HomeMy WebLinkAbout2015_07_21 CC PKT - RevisedCity Council
City of Brookings
Meeting Agenda
Brookings City Council
Brookings City & County
Government Center
520 3rd St., Suite 230
Brookings, SD 57006
Phone: (605) 692-6281
Fax: (605) 692-6907
Community Room5:00 PMTuesday, July 21, 2015
Study Session
The City of Brookings is committed to providing a high quality of life for its citizens and fostering a diverse
economic base through innovative thinking, strategic planning, and proactive, fiscally responsible municipal
management.
5:00 PM STUDY SESSION
1. Call to Order / Pledge of Allegiance.
2. Record of Council Attendance.
3.ID 2015-0491 The City Council to discuss potential new Visioning Statement.
- Council Questions / Discussion
- Item to return to Council for consideration or adoption at later date
- Estimated Time: 30 minutes
4.ID 2015-0490 Budget Workshop #4.
Page 1 City of Brookings
July 21, 2015City Council Meeting Agenda
City Manager's Budget Message
2016 Proposed Budget Summary
2016 Proposed Detailed Budget - 7.15.2014
Estimated Cash Balance 12/31/2015, General Fund
Estimated Cash Balances 2013-2016, All Funds
5-Year Capital Improvement Plan
Debt Service Amortization Schedule
75% Second Penny Cash Projection Worksheet
G&E Policy - Subsidy Guidelines
SC - VenuWorks Agreement - July 2006
SC - Agreement Addendum for contract extension - April 2011
SC - Business Plan 2016
SC - Ordinance 24-06 - est. the SC Advisory Committee
SC - 2014 Audit of Swiftel Center
SC - Economic and Fiscal Impacts; Consultant Report
SC - Detailed Budget
Attachments:
- Council Questions / Discussion
- Item to return to Council for consideration or adoption at later date
- Estimated Time: 120 minutes
5. City Council member introduction of topics for future discussion.
Any Council Member may request discussion of any issue at a future meeting only.
Items cannot be added for action at this meeting. A motion and second is required
stating the issue, requested outcome, and time. A majority vote is required.
6. Adjourn.
Brookings City Council:
Tim Reed, Mayor, Keith Corbett, Deputy Mayor & Council Member
Council Members Patty Bacon, Dan Hansen, Scott Meyer, Ope Niemeyer, Jael Thorpe
Council Staff:
Jeffrey W. Weldon, City Manager Steven Britzman, City Attorney Shari Thornes, City Clerk
View the City Council Meeting Live on the City Government Access Channel 9.
Rebroadcast Schedule: Wednesday 1:00pm/Thursday 7:00pm/Friday 9:00pm/Saturday 1:00pm
The complete City Council agenda packet is available on the city website: www.cityofbrookings.org
Assisted Listening Systems (ALS) are available upon request. Please contact Shari Thornes, Brookings City
Clerk, at (605)692-6281 or sthornes@cityofbrookings.org. If you require additional assistance, alternative
formats, and/or accessible locations consistent with the Americans with Disabilities Act, please contact Shari
Thornes, City ADA Coordinator, at (605)692-6281 at least three working days prior to the meeting.
Engage Brookings is an online tool where citizens can engage, communicate and collaborate with community
decision makers and other residents. Where these ideas overlap is the future of Brookings.
www.engagebrookings.org
Page 2 City of Brookings
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 2015-0491,Version:1
The City Council to discuss potential new Visioning Statement.
Summary:
Proposed New Vision Statement:
“The people of Brookings are its greatest asset, who through dedication and generosity, create our
future. The visitors and residents experience an inclusive, connected community that is diverse,
fuels the creative class, embraces sustainability and enjoys a complete lifestyle. Bring your dreams.”
Council Member Thorpe’s proposed amendment:
"We are an inclusive, diverse, connected community that fuels the creative class, embraces
sustainability and pursues a complete lifestyle. We are focused on dedication, generosity and
authenticity. Bring your dreams."
ADDENDUM - posted 7/21/2015
"We are an inclusive, diverse, connected community that fuels the creative class, embraces
sustainability and pursues a complete lifestyle. We are committed to building a bright future through
dedication, generosity and authenticity. Bring your dreams."
3 Guiding Principles from Mayor Reed:
1) Evolving economic growth and community strategy.
2) Active civic engagement
3) Distinctive community asset
City of Brookings Printed on 7/21/2015Page 1 of 1
powered by Legistar™
City of Brookings
Staff Report
Brookings City & County
Government Center, 520
Third Street
Brookings, SD 57006
(605) 692-6281 phone
(605) 692-6907 fax
File #:ID 2015-0490,Version:1
Budget Workshop #4.
Summary:
This workshop is a continuation of the City Council deliberations of the proposed 2016 City of
Brookings budget from Budget Workshop #3 which was held on July 7, 2015.
Background:
Much of the same information from the previous packet is included as well as new information
submitted by staff, some of which was requested by the City Council at that meeting.
The first attached document is the 2016 Budget Message which is the City Manager’s official
transmittal of the budget recommendation. It is in narrative form and represents and effort to provide
a written description of the spreadsheets that comprise the actual budget document. It is intended to
provide some policy insights, justifications, and further explanations of the budget as a policy
document. It is also an aid to better understanding the budget.
