CITY OF SIOUX FALLS PROPOSES 20% RATE INCREASES TO FUND WATER AND WATER RECLAMATION

June 7, 2023 - the City of Sioux Falls is asking the People of the City to amend the ordinances of the City to raise user fees related to the Water and Water Reclamation to help pay for, and administrate the Enterprise Funds that provide back to the people Water and Sewer Services.

Within a fast, growing, and expanding City, of which has a population which is fast pushing nearly 215,000 residents, the Water and Water Reclamation Enterprise funds have a core customer base of 59,856 paid customers, each of whom pay an average of $1,285.79 per annual fiscal year. That means, per monthly billing statement, the average customer pays $107.15 dollars.

Of course, that is an 'average paid customer" which includes both residential service, and commercial service, still that is a pretty hefty pay for play service paid by the customers of the City of Sioux Falls.

Each year, the City of Sioux Falls, led by the Mayor, of whom administrates, and manages the Departments, Offices, Agencies of the City, maintaining the fact, that the government is following, and adhering to the ordinances adopted by the people, must present to the City Council an annual budget of revenues, expenses, and noting any such bonds and bond payments to be paid.

The Water and Water Reclamation Programs generate per year, roughly $76,960,000 million dollars a year, with a collective list of expenses that include, personal services, casualty losses, insurance, professional services, rents, repairs, maintenance, supplies, materials, other utilities that amount to an annual total of $76,960,000 in total expenses.

So, for every dollar that comes in, the City is expensing off 100% of all revenue dollars in the form of expenses.

One of the key expenses that should be taken a closer look at, would be the "Operating Income (Loss) of which amounts to roughly $26,190,000 million dollars worth of dollars, of which the city council should audit, and take a more investigative approach to managing, to determine whether or the savings could be saved under that line item.

 

In any given, or stated year, on January 1st, the Water and Water Reclamation Funds begin the year with a grand total of $80,000,000 million worth of funds on hand, in the combination of cash, cash equivalents, special assessments, receivables, monies due from other governments, etc - while it also holds assets of equitable value such as land, buildings, improvements to buildings, machines, equipment, infrastructure, and other intangibles with a total value of $612,000,000 million.

And while the two funds hold a low value in terms of debt, as compared to total assets, they still hold roughly $22,725,572 dollars in bonds and notes that are payable in future years moving forward, while it has non-current liabilities that total another $99,109,085 million dollars, most likely due to the S.R.F funds and other Liabilities owed to the State Treasury being used to pay for, and expand the Water and Water Reclamation Infrastructure and other Capital Projects over the ensuing years ahead.

A basic understanding of the Profit, and Loss Balance Sheet shows that "We the People" of the City of Sioux Falls have total Assets of $692,896,000, with total liabilities of $130,885,000 dollars, and by the time you adjust down for deferred outflows, and inflows, you have a total Net Position of $556,983,000 million dollars, making the Water and Water Reclamation Enterprise funds two of the most profitable, and prosperous enterprise funds held by "We the People of the City of Sioux Falls.

While, the Public Works Department downplays the "Rate Increases" as marginally, low, managed increases over time, they are in fact promoting nearly a 20% rate increase over the subsequent years ahead which means the 'users' will be eventually pay an additional $260 dollars per year, or roughly $1,545.79 a year or $128.82 per month, with the business community paying the largest amount of the revenues, based on usage.

A 20% Rate Increase upon the "residents" of the City of Sioux Falls does not simply harm the residents, you are going to see huge inflationary rate increase in the goods and services you pay for throughout the city, due to the fact, that businesses, pass on those 'increases' to their customers, as the cost of doing business, so what really is the increased cost to the 'taxpayer'...

You can make the argument, as the "City" grows in population, yes, 'we' we need to continue to invest in land acquisition, infrastructure, and capital projects in order to maintain, and improve the two systems, but a basic look at the # of paid customers of the two funds present to us, that as the population in 2012 was 162,300 of which at the time, we had 98,183 paid users.

In the year 2021 - our population was 202,600 residents, and we had a total of 118,172 total paid customers of the water and water reclamation funds.

Where the population grew by a little more than 24% over a ten year period, 'we' also added an additional 20% more 'users' during that same period, of which, amounts to roughly 2,000 new customers, all of whom generate new revenues of $2,700,000 million dollars each year.

A basic understanding of the new paid customers 'we' will see over the next five(5) years, of which 'we' plan ahead under our Mayor's Capital Program 2024 to  2029 - those new paid customers would, at the current rate, generate $12,858,000 in new revenues, above what we currently are generating today, from the current number of users.

If, today, our current 59,856 users are contributing to the City of Sioux Falls, a total revenue stream of $76,962,246 million dollars, by the year 2029 - with the influx of new residents, we would have a total customer base of 71,856, of whom at the current 'rate' would generate $92,391,726 million dollars per year, in the year 2029. That amounts to net gain of $15,429,480 dollars per year over a five year capital program, of which the current 2022-24 City Council will plan for, for the years ahead.

With the proposed 'rate increase', the 20% Rate Increase, would amount to new revenues totaling $111,017,520 million dollars, an increase from today's current customer base of $76,962,246 dollars collected in the year 2021.

If, our projections are correct, at the current rate, and with the addition of new paid customers of 12,000, giving us a total core customer base of 71,856 by the year 2029, 'we' would generate at the $1,285.79 current rate, a total $97,534,886 dollars.

An overview of both the current, and future "estimated" revenues for our Water and Water Reclamation Funds are:
 

Year.........Current Rate/Customer........# of Customers.......Total Annual Revenues.....New Projections
2021.........$1,285.79.....................................59,856......................$76,926,246.24...................x
2022..........$1,285.79....................................61,856......................$79,533,826.24...................x
2023..........$1,285.79....................................63,856......................$82,105,406.24...................x
2024..........$1,285.79....................................65,856......................$84,676,986.24...................$101,747,520
2025...........1,285.79.....................................67,856......................$87,248,566.24...................$104,837,520
2026...........1,285.79.....................................69,856......................$89,820,146.24...................$107,927,520
2027............1,285.79....................................71,856......................$92,391,726.24...................$111,017,520
2028............1,285.79....................................73,856......................$94,863,306.24...................$114,107,520
2029............1,285.79....................................75,856......................$97,534,886.24...................$117,197,520