Brady. Of course. Much of this was before, like, the Internet, social media and things of that nature. So I think there's room for conversation about having there be mutual support, especially kind of goes back to some of the prior discussion. If there's policy discussion around communication engagement, like there may be more capacity there to be able to do some of that, like scheduling rooms, scheduling meetings, things of that nature. I don't think it's, you know, everybody gets office support, but if there's some parameters within that, I think there's probably some capacity, and I think that's also a conversation amongst yourself. If you're looking at adding an additional person, then you would need to be looking at doing that now. I think it could be healthy to have that person report to administration, which it did in the past, especially from the perspective of the labor unit that it's in, things of that nature. not for day-to-day activity, but just for making sure that if there is support for eight different people that we're following the council rules or procedure and code of conduct, things of that nature. I think we've talked in the past about that there would be additional capacity within communications and engagement and personnel there if you have some of that agreement on what does the policy look like for having best practices for elected official communications and engagement married with what is the best practice for strategically communicating and not diluting your message as a whole. So I think there's room to have that conversation and it's really the pleasure of the elected body.

Other thoughts? Council member Miller. Sure. And.

I mean, I don't necessarily think that the next step is to add a half time for the council, but I. I would be in favor and I've talked to the council president as well about feeling a limitation. Uh, staff support, um, and having to go through. The rules and procedures process where we're not asking for more than 30 minutes of staff time for any single question. And I do feel like having support for communications initiatives that can be filtered through a general communication strategy would be helpful for doing outreach around specific areas, geographic town halls. I see the mayor operating quite effectively with her town hall initiatives and at the same time feel a slight disconnect in some of the like when it from the public when is the mayor leading an initiative where is it council how do we work together and i think some of the staffing that we see here kind of sets that up to be the way it is that the mayor has additional support and yet the community doesn't always understand that the council is the voting body so i wonder how we can begin to better educated and build those in from a collaborative place, even in the budget. So I don't have a prescribed solution to this, but I would support more conversation on it.

And I think, just to follow up on that, I think that given that we will have a new mayor in 2027, I think it's the time to have that discussion and to look at, you know, each one of these line items. I mean, travel and training. You know, there's 16 in the mayor category. budget and we don't know if the the next mayor is going to be as international and and a spokesperson as as our current mayor and um i also i i'm not finished mayor I will. And I do think the mayor's initiatives, I think bringing that into council consideration I think is important. I do think also when it comes to partnership, the mayor and the city council are partners, I think the looking at what what was a mayor city council budget may be a an option that we should we should have further discussion on as well so that it's it's one budget and it's not uh not separated uh this way so mayor norton

Thank you, I just want to be really clear because the community gets off on this and gets very confused. None of my travel internationally has been, none of the city's budget has been used. I've used my personal funds for all international travel. Just want that on the record.

Thank you. Council Member Palmer.

Well, I appreciate what the mayor has done. And I think if you're going to change anything, I would talk to the mayor. I mean, she's the one that sat there for eight years and has done it. And maybe she has some suggestions that she can give to us and to the administration. Because I don't know. her positions on what she's doing, but her travel and her training has been very good for Rochester and very upfront with Rochester, so her budget's different than ours, but there's a reason for that. She is the mayor, or it is the mayor's position. I'll just speak to the 3%. I am not in favor of a raise, and I don't think that's necessary for us.

Further discussion? I think that's a great idea, Council Member Palmer, as far as we want to hear the mayor's thoughts on this. So we'll have further discussion.

This could be a carryover to the next meeting. I mean, we have 90 minutes for our next study session. We could bring this slide back if you have some time between now and then to collect some thoughts on these issues. But I'm certainly happy to do that. Just a quick, I'm not going to go through this point by point, but as you know, and the council had asked about process, and this also kind of walks into our engagement strategies around key important and big policy issues. So the council had asked about how can we engage better with the budget for our next two-year budget? We also have strategic planning, so we do anchor strategic planning efforts every year. And so I think this process that we're laying out really does provide the opportunity to walk the strategic planning process with the budget process with higher levels of engagement targeted out in the community meetings. We can consider some of your fifth Monday types of meetings for town hall budget feedback. So Deputy Administrator Steinhauser's put together a great request for proposals for us to be out getting proposals on potential consultants that can help us through the process. They typically have some things that they bring to the table. Um, but just say that there's a organizational and employee input piece of this. Um, there's high touch and high engagement with, uh, community partners and board and commission members. Similar to what we've done in the past individual meetings with mayor and council members, um, community outreach and so, you know, we'll continue to refine the process as we move along. But you all in next you know late this year into early next year Ahead of the budget process so your policy priorities can be reflected in it We'll have the opportunity to update your strategic priorities So again, we'll be out with an RFP on that soon bring the results of that back for to the City Council for consideration so you have the opportunity to select a team that makes sense to support your process and And again, all the great similar budget stuff that you all know of and the cadence. And I'm not going to go through the calendar for you all on that. But any questions on strategic planning, action planning, budget for next year? Good, okay. A few slides here are kind of bundled together, so I'm gonna go through a handful of these fairly quickly. So we have summer festivals. We just wanted to lay out what we're spending in sort of this community experience space. I know there's been a lot of active council conversations here. But you can see what we've done for 4th of July, celebration of the city, the level of investment we've made. We did a little bit differently this last year with the way we did 4th Fest, et cetera. So these are the budget amounts we have available. If we want to do any rethinking monetarily, that's one way. But then I think also we're proposing that we spend some time process-wise thinking about how we might want to do these next year as well. And you have Riverside Forward here.

I do just want to point out $36,000 there is for fireworks. It's not for 4th Fest.

That's correct, so I'm sorry about that. So just some summer festival highlights here, just again, I'm not gonna go through all these.

Council Member Miller.

And just a point of clarification, celebration of a city is Rochester Fest.

Correct, and it has always been carried in the budget as celebration of a city, and at some point in history, the Rochester Fest organization is the organization in 501C3 that's been operating that.

Yep. So again, some of the highlights of things that we've done with Riverside and Forward Concerts and the net investments in there. Previously you talked about some destination marketing focused efforts as you had conversations around the Chateau Theater. There was some additional conversation about a new destination marketing initiative. Very normal for a group like Experience Rochester to have a very active destination marketing presence. We put a lot of our lodging tax revenue into the operations of the Civic Center and Rochester Sports. But there's sort of this traditional Convention and Visitors Bureau activity that you want to think about as well. Uh, there was a requested 300,000 dollar investment. Uh, to focus on more active festivals and events and visitor information center, and continue with the certified tourism ambassador. Program and headquarters and just other things that. Uh, are trying to support the tourism strategy that, um. Experience Rochester is trying to deliver on and they've done a nice job of going through their most recent tourism planning effort or outreach effort there. From a financial perspective on the lodging tax, just walking you through this. So we tend to think about it in a few areas. Again, just overall anchor commitment for Experience Rochester running and contracting. Uh, with the vendors for the operations of the civic center. Uh, again, we have about 600,000 that also goes to Rochester sports. Um, we try to retain the residual for capital investment because we have substantial capital needs there. Um, and you've seen those in the past, but they're very material. and then our debt service, which we are on a trajectory, as we talked at a previous meeting, toward satisfying that in the early 2030s. When we do that, we can redirect that into future capital investments within the Civic Center. But until now, I mean, it's really supporting the previous expansion. Want you to see that we're on a forecasted trend upward in this area. This does reflect the additional $300,000 that could be done from policy perspective you so desired, but just wanted to give you sort of a better connection and break it out as a standalone policy issue as you all requested previously. So with that, I'm gonna just advance

So, Mr. Parrish, just so I'm clear, so the $300,000, the destination marketing, is that in the operations of the Chateau piece? That's the $300,000 that we're talking about? Or is this a separate?

It's both. There is a component. So if you're talking about daily activation, there's a component about the downtown welcome center and the festival coordinator that would also be working on the Chateau. So there's a mix of that. I believe.

So when we have our discussion on September 9th on the Chateau, these two positions and this downtown welcome center will be a part of that operations budget, is that correct?

Just if you look at this slide, and correct me if I'm wrong here, but there's the Chateau piece and how do you activate the Chateau and work with that, and I think the Chateau events manager is wrapped up in the the approach overall, the 200 whatever thousand that's needed to do that. The second two items here are really focused in that $300,000 additional enhancement. So you can break these out into those two areas. Item one, I think, walks with Chateau. Two and three really walk with this enhanced $300,000 investment and activation that's talked about more here.

I think it's a little bit more nuanced than that, but we will clarify it for you. Mr. Yatzer, can you help us kind of tease this out?

Yeah, so first of all, I think we will provide more information to this in an upcoming reports and recommendations on a city council meeting, but I do think they are somewhat commingled in using a percentage of that 300,000 focusing on specifically the activation and potentially staffing of the Chateau, as well as the visitor centers, those sorts of things, and then a smaller portion of that 300,000 focused on partnering with the community to activate the Chateau. So if, for example, we were to say don't do anything on the Chateau but do these other things, I think it would be a very different number. So they are sort of co-mingled in that 300,000 and we'll work to provide more information on that.

Thank you.

