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.
The other sad part of the story is us small business people and nonprofits who have to pay for such a lavish waste of money.
The truth: Businesses are only paying for the replacement of the roadway and sidewalks. This is required as the current stretch is in need of replacement. There is nothing lavish about that.
Mehring:
We have been struggling to break even from year to year, and now after an 8.5 percent tax increase on each property, they are assessing our properties another $81,000 to pay for this unnecessary beautification project. This will take years upon years for us to even think about paying off.
The truth: The assessment is at the same rates as every other business and we are offering payment over 10 years. Not one penny of the $81,000 is going to unnecessary beautification.
Mehring:
We believe that there is a plan to take our property at below market rates because we will not be able to keep up with all of these extra expenses and we will be forced out by the bank.
The truth: There is no such conspiracy.
Mehring:
Not only is this a huge financial burden on us, this project also calls for taking part of our lawn, shrubs, our very mature trees, taking out our street parking and cutting down our main access to our property.
The truth: Not one square inch of this property is being take for this project and the property still has access. The business raised the concern about the future access, so I tried the access in a Prius in a snowstorm and had absolutely no issue.
Mehring:
When asked for revisions during the many meetings leading up to the decision to go forth, our Council Member Michael Wojcik told us if we do not like it, we can move.
The truth: Completely fictitious statement that was never said. This statement is insulting and contradicts the public thanks received from several businesses through the process.
Mehring:
Why then are we the ones to take all the hardship on absurd projects like this one, especially in a poor economic market that we still find ourselves in.
The truth: The market for rental housing near downtown is on fire, many new projects are getting started. Rochester is one of the fastest growing areas in the nation. Maintaining a roadway is not absurd.
-Rochester City Lines (RCL) General Manager Dan Holter
A business works smart and works hard to earn a profit.
Business owner Michael Wojcik
Notice a difference.
At the special meeting on December 22, 2011 the city council met to pay Dan Holter his $140,000 in taxpayer ransom. The city approved a horrible 6 month contract by a 4-2 margin. Everyone on the city council was disgusted by the contract and looked forward to awarding a new contract through open competition beginning July 1, 2012. In addition, the taxpayers of Rochester will be funding a 3% across the board increase for RCL (our staff is getting 1% increases). To the extent that is legally permissible we will consider this experience in evaluating RCL for future competitive contracts.
As much as Dan Holter is to blame for this fiasco I place a similar amount of blame on city staff for allowing us to be in a situation where a majority of the council felt we had no choice but to give into Holter’s demands. The question is why we had not negotiated with another company so as to have some leverage with RCL. A review of the entire process and transit operations is probably in order.
After the meeting Holter was stopped from making some statements by his own staff. I wasn’t there, but others were. I wish he had gone on. He also wanted to blame me for some of this and claims that I have been non-responsive. I did meet with Holter and other took his concerns back to transit staff. The problem has always been that he tends to make these silly statements like he owns the transit system. The taxpayers own the buses, streets, bus stops. RCL owns the RCL name and the garage where some buses are currently stored. We waste a bunch of staff time to debunk these statements time and time again. It was also suggested that the service would have continued to operate regardless if we had approved the contract. We were not made aware of this.
My advice to a bus driver at RCL that I spoke with after the meeting is that you further organize and perhaps make your own bid for the contract beginning in July as an employee owned bus company. I hate to see innocent victims to another’s greed.
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.
At last Monday’s meeting the circus was back in town. The local Tea Party “patriots” came loaded with talking points and were upset the the adults (including all 7 council members and the mayor) in the room instead relied on facts and logic.
Cindy Maves: That last post-bulletin survey 73% said no, 20% said it could wait.
Michael Wojcik: You do know what a scientific poll is and an unscientific poll, though?
Cindy Maves: It’s still a poll, it’s still a poll, I’m not saying those are factual numbers.
Wojcik: Laughing.
I for one prefer factual numbers and choose responsibility for preserving our assets and minimizing out local taxes over pandering.
Here is Mary Allen as written in the Post-Bulletin:
Monday night I attended a frustrating meeting where the voices of many citizens were ignored by the council, especially Michael Wojcik. I would like to challenge him, since he likes to do research, he says, to come up with a list of $40 motels where poor people stay when coming to Mayo for treatment.
I haven’t seen a $40 motel for years, and if I did I certainly wouldn’t want to spend time in it while getting treatment at Mayo Clinic.
Here is the 1 minute it took be to answer this challenge:
What is so infuriating to me is that I have reached out to Cindy Maves in the past in an effort to get some help in eliminating developer subsidies and fighting LGA cuts both of which would help lower taxes and fees. This group has shown no interest in any education or any real policies that could reduce local taxes of fees. I have voted against more spending than anyone on the council the last three years. My Tea Party reward is this clueless babble and absolutely no engagement.
Here is a clip of Mayor Brede and myself discussing our continuing support for the Mayo Civic Center renovation and expansion. We are asking the state for support in 2012. You can listen to my rational for support and see if it seems thought out and reasonable.
If you remember only one thing, remember that Rochester citizens will pay less by doing this project as we have outlined than if we do not.
