Tight budgets aren't a new phenomenon for the City of Rochester. Neither is the demand for services. And while the city's tax base has shrunk, officials have tried to improve the city's neighborhoods and commercial areas. In the process, for more than two decades they have worked hard to involve residents and business people, encouraging them to help plan their community's future and providing loans and grants.

In its first year and a half in office, the Duffy administration has continued that tradition. But administration officials say it's beginning to have some unintended consequences. One is expectations that can't be realized. And some city officials say that as neighborhood groups have gotten more sophisticated, the planning process has become fragmented.

At a City Council budget-review session last week, Economic Development Commissioner Carlos Carballada expressed his concerns about his ability to deliver on the promise.

"I hope I haven't created a monster," he said.

Throughout the city, neighborhood and business groups have come up with plans that include such improvements as new sidewalks, better lighting, and landscaping - and sometimes a lot more than that. Now, with their budget increasingly tightened, city officials are pulling back.

"I don't want to discourage people from being active and becoming involved," Carballada said. "But we can't do everything for everyone."

The dilemma is pushing two city departments, economic development and community development, closer together. And they're prioritizing and focusing their investment strategies. At last week's budget review, observers got a look at elected officials and city staff members wrestling with an issue they'll have to deal with for as long as the city's finances are tight.

Carballada and Community Development Commissioner Julio Vazquez say they have concluded that by the time funding for neighborhood improvement has been divided up, few areas benefited significantly.

"We've done some good things," says Vazquez, "and the programs themselves have been sound, but the approach we've been using can't produce the type of results we need."

Now, they want the city to try something new, which they're calling the Neighborhood Focused Investment Strategy. It's a comprehensive community development program, says Vazquez, that will target four specific neighborhoods over three to five years.

The four neighborhoods haven't been identified yet. "That will be the goal of a 30-member advisory committee that will include stakeholders from all areas of the city," says Vazquez. "We will determine some of the criteria in advance, but it will be the job of representatives from neighborhood associations, the real estate community, business, landlord associations, and the city to identify the areas, what is needed, and how best to implement the changes."

The city receives more than $10 million annually through the federal government's HUD allocations and from several grants. Vazquez has recommended to City Council that about half of that money be directed toward the new program. The targeted approach has been used successfully in other cities, he says, and it could be targeted to more than 100 blocks in Rochester's inner city.

"Richmond is one of the cities that use this model, and it has made a very big difference there," he says. "We don't know exactly how many city blocks we are talking about yet. But based on the needs of those blocks, it could mean that some need new housing, some may need rehabbed housing, and some may need housing demolished."

In addition to money, city officials are concerned about targeting and coordinating neighborhood planning efforts.

As the city has encouraged public involvement in neighborhood improvement, some residents and businesses have looked beyond City Hall for help. "Some groups have become quite sophisticated," says Phil Banks, the city's deputy commissioner of economic development. "They have learned how to approach state leaders and other sources for funding."

And nearly a dozen neighborhood associations have looked to the Rochester Regional Community Design Center for guidance. The process usually begins with design charrettes, brainstorming sessions that pool ideas from residents, business owners, and community leaders. The goal is to come up with a vision of what they want their neighborhoods to become. ARTWalk on University Avenue is an example of what can come of that kind of collaboration. Upper Monroe, Maplewood, Hudson Avenue, and the Susan B. Anthony neighborhood are in various stages of the charrette design and planning process.

The charrettes have been successful in getting the public engaged, but not every idea that residents come up with is feasible. And it could be years before the revitalization that neighborhood groups envision is realized, if ever.

"I think working through a planning process with the city is the preliminary step to the charrettes," says Banks. "There has to be some economic viability to what these neighborhoods are proposing. Let's say they want to add an ice cream shop or a movie theater to that area. We have the software to look at the demographics, the income level of those residents, the other businesses in that area to say, yes, that is an economically viable proposal. We can save people a lot of frustration if we use a more holistic approach."

Façade improvements are fine, says Banks - new sidewalks, lighting, bump-outs for parking, landscaping, and brick accents on streets - but persistent systemic problems need to be addressed, too.

"If the underlying causes to that neighborhood's problems are not being addressed, we're not going to see much improvement," he says. "We may need to look at the housing or crime. What's impeding customers from supporting those small businesses? And when we talk about neighborhood revitalization, it is essential to make business development a part of that discussion. One does not happen without the other."

To do that, says Banks, the economic development department is recommending a program called Revive, which will complement the Community Development Department's efforts. In the past, some neighborhoods received as much as $250,000 for façade improvements. The new program, says Banks, will focus on the target neighborhoods, but he wants to see the city's investment result in more customers supporting businesses in those neighborhoods.

He also wants to see the school district's plans for the Rochester Children's Zone and Facilities Modernization - programs that will infuse large investment sums into city neighborhoods - complement the economic development department's goals.

"We are meeting with the district regularly to see how our combined efforts can achieve the common goals we have for some of these areas," he says. "The school district plays an enormous role in both housing and business decisions when it comes to the city. Many people will move here and when their children get to the middle or high-school years, they will take their kids and move to the suburbs."

The targeted approach that Carballada and Vazquez recommend will mean that some neighborhoods won't get the funding they'll want for improvements. The fine line for City Hall will be to keep residents involved despite that change in approach.

It's important for residents to see some progress toward improvement in their neighborhoods, says Joni Monroe, executive director of the Rochester Regional Community Design Center.

"This is really a difficult and complex problem that doesn't have easy answers," she says. "Yes, resources are limited. But we have to remember that the progress that's been made with ARTWalk and South Wedge did not happen overnight." Residents and business owners have been working on improving those areas since the 1970's, notes Monroe, "but what kept people committed was having a plan and seeing small incremental progress."