With regard to the actual budget document, the most significant attachment is perhaps the
departmental summary. This is the document staff described department-by-department at the last
meeting. It contains categorical summaries of each department. This is followed by an expanded
version of the same information to include line-item detail of each budget. Cash balances are also
attached for each fund.
Also attached is the Capital Improvement Plan (CIP) from the last meeting as well as the revised
cash flow analysis for the Public Improvement Fund, the fund that finances most of our capital
improvement projects. This file was also emailed to you an Excel spreadsheet so you can make
adjustments by changing cells and see the outcome. This opportunity will also be set up at the
Workshop. Unfortunately, our packet software is not compatible with Excel to enable this to occur
within our agenda packets.
Council Member Thorpe inquired about the policy directives prescribed in the Governance and Ends
policy pertaining to subsidies. That excerpt is attached.
Upon an affirmative motion by Mayor Reed, the council requested information pertaining to have a
full review of the Swiftel Center during the budget discussion. Subsequent to that, Council Members
Hansen and Niemeyer inquired about the economic impact analysis and Council Member Niemeyer
further inquired about the role of the advisory board and the VenuWorks contract. Attached is
information pursuant to such requests for information.
Attachments:
City Manager’s Budget Message
City of Brookings Printed on 7/16/2015Page 1 of 2
powered by Legistar™
File #:ID 2015-0490,Version:1
2016 Proposed Budget Summary
2016 Detailed Budget Proposed - 7.15.2015
Estimated Cash Balance 12/31/2015, General Fund
Estimated Cash Balances 2013-2016, All Funds
5-Year Capital Improvement Plan
Debt Service Amortization Schedule
75% Second Penny Cash Projection Worksheet
G&E Policy - Subsidy Guidelines
SC - VenuWorks Agreement - July 2006
SC - Agreement Addendum for contract extension - April 2011
SC - Business Plan 2016
SC - Ordinance 24-06 - est. the Swiftel Center Advisory Committee
SC - 2014 Audit of Swiftel Center
SC - Economic and Fiscal Impacts; Consultant Report
SC - Detailed Budget
City of Brookings Printed on 7/16/2015Page 2 of 2
powered by Legistar™
Jeffrey W. Weldon
City Manager
July 21, 2015
Mayor, City Council Members, and Citizens of Brookings
City of Brookings
520 Third Street
Brookings, SD 57006
RE: 2016 Budget Message
Dear Mayor Reed and Members of the City Council:
Attached herewith are the proposed operating and capital budgets for 2016. This recommended budget
provides for the revenues and expenditures of all city operations except Brookings Health System and
Brookings Municipal Utilities. City budgets are constructed and implemented in accordance with
standard governmental auditing and accounting practices. In addition, they are designed to encourage
and promote transparency in public finance. As such, they are divided into various funds so the city
financial operations are comprised of several budgets as opposed to one, comprehensive budget. Our
cash is “pooled” meaning that while the accounting is separate, the cash is, with few exceptions, in one
account. The major exception to this is for invested funds. This “pooling” assists us with cash flow and
fund management.
Budgets have long been considered the most significant public policy document a governing body can
have. A budget embodies the old adage “Put your money where your mouth is!” Budgets need to
provide the financial resources for the policies and service levels the governing body values. It needs to
support interests, goals, aspirations, mission, and vision of a community. As such, it needs to be
properly aligned with long-range strategic plans. In addition, budgets should provide for the financing
and planning of bold, new initiatives designed to move the needle, however incremental that may be,
toward continuous improvement. It should also continue to finance the basic services our consumers
use daily and believe fundamental to a functional and safe community. Financial restraint and prudent
investments of resources are core values in budget development. A delicate and sometimes competing
balancing task between these various axioms, an effective budget needs to do both. I believe this
budget does that. With that, let’s look at some specifics.
Page 2.
Budget Message
Budget Process
Staff began the budget process in late April with updating the capital improvement plan followed by
preparing the departmental operating budgets. It will culminate with final approval by the City Council
in September. Our budgets utilize the line-item budgetary format. Personnel expenses are the
summation of employee wages, salaries, benefits, and other employee-related costs. Increases in
personnel costs are the result of employee wage/salary advancement through our personnel plan for
eligible employees, as well as employee investments in accordance with union collective bargaining
contracts. I instructed department heads to flat-line operating expenses for the third year in a row to
last year’s levels unless they could demonstrate specific line-item expenditures that needed to deviate
from the past amount. In addition, I encouraged them to strive for accuracy in estimating where past
amounts provided less-than-accurate budget estimates and such flat-lining would only perpetuate
budgetary inaccuracy. Capital expenses do not rely on past history, nor should they, and are reflective
of annual capital projects and changing needs and priorities. As such, comparing previous capital
expenditures to current year is a futile exercise due to the nature of this expense.
As always, budgetary restraint, innovation, lean practices, prudent and realistic estimating, maintaining
desired service levels, efficiency, and effectiveness are all values and approaches that are interwoven in
the fabric of each budget.
Fund Structure
The primary fund that comprises the majority of city operations is the General Fund. The General Fund
finances most of the daily operations and functions of city government and thus, includes most city
departments. Revenue supporting the General Fund is chiefly the first penny sales tax, property taxes,
fees and service charges, permits and licenses. It often includes intergovernmental transfers. The
General Fund operations are confined to one budget year, meaning the current year revenue is designed
to finance the current year expenses.
Fortunately, the growth of Brookings is providing additional revenue to finance the costs of such growth.
