19 thoughts on “The Exploding Debt of the City of Sioux Falls”
The last two mayors look like the last two presidents in terms of acceleration of debt load. What worries me as much as the total absolute dollars is the rate/bending of the curve up so steeply. I’m sure we’ll have apologists who mention things like low interest rates, good credit ratings etc – but the fact is all of this debt continues to add risk and commits our finite funds for years to come on things we can’t get out of. Everything comes at a price. I wish we’d slow down on the quality of life stuff using debt. Off the top of my head the flood control (levys) and Lewis and Clark are the only two items that were more ‘necessary’ items than optionals. The rest are nice toys. Nice, fun, but toys. Look at how much we’ve committed to debt service the next handful of years. And remember there are things we cannot control that may take major funding, like sewer projects we don’t expect, loss of federal funding for the bus system (which will blow a gaping hole in our current budget). The fact is we continue to increase debt at a rate greater than our income is increasing, and I don’t know when it will end. And its largely for things that will burden us with ongoing operational costs and will further stress our budgets for years to come. I’m not against the quality of life stuff. I love the bike trails. I just wish it were things we paid for and were free/very low cost so everyone could use them. Things like event centers, indoor pools, indoor tennis, hockey – all of these things some of us (myself included) can afford, but we could do that without the city getting involved in it. And its not like we can sell any of this stuff. We’re stuck with these items, no matter how good or bad they go, or how much of a drag they put on our city budget. Many for decades to come. If the economy turns back down, sales tax receipts fall off, or anything goes wrong, we’re going to be in a pinch, and its going to mean tax increases or fee increases, which will be sold as necessary for essential services, but make no mistake, its going to be a tax increase because other city funds were already promised to pay for debt on/operations of event centers etc.
As I was making the graphic I said to myself, Munson and Huether have launched a freaking rocket ship!
The real purpose of the debt is who handles the bonds and not so much who buys them. The coming crash in the bond market will leave only the bond seller as the winner. When a bond seller can sell $100 million in bonds he may make 10% or more or at least $10 million for his pocket.
The ones hurt through this hidden penalty are the citizens and the bondholders. Just ask Reno and other cities where the politicians hooked up with bond sellers to fleece their cities causing the taxpayers to now have no money to keep their lights on. The bondholders are screwed out of their contracted interest and principle payments after the likely bankruptcies.
SubPrime Mike and friends are doing this to fleece us.
On the horizon………..
Another Quality of Life Bond………
Over $20 million dollars for a “swimming pool”!!
Ultimately, this decision will be made by the Council.
They have the “power” to say “NO”!!!!!
BUT, will they??!!!
Nope, they will probably just climb aboard the rocket ship. Up, Up, and Away . . . .
16 years ago (Munson), the city adopted Home Rule Charter. Competitive bid process ended for city projects. We’ve been paying inflated prices. Contracts are inferior work. Money is filtered into the hands of white collar criminals. Wait for the city to go bankrupt. Huether will go to jail for the mandatory 13 years (public funds fraud). The recovery mayor must offer amnesty to contractors who testify against him. City associates/retirees who supported Huether will be 2nd in line looking for handouts at freeway exits. It’s coming. Citizens are somewhat sheltered. They can’t raise taxes or we’ll move. It would be time before we lose equity in our homes. Buy online to escape city sales taxes. Team with neighbors for a weekly trip to Worthington MN where there’s no tax on food or clothing. Heil Huether.
What’s sad is Huether doesn’t even realize he’s the fall guy for Munson and developers.
But…but…but…the ECONOMIC IMPACT graph surely also looks like a rocket blasting off….doesn’t it?
This is the result of bad planning for a long time, but it’s not a problem unique to Sioux Falls.
Consider this explanation from Strong Towns. It’s part of a longer series (a great read), but look at the graph about halfway through the article. This is happening everywhere in our country, and it’s going to have to be fixed one way or another. I can guarantee you it won’t be painless.
It’s easy for me to understand people getting duped into excessive debt; but much more frustrating to be a part of a collective body, or in the USA a group of collective bodies, whose elected officials rush into debt that I don’t choose to participate in. I’m not a demise-of-civilization nut, but I don’t want to be here for the fallout. Add up the individual debt spiraling out of control, and the multiple government entity debt spiraling out of control, and somebody — I don’t know who but I’m worried it’s me because I’m a little guy — is going to take it in the shorts.
Sometimes I wish I could take it in the shorts, the front of my shorts of course 🙂
This type of graphic would upset most citizens to the point they would want action to be taken. I’d advise anyone who wishes to run against Mayor Mike to make this a key point of his or her campaign. It is time to get the spending under control… nobody can tell me we are better off now than we were a decade ago when debt per resident was about one third of where it is today.
That said, one thing I find odd is that it shows our population has dropped slightly in the past three years. Looking around at the number of new homes and apartment complexes being built I find that hard to believe. If it is true, and is even more reason for the administration to be concerned with these numbers.
Craig,
We will be better off because we will have a new event center, duh!
Craig raises a good point, the estimated population of the city may be down because of all the building being encouraged outside of the town. We gain no taxing authority from the buildings on the other side of town lines. For a long time the city government and chamber have used several metrics to estimate the actual size of the town population. Our density per dwelling is very low in this town.
We should add an urban growth boundary a la Portland.
I found the population decrease a bit strange also.
Yeah, that’s confusing, and probably not true. Where did you get your 2012 population estimate? I can’t find one on the city website or the census website either.
It’s the number that is thrown around since the 2010 census. Even if I am off by a couple of thousand, it still doesn’t change the rocket ship debt machine.
