Informational Meeting

MINUTES Informational Meeting Tuesday, December 13, 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, Curt Soehl Council Members Absent: Alex Jensen, Pat Starr Council Chair Curt Soehl called the meeting to order at 4:00 p.m. Soehl reminded the Council Members and the audience that the Informational and Joint Council Meetings scheduled for Tuesday, December 27, 2022 have been canceled. 2. Committee/Commission Reports A. Accessible Housing Advisory Board: Wednesday, December 7, 2022 (Council Member Selberg) Council Member Marshall Selberg stated they received an update on THRIVE from Michelle Erpenbach and additional updates on the following: the Children's Inn projects, Lloyd Properties apartment projects, and the Minnehaha County/City of Sioux Falls housing position. 3. Councilor Remarks There were none. 4. Presentations A. November 2022 Monthly Financial Statements by Shawn Pritchett, Director of Finance Presentation: Approximately 10 minutes followed by discussion Pritchett informed the Council that this will be the last monthly update until March of next year as they will be working on the City audit. Pritchett opened the presentation by providing updates regarding employment. We are continuing to see a general increase in employment and labor force numbers. Employment numbers are up 3.2% over this time last year, with labor force up 2.7% over October, 2021. City MSA unemployment was at 1.8% in October, 2022, bringing the average rate for 2022 to 2.0%. This is the lowest annual average we’ve seen since 2000, where it was also at 2.0%. Statewide, the unemployment rate is at 2.1%, while nationally, unemployment is at 3.4%. Pritchett stated that the details were not updated in the November monthly financial report as data was released today. Inflation is at 7.1% for November, down from 7.7% in October, and down 2.0% from the peak we saw in June. On an industry level basis, energy inflation rates continue to lead at 13.1%, but have fallen 28.5% from the peak we saw in June of 41.6%, which was the largest increase since April 1980. Food cost inflation was at 10.6%, which is about 8.7% higher than what we were seeing prior to the start of the pandemic; and we haven’t seen rates above 10% since 1981. If you remove food and energy inflation, general inflation came in at 6.0% for November. Seeing some positive viewpoints in the market that we may have peaked in terms of inflation. Month over month, consumer prices rose 0.1% in November, and core prices up 0.2%. Pritchett provided details regarding building permit valuations as follows: through November, we had over $1.8B in building permit valuations. YTD permit valuations continue to track well ahead of last year by about $829.7M, an 82% increase over last year and a 175% increase over 2020. As in the past, the biggest driver has been other commercial (Strip Malls, Hotels, Restaurants), which is up $289.0M, but this is followed closely by apartments which is up $253.3M through November. Office, institutional, educational developments are up $149.4M. New Residential Values are experiencing a decrease of about $52.5M less than last year at this time or down about 18%. However, residential remodel and addition is up $63.2M or up about 94% as you see more shifting to making updates to existing homes. Sales tax collections month over month are up 10.2% over November 2021. We remain up 12.8% YTD. Our 12 month rolling average fell to 13.8% through November, 2022 (year end 2021 was 19.3%). Entertainment tax is significantly more variable from month to month. Entertainment tax collections showed an 11.2% increase over November, 2021. We remain up 14.3% YTD. The 12 month rolling average was 16.0% through November (compared to 17.9% last month and 28.9% as of December 2021). Pritchett reviewed the following industry taxable sales data: The industry sector data provides some interesting insights on what is happening within the local economy: Sectors like Large Department & General Merchandise Stores, Gas Stations, and Drinking Establishments continue to fair well and are all up compared to their totals in 2021; Eating Establishments (Restaurants) are up 9% compared to November, 2021 (October transactions); Lumber and Hardware were up 17% over November, 2021; Remoter Retailer Sales were up significantly January through November, 2022 over this same time frame last year, with the exception of a 10% decrease in June 2022 over June, 2021; and Business Services continue to be up each month this year over last year, with the exception of a 6% decrease in March 2022 over March, 2021. It will be important to watch these key industries, which are typically less driven by local consumer demand and generally more driven on the broader health of the national and international economies, and assess indications for potential drags on the local economy. Lodging tax revenue month over month is up 9.2% over November, 2021, but this comes off an 83.4% increase last November. Up 21.1% YTD. BID Tax revenue,  which follows the lodging tax to a great extent, is down -0.2% over November, 2021. Up 7.4% YTD. Overall revenues YTD - through November, we have received 102% of anticipated budget revenues compared