The property tax rate freeze limits this revenue stream to inflation and an expansion of the tax base.
Our assessed valuation is now $1,123,648,038; an increase of $52,891,255 (2.18%) in one year. This
increase is due to a combination of new property ($23,329,633) and re-appraisal ($29,561,622). This
growth “expands the pie” with new taxable development without increasing the tax liability on each
parcel.
Likewise, sales tax is growing moderately and the new budget projects an increase in Sales Tax Revenue
of three percent (3%) even though our actual increase is closer to five percent (5%). Still, the cost of
government will only increase with an expansion of services and inflation so expanding the revenue
opportunities is significant.
For the General Fund, our personnel costs are 2.71 percent for 2016 over 2015 for base salaries,
benefits, and eligible employees moving through the pay plan. It does not include the cost-of-living
adjustment (COLA) that is still subject to negotiations. While most General Fund expenditures were flat-
lined for 2016, the numbers show an actual 8.06 percent increase, which is chiefly driven by only a few
items. First, is the contingency which is artificially high due to the COLA allocation, which will be re-
distributed to personnel after union contract negotiations are completed. Other increases are
Page 3.
Budget Message
attributed to an increase in strategic planning costs for a mid-year event; increases in elections caused
by the State of South Dakota; and increases in the street department caused by increased costs of
streetlights to BMU and curb/gutter maintenance costs to keep from getting behind.
The cash balance (unencumbered reserves) in the General Fund estimated for year-end 2015, excluding
allocations restricted by City Council, is $4,738,993. This estimate is what we will begin the year with,
unless there are unforeseen expenditures that occur during the balance of this year.
Generally, excess cash in the General Fund is not carried over to the following year’s General Fund
Budget unless a specific expenditure is not expended in that year and needs to be carried over into the
next year for its completion. I authorize such an exception only for specific expenditures which can
occur at year-end for a carry-over. Historically, we have always under-spent the General Fund thanks to
conservative budget estimating and prudent spending. Under-spent funds are used to build the General
Fund Reserve and are no longer a part of the operations. Other funds, however, do carry-over under-
spent cash into the next budget year such as our Capital Funds and Special Revenue Funds. This General
Fund Reserve is quite healthy. The General Fund is also used for cash flow and can vary considerably
from month to month. According to the 2014 Annual Financial Report, Brookings has 55 percent
unrestricted fund balance as a percentage of annual expenditures in the General Fund. This compares
to only 31 percent for our peer-cities. However, this percentage was high due to funds available for the
Street Dept. Maintenance Facility Project because of the 2014 Capital Bond.
Public Enterprise Funds are various funds and departments designed to operate similar to private
business models and financed by their own revenue. Many such funds provide revenue transfers to the
General Fund to help off-set operating costs. Such operations include the Liquor Store, Solid Waste
Collection, Solid Waste Landfill, EdgeBrook Golf Course, Brookings Regional Airport, and the Research
and Technology Center. Of course, the airport is not self-sustaining and never intended to be, but
because of federal accounting and the significant federal grant revenue for the airport, it is designed as
a Public Enterprise Fund. Many general aviation airports are constituted as Special Revenue Funds as
opposed to Public Enterprise Operations. The self-sustainability of the golf course is dependent upon
weather and the Research and Technology Center is dependent upon rental income revenue.
Governments typically utilize transfers from Public Enterprise Funds to the General Fund to help
diversify its revenue stream and lessen the General Fund dependence on taxes. Transfers also represent
a taxpayers’ return on investment and is an intrinsic part of the value of a municipality in having a Public
Enterprise Operation. Such transfers can be compared to a shareholders dividend payment for an
investment. Transfers can also be considered compensation to the General Fund as a ‘management fee’
for services of personnel, accounting, auditing, legal, administration, and oversight. This budget
provides for the following transfers into the General Fund and a contingency to the Golf Fund:
Brookings Municipal Utilities $2,205,000
Brookings Liquor Store $ 200,000
Brookings Liquor Store $ 75,000 (To Golf Fund only if needed.)
Research and Technology Center $ 105,000
Solid Waste Landfill $ 575,000
Page 4.
Budget Message
Special Revenue Funds are funds with a dedicated revenue stream and a corresponding expenditure
that is financially tied to the revenue. Examples of this are the Storm Drainage Fund which generates
revenue from a Special Storm Drainage Utility Fee to finance storm drainage capital projects and their
associated maintenance costs. The Swiftel Event Center, as a partially-privatized city service under a
management contract, generates most of its revenue from its own operations like a Public Enterprise
Operation, but requires a proportionately smaller amount of city funding to balance its budget. The 3B
Fund is similar since it is a sales tax on a specific base to finance specific expenditures related to the tax
base. Likewise, the Special Assessment Fund, the E-911 Emergency Communications Fund, and the
Business Improvement District (BID) Fund provides for specialized accounting and fund segregation.
Budget Structure
The departmental budgets on the pages that follow are constructed in the following manner: They are
divided into four summation categories: (1) departmental revenue generated, (2) personnel expenses,
(3) operating expenses, and (4) capital expenses. A fifth line will list Cost of Goods Sold for applicable
budgets. Also included is prior year history so you can see the changes in these categories over the past
few years. The final budget document will have line-item detail of each of these summation categories.
