Informational Meeting

MINUTES Informational Meeting Tuesday, April 13, 2021 at 4:00 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 (via telecom), Rick Kiley, Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr Council Members Absent: None 2. Committee/Commission Reports A. Metro Management Council: Thursday, April 8, 2021 (Council Members Erickson and Kiley) Council Member Rick Kiley’s update included a review of the Director’s Report for financial statements for September 2020 and January through March, 2021. A presentation was watched on the 2022 Budget and resulted in good questions and discussion. This item will be finalized at the next meeting in April, 2021. Kiley also stated they accepted the final Audit Report. Council Member Christine M. Erickson added that Metro 911 will be receiving a $1M dollar grant from the State. They have identified budget additions to include some uses for new technology and for possibly adding staff. B. Siouxland Heritage Museum Board: Thursday, April 8, 2021 (Council Member Starr) A report was not given. 3. Councilor Remarks Erickson noted that this is Metro 911 Appreciation Week. She thanked the organization for their service to the community and encouraged others to stop in and express appreciation to them. 4. Presentations A. 2020 Financial Results by Shawn Pritchett, Director of Finance Presentation: Approximately 15 minutes followed by discussion Pritchett stated that the Audit Committee accepted the Finance Report on March 29, 2021. Finance will resume monthly presentations to the City Council beginning with March, 2021 financials next week. Economic Unemployment in Sioux Falls is at 2.8%, the prior year in December was at 3% for unemployment. Some normalcy is returning to Sioux Falls unemployment compared to the national levels. Pritchett stated that our permit values set a record at $133M, even with commercial permits lagging a bit due to the pandemic. The city received a major boost due to the Amazon Fulfillment Center and housing continues to improve. Sales taxes were at -0.07% due to the pandemic but are now trending in a better direction and have been for the first three months of 2021. Entertainment taxes have a smaller base to draw from and were impacted more with a -13.6% result. This was $1.5M less than anticipated for the year. For the General Fund, the budget information presented includes the funds received from the CARES Act which was $47.7M. General fund expenditures were $10.8M below final budget expectations. The highest savings results were from highway and streets due to a mild winter and spring. Parks and Recreation were also under budget due to deferred hiring and not opening the pools because of Covid. General Government funds were down due to not filling open positions, again because of Covid. The Available Fund Balance, known as the Reserves, is at 42%. The policy is to maintain at least 25%, and if CARES Act funds are removed, this balance would show at 35%. The history of this fund shows an increase because of the CARES Act but Council needs to keep in mind that we will be opening a new fire station soon and taking on an additional operating personnel of 15, said Pritchett. Sales Tax Remaining Available Balance ends at $7.9M with a beginning balance of $60.9M. Deferred Revenues are at $9.3M. These are funds owed to the City from other entities and this is significantly higher than previous years. These funds are due from the State of South Dakota for unfinished projects for the State. The reserve fund will be discussed in more detail in future meetings. Entertainment Tax was hurt the most by the pandemic. This funding is not discretionary and is volatile. There was a $13.6M drop, the first major drop in this revenue source for many years. Pritchett stated this tax may not recover in 2021. With all the ground lost in 2020, it’s more likely that 2021 will be the same as the numbers in 2018 and 2022 numbers will be similar to 2019. The recovery rate for this tax will be much slower than others. Enterprise Fund Activities Operating and Capital needs presentation provided an update on available cash in 2020 in: Light ($6.6M); Parking ($1.4M); Landfill ($13.5M); Water ($16.2M); and Water Rec ($37.5M). These funds are for use for future capital projects and operations in their respective areas. Outstanding Debt for the City started this year with same amount of debt from last year which was $288.8M. There was an increase of $2.7M in Governmental funds and a decrease of $2.7M in Enterprise funds which balance the final amount.  