Budget Hearings

MINUTES Budget Hearings Monday, August 5, 2019 at 3:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call to Order Council Members Present: Janet Brekke, Christine M. Erickson, Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr, Theresa Stehly, Paul TenHaken Council Members Absent: Rick Kiley Mayor Paul TenHaken called the meeting to order at 3 p.m. 2. Budget Hearings A. Mayor's Budget Presentation by Mayor Paul TenHaken TenHaken presented the proposed 2020 Budget, which focused on the core essentials and setting the City up for sustainability. The One Sioux Falls framework of: Innovation, Foundation Growth, Safety & Health, Accessible Housing, Workforce, and Engaging People, served as the budget guideline. The City's Hierarchy of Needs: Infrastructure, Safety and Health, Livability, Culture, and Innovation, Planning & Economic Development, were also factored into the budget strategy. A new process, involving Request for Results (RFR) was used for the submission of new budget requests. The RFRs, were reviewed and scored by a variety of people. The end result called for the budget focus to be on infrastructure and safety. City departments were also asked to develop a plan for scaling back, if there were an economic down turn. Some of the discovered efficiencies were placed in the budget. As part of the process nine loans, totaling nearly $4M, will be retired early and will save the taxpayers money. The revenue forecast is $545.8M with a recommended budget of $545.4M: $247.3M for Operating Funds, $207.9M for Capital Funds, and $90.2M in Internal Services. The forecast of sales tax and population growth helped steer the budget. In 2020, the City will be hiring 20 new full-time employees. The General Fund will be used to pay for: four police officers; a police mental health officer, a chief culture officer, a parks service worker, a digital content specialist, a data analyst, and a planning permit technician. The Enterprise Fund will cover the following positions: an attorney, a paralegal, an engineering technician, two sewer collection technicians, a controls technician, and a civil engineer. A GIS specialist and Health Nurse Case Manager will be moved from interim to full-time positions.  The total proposed Capital Program is $776.5M, an increase of approximately $28M; of which $171.7M will be budgeted in 2020. TenHaken is proposing that 80% of the available sales and use tax be dedicated to repairing and reconstructing the highways and streets, Over the next five years, $30M will be dedicated to highway and street investments. He then spoke about repairs for the 8th Street Bridge; School Infrastructure; Enterise Projects (landfill, water, lights, and water reclamation); the future Water Reclamation Treatment Facility; Parks; the River Greenway. In relation to Safety and Health, the following were discussed: a Community Triage Center, the Police Department; a Training Center (for Fire and Police); and Fire Station 12. Also discussed was Accessible Housing; the Workforce; Events Campus; Southeast Tech; Engaging People; Employee Culture; Recognition; Employee Engagement; Onward; Customer Service; and Building Culture. A five minute recess was taken. B. Finance by Shawn Pritchett, Director of Finance Shawn Pritchett, Director of Finance, provided the overview of the Finance Department through the principles of plan, balance and adapt. In discussing the plan, Pritchett spoke about the budget timeline; revenue sources (all sources $545.8M and General Fund Sources $177.7M); and the Budgetary Environment, which includes strong employment, growing population, healthy inflation, solid construction activity, improving sales tax growth, sales tax budget to actuals, property tax growth and CPI, general fund reserves, and general fund revenues budget to actual. Balance covered: Internal Service & Trust Funds; Revenues & Expenses; Total Expenditures (All Expenses $545.4M and General Fund Expenses $177.7M); Capital & Operating; Capital Investments (2nd Penny); Capital Investments & Operating; Livability/Culture; Cash Funded & Borrowing; Sales Tax Coverage; Managed Debt; Debt Per Capita; New Bond Issue; and Debt Per Capita (New Sales Tax Bond). In regards to a new bond issue, Pritchett spoke about the 2020 Budget and 2020-2024 Capital Program including debt service for: a Public Safety Training Facility, Fire Stateion #12, the River Greenway, and Refinancing QOL (Quality of Life) II Bonds. The Adapt principle focused on: Long-Term Sales Tax Growth, General Fund Breakdown; Reserves as a Part of the Budget; General Fund Reserves; Where are your taxes Going?; and the Budget Timeline. Department presentations will continue through August. The public hearing for the proposed budget, will be September 10th, and the budget adoption will be held on September 17th. Discussion followed regarding: financial burdens placed on residents through property tax payments and water sewer payments; bonding; Parks & Recreation Master Plan Study; property tax growth and opting out. C. Human Resources by Bill O'Toole, Director of Human Resources Bill O'Toole, Director of Human Resources, provided an overview of the following: Functional allocation of personnel; Employees per 10,000 population; Employment  statistics; 2020 personnel services; General Fund personnel expenditures; Part- time equivalent; and 2020 recommended new positions. O'Toole provided a handout with a brief description of the recommended 20 New Full-Time positions. Discussion followed regarding: increasing wages for part-time park workers in 2020; the Chief Cultural Officer position; increases in supplies & materials and training & education; explaining the cost of new employees; penitentiary work force; comparing Mayoral employees; ombudsman for the public; Project TRIM; use of interns and recruiting tools; the Onward program; the Hurman Resources intern; hiring and diversity; cyclical debt; utility rates; and employment statistices. D. Innovation and Technology by Jason Reisdorfer, Director of Innovation and Technology Jason Reisdorfer, Director of Innovation & Technology, provided an update on the department and their accomplishments and goals. The topics he spoke about included: community dashboard, 5G technology, transit pilot, What Works Cities (WWC) certification, community engagement, ARCGIS Urban, and a customer kiosk. He discussed the budget for both the Information & Technology Department and Communications Department. Major changes for the I&T Department will include a Data Analyst and Innovation Coordinator, Consulting and Security Testing. Communications will see major changes regarding a Digital Content Specialist and Franchise Fee Pass Through. Discussion followed regarding: does the City have a Security Analyst or Securtiy Officer; CityLink; Digital Content Specialist; Transit; professional services budget; education and training budget; pothole hotline costs; communication with citizens; and emails. E. Entertainment Tax by Shawn Pritchett, Director of Finance Pritchett spoke about the Entertainment Tax Fund. He said they forcasted $8.7M in revenue, there is an estimated 4% increase for 2019 over 2018 ($8M) actual, and for 2020; Year-to-date is up 7.7%; the rollowing 12-month average is at 6.6%; and there continues to be an upward trend. Pritchett spoke about the following: Entertainment Tax Collections w/out Audits; Entertainment Tax Fund Forecast (excludes SMG operating account balance); the Entertainment Tax Fund Budget; 2020 Events Complex Expenditures, which included Convention Center Capital and Arena Capital Hightlights; 2020 Orpheum Theeater Expenditures, with Capital Highlights; 2020 Sioux Falls Stadium Expenditures, with Capital Highlights; 2020 Washington Pavilion Expenditures, with Capital Highlights; the Events Campus Study; and the goal to breakeven combined net operating results for the City's six entertainment venues by 2022. Discussion followed regarding: the Arena, Event Campus Study recommendations report, Great Plains Zoo, Entertainment Tax Reserve Fund, upcoming Neighborhood Summit, additional bonding possibility, 2nd and 3rd Penny Sales Tax, future plans for the 3rd Penny Sales Tax fund; property rentals and cost savings, and the Transit fund. 3. Public Comment  There was none. 4. Adjournment Council Chair Marshall Selberg adjourned the meeting at 6:19 p.m. Denise D. Tucker, MMC, Assistant City Clerk