The various revenue budgets itemize sources of revenue that are expended on various funds. The Non-
Departmental Revenue Budget itemizes revenue sources and amounts that primarily finance the
General Fund across most city departments. As stated, major sources of revenue include the first penny
sales tax, property taxes, intergovernmental transfers, and some licenses and permits. In general,
revenue generated that is not specific to a department is listed in this budget. Conversely, the Second
Penny Sales Tax is, in accordance with City Council policy, divided into two funds to finance primarily
capital projects. Seventy-five percent of the Second Penny Revenue comprises the Public Improvement
Fund and finances capitalized projects across several budgets. The remaining 25 percent of Second
Penny Revenue finances capital projects related to public safety and street maintenance. In addition to
cash projects, it is important to remember that these two funds often finance debt service for any debt-
related to financing long-term capital projects.
The General Fund is balanced at $23,254,170 in revenues and $23,253,663 in expenditures. Most
revenue is derived from property tax ($3,009,430), first penny sales tax ($6,180,000), and inter-
departmental transfers ($4,833,929). Revenue is accounted for as being non-departmental or derived
from each department. The budget detail illustrated both locations for revenue. It also contains a
General Fund Contingency in the event of emergencies.
Personnel Investment
The various budgets provide for a total full-time workforce of 134 employees. This is an increase of two
positions over 2015. The increases are one police officer to replace the additional existing officer who
will be moving to fill the second School Resource Officer position for the Brookings School District. This
position will be financed 75 percent by the School District. As a result, it will be an addition of a full-time
employee in the Police Department but will have a budget impact to the City of only 25 percent of
personnel costs. This is reflected in the Police Department Budget.
The second position is an additional full-time position in the City Manager’s office. The specifics of this
position have not yet been crafted, but it is in anticipation of increased workload resulting from new
Page 5.
Budget Message
strategic initiatives to help support our long-range vision. Many such initiatives are not yet clearly
defined at this time. I will need to make sure the duties of such a position adequately reflect the scope
and nature of these additional responsibilities. It is for this reason the position has not yet been fully
detailed. Still, I want to insure a budgetary place-holder for such a position when such anticipated
responsibilities come into better focus. Mine is the only department that does not have allocated
support staff; and with anticipated changes at the policy-making level of this organization, I am
anticipating a change requiring more resources. Various staff models under consideration are: an
Executive Secretary, Administrative Assistant, or Assistant to the City Manager. Time will tell which of
these various staff models will best suit future needs.
Our two collective bargaining contracts expire in 2015, meaning we need to negotiate new employment
agreements with certain employees. For purposes of negotiation, funds for salaries under a union
contract are not yet itemized in the various departmental budgets. Rather, they are placed in a
Contingency Budget as a temporary place-holder and will be re-allocated to the various budgets
following settlement of the contracts. We have adopted a systematic pay plan which is competitive,
progressive, and incentive-based. It enables us to attract and retain a qualified workforce, but is
constantly adjusted to be reflective of a changing market.
Looking to the future, our long-range staffing plan does show some growth in the operational level of
our workforce. Such staff increases are primarily in the maintenance and law enforcement areas simply
in response to the needs of a growing community with more demands. As streets and homes are added,
more staff and equipment will need to be added to remove snow, repair and sealcoat streets, pick up
solid waste, and comply with code enforcement. More population will require more patrol officers on
daily shifts patrolling more neighborhoods. More parks will require more mowing, more playgrounds to
build and repair, and more trees to maintain our urban forest.
As always, we make extensive use of a cadre of part-time and seasonal employees in many
departments. Their workforce is essential in assisting us in fulfilling many of our service levels in an
efficient and economical way. The City is a major employer of high school and college students as well
as providing many second-income household jobs in addition to our primary jobs.
Capital Investment
An update of the annual, five-year Capital Improvement Plan (CIP) is an integral part of the budget
process. While the first year of the plan is perhaps the most significant in terms of specificity and it’s
compatibility with the pending operating budget, proper planning must be done to the subsequent four
years for long-range financial sustainability. Capital items are described generally as items over $5,000
in individual cost and having a life expectancy of five years. Long-range planning is helpful to better plan
for the eventual purchase of such items.
Capital spending is provided for in the General Fund, Public Improvement Fund (75 percent Second
Penny Fund), and the 25 percent Second Penny Fund. Capital spending can also be found in the
respective Public Enterprise Budgets. For example, capital items for the two Solid Waste Budgets are
financed by revenue from Solid Waste Operations. Which fund finances various capital expenditures is
dependent upon Council Policy. You will note the budget describes transfers of Second Penny Funds
into various departments. The purpose of that is for transparency to illustrate that capital funding is
Page 6.
Budget Message
assigned to various departmental expenditures and thus, shows the true cost of operating the
department.
Capital investments include maintenance, repair, and upgrade of existing investments to buildings,
equipment, facilities, and grounds. It also provides for new or replacement of existing assets. Vehicles
and equipment are replaced in accordance with a prescribed asset management plan, but often
modified to adjust to budget constraints. We retain vehicles and equipment until such time as their use
becomes unsafe or it is no longer cost-efficient to keep repairing them. We frequently transfer vehicles
to less-intense use in other departments to further extend the life of such items. Preventative
maintenance is a major component of our fleet and equipment program.
For the 75 percent Capital Fund, 2016 expenses will exceed 2016 revenue by $198,108. However, we
estimate an ending cash balance in the fund of a favorable $359,651 when factoring in year-end 2015.
Past commitments and debt service will consume $2,936,554 of this amount, while cash will be used to
pay $2,280,844 in infrastructure projects.