And there's an additional investment beyond the 300,000 that anchors it in, yeah. Okay, so then just thinking about this, we have a variety of, we talked about how we're delivering public music activities, how we're delivering the Chateau, Destination Marketing, other festival items. As part of our ongoing evaluations, we have one forecasted for public safety. We're working on an RFP in that space that you all will see in September. And so that's another conversation. But we also are proposing to really have one that's anchored in community experience. So thinking about how we do that for 2027 and bring back some recommendations on how some of these additional items work. Because again, a lot of work in the tourism space that's happened. Parks continues to do their master planning. with a lot of things in the library space that are ongoing, but this really would focus in some of our, we'll call it third party community experience providers, and really just seeing like, are those in alignment? Does there need to be some shifting to optimize those existing investments and thinking about arts and culture and other elements of community experience? So with that, before I move on to the next, last two pieces of the conversation, just any questions you have in the previous slides that you,

had seen in the community council member miller yeah i do have a question because it comes up every summer uh the idea of like how rochesterfest is evolving how the city's role in guiding that is what is the length what is location and obviously thursday's downtown has grown quite a bit um over the years as well and just curious where and how the city and and us have a conversation about the right level of programming working with event organizers to make sure that it's an efficient event that's well using these resources, is well attended, is relevant, is not competing with two events in the downtown space, and is basically moving forward into the modern time as a relevant event that draws people across the community and region.

I think that's part of what we're trying to get to and looking at the broader system. I would just say generally we've been providing a specific level of support and Rochester Fest as the entity that's been operating has programmatic ability to be able, if they feel confident that they could pull that off, we just don't give them more money. So they have a fixed amount that they're receiving and I think that that would be a healthy conversation that we could either have going into the two year budget and having some of this information might be helpful Because there are any number of groups that maybe would be interested in partnering together or not partnering together, which also then becomes the challenge. If there's individual visions, then how does the budget process play into maybe... marrying those up a little bit, whether that's through reducing funding for one or the other, is a little bit challenging, I'll just say. Right.

And that's one of my concerns, too, looking at the possibility of a festival coordinator in the presence of RDA running a series of downtown programmatic events, plus Rochester Fest, how we're making sure from a budget process that those are all happening in collaboration and partnership and not in a competitive way for a potential audience for a downtown summer festival when those happen at similar times, similar locations. And I'm just struggling a little bit to understand how we best manage that, particularly in light of a potential opportunity to invest funding from the lodging tax to create a festival department within Experience Rochester.

I think it can be part of our, you know, this whole idea around the evaluation, you know, could also try to assess impact, right? I mean, I think, you know, this is what we're doing, but part of that will include recommendations for enhanced impact. And these are all very challenging conversations. People get used to sort of how you deliver these things in the past. So, you know, receiving a list of recommendations on how you might optimize and enhance some of these investments and what kind of impact and putting numbers in front of people in terms of attendance and all that will certainly be part of the evaluation.

Council Member Palmer.

Going off what Mr. Miller's kind of talking about is the celebration of the city. It seems like we've increased it and increased it. I'm not particularly sure that we need to keep doing that. I don't know if it was started out as a, let's get it going and see if it could run on its own. But I believe that dollar amount you're showing is only for a cash outlay. It does not include our employee time from parks and police. Is that correct?

It's sort of correct. There are some bill backs that they do pay. So when we clean up the streets around there for the parade, they don't pay for that because there's tangential value to having street sweeping, things of that nature. like many other event permits, they are paying for some direct services, but this has been going on for quite some time, so there are other services that are likely going in kind to be able to support the celebration of a city that has been operated by Rochester Fest. But I would say they do reimburse for probably the lion's share of the cost, but there is some immeasurable amount of cost for Parks and Public Works that does not get reimbursed easily.

And your 4th of July is only for the fireworks. What would it take for us to do an experience Rochester event that they had prior to that?

So you are still carrying in this budget, the $20,000 that was slated to be removed in the 2026 budget from public music. So that could go over to them and then you could have a conversation also about lodging tax and whether or not that might be able to support it. I think the policy question is, would you like to have an entity like Experience Rochester operate that or not? And I don't know what the pleasure of the city council is. Perhaps that could be additional conversation at your next study session. I believe the cost this year was close to $40,000. Now granted, we were in the 250th celebration, so perhaps you would scale some of that back a little bit, but that was the approximate cost that was estimated.

Thank you. Council Member Miller.

I'd be in favor of that. I think additional discussion about the interim 2027 year and then a fuller evaluation of community impact could be a thoughtful process to be able to step into a different model. uh build in partnerships understand how the community would receive these i'll just still also say i would love to see the fireworks move down to cascade lake once link is open and we have much greater access pitch the lacrosse field is the point to shoot them but i i do want us to figure out how to evolve and make sure that all of our community investment and festivals and public events continue to be relevant to the diverse cross-section of our community and evolve as our community grows

Your Honor, if there's no more questions in this space, I think the remaining slides can forward to the next study session if that's okay.

All right. Thank you.

Can I just ask if there's anything else we need to discuss at the next, that would also be helpful to know now.

Council Member Doering and then Council Member Keene.

If we want to make an amendment to the supplementary budget, how do we do that?

It would be helpful to have that information now, especially if it's an increase in the tax levy because that's going to be coming on September 21st.

I anticipate that I will be making about a $100,000 ask for the Any Path Home Initiative as we look at future programmatic efforts or possible staffing of a community engagement professional for the neighborhoods surrounding our home. our homeless shelter network. So I would like to have that discussion at the next meeting. We can show what the implications of that might be. That would be great, thank you.

Council Member Keene. Yeah, just on the overall, I know you asked for an additional feedback on the 27th.

Early on slide seven, government services growing. In my view, I was trying to look at the overall seven year view and we're at about 6% a year average, which is above the growth of Rochester and also like above inflation. But we've also added a bunch of services like 311. And most of all of those things have been council approved. So I'm watching and thinking, is it reasonable? But I'm also watching on page 12 when you talk to tax capacity below 50%. I just have this bad feeling that that is so overwhelmingly supported by these increase in property values that have happened over that same seven-year list that if we ran into an economic crisis, like a struggle where things stabilized or went down 10%. I mean, I think we're at a point where I think we'd really struggle as a city to try to figure out how to absorb those because right now we've been sort of getting by on some of the city growth. services that we i mean we've also had voters approve a two percent increase for uh for the parks referendum so most of the things like looking at that as the bigger seven-year picture but i really do get constr concerned when i see that eight percent twice in the next five years and saying like how can we defend that as public services going up is it um you know i know there's things with benefits and these other things but i think some of those things we have to find a way to absorb which we have in the last couple years we've had twice now in the last couple of years where we projected a higher levy increase than when we got back to. So that was good to see. The other point I'll make, and this is budget discussion, but budget discussions send us in different directions. But I mean, I really do appreciate that our major capital projects are staying pretty well within bounds. We're having all kinds of trouble with closed roads and that, but we're not falling down or getting in the way of mail or getting in the way of other private things i think that i'm glad to see the attention going into that but i'm hoping it leads towards it you know early twenty seven twenty seven mid twenty seven where streets are more open and and safer than they can happen So those are my couple, I've got a couple other little things here, but just to tie it out, as far as I could, I would support the budget, the supplemental budget the way it is. I do want to just state for people watching this, we really did a two year, we do a two year budget, so this is a year of just looking for what's, you know, nominal changes. This isn't a full budget year. I think the people around the table know that, but for anybody listening, we're really just looking at what changed year over year, and I appreciate the RPU perspective on that, and the communication stuff. So those are my comments and if there's any reaction.

Council Member Palmer.

Yeah, just to be clear, it's not 2% for the park referendum. It's $2 million that they get each year. So just to be clear on that. I'm only on slide 11 with the total growth of your estimated market value is 5.2%. I think that that's reasonable for us to stick to. I know that we have some TIF funding that's coming off under the full budget. So I'd like to see us be at that 5.21. I think that makes sense for people. If you're out in the neighborhood talking to people, affordability is a huge issue. And I think that we can justify a 5.21.

Is there something specific that you would recommend removing from the budget?

I'll bring it up next time. I've sent an email already.

And Administrator Zalms, remind us a point. So what Council Member Palmer is proposing is a reduction of the current percentage that we're looking at by 3.9%. What is the number, the financial number that connects?

I believe that's in the neighborhood of $300,000.

So it would be $300,000.

4.39, not 3.9, that'd be nice.

5.39, tell me your number again.

No, no, no, 0.39 is what kind of budget cut would?

About 400,000.

400,000, there we go, okay.

We can get you a specific number about what it would look like, what the total dollar amount necessary to cut would be to have the levy amount at 5.21. Okay. We can show that to you at the next study session. And hopefully, and remember, we have to get to agreement on what would those things that would be cut in order to be able to make it there. And we've had and suggested that there would need to also be healthy discussion about whether or not there's support for any path home funding.

And just to be clear, I was asking for that not because I was advocating for it, but I just wanted to be clear that we would have to find $400,000 in cuts, not including the addition that Council Member Doering is going to propose. Correct. Any more, Mayor Norton.

