The Rochester City Council on July 1 approved a tax‑anticipation note line of credit to cover a seasonal cash shortfall tied to the city’s property tax schedule.

City Director Sullivan told the council the short‑term credit would “bridge that gap for when you anticipate your property tax revenues to come in” and run for 30 to a maximum of 60 days, keeping the city from breaking certificates of deposit and losing months of interest.

The measure matters because Rochester must pay the county’s share of property tax on a fixed date each year even as the city’s tax bills and collections are moving later in December. Director Sullivan said the city sometimes needs to advance roughly $8.8 million to $9 million for the county payment before tax revenues arrive. “So that can’t be missed or delayed,” he said.

Under the plan staff presented, the line would be negotiated with a banking partner and would only be drawn with city manager approval; staff emphasized it is a short‑term liquidity tool rather than long‑term debt. Sullivan explained why the line is preferable to cashing CDs: calling a CD early would trigger a penalty equal to roughly three months of interest and would reduce future compounding on about $2 million in CDs that generate interest used to offset the tax rate.

Councilors asked about whether the city could instead fix the underlying timing problems. Councilor Kelsey Deja Vuis asked what process changes could speed the tax‑bill timeline; Sullivan pointed to the multiple steps required to set the tax rate, including closing fiscal year accounting, completing a 535 summary for both city and schools, and waiting for the DRA’s (Department of Revenue Administration) review. He said the city is pressing its financial software vendor and trying to move more materials earlier into the DRA queue but cautioned there is no simple technical fix that guarantees earlier bills.

Several councilors questioned mechanics and cost. Councilor Walker asked whether the approved line would be revolving; Sullivan confirmed it would be structured as a line of credit with a commercial borrowing rate to be negotiated and observed that the net cost must be compared with the lost interest from breaking CDs. Councilor Richardson asked how often the city had cashed CDs to cover county tax; staff said they have generally used liquid investment accounts and that December is historically the most difficult month for cash flow.

The council approved the measure by roll call; the motion carried. City staff said the line is intended as a contingency to be used only when necessary and with managerial oversight.

Looking ahead, Sullivan said staff will continue efforts to tighten the tax‑bill schedule and work with the city’s banking partner to finalize interest terms on the line of credit.