Rochester City Council members voiced a desire to see how city services can return to pre-pandemic levels.

“The constituency wants to get back to the quality of life they had before,” said council member Mark Bransford.

City Administrator Alison Zelms said early calculations show a 7.4% tax levy increase would be needed to return city services to pre-pandemic levels.

RELATED: Olmsted County eyes options for expected $30.7 million in federal funding

The City Council held the city’s total collected flat this year at $81.5 million. The result was a $472 million budget that cut nearly $100 million from the previous year in response to the pandemic.

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Alison Zelms
Alison Zelms

Maintaining current reduced services would require a 3.9% property tax levy increase, which could hold many tax bills relatively flat due to a projected 4.5% increase in property value throughout the city.

The tax levy projections were created before the city was told it would be receiving $17.5 million in federal funds through the American Rescue Plan Act. The first half of the funds are expected in May, with the rest distributed in 2022.

Specific authorized uses for the federal funds have not been released, but Zelms told the council it’s likely the only resource the city will have to stabilize its budget following a period that has seen reduced revenue on several fronts, including a 46% reduction in lodging taxes.

She said plans for the 2022 city budget will start with the 2021 spending plan, and the council will be asked what priorities it wants to see added or what reductions should be considered.

Council member Shaun Palmer said he’d like to see discussion start targeting a flat property tax levy, but others voiced a desire for potential increases to maintain or resume services.

Shaun Palmer
Shaun Palmer

Council member Nick Campion argued against working from a specific tax levy goal. Instead, he said the council and city staff should determine how the city can best move forward to meet residents’ expectations.

“We should be talking about the quality of services we want to provide the community,” he said..

When it comes to potential impacts on long-term services, Zelms pointed to 11 city staff positions that have been held open during the pandemic. She said keeping the positions vacant offered short-term cuts, but will have long-term implications as recovery starts.

“They do a trickle into our ability to turn things around,” she said, pointing to delays in replying to city residents’ questions and requests.

She called a zero percent levy increase for 2022 a “nuclear option,” but told the council city staff can prepare a look at multiple choices for setting the future tax levy, as well as uses for the federal funds, which must be spent by the end of 2024.

Several council members voiced a desire to see the federal funds used to fill pandemic-related revenue gaps, but also find ways to invest in programs that help the community.

Nick Campion
Nick Campion

Council President Brooke Carlson pointed specifically to finding new ways to address housing and public safety concerns in the city.

“I’m really glad to see that called out in your framework for how to invest those dollars,” she told Zelms.

With the U.S. Treasury expected to release details on how cities, counties and townships can use the funds from the American Rescue Plan within weeks, Zelms said details will return to the council at a later date.

Additionally, specific 2022 budget recommendations aren’t expected to emerge until July or later.

Brooke Carlson
Brooke Carlson