I think the caveat for all of this for the community though is that we don't know exactly what cost of living increases are going to be. We don't exactly know what the bill will be at the end when the county rolls out the amount that we're going to have to spend. So this is your best professional guesstimates as to where these numbers are going to take us.

Correct. We typically do not get the final estimated market value from the county until after you've adopted your preliminary levy, and it's at some point in November right around the time that they're sending out the tax notices. We every year try to get that in advance to understand is there new construction coming online that will adjust that. But Councilmember Keene is correct that a lot of that is being absorbed. Now what I will say is that there are other communities that don't have growth in assessed value or new construction. And some of those communities are at double digit increases year over year in their levy increase. And really what you'd be talking about in a year if we started to enter that trend is service reductions.

Thank you, that's what I want to clarify.

I think that's extremely important, not to belabor the time here, but if you hear about the kinds of budget conversations that are happening through the state, this is actually pretty remarkable. I mean, you see like Minneapolis-St. Paul, they're coming in at very high projected structural deficits in the 30 plus million range. talking about tax levy increases, much more material than that. I think why we're not in that situation is because we've had prudent budgeting in the past, and you've all been very responsible in the decisions you've made. So just emphasizing that from our neighbors around here, but particularly our neighbors to the north, we're doing quite well.

All right, and thank you. Thank you. And we will move on to Rochester Public Transit Financial Outlook. Since you weren't listening to the whole thing, these are the three things that came out of this.

See, we could have done that in 30 seconds.

Take it away.

Good afternoon. I'm Rachel Fouch the director of transit and parking so it's been Just over six months since I came in January and presented on the financial status of the transit department So just here to give a mid-year update and where we are in our initial plans and where we see kind of projections as we move through the rest of this year next year and the future So today's route, we'll be going over a few things. One is our financial outlook. So we'll be looking at where we were, where we are, and how we plan on tracking that.

So just to be clear, route is agenda?

Yeah. Thank you.

Got it.

Yeah. The pun was not subtle or deep, but it was there. We'll be reviewing our KPIs. We have our partner in VIA here, McCall Houston, will be presenting on kind of VIA's forecasting and plans. And then kind of going over our existing and future community collaborations and timelines on what council should expect over the next two years through the transit department. So just to level set in a reminder, this work is ongoing. So this has not been, we came in January and nothing's happened over the last seven months. We have made many improvements and many changes in the transit department. One was RFP for operations and so that award has been given and they start next Wednesday, Tuesday, September 1st. And then additionally, as presented in January, kind of talked about the biggest cuts that we are able to make are within our CIP projects. And so we're going over some of those reductions that we've made. And then additionally, our advertising RFP, which I briefly talked about previously, but it's an opportunity for us to generate additional revenue for CIP. The Transit Department, as a reminder, our only form of revenue is fare and advertising. We don't collect any local tax dollars. So no tax levy or sales tax dollars are utilized within the Transit Department. So for our financial outlook, we came back in January and presented this slide to talk about what we had anticipated the impacts to the transit fund would be over the next three years. And this is due primarily to the fact that MnDOT's required contribution for local share was shifting from 5% to 15%. Historically, that percentage was 20%. So just to provide that additional context there. So 2024 and 2025, there was a reduction of that local share dollars to a 5% match. And then this year, 2026, 2027, and potentially 2028, that will be 15%. But historically, that match has been 20%. And that's what that match is. on the capital improvement side consistently. So there was no reduction in that match requirement for the past few years. So as we're looking at these numbers, you'll see those also reflected within the data sets and the KPIs that you see in our projections. We anticipate that match going up to 20% in 2029. So you'll see that being reflected within the graph as well. Oh, I didn't even talk about it. So in January presented that we were sitting at about 5.3 million within the transit fund with an anticipated loss in 2025 at just over half a million dollars. Um, and then a projected loss for 2026 at about 2.4 million. And as you'll see, this is our current projection. So in 2025, we actually were able to put around $300,000 into the transit funds. Our transit fund is sitting at around 5.6 million right now. And for 2026, our anticipated loss is only 0.8 million. And as reflected, that is based on Um, that's based on a reduction in projects. So we reduced, um, our office remodel project substantially, although that hasn't come forward to council yet. We did slim back even with the proposed plans that we're working on right now to bring to council in the future. Um, but additionally we reduced any, um, fleet enhancements. So we're only in the, in the business of doing replacement fleet right now and not expansion fleet. And that did allow us to have a reduction in this dollar amount. And the transit development plan, as presented on last Monday, is now being covered by our operator, VIA. So we are able to cut that expense as well. So a really great reduction in the projected loss for 2026. But as indicated, we're still not generating enough revenue to cover that 15% and cover our capital right now. But we are working on a projection for that. Mayor Norton.

So the 2028, the 2.78, is that with a 20% assumption or is that still showing the 15?

That's the 15, but if you have read through the TIP and the ROCOG TIP that's out for public review right now, MnDOT has awarded us replacement vehicles a substantial amount hit in 2027 and 2028. And so those are those big hits that you see happening there. and I can go into deeper if anybody has any questions on what those numbers are, or class or size of those vehicles, but that's what you see primarily reflected there. You'll see the loss of operating, but additionally, the large expense of those replacement vehicles, which are necessary to run a transit system.

Council Member Palmer.

Why are you excluding the link BRT?

That's a great question, and primarily because as of right now, beyond the startup grant, the pilot grant that we've received for LINC, we don't have secured funding from MnDOT for operations after that grant is, so that's for three years. And so we didn't want that to potentially skew the data in here. LINC is primarily, it's covered through those hopeful MnDOT dollars after that, but we don't have those secured and so we didn't want to. If we put that in here, you would see dramatic losses because we're only showing what we know and we don't know that grant is locked in yet.

Well, there's a council person who likes to say that hope is not a plan, so I would like to see that included.

We can provide those updated numbers, but they do skew where we're living right now in this data set. And so we just wanted to ensure we're providing what we know. We do anticipate support from MnDOT, but we don't, that's not a known because we don't receive those operating dollars until the year, like until I just like brought it up to council last week until those are approved.

Council Member Miller.

And I guess I would just add that a legislative priority of ours League of Minnesota City is sustainable transit funding from the state. And so we continue to advocate for those. I serve on the improving local economies committee. We've had some discussion of that. And I will plan to continue to make sure that hope turns into advocacy turns into plans.

And we have had significant conversations with MnDOT and they are aware that we are actively working towards wanting to make sure that we have similar consideration for an out-state bus rapid transit system as there are funding sources similar to what the grant is for the next three years that are available to all of the BRT system that is not out-state.

And I just will take a moment to plug that MnDOT has been incredibly supportive. They did provide a pilot grant to support the one month prior to the revenue start date for LINC, actually almost two months prior to the revenue start date of LINC to cover some of those operations costs. that will will hit prior to august 19th um so we are really grateful in the partnership and they have been incredibly collaborative and know that this is an ask and um if it's any indication and this is probably anecdotal data but link did receive an entire full page feature and the great minnesota the greater minnesota transit plan that mndot just adopted so it is a highlight of the system and it's a highlight of our city as well councilmember keene

Yeah, I'm going to just follow up on Council Member Palmer's thing. I understand that there is one transit fund at the end, but I think it would be misleading to try to reflect BRT in here now, especially, I mean, I actually struggle when I look out in 28 and 29, because that is a Mayo-supported thing, so that there probably shouldn't be, depending on our metrics, we shouldn't be underrunning it, but the fact that we don't have those federal and state commitments yet, it just would make this less valuable for me to try to look through. But again, it's jumping off the page here that you are out of funds in 2028. I'm cutting to the end of it for you, but...

spoiler um uh so were there any questions other questions uh council member miller just a point of clarification because you threw out august 19th that is the plan start date for link brt it's our current plan start date for link brt that's what's our agreement with um fta indicates If construction delays happen, if something were to happen, this is definitely something that would be effectively communicated to council and the team. Now, the 19th is a Thursday, so it's likely that we won't implement a service change on a Thursday. So we would likely have links start on a weekend consistent with how we perform service changes right now in the system. And for clarification, when LINK comes online, that will be a service change. So it'll be treated the same way as our other, but obviously much larger and much bigger, but it will be implemented as a service change. So you'll see other changes to the fixed route system at the same time.

Thank you. Continue.

