Informational Meeting

MINUTES Informational Meeting Tuesday, December 17, 2019 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: Janet Brekke, Christine M. Erickson, Rick Kiley, Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr, Theresa Stehly Council Members Absent: None 2. Committee/Commission Reports A. CVB-BID Board: Tuesday, December 10, 2019 (Council Member Brekke) Council Member Janet Brekke said the meeting was canceled. B. Metro Management Council: Wednesday, December 11, 2019 (Council Members Erickson and Kiley) Councilor Rick Kiley provided the report and spoke about what they accomplished during the meeting. He spoke about the following: the Director's Report; adoption of the 2020 Meeting Schedule; approval of 8 hours Administrative Pay for December 24, 2019; approval of Resolution #19-03, Non-Bargaining Unit Pay; approval of Resolution #19-04, Property Transfer; approval of Resolution #19-05, Employee Benefits; and adoption of Personnel Manual Revisions. Kiley spoke briefly about the group's previously held meeting, the agency facilities discussion, and the 2020 Minnehaha County Metro PSB Lease Agreement. 3. City Council Open Discussion Councilor Christine M. Erickson spoke about: a recent liquor sting and that all 24 businesses passed; and, her attendance at a recent Municipal League Meeting in Pierre. Councilor Theresa Stehly spoke about watching a recent Planning Commission Meeting and doing her homework to prepare for an item on the upcoming City Council Meeting. 4. Presentations A. November 2019 Monthly Financials by Shawn Pritchett, Director of Finance Presentation: Approximately 15 minutes followed by discussion  Pritchett presented the report and stated: Unemployment is at 2.4%; Labor Force & Employment has grown about 3% since October 2018; Inflation has increased slightly and is at 2.1%; Building Permits YTD Building Valuations, there have been about $730M in building permits through November 2019, due to a strong month of October in which building permits for Jefferson High School and another one for First Premier Headquarters came through, about $30M came in for November; Sioux Falls YTD Housing Permits (Units), no real change has occurred; Sales Tax Collections w/out Audits there is positive news it has grown by 6.2% compared to last year and the rolling average is at 6%; Entertainment Tax Collections w/out Audits is also positive and has increased by 14.1% compared to last November and there is a rolling average of 6%; General Fund - Revenues YTD, there is strong sales tax revenue coming in; and General Fund - Expenditures YTD, we are in good shape. Discussion followed regarding: federal and state grants; apartment building permits; and expenditures by departments. B. Audit 19-01 Landfill License Audit by Shana Nelson, Internal Audit Manager Presentation: Approximately 15 minutes followed by discussion Nelson presented the audit. She began by providing background on the landfill, which is the largest in the state and serves approximately 280,000 residents in a five county region; and has a projected closure date of 2077. The Landfill is an enterprise fund, fees are based on cost of service and no tax dollars are used to fund the solid waste system. The system includes the Landfill, public drop off sites, household hazardous waste collection, public education programs, and Environmental Center related expenses. In 2019, there were 27 licensed haulers, 221 licensed trucks, and 573 licensed units (roll offs). She spoke about the Sanitary Landfill Waste Tonnage and how there are four haulers that bring in the majority of waste. Nelson reviewed the objectives of audit, which were to: Evaluate the efficiency of the City's Landfill Licensing process to determine if the process follows leading practices; determine if adequate controls are in place over the hauler licensing process; and to determine if adequate controls are in place over hauler compliance after the issuance of the license during hauler operation. The audit revealed: the hauler application is outdated and is not available electronically for haulers to access; the licensing process is manual and takes approximately three months to complete; several required items were missing from haulers files; compliance with the license sticker requirement and weekly hauling requirement is not consistently being monitored or enforced by Landfill staff; vehicle and equipment inspections are not being conducted by staff; and insurance paperwork is missing for four haulers based on review of hauler files. Recommendations included: update the license and permit application for Garbage, Construction and Demolition Haulers to include necessary information; Utilize the City's website to enhance the customer experience and provide added convenience and efficiency for both haulers seeking a license and for City staff involved in the licensing process; Implement electronic document routing software and electronic filing to add security and improve the efficiency of the landfill licensing process; establish written and internal polices and procedures to: 1) Define the hauler licensing process requirements and responsibilities. 