CITY OF ROCHESTER COUNCIL AGENDA Council/Board Chambers 151 4th Street SE Study Session July 27, 2020 03:30 PM - THIS MEETING SHALL BE CONDUCTED PURSUANT TO MINNESOTA STATUTES SECTION 13D.021 AND MEMBERS MAY APPEAR ELECTRONICALLY. SHOULD ANY MEMBER APPEAR ELECTRONICALLY, ALL VOTES SHALL BE TAKEN BY ROLL CALL AND EACH MEMBER OF THE BOARD WILL BE ABLE TO HEAR EACH OTHER. PUBLIC ACCESS WILL BE RESTRICTED TO COMPLY WITH STATE HEALTH GUIDANCE DURING THE PANDEMIC. CURRENT ROOM LAYOUT ALLOWS FOR APPROXIMATELY 11 INDIVIDUALS TO ATTEND. -VIEW MEETING: CITIZENS ARE ENCOURAGED TO VIEW THE MEETING BY EITHER WATCHING ON SPECTRUM (CHARTER) CHANNEL 180 OR 188 OR VIA LIVE STREAMING THE MEETING. THE LIVE STREAM CAN BE FOUND AT THE WEB ADDRESS ONCE THE MEETING STARTS: WWW.ROCHESTERMN.GOV/AGENDAS. STUDY SESSION MEETING ITEMS City of Rochester Vision, Principles, and Priorities 1 Comprehensive Annual Financial Report and Audit Review / Finance - Estimated Time 60 Minutes 2 Sustainability Update / Community Development - Estimated Time 30 Minutes 3 Study Session Schedule 4 Other Business
Agenda - Monday, July 27, 2020Council/Board Chambers 151 4th Street
SE
Study Session July 27, 2020
03:30 PM
- THIS MEETING SHALL BE CONDUCTED PURSUANT TO MINNESOTA STATUTES
SECTION 13D.021 AND MEMBERS MAY APPEAR ELECTRONICALLY. SHOULD ANY
MEMBER APPEAR ELECTRONICALLY, ALL VOTES SHALL BE TAKEN BY ROLL CALL
AND EACH MEMBER OF THE BOARD WILL BE ABLE TO HEAR EACH OTHER.
PUBLIC ACCESS WILL BE RESTRICTED TO COMPLY WITH STATE HEALTH
GUIDANCE DURING THE PANDEMIC. CURRENT ROOM LAYOUT ALLOWS FOR
APPROXIMATELY 11 INDIVIDUALS TO ATTEND.
-VIEW MEETING: CITIZENS ARE ENCOURAGED TO VIEW THE MEETING BY
EITHER WATCHING ON SPECTRUM (CHARTER) CHANNEL 180 OR 188 OR VIA
LIVE STREAMING THE MEETING. THE LIVE STREAM CAN BE FOUND AT THE WEB
ADDRESS ONCE THE MEETING STARTS: WWW.ROCHESTERMN.GOV/AGENDAS.
STUDY SESSION MEETING ITEMS
City of Rochester Vision, Principles, and Priorities
1 Comprehensive Annual Financial Report and Audit Review / Finance
- Estimated Time 60 Minutes
2 Sustainability Update / Community Development - Estimated Time 30
Minutes
3 Study Session Schedule
Priorities
Community Vision 2040
Rochester is a city that cares: where all people are treated with
dignity and respect; where
residents, employees, and visitors enjoy a high quality of life;
where business and industry
thrive; and where the land and environment are renewed and
sustained for the benefit of
all. It is a welcome and diverse community:
Renowned for its reputation as a center for growth and innovation,
its robust economy,
and programs and institutions that support life-long
learning;
Characterized by its safe and friendly neighborhoods, diverse and
affordable housing
options for people of all ages and backgrounds, thriving downtown,
vibrant public
spaces,and easy access to parks and recreation amenities;
Committed to health and wellness for its people, and also of the
air, water, and land they
depend on for sustenance;
and
Dedicated to the sustainable and responsible use of public
resources and provision of
quality public services, supporting livability and long-term fiscal
health.
Packet Pg. 2
Maintain and increase neighborhood vitality and livability.
Secure a funding stream for sustained parks and recreation
improvements and
community amenities.
Create employee development plans.
Manage growth and development
Incorporate P2S infrastructure planning into development
decisions.
Implement the recommendations of P2S, the Parks and Recreation
Master
Plan and the Library Strategic Plan.
Balance public infrastructure investment
Improve transportation and related facilities.
Develop an asset management plan and use life-cycle cost
considerations during decision
making.
Develop a policy and practice of assessing new infrastructure
investment based on
current assets and maintenance costs.
Packet Pg. 3
STUDY SESSION ITEM ITEM 1: Comprehensive Annual Financial Report
and Audit Review
The City’s FY 2019 Comprehensive Annual Financial Report (CAFR) was
issued on June 22, 2020. The CAFR is prepared and published
annually by the City’s Finance Department.
The entire CAFR can be found on the City’s website at the following
location:
https://www.rochestermn.gov/departments/finance-information-technology.
Teammates from the Finance Department will provide an overview of
the CAFR.
