Informational Meeting

MINUTES Informational Meeting Tuesday, November 15, 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 (arr. 4:33 p.m.), Marshall Selberg, Curt Soehl, Pat Starr (arr. 4:17 p.m.) Council Members Absent: Alex Jensen Council Chair Curt Soehl called the meeting to order at 4:00 p.m. 2. Committee/Commission Reports A. Accessible Housing Advisory Board: Wednesday, November 2, 2022 (Council Member Selberg) Council Member Selberg stated they discussed the Minnesota Avenue Cooridor Study and read an overview of the proposed contract for the Sioux Falls Development Foundation. Selberg stated that Council Member Rich Merkouris attended the meeting and provided an update on the Homeless Task Force. B. Homeless Task Force: Monday, November 7, 2022 (Council Members: Merkouris (Chair), Selberg, and Soehl) Merkouris will provide an update at the November 22, 2022, Informational Meeting. He also stated that this was Homeless Awareness Week and noted there would be different events throughout the community to raise awareness about homelessness. 3. Councilor Remarks There were none. 4. Presentations A. October 2022 Monthly Financial Statements by Shawn Pritchett, Director of Finance Presentation: Approximately 15 minutes followed by discussion Pritchett began by talking about the Labor Force & Employment numbers. He stated employment is up 4.3% and labor force is up 3.6%, compared to this time last year. Statewide the unemployment rate is 1.8%; and the national rate is 3.3%. Building permit valuations overall are at $1.77B in building values which is about a 100%  increase over last year. Commercial, strip malls, hotels and restaurants are up the most at $259M over last year; apartments are at $ 267M over last year; office, institutional and educational are up $185M; and new residential is still down about $40M. New residential is making up for that through remodels and home additions, which is up $60M over last year. New housing permits are up 52% with the following breakouts: Single family is at 612, down from 782 last year; multi family is at 3,255, up from 1,595 from last year; and townhome/duplex is at 388, down from 418 from last year. Overall, units are at 4,255 which is almost 1,500 units from last year. Sales tax collections are up 12%, (8% inflation) with year to date up 13%. Entertainment tax collections are up to 12.5%, which is the strongest it has been in 3 months; we are at 17.9% for entertainment tax collections now. The state has not published their breakdown by industry so the industry taxable sales data is not available at this time. Lodging tax receipts are coming in very strong, up 14% from last year. Lodging BID tax receipts are up 8%. General fund revenues year to date are at 81% of the budget, ahead of last year’s 78%. These revenues are driven by sales tax revenues, which are coming in at a good pace. We have 72% of the budget expended, up from $17M total expenditures over last year. Inflation is at 7.7% for October, which appears to have peaked for now. The impact of inflation by industry: 7.7% on all items; 10.9% on food; 17.6% on energy; and 6.3% on all items less food and energy. In reviewing a chart that goes back to 1965, inflation is at the 3rd highest rate it has ever been, according to Pritchett. Areas being impacted by inflation include: fuel, chemicals and supplies, vehicles and equipment, utility and road construction, and wages. City part time wages were increased to become market competitive. City wide industries and businesses are experiencing wage pressures, which naturally has an impact on goods, services, and supplies. The impact of inflation on fuel was reviewed showing a steady upward cost in diesel fuel, which has an impact of $1.1M, and unleaded fuel has an impact of $0.06M. The total impact to the city budget does not reflect the costs associated with contractors in regards to labor, supplies and services. For supplies and chemicals, there was a quick review of the City’s water reclamation and treatment chemicals. The increased costs are: Water purification treatment chemicals up 24%; wastewater treatment chemicals up 21%; light poles - steel are up 40%; and water meters are up 19%. Inflation increases for vehicles and equipment: Police Patrol Crossover is at 25%; landfill equipment (compactors, dozers) is up 24%; and fire rescue equipment is up 34%. The largest impact is in delays, bidding and receiving, and requiring a one year lead time to order certain equipment and vehicles. The inflation impact on Roads and Infrastructure: Grading and paving products only is up a minimum of 20%; utility infrastructure supply is up a minimum of 70%. There is a $3M impact to the budget, but this does not reflect an impact to budget for contractor labor or fuel costs. Discussion followed regarding: food and grocery tax activity; impacts on local property bases with sales revenue changes; income taxes vs. taxes on food; the bidding process during this economy; the impact on project decisions; and delayed expenditures. B. 21-05 ASM Global Management Agreement by Ryan Lauseng, Internal Auditor Presentation: Approximately 5 minutes followed by discussion  Lauseng reviewed the audit conducted on the ASM Global Management Contract 21-05. He reviewed the background of ASM Global and detailed the entities that the the City of Sioux Falls owns. Lauseng reviewed the objective of the audit, the scope and the opporunity for improvement. There was no disucssion on this audit. C. 22-01 Golf Management Agreement by Ryan Lauseng, Internal Auditor Presentation: Approximately 5 minutes followed by discussion Lauseng provided an update on the audit of the Golf Management Agreement 22- 01. He covered the background, objectives, scope and what they found. There were three recommendations of which two were implemented by July 26, 2022. Another opportunity for improvement is to utilize electronic signatures when getting written approval, this was implemented by August 3, 2022. Discussion followed regarding: insurance coverage and liability; the audit process and timeline involved in conducting this type of audit; requirements for a new contract; and language updates. D. 22-02 Utility Billing Cash Handling by Emily Trujillo Rodriguez, Internal Auditor Presentation: Approximately 5 minutes followed by discussion Trujillo Rodriguez reviewed the Utility Billing Cash Handling audit 22-02. She reviewed the background, overview and what was found. There were five recommendations made with four of them being completed by the end of September, 2022; and one recommendation regarding approval process for retunds to be done by January 1, 2023. There were two opportunities for improvement, both of which were done by October 2, 2022. The conclusions were reviewed with no evidence of fraud, waste or abuse detercted within the specific scope of this audit. Discussion followed regarding: changing the requirements for signatures; and the process for handling waivers. 5. Public Comment Mike Curtis spoke about his involvement in the Homeless Task Force and recommended the Council Members place their belongings in one or two bags to have an idea of what it is like to be homeless. Sierra Broussard spoke about activity in the City regarding transients and the homeless population in Sioux Falls. 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 was cancelled. 7. Adjournment Council Chair Curt Soehl adjourned the meeting at 5:12 p.m. Tamara Jorgensen, MMC, Assistant City Clerk