to 97% in 2021 and 112% in 2020 (92% without CARES funds). We are on par and trending slightly ahead of prior years in this regard. This is driven in part by stronger sales tax receipts and a significant increase in license and permit revenue. Alcohol/Liquor licenses are up approximately $4.7M over this time last year since we had 19 new licenses, along with a $2.2M increase in Building Permit revenue through November. For General Fund Expenditures YTD, through November, we have expended 78% of the budget, compared to 80% last year (82% with LGA expenditures) and 79% the year before (81% with CARES expenditures). Overall, expenses are running about $17.9M more in 2022 vs. the first 11 months of 2021 and $30.5M more vs. 2020. Discussion followed regarding: the status of outstanding bonds; the DSU Discovery District fund distribution; and parking sale proceeds. B. Quality of Life Bond Update by Don Kearney, Director of Parks and Recreation; Mike Patten, Parks Planning and Projects Manager; and TBD, Pros Consulting Presentation: Approximately 20 minutes followed by discussion Kearney provided opening remarks regarding the community engagement process for the future of Sioux Falls aquatics. He stated we are looking at replacing aging facilities (exceeding 50 years of age); he reviewed the vision for the future noting we may not get everything done through the Quality of Life Bond; and he noted the plan to address growth of the community. Kearney reviewed the timeline for reviewing the needs in the community and talked about the bidding climate and availability of supplies. He stated we are at least six months away from knowing any final costs for the projects but, that several examples are available in this presentation to get a rough idea on what to expect. Kearney reviewed the project timeline for the last three months covering the information gathering process in September; the public engagement in October; the public feedback in November; and what the next steps are. Will Younger, Principal for PROs Consulting, reviewed the stakeholder engagement summary information including the survey responses by zip code and the major themes determined through the input from the public. The main feedback from the public included: overcrowding of current facilities; community desires both recreation and fitness water; shade at all the facilities was consistently noted; swimming lessons is the most desired program; Frank Olson and Kuehn Park had preference for a multi-generational recreation center with an aquatic component for replacement; and a new pool in the southern part of Sioux Falls. Mike Patten, Parks Planning and Projects Manager, covered the spatial diagram details which encompassed what was heard about and the site plans for Terrace Park, Laurel Oak Park, McKennan Park, Kuehn Park, and Frank Olson Park. Jackie Nelson, Recreation Manager for Parks and Recreation, spoke about potential programming opportunities. Visuals were provided showing the costs and details for: the Prairie Lakes Wellness Center in Watertown; SD; the Recreation  Center in Rexburg, ID; the Huether Family Aquatic Facility in Yankton, SD; and the Aquatic Center in Marshall, MN. Leon Younger, President of PROs Consulting, reviewed the alignment with the Park System Master Plan, with the following main points: replace aging aquatic facilities; renovate and update aquatic facilities to extend their useful life; adult fitness and wellness programs; year round programming; maintain the level of service with population growth; address the shortage of indoor recreation space. Younger also stated the following recommendations: prioritize indoor multi-generational recreation center with aquatics at Frank Olson or Kuehn Park, ideally both; follow Master Plan for McKennan Park with replacement of wading pool; add shade and upgraded concessions at Terrace and Laurel Oak parks. Kearney provided closing remarks regarding the Park Foundation Support, the 2023 Master Plan, and the timelines for 2023-2024 designs, and 2024-2026 construction. Discussion followed regarding: the timeline for the improvements; the need for shading in some of the parks needed now; whether or not some of the pools would be offline while building new pools; the indoor recreation facilities and what will the costs be for participants; the public/private partnerships of the facilities reviewed and the split between the donations; the life expectancy of existing and newer pools; access to the pools for all; the feedback and demographics involved in responding; how can the Council assist in moving this item forward; the location of newer communities; the transportation needs for individuals wanting to attend the facilities; title sponsorships; the demographics associated with the parks; the breakout of types of aqua pools (warm/cool); community centers; swimming lesson availability to all levels of financial ability; staffing at indoor and outdoor pools; population estimates for the city; and public feedback regarding a need for another pool on the eastside of the city. 5. Public Comment There was none. 6. Adjournment Council Chair Curt Soehl adjourned the meeting at 5:08 p.m. Tamara Jorgensen, MMC, Assistant City Clerk