MMM? Master of Puppets?
From my email box;
As of December 31, 2012, City debt was $398,868,664. The most significant debt-related transaction since September was the final bond sale for the Events Center Project which occurred in October. At that time, the City raised the remaining $12.5 million needed to fund the Events Center.
Tracy D. Turbak, CPA – Finance Director – City of Sioux Falls, SD
In the Mayor’s State of the city address he talked about how our city was in great financial shape and that we have $45 million in reserves. I am no accountant, but I would think the $400,000 million dollar debt wouldn’t classify us being in ‘great financial shape.’
Also if you FF to almost the end of the informational you will see an interesting exchange between Jamison and Tracy Turbak. Jamison asks Tracy why the mayor has been holding press conferences without including the council (in reference to the Walmart announcement and the City Survey). Turbak told Greg that he wouldn’t answer the question because he didn’t think the question was ‘relevant’. Turbak didn’t answer the question because he knows the real answer, “I do what my boss tells me to do.” Jamison never did get an answer. A city official told me yesterday this issue is coming to a boiling point and something is gonna happen very soon. The rest of the council actually agree with Jamison on this issue. Prepare to see a battle royal between the council and mayor on this one. I hope the council holds it’s own press conference calling the mayor out on this issue.
Debt always has to be considered in proportion to the revenue stream that comes in. $400MM in mostly long-term debt on a revenue stream of about $350MM isn’t that bad. Per the 2012 budget, the city dedicated about 4.5% of its budget to debt service. That’s likely way, way below the percentage that most of our residents allocate to debt service. Most families with mortgages aren’t going to get anywhere near that ratio.
Also, for lots of major long-term capital projects, debt is a better way to go (assuming reasonable financing costs) since it puts the cost on those who will be around in the future to enjoy the benefit rather than trying to pile up reserves from people who have have moved, died, etc.
Not a defense of everything the city has borrowed for, mind you. There’s always room to question that. But as a taxpayer, I don’t feel like the city is borrowing at a aggregate level that I would consider irresponsible.
I’m with you a little on this. I do have a couple of concerns though. The debt has climbed $310 Million since Hanson left office. That is a big jump in just a few years, especially if you compare it to how much our population and retail has grown in that same amount of time. While the debt may not be ‘bad’ I certainly question where the ‘debt’ is coming from. $70 million of it was for Lewis & Clark (Which I still think we did not need) and I believe another $40 million was for sewer upgrades. Both of which get paid off thru our enterprise funds. So add that to Hanson’s debt of $90 million and subtract that from the current debt, you come up with $200 million half of which goes towards the EC. I just get a little concerned when half of our debt is due to ‘entertainment wants’
Futhermore, let me put that in perspective. Do you think the average resident in SF spends HALF of their income on Recreation and Entertainment? Not even close. I think most people budget about 10% for that. I am probably at around 15%.
If we pulled the last of the authorized bonding to pay for the EC, where is the money hiding in the budget?
There probably have made a few progress payments but the EC is maybe 25% complete with a year of so to go? What has SubPrime spent it on? Have they turned over all the funds to Mortenson already?
$400,000 million? Wow, is the city really that broke or was it a typo? LOL 🙂
Any kind of debt is not necessary and ridiculous; no one can say that whatever is in great financial shape with any kind of debts no matter which ventures Sioux Falls has or will come up with. I hope the city officials (present and future) have something up their sleeves to come up with long term solutions.
I should have said ‘Balance Sheet’ instead of budget.
BTW, who is the seller of the bonds? A local or national sales office? What is the sales commission?
To put this in perspective, our local debt is around $2,000 per person. Your share of the national debt is $54,000. Which is easier to manage?
Why do we need a city debt when we supposed to be doing so well?
Events Center was supposed to cost 99 mil but the city is suddenly 400 mil in debt. Munson left with an 80 mil debt. There’s at least a new 200 mil. How come? Citizens should know bond money goes straight to Mortensen without council revue. It’s the fox watching the hen house. I have a feeling our credit card mayor is diverting other funds so that the 99 mil EC will cost the 300 mil going rate. He’ll make minimum payments until he can’t then put the city into bankruptcy.
Puppet strings are funny. Maybe find a picture of the mayor and council and photoshop strings for the 5 councilors who support unconstitutional city government. Maybe stretch Huethers head to symbolize his ego and place a pharoah hat on our dictators head.
http://www.siouxfalls.org/~/media/Documents/finance/AnnualCAFR/2012-cafr.pdf
On page 124 of the 2012 SF Financial Report a table show the debt in 2009, the last full year of Munsen’s term, to be $272M. 2001, Hansen last full year, the debt was almost $119M. I suppose one can find the actual debt service somewhere in the budget, but it appears most of the big jump from 2011 to 2012 ($279M to $396M) is from the events center.
Detroit is the first city to go under!! Will Sioux Falls fall? when inflation is so bad people will be paying 5-6 dollars for gas. Businesses close their doors. The mayor’s is racking up debt. bad news.
My question is why the events center only supports seating for 12,000? How in the world can the events center pay the 300 million back? Not possible.