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Did you know that Rochester’s Public Library is the busiest in the state of Minnesota?  Did you know that our Bookmobile by itself would be the 4th busiest library in Southeastern Minnesota?

Times are challenging right now yet the city council just purchased a new $385,000 Bookmobile (this included all consulting, design, travel, etc.). This does have all the bells and whistles.  The drive train is Hybrid electric / clean diesel, some power is generated by a solar array.  With the batteries and solar, thousands of hours of idling will be avoided.  Everything on the vehicle is heavy duty to ensure a 20 year life.

Was this a good investment?

I think so, but lets study the issue.

Our old bookmobile was pretty well shot, with heavy usage comes heavy abuse.  Most library systems that approach the size of the Rochester Public Library begin to open new locations.  The problem is that in tough times they are hard to close.  Further; population and demographics can change significantly over time.  With the Bookmobile we get 77 other locations, admittedly with more limited service.  Because we are a AAA rated city we can bond at about 3% right now.  This means that if we amortized the vehicle cost over its life it cost us less than $26,000 per year.  Basically we get 77 library locations in a state of the art, efficient vehicle for less than the cost of a custodian at a branch location.  The vehicle also gives us the ability to target areas that need access to materials the most, even if those areas change.

In my opinion staff at the Rochester Public Library did a great job in looking out for the best interests of the city.  What do you think?

As many of you know I have a background in business finance and am particularly interested in finance issues.  You are also probably aware that the City of Rochester was directed by the FTA to have competitive bids to run OUR transit system (I refer to it as ours since we own the buses, streets, shelters, set the fares and routes, and have paid for most of everything for decades…).  You probably also know that I believe that we should have bid this competitively even if we weren’t required to.  Here are the financial results in 3 charts.  If you look at these 3 charts, I think you can see why competitive bidding is good for the city.

For a decade we saw double digit growth in expenses compared to less than 5% population growth + inflation.  The bid resulted in growth rates that are far better.  FT = First Transit

Edit:  Today I asked staff about this and part of what we need to look at is revenue hours for each year.  Staff is getting me that information and I will update.

Here are total expenses per the bids vs. what would happen if RCL had continued to grow at the same rate as the past 10 years.

Edit 2: The jump in 2012 is due to an adjustment in revenue hours (I think).  I will confirm.

Edit 3: I will update this chart to adjust for revenue hours when available.

I don’t know if there is a way to embed KAAL (ABC 6) stories, but here is a link to their coverage here.  They once again went to the bottom of the barrel and interviewed me.

“Every year, the City of Rochester and Olmsted County send almost $90 million more to the State Treasury in taxes than they receive back in LGA, school aid, and other assistance,” said Governor Dayton.

“The reality is we send so much in income tax and sales tax up to Saint Paul and we get a pittance of that back,” says Rochester city council member, Michael Wojcik, who met with Governor Dayton on Thursday. While he’s happy with the Governor’s praise, he points out Rochester’s state contributions are a double-edged sword; especially, when programs like Local Government Aid are being slashed.

“We don’t have necessarily the means to keep funding the programs that we have and that’s why you see this constant budget struggle at the city and county level,” says Wojcik.

Here is a fair question posed by Cindy Maves.  I am not sure that it is related, but I asked some similar questions during budget negotiations.

Read the rest of this entry »

The county and the school board were able to hold their tax levy flat this year despite inflation.  The city raised their levy.  Here is a note from Dale Martinson explaining how much our levy change will effect your taxes.  When you factor in lost LGA, we actually made significant cuts yet again.  I have some concerns over increasing deferred maintenance within the city.

Well, it is still the same percentages off their current proposed tax bill if you went back to the prior year levy.

However, if you are asking what we could save them if we went from where we are now to last year’s levy, we are at about .787 of the original increase so the percentage of their total bill savings would now be around 1.49% and 1.06% for homes and commercial props respectively.

However, we really couldn’t go that low without finding some other department to cut since one half of the remaining 2.1 million increase is all related to the PWOC debt payment increase.

Dale

More BS from some legislators:

A growing number of legislators have been sending out letters to their local news media defending their votes to eliminate the Market Value Homestead Credit and replace it with a Homestead Exclusion. These letters claim that they are not responsible for property tax increases and leave the impression with the public that local governments are responsible for any property tax increases.

Response to legislators on property tax increase

Here is a link to the League of Minnesota Cities webinar on the elimination of the Homestead Credit and the creation of the Market Value Exclusion.

Hear are my thoughts:

• Local governments get beat up by the state, yet again.
• We are really fortunate that Rochester is conservative with TIF.
• This really is going to hurt local for-profit businesses that own property.
• There is a reason why the state credit rating was downgraded and Rochester’s was not…

Here is a piece that I submitted to the Rochester Post Bulletin.  I reference data posted on this site.  Here is a direct link to LGA data.  Here is a link to the efficiency of our local government.  When I first became interested in studying the numbers I looked at a decade lookback.  However for some of the tax items it makes more sense to look post 2003 when some new tax structures began.

The real size of Rochester city government has shrunk 17 percent since 2003. Over that period, Rochester property taxes have increased 28 percent because of state Local Government Aid cuts.  Unlike some other figures that have been thrown out in the media, these are true and not misleading.
Read the rest of this entry »

I do sometimes get emails like this and try to offer a respectful response.  I removed the name of the sender.

Question:  Why not lay off some building safety employees? Read the rest of this entry »

28.3% of Rochester property taxes are due to state aid (LGA and MVC) cuts since just 2003. Read the rest of this entry »