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DMC projects eyed in spending plan

October 29, 2018 GMT

The Rochester City Council on Monday will revisit the plan for funding Destination Medical Center public realm, infrastructure and transit projects for the next five years.

While the plan — known as the Capital Improvement Program — is tweaked on an annual basis, each year the council is asked to approve the expected expenses for the following year.

For 2019, that is $37 million for projects ranging from continued work to redesign public spaces in the Heart of the City subdistrict and near St. Marys Hospital to sewer and street reconstruction in and around the DMC district.

“This is a little bit of a departure where we are splitting the operating budget and the CIP really to give the council the opportunity to have more of a discussion on the CIP,” Assistant City Manager Aaron Parrish said during an earlier review of the annual DMC budget, which the council has already approved.

Funding capital improvements were separated from the regular budget approval after council members voiced concerns regarding emerging plans for the Heart of the City project, which involves Peace Plaza.

Since that discussion, city staff, as well as staff from the DMC Economic Development Agency, has said the Peace Fountain is expected to remain in place.

However, that was only one concern voiced about what is expected to be a $16.7 million renovation a portion of the sub district that includes blocks of First Avenue and the alley that intersects the eastern end of Peace Plaza.

Council members voiced concerns about the price, as well as some of the other changes being proposed.

In the proposed Capital Improvement Program, the project is funded over three years, with $1.7 million budgeted for 2019 and the largest amount — $9 million — expected to be paid in 2021, a year after physical renovations are slated to start.

Parrish said earlier this month that spreading the expenses over multiple years allows the city and DMC Corp. to approve paying for projects as funding is available.

The bulk of the funds come from three sources: a DMC sales tax, transit aid from the state and Olmsted County and DMC-designated state aid.

“We tried to correlate what we are projecting from those three sources every year and then budget to the amount of funds available,” he said, noting several other utility funds, taxes, fees and other revenue sources also help fund the projects.

For 2019, it is estimated that $23.46 million of the nearly $37.2 million in spending will come from the three main funding sources, with state aid contributing the largest amount at $10.85 million for the public projects.

According to a memo sent to the council by Parrish, council members will be asked to either approve the Capital Improvement Program on Nov. 5 or prepare recommended changes for the DMC Corp. board to review during its Nov. 13 meeting.

Approving the Capital Improvement Program doesn’t automatically authorize the planned projects. Many of the projects still need to go through the bidding process and receive final city council and DMC Corp. board approval when more complete cost estimates and plans are developed.

The council’s discussion on the Capital Improvement Program will be part of its weekly meeting at 3:30 p.m. Monday in room 104 of City Hall. The meeting will also include discussion of a planned update to the city’s Land Development Manual.