2) Ensure Landfill staff are consistently monitoring and enforcing the requirements set forth in City ordinance that licensed haulers are to follow to obtain a license and operate under that license. Also, to establish a process to verify the safety of licensed hauling units to protect citizens,  employees, and other haulers. The Landfill management is already taking action to enhance the license and permit application process; to provide a more efficient and effective licensing process; taking action to produce necessary internal policies and procedures; creating a Standard Operating Procedure; and will require any hauler with hauling unit(s) required to have an annual DOT truck inspection to submit the most recent copy of the passing inspection results with a license application. Discussion followed regarding: haulers getting in arrears and licenses being revoked, the new policy; a hauler getting assurance bonds and inspections; state DOT requirements; engagement with City Landfill staff; cost to City for clearing route of no longer existent haulers; inspections of vehicles; mechanical inspections; and the haulers who deliver the most waste tonnage. C. Sioux Steel Project - Tax Increment Financing by Dustin Powers, Urban Planner Presentation: Approximately 20 minutes followed by discussion Jeff Eckhoff, Director of Planning and Development Services, explained why they are seeking an economic development TIF, which is allowable in state law and conforms to the 2025 Downtown Plan. He said that this is the largest project ever pitched downtown. The TIF portion is 11.6% of the overall budget, which is under the 15% that is usually sought for a TIF. Eckhoff said this is the first of six public hearings that will be held regarding the TIF. Jake Quasney, Executive Vice President of Development for Lloyd Companies, provided an overview of the redevelopment project. The 7.46-acre project includes: a 217 room hotel, a convention center, a mixed-used office tower, and a 930-stall parking ramp with ground floor retail and residential above. This will be a walkable space with several public access points. He said they will work with the City regarding easements to create a river greenway to make the top of the Falls accessible. The goal of the project is to create a urban neighborhood. Quasney explained that $2M has already been invested in the project. He showed detailed renderings of the project and spoke about their hopes for the various areas. He provided statistics for the project: the Hotel/Convention Center will cost $75M, have seven levels, 60,000 square foot meeting space, and a 2-level bar/restaurant; the Office Tower will cost $43.5M (plus buildouts), will have nine levels, is 173,000 square foot building, and will have 139,000 of useable square footage; the parking ramp will cost $24.9M and will have eight levels; the parking ramp wrap will cost $40.2M and will be five levels, 30,000 square foot of retail space, 100 apartments, and space for a future office wrap. Total project cost is $186,793,43 with a $21,508,407 TIF (for parking ramp construction) and $1,157,982 Business Improvement District (for public art and promotion of the district) requests. He explained the TIF benefit by stating the 2019 tax payment, for the area is currently $56,911 per year and by the 2040 tax payment if would be $2,541,984 per year. He spoke briefly on parking ramp operations, investment and long-term management of the project by Lloyd. Quasney spoke about the project's tax generation ability: one- time sales tax on construction materials, $1,870,105 for City revenues; and $4,207,736 for State Revenues. The long-term annual tax generation for the project would be $2,144,475. The estimated economic impact that the hotel (Canopy by Hilton) would be $25,293,421.74. Dustin Powers, Urban Planner, spoke about the next steps for the project will be to: go to the County Commission Briefing on December 31, 2019; the Planning  Commission on January 9, 2020; and before the City Council on January 21 and February 3, 2020. He said the TIF items that will be brought forward are: a resolution to approve the district boundary; resolution to approve the project plan; and an ordinance to approve the development agreement. Discussion followed regarding: starting the project in the summer of 2020; opening the hotel, offices and parking garage in early 2022; leasing apartments in the summer of 2022; spending the past 10 months looking into the area and working with the Department of Energy and Natural Resources, they plan is to build upwards versus drilling down; projections on number of jobs created and average pay; how is the TIF process approved; who did the financial analysis of the project; parking ramp comparisons; determining TIF percentages for a project; property tax; blighted areas; needs to be a way to help residents; excitement for the project moving forward; TIF eligibility determined by state law; and employment opportunities at the complex. 5. Public Comment Mark Weber provided an analysis of the 6% growth in 2% Municipal Sales Tax, based on information obtained from a 1,000 page South Dakota Department of Revenue document. 6. Executive Session A. Consulting with legal counsel or reviewing communications from legal counsel about proposed or pending litigation or contractual matters pursuant to SDCL 1-25- 2(3) A motion was made by Council Vice-Chair Neitzert and seconded by Council Member Kiley to enter Executive Session at 5:42 p.m. for Consulting with legal counsel or reviewing communications from legal counsel about proposed or pending litigation or contractual matters pursuant to SDCL 1-25-2(3). Roll call vote to enter Executive Session. 8 Yes: Brekke, Erickson, Kiley, Neitzert, Selberg, Soehl, Starr, Stehly; 0 No: (None). Motion Passed. 7. Adjournment A motion was made by Council Member Erickson and seconded by Council Member Soehl to exit Executive Session and adjourn at 6:25 p.m. Voice vote to exit Executive Session. 8 Yes: Brekke, Erickson, Kiley, Neitzert, Selberg, Soehl, Starr, Stehly; 0 No: (None). Motion Passed. Denise D. Tucker, MMC, Assistant City Clerk