For the 25 percent Capital Fund, revenues will exceed expenditures by $265,971 leaving this amount to
add to our cash balance of approximately $1.4 million. It includes a pro rata subsidy payment of private
business incentives of $25,000. This fund should be preserved to at least partially set-aside some cash
for upcoming major public safety improvements such as the replacement of a fire truck and/or the new
south fire station; both of which are slated within the next five years. This amount will provide cash for
one, but not both, of these major Fire Department expenditures.
Part of the success of Brookings can be attributed to our historic and strategic investment in new capital
items using Second Penny Revenue. Such items are our pool, ice arena, library, Swiftel Center, and our
park system; some of which result from our partnership with the Brookings School District. Other items
include the Performing Arts Center, McCrory Gardens, and Wellness Center in partnership with SDSU.
This revenue stream has also enabled us to invest significantly in other partnerships with the Brookings
Boys and Girls Club and the Research Park at SDSU. The list goes on. We have always been able to
balance these items with basic and vital infrastructure that has allowed Brookings to grow in order to
support these other amenities.
We face that same balancing challenge with this budget in the years to come. We have significant
infrastructure needs as well as important quality-of-life amenity improvements. All such items have
seemingly staggering costs with on-going maintenance and operating costs inextricably tied to them.
Some of those items include:
20th Street East Overpass/Interchange 20th Street West Re-Construction
Western Avenue Upgrade Youth Softball Complex
Bob Sheldon/Dwiggins Medary Baseball 15th Avenue/7th Street Extensions
Possible Indoor Recreation Center Complex Storm Drainage Master Plan Projects
Trail/Bike Path Extensions 6th Street Gateway Enhancements
Brookings Marketplace/Wiese Business Park Development
In addition, you have pending requests for sizable contributions which, if funded, would require
additional debt. These are the SDSU Performing Arts Center addition and the Brookings Health System.
Page 7.
Budget Message
Finally, we have annual street maintenance items involving overlayments, digouts/repair, sealcoating,
and striping. We need to maintain our aggressive schedule so not to get financially behind an avalanche
of costly street repairs. Capital investment is also done as we incrementally implement the Storm
Drainage Master Plan. We have three specific Storm Drainage Projects slated for 2016.
The 2016 Capital Budget provides for balanced investment of these capital items. However, the Council
will need to prioritize the remaining items for the out-years in addition to identifying costs associated
with some of the items for which costs are unknown at this time. As a result, the capital investment
cash flow for the out-years is in a state of flux.
Economic Development Investment
Efforts to grow the community through various facets of economic development continue to be a
mainstay initiative of the City of Brookings. As we weathered the recession quite well, we are increasing
our population further securing us as the fourth largest city in the state with an increase of
approximately 1,000 residents just since the official 2010 dicennial census. This budget continues our
partnership through various agencies who, through their own economic development niche, address
economic development issues. These primary agencies are the Brookings Economic Development
Corporation (BEDC), the Growth Partnership Board at the SDSU Research Park, and the Brookings
Convention and Visitors Bureau (CVB).
The BEDC continues to work on commercial and industrial development. In response to an anticipated
slow-down of industrial expansion and a shortage of workers, BEDC has adjusted its emphasis to small
business development, workforce enhancement, retail development, and entrepreneurial advancement.
The South Dakota Education Campus at Brookings is a major part of the workforce development
initiative. The Growth Partnership continues to advance research-related technology transfer to
development through the research park. The Visitor and Convention Bureau focuses on visitor
enhancement through events and growth of amenities.
This budget provides for level funding for each of these initiatives. The budget also provides for a
continuation of two initiatives started in 2015. First, I am recommending continued funding in the
amount of $50,000 for the Downtown Retail Acceleration Grant Program continent upon a performance
and interest evaluation of the program’s progress for this year. This amount of funding utilizes any
unspent funds from the 2015 allocation, but does not envision adding funding to build a balance of
unspent funds. Likewise, I am recommending continued funding of the downtown music attraction
program, “Downtown at Sundown” by the CVB at their requested amount of $30,000; down $20,000
from 2015 due to second-year costs expected to be less. Such funding should also be contingent upon a
performance evaluation of this initial year’s program.
In addition, I am recommending funding a new subsidy request from the South Dakota Humanities
Council for the South Dakota Festival of Books. This annual, state-rotating event is the state and
region’s premier literary event. It will showcase over 50 authors in over 100 events for its inaugural
event in Brookings. With ties to SDSU and the Brookings Public Library, this new and exciting event
promises to add a new dimension to the rich and diverse quality of life while bringing out-of-town
visitors to Brookings.
Page 8.
Budget Message
Finally, I am recommending terminating the funding to Downtown Brookings, Inc. The performance of
this organization has been chronically deficient over its long and tumultuous history and it simply does
not perform. Clear evidence of this is the lack of support from the various stakeholders it is intended to
support. This is a clear sign this organization should no longer be artificially propped-up by government.
An area of economic development where we are making slow but incremental progress, is in the retail
and service area. Our efforts during the annual International Conference of Shopping Centers are
producing more and better leads for retail development. Retail developers are becoming more
confident as the recession begins to fade and store expansions are planned. The city-owned property
that comprised the Wiese Business Park and the Brookings Marketplace are our best efforts to have
property in place to accommodate such retail/service development. Full development of such parcels is
expected to cost $7 million. Such costs can be creatively structured with development agreements
among developers in numerous ways so as they do not become exclusively a cost to the City. Still, we
should be prepared to financially assist through the use of creative incentives the ability to attract
national retail chains to Brookings.
