Budget Hearings

MINUTES Budget Hearing Tuesday, August 3, 2021 at 2:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call to Order Council Members Present: Janet Brekke, Christine M. Erickson, Alex Jensen, Rick Kiley (arr. 2:10 p.m.), Greg Neitzert (arr. 2:28 p.m.), Marshall Selberg, Curt Soehl, Pat Starr Council Members Absent: None Council Chair Curt Soehl called the hearing to order at 2:00 p.m. 2. Budget Hearings A. Finance Shawn Pritchett, Director of Finance, provided an overview of the total budget of $654.2M and showed that revenues consist of taxes (39%), charges for goods and services (25%), and other sources (36%). Total revenues are projected to be $659.6M. The budget includes a $277.0M Operating Balance and a $272.76M Capital Balance. Pritchett went on to break down allocations by department for both Operating and Capital expenses. On the Operating side, the Police hold the largest share with 22%, followed by Fire with 16%. He described several major Capital Improvement projects. The Internal Service and Trust Funds is at $104.5M which covers planned impact on Property and Liability, Technology Revolving and Centralized Facilities. Inflationary impact is on fleet, health benefits, workers’ compensation and pension trusts. Pritchett next reviewed General Fund revenue sources, major revenue impacts, first penny sales tax projections, property tax growth and CPI. He then reviewed the total construction values comparing 2021 and 2020. He provided a breakdown of General Fund expenditures by department/program and listed a series of General Fund highlights. Pritchett concluded this portion of the presentation with an overview of the 2022 Budget plan maintaining financial stewardship through: planning, balancing and adapting, one-time funding opportunities and the City’s vision, values and commitment to service. B. Human Resources Bill O’Toole, Director of Human Resources, reviewed statistics indicating the population growth in the city vs. the number of employees to include an estimation up to 2050. He reviewed the employees per 10,000 population as compared to  Omaha, NE, Lincoln, NE, Des Moines, IA, Fargo, ND, Wichita, KS, Sioux City, IA, Rapid City, SD, and Springfield, MO. Compensation and Benefit Objectives were discussed with the following main points: Attract qualified applicants for employment in all categories of work; retain experienced and qualified employees in all categories of work; provide incentives for employees to pursue career advancement opportunities; and accomplish objectives within reasonable economic parameters. O’Toole reviewed employment statistics to include the number of applications and full-time turnover rate. He also pointed out that personnel services account for 24% of the total 2021 budget. Funds are used for wages/salaries, OASI and workers’ compensation, pensions, and insurance. The 2022 budget recommends 23 new full-time positions bringing full time FTE from 1,305 to 1,328 in 2022. O’Toole provided an update on the full time employee wage commitment stating that all union contracts are successfully negotiated through 2023. He stated the FOP and IAFF contracts for 2021-2023 are complete; and the AFSCME contract wage opener for 2022-2023 will be completed with Council action in August, 2021, to approve the contracts. Discussion followed about: the information regarding per capita numbers; the use of technology in keeping employee numbers lower; how has retention been impacted by the Chief Culture Officer position; the lack of diversity in the work force; the amount of money in the budget for the Peakon program and its impact on employees; the difficulties in hiring part time staff, the impact on city services, and how to fix it. C. Innovation and Technology, Communications Mike Grigsby, Director of Innovation and Technology, talked briefly about the last year’s challenges in his department because of Covid. He 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. Grigsby stated that the main component/common thread that ties the divisions together is data. In the next 3-5 years, the focus will be on working with technology to set up a foundation as digital needs first, mobile next and then cloud management. Covid displacement to other work locations was impacted by use of technology. Solutions were required for office environments that were outside of the traditional office environment and this included an increase in mobile device usage by customers. Grigsby stated there will be the following updates: a software update to Microsoft Office 365 over the course of the next year; unified communications improvement to desktop phones to update technology to voice over IP; cyber security will be reviewed in regards to adding an additional layer to the existing systems; the website