Staff refutes Rochester council members' claims related to rapid-transit costs

Jun. 13—ROCHESTER — A Rochester City Council member continues to question costs and benefits of a planned downtown rapid-transit system.

The

proposed $150 million bus-based system

is slated to be funded by state Destination Medical Center and federal transit funding, which leaves an anticipated $5.42 million annual operations and maintenance cost.

Rochester Transit and Parking Systems Manager Ia Xiong told Rochester City Council members that all future costs are expected to be covered through state and federal transit fund, as well as local transit revenue.

"There is no local tax being used for any of our transit," she said. "It is all state and federal grants, and then we generate revenue through fare collection."

In the case of the Second Street rapid transit plan, the fares are being covered by Mayo Clinic, which is expected to contribute to the bulk of the initial 11,000 ridership estimate.

Without the agreement reached last year, Xiong said the city would be required to charge a fare for riding the proposed Link system, which will serve a 2.8-mile loop with seven stations seeing service every five minutes during peak periods.

Council member Molly Dennis questioned whether the plan outlined in the

20-year agreement

between the city and Mayo Clinic is sustainable.

"We have things paying for this amazing project, but in 10 years, 20 years, 30 years, taxpayers across the city — down in ward 1, up in Ward 3 — are going to be paying for a downtown rapid-transit that I believe is primarily used to benefit Mayo Clinic," she said.

Deputy City Administrator Cindy Steinhauser said that's not the case.

"The negotiated agreement that allows for this to be free is because Mayo is going to be writing a big check every year, and included in our formula is putting money into capital reserve, which helps pay for ongoing maintenance, replacement cost, etc.," she said.

The agreement calls for a $3.5 million payment with the Link system's anticipated launch in 2026, with annual increases. The contract calls for potential renegotiation every three years as actual expenses are reviewed.

When the council unanimously approved the agreement last year, Steinhauser reported that approximately 80% of Link-related expenses will be covered by state and federal transit grants.

With an anticipated $5.42 million annual operations and maintenance expense, Steinhauser and Xiong said the Mayo contribution is expected to create a city-controlled capital fund to cover long-term needs, such as bus or infrastructure replacement.

During Monday's council study session, Dennis continued to contend the transit service was for Mayo Clinic's benefit, highlighting the fact that the health care provider is planning a dedicated employee parking ramp at the west end, but planned public parking will likely include a fee.

"For truly free transit, we need to have free parking," she said of proposed city parking.

City Administrator Alison Zelms has pointed to the need to fund the construction of the ramp, pointing out parking fees are typically charged to avoid using local property taxes for the service.

The creation of parking ramps have cost $32,000 to nearly $50,000 per space in recent years, with prices based on amenities included and other factors.

When

Mayo Clinic was planning its most recent parking ramp

near the intersection of Fourth Avenue Southwest and Fifth Street, the estimated price was nearly $45 million for 1,400 parking spaces.

The city's most recent public ramp

at the intersection of First Avenue Southeast and First Street cost $31.4 millio

n

for 630 stalls, but included added work that was initially intended to provide added construction.

In addition to covering costs, council member Patrick Keane said a parking fee would avoid the planned city ramp from becoming crowded by commuters that could find space elsewhere.

"I don't understand why anyone would use a park-and-ride when this is in place," he said of the potential of free parking and free rides on the Link system.

Current park-and-ride lots cater to any commuters at no cost for parking and a fare charged for the associated bus rides. Many downtown employers, including Mayo Clinic, offer employees free or discounted bus passes.

Dennis, however, said she doesn't believe enough non-Mayo traffic exists for the planned Link system to be considered a community benefit, given the

recent announcement of planned development

by the health care provider.

"For me the demand is to meet the demand of the future of Mayo Clinic," she said. "As we have seen, the storefronts are starting to close down. We don't have as much downtown for residents."

"Residents don't have anything to come to downtown," she added. "It's not a destination downtown when nothing is open."

Council President Brooke Carlson cut off Dennis' comments, questioning the accuracy of her statements and pointing to ongoing city and community efforts to revive downtown activity.

"Your statements are an exaggeration, and I don't appreciate it," she said.

Council member Mark Bransford, a Mayo Clinic employee who has raised questions about the proposal in the past, said the Link system will serve a growing number of people living downtown and help spur new development, which will include non-Mayo jobs.

Steinhauser agreed, adding the service will provide benefits to residents who live throughout the community.

"Whether they are a Mayo employee or not, they are community members, community members who can use the system for free," she said, pointing out residents and visitors will also be able to use the service.