So how are we measuring all these things? We have kind of isolated four main key performance indicators for us to be able to view. Now the data that we look at is pretty concise for transit. We're looking at what's in JDE, so what's in our fiscal monitoring system that the city has. What our operating data is, so that's our ridership and that's our vehicle revenue hours. If you recall our contract with our operators based on vehicle revenue hours, it's a contractual hourly rate. And so those are two metrics that we can easily track. And then it allows us to, these specific KPIs allow us to view the source data in really meaningful ways. And so we don't have lots of diverse data, but we do have a lot of data that needs to be analyzed appropriately. And I would be remiss, I did forget this at the beginning, I would like to thank my transit team and our finance team as well has helped put together this data. Although a set of metrics that you see on here, this is months of work and months of collaboration between our two departments. And I just want to give a special shout out to both Lindsay's, Lindsay B and Lindsay H, through both departments because they've dedicated a substantial amount of time to bring this to us today. And data drilling isn't as straightforward as we all think it could be. So we have four proposed, or four key metrics that we'll be looking at. As a reminder, this is living data. So this is data that's updated on a monthly basis and that's with both our fiscal and our ridership data and all of that that's coming in. So I'll walk through each one of those and kind of explain what you're seeing on those. I know a lot of questions on how to interpret these. visuals and again as we gain revenue through advertising and ridership they will change these metrics and so our revenue is not just as you see on there is not just ridership revenue that would be advertising revenue as well So our first one that we have to look at is our operating revenue and surplus chart. And so you'll see there's an operating and that's that light blue line. And then the dark blue line, as indicated, is the CIP and the operating totals. And as I explained, in 2028 and in 2027, we have some substantial CIP projects with the replacement vehicles. So that's where you see that kind of large dip in there. And then that additional dip down in 2029 is based on the assumption that that local match will go up to 20%. So you can see this trend as we're following. And so this allows us to really take a look at the impacts that we're making revenue exclusive or surplus revenue. So obviously the goal is to not be down. The goal is to be up. So this allows us to really utilize this metric to track it that way. And our next one on here, and probably the one that has drawn maybe the most amount of questions prior to this meeting, is the annual year-to-date revenue versus target year-to-date revenue versus target year-end revenue. So these are not additive bars. These are reflective of where we are right now. So that's the blue bar that you see. The green bar that you see is where we would hope to be trending right now. So that's the metric that we'd like to be seeing. And this is end of July data. So this is the metric that we'd like to be seeing at the end of July. And that gray bar that you see is where we need to be at the end of the year. So if you're just following that trend, it's clear that we're going to be falling a little bit short. But this allows us to visualize the gap between those. And so the goal is, as we're looking at these two bars between the blue and the green bar, the blue bar will hopefully at some point meet the green and then at some point surpass the green. And if it surpasses the green, that indicates that we're in a surplus and not a deficit. So that allows us to track those two metrics as they're going and know what our year-end goal is at the same time.

Mayor Norton.

So I want to be delicate about this, but I'm also wondering, we've had a lot of call-offs, we've had a lot of missed trips this year, not because people didn't want to take the bus, but because the bus wasn't running. Is that part of what we're seeing here?

So it could be. There's a couple of things. We do always see a decrease in ridership during the summer. And we are in that time of year right now. And so it's hard for us to look at our ridership data and assume one thing or another. And as a reminder, our riders are majorly anonymous. And so we don't have the ability to talk to individual riders because their process of purchasing a pass, their process of riding is an anonymous experience. We have citywide surveys that happen twice a year. No, there's an impact of loss of ridership because we have missed trips. But as an additional reminder, we have around 500 trips a day. And on those days of massive missed trips, it was 23 to 40. So although substantial, a smaller percentage, then I don't want to minimize the impact, but I just want to be clear on what that impact was.

Council Member Doering.

And this might be an antidotal question as well, but it seems like this summer we had more cool places to be days than typically are normal. And what's a revenue loss for one of those days? Because that might be easier to measure.

Yeah, so we actually... track that data through a tablet that's on the buses and it allows the drivers to push specific buttons and so that is tracked the same way if somebody came in and refused to pay a fare they could track that data and so it's not technically lost revenue because it was never anticipated revenue so we don't it's not they're likely not somebody who was going to be riding the bus anyways so like it allows us to determine that number but it We're talking like 20 to 40 individuals.

So we still charge someone if they're going to use the bus to commute. You ask specifically, the driver asks specifically.

Right. Okay. The rider would come on and say, I would like a cool place to be. And then the driver would track that rider. And so it's separate data.

Council Member Palmer.

Well, this isn't gonna be new, but the dependability is the number one issue for me, and you're not meeting that expectation. And with the largest employer in the town giving away free bus passes, it's hard for me, and you get the revenue, I understand that, but it's hard for me to believe that we're going to have an increase in ridership when the largest employer opens up for major ramps. So I don't see much hope for what you're trying to do other than getting dependability down to be number one issue. And when you say that we only missed 10 or 20 trips, It doesn't matter, but if I'm one of the 10 or 20 trips that are missed, I don't get to work. I don't get home. So now you become undependable, and I've preached this many different times in meetings that we've had with you here. So I'm disappointed greatly with the lack of dependability. I understand you're new. I understand we have a new operator coming, but it almost seems like we're rearranging the seats on the Titanic, and your numbers aren't saying I'm wrong.

Yeah, and I'll definitely touch on that. I think that's one of the things that VIA's been working really hard on. They have been over-hiring for the positions that were short right now and will be consistently hiring to fill that gap, but also are utilizing technology to ensure that we have efficient trips, and that way we can reduce the amount of vehicles needed, which means we can reduce the amount of drivers needed during peak. during those those analysis and i'll say that none of these changes are ones that we can and it's unfortunate and i wish i could change the whole system in two weeks but we're not in a situation in which that can happen all of our service changes have to happen in the appropriate fta protocol we have to announce this we have to do public engagement All of those take around three months to research and implement. And so even shifting the routes to better fit the needs of our driver capacity isn't something that we can do in a quick removal of a Band-Aid situation. But there are specific plans that have been implemented to get us to where we're going. And we are still trending in upward ridership regardless of the situations over the past year.

Council Member Miller.

I don't want any detail on this in detail, but are we seeing... from our partners at Mayo Clinic that their transit ridership is growing or falling.

I don't know what their, like in terms of our system. And their shuttle ridership. Yeah.

And their shuttle use. Are they adding shuttles or removing shuttles?

So with the oncoming of Link, there will be a reduction of shuttles as we service some of the spaces with Link that were historically serviced by shuttle service. And I think that the addition on there is I am so proud to say the collaboration and the level of partnership that we've had with Mayo over the past six months, it's definitely indicated that they are in support of RPT and they want to collaborate steer more individuals to utilizing our PT, but they understand that we're under the same constraints and we understand theirs. We need to have a reliable service and we're working towards that. Um, and definitely hopeful for the future. But we are, I'm very excited about the partnership that we have and and I'll go over some of those as we come up in a few slides.

But to Council Member Palmer's question, when they open four new ramps, do they plan to reduce their shuttle operations because now people are just driving themselves?

And that's a question, unfortunately, I can't answer because I'm not within Mayo's operations.

Continue.

So this metric indicates our ridership target. And so the blue bar is where we're at. The green bar is where we think we're going to be tracking based on our current trends for the year. And then that 1.1, almost 1.2 million is our target ridership to reach the revenue. Now, that green number and that gray number they'll move and they'll adjust as our cost per ride adjusts over the course of the year. So those aren't static numbers either. They're taking into account revenues that's being brought in. So as our cost per ride, so it's easy to think that each rider pays $2, but that's not true. That's only if they're buying a single fare at full rate. If they're buying a monthly pass or a ride pass, that's a reduced number. or another example is our agreement our student writers ride for a reduced rate and so all of and veterans ride for free and so all of that has an impact that the total ridership dollar amount And this is, as I've affectionately been calling it, kind of our doomsday clock. But if we were to make no modifications to the system, but we are and we have been making modifications to the system. If you recall on the slide that I presented in January, we would have been out of money in about two and a half, three years. And so now our projection is about just over four years until we anticipate if no shifts in ridership, if we're trending the way that we're trending, if that that line graph that we indicated for the KPI stays in that downward trajectory, this would be where it would be trending. But we don't anticipate that, and we've already seen moves in the contrary.

Council Member Miller.

Yeah, just a question. Since this dashboard is largely a snapshot, as you've mentioned, are you tracking those measures over time? And how might we understand improvements? I think it's great. And I know that we've seen drastic improvements for this presentation. But again, we're just looking at this snapshot and only comparing time periods for a couple of the measures. for anybody that looks at this and says, this is really bad, right? If there's a photo taken, published online somewhere, and somebody sees, well, four years, we're out of money, that's a better state than we were in. And I just wonder how we're telling that story to the public as well, that you and your team are doing great work to improve our position.

And I think one of the ways is just providing a constant update on these metrics. These are actually all Power BI. And so it's live dynamic data. And if anybody would like access to that on our council, we can definitely provide that without admin rights. But additionally, we will be providing this monthly to council in our monthly updates. Um, in replacement to the transit report that you have been receiving, I think this provides a better snapshot of what's going on and where we are and you can track that on a monthly basis.

I just want to say I love this dashboard. You guys did an amazing job. I mean, yes, it is a snapshot in time. But to really have this level of transparency and where we are headed and it really helps us with our decision making. And so I really encourage you. all of our departments to really look at this dashboard and i know i haven't even seen all of it yet but it really is what i'm looking at when it comes to really getting a real clear crisp view overview of uh of the dynamics in that department so thank you well thank the lindsays they worked really hard on it and i appreciate their work lindsay's back there

So as we kind of wrap up these metrics, what are the things that we want to ensure? And I think these are some of the topics that we've touched on, but again, increasing of rider confidence. We want to ensure that they know that vehicle's coming, they know that bus is coming to pick them up, they know that paratransit vehicle is coming to pick them up, and they can depend on it, and they know they're going to get to where they need to go when they need to be there. reliability fits within that as well and obviously none of this is going without saying that we have our transit development plan coming up but that doesn't mean we're not doing any analysis of our of our systems before then we've already sent our december service change to via to review for optimization and efficiency and so those conversations have have already started and that data has already been shared and it's not even september 1st yet And then additionally, having service changes that are thoughtful and provide the service that's most effective for our system. And we can do that with our partner in VIA. So at this time, I'll hand the clicker over to McCall Houston to introduce herself and to provide an update on what VIA is planning for the next few years.

