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8 things to know about Rochester's proposed 2022 budget

Rochester City Council will take public comment on the budget during Monday's council meeting

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The Rochester City Council holds a meeting at the city-county Government Center in Rochester Thursday, Aug. 19, 2021. Joe Ahlquist / Post Bulletin
Joe Ahlquist

A $509.4 million budget will be reviewed by the Rochester City Council on Monday as it also takes public comment on the planned property tax levy.

The proposed spending plan has increased by $20 million since the last council review, largely based on adjustments to the city’s capital improvement plan, which does not affect the amount of property taxes collected.

The council will hold a hearing on the budget and related property tax levy during its regular meeting at 6:15 p.m. Monday in council chambers of the city-county Government Center, 151 Fourth St. SE.

Online participation in public hearings is available through a Zoom meeting connection at https://bit.ly/2OGnZYB and audio access by phone is possible by calling 312-626-6799 with the webinar ID 912 4541 8192 and passcode 162027.

Here are a few things to know about the city’s proposed 2022 budget.

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1. It’s the second year for a combined city and Rochester Public Utilities budget

When utility costs are taken out, the 2022 recommended city budget is $305.9 million, with nearly $190 million covering operation expenses, $105.6 million for capital improvements and nearly $10.3 million being used for existing debt payments.

The recommended RPU budget is nearly $203.5 million, with nearly $153.6 dedicated to operation costs, $42.8 in capital improvements and nearly $7.1 million for debt payments.

2. The increase in property tax levy collected is not equal to the tax rate

The city’s proposal calls for collecting a combined $86.8 million in property taxes next year, a 6.5% increase from this year’s collected taxes.

The city’s tax rate is a different calculation, which takes into account the levy collected, as well as the increase in property values throughout the city.

The city’s tax rate has remained fairly flat in the past decade, fluctuating from a low of 48.24 last year to a high of 52.72 in 2019. This year’s proposal sits at 49.61.

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3. Charges for city services cover nearly half the city budget

Nearly 48 percent of the city’s anticipated operating revenue for 2022 will come from charges for specific services the city provides, including utility fees for electricity and water.

While parking and transit fees will not increase in 2022, the Rochester City Council has approved adjustments to other fees in an effort to cover related operating costs.

4. Planned capital improvement program is increased by $11.1 million

The plan calls for work on 193 projects, with the majority of funding coming from sources outside the property tax levy.

The three largest planned projects are $22.4 million to create a district energy system for city buildings, $20.3 million for an RPU Marion Road substation and $18.7 million for the planned rapid-transit project along Second Street Southwest.

While no property tax funds contribute to Destination Medical Center projects, 7.2 percent of the city’s property taxes will be used for other projects throughout the city.

5. Proposed property taxes cover nearly 17% of the recommended city budget

Of the $86.8 million in property taxes slated to be collected by the city, 68% will be used in the city’s general fund, with 58.1% of the general fund dedicated to public safety expenses.

Another 16.6% is dedicated to general government expenses, followed by 16.5% anticipated to cover public works costs.

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6. The American Rescue Plan is helping stem a larger property tax increase

Rochester City Administrator Alison Zelms said the city’s reliance on property taxes in 2022 is being reduced by using $1.4 million from the city’s nearly $17.5 million in federal American Rescue Plan funds.

The current proposal also calls for using nearly $6.3 million through five years to slow the rate of property tax increases needed to fund city services.

7. City is adopting a two-year budget process

In addition to approving next year’s spending, the Rochester Council City will be setting the stage for the 2023 city budget.

“Once adopted, the 2022 budget will serve as the basis for spending and the 2023 budget will be the anticipated baseline for that year, with the ability to make final adjustments for updated forecasts and any additional strategic priorities,” Zelms wrote in her budget message.

She said the two-year approach allows for a longer focus on rebuilding programs and related revenue streams following pandemic cuts.

8. City staff positions remain on hold

With approximately 950 full-time employees, city officials froze 11 vacant positions during the pandemic. The proposed city budget restores five of them in 2022 and four in 2023.

The budget also calls for adding a new principal planner position to the Community Development staff.

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