Sioux Falls grows reserves to record levels with strong 2022 financials
City Hall says it's not 'stock-piling money,' but preparing for lean years, big expenses
Sioux Falls City Hall collected about $20 million more than it spent last year, pushing the city’s reserves to record levels.
Mayor Paul TenHaken’s administration this week rolled out a rosy 2022 year-end financial report that showed revenue growth exceeding budgetary expenses in all major funding areas.
“We have a stable, well-run city that is financially strong and capable of moving forward in a successful way as we have for decades,” Sioux Falls Finance Director Shawn Pritchett said when presenting the yearly report to the City Council Tuesday afternoon at Carnegie Town Hall downtown.
Sales tax revenues were the primary driver of revenue growth in 2022. The two-percent municipal tax generated more than $25 million above the capital projects and operating expenses that the revenue source covered last year.
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Entertainment tax revenues — generated through events, restaurants and hotel stays — also came in $2 million beyond what the mayor and councilors anticipated spending on city-owned venues and management contracts in 2022.
Those year-end totals combine to drive up the city’s reserve fund to more than $82 million — equal to 37.8 percent of the city’s annual operating expenses.
That’s far above the 25 percent reserve level the city has traditionally targeted. And with the city projecting reserves to exceed that target by more than 10 percent through at least 2025, Councilor Greg Neitzert questioned whether residents are seeing the benefit of their tax dollars.
“At some point, it looks like we’re just stockpiling cash,” he said.