Attachments: • Presentation: City of Rochester Financial Statement
Overview 2019
1
• Issued unmodified opinion on City’s basic financial
statements
– City issued 2019 CAFR in June 2020
– Smith Schafer relied on Baker, Tilly, Virchow, Krause’s
unmodified opinion on Electric and Water Utility Funds
– Smith Schafer relied on CliftonLarsonAllen’s unmodified opinion
on the blended component unit, DMCC
– City applied for GFOA Certificate of Achievement for Excellence
in Financial Reporting for the 2019 CAFR & responded to GFOA
comments on 2018 CAFR for which City received the Certificate
• Smith Schafer is performing the Single Audit of 2019 federal
grant awards in July
• Audit Committee Meeting – Reviewed results of 2019 Audit,
Procedural Recommendations and Auditors’
Responsibility Letter
• Special Revenue Funds: – Library –
Municipal Recreation System – Mayo Civic Center
– Edward Byrne Memorial JAG –
Airport Operations – F.E. Williams Estate –
Transit – Minnesota Bio Science Center –
Community Development Projects – DMCC
• Capital Project Fund – Capital Improvement
• Debt Service Funds: – Tax Increment Bonds –
TIF Revenue Bond –
Facility Energy Improvements
Loan – EDA Bond –
Public Works & Transit Operation
Center Bond – Lodging Tax Revenue Bond –
GO Variable Rate Sales Tax Bond
3
1
• Internal Service Funds: –
Equipment Revolving –
Information Technology
Revolving – SelfInsurance
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
$100,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Other Revenues
In Lieu of Tax Transfers
Expenditures Sales Tax Revenue
Transfers Out/In Net
Excess
• Generated surplus of $2,524,166
in 2019
• Revenues increased $5,899,397 from
2018 to 2019 primarily as the result of:
–
Increase in General Property Taxes of $6.4 million
–
Offset by decrease in hotel/motel tax revenue of
$0.6 million
• Expenditures increased from 2018 to
2019 by $7,742,443 or 9.5%
– Increases in: •
General Government $1,252,759 11.5%
•
Public Safety $3,957,741 7.5%
•
Public Works $2,314,358 15.6%
• Culture
$175,260 9.6%
•
2019 In Lieu of Tax received by General
Fund:
– Electric $8,714,477 – Sewer 1,873,334 – Storm Water 619,442 –
Parking 648,341 – Water 357,668 – Total $12,213,262
5
1
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
$90,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Total Expenditures
• General fund unassigned
fund balance was
$37,808,279 at 12/31/19
expenditures totaled $88,962,377 in 2019
• State Auditor recommendation and
adopted city policy is no less
than 5 months of expenditures (42%)
6
1
7
1
Special Revenue Funds
– Library – Municipal Recreation System –
Mayo Civic Center –
Edward Byrne Memorial JAG –
Airport Operations – F.E . Williams Trust
– Transit – Minnesota Bio Science Center –
Community Development Projects – DMCC
8
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Market Value Credit County Contributions Fees
& Other Revenues Transfers In Expenditures Transfers Out Excess
(Deficit in Red) Fund Balance
• Property taxes of $6,978,565 represented 80.5%
of Library revenues in 2019
• In 2019, the Library operated at
a deficit of $64,927
• County contributions totaled $1,012,711
in 2019 which is raised
through property taxes levied
outside of the City
• Expenditures increased by $781,533
in 2019
• Ending Fund Balance of $3,029,188 was 35%
of 2019 Expenditures
9
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Market Value Credit
Fees & Other Revenues
Intergovernmental Transfer In Expenditures
• Municipal Recreation System includes:
Maintenance – Recreation – Tennis Center – Swimming Pools
– Plummer House – Foster Arend Park –
Graham Arena – Nat'l Volleyball Center
• Property taxes of $7,623,422 were 63%
of revenues in 2019
• In 2019, Municipal Recreation
System operated at a deficit of
$436,668 after transfers out of $575,425
• Fund balance totaled $2,797,741 at
12/31/19 (23% of 2019 Expenditures)
10
1
Recreation Center
Charges for Services, Direct Expenditures and Property Tax Support
$0
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Market Value Credit Customer Charges Direct
Expenditures Excess after Property Tax Support
• Direct expenditures exceeded customer
charge revenues by $341,528
in 2019, versus $386,726 in 2018
• The Recreation Center
was supported by tax
levy of $420,992 in 2019
11
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Excess after Property Tax Support (Deficit Red) Direct Expenditures
Program & User Fees County Contributions Property Tax
Support
• Rentals, User Fees, and
Program Fees totaled $706,444 in 2019
• Expenditures totaled $842,457
in 2019, a decrease of $21,585 from
2018
• Any operating deficit is
split between the city and county
Graham Arenas
Charges for Services, Direct Expenditures and Property Tax Support
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Customer Charges Market Value Credit
Property Tax Support Direct Expenditures
Excess after Property Tax Support (Deficit Red)
• Customer charges in 2019
increased $596 in
comparison to 2018
• Total expenditures increased $6,817
from 2018 to 2019
• Property tax support totaled $190,875
in 2019
• Total expenditures exceeded customer
charges revenues by $369,631
in 2019, versus $363,410 in 2018
Golf Operations
Charges for Services, Direct Expenditures and Property Tax Support
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Intergovernmental Revenue
Operating transfers Charges for Services
Direct Expenditures Excess after Property Tax Support
• Property taxes of $5,850,161 represented
93% of revenues in 2019
• Expenditures of $6,167,733 in 2019 were
$718,640 higher than 2018
• Overall departmental excess of $110,748
in 2019