Pritchett discussed the specific areas of amounts, debt and bonds that were paid down this year including principal debt on payments. Pritchett provided an update on Per Capita Debt based on population growth. As a city we are doing very well with debt management, paying for projects and our ability to borrow. A comparison chart was shown illustrating our funds compared to cities of like size and geographic proximity. Pritchett stated that the Finance Department will be presenting at future meetings to discuss March financials and how 2021 is progressing. He indicated there are more discussions to have regarding revenue opportunities including funds from the federal government. He provided a brief update on guidance provided by the National League of Cities on how to best utilize future funds and programs. The National League of Cities has tips available for guiding cities with revenue sources, working with county entities, not duplicating efforts, setting up city priorities, maintaining good records and communicating with legislative delegations and communities on how funds can be utilized. Pritchett acknowledged the hard work of the Finance Department and the careful, strategic, ongoing planning given to City finances through the years. He noted that because of the strong oversight and wise decisions, our city has a better financial holding, even while handling the challenges of the pandemic. Discussion followed regarding: how the CARES Act funding impacted the budget; monitoring any fund surplus; the collection of the entertainment tax funds compared to previous years; the breakdown of loss between restaurants and lodging due to the pandemic; the comparison of our debt to cities of similar size and area; use of the CIP Funds vs. the CARES Act funds; the status of the CARES Act funds; debt and repayments with outside entities like the Canaries and the OrpheumTheatre; the aspect of restructuring payment arrangements with entities; and financial movement in the reserves. B. Downtown Parking Update by Matt Nelson, Public Parking Facilities Manager; and Dustin Powers, Urban Planner Presentation: Approximately 15 minutes followed by discussion Powers reviewed the redevelopment of surface parking lots. He referenced last fall's presentation and noted that further updates were requested by the City Council. Powers reviewed the past updates by the Walker Parking Consultants and the Sioux Falls Downtown Market Study. The Walker Parking Study provided updates on the availability of parking areas in the downtown areas. Nelson added by providing an overview of items that have changed since the last review and provided updated information. He reviewed that the City has more than 2,967 off-street and 1,100 on-street parking spaces in the downtown area. This is part of the Enterprise fund and has a history of 70+ years of parking meters and 60 years of parking facilities including monthly, daily and hourly parking which provides ongoing support for economic development. He reviewed the historical trends for the occupancy rate showing the lease percentage at 64. This number reflects an increase in capacity and the impact of  Covid. Covid impacted hourly parking, decreased meter usage and caused a decrease in leased customer parking. Nelson stated that businesses are starting to come back and, by the end of the year, these numbers should increase. Nelson provided a review of the Walker Parking Study focusing on the trends that are relevant in today's economic environment. Powers continued with surface parking lots focusing on future development assumptions. He reviewed the number of spaces needed: 2,104+ long term spaces for weekday employees and approximately 20+ spaces for short-term spaces for visitors. He provided an update on developments in downtown projects that have occured since 2014 which included 582 residential units, 309,000 square feet for office and 110,000 square feet for commercial (retail). Powers reviewed the off- street parking numbers for existing, new and net parking spaces in the downtown areas. In conclusion, he noted the following two development opportunities are listed on the City's website with additional information: 400 South 1st Avenue and 301 N. Main Avenue. Discussion followed regarding: the occupancy rates of the surface lots; which lots will handle the loss of those spots; how are we advertising private lots that are in a private/public agreement; Public Parking Advisory Board meetings; the challenge of citizens applying for vacant City board vacancies; the process for declaring property legally surplus; the timeline for proposed changes or offers for vacant properties; a request for more information in the future for selling lots and related development activity; the Covid impact numbers on parking usage; surface lots in other parts of the City; marketing the lots; and the need for public updates. 5. Public Comment Scott Ehrisman spoke about: meeting video streaming and changing the start times for City Council Meetings and public input; Sioux Falls citizens being excessively taxed; the need for the City to spend more money on the core of the city; and the plans being made for future parking areas. 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) The Executive Session will be rescheduled. 7. Adjournment Council Chair Greg Neitzert adjourned the meeting at 5:46 p.m. Tamara Jorgensen, MMC, Assistant City Clerk