Welcome.

Thank you. Just wanted to start by saying thank you for having me. I am super excited to be here. And I think VIA as an entire company is really excited for this partnership over the long term. I'm going to dive into a little bit of kind of how we look at things over the long term and how we think about planning. To be totally honest, this week and next week and the next week, my team is so focused on making sure that September 1st is smooth. And to your point that buses are running as they should be. But we do want to give you a little bit of a peek behind the curtain on what we're doing in more of a long term approach. So first, we have a team at VIA called VIA Strategy. So that's different than who's going to be here every day managing. We have a dedicated transit planning and consulting practice that are true experts in this. And it comes with our contract and is part of our partnership that we are available to help and do and support on a variety of things, whether it's public engagement, full network resilience strategies, mobility hub and infrastructure planning. really kind of from start to finish, working alongside you all to figure out what the best long-term plan is for RPT. And one thing that we really believe is that while you do make trade-offs, obviously, anytime you're planning transit, there are a lot of ways that we've seen and have been able to implement where we're both expanding access and improving efficiency. So kind of a very high level of our core philosophy is that we tend to look at the least efficient routes, likely move that into micro transit. That way you can decrease costs and increase the coverage. Medium efficiency routes, we like to optimize service, make sure we have the right frequencies, the right hours. And then in the most efficient routes, that's where we tend to really invest and improve headways as we see really frequent headways are what drive ridership the most. And the three pillars of how we think about this, again, there are always trade-offs as we do work through this. But we try to balance between the rider experience, efficiency, and coverage. And each of these mean quite a few different things. So for us, coverage, as an example, isn't just the service area. What's the service mode? What are the operating hours? Our experience is the booking model as well as stop locations and frequency and wait times. And there are just a lot of different pillars that we look at here. Efficiency is cost per trip for you all as our partner, but also productivity and multimodal coordination amongst all of the different methods of getting people around. And we've taken this approach with quite a few different partners, a few that are highlighted here. One, the first one is Sioux Falls, South Dakota, which is actually a relatively similar system to what we have here. We went and did a full network redesign a few years ago, saw a very significant increase in ridership. I think in the first year it was up about 23%. And we were also able to commingle microtransit and paratransit. which allowed efficiency to increase by 53%, so phenomenal results across the board there. Mobile Alabama is actually launching a full network redesign here, I think, in about a week or two. And there was a massive community engagement push behind that piece. It was important for our partner there to make sure that voices were heard. So we engaged over 2,000 different community members met with tons of different partnerships. I think that's a playbook that will actually apply very well here where they're very strong partners in the community. Then Salt Lake City, we've done very deep transit planning with them over a few different modes over the past eight years. I think via strategies has a lot of different elements that we can bring. And it's not a one size fits all. It's not here is the playbook and how we do it. But here's how our many playbooks can be applied across different markets as like is going to suit Rochester and be the best for the future here.

Thank you, McCall, and I just want to point out McCall was one of the leads for the Mobile, Alabama transition as well. So familiar with the space, a lot of familiar situations, also an ATU unionized facility. So just good for additional reference there and some context. And as we move through, definitely new and continued partnerships are how we're gonna be successful in this space as well. So again, to touch on our really honored collaboration with Mayo Clinic, I just feel consistently supported by that team, and they've been an asset in ensuring that we can do certain things, and a great example is i'll just jump ahead to the timeline that's on the next slide but we will be doing a service change in december to move back to the second street transportation centers and that was facilitated through a substantial amount of conversations with the mayo partners because the construction for their facilities is is what's kind of in that space and so we want to ensure that we have that but they also see the value in us moving back there so really appreciate our continued collaborations with them in constant conversations right now with UMR to see how we can facilitate more student and faculty access to Rochester Public Transit. Our continued collaboration with RPS and trying to show viability in that and as we've brought buses out to John Marshall and try to encourage students to ride that, our data for that is really, it's pretty successful looking. Right now we have around 1,000 rides per month for students and so, although that's not a substantial amount of students, that's about 40, on a monthly basis, but that's 40 students that were not riding transit before. So really interesting data coming out of there. And then the Southeast Minnesota Transit Management Organization that's getting started up, we had the steering committee meeting today, and so their tagline is Your Region, Your Ride, and so that's an opportunity for us to collaborate with transit agencies throughout the Southeast Minnesota area and see how they can filter into Rochester in an effective and successful way. but also provide transit to more rural areas of the state as well. So a really great asset to have in the region. And then the TDM work group that's spearheaded by Matt Lynch is an indefinite asset to Rochester Public Transit. He is collaborating, creating those collaborations. I'll thank him for those continued conversations that we've had with the OMR. And then as Amanda gets on deck, but really excited about the work that she's doing and how transit can incorporate itself into her economic mobility plan. But I also forgot to put DMC on here. We do collaborate highly with DMC as well, especially with the upcoming week without driving activity. And so we'll have a learning opportunity for individuals to come out and experience a bus and get on a bus and learn what that looks like. And again, at John Marshall, but then have a fair free day in conjunction with a week without driving. And then what does the next year plus look like? So VIA starts next Tuesday, as I've said a few times during this presentation. As indicated, we have our next service changes targeted toward December. I know I'd originally hoped that to be in October, but construction impacts won't facilitate us moving back in a clean way onto Second Street, but through those conversations and collaborations with our internal construction teams and Mayo's construction teams, we feel good about moving back to the Second Street Transit Center in December. And then in January, you'll receive hopefully an intent to award for our, well, prior to that, but our advertising RFP updated will be in January. So that's a substantial increase to what we currently have. I think right now we have about 15 wrapped buses. We're hoping to increase that to 51, which is our entire diesel fleet. And then the electric buses would not be wrapped. Obviously the link buses won't be wrapped, but additionally the remaining buses would be available if we needed to incorporate them into the link route. So we wanted to keep them unwrapped. But it also looks at increasing maybe the percentage back to the city as well and more advertising in our transit shelters. And so right now we only have advertising in one, so we're definitely hoping to increase that number as well. Summer 2027, bringing on the Link BRT mode, which will definitely have an impact to our fixed road system and hopefully a very positive way as individuals are exposed to transit and allowed to experience it in a low risk capacity. And then we'll also in 2027 start the TDP as indicated. There's a lot of things happening and we're still doing ongoing analysis, but we want to ensure that we incorporate data from Link into the TDP as well. And then in 2028, we would implement that transit development plan. And as a reminder, that's a five-year outlook. But with VIA and VIA strategies as a partner, there would be, again, continuing ongoing analysis if that's the best fit for the city as well. And now, any discussions or feedback?

Very thorough. Council Member Wall.

Thank you, I enjoyed the presentation. I appreciate that we do, did you say two citywide surveys each year? And I would guess most of those surveys would go to non-riders, and some of that data could be helpful. Is there a way to get beyond the anonymity of the current ridership So that we get user data as to how we can make the transit system even more desirable for ridership.

Yeah, that's a great question. So our transit survey goes out with our service changes through Poco. So it gets blasted to the entire Poco listserv. We typically have pretty good turnout on those, like 500 plus survey responses. Some transit riders, some not transit riders. And within those surveys, we're always asking, are you a transit rider? And if they are, it leads to a series of questions. What route do you take? What hinders you in that space? So we are tracking all of that data. What's interesting is historically, I mean, historically, the last two surveys that I've been a part of prior to the one that we just did a few weeks ago, it was that Central Park was a hindrance that we saw in there. It was harder for them to access where they needed to go because of Central Park. But now that summer has started, it's delays, it's construction delays that seem to be the number one concern on people's plate. But I will add, we do two surveys a year, but we also encourage individuals to reach out directly to rbt at rochestermn.gov. That comes directly to me and some of my team, and we keep that data and utilize it for upcoming service changes. So if there's an opportunity to provide input, you don't have to wait for a survey either.

Maybe another way of asking that, is there a requirement for anonymity based on the federal funding or other resources that hinders us from...

There is not. But I think as there's more adoption and more utilization of our current app and future apps, we could reduce some of that as well. Currently with the transit app, we have looked at the possibility of pushing out survey questions through that. However, it was very cost prohibitive to add that as a feature. If you're curious of what that cost was, I think it was around $30,000 a year to add survey as an option within the transit app. So we chose to maintain with Polco.

Continue. And one more question. Did the change from a loop system to out and back, did that change ridership much?

We did, at the jump with the implementation of change, did see a reduction in ridership, and that's not unexpected. Change is scary and overwhelming and can be a little bit hard to adapt to. And so we did see a slight reduction, but we have seen that kind of recover and come up. And as a reminder, the spring service changes We're in line with summer, which has a reduction of service too, so a little bit hard to track if some of that reduction was just because the weather was nicer too, but we did notice a slight reduction. We are grateful for the riders that decided to reach out and ask for kind of how to move through that system, and I think it was a good opportunity for my team and myself to learn and lean a little bit more into change management as we move through that. We definitely saw it as a positive, but for individuals that have been riding as a loop, it felt overwhelming.