Park/Forestry/Parkway Maintenance
Charges for Services, Direct Expenditures and Property Tax Support
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Market Value Credit Lodging Tax Charges for
Services Transfers In Direct Expenditures/Transfers Out Excess
after Tax Support (Deficit Red)
• MCC operations were
supported by lodging tax of $2,397,270
in 2019 (38% of 2019 Revenues)
• Charges for services decreased $1,108,878
in 2019
• Total expenditures exceeded
charges for service revenues
by $2,484,691 in 2019, versus $1,145,469
in 2018
• Fund balance totaled $1,525,049
at 12/31/19
• Expenditures and transfers
out increased by $230,344 in 2019
15
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Landing/Loading Fees Commissions
Land & Building Rent Other Income
• Airport saw an increase in
commissions of $72,657 and
an increase in landing/loader
fees of $35,981 in 2019
• Commission revenue generated primarily from:
– Parking lot – Car rentals –
Fixed Base Operator
• Land and building rent
continues to grow and is the 2nd
largest source of revenue ($1,423,948
in 2019, an increase of $41,844)
• Total Airport operating
revenues in 2019 was
$5,309,496, an increase of $123,363
from 2018
16
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Airport Revenues Expenditures
Transfers Out, Net Excess (Deficit in Red)
• Property taxes of $509,148 were
collected for airport operations
– Utilities (excluding natural gas)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$3,830,289
$3,218,374
$1,514,238
$558,458
18
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Tax Support Federal and State Grants Charges for Services
Other Revenues Expenditures/Transfers Excess (Deficit in Red) Fund
Balance
• Increase in revenues of $1,807,624
primarily due to
increased allocation of state
aid and user fees
• In 2019, the Transit Fund
operated at an excess of $1,630,061
• Fund balance at December
31, 2019 totaled $4,498,556
• Change in contract type
from cost reimbursement in
2012 resulted in gross
recording of revenues and expenditures
• Expenditures increase in
2018 and 2019 included
expansion of services
19
1
$500,000
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Rental income Expenditures Transfers
Excess (Deficit in Red) Fund Balance
• This fund includes revenues from
nonTIF portion of building only
(Floors 48)
• Rental revenues totaled $2,774,615
in 2019
•
In 2019, the MN Bio Science Center
operated at a deficit of $114,806
• In 2019, transfers of $1,505,229
were made to the EDA Bond Fund
for principal and interest
payments and repayment of
advance from parking fund,
transfers in 2018 amounted to
$929,726
• Fund Balance totaled $1,181,303 at
12/31/19
20
1
Debt Service Funds
• Tax Increment Bonds • TIF Revenue Bond •
Facility Energy Improvement Loan •
Economic Development Authority Bond •
Public Works and Transit Operation Center Bond
• Lodging Tax Revenue Bond •
GO Variable Rate Sales Tax Bond
21
1
• REDA Lease Revenue Bond Outstanding –
2010 $16,215,000 –
2011 15,810,000 –
2012 15,385,000 –
2013 14,940,000 –
2014 14,470,000 –
2015 13,985,000 –
2016 13,475,000 –
2017 12,940,000 –
2018 9,904,000 –
2019 9,436,000
• Bond payments will be
funded by sublease rent
payments from tenants of the
Minnesota Bio Science Center
22
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
$15,000,000
$18,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1
Tax Increment Bond
• Tax Increment Bonds Outstanding – 2010 9,841,721 –
2011 9,586,023 – 2012 9,079,422 – 2013 8,548,965 – 2014 7,895,273 –
2015 7,224,787 – 2016 6,860,000 –
2017 6,600,000
–
2018 6,330,000
–
2019 2,040,000
•
TIF Bond issued in 2009 is to be
paid by the collection of Bio
Science Center tax increments
and building lease revenues –
Balance at 12/31/19 $2,040,000
• Principal paid in 2019 totaled
$4,290,000
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
23
1
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$26,700,000 $26,650,000
$25,780,000 $24,900,000
$24,010,000 $23,110,000
$22,195,000 $21,255,000
$20,300,000
• GO Taxable Build America Bonds
(Series 2010A) were issued in
2010. Proceeds of these bonds
used for: – Public Works Operations
Center $23.8 million –
Transit Operations Center
$2,475,000 – Fire Truck $425,000
• A portion of the interest payable
on these bonds is reimbursed
through federal grants
24
1
• Adopted new Accounting Standard for Pensions in 2015
• Net Pension Liability represents City’s portion of PERA
underfunding – based on PERA Actuarial Report dated June 30,
2019
• Recorded as – Governmental $48,024,820 – Proprietary
16,823,664
Total $64,848,484
• Funding percentages at June 30, 2019 estimated at – General
Employee Fund: 80.2% – PEPPF: 89.3%
25
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$61,538,343 $63,138,279
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
• Fund balance totaled $132,192,804
at 12/31/19 –
Fund balance is either committed by the City
Council or restricted for the following:
– Flood Control ($15.0 Million) –
Sewer and Water ($6.2 Million) –
Infrastructure Sales Tax Projects ($30.3 Million)
– Highways & Streets ($27.1 Million) –
Future Construction ($946,000) –
Economic Development Loan ($938,000) –
Mass Transit ($1.8 Million) –
Tax Increment ($9.0 Million) –
Future Assessment Projects ($8.8 Million) –
Future Property Acquisition ($2.8 Million) –
Park and Recreation ($3.3 Million) –
Fire Station, Computer Upgrades, Airport,
Future Construction & other misc. projects
($10.3 Million)
– Police Precinct/Development Service
Infrastructure Center ($10.8 Million)
– Mayo Civic Center ($6.8 Million) –
DMCC ($19.7 Million)
27
1
• Parking • Electric Utility • Water Utility •
