Why City Council may not be ready to pass an aquatics bond

Simplified: Sioux Falls City Councilors on Wednesday spent nearly an hour discussing the specifics of a potential $77 million aquatics bond. The big takeaway? The city and council don't yet see eye-to-eye on the total bond amount or the definition of what a "recreation center" is.

Why it matters

• The city has been talking about the need to replace aging pools at Kuehn and Frank Olson Parks for several years. Those discussions culminated with a proposed $77 million bond unveiled by the city in April.
• Since then, the city has already spent $9 million to purchase the former Sanford Wellness Center on the west side of town – money that was intended to be part of the bond, but instead came from city reserves with the understanding that those funds would later be reimbursed when the council passed the bond.
• Now, though, some councilors are looking to put some solid budgetary constraints around these pool projects. Councilors Curt Soehl and Miranda Basye had proposed a resolution to keep the bond amount at no more than $68 million.
  • That resolution was ultimately withdrawn by Soehl after discussion during Tuesday's council meeting, in which he was reassured that the bond the city intends to present in the coming weeks will be able to be amended by councilors without delaying the entire project any further.

"These are important issues for us as a council to set some limits on what we can do and how much money we’re going to borrow and spend," Soehl said. "I want these pools done in the worst way, but I don't want to get to an all or nothing vote."

How did we get here?

It's been known for some time that the aging pools at Frank Olson and Kuehn Parks need replacing.

• In the fall of 2022, the city first publicly presented the idea to make one or both of these new pools an indoor recreation center – a way to fulfill the unmet demand for indoor recreation in the city.

Ultimately, those discussions resulted in plans to build a new $18 million outdoor pool at Kuehn Park, and, at Frank Olson Park, construct a $47 million, 80,000-square-foot indoor recreation facility including a pool, court space and an indoor walking trail.

The council was initially set to vote on this bond in the spring, before half of the councilors vacated their seats to new members.

• That vote was delayed until September when the council couldn't come to an agreement on how the pricing model for the new indoor recreation center would work.
• The vote was again delayed until mid-November, with city officials citing uncertainty around the presidential election as a reason to press pause.

Ok, so what's the hold up now?

Part of the concern is surrounding the $9 million the city has already spent to buy the former west-side Sanford Wellness Center – which will now be operated by the city.

That money came from the city's general reserves, but even if the bond reimburses the $9 million spent, it's unlikely that money will go back into the reserve fund, Finance Director Shawn Pritchett explained to councilors on Wednesday.

• Instead, the public works department is hoping to use the $9 million in the bond to help pay for already-delayed improvements to Minnesota Avenue, Director Mark Cotter told councilors.

"I don't think we can accomplish Minnesota Avenue without this additional $9 million dollars put into the sales and use fund," Cotter said, noting that the project has already been delayed when additional funds were needed to complete the Sixth Street Bridge.

But it's not typical to use a bond to finance road repairs, Soehl noted.

"Borrowing money for street repair – that's just not good public policy," he said. "That is just bad government."

Councilors also don't entirely agree on what should go into a recreation center.

• Councilors Jennifer Sigette and Rich Merkouris have previously expressed reservations about the city getting into the business of funding and maintaining exercise equipment.

The council has also historically disagreed about how much the city should subsidize public pools.

• Right now, the city is spending about $1.8 million per year to subsidize pools, and only a fraction of those costs are recouped by entrance fees.
  • This didn't come up in Wednesday's meeting, so it's unclear if that's been resolved by councilors outside of public meetings.

What happens next?

The council is set to hear an update on the bond specifics next week during the council informational meeting, with plans to vote on an official ordinance later this month.

If everything works out that the bond passes, it's likely still going to be another year or more before any construction begins on new pools, Pritchett said.