Council addresses budget, modifies transit plan

Two weeks ago, it was revealed the City of Rochester projected up to a $28 million revenue shortfall directly related to the economic impact of Covid-19. On Monday, the Rochester City Council took the first steps toward bridging that economic gap.

Rochester City Administrator Steve Rymer laid out the tentative plan for the coming months in a presentation to the council. By combining federal aid, the use of contingency funds and across-the-board spending cuts, the city projects to cover up to $26.6 million, in line with the high end of the assumed budget shortfall.

Notable to the city’s plan is that while it does include a hiring freeze and a reduction of employee overtime hours, no staff positions are being cut.

Council President Randy Staver said Monday that the updated measures show a path forward for the city, even as the future remains murky.

“It does, personally, give me some cautious optimism that we will continue to work through this,” said Staver. “And perhaps it’s even more important that we’re able to maintain core services — public safety, some of those other things that our community looks to us to provide.”

Under the plan, $4 million will be cut from the city’s general fund. Another $4 million will come out of the budget for Rochester Public Utilities and enterprise funds (i.e. parking and sewer fees) respectively, while $2.6 million more comes out of the city’s recreation budget.

While many core city services avoided catastrophic budget cuts, the measures most likely to be noticed in the coming months came in the recreation sector. The city plans to drastically reduce mowing and routine maintenance at its facilities, including the public golf courses. Beaches and outdoor pools will also remain closed through 2020, unless the governor gives clearance to open them before July 4. Lights at public ball fields and stadiums will also likely remain off through the year.

Given the budget woes, council members were unanimous in supporting the measures. Council Member Michael Wojcik said administration’s plan found a middle ground between cutting too much and not saving enough.

“This is about being proactive, but it’s also about reacting and not overreacting, and keeping an eye on what comes next,” he said. “Getting through the crisis is the first part, rebounding with great strength is the second part, and I believe this budget sets us up for both of those things.”

The city expects just under $10 million in aid from the federal government’s CARES Act, directed specifically at the transit system ($7.2 million) and Rochester International Airport ($2.5 million). The money does not all have to be spent in 2020, and in the transit case, funds can be used to bolster the existing fleet of buses. (In the airport’s case, the funds can only be used to take care of operating expenses.)

Rymer also noted plans to pursue more funding from Minnesota’s $2.1 billion share of the federal government’s Coronavirus Relief Fund, though there is no guarantee more funding will come down the line, if the state decides to divvy up funding based on need between cities. This could leave Rochester, and its relatively solid financial standing compared to its statewide peers, out of luck.

“Rochester shouldn’t be penalized just because we’ve done a pretty good job of planning and maintaining reserves,” said Staver. “That speaks to our AAA bond rating that we’ve held for decades, which is a big plus.” 

Rymer’s next step is to draft an interim 2020 budget, including updated revenue totals and the cost-cutting measures approved by the council. The finalized version should be ready in the coming months.

Bus Rapid Transit Plans Modified

The council unanimously approved a modification to the bus rapid transit plan in conjunction with Destination Medical Center, opting for a multi-phased approach to construction. Before the east transit village is created at the Seneca Foods/Graham Park site on South Broadway, the BRT system will run on 2nd Street between downtown and the Mayo West Lot.

According to the city, the scaled-down alternative would require $107 million in initial capital, just over half of the $203 million expected cost of the full circulator, while still serving an estimated 9,925 daily riders. The proposed changes would upgrade the route’s “cost-effectiveness” score from the Federal Transit Administration (FTA) from ‘medium-high’ to ‘high’ (roughly akin to raising your GPA from 3.6 to 4.0). 

Mayor Kim Norton, who notably preferred a rail circulator over the BRT concept, threw her support behind the change, noting the strong expected ridership numbers and cost-saving measures, as well as giving the city some time to reconsider if the circulator doesn’t work as hoped.

“Given some of the other concerns I’ve had, including traveling down Broadway and limiting traffic to one lane, I think this, at least, gives us a little bit more time to figure out if this is really what we want for our community,” said Norton. “It does move the idea of bus rapid transit forward on what I see as the most crucial line, which is from the west transit village forward.”

Council Member Patrick Keane noted the modifications do not shy away from the Seneca/Graham Park site becoming the inevitable east terminus for the transit circulator, but does allow the project to get off the ground.

“I think it’s important to say we’re not as much changing [the project], but we’re scaffolding the project, to do this part and potentially others,” he said. “It really helps reduce the risk to the city over the next couple years.”  

The project still needs DMC Corporation Board approval at their next meeting later this month, plus the city’s application for funding must be approved by the FTA in September. It is anticipated the project will be paid for using a mix of federal dollars and state DMC funds.

Meanwhile, the city continues to meet with Olmsted County on plans for the east transit hub. The two sides have not yet come to terms.

Golf’s Resurgence

During Rymer’s presentation, Rochester’s Parks and Recreation director Paul Widman noted one major surprise in the past couple weeks: demand for golf blew past the city’s expectations. 

“We definitely do have demand to open at least another course, if not both Northern Hills and Hadley Creek, and that’s what’s been surprising,” said Widman. “We anticipated that there might be a little bit of a lag because of the financial impacts, but if you consider that golf is one of the only programmed outdoor activities available right now, we’re seeing a lot more interest than we anticipated.”

Soldiers Field and Eastwood are the only two city-operated golf courses open for tee times as of publication; Northern Hills and Hadley Creek remain closed due to Covid-related staffing shortages. That may not be the case for long, though — Widman said conversations started Tuesday about bringing on additional staff to open both courses.

“We knew we could manage two courses with the team members we had available,” said Widman. “Moving forward, we knew we’d have to have the discussion we started today, about bringing on seasonal help in order to open the other two courses.”

Rymer also noted discussions were under way with tennis and pickleball players on proper practices regarding reopening courts at the city’s parks. More information on both fronts is expected in the coming weeks.

Isaac Jahns is a Rochester native and a 2019 graduate of the Missouri School of Journalism. He reports on politics, business and music for Med City Beat.