Civic Center, Art Center on council agendas

August 27, 2018

A pair of neighboring entities with lingering financial concerns are on agendas for the Rochester City Council Monday.

The full council will discuss Mayo Civic Center operations goals during its weekly 3:30 p.m. meeting in room 104 of City Hall.

Prior to that, a smaller group of council members will examine Rochester Art Center finances during a 2 p.m. committee meeting in the same room.

The Civic Center and Art Center, while separate entities, are housed in connected city-owned buildings and have faced recent scrutiny of their operations, which rely, in part, on public funding.

Mayo Civic Center

The council’s planned discussion of the right mix of business for the newly renovated Mayo Civic Center is a continuation of an ongoing $94,500 study of the facility’s operations.

Dan Fenton, executive vice president of Jones Lang LaSalle Inc., will present sales data gathered under the related consulting contract.

“This is an analysis of the current level and mix of business in the Mayo Civic Center and an analysis of what the optimal business would be going forward,” he stated in an email regarding the goals of Monday’s meeting.

Fenton last met with the full council in late June to discuss potential management models for operating and booking events at the center.

Currently, Civic Center operations are managed through a city department with oversight from a mayor-appointed commission. Bookings for most events — aside from entertainment — are handled by Experience Rochester, formerly known as the Rochester Convention and Visitors Bureau, which receives 2 cents for every dollar spent for a hotel room in Rochester for operating expenses.

Fenton said he does not expect the council to discuss the operating model on Monday.

Instead, the discussion is expected to center on the results of recent visits, data collection and discussions with a stakeholders group.

City Administrator Steve Rymer has noted the intent of the ongoing study is to define success for the facility, which completed an $84 million renovation and expansion last year.

Fenton echoed the sentiment, noting that simply focusing on numbers won’t lead to success.

“It’s not just about volume,” he said. “It’s about the mix of the business in the center and whether that business aligns with what the overall goals are.”

The study comes at a time when Mayo Civic Center is seeing an increased reliance on lodging tax dollars.

Mayo Civic Center revenue for 2017 was $3.5 million, with $5.2 million in expenses, requiring $1.7 million from lodging tax funds. The lodging tax is paid by guests in Rochester’s hotels and motels.

Projections indicate that under existing conditions, the center will require an estimated $2.5 million in lodging tax support by 2023.

Rochester Art Center

The three members of the council’s Outside Agency Oversight Committee — Council President Randy Staver and council members Ed Hruska and Nick Campion — are slated to meet with Rochester Art Center representatives at 2 p.m. Monday in room 104 of City Hall for an annual report.

The Art Center continues work aimed at overcoming a recent history of financial deficits.

Council concerns about the center grew in early 2017 after financial reports filed with the Minnesota Attorney General’s office revealed the center lost $279,099 on a $1.1 million budget in 2015. In the two previous years, it lost $190,778 (2014) and $206,277 (2013).

The center took action last year by reducing staffing and other expenses, which took the budget from $1.27 million in 2016 to $1 million last year.

With the reduction, a $134,725 deficit was reported in 2017, which was less than the $222,577 loss seen in 2016.

A financial report for the first seven months of 2018 indicates the center’s income is outpacing expenses by approximately $126,000 so far this year.

In a letter to Rochester City Administrator Steve Rymer regarding Monday’s meeting, Brian Austin, the center’s director, sought to highlight efforts to improve the organization’s financial health.

“However, we are fully aware that we are on a path of continuous improvement with not only our financial practices, but in our ability to fashion new value propositions and revenue streams,” he added. “We must be able to execute these in alignment with our mission to be a center that champions curiosity.”

The council’s oversight committee was formed this year to take a closer look at non-municipal agencies that receive financial support from the city.

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