What an amazing video! People prioritizing a library over taxes! Just remember our library lost a battle against the tea party. But I continue the fight.
I don’t want Rochester to ever forget that we have the busiest library in the state of Minnesota. The city council asked for an expansion to be part of our sales tax proposal only to have Rep. Greg Davids and the Tea Party legislators remove it, against the will of Rochester at the state level. We will have fixed this injustice when we restore the funding for this needed and worthy project.
Here is a look at what has happened to real per capita Minnesota spending since 2002. Statements that spending is out of control is factually incorrect. The local affect of these policies has been increases to local property taxes. The chart on page 5 shows the reality of the spending levels in the Dayton budget.
This is an example of how TIF districts can fail and leave the public with a big bill effectively subsidizing development. The stormwater work needed to be done, but unfortunately because of a lack of insistence in smart growth principle citizens will likely end up pay the bills instead of those that profited from the development.
As City Administration and Finance staff have recently been reviewing the status of the various TIF Districts in the City, one thing I want to point out for informational purposes, relates to a likely shortfall of tax increments to be collected to cover the costs associated with the construction of stormwater improvements back in 2002, at the time this area was being developed.
By way of background, back in 2001, when the area was proposed for development and the TIF District was being considered, there were concerns expressed to City staff by both County Board members and neighborhood property owners regarding stormwater runoff issues in the Rose Harbor area. As a result, the City agreed to construct a stormwater facility south of 15th Street SE, and placed it in the 2002 CIP with a proposed cost of $300K. In reality, over $460K was expended for the stormwater improvements. The funding source was an interfund loan from the Flood Control account to the TIF District # 20-1, with collected tax increments used to reimburse the Flood Control account.
TIF District # 20-1 is a housing TIF District, which consists of 21 single family dwellings in Rose Harbor Estates, and the duration of which can be up to 25 years. At that time, staff felt that there may not be enough tax increments collected over the life of the district to cover all the stormwater related costs, but we didn’t have a good grasp as to how much we may be short, because at that time, the Legislature was making some tax class rate changes, and the market values of properties were escalating pretty rapidly.
Subsequently, the market values have flattened out and the city also has 10 years worth of tax increment collection behind us to help give us an idea of how much we may be short. Based upon our most recent amortization schedule calculations, it appears that there will be approximately $230K that the TIF District will be short at the end of its duration in 2028. This is 16 years out, but I wanted to make sure it is “on the radar” so to speak.
At the end of the TIF District duration, the City will likely need to transfer funds from a source such as the Stormwater Management Enterprise Fund to the TIF District, to cover the remaining portion of the interfund loan from the Flood Control account that funded these improvements back in 2002.
We don’t play games. We don’t unallocated LGA. We don’t cut market value credits. We don’t retroactively cut CDBG. We don’t steal from school districts. We don’t shift fees to other governments. We don’t inappropriately borrow against future revenue streams. We sometimes get beat up for setting taxes that actually pay for our expenses. We prioritize stewardship over talking points. We have still managed to reduce our expenses nearly 20% in real terms over the last decade. We are still a great community to live in. And that is why S&P says that we are still AAA rated and stable, while Minnesota and the US Governments are not as a result of their diffusional tax policies.
Dear Minnesota and Federal politicians, take a look at how responsible stewards do it…
Today the city council unanimously voted (6-0 with Hanson absent) to approve the independent recommendation to select First Transit to operate Rochester’s transit system. There were four companies competing, but everyone was interested in whether First Transit or stick with Rochester City Lines.
If we are going to be a serious player for businesses we must be fair to those that wish to compete here. After a fair process, we had an impartial recommendation that stated that First Transit was the best of 4 choices (all capable) while Rochester City Lines came in last. First transit also cost $2 million less over 54 months based on operating 70,000 hours per year. To look at these facts and chose anything but First Transit would be cronyism at its worst. I asked questions about the process and found it to be exceedingly fair. RCL questioned if the request for proposals was fair, but the example that they raised about experience with new technologies, was actually something that I strongly think is needed.
We also secured an understanding with First Transit that they would recognize the existing ATU organization and would be offering positions to existing employees first. If we lowered our costs by pushing working families into poverty we accomplish nothing. I have already told these workers, that I will continue to have their backs. I respect how good these drivers are.
Dan Holter continues to threaten to run a parallel transit system that he implies will cause harm to the city’s system. That kind of entitled behavior leaves me shaking my head. That said, if he can run a successful system that will only help transit in Rochester, but to do so he will have to follow rules pertaining to franchises.
There is no love lost between me and Dan Holter, given his lobbying antics, belief that he is “entitled” to a profit, and his holding us hostage for that profit. But we lose credibility as a city if we don’t have a fair process to choose our venders. We did have a fair process, and made a decision based on facts. We did not make any sort of decision based on spite or revenge.
This should have no negative impact on Dan Holter’s business since in a statement to the city council he stated hasn’t made any profit in 44 years…
It will be interesting how long the wasteful lawsuits continue. We will see tremendous improvements in transit between now and 2016. We are going to see better access, faster service, and more hours, and we can best achieve this by working with the best.
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.