SIOUX FALLS, S.D. (KELO) — Managing population growth and combating inflation are two top priorities Sioux Falls Mayor Paul TenHaken will focus on during a budget address Thursday afternoon.    

TenHaken will present his annual budget address – a $646 million budget for the fiscal year 2023 – in front of city council members and the public at 3 p.m. in Carnegie Town Hall. You can watch the roughly 40-minute address in the video player above.

Along with the 2023 budget, TenHaken will highlight his office’s five-year capital improvement plan for projects in the near future for Sioux Falls. TenHaken released the 170-page capital improvement plan with a $931 million price tag earlier this summer.

The city council will hold budget hearings on the 2023 budget and the proposed capital program in August. Like the 2023 budget, the top priority listed for the 2023-2027 plan is “replacement, rehabilitation and expansion of the street and utility infrastructure.”

In his speech Thursday, TenHaken thanked city staff and city council members for help on building the budget. He highlighted the population growth in Sioux Falls, including more than 7,000 people moving to the city in the past year and up 15,000 since 2018.

He described the budget as “more than numbers and more about community investments.” He said the city needs to prioritize kids and families with its budget. Remaining fiscally conservative, TenHaken said the city is projecting only 4% sales tax growth in 2023. So far in 2022, sales tax growth is up 14% compared to 2021.

In highlighting downtown, TenHaken said 2023 will have investment for the 6th Street bridge which will be called the “Unity Bridge.” He noted how the bridge in place right now is 47 years old and the new 6th Street bridge will complement development at Cherapa Place II and the Sioux Steel District.

A preview of the new 6th Street bridge. Rendering from the city of Sioux Falls.

“The skyline is literally changing daily in downtown Sioux Falls,” TenHaken said.

On housing, TenHaken said land will be available for future growth in Sioux Falls. He said the city will be offering affordable housing TIFs (tax increment financing) options to help address that need in the city.

TenHaken highlighted the new 30 full-time city employees included in the 2023 budget. One of those new employees will be focused on the arts community in the city and TenHaken said he’ll remain an advocate for the arts in the community.

On public infrastructure upgrades, TenHaken said upgrades are planned at the landfill and a western Sioux Falls sewer treatment plant. He said the city will open a new water collector well this fall to give the city an additional 9.4 gallons of water per day. The city currently averages about 16 million gallons of water per day in the winter and peaks of 46 million gallons per day of water in the summer.

TenHaken highlighted how construction will start on South Veterans Parkway in 2023 with the first strech between Western Avenue and Cliff Avenue will be built.

He spoke about how important city amenities like pools and parks are for kids in the city. He highlighted the new splash park going up at Hayword Park in northwestern Sioux Falls as will as advances to the city’s bike trail and a new skate park at Nelson Park.

“This budget shows the determination to make Sioux Falls a better place to live and work,” TenHaken said in closing. “We must continue our One Sioux Falls approach.”

Previewing the speech

Earlier this week, TenHaken highlighted some of the factors he considered priorities for the 2023 budget including: the city hiring 30 new full-time employees, giving wage increases and adjustments for city staff, growing and maintaining city streets and quality of life benefits like a new skate park and improvements to city pools and parks. 

“It’s a really well-rounded budget that really focuses on how quickly we’re growing as a community,” TenHaken told KELOLAND News on Tuesday

TenHaken said adding 30 new positions in a single year is the most the city has ever done. He said the city will be adding its own concrete crew for the street department as well as two positions to help with construction permits, a new librarian to focus on early literacy programs, four to five new police officers and extra workers for the wastewater and water treatment plants.   

When TenHaken was first elected mayor in 2018, the city had a population of 187,200. That number has increased by more than 15,000 in three years to 202,600 in 2021. 

“We’re growing at a rate we’ve never seen before,” TenHaken said.

Taxes are the largest source of revenue for the overall budget and the general fund budget.

TenHaken said the city will have a 12% increase in sales tax revenue by the end of this year, which is more than expected.

The top three sources of revenue for the overall proposed budget are: $296.8 million in taxes, $167.9 million in charges for goods and services and $59.6 million in investments and interest earnings.

What are the street projects? 