Retail development is essential for two primary reasons. First, it provides shopping options for our
residents and visitors and adds another fully-developed dimension to our quality of life and livability of
Brookings. Second, and more fundamental to the City, it adds Sales Tax Revenue to state and city
budgets to help finance future expenditures that are sure to grow over time. Retail demand attributed
to “leakage” is a direct out-migration of Sales Tax Revenue. Such a trend needs to be reversed and even
where we do not have such leakage, more retail sales can be grown. Brookings is sure to grow and
expand; and with that growth come added costs of services to meet the demands of that growth. As a
result, the revenue streams of both sales tax and property tax must grow at a corresponding rate.
The City has developed some tools to assist economic development. In addition to the Downtown Retail
Acceleration Grant Program discussed earlier, the City Council has formalized a Sales Tax Refund
Incentive Program for qualifying businesses. This applies to both retail and industrial businesses. So far,
it has been used to assist Bel Brands USA and the latest 3M plant expansion. As before, the judicious
use of Tax Increment Finance has proven to be a valuable tool for economic development as well as land
price write-downs.
Debt Management
The City currently has $10,750,000 in outstanding debt obligations from the 2010 refinancing with a
debt schedule to December 1, 2022. Our annual debt service payments on this remaining issuance
average approximately $1.7 million per year. In addition, we have the 2014 debt issuance which has
$10,000,000 in outstanding debt obligations to 2033. This issuance was used to finance an extensive list
of capital improvements so cash could be used for the Bel Brands Digester Incentive Program. It was
also used to finance the South Main Avenue/26th Street improvement project. Both these issuances are
being repaid with revenue from the Public Improvement Fund; the 75 percent Second Penny Sales Tax
Capital Fund. Other incentives to Bel are sales tax refunds found in the three sales tax revenue budgets.
In addition, the Storm Drainage Fund has several debt issuances associated with the State of South
Dakota State Revolving Fund (SRF) Program. This program has a very favorable interest rate and a 20-
year term. In an effort to implement our Storm Drainage Master Plan, we have financed such
Page 9.
Budget Message
improvements from either cash or these various debt issuances. All such financial liabilities are financed
by the Storm Drainage Utility Fund. Completed storm drainage projects financed with such debt are
Southland Pnd, Pheasant Nest Pond, Nelson Pond, and the Camelot Subdivision Pipe Project. Our total
amount of outstanding SRF debt obligations is $2,967,485 for these projects.
While the City has ample debt ‘capacity’ in terms of our constitutional debt limitations, we do have
slightly more debt than our peer-cities. Again, according to our 2014 Comprehensive Annual Financial
Report, our long-term governmental debt principal outstanding to assessed valuation is $2.40, up from
$1.99 in 2013 and compared to $2.02 to our peer-cities for 2014. Looked at another way, the same
long-term governmental debt principle outstanding to population is $1,121 compared to $895 for 2013
and compared to $1,085 for our peer-cities for 2014. Our total debt (governmental and business-type)
principal outstanding to population is $2,537 compared to $1,597 for 2013, and compared to $2,399 for
our peer-cities in 2014. While we have healthy reserves, our long-term debt is slightly above our
contemporaries and we should remain vigilant in considering future debt. We should not be lured into
complacency by the fact we still have approximately 40 percent debt capacity before we reach our
constitutional debt limit. This calculation is only one benchmark and is not reflective of a governmental
unit’s true ability to repay its debt. Nor does it adequately reflect the needs of other priorities.
At this point, the budget proposal does not contemplate any significant debt issuances for 2016 except
for the possibility of an additional SRF application for the Division Avenue Storm Drainage Project.
However, the City Council could consider a debt package for a combination of items contemplated in the
capital improvement discussion as previously mentioned. Those would most likely include park and
indoor recreation amenities.
For the following hypothetical principal debt issuances for a 20-year term, the following annual
payments would be necessary: Principal Annual Payment
$10 million $ 780,972
$15 million $1,171,632
$20 million $1,561,956
Sources of revenue to service this debt would either be sales tax bonds from our second penny revenue
stream or general obligation bonds from a property tax increase.
We have six active Tax Increment Districts which are considered Debt Service Funds. District 1 is cash-
flowing adequately, but will likely require the full term to mature. Districts 3 and 4 are housing districts
and are cash flowing exceptionally well and will likely be de-certified early. District 5 is dependent upon
development which has not yet materialized. District 6 is expected to cash flow well over time with
development. Finally, District 7 is starting out well, but will require robust development sustained over
time to meet its cash flow requirements.
New Initiatives
The stage has been set for a series of bold, new initiatives to be undertaken, and this budget does begin
to incrementally provide for them. First, we incorporated specific practices for lean operations and have
incorporated transparency, technology, and lean efficiencies in several areas. Second, the Sustainability
Council has documented benchmark indicators and adopted a workplan for sustainability-related issues
Page 10.