Council Member King, did you have a question?

Yes, so first off, I really do appreciate your team coming in with KPIs, but also understanding that this is a way to look at it, and there's different connections to it, but it almost is almost like looking at the scoreboard than looking at the game. And within the game, it still strikes me as our biggest problems we're still trying to get over is the collapse of ridership during COVID. It has not come back, whether that's systemic or something we just have to figure out. This idea that we got funding help during COVID and now we're coming out of it. And that's clearly the main problem when you look at this. I still can't get over the fact that our director calls it a doomsday clock. We got to get past that. I'll try. I'll try. But, I mean, are we looking at more the system as a, like, are there any other systemic problems? I mean, I've always heard that the Rochester population with a 55-mile spread just can't do public transit in an efficient way. And that's why our system is sort of supported by the park and rides and the other things is like catch-and-catch camp, but they're not... paying for themselves. Are we looking at it that way or, because I'm still looking at this whole BRT as a major, major change, and I'm just wondering if the whole route system we have right now with hub and spoke and everything coming to downtown has got to change or, I don't want to try to do a strategy thing here, but are those the kind of things we're thinking of? Because I don't want to just look at the scoreboard. I want to kind of make sure we're understanding the game.

Yeah, and the answer to all of this question is yes. It's one of the reasons why we saw a lot of value in having VIA come on as a partner. But I think there's additional opportunities and we're looking at, and I did leave this off of, and I apologize off of the timeline, but the new North Broadway Park and Ride location will provide an opportunity for us to diversify the transit hub. And if you don't need to go all the way to downtown, you don't have to anymore. And so we're going to be looking at that and implementing some effective change in what our service area can do and what those transit hub areas look like as well. But we are looking at it very holistically, looking at other partners, looking at what other systems are doing. But VIA is doing some incredible things with data. And I think we kind of glassed over it, but I think it's important to mention some of the ridership issues that we've had with paratransit service as well. And VIA has been able to analyze our current current vehicle capacity and our current driver capacity and determine that in a lot of situations we wouldn't need to call overflow rides. We just aren't booking in an efficient manner. Um, and so they can look at that and really, um, look at it's everybody going to the same place. Okay, how do we coordinate that ride? So it makes sense and we can pick up multiples and drop them off. So they've already started conversations with those, those main drop off locations. Um, you know, um, like elderly centers and facilities that bring in a lot of individuals, and how can we more efficiently drop people off? So those are all things that have already started before September 1st has even come, but also before VIA was even on board. Our transit planner, Sandra Abusa, if you see her name, she did get married, so it's different. She didn't leave. But she's been having a strategic outlook on this prior to even VIA's coming on board. Yeah.

Well, I'm glad to see the micro discussions coming to the discussion. I think VIA does bring a lot to the table, more than just that sort of, not just operational partner, but also having that experience. But I also want to sort of vote for not so much asking what our customers watch, but watching what they do. And this whole thing with the Mayo shuttles and how they got put in place, and then we're gonna try to figure that out. In the meantime, BRT comes in, and I think it's gonna change behaviors, depending on who gets the 2,500, parking passes and who gets something else. But I am worried about this system because not just the ridership thing with working at home, the funding thing, but it still is looking at Rochester as this 58 mile, place that we're trying to do public transit for a 150,000 people is that is it a a winner or do we need to do something much more focused and and that's the new get I know that Mister gets are wanted to jump in on something thank you I'm sorry Rachel please jump back in here but I just wanted to take a different spin the council member teens question as well so

First of all, I'll just start by saying Rachel and her team have been so focused on this, and you can see the impact. I'm excited about the ideas VIA brings to improve the service in other ways and grow ridership. But you asked about the scoreboard, and so I want to maybe go the flip side of that for a moment and just share that one of the things that I'm always talking with Rachel about and she's always talking with her team about is watching the scoreboard numbers, because the reality is the consistency and the reliability of our service must improve or we will have to make drastic changes. And so one of the reasons that we're watching this so closely is because if the ridership drops due to inconsistent or unreliable service, we have backup plans that we can reduce service such that we then do have enough drivers to deliver the service more reliably. That's the flip side of the answer. And I know that Rachel and her team are focused on and will get us there without having to take that drastic step and the VIA team. But I just want to put that out there that that is the other side of that coin. And if we can't fix this the right way, then the other way is to just drastically reduce service so that we can have reliable service because reliability is a must.

Yeah, no, I appreciate that. And I don't want to belittle the because I really do appreciate have KPIs. But yeah, I guess the other part of this, the underpinning of this is this idea of the number of people who are so dependent. And I don't mean just people trying to get to their jobs, but people running businesses that this is the way this stuff works. And if if we fail on it, it really is going to drive a lot of other problems that that I just don't want us to have to deal with.

Yeah. And I'll say, and I hope my team nods behind me, but one of the things I consistently say is we're looking at numbers, we're looking at dollars, we're looking at metrics, but all of those are reflective of actual people that are trying to move around their daily life. And if they're, maybe they're going to work, but maybe they're going to appointment, maybe they're going to visit their family. And I think there are things that we have within our system that don't provide that experience either. And so what are the ways that we can really meet people where they are? And I think that's when we're looking at service changes and that's when we're looking at marketing when it comes to transit. And transit has a different spin on it. Like we are shifting our system to meet people where they are, not asking people to meet us. And so it's a little bit of both. There might be some last mile conversations in there as well. But we really want to provide a system that works for people and not force people to manipulate their lives to really work for our system.

Council Member Palmer.

You mentioned the park and ride, but we have a park and ride right now. You're just replacing the one that's at the Haley Center. And in 2019, we had over 2 million riders. The city of Rochester hasn't grown that much. We're down to 600,000 riders right now. The city hasn't grown that much. And so I don't like the idea that, oh, jeez, we're too big and we can't survive. We had 2 million riders. Something happened to those 2 million riders, and I think that Mr. Yetzer is right on the number, and I've said it 20 times, is if you're not going to be reliable, they're not going to use you. And I don't care who's running the ship if you don't have reliability. I'm not a fan of your microtransit. We did a pilot program. It was $285 a rider cost, and I don't know who thinks that's a good number, but if that's what we're going to be bringing to it, that does not work.

Yeah, I would ask for us not to look at that microtransit pilot as an example of what microtransit systems look like in other cities because it doesn't mimic what we would see in similar urban systems.

Well, we did a pilot, and that's what the Dollar Mall was. Okay, we've got four people now that want to speak. And just to be clear, Council, we are over on this item, and we will be kind of pressed on the next one. So I've got Mayor Norton. I've got... I've got council member, oh, okay. I've got council member Frederick, so go ahead, Mayor Norton. And let's be brief, I wanna end this topic.

It's an interesting topic and I appreciate it. I had a question maybe more for, thank you. The point has been made that we've seen a decrease in ridership, and that is true. We know that the pandemic was part of that. I don't know if it was all of it. I'm wondering, since you do services in other cities, is what we're experiencing unusual or is what we're experiencing happening across the country?

I think there were hits across the country. I think the numbers that we're seeing here are a little bit more drastic than in other locations. My guess is part of it here is the reliability piece. I think we do see major hits with reliability. So that's obviously like our number one priority to fix. And then some of the integrations with the Mayo system is my understanding. And those have probably had a good chunk of the impact as well. So I think similar, but maybe more exaggerated.

And I'll say that the timeline is a little misleading when it came to COVID impacts to our system because it was also when our IBM parking ride came offline. And I think that would be a miss for me to not mention that now. That did reduce a lot of our ridership within the system.

Council Member Fredericks.

Yeah, do you have the updated per rider cost per ride at this point? I heard it a few months ago what it was, but what are we sitting at now?

Yeah, I can pull it up. It's a dollar. Of course, I closed my computer. And then you asked. I can pull that data up.

I'm typing my password 12 times if I have a question.

I know. I got it the first time.

While you are pulling that up, and Council Member Miller, if you can make it brief, we will let you ask your question while she's pulling up the number.

A request then for VIA, because you operate in the Sioux Falls market, I was just looking at the numbers. There are nearly 200,000 people over 81 square miles, a very similar population density to us. You've done drastic route redesign, microtransit integration. Are there materials that you could share with the council about kind of what you did in that market and what impacts you've seen? Because I suspect that that's just going to be something that's quite unfamiliar and would be a helpful resource in how we understand how your involvement might change the prospect for our system.

Yeah, absolutely. I think at a high level, it was like decrease the routes that were inefficient, add micro and increase frequencies on more efficient routes. But we have tons of materials that we'd be happy to provide.

Got a number for us? It's $1.40. All right. $1.40 per... Per ride. And I think it's important to have that clarification too. A rider is not a ride. And when we present numbers and we present data, that's data that's based on rides. And so that could be one person riding multiple times.

I should have been more clear. My question is what's it costing us per ride?

Oh. I can also give you that number. $1.64. Thanks, Lindsay. $1.64. There you go. Good.