[…] City debt has jumped almost $125 million in the past 4 years (sits at about $400 million), the council has to approve all expenditures the mayor’s office proposes (to put it in […]
The last two mayors look like the last two presidents in terms of acceleration of debt load. What worries me as much as the total absolute dollars is the rate/bending of the curve up so steeply. I’m sure we’ll have apologists who mention things like low interest rates, good credit ratings etc – but the fact is all of this debt continues to add risk and commits our finite funds for years to come on things we can’t get out of. Everything comes at a price. I wish we’d slow down on the quality of life stuff using debt. Off the top of my head the flood control (levys) and Lewis and Clark are the only two items that were more ‘necessary’ items than optionals. The rest are nice toys. Nice, fun, but toys. Look at how much we’ve committed to debt service the next handful of years. And remember there are things we cannot control that may take major funding, like sewer projects we don’t expect, loss of federal funding for the bus system (which will blow a gaping hole in our current budget). The fact is we continue to increase debt at a rate greater than our income is increasing, and I don’t know when it will end. And its largely for things that will burden us with ongoing operational costs and will further stress our budgets for years to come. I’m not against the quality of life stuff. I love the bike trails. I just wish it were things we paid for and were free/very low cost so everyone could use them. Things like event centers, indoor pools, indoor tennis, hockey – all of these things some of us (myself included) can afford, but we could do that without the city getting involved in it. And its not like we can sell any of this stuff. We’re stuck with these items, no matter how good or bad they go, or how much of a drag they put on our city budget. Many for decades to come. If the economy turns back down, sales tax receipts fall off, or anything goes wrong, we’re going to be in a pinch, and its going to mean tax increases or fee increases, which will be sold as necessary for essential services, but make no mistake, its going to be a tax increase because other city funds were already promised to pay for debt on/operations of event centers etc.
As I was making the graphic I said to myself, Munson and Huether have launched a freaking rocket ship!
The real purpose of the debt is who handles the bonds and not so much who buys them. The coming crash in the bond market will leave only the bond seller as the winner. When a bond seller can sell $100 million in bonds he may make 10% or more or at least $10 million for his pocket.
The ones hurt through this hidden penalty are the citizens and the bondholders. Just ask Reno and other cities where the politicians hooked up with bond sellers to fleece their cities causing the taxpayers to now have no money to keep their lights on. The bondholders are screwed out of their contracted interest and principle payments after the likely bankruptcies.
SubPrime Mike and friends are doing this to fleece us.
On the horizon………..
Another Quality of Life Bond………
Over $20 million dollars for a “swimming pool”!!
Ultimately, this decision will be made by the Council.
They have the “power” to say “NO”!!!!!
BUT, will they??!!!
Nope, they will probably just climb aboard the rocket ship. Up, Up, and Away . . . .
16 years ago (Munson), the city adopted Home Rule Charter. Competitive bid process ended for city projects. We’ve been paying inflated prices. Contracts are inferior work. Money is filtered into the hands of white collar criminals. Wait for the city to go bankrupt. Huether will go to jail for the mandatory 13 years (public funds fraud). The recovery mayor must offer amnesty to contractors who testify against him. City associates/retirees who supported Huether will be 2nd in line looking for handouts at freeway exits. It’s coming. Citizens are somewhat sheltered. They can’t raise taxes or we’ll move. It would be time before we lose equity in our homes. Buy online to escape city sales taxes. Team with neighbors for a weekly trip to Worthington MN where there’s no tax on food or clothing. Heil Huether.
What’s sad is Huether doesn’t even realize he’s the fall guy for Munson and developers.
But…but…but…the ECONOMIC IMPACT graph surely also looks like a rocket blasting off….doesn’t it?
This is the result of bad planning for a long time, but it’s not a problem unique to Sioux Falls.
Consider this explanation from Strong Towns. It’s part of a longer series (a great read), but look at the graph about halfway through the article. This is happening everywhere in our country, and it’s going to have to be fixed one way or another. I can guarantee you it won’t be painless.
It’s easy for me to understand people getting duped into excessive debt; but much more frustrating to be a part of a collective body, or in the USA a group of collective bodies, whose elected officials rush into debt that I don’t choose to participate in. I’m not a demise-of-civilization nut, but I don’t want to be here for the fallout. Add up the individual debt spiraling out of control, and the multiple government entity debt spiraling out of control, and somebody — I don’t know who but I’m worried it’s me because I’m a little guy — is going to take it in the shorts.
Sometimes I wish I could take it in the shorts, the front of my shorts of course 🙂
This type of graphic would upset most citizens to the point they would want action to be taken. I’d advise anyone who wishes to run against Mayor Mike to make this a key point of his or her campaign. It is time to get the spending under control… nobody can tell me we are better off now than we were a decade ago when debt per resident was about one third of where it is today.
That said, one thing I find odd is that it shows our population has dropped slightly in the past three years. Looking around at the number of new homes and apartment complexes being built I find that hard to believe. If it is true, and is even more reason for the administration to be concerned with these numbers.
Craig,
We will be better off because we will have a new event center, duh!
Craig raises a good point, the estimated population of the city may be down because of all the building being encouraged outside of the town. We gain no taxing authority from the buildings on the other side of town lines. For a long time the city government and chamber have used several metrics to estimate the actual size of the town population. Our density per dwelling is very low in this town.
We should add an urban growth boundary a la Portland.
I found the population decrease a bit strange also.
Yeah, that’s confusing, and probably not true. Where did you get your 2012 population estimate? I can’t find one on the city website or the census website either.
It’s the number that is thrown around since the 2010 census. Even if I am off by a couple of thousand, it still doesn’t change the rocket ship debt machine.
[…] City debt has jumped almost $125 million in the past 4 years (sits at about $400 million), the council has to approve all expenditures the mayor’s office proposes (to put it in […]