Budget Message
that involve better stewardship of our public assets. These items are gradually being integrated into the
fabric of our operations but clearly, more ideas and programs regarding sustainability advancement on
several levels will be forthcoming. One such project by the Street Department is the change-over of the
remaining traffic lights to LED. While this has up-front costs, the pay-back is only a few years. LED
traffic lights last much longer and are more energy efficient. In addition, we are looking at grant
opportunities to help off-set some of the up-front costs. However, the promise of sustainability
initiatives can be misleading. I urge the Sustainability Council and City Council to exercise prudence and
incrementalism when selecting specific items with which to undertake. Many such initiatives often
mask negative, unintended consequences.
Entrepreneurialism has taken root in various pockets of Brookings and promises to provide a new
wellspring of ideas, concepts, and activities that will affect technology, small business, research, and
services. BEDC has aided this with resources to assist entrepreneurs as well as the establishment of
“makerspace” accommodations to support small business at, most appropriately, the research park.
In addition, I am recommending funding a new subsidy request that builds upon entrepreneurialism by
setting Brookings on a path to become a ‘Creative Capital of North’. The flagship event, Creativity Week,
is expected to have over 80 events with over 1,000 participants further bringing new visitors to
Brookings.
This year, the City Council established a citizen’s committee to investigate the feasibility of a
comprehensive community/indoor recreation center. Their final report will not be due until the end of
the year. If the conclusions of their report are favorable, and if the City Council concurs with advancing
the concept of such a facility, it will have a far-reaching financial impact for the City. Initial support is
very strong but much work remains ahead to determine if such a facility is appropriate for Brookings.
This bold and exciting new concept could be a catalyst for further advancing our comprehensive park
system as a capstone to the extensive list of recreational amenities we already have with even more
indoor recreational activities for residents and visitors alike. This budget does not attempt to predict the
committee’s final conclusions and as such, does not anticipate further funding for what might be
considered the next steps for such an ambitious project.
The issue of affordable housing continues to be a challenge for further growth and development. A
disproportionately high percentage of Brookings residents pay more in household income for housing
than the national or state average. High costs, reflective of the market, are keeping a large segment of
our population in rental situations. The shortage of lower-cost homes is driven, in part, by the inability
of homes in this price range to be profitable to builders and developers. It is creating pent-up demand,
but very low supply of owner-occupied homes in the price area below $175,000. The City Council should
address this as a new initiative in 2016.
Conclusion
Finally, I strongly believe this proposed budget is well-positioned to meet both the operational as well as
the strategic needs of the City of Brookings for 2016 and beyond. Still, I strongly suggest we continue
our policy discussions of long-range planning with a critical examination of 2017 and the future; first, by
fully defining our vision and second, by identifying the necessary resources it will take to fully implement
that vision.
Page 11.
Budget Message
I would like to thank my teammates in the organization and especially the 13 department directors who
live and breathe these budgets every day. They submitted responsible budget requests and do their job
admirably with the resources allocated to their professional stewardship.
I would also like to thank the Mayor and City Council members for your policy leadership on the many
crucial issues we have faced in the past, that confront us today, and will challenge us in the future.
Lastly, it is the citizens of Brookings that are the bedrock foundation of this great community and the
reason we strive to make Brookings the kind of place that where anyone can bring their dreams. Clearly,
Brookings brightest days are ahead and it remains an honor and privilege for me to serve as your City
Manager.
Sincerely,
CITY OF BROOKINGS
Jeffrey W. Weldon
City Manager
City of Brookings
Long-Term Maturities
December 31, 2014
2016 2017 2018 2019 2020 2021 2022
213 75 % Sales Tax Debt Service
Principal 1,886,981.10 1,877,325.97 1,921,243.62 1,975,609.32 2,029,704.68 2,090,719.42 871,516.90
Interest 560,872.62 518,227.75 471,797.60 420,556.90 364,799.04 303,689.30 239,891.82
2,447,853.72 2,395,553.72 2,393,041.22 2,396,166.22 2,394,503.72 2,394,408.72 1,111,408.72
282 Storm Drainage Debt Service (estimated at this point due to SRF 9 in draw down status)
