The meeting began with the presentation of the 2024 year-end audit by Jason Boynton from Smith Schafer. Boynton reported that Rochester’s financial statements received a “clean” opinion. The audit included a special federal program audit, emphasizing compliance with federal funding requirements.

A detailed overview of the city’s financial highlights for 2024 was provided. The general fund saw revenues of $120 million, driven by an increase in property tax collections to $69 million, resulting from a 9% levy increase. The city achieved a $3.1 million surplus. Questions arose about the allocation of this surplus, with clarification that it contributed to the general fund unassigned balance. Discussions also covered the impact of property tax levies, with some council members suggesting that a lower levy might have led to a break-even scenario.

The dialogue then transitioned to the city’s adherence to maintaining a 42% fund balance policy for cash flow management, crucial due to the timing of property tax revenues. The library fund and municipal recreation funds reported surpluses, while golf operations faced a deficit attributed to increased expenditures and a reduced levy allocation. The airport operations reported a surplus but faced concerns about decreased income following the end of CARES funding.

Adjustmentsttention was given to the electric and water utilities, with the electric utility reporting a revenue surplus of $35 million. Discussion highlighted the need for substantial capital investments in the electric sector, particularly as ongoing projects demand more resources. The water utility also reported a surplus, attributed to a 5.5% rate increase.

The council reviewed the proposed budget for 2026-2027, described as a important tool for aligning the city’s financial strategies with operational needs. The total budget figure was $4.2 million, covering various sectors excluding Rochester public utilities. Discussions highlighted the challenges of maintaining equitable tax levels while meeting service demands, with concerns about the implications of property tax increases on residents.

The meeting also addressed the Fourth of July fireworks and associated events, focusing on the viability and logistics of the Fourth Fest program. Suggestions were made to consider alternative locations for the fireworks to achieve cost savings, although skepticism was expressed about whether such changes would reduce expenses.

A critical part of the discussion centered on the Capital Improvement Plan (CIP) for 2026 and 2027, involving 210 projects with a total investment of $560.4 million. Key projects included a $57 million runway upgrade at the airport and a $90 million wastewater treatment upgrade. The council emphasized the importance of transformative projects alongside the preservation of existing assets, with funding sources including municipal state aid and local option sales tax.

The meeting further delved into funding allocations for outside agencies, with particular focus on the Rochester Civic Theatre and the Art Center. Concerns were raised about funding discrepancies and the sustainability of increased funding requests. The council also discussed the Rochester Area Development Authority’s request for doubling its budget, questioning the economic return on investment.

Lastly, the council explored the community building fund and its impact on neighborhood engagement. Discussions highlighted the need for better integration of communication about funding opportunities, as well as the importance of aligning funding strategies with the city’s growth and evolving community needs.