News Column

DMCC board, city council approve DMC agreements

February 20, 2014

By Edie Grossfield, Post-Bulletin, Rochester, Minn.



Feb. 20--Under operating rules approved Wednesday, the city of Rochester will maintain control over the Destination Medical Center public funding being used to finance public infrastructure, City Attorney Terry Adkins said Wednesday in response to questioning.

The questions were raised after the Destination Medical Center Corporation board of directors and the Rochester City Council approved documents governing how the groups will oversee DMC projects over the next 20 to 35 years.

Officials and staff from the city, DMCC and the DMC Economic Development Agency spent many hours during the last couple of months hashing out details of the DMCC's articles of incorporation and agreements for how DMC public funding will flow between the three bodies, said DMCC board Chairwoman Tina Smith.

On Wednesday, it was apparent everybody was comfortable with the final drafts of the documents -- they won quick and unanimous approval with very little discussion from DMCC board members during their 12:30 p.m. meeting and from the City Council at its 7 p.m. meeting. The board also approved an agreement between itself and the EDA.

"I think these articles of incorporation capture what the legislation envisioned, which is a unique partnership between the city, county, state and Mayo Clinic. ... The articles also clarify that our organization has unique powers and authority, but the city retains its powers and authority," Smith said.

Some have been concerned about whether the Rochester City Council would, indeed, have the final say on public spending. Rochester resident John Kruesel spoke during the council's public hearing on the DMCC's articles of incorporation, which is a document filed with the Minnesota Secretary of State that states the purpose and details of operation of the nonprofit group.

Kruesel expressed concern about the city's financial burden and risk in the DMC initiative. Of the $585 million in public funding committed to DMC initiative, the city's share is $128 million. The DMC initiative is a 20-year plan, but according to the statute, the city can take until 2049 to pay back debt issued for DMC projects.

The city is financing the DMCC/EDA 2014 budget of $8.2 million, of which most will go to consultants for helping to create the overall DMC Development Plan. The City Council approved the budget Wednesday night.

City Council member Michael Wojcik told Kruesel he had valid concerns, and as a way to reassure him and the public, he asked Rochester City Attorney Terry Adkins, who has been deeply involved in drafting the articles and agreements, three questions: Does the city have control over public funds used for public infrastructure? Does the city have control of the issuance of debt? Does the city have control over the DMCC's articles of incorporation.

Adkins answered yes to all three.

Assistant City Administrator Gary Neumann also has spent a lot of time helping to negotiate the agreements. He also played a key role during the DMC legislative process.

"I think it's gone very well, and it's a huge step forward," he said.

Most of the recent discussions centered around how the public funding will be provided and managed among the three bodies, Neumann said. Basically, the EDA will submit requests for funding to the DMCC, which will decide whether to accept or reject them. Accepted requests then will be sent to the city for final approval.

City Finance Director Dale Martinson, who the DMCC board appointed as its assistant treasurer, will transfer the money from the DMCC's bank account to the EDA's bank account so the EDA can pay consultants and staff and take care of expenses.

The DMCC and EDA are required to submit annual budget requests to the city for approval. In addition, beginning next year, the DMCC must adopt an annual five-year capital spending plan for public infrastructure projects identified in the Development Plan, according to the agreements.

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(c)2014 the Post-Bulletin

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Source: Post-Bulletin (Rochester, MN)


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