Sewer Utility • Storm Water Utility
28
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenues Other Income (Expense) Expenses
Transfers Out/In Lieu of Tax
Net Income
• In 2019, revenues from Ramps
increased by $51,939 and parking
fines collected increased by $31,968
• Operating costs, not including
depreciation, increased by $651,981
• Net income totaled $962,276 in 2019
and $1,507,385 in 2018
• Unrestricted net position at
December 31, 2019 totaled $15.8 million
• Chart excludes capital contributions
and transfers out to the BioScience
Center
•
2017 net income excludes transfer in
of $22.4 million related to bond
proceeds
• Transfers out in 2017 include $1.9
million related to consulting studies
(DMCC)
29
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Net Income Expenses/Transfers out
Retail Sales
• Electric revenues in 2019 were
$164,893,341, a decrease of $4,401,892
•
Rates increased 1.9% in January 2019 and
1.5% in January 2018.
• Additional Electric Customers: –
2019 1,047 –
2018 1,102 –
2017 939 –
2016 1,520 –
2015 974 –
2014 418 –
2013 392 –
2012 583 –
2011 1,188 –
2010 544
• Operating expenses have fluctuated
primarily as the result of SMMPA
purchased power rate increases and the
changing volume of wholesale activity
•
Revenue Bonds and Electric Utility Notes
of $171,180,000 outstanding at 12/31/19
30
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Operating Revenues
Operating Expenses/Transfers out
Net Income (Loss in Red)
• Water revenues in 2019 were
$11,657,335, an increase of $840,037
•
Rates increased 6.0% in January 2019
and 6.0% in January 2018.
• Additional Water Customers: –
2019 268 – 2018 451 –
2017 434 – 2016 481 –
2015 503 – 2014 296 –
2013 367 – 2012 398 –
2011 318 –
2010 219
• Operating expenses/transfers out
increased by $392,368
•
Net income for 2019 and 2018, as
shown in the chart, of $1,122,486 and
$619,954, respectively, excludes
capital contributions
31
1
Electric and Water Utilities (RPU)
Unrestricted Cash and Investments Reserves
Unrestricted Cash and Investments
(PILOT)
22%
32%
42%
55%
63%
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2013 2014 2015 2016 2017 2018 2019
32
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Revenues Other Income Net
Expenses Including In Lieu of Tax
Interest Expense on Bonds
Depreciation Expense
Income Before Cap. Contr. (Loss Red)
• Rate increases approved
through 2021 based upon
rate study completed in 2015
• Noncash depreciation
expense of $6.2 million and
interest expense of $1.5 million
in 2019
• Sewer Bonds outstanding totaled $65,675,000
at 12/31/19.
33
1
75% 93% 88% 86%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Unrestricted Cash and Investments Operating Expenses, Interest, and
Transfers Out
34
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Storm Water Fees Revenue from Developers
Expenses Including In Lieu of Tax
Depreciation Other Revenue (Expenses) Net
Transfers In (Out) Net
Net Income Before Capital Cont
• Net income, after transfers
(excluding capital contributions), totaled
$3,543,961 in 2019
• Rate increase of 10.75% in
January 2019 based on rate
study completed in 2015
• Operating excesses are being
set aside to fund future storm
water system improvements
• Capital contributions of $2,903,829 and
$ 3,010,280 for
2019 and 2018 are not included
in the chart
• Storm Water Unrestricted Net
Position at 12/31/19 was $19,388,915
35
1
28% 64%
112% 145%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Unrestricted Cash and Investments Operating Expenses and Transfers
Out
36
1
37
1
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Department Charges Equipment Acquisitions
• Cash reserves and related interest
earnings allows for: –
Stable departmental charges –
Interest income to supplement
departmental charges as source
of funding for acquisitions
• 2019 Equipment capitalized totaled
$3,839,343 and included:
38
7Ford Interceptor Utility AWD 345,502
5Ford Interceptor Sedan 153,323
2Pierce Impel Pumper 1,082,197
3Peterbilt Tandem Axle Plow Truck 778,883
1CAT Wheel Loader 938M 180,037
1Chevy 3500 4x4 127,473 3Toro GM 5910
297,269 1Peterbilt 348 w/Chip Box
129,749 1Aerial Lift Truck 208,913 1
Jet Sewer Truck 260,591
1
$0
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
$2,000,000
$2,250,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Equipment Acquisitions & Other Charges Department Charges
Transfers In
• Cash reserves and related
interest earnings allows for: –
Stable departmental
charges – Interest income to
• Other charges consisting of
maintenance agreements,
software licenses and other
professional and contracted
services amounting to $1,005,515
in 2019 and $712,542 in 2018
• Increase in 2016 related to
technology enhancements as
part of the Mayo Civic Center
expansion
39
1
Equipment Revolving Fund and IT Revolving Fund
Unrestricted Net Position
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
40
Unrestricted net position of the equipment revolving fund increased
by $828,500 to $5,150,059 in 2019
Unrestricted net position of the information technology revolving
fund increased by $495,091 to $4,451,782 in 2019
1
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GASB 75 Implementation Total Net Position
Net Income (Loss in Red)
Operating Income (Loss)
• Total Net Position at December
31, 2019 of $16,617,957 represents
the City’s reserve against Self
Insurance risk for: – Deductible Property Loss
– Medical/Dental Claims – Workers Comp Claims
• Net income in 2019 was $2,472,314
(an increase of $2,939,005
from 2018’s net loss of $466,691)
• Departmental medical charges
increased by 14% and dental
charges increased by 1% in 2019.
