Rochester City Council approves 2023 operating budget

(ABC 6 News) – The Rochester City Council approved the 2023 Operating budget and Capital Improvement Plan Monday evening.

This is the first supplemental budget for the second year of the City’s two-year budget process. Upon adoption, the 2023 supplemental budgets will serve as the basis for spending.

The two year budget process provides a longer runway for more strategic discussion, while still allowing for final adjustments to reflect updated forecasts, evolving strategic priorities, and fiscal policy enhancements implemented in the second year.

City Administrator Alison Zelms states, “I would like to thank the Mayor and City Council for their commitment to ensuring the City of Rochester can provide the vital and necessary services that our residents and businesses depend on. The Council’s foresight to mitigate tax impacts and recover from structural financial issues created by the pandemic and complete the downtown building energy at minimal impact to the levy certainly assisted in balancing fiscal sustainability while still advancing strategic priorities. We are seeing the impacts of the first ever creation of a two-year budget document with the second year allowing us to focus on increased understanding, transparency, and more intentional planning.”

“Now, yes do we have wasteful spending here and there? Yeah, absolutely we do. But we also have a city to run and it’s really really difficult. It’s tough but I would like to just say to everyone in this room, I feel for everyone I really do,” said councilmember Mark Bransford.

The 2023 total budget is $600.9 million dollars, which is inclusive of Rochester Public Utilities (RPU). Of the total budget, $105.3 million represents general fund expenses of which 57.1% funds the public safety services, which includes police and fire. The total for 2023 property tax, both residential and commercial is $92.8 million. Of that, 67.9% supports the general fund, while 10.5% supports Parks & Recreation and 8.4% supports the Rochester Public Library. Of the total budget, the largest expenditure is the Capital Improvement Plan, with a total of $213.8 million supported by $8.0 million in property taxes.

The most notable Capital Improvement Plan projects include:

• Water Reclamation Plant Upgrades – $29 million (Total Project Cost $54 million)
• Marion Road Substation – $27.3 million (Total Project Cost $51.6 million)
• Bus Rapid Transit – $17.7 million (Total Project Cost $143.4 million)
• Downtown Buildings Energy Transition – $15.6 million (Total Project Cost $15.6 million)

In the coming weeks, the adopted budget documents will be available via the City website.
Programs that provide property tax relief and support for community members include:

• State of Minnesota Property Tax Relief
• State of Minnesota Property Tax Refunds
• Senior Citizen Property Tax Deferral
• Homestead
• Special Homestead Classification for Blind or Permanently and Totally Disabled Persons
• Market Value Exclusion on Homestead Property of Disabled Veterans