Well, thank you both very much. Welcome again. Good luck next week with the rollout and we will take a six minute break.

Oh, excuse me.

Thank you.

But I just want to warn the council, we may run over our 630, but we're not going to take it out on Amanda. So take it away.

I will do my best to get us out of here by 630. Wonderful, yeah, Council President, Council, Mayor, thank you so much for your attention this evening. I know it's been a long evening, but I met some of you during my start in the city, but my name's Amanda Lightner. I'm the Economic Mobility Program Specialist, and this is a brand new role that started in February. So tonight, we're gonna give you a six-month update or progress update on economic mobility work to support inclusive growth. sharing key findings and lessons learned as we're identifying emerging areas of focus as this work moves from discovery into action phases. So we'll bring this slide back up at the end, but tonight we'll be seeking your feedback on the emerging direction of this work to inform its continued development, especially as we're moving into more in-depth stakeholder engagement and community co-design process. So I wanted to start tonight by providing the shared definition of economic mobility to ground this conversation. So when we're talking about economic mobility, we're just saying it's the ability of someone to improve their well-being over time going from where they are now to a greater state of financial security and opportunity. So that can be at an individual level or intergenerational. I also really like this framework provided by the National League of Cities, where you can see a transition through stages of economic stability, security and well-being. That's not always a linear process, but it helps you see what's involved in those stages and also shows that this is a very individualized process that involves multiple systems coming together to influence these outcomes. So why are we talking about economic mobility now? Every week you come in and talk about growth that's going on in the Rochester community. However, this growth doesn't equal the same opportunity access for all residents. So really when we're adding economic mobility into the conversation, we're just saying let's have improved coordination, alignment, and solutions building across internal and external systems to get better outcomes for residents. I WANT TO NOTE, TOO, WHEN WE'RE TALKING ABOUT ECONOMIC ABILITY TONIGHT, WE ARE NOT SAYING THAT THE CITY IS LEADING AND OWNING ALL OF THESE PROCESSES. WE'LL BE VERY SPECIFIC, AND YOU'VE SEEN IN YOUR SLIDE DECK WHERE THE CITY, WHERE THERE'S BEEN SPECIFIC AREAS WHERE THE CITY CAN LEAD, SUPPORT AND INFORM THAT WORK, AND WE'RE SEEING THIS VERY MUCH SOMETHING THAT NEEDS TO BE DONE IN PARTNERSHIP WITH ORGANIZATIONS IN THE COMMUNITY. So you talked about economic mobility as a part of economic development a few weeks ago, so I'm not gonna take too much time here, but economic development is looking at growing the economy. Economic mobility is saying who can actually participate in that growth and what are their barriers to accessing it? So when we consider economic mobility, that's a more inclusive look at economic development and economic opportunity access. In addition, the city of Rochester received this grant from ICMA last fall to kind of stand up this work, identify mobility areas, align stakeholders, and develop pilot work. So we're part of a national network of communities that gets to work on this kind of together, which has been really helpful. After this grant is done, really what we want to do here is lay the groundwork to align systems, connect work to support and sustain inclusive economic opportunity and economic development as we move through this grant and beyond into sustainability. So I mentioned in the beginning that this position is new, but economic mobility work has already been happening both outside of the city, or excuse me, inside the city and outside through external partners, how we've been thinking about land use, transportation, economic development and housing. Those systems are all coming together to influence economic mobility outcomes for folks in our community. So this isn't about doing new work, it's saying let's be intentional about how this work spans different departments in the city, different work with partners, how residents are experiencing the interaction of those systems, and where really small changes layering on that economic mobility lens could have different outcomes for folks. So this is an overview of the work that's been done to date since I got started in February through to the end of this year. So we've taken a very intentional data driven approach really to understand systems and constraints, do extensive engagement with stakeholders and understand and uncover data. And really the intent with all of this is to be very mindful about where the city can have the most meaningful impact and collaboration with the work that's already taking place to be additive. So the first two stages of this work really looked at deepening our understanding of economic mobility challenges within the community through a variety of ways, and we'll go through all of these here, but a lot of external stakeholder engagement, workshops, data discovery. And through this work, we uncovered over 30 areas specifically impacting economic mobility in Rochester, and then worked with stakeholders and key leadership to prioritize these down to four mobility areas where the city has unique opportunity to add value, and working towards narrowing that down to one specific focus area for work under this ICMA grant. So this is showing the outcomes of that narrowing work through engagement with stakeholders and city team members to elevate the four economic mobility areas from those original 30 that were identified as most impactful to residents opportunity access and specifically where the city had some action lever to lead support or influence the work, which is shown here through these different colors. So I'm not going to go through this with you tonight. You're all very aware of work that's being done in connected and reliable transit, affordable housing supply where the city supports, and these two other economic mobility areas that were elevated are areas more where the city would influence through bringing stakeholders together through policy, data-driven approach, and systems level alignment. So even with narrowing into those four areas, that's still quite a lot of work to be done. So what we're doing right now in this next stage is more in-depth and targeted stakeholder and partner engagement, working with local experts and diving deeper into data sets to get to a much more detailed and prioritized singular economic mobility focus area for work under the ICMA grant. So we use this decision matrix and conversations with stakeholders and leadership to start that narrowing process for the ICMA grant across those four general economic mobility themes. Specifically, we were looking at the level of current momentum, leadership, both inside and outside of the city in these different spaces, as well as the impact of grant resources to move the needle in these areas. Through this analysis, conversations with stakeholders and leadership, career readiness and workforce systems alignment was chosen for further exploration for pilot work under this grant. Completely recognizing that all four of these areas are highly interconnected and important to economic opportunity access, and work will continue with the goal of increased connection, alignment, and focused collaborations to move towards that more sustainable and long-term economic opportunity access.

BEFORE YOU GO OFF OF THAT SLIDE AND I REALLY APPRECIATED THIS LOOK AT THIS. SO WITH THE CURRENT MOMENTUM FOR CAREER READINESS AT MODERATE AND LEVEL OF LEADERSHIP, IS THAT WHAT YOU'RE LOOKING AT IS FOCUSING ON BRINGING MORE MOMENTUM AND WHAT DOES THAT LOOK LIKE AND HAVING THE CITY TAKE A HIGHER LEVEL OF LEADERSHIP?

Yeah, that would be correct. From our conversations, there wasn't really a lot of city bandwidth dedicated toward career readiness and workforce system alignment, both with work being done in the city and alignment with external partners on work already being done. So we weren't playing a huge role in that to date.

So the plan is to play a bigger role, a more visible role?

That's correct, yeah.

Okay, and you and I have talked and I've mentioned this to Ms. Steinhauser as well, is I think the connections with our largest employer here in Rochester and really understanding those pathways that they use and then taking our position as the city in making making sure that those pathways are clear to to our residents and neighbors so that there is a pathway for the residents of rochester and homestead county yeah no absolutely and we'll dive into those deeper conversations as this work moves forward yeah absolutely thank you okay

Okay, so to start kind of understanding what's going on in the career readiness and workforce space, we did a deeper dive into labor force data with the support of our partner at DEED. And really, we were just looking at occupations that were growing the most quickly in the area if they were actually creating economic mobility for folks. So to do this, we examined wages, household costs, or households that these supported, and education barriers to get into those occupations. and found that they segmented into these groups shown here on the slide, with only some of these occupations actually supporting economic mobility based on this data, and actually the majority likely supporting more stability, but not economic advancement. I'm not gonna spend too much time here, but we looked at the data and asked who was accessing these mobility occupations, and you can see there's distribution, not equal distribution. So this will be further explored through community engagement and resident voice to understand this more in depth. So as I mentioned, the city is not intending to own this work. We don't want to be a workforce development provider. We fully recognize that this is a community-wide and system-spanning work that needs to be done in partnership with others in the community. This map is meant to be a preliminary look at some of the partners working in this space, and many of these have been engaged to date in preliminary discussions around economic mobility challenges that they are seeing and that's showing up with the people they serve.

Council Member Doering.

Just for clarification, are those representative organizations or is that the exhaustive list of organizations?

This is very preliminary. Yep, needs to be further explored with engagement with these folks. So from this early stage, kind of preliminary engagement with folks in the workforce development space, this has also been helpful to start to create an asset map draft, very much still in draft form. And this can help us start to understand the resident experience across the ecosystem, how these pieces connect together, where people enter the system, where gaps and friction could be occurring. So from this labor market data and these stakeholder conversations, that's kind of converging around these two main focus areas. More in-depth analysis of career pathway access barriers and household stability barriers. So, so far the data has been telling us what's happening. Now more in-depth stakeholder engagement and adding in that resident voice is going to tell us why that's happening and allow us to lead toward more in-depth co-design and solution generation with the community. So that kind of leads us to where we are now. So maybe getting us to 630. We'll see. But getting wrapping up the end of this refined stage where we've kind of narrowed in on this specific economic mobility focus areas leading into community engagement and co-design to better understand the specific barriers that are occurring in that space and add in the resident voice to explain why this is happening. While this is all occurring, we continue to engage with national experts at ICMA, continue to have more in-depth conversations with stakeholders to have more in-depth and refined conversations in these spaces.

Ms. Leitner, can you hold? Oh, when you're done.