• Implementation of GASB 75 in
2018 restated beginning net
position by $3,670,778
41
1
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Department & Employee Charges
Benefits Paid
• Departmental and employee charges are
used to pay health insurance claims
•
Interest earnings on reserves are used
to supplement departmental and
employee charges
• Departmental medical charges have
changed annually as follows:
–
2019 14%
–
2018 14%
–
2017 14%
– 2016 13% – 2015 2% – 2014 5% – 2013 5% – 2012 % – 2011 3% – 2010
%
•
In October of 2011 the City had an
insurance holiday where neither the
departments or the employees were
charged for Health or Dental Insurance
42
1
Taxable Market Value
State Market Value Exclusion
• Taxable Market Value for 2020 is
$12.6 Billion, up $1.1 Billion (8.8%)
from 2019
• Includes both real property and
personal property
43
1
44
1
2015 2016 2017 2018 2019
45
1
Governmental Funds – All Expenditures
(Excluding Capital Outlay and Debt Service)
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
General Govt Police Department Fire Department Other Public Safety
Airport Transit
2010 2011 2012 2013 2014
2015 2016 2017 2018 2019
46
1
Governmental Funds – All Expenditures
(Excluding Capital Outlay and Debt Service)
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
Unallocated
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
47
1
Property Taxes, LGA, & Market Value Credit
(Per Capita, Inflation Adjusted)
$0
$100
$200
$300
$400
$500
$600
$700
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Property Taxes LGA/Market Value Credit
• Per Capita Property Taxes (Excluding
Market Value Credit) •
2010 $435
•
2014 445
•
2019 632
• Per Capita LGA/Market Value Credit •
2010 $58
•
2014 64
•
2019 64
•
Per Capita Total of Property Taxes,
LGA/Market Value Credit •
2010 $493
•
2014 509
•
2019 696
• Population •
2010 106,769 •
2014 111,187 •
2019 118,815
48
1
• Consists of: – Statement of Net Position –
Statement of Activities
• Utilizes accrual basis
of accounting and requires
capitalization and depreciation
of all property and
equipment and recognition of all long term liabilities
49
1
51
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
GENERAL GOVT
PUBLIC SAFETY
Summary
•
General Fund Unassigned Fund Balance at 42% of annual expenditures. (City policy is not less than 42%)
•
Library Fund Balance at 35% and Municipal Recreation Fund Balance at 23% of annual expenditures. Mayo Civic
Center fund balance totaled $1,525,049 at December 31, 2019.
•
Trend of declining Airport Fund Balance was reversed in 2014 as the result of reinstating levy allocation,
reducing capital improvement transfers and improved airport operations. Airport Fund Balance has a balance
of $6,019,604
in 2019 an increase of $1,489,806
from 2018.
•
Transit fund revenues continue to exceed expenditures increasing fund balance to $4,498,556 at December
31, 2019. Much of this balance is designated for additional bus purchases.
•
Capital Improvement fund has $132 Million in reserves for future capital projects as outlined in the City’s
capital improvement plan.
•
Parking fund has $16 Million in reserves for future capital needs through annual operating profits.
52
1
•
Electric and Sewer Utilities servicing $237 Million in bonds (including Crossover Refunding bonds) with
future access charges and user fees.
•
Sewer rate increases have allowed the Sewer Fund to service outstanding Sewer Bonds and build cash
reserves for future capital improvements.
•
The City’s SelfInsurance Fund reserves at December 31, 2019 totaled $16.6 Million an increase of $2.5
Million from 2018. Fund reserves increased for the first time in the last 5 years.
•
Equipment Revolving fund unrestricted net position increased from $4.3 Million in 2018 to $5.1 Million in
2019. Amount still below the a high of approximately $8 Million in 2012.
•
The activity of the DMCC, a separate nonprofit corporation, is included in the fund financial statements.
DMCC activities are being funded with sales tax collections.
