Budget Hearings

MINUTES Budget Hearing Tuesday, August 2, 2022 at 3:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call to Order Council Members Present: David Barranco, Sarah Cole, Alex Jensen, Rich Merkouris, Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr Council Members Absent: None Council Chair Curt Soehl called the meeting to order at 3 p.m. 2. Budget Hearings A. Finance Overview Shawn Pritchett, Director of Finance, opened the presentation by providing an overview of the 2023 budget process, which begins in January with strategy, planning, and updates and concludes generally during the third quarter with the Mayor’s budget address, budget hearings, and budget adoption. The proposed budget includes a $384.3M Appropriations Ordinance reflecting only tax-supported departments and funds; a $646.2M Budget Resolution reflecting all departments and funds; and, a $930.7M Capital Program that reflects all projects, equipment, and departments over the next five years. He discussed key fiscal stewardship themes found throughout the budget and articulated several areas of focus when developing the budget. Over half of the budget is dedicated to highways & streets and public safety, with the remainder going toward culture & recreation, public health, general government, planning, housing, and transit. Pritchett then discussed economic consideration taken into account as the budget was developed. He noted that major impacts to the budget include the City’s strong labor force; strong building construction; strong sales tax growth; consistent property tax revenue; and, the economic variability of inflation, the supply chain, and economic activity. As a result, the City has remained stable, consistent, and proactive throughout recent periods of uncertainty. Pritchett discussed the total 2023 Budget by showing the breakdown between public service capital and operational expenditures; funding sources; revenue sources; property tax growth; sales tax projections; and, long-term sales tax growth. Funding sources for the $214.9M general fund come predominantly from taxes, but there are other sources. Overall, the general fund budget is an increase of $14.7M over the 2022 budget. He spoke about the use of reserves and detailed capital investments from the sales tax fund.  Discussion followed about: the quality of Pritchett’s presentation; impacts of inflation; major changes/impacts to the budget over the past several years; investment income; and remote sales tax collections. B. Human Resources Overview Bill O’Toole, Director of Human Resources, provided a citywide personnel overview. He explained that 64% of the $214.9M general fund budget goes toward personnel. He showed the percentage has been fairly consistent for at least the past 10 years. He detailed part-time wage commitments as well as fulltime employee commitments. This includes successfully-negotiated union contracts as well as a forthcoming wage and benefits study. He then provided employment statistics showing turnover, vacancy fill rates, and the number of employees per 10,000 residents. O’Toole concluded by providing an overview of the proposed 30 new FTEs in the 2023 budget. Discussion followed about: variations in the number of new FTE requests per budget; turnover; the wage study; capacity versus inflation; overtime; and the benefits of in-house services compared to contracted services. C. Mayor's Office Erica Beck, Chief of Staff, presented the budget for the Mayor’s office. The $0.9M budget includes the addition to one new fulltime employee to serve as a Research and Projects Officer & provides support coordination of the Sioux 52 Mentorship Program. The budget is neutral because one position is shifted to another department. Discussion followed about: the office of responsibility for the mentorship program; the use of lobbyists; professional services expenditures in the past; and specific duties of the Research and Projects Officer. Beck next provided an overview of a new organizational concept in the Administration that establishes an Operations Team consisting of Communications, Finance & Facilities, Human Resources, and Innovation & Technology. The purpose of the team is to ensure strategic initiatives and key operational issues are aligned, coordinated, supported, and communicated throughout the City organization. D. Communications Allie Hartzler, Communications and Culture Officer, explained that the purpose of the division is to engage, inform, and connect the community to City resources. Her team supports key initiatives through strategic communications; by providing accurate, helpful, and easy-to-find information; providing emergency incident response; and, supporting the daily needs of the City. The proposed budget is $3.2M and reflects an increase of $169k for normal wages and benefits and $7k for inflationary increases in supplies and utilities. E. Information Technology Rick Weelborg, Chief Technology Officer, explained the purpose and focus of the department, which include protecting the City against cyber threats, realizing efficiency through leveraging the use of technology, and leading efforts in being a smart city. The department includes both Information Technology and Civic Analytic  capabilities. He discussed the many purposes of the department and how it works to integrate them all to provide daily services to our residents. The proposed budget of $6.2M includes a $645k increase for normal wages and benefits, three new fulltime employees, and additional part-time employees. It also reflects a $43k increase to invest in needs gaps and certification training as well as $14k to address uncertainty in the economy. Discussion followed about: civic analytics; wages; and the transitioning of new enterprise programs. F. Human Resources O’Toole then discussed his department’s purpose and focus. There are currently 17 fulltime positions in the department that work to attract talent to work for the City and to develop strategies that promote employee retention, culture, and resilient leadership. The proposed budget includes the addition of a new Talent Acquisition Coordinator and additional part-time support for 2023. The overall proposed budget is $2.3M, which reflects an increase of: $165k for employee wages, $100k to complete a compensation & benefits study, and $22k for occupational physicals. Discussion followed about: the compensation and benefits study; job descriptions for proposed new hires; occupational physicals; and, diversity. G. Finance Pritchett presented the Finance Department's proposed budget of $3.8M. The proposed budget includes an increase of $253k for personnel, specifically two new fulltime employees to support the delivery of services and part-time support for the implementation of financial software. The purpose of the department is to: protect the City's financial strength; support the delivery of department services; and to plan ahead to keep the City moving forward. The department consists of 31 fulltime employees. Discussion followed about the proposed fulltime employee additions intergovernmental coordination; and strategies for hiring personnel in the department. 3. Public Comment Jordan (last name not provided) spoke about investment strategies for bikability and walkability in the City as well as participatory budgeting. 4. Adjournment Council Chair Curt Soehl adjourned the meeting at 5:23 p.m. Thomas M. Greco, City Clerk