Informational Meeting

MINUTES Informational Meeting Tuesday, July 19, 2022 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: David Barranco, Sarah Cole, Rich Merkouris, Greg Neitzert, Marshall Selberg (arr. 4:01 p.m.), Curt Soehl, Pat Starr (arr. 4:03 p.m.) Council Members Absent: Alex Jensen 2. Committee/Commission Reports A. Urbanized Development Commission (UDC): Thursday, July 14, 2022 (Council Members: Barranco, Merkouris, Neitzert, Starr) Council Member David Barranco provided an update and stated the meeting was very successful. 3. Councilor Remarks There were none. 4. Presentations A. June, 2022, Monthly Financial Statements by Shawn Pritchett, Director of Finance Presentation: Approximately 10 minutes followed by discussion Pritchett spoke about: Economic overview; labor force and employment; unemployment; inflation; building permits YTD Building Valuations; Sioux Falls YTD Residential Permits (Units); Sales Tax Collections without Audits; Entertainment Tax Collections w/out audits; Industry Taxable Sales Data; Lodging Tax Receipts; Lodging BID Tax Receipts; General Fund - Revenues YTD; and General Fund - Expenditures YTD. Entertainment Tax Fund: Purpose; Sources; Historical; Uses. Pritchett also spoke about the future focus items including Well-Maintained Facilities, Solid Operating Reserves and Preparing for Future Investments. Pritchett stated that employment is at 3.9%. The labor force is up 3.0% since May of 2021. Unemployment is at a five year low at 1.9% which is where we were last month and the national average is at 3.4%. We are staying low locally, regionally and nationally. Inflation continues to be elevated at 9.1% in June which is the highest it has been since November, 1981.  Building permits year to date are at $868.5M building permit valuations, 76% over previous year. New commercial is driving the rate with office, institutional and educational building development at 146M. Strip malls, restaurants and hotels (other commercial) are up $141M and multi-family usage is at $112M. Sales tax collections are up 12.4% over last year, seeing a 3-3.5% growth. Entertainment Tax Collections are up 12% over same time last year. Pritchett reviewed the Industry Taxable Sales Data for the top ten industries experiencing growth/reductions as follows: 1) Department Stores and General Merchandise Stores; 2) Wholesale Trade of Durable and Non-Durable Goods; 3) Lumber, Hardware, and Garden Supplies; 4) Eating Establishments; 5) Grocery Stores, Meat and Other Food Stores; 6) Business Services; 7) Remote Retailer Sales; 8) Manufacturing; 9) Home Furniture, Furnishing and Equipment Stores; 10) Miscellaneous Retail Stores. It was noted that Remote Retailer Sales are down 10% at this time. Lodging Tax Receipts are up 28% over last year, driven by higher rates and solid occupancy, returning occupancy to higher than the pre-pandemic levels. General fund revenues – YTD – are at 55% total collected. Last year at this time it was at 54%. The sales taxes are driving the increases and this is consistent with what the expected expenses were going to be. General fund expenditures are at 40% through the end of June, it was 39% at this time last year. Pritchett explained the background on what the Entertainment Tax Fund is and what it does. The purpose is to invest in civic and entertainment related facilities that enhance and promote the City via Construction and Capital Improvements; Maintenance and Repair; and Operating. Sources for the Entertainment Tax Fund are: The third penny sales tax (lodging accommodations, alcohol sales, dine-in or carry-out dining, and ticketed events) and facility revenues (held by third-party manager on behalf of the City). Restaurants provide 50% of the revenue, Lodging is 12% and ‘other’ is 23%. Entertainment Tax Fund uses are: Events Complex (managed by ASM Global; Food Services provided by Spectra); the Washington Pavilion and the Orpheum Theater (Washington Pavilion Management). Discussion was held regarding: Year to date sales tax; raising permit fees – breakdown between the general homeowner permits vs. the contractors; what are restricted funds; and available fund balances. B. Washington Pavilion and Orpheum Theater Update by Darrin Smith, Executive Director of Washington Pavilion Management, Inc. Presentation: Approximately 10 minutes followed by discussion Smith stated that the Washington Pavilion has emerged from COVID stronger and better, including the highest level of community support in its history. There are new all-time attendance records in the museums; the educational programs continue expanding; and the live theater remains popular – enjoying its biggest year yet in Sioux Falls.  Smith stated that the “Guild Hall: An Adventure in the Arts” exhibit is coming this fall to the Visual Arts Center. This is the first blockbuster national traveling exhibit in five years. The South Dakota Art Educators Conference changed locations from Rapid City to Sioux Falls because we are hosting this exhibit. There is a new water playroom in the Kirby Science Discovery Center opening in 2023 (private donor funded). In addition, there are more exciting changes and new services offered in the coming year. The Pavilion will have an expanded footprint in the community and in the region, supporting the arts and other non-profit organizations: SculptureWalk, Municipal Band, Community Theater Organizations, Dance companies, and Universities. Smith stated that the Orpheum is full nearly year round now. They support and include non- profit organizations; community theater groups; dance companies; third-party promoter events; pavilion presented events like comedians and off- Broadway shows. Smith added that there has been no operating contract funding increase request for 3rd consecutive year in 2023. The City operating contract funding goes primarily to facility related expenses: Utilities, facilities maintenance staff; custodial staff; supplies and equipment. The City continues to invest significantly in its facilities and equipment. Smith thanked the Finance teams for their assistance and praised their knowledge and experiences in helping the Washington Pavilion and the Orpheum Theater. 5. Public Comment Scott Ehrisman spoke about executive session procedures and talked about last year's annual report of the Washington Pavilion. 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) B. Discussing information listed in subdivisions 1-27-1.5(8) and 1-27-1.5(17) pursuant to SDCL 1-25-2(6). A motion was made by Council Member Merkouris and seconded by Council Member Cole to enter Executive Session at 4:54 p.m. for the purposes of 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) and for discussing information listed in subdivisions 1-27-1.5(8) and 1-27-1.5(17) pursuant to SDCL 1-25-2(6). Roll call vote to enter Executive Session. 6 Yes: Barranco, Cole, Merkouris, Neitzert, Selberg, Soehl; 0 No: (None). Motion Passed.  A motion was made by Council Member Starr and seconded by Council Member Selberg to exit Executive Session at 5:58 p.m. Voice vote to exit Executive Session. 7 Yes: Barranco, Cole, Merkouris, Neitzert, Selberg, Soehl, Starr; 0 No: (None). Motion Passed. 7. Adjournment The meeting adjourned at 5:28 p.m. Tamara Jorgensen, MMC, Assistant City Clerk