53
1
STUDY SESSION ITEM ITEM 2: Sustainability Update
The sustainability team will be providing an overview and update on
the top focus areas as noted in the attached City of Rochester
Sustainability Report. In addition, the Energy Commission will also
be providing an update on their work related to implementation of
the Energy Action plan.
Attachments: • Memo: Study Session on Sustainability & Energy
Action Plan • City of Rochester Sustainability Report
2
SUBJECT: STUDY SESSION ON SUSTAINABILITY & ENERGY ACTION
PLAN
DATE: JULY 23, 2020
CC: STEVE RYMER, CITY ADMINISTRATOR CINDY STEINHAUSER, COMMUNITY
DEVELOPMENT DIRECTOR KEVIN BRIGHT, ENERGY & SUSTAINABIITY
DIRECTOR
Please find attached the project status report from the Community
Development Department related to our focus area of sustainability.
The sustainability team will be providing an overview and update on
our top focus areas at the July 27, 2020 study session. In
addition, the Energy Commission will also be providing an update on
their work related to implementation of the Energy Action plan.
This update will include their progress on achieving the energy
goals identified in the plan and priority areas for 2020-
2021.
2
CITY OF ROCHESTER SUSTAINABILITY REPORT Community Development
Department July 2020 CITY OF ROCHESTER ADOPTED SUSTAINABILITY
GOALS
_____________________________________________________________________________________________
Project: Sustainability & Resiliency Task Force Foundational
Principles: Social equity, environmental stewardship, fiscal
responsibility and sustainability Strategic Priorities: Enhance
quality of life, manage growth and development, balance public
infrastructure investment Goal Area: City for Health,
Transportation, Energy, GHG Emissions, Vibrant Neighborhoods Key
Actions: Development of action plan, public engagement, community
collaboration Scope The Sustainability and Resiliency Task Force, a
diverse cross-section of over 40 community members, was created to
ensure the community has a voice in guiding the development and
implementation of an action plan with input and guidance from all
of Rochester’s residents. The Action Plan will focus on five key
areas – Vibrant Neighborhoods, City for Health, Transportation,
Resilient Economy, and Greenhouse Gas Emissions – highlighting the
economic, environmental and social resilience strategies that can
help guide the City in future decision making. Staff Update
• Revisiting outcomes of the planning process so far, review draft
vision statement • Community Listening Advisory Group created to
react to and shape process for community engagement • Organizing
community calendar to schedule community listening appointments •
Finalizing the Sustainability and Resiliency webpage that will
share updates and engagement opportunities
Sustainability Goals
Packet Pg. 60
Project Timeline • April 2020: Monthly task force workshops began •
June & July 2020: Community engagement plan under review and
community listening sessions will begin • October 2020: Task Force
will debrief on community listening • November 2020: Begin drafting
an action plan • Spring 2021: Draft Sustainability & Resiliency
Action Plan to present for review
_____________________________________________________________________________________________
Project: City of Rochester Green Team Foundational Principles:
Environmental stewardship, fiscal responsibility and sustainability
Strategic Priorities: Foster team-oriented environment, manage
growth and development, enhance quality of life Goal Area: Energy,
Transportation, GHG Emissions Key Actions: Development and
implementation of strategy plan Scope The City’s Green Team was
launched in 2020 to implement sustainability actions and
initiatives within the City units, with a goal of integrating
environmentally preferable practices into City operations. Team
members assess current operational practices identifying
opportunities in procurement, transportation, energy, waste,
integrated pest management and landscaping, and greenhouse gas
emissions. Staff Update
• Adopted polystyrene ban in all City facilities, January 2020 •
Building Temperature Guidelines were accepted by City
Administration, May 2020 • Current initiatives include a robust
review of the City’s procurement in 2019 and a review of the
current
waste management system • Creating a high-level priority list and
draft strategic plan to present back to Team in August
Project Timeline
• Currently developing a strategic plan and timeline for each
priority and its performance metrics • Completion of a formal work
plan anticipated by September 2020 • Waste priorities will be
confirmed at the July 2020 meeting
_____________________________________________________________________________________________
Project: Air Quality Monitoring Program Foundational Principles:
Public safety, social equity, environmental stewardship, fiscal
responsibility and sustainability Strategic Priorities: Enhance
quality of life, manage growth and development Goal Area: City for
Health, Transportation, GHG Emissions, Vibrant Neighborhoods Key
Actions: Data collection and analysis, Community collaboration
Scope In 2019 and 2020, the Community Development Department and
the DMC EDA purchased 14 air quality sensors to install throughout
greater Rochester and the downtown core to better understand air
quality concerns. These sensors will monitor air pollution in
real-time throughout the year, data is publicly available for
review and download on PurpleAir’s website. The data will assist
the City in policy decisions around transportation, planning and
other key priority areas, while monitoring air quality as
development continues. Staff Update
• All 14 air quality sensors have been delivered to their
respective locations and stakeholders • Working with the
stakeholders to assist in getting sensors registered and
online
2
• Joining the We Bike Rochester August meeting to discuss ideas for
future collaborations on data collection Project Timeline
• Sustainability staff anticipates all monitors to be installed and
live on the PurpleAir map by August 2020 • Collect and analyze data
with Mayo and the University of Minnesota, Rochester • Early 2021,
work MPCA to develop a robust Air Quality Monitoring Program
_____________________________________________________________________________________________
Project: Bike Share Committee & Program Foundational
