HomeMy WebLinkAboutResolution No. 138-21 - Approving Holistic Budget Stability and Community Investment Recommendations - Phase 1
RESOLUTION
Authorizing the Holistic Budget Stability and Community Investment
Recommendations – Phase 1.
WHEREAS, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into
Federal law, allocating to the City of Rochester $17,435,537 in emergency funding to
respond to the impact of the COVID-19 pandemic; and
WHEREAS, on June 7, 2021, the City Council received the Holistic Budget Stability and
Community Investment (HBSCI) Recommendation from the City Administration team.
NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of Rochester
that the overall the HBSCI Recommendation be approved in its entirety as represented
in Exhibit A.
BE IT FURTHER RESOLVED that Phase 1 proposed investments in the amount of
$6,162,537 are authorized as outlined in the HBSCI Recommendation as represented
in Exhibit A.
PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF
ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2021.
___________________________________
PRESIDENT OF SAID COMMON COUNCIL
ATTEST: __________________________
CITY CLERK
APPROVED THIS _____ DAY OF ______________________, 2021.
___________________________________
MAYOR OF SAID CITY
(Seal of the City of
Rochester, Minnesota)
Exhibit A
The Federal Government adopted the American Rescue plan as an opportunity to address the
financial impacts of COVID 19 on local government and to further support mitigating the impact of
COVID 19. As a result, the City of Rochester has been allocated $17,435,537. At the June 7,
2021, City Council Study Session, the Holistic Budget Stability and Community Investment
Recommendation was presented to the Council.
The Guiding Principles used for allocating the funding are as follows:
1. Use funding strategically to address structural imbalance created by revenue loss and
unsustainable expense reductions resulting from the pandemic.
2. Invest for future cost avoidance, operating cost reduction, service innovation, and other
strategies to ensure a resilient budget.
3. Consider programmatic investments that ensure support for people, economic inclusivity,
and post pandemic economic activation.
4. Invest within a framework that reflects our commitment to strategic communications,
engagement, and equity.
The proposed investments include five categories and are related to the Council’s Foundational
Principles and Strategic Priorities.
1. Facility Investment for Sustainability
2. Revenue Impact Mitigation
3. Support for People
4. Reopening and Resiliency
5. Supporting Innovation
The American Rescue Plan indicated the dollars granted from the Federal government may be
used to replace revenue loss as a result of the COVID-19 pandemic. Revenue loss is estimated to
be $17,435,537.00. Combined with retained earnings of $5,000,000.00, there is $22,435,537.00 of
revenue to be allocated in this recommendation. Below is the recommended breakdown of
investments by category.
Facility Investment for Fiscal Sustainability $ 9,331,537.00
Revenue Impact Mitigation $ 7,423,000.00
Support for People $ 1,570,000.00
Reopening and Resiliency $ 1,761,000.00
Supporting Innovation $ 2,350,000.00
The Revenue Impact Mitigation category can help to offset the project levy increase over the next
five years.
Long Range Financial Plan Transitional Funding
2022 2023 2024 2025 2026 TOTAL
Annual Amount
Prioritized for Levy
Stability
$2,855,000 $2,141,250 $1,427,500 $713,750 $285,500
$7,423,000
Projected Levy
Increase: Draft
Baseline Budget to
support current
operations 8.23% 2.14% 3.90% 3.83% 5.55%
Levy Stability 3.50% 2.63% 1.75% 0.88% 0.35%
Net Levy Prior to
4.75% -0.49% 2.15% 2.95% 5.2%
Decision Packages
Final Budget after
? ? ? ? ?
service enhancements
Phase 1 of the proposed investments include projects from the categories of Facility Investment
for Sustainability, Support for People, Reopening and Resiliency, and Supporting Innovation. The
total of Phase 1 proposed investments is $6,162,537. Any expenditures above $50,000 will be
presented to Council for approval.
Phase 1 specific projects include (details are in Workbook A):
1. Silver Lake Pool Funding
2. Strategic Communications, Engagements, and Equity Initiatives
3. Innovation and Service Evaluation
4. Funds for Pre and Post Audit
5. Hybrid Work Transitions and Remote Work Investments
6. Facility Renewal Fund Initial Investments
7. Energy Conservations and Retrofits
8. Event Safety
9. Downtown Reactivation
10. 2021 Liquor License Support
Phase 2 project (details are in Workbook A) ideas are still up for discussion with the Council, but
include:
1. Housing and Affordable Living
2. Support for People
3. 311-CRM and Phone System Transition
4. District Energy
5. Workforce Development Partnerships
Finally, a few other points to consider
1. This is the only funding specifically targeted toward local government revenue loss and
budget stability. The presentation highlights how the funding dedicated for budget stability
will allow us to mitigate the levy increases needed to support operations. Of note, we
utilized $2M in reserves to balance the 2021 budget allowing for no increase in the
levy. This approach also allows time for lodging tax to stabilize, planned rate increase to
eventually be reintroduced (liquor license fees as an example) and address revenues that
are likely to be permanently reduced.
2. We have reviewed the Interim Treasury Guidance and our 2020 Projected Revenue Loss
is $17 million +/- (still being finalized). Our working assumption is that all of our ARPA
funding will be allocated to revenue loss in 2020 and the subsequent years. We would
then invest based on the holistic framework referenced above pending interpretation of the
final guidance.
3. Half of the funds have been received and the other half provided in 2022. All funds need
to be spent by the end of 2024.
4. The American Rescue Plan has significant other funding outside of the direct support to
local government. Other Elements of the Rescue Plan: Economic Assistance to
Individuals and Families; Employee Benefits; Small Business Assistance; Public Safety;
Transportation and Infrastructure; Health and Human Services; Housing and Utility
Assistance; Broadband; Nutritional Assistance; and Education Assistance.