will be redesigned for internal and external interaction to improve operational efficiencies. Discussion followed regarding: the timeline for the update to the phone system;  crosss training of staff; cable franchise fees; the Communication Specialist position and how it blends with existing positions; explanation of an increase in an internal fee that departments have to pay; the 3-5 year timeline/cycle of the revolving fund for replacing computers. D. Public Works Mark Cotter, Director of Public Works, presented the budget for the following Public Works Departments: Highways & Streets, Storm Drainage, Fleet, Sanitary Landfill, Power & Distribution, Water Purification and Water Reclamation. He noted that Public Works has 299 full-time employees, between 40-60 part-time employees, and a $328M budget of which $95M is Operations, $214M is Capital and $20M is Debt Service. Cotter reviewed the organizational structure changes that are designed to simplify the operations. The subdivision/breakdown for the following areas are: Transportation, Business Operations, Environmental Services and Utilities. An additional support group for the Assistant City Attorney’s Legal Specialist and Communications Support was also acknowledged. Cotter reviewed the major impacts to Highways & Streets. He stated their core mission encompasses engineering, streets, storm drainage, traffic and lights. He reviewed camera information regarding vehicle detection, intersection cameras, signal controllers and traffic calming. The Sioux Falls One Link (online requests from citizens) was reviewed and discussed showing over 5,000 pothole requests, 1,000 requests for roadway lighting, as well as other online reports received yearly. Additional updates were provided regarding major projects in Capital including projects with Marion Road, Minnesota Avenue, 6th Street Bridge, Phillips Avenue, Arrowhead Parkway, Cliff Avenue, Tallgrass Avenue, and Sycamore Avenue. He also reviewed partner projects with the SDDOT regarding the 41st Street and I-29 Interchange and Veterans Parkway. Capital overview was also reviewed for the following projects: Facility expansion, Basin 15 Sewer Extension, Basin 17, Phase 2; South side interceptor rehabilitation, pump station 240 force main. Highway and Streets: Budget is $89.6M; FTE = 120 with a requested increase of 5. Storm Drainage: Budget is $15.2M; FTE = 15 with a requested increase of 2. Fleet: Budget is $15.9M; FTE = 26, no requested increase. Sanitary Landfill: Budget is 11.6M; FTE = 26, with a requested increase of 1. Power and Distribution: Budget is $8.1M; FTE is 12, no requested increase. Water Purification: Budget is $44.4M; FTE = 66, with a requested increase of 2. Water Reclamation: Budget is $144.7M; FTE is 55, with a requested increase of 1. Discussion followed regarding: A jetting truck and what it does, cost of fuel tank replacements, sump pump collection systems, the recent purchase of an electric vehicle, traffic calming, future quiet zones and continuing with pilot projects. E. Centralized Facilities  Centralized Facilities manages 36 city owned properties maintained by Facilities Management totaling 890,000 sq. feet. The current budget is $6.5M. There are currently 27 employees with no requests for additional staff. Pritchett reviewed the facilities and care, maintenance and growth plans from 2021 to 2025. Finance encompasses the budget, investments, accounting, procurement and asset managements. Pritchett noted they have audited financial statements within 90 days of year end. The current budget is $3.5M. There are currently 29 employees with a request to add one more. Discussion followed about: fund balance for net income for public parking showing a net loss. The Council expressed appreciation to Finance for a job well done in preparing the budget information and giving access to the public. F. Public Parking Pritchett reviewed public parking. Public parking has a current budget of $3.2M. There are currently 10 employees with no requests for additional staff. There are 3,969 parking places and 1,000 parking meters. Public parking is upgrading to ‘smart meters’ Pritchett noted there was a reduction in proposed revenue which is related to the pandemic. He said that they are confident in revenues increasing and they are at 15% from pre-pandemic leasing. Also, there is an increase in people moving to hourly parking vs. long term leases which is also related to changes from the pandemic. 3. Public Comment Sierra Broussard compliment this budget for being more organized and thought out; complimented Shawn Pritchett for budget set up; and spoke about areas in the city where road work needs to be done. 4. Adjournment Council Chair Curt Soehl adjourned the meeting at 4:45 p.m. Tamara Jorgensen, MMC, Assistant City Clerk