Principles: Environmental stewardship, social equity, fiscal
responsibility and sustainability Strategic Priorities: Enhance
quality of life, balance public infrastructure investment Goal
Area: City for Health, Transportation, GHG Emissions Key Actions:
Community collaboration Scope The Community Development Department
partnered with 10 agencies and departments to offer a free bike
sharing program for the community in 2019. Over 1,200 riders used
the program during the summer of 2019 to run errands, commute to
work or job interviews, get groceries or just enjoy the City’ 100
miles of bike trails. In the spring of 2020 the group reviewed
ridership for the program and decided to grant underutilized bikes
to individuals or organizations within the community who
demonstrated need. The bike share and bike grant programs allow
community members with mobility challenges access to reliable
transportation. Staff Update
• 34 individuals were awarded bikes for personal use • 40 bikes
were awarded to 8 community organizations • Partnered with Pata de
Perro (Rochester Community Bike Club) to salvage unclaimed bicycles
collected by
the Rochester Police Department o 15 bicycles were picked out and
transported back to Pata de Perro’s shop, where they will be
distributed to community members in need or used in the Bike Grant
Program • Reviewing use of SHIP grants for bicycle friendly
designated businesses and organizations in the community •
Partnered with Lime to bring back the scooter-share with the
addition of electric bikes for the 2020 season
Project Timeline On-going
_____________________________________________________________________________________________
Project: Energy Benchmarking Program Foundational Principles:
Environmental stewardship, fiscal responsibility and sustainability
Strategic Priorities: Manage growth and development Goal Area:
Energy, GHG Emissions Key Actions: Community engagement, data
collection and analysis Scope The Building Energy Program seeks to
help buildings limit energy waste and reduce greenhouse gas
emissions. Participants gain insight into the efficiency of their
buildings and their relative performance to peers, encouraging
energy-saving actions. The program provides performance
transparency for building owners, operators and municipal leaders
aiming to achieve energy and climate goals. Staff Update
• Wrapping up utility data collection from new and existing program
participants
2
Packet Pg. 62
• In 2020 the benchmarking program welcomed its first hotel,
Hilton’s Home2Suites, with another on deck for 2021 when
construction completes
• Other new participants included Channel One and St. Mary’s
Cascade Meadow Environmental Science Center • City was awarded a MN
GreenCorps member for the 2020-2021 service year, who will assist
with recruitment
and help current participants identify and implement energy saving
opportunities Project Timeline
• Data analysis will begin late summer 2020 • 2019 Benchmarking
Report completed and published in fall 2020 • 2020 program year
recruitment will begin February 2021
_____________________________________________________________________________________________
Project: Downtown District Energy System, Analysis Foundational
Principles: Fiscal responsibility and sustainability, environmental
stewardship Strategic Priorities: Manage growth and development,
balance public infrastructure investment Goal Area: Energy, GHG
Emissions Key Actions: Infrastructure development Scope Several
City and County government facilities are served by the Olmsted
County Waste to Energy Facility (OWEF), a steam-based district
energy system, which will need replacement in the coming years. As
a result, the County, City and the DMC EDA are evaluating a
building-based and a second district energy system (DES) option in
the Downtown Waterfront sub-district. The study will inform future
capital planning efforts - a DES could be leveraged to support
further private development, incent affordable housing and build on
RPU’s 100% renewable energy resource plan. Staff Update
• Olmsted County has decided to install independent heating and
cooling systems for their facilities, City and DMC EDA are moving
forward in pursuing a DES
• Next stage of analysis would be for business as usual case vs
180-degree DES hot water loop case • Staff currently preparing a
presentation, in accordance with RPU, for City Council
Project Timeline
• The project team aims to bring forward the recommendation of
further analysis to City Council in August • Pending approval, the
study may move to the next stage of analysis later summer 2020 •
Completed study by early 2021
_____________________________________________________________________________________________
Project: GreenStep Cities Program Foundational Principles: Social
equity, fiscal responsibility and sustainability, environmental
stewardship Strategic Priorities: Enhance quality of life, manage
growth and development Goal Area: City for Health, Transportation,
Energy, GHG Emissions, Vibrant Neighborhoods Key Actions: Data
collection and analysis, performance measurement Scope Since its
inauguration in 2010, the City of Rochester has participated in the
Minnesota GreenStep Cities Program, a voluntary challenge,
assistance, and recognition program to help cities and tribal
nations achieve their sustainability and quality-of-life goals.
Step 4 recognition is awarded to cities who report a minimum number
of core metrics for the previous calendar year. These metrics aim
to show the aggregate, quantitative results of taking multiple
GreenStep actions. Step 5 cities show improvement in the Step 4
metrics.
2
Packet Pg. 63
Staff Update • Rochester received Step 4 and Step designation for
calendar year 2019 • Rochester has completed 88 out of 175 possible
actions • Recently joined the Sustainable States Network Community
Energy Challenge as a participating GreenStep
City Project Timeline
• Data collected and updated every spring, submitted by June 1st •
Cities receive recognition in July
ClimateSmart Municipalities: Through its participation in the
GreenStep Cities Program, Rochester was one of five communities
chosen in April 2016 to participate in the ClimateSmart
Municipalities program. Minnesota municipalities were paired with
award-winning climate-smart communities in Germany to accelerate
progress toward a cleaner and more efficient energy footprint.
