A closer look at the City of Rochester's proposed 2021 budget
Rochester’s proposed 2021 budget went under the microscope of the city council earlier this week. Like almost every other city in America, the city faces a budget crunch thanks to Covid-19.
On today’s edition of the Rochester Rundown, we sift through the 390-page proposed budget and talk with Rochester city administrator and budget architect Steve Rymer to figure out what or who will be impacted by this year’s tough decisions, and if the pandemic will affect budgets to come.
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🎧 As a reminder, new episodes of the Rochester Rundown can also be found on Spotify, Apple Podcasts, Stitcher and other leading podcast services.From Monday’s city council study session, a fact that’s sobering yet not quite surprising: Rochester administrator Steve Rymer says a city undergoing massive growth will lose millions of dollars in revenue in 2021, compared to previous years.
$2.8 million lost in parking ramp revenue; $1.7 million lost in hotel taxes; drops in inspection permits, cable TV franchises, government aid… it all adds up to a $14 million revenue shortfall.
To balance the budget, the answer may seem simple: raise property taxes, which feeds into the city’s General Fund. Rymer says that’s not happening, though: in reality, Rochester’s residents will pay less in property taxes this year, thanks to the formula the city uses to determine property tax rates.
“There’s a couple factors we look at,” said Rymer. “One is the property tax levy, that’s the dollar amount we need to generate. Then you look at the assessed value of the properties — we’ve learned that the assessed value of properties in the city are going to go up by about seven percent. So because you have that larger base, but are spending the same amount of money, that actually brings the tax rate down.”
With the tax levy unchanged, Rymer and his team have drafted a $476 million budget for the 2021 fiscal year, paling in comparison to the $574 million budget approved this time last year — but the difference is not entirely thanks to the pandemic.
Multi-million dollar bonding projects like Heart of the City construction sent the 2020 budget sky-high, and a reduction was expected before Covid — yet not to the extent we’re seeing.
According to Rymer, the main way for the city to tighten its budget has been in personnel — not in job losses, but in cutting overtime for departments like police and fire, while leaving some vacant part-time and seasonal positions vacant.
“I think during 2021, the direct impacts will be minimal,” said Rymer. “At the same time, they’re not sustainable changes, if that makes sense. We’re able to do things like this in the short term. If the impacts of the pandemic continue for local government, that’s where I think you’ll see more direct impacts.”
Some less essential city offerings are still on the chopping block, however. The proposed budget calls for the permanent closure of Silver Lake Pool, citing extensive maintenance and repair costs. Rochester International Airport stands to lose $250,000 in funding, with the city expecting 20 percent of normal passenger volume through next year.
Most non-profit organizations that receive city money, from the Diversity Council to RNeighbors and the Rochester Downtown Alliance, will also get less this year, while others such as the History Center of Olmsted County are anxiously awaiting to see whether they receive any funds at all.
But in Monday’s meeting, council president Randy Staver said those agencies should see the situation less like a slippery slope, and more like an aberration.
“This is an unusual year, and we’re making some significant changes, and hopefully some of these things are one-time things,” said Staver. “I just don’t want them to get overly alarmed that this is something that would trend into the future. This is something that we need to do for this budget year.”
It is important to note that the budget is not final just yet — the Council will review further and vote on approving or denying during their September 21 meeting. If approved, Rymer says it should be adopted by mid-December.
Rymer will move on from the administrator role after the 2021 budget is approved, but he says he hopes the decisions made in his final year — a year unlike any other — sets his replacement up for success.
“We’ve learned a great deal during 2020… how we can work together and make quick decisions in the benefit of small business, families, and youth,” said Rymer. “We want to build on that, and the philosophy of the budget is a similar thing: building collaboration, making sure we get through a very difficult time together, and build an even stronger Rochester.”
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.