Okay, pretty much done. And then, yeah, continue to do work across these four primary priority mobility areas.

Councilmember Fredericks.

Did you get through it?

Yes, we were at the end.

So I enjoyed my visit with you. It was nice of you to come down and visit. And what I started thinking about after you left is, she'll go through all of her people. I wonder what her biggest, cliche word here, aha moment will be here. This is a front burner thing I think we need to look at. I'd like to hear what that is.

I think what has come to mind quickly to me is that we have a lot of people in this space doing really great work, and it's just fragmented, and residents often don't know about it. So I'm not saying that all the solutions are there. I'm saying we have some great gems to work from, and we just need to connect those pieces together. to make a more cohesive pathway for residents.

Yeah, we used to go down to City Hall, everybody did in person, talk to somebody, and then they'd say, yeah, go here, go there. Now people are sitting there at home on their phone surfing on where do I go, where do I go?

and I think that gets to the point, like when you know where to go, it makes it so much easier. Like you just have that, you know, that access that other people don't, who don't know it. So to me, that's a huge piece of this is how can that be equitable to more people to know how to navigate these pathways?

Maybe the point I'm making, I might need just to say city hall. It was anywhere you went and networked in person and you talked to people and you made connections and you could see it, taste it, feel it and, and you know, get pointed in the right direction. And, Quite frankly, it's almost a lost art at this point. Thanks.

Administrator Zales?

Could I just also offer that I wanted to recognize that Amanda is right around her six month mark and she's done an amazing job to bring us to this point. Although she's been in the city of Rochester at large for much longer, I think that a lot of work condensed down into a few slides that help us to then focus in on, to your point, what could actually hopefully move the needle to a degree in helping connect people to existing resources or understanding what the gap is, but just wanna say thank you to her doing all of this in, it feels like way longer to me, but it's only been six months.

And she also, on her first foray into, at a study session, actually can be flexible.

Masterclass on study session presentation.

Flexible and abridge her presentation. So Council Member Keene.

Yeah, thanks for being here. And again, I did meet with you. I appreciate getting, there's something about this that I get suspicious of with the idea of like economic mobility, but I really liked the thing you started out with. And it started out with economic stability, moving to economic security, moving to like building wealth. And I almost thought I'd missed the first one is like at risk, starting out at risk. I am still unclear if like, I mean I know this is not, like I really appreciate the city's not trying to take this in here, we're gonna do this, but if you had, if you were gonna do your key metrics, would it be based on the transit system would get better in support, or the housing system would get better in support, or would it be we've, like dramatically improved lives of seven families.

Yeah. Yeah, no, I understand and appreciate that point. And that's what we're getting to now with leadership in these areas, housing transit, um, to develop more of those metrics. Um, but yes, I think to your point, um, we're in the process of thinking more in depth about what that will be. Is it, you know, increased ridership? Is it, are we looking at household cost burden? So we're, we're having those conversations now.

And I think they're all contributors too, and I always get caught up with this mobility, because I look at this mobility as being able to kind of build a career or build something. My other comment is, and this is getting personal lately, but I don't like to see the first time we talk about economic mobility, we talk about let me help you start a business, because 85% of us, we get a W-2, that's what our careers are, and to say we're gonna start out with entrepreneurship is a wonderful thing, and hopefully some people really do well with that, but it is ignoring the majority of the population. And I want to, I like that thing when the mobility occupations pay 50% or above. How do you get people to start, not just like saying, I just need a job, I gotta go get the first job, and try to get them to build skills in those first jobs, to get them to the next, and get them to that. And that's the mobility piece that really interests me in this. It is daunting, though, to think about how to go about it.

And I couldn't agree with Council Member Keene more, and that's why I focused on our largest employer, because I think there are those that want stability, but... A lot of our employers provide wages increases benefits part of those benefits are our professional development and education and others that can then lead them to that economic mobility. So, I, what I was very excited about hearing from you is your answer to council member projects question, which is. You know, the connections need to be there and if we can be a conduit for helping make those connections between those agencies that work in this area workforce to workforce, mobility or workforce. I don't want to say development because that's your other one, but, uh, the, uh, and the employers, I think then that is how I would see success in, uh, in our part of it is is making connections. It can be lasting council member during.

Yeah, I wanted to make sure I address the three questions you put on your last slide. I like the prioritized economic mobility areas if I'm reading those on slide 19 of your presentation. Focus area one, career pathway access barriers and household stability barriers. I would love to see some in-depth work in the trades. Uh, what that means for folks and economic stability and long term career pathways. I'm fascinated by the work of of equity across our, our economic space. So I know that we kind of glossed over for lack of time over the, the racial slide in here. I'm interested in a more equitable. workforce across racial barriers as well as gender barriers. I'd love to see that information. And for me, success metrics would be a more equitable workforce. So obviously that for me includes across those ethnic or racial barriers as well as the gender gap in some of our occupations. So I hope that's helpful.

Very. I appreciate that. Thank you.

Council member wall.

Thank you. Uh, I had to, unless I missed it previously in the presentation, I had to look at what Alice means, uh, from the, uh, but I. What? Yeah. Survival occupations. I presume in economic mobility, we're not simply trying to eliminate. I mean, that represents a huge part of our workforce. We will always need servers, food prep. How does that work into the economic mobility ladder?

Yeah, no, I fully recognize that point. And I think this is just meant to say that based on the data, if this was the only income coming into a household it would not really be able to support even a single adult. So I think it's the understanding that what that means and that overall that would have to be supplemented in some other way. So I think going back to, I can't quite remember when the point was made, but thinking about how people transition through those different stages, but kind of just recognizing what that means to be in some of those occupations and that there are other supports that those people are needing.

And if I could add, and Amanda, you correct me if I'm wrong, so you're absolutely right. We are a hospitality-based community, right? And so, but when you think about economic mobility, income and pathway is one component of economic mobility, and where we influence and directly lead are in the housing pathways, the transportation pathways, and so, again, thinking about what's the work that we do That if some is not going to get out of that survival occupation, how might we. Provide support for that household thinking about those other pathways.

Council member Miller yeah, just going through the, the questions or feedback. Yes, these resonate. necessarily have anything to add from the current framework. I would love to know, especially looking at slide 20 and even beyond December 2026, at what point the council should expect check ins or updates in this process. I mean, often when we do development processes, we'll have stars of this is when we should expect to hear back next. And here would be the scope of that. So helping us understand how we're involved moving forward. And then I think part of success would look like having built out metrics much like we had in the transit space. So we understand what we're measuring and so that we can track that over time. I think the scorecard of our public transit system was a good part of what measuring success in one of these areas would look like or part of it. And I would just wonder how we're adding these tangible ways that, you know, equitable workforce is based on a specific set of measures and helping us understand how we're measuring progress because otherwise it can feel quite vague and intangible to understand whether we're making progress or not and for whom.

Yeah, no, and I completely appreciate that. And that's part of what we're working on now is we narrow in that focus, how we can get more, what's the right word to put this, stepping stones of kind of those metrics, because economic mobility, right, is generational. It's maybe five, 10 years. So that's what we're working on right now is we narrow in that focus to identify more specific metrics that could be used. And I think along with that, we can work alongside leadership to provide kind of that glide path for you all and keep you all informed as this moves forward.

I want to go back to something Council Member Doering said, and he mentioned the trades. And I look at, you know, the construction trades and, you know, plumbers, carpenters, electricians. There is, one, we have a need. We're a growing community. And there is economic mobility in those professions as people get involved. furthered license and through apprenticeships and so, and I didn't see that up there and so is there a reason or is it something that you can add into, I saw repairs

Oh, that's probably just because it wasn't in one of the.

Yeah, it was stability and I, you know, yeah, I think the construction trade should be something that you certainly should look at and look at as a major piece of our economic development.

No, I appreciate that. And I will say these were meant to be more like wage brackets more than definitive. These are the specific occupations that we'll be focusing on. So I completely appreciate that. Yeah.

And again, this is a finite period of time with this grant to be able to bring us to a certain point. But part of the next exploration process that that Amanda is sharing about also there's continuing adjustment and refinement for the next few years of the Rochester Public Schools strategic plan, and I know they're focusing on some of that, so this isn't intended to replace all of those other things, but also in order to have an outcome that's necessary in order to deliver on the grant requirements, we can't boil the ocean either. Doesn't mean the ocean won't still exist. We can't keep boiling it later.

All right, well, thank you. Great presentation in more ways than one. It was brief, it was worthwhile, and you got some new information from us. All right, with that, study session schedule

Thank you, Council President, Council Members. Just a quick reminder, this coming Monday is the fifth Monday of August, so you will not have a study session or a council meeting. So in case that's something that you're going to feel sad about, get prepared for that now. And then the next study session following your September 9th, which is a Wednesday council meeting, which is the week of Labor Day, is the city administrator's recommended supplemental budget. So additional feedback from what we heard here today as well as continuation of the discussion of those last slides and action plan update as well as credit card service fee. So lots of aligned type of activities. Then just did also want to point out forthcoming later in September we have some updates on stormwater quality credit transfer policy. seen that once before, as well as mode shift and housing access update.

All right. We are adjourned.