Representatives are sent to Germany to learn about innovative
programs and practices, then share their progress and insights in
Minnesota. They also have the benefit of working with their twin
community, while a delegation of municipalities and leaders visits
Minnesota each fall. Staff Update
• Participated in a virtual exchange in June 2020 • Tentatively
scheduled to host German delegation in fall of 2020 (pending
COVID-19)
_______________________________________________________________________________________
Other Ongoing Projects & Cohorts:
• Food Access Assessment Planning • Sustainability Asset Map •
Sustainability Website • Energy Commission Support, Implementation
of Energy Action Plan • LEED Green Associate, Staff Training •
Sustainable States Network, Community Energy Challenge
Upcoming:
2
Packet Pg. 64
Printed On: 7/23/2020 Page 1 Study Session Schedule Working Copy
REVISED.xlsx
City of Rochester - Rochester City Council Council Study Session
Items
Discussion Item Responsible Dept. Impact Estimated
Time Review Date
Comprehensive Annual Financial Report and Audit Review Finance
Discussion 60 Minutes 7/27/2020
Sustainability Update Community Development Update 30 Minutes
7/27/2020
Council Meeting 8/3/2020
Rochester International Airport Master Plan Airport Update 45
Minutes 8/10/2020
Trust for Public Land Initiative Parks and Recreation Discussion
8/10/2020
Council Meeting 8/17/2020
Review of Recommended 2021 Operating Budget & 2021- 2026 CIP
8/24/2020
Council Meeting 8/31/2020
Labor Day 9/7/2020
Review of Recommended 2021 Operating Budget & 2021- 2026 CIP
9/14/2020
Review of Recommended 2021 Operating Budget & 2021- 2026 CIP
9/21/2020
Review of Recommended 2021 Operating Budget & 2021- 2026 CIP
9/28/2020
DMC EDA Update DMC EDA Update 30 Minutes 10/5/2020
Bring Back the Clock Fire Dept. Update 15 Minutes 10/5/2020
Silver Lake Dam Modification Presentation Public Works Discussion
40 Minutes 10/5/2020
Age Friendly Community Mayor Discussion 20 Minutes 10/12/2020
Assessment Policy Public Works Discussion 50 Minutes
10/12/2020
UDC Update Community Development 45 Minutes 10/19/2020
3
Packet Pg. 65
Printed On: 7/23/2020 Page 2 Study Session Schedule Working Copy
REVISED.xlsx
City of Rochester - Rochester City Council Council Study Session
Items
Discussion Item Responsible Dept. Impact Estimated
Time Review Date Maxfield Housing Update Administration 45 Minutes
10/19/2020
10/26/2020
10/26/2020
Bury Power Lines; policy RPU
Rental Property Inspection Ordinance Bldg. Safety
Bicycle Master Plan Community Developmnet April/May
LUPA Market Study/Annexation
Packet Pg. 66
Printed On: 7/23/2020 Page 3 Study Session Schedule Working Copy
REVISED.xlsx
City of Rochester - Rochester City Council Council Study Session
Items
Discussion Item Responsible Dept. Impact Estimated
Time Review Date Infrastructure Liabilities and Financial Planning
Admistration/Public Works
CIA- Policy Establishing Community Broadband Goal for the
City
Administration
RST Airport Master Plan Update Airport
Community for Health Update Kevin Bright 30 Minutes
Postponed Items - COVID-19 Towards Zero Deaths Abby Tricker
-Olmsted CO
Riverfront Re-imagined Administration
Single Family Rehab Program Update HRA
Proposed Stormwater Ordinance Revisions Public Works
Library Library
Agenda Packet
- This meeting shall be conducted pursuant to Minnesota Statutes
Section 13D.021 and members may appear electronically. Should any
member appear electronically, all votes shall be taken by roll call
and each member of the Board will be able to hear each other.
Public access will be restricted to comply with State Health
guidance during the pandemic. Current room layout allows for
approximately 11 individuals to attend.
-VIEW MEETING: Citizens are encouraged to view the meeting by
either watching on Spectrum (Charter) channel 180 or 188 or via
live streaming the meeting. The live stream can be found at the web
address once the meeting starts: www.rochestermn.gov/agendas.
Study Session Meeting Items
Attachment: City of Rochester Vision, Principles, and
Priorities
1. Comprehensive Annual Financial Report and Audit Review / Finance
- Estimated Time 60 Minutes
Attachment: Comprehensive Annual Financial Report and Audit Review
/ Finance - Estimated Time 60 Minutes
2. Sustainability Update / Community Development - Estimated Time
30 Minutes
Attachment: Sustainability Update / Community Development -
Estimated Time 30 Minutes
3. Study Session Schedule
Attachment: Study Session Schedule
City of Rochester Vision, Principles, and Priorities
1 · Comprehensive Annual Financial Report and Audit Review /
Finance - Estimated Time 60 Minutes
2 · Sustainability Update / Community Development - Estimated Time
30 Minutes
3 · Study Session Schedule