Budget Hearings

MINUTES Budget Hearings Tuesday, August 4, 2020 at 2:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call to Order Council Members Present: Janet Brekke (Via telecom), Christine M. Erickson, Alex Jensen, Rick Kiley (Via telecom), Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr Council Members Absent: None Council Chair Greg Neitzert called the meeting to order at 2:09 p.m. The meeting began late due to technical difficulties. 2. Budget Hearings A. Finance Overview by Shawn Pritchett, Director of Finance Pritchett provided an overview of the total budget of $593.6M and showed that revenues consist of taxes (41%), charges for goods and services (27%), and other sources (32%). Total revenues are projected to be $587.9M. The budget includes a $259.6M Operating Balance and a $235.6M Capital Balance. Within the two categories, he broke down the differences between tax-supported funding and user fee-supported funding. Pritchett went on to break down allocations by department for both operating and capital expenses. On the operating side, Police holds the largest share with 16.8%, while Water Reclamation will draw 39.6% of the total capital budget. He described several major capital improvement projects. The Internal Service and Trust Funds cover fleet, technology (revolving), property and liability, health benefits, workers’ compensation, pension trusts, and the new “centralized facilities fund”. The new fund is designed to ensure that City-owned buildings are proactively managed and maintained; it focuses on longevity and usefulness; and, it invests in structural maintenance and interior remodeling. The fund is modeled after the success of the Fleet and Technology funds and allows the City to proactively invest in its infrastructure. Pritchett explained that the centralized facilities management program covers 12 fire stations, the Law Enforcement Center, five City libraries, the Street/Fleet campus, City Hall, City Center, Carnegie Town Hall, the Parks Shop Campus, and Enterprise Non-plant facilities. The centralized facilities fund accounts for all facilities-related expenditures like maintenance and custodial staff, repair and maintenance, supplies and materials (custodial), and utilities. The intent is to charge back to departments based on service. The proposed 2021 centralized facilities budget is $5.6M, $660,000 of which are capital expenses.  Pritchett next reviewed General fund revenue sources, property tax growth and CPI, sales tax growth and long-term sales tax growth. He then reviewed the sales tax budget to actuals along with the general fund revenues budget to actuals. He provided a breakdown of General Fund expenditures by department/program and listed a series of General Fund highlights. Pritchett also provided an explanation of reserves as part of the budget and showed projections through 2030. Pritchett discussed the proposed new bond issue. It would complete the replacement of fire and police training facilities, solves space shortages for the PSAP 911 team, provides for a 911 backup center, provides for a facility to conduct police recruit training, and serves as an investment that meets training and metro communications needs for decades. He provided an in-depth review of different scenarios of sales tax bond payments to revenue to 2031. As a percentage of sales tax revenue, debt service would remain fairly steady over the next five years and begin to decrease to 2035. Pritchett concluded this portion of the presentation with an overview of the budget timeline over the next two months. Discussion followed about: the Centralized Facilities Fund; sales tax projections for 2021; body cameras; CARES Act funding; and the Budget Book. B. HR Overview by by Bill O'Toole, Director of Human Resources O’Toole provided a breakdown of personnel in 2020. Public Safety accounts for the highest number of City employees (41%) with the remainder of employees spread out among enterprise, culture & recreation, general government, highways and streets, health, and urban development. There are currently 66 City employees to every 10,000 of the City population and that number is expected to increase to 67 in 2021. By comparison to similar cities, this employee to population ratio is relatively low. C. HR Budget by Bill O'Toole, Director of Human Resources O’Toole provided employment statistics to include the number of applications and full-time turnover rate. He also pointed out that personnel services account for 26% of the total 2021 budget. Funds are used for wages/salaries, OASI and workers’ compensation, pensions, and insurance. The 2021 budget recommends 24 new full-time positions. The proposed human resources budget reflects a $10,000 decrease to employee wellness benefits based on use and a $16,000 increase to DOT and non-DOT Drug/Alcohol Random Testing. The budget also shows a $10,000 increase in technology rental charges, a $5,000 decrease in supplies and materials, and a $2,250 increase for training and education. Discussion followed about: travel in 2020; unfilled part-time positions; changes in employee retention resulting from the hiring of the Chief Cultural Officer; union negotiations; mayoral compensation; leader succession planning; risk management; and turnover. D. IT/Communications by Mike Grigsby, Director of Innovation and Technology Grigsby explained that the Innovation and Technology budget and department is organized into three separate divisions: Information Technology (IT), Civic Analytics  (formerly GIS), and Communications. He provided an overview of each division. The IT and Civic Analytics budget reflects a revenue increase of $100,000 to acquire grants to support innovative and smart city initiatives. It also includes increases in part-time wages, professional services, and rentals. A decrease of $128,000 in supplies and materials is due to the reallocation of City-wide software and technology services moving to the Technology fund. For Communications, there is a $219,343 increase in fulltime wages and benefits due to adjustments and reallocating four positions from other departments in order to centralize Communications and Marketing. CityLink will also have an $18,720 increase for part-time interns. Discussion followed about: Director Grigsby's vision for the department; the Centralized Facilties Fund; drone usage; the Innovation Coordinator; smart cities; and, hiring a transit consultant. E. Entertainment Tax by Shawn Pritchett, Director of Finance Pritchett described the venues supported by the Entertainment Tax. Among them, the Events Complex will see a $1,415,029 decrease which is primarily driven by the timing of large one-time capital projects such as the lighting system upgrade and boiler replacement for the Convention Center in 2020. There is also a proposed decrease of $328,333 for the Sioux Falls Stadium due to the timing of the one-time projects such as miscellaneous concrete repairs and replacing the netting and foul pole lines in 2020. The reduction in capital is due to the one-time purchase of concession equipment in 2020. The proposed budget includes a $53,267 decrease for the Washington Pavilion and $135,571 decrease for the Orpheum Theater. Discussion followed about: zoo funding using the Entertainment Tax; CARES Act funding; the parapet and cornice project at the Pavilion; Convention Center Booking; shows at the Pavilion; and rennovation of Leonardo's Cafe. F. Finance, Facilities, Public Parking by Shawn Pritchett, Director of Finance Public Parking will not see a change in the enterprise model because it allows the City to adapt to changing circumstances. Pritchett stated there will be rate adjustments as expected and within existing authorization. He provided a synopsis of COVID-related impacts in 2020, indicating that impacts were not as significant as originally modeled. A $25,000 decrease in budgeted interest earned is expected along with a $164,456 decrease based on the debt service schedule. Professional Services and Capital will see increases of $13,490 and $42,500, respectively. The Facilities budget includes a proposed $30,427 increase in professional services primarily due to the Property Liability Insurance Fund valuations and adding City Center. Rentals will increase due to revised City-wide allocations of internal technology rental charges; repair and maintenance will increase to accommodate repairs and maintenance for City Center coming off warranty; and, utilities will decrease primarily due to electricity trends. Pritchett concluded the presentation with the Finance budget. Professional services will see a $15,000 increase for bank reconciliation automation, a $39,972 increase due to revised City-wide allocations of internal technology rental charges, and a $2,229 reallocation to increase training.  Discussion followed about: opening of the new parking ramp; rate increases for public parking; attorney fees for the Village on the River project; the parking division's fleet of vehicles; buildings and storage; and, waiting lists for parking facilities. 3. Public Comment There was none. 4. Adjournment Council Chair Neitzert adjourned the meeting at 5:27 p.m. Thomas M. Greco, City Clerk