A large portion of the 2023 budget and the five-year capital plan focuses on growing city streets.

For 2023, the highway and street portion is proposed at $32.7 million or 15% of the general fund budget.

Veterans Parkway, which will eventually link Interstate 29 near the Tea exit to Interstate 90 in northeastern Sioux Falls, will start construction in 2023. The segment of Cliff Avenue to Western Avenue will be the first to be completed for the South Veterans Parkway project.     

Benson Road in northeastern Sioux Falls is also getting reworked. A new water main is being installed this summer ahead of a diverging diamond interchange being constructed in 2023. 

In downtown Sioux Falls, the current 6th Street bridge will be torn down and a new bridge will be built to connect the East Bank and West Bank of the Big Sioux River. 

Streets that will be extended include 57th Street from Veterans Parkway to Six Mile Road, 49th Street from West to Grange Avenue, Marion Road from County Road 130 to Opportunity Avenue.  

In addition to the street projects, water transmission improvements are happening for Southeastern Avenue to Bahnson Avenue in between 41st Street and 49th Street. 

A $215 million expansion is coming to the Sioux Falls Regional Water Reclamation Plant located near North 60th Street and Sycamore Avenue alongside the Big Sioux River in northeastern Sioux Falls. Funding for the project came from $180 million in state revolving funds and $41.9 million from the American Rescue Plan Act.  

Water capacity at the wastewater plant will increase 50% from 21 million gallons per day to 30 million gallons per day with a max capacity near 57 million up from 35 million. The plant serves the cities of Sioux Falls, Brandon, Tea and Renner. 

What is missing? Child care continues to be an issue 

TenHaken told KELOLAND News on Tuesday child care continues to be the top issue hampering the city’s workforce. 

He admitted the 2023 city budget doesn’t have “direct dollars” to help the child care issues in Sioux Falls. He said the city is working to form a task force to propose solutions. 

“We’ve studied this issue to death,” TenHaken said. “We know it’s a need. What I need to know is what are the solutions.” 

TenHaken asked if the child care industry needs a money solution, a flexibility solution, if more buildings are needed or if more staffing for existing day care centers is needed. 

“I need to know where we can help,” TenHaken said. “Before we just throw money at something, I need to know what we need to throw money at to fix the problem.”    

TenHaken said the city is partnering on a child care collaborative initiative to hire a position focused on implementing solutions. Along with the city, the Sioux Falls Chamber of Commerce, the Development Foundation, the United Way and Sioux Falls Thrive are working on the issue. 

The city of Sioux Falls is not alone in dealing with child care issues.

The U.S . Department of Health and Human Services says if a family makes $60,000 per year, affordable child care would cost $4,200 a year per child. A local study found parents were already paying more than twice that amount two years ago.

A local business owner told KELOLAND News the price for child care for two newborns would be $500 a week.

Experts in the child care industry have said the $100 million in one-time federal aid would not help solve long-term issues hampering the industry. One child care lobbyist said the only way child care providers can make profits is by caring for 3-5-year–olds only because you can have a higher ratio per employee. 

Bike trail improvement, skate park and pool designs 

TenHaken highlighted how Sioux Falls was able to open all of its city pools this year while many other communities struggled to get enough lifeguards to staff all their pools.

“That’s due to the fact because the council, last year, approved a wage increase to get those lifeguards in place, those pool people in place,” TenHaken said.   

Three Sioux Falls pools – McKennan Park, Frank Olson and Kuehn Park will start the process of reconstruction and renovation of the existing pools. The capital program is looking to use $1.9 million in sales tax funding in 2023 and $500,000 in 2024. 

McKennan Park pool was constructed in 1971, Frank Olson pool in 1972 and Kuehn Park pool in 1981. 

“These pools are at or near the end of their useful life and serve as key recreational elements,” the report reads. 

The Sioux Falls Skate Park will build a new skate park at Nelson Park, while construction for a new tennis complex has started at Tomar Park.

The Sioux Falls bike trail will be extended from Lien Park to Bahnson Avenue in east Sioux Falls. 

Other improvements include updates to the Elmwood Golf Course Clubhouse and improvements at the Great Plains Zoo.