Principal 152,275.18 156,895.07 161,655.12 166,559.63 171,612.91 176,819.51 182,184.08
Interest 102,622.66 98,002.77 93,242.72 88,338.21 83,284.93 78,078.33 72,713.76
254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032
522,822.94 539,098.46 557,008.85 574,940.36 593,449.12 612,199.59 632,261.97 652,616.06 673,625.40 695,185.48
212,088.28 195,812.76 177,902.37 159,970.86 141,462.10 122,711.63 102,649.25 82,295.16 62,285.82 39,725.74
734,911.22 734,911.22 734,911.22 734,911.22 734,911.22 734,911.22 734,911.22 734,911.22 735,911.22 734,911.22
187,711.38 193,406.41 199,274.20 205,320.00 211,549.28 217,967.48 224,580.45 231,394.02 238,414.51 180,791.49
67,186.46 61,491.43 55,623.64 49,577.84 43,348.56 36,930.36 30,317.39 23,503.82 16,483.33 9,901.80
254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 254,897.84 190,693.29
2033 2034 2035 2036 Total
717,690.76 - - - 20,750,000.00
17,220.38 - - - 4,472,401.88
734,911.14 - - - 25,222,401.88
157,007.99 47,140.72 14,943.58 - 3,617,074.73
4,690.80 966.03 281.22 - 1,116,687.38
161,698.79 48,106.75 15,224.80 - 4,733,762.11
1.03 75% of Second Penny Sales & Use Tax Cash Projections 7/14/2015
2015 Year End
Budgeted Account Number Description 2016 Proposed 2017 Proposed 2018 Proposed 2019 Proposed 2020 Proposed 2021 Proposed
$359,651 213-000-0-102-00 Projected Cash on Hand @ Year End 161,543$ ($13,858,751)($15,893,858)($16,108,075)($15,515,402)($22,126,432)
2015 Projected Ending Cash $359,651
4,543,000$ 213-000-4-113-02 Sales & Use Tax 4,679,290$ 4,819,669$ 4,964,259$ 5,113,187$ 5,266,582$ 5,424,580$
213-000-4-334-09 Grants 0 0 0 0 0 0
1,703$ 213-000-4-441-08 Reimbursement 0 0 0 0 0
213-000-4-446-10 Donations 0 0 0 0 0 0
25,000$ 213-000-4-661-00 Interest Income 25,000 100,000 100,000 100,000 100,000 100,000
13,800$ 213-000-4-661-01 Money Market Interest 15,000 15,000 15,000 15,000 15,000 15,000
213-000-4-663-50 Loan Proceeds 0 0 0 0
242,000$ TIF Revenue-TIF 5,6,&7 300,000 320,000 320,000 320,000 320,000 320,000
526,663$ Transfer in 25% S&U
16,982$ Transfer in
460,558$ 213-000-6-700-20 Transfer in Nature Park Project 0 0 0 0 0
213-000-4-663-50 Transfer in Liquor Store
213-000-6-700-02 Transfer in Landfill
-$ 213-000-6-700-16 Transfer in from BMU/Advance 0 0 0 0
5,829,706$ Revenue Total 5,019,290$ 5,254,669 5,399,259 5,548,187 5,701,582 5,859,580
186,678$ 213-000-5-466-01 Economic Development Grant 75,000 75,000
250,000$ 213-000-5-466-02 Job Creation Incentive 162,500 162,500
436,678$ Economic Development Grants Expense 237,500$ 237,500 0 0 0 0
1,380,000$ 213-000-5-470-01 Bond Principal Payments 1,886,981 1,877,326 1,921,244 1,975,609 2,029,705 2,090,719
278,443$ 213-000-5-470-02 Bond Interest Payments 560,873 485,715 434,923 378,894 319,704 303,690
1,200$ 213-000-5-470-03 Debt Service Costs 1,200 1,200 1,200 1,200 1,200 1,201
213-000-5-470-04 BAN (Digestor)
1,659,643 Debt Service Expense Total 2,449,054$ 2,364,241 2,357,366 2,355,704 2,350,609 2,395,610
150,000$ 213-000-5-856-76 SDSU Research Park 150,000 125,000 100,000 75,000 75,000 75,000
100,000$ Boys & Girls Club-Teen Center 100,000 100,000 100,000 100,000 0 0
Bata Bus Grant Match 12,000
250,000$ Subsidy Expenditure Total 262,000$ 225,000 200,000 175,000 75,000 75,000
140,527$ 213-000-5-422-03 Consulting
140,527$ Operating Expenditure Total -$ -$ -$ -$ -$ -$
Capital Expenditure Detail
Carnegie Building electrical/HVAC 47,000 12,000
Sexauer Park Restrooms 140,000
213-000-5-911-00 Edgebrook-Golf Course Capital Improvements 10,000
Swiftel Center-Capital Improvements 300,000 300,000$ 300,000$ 300,000$ 300,000$
Gateway Project 275,000 200,000 -$
Airport-Facility 91,844 117,721 50,000 29,200 62,800
59,451$ Infrastructure-Railroad Traffic Signal/match only - 20,000$ 20,000$ 20,000$
500,000$ Infrastructure-Prince Dr to 8th St
Infrastructure-15th St S 900,000
Infrastructure-W20th St S,Western Ave to Cumberland 2,000,000$
Infrastructure-Western Avenue S 1,000,000$
Infrastructure-E20th St S,22nd Ave to Interstate 800,000
Infrastructure - Wiese Business Park 1,000,000$ 500,000$ 500,000
Infrastructure - Brookings Market Place 1,500,000$ 1,500,000$ 1,500,000$ 0
Bob Shelden and Ball fields Upgrades 4,000,000$
New Ball field Complex (no land)7,500,000$
Add'l Rec Trail (Gust pond & around Airport)250,000$
Add'l restrooms Valley View Park 120,000
Prairie Hills Park 750,000
Brighton-Timberline Park 500,000
Trail Extensions 1,000,000
Roof mechanical repairs, Parks facilities 650,000
20th Street Overpass of I-29 6,800,000
Reconstruct parallel taxiway - airport 300,000
Streets-Digouts and Overlays 505,000 798,500$ 757,000$ 882,500$ 900,500$
559,451 Capital Expenditures Total 2,268,844$ 16,448,221 4,877,000 3,231,700 2,683,300 10,000,000
1,318,000$ 213-000-7-899-00 Transfer out General Fund P&R
202,500$ 213-000-7-899-28 Transfer out to Edgebrook Golf CIP
500,486$ 213-000-7-899-03 Transfer out-Swiftel Projects & Equip
610,505$ 213-000-7-899-30 Transfer out-Streets
102,770$ 213-000-7-899-01 Transfer Out to Airport Runway Project
800,000$ 213-000-7-899-32 Transfer Out to Street Shop
3,534,261$ Transfers for CIP Total 0 0 0 0 0 0
5,829,706$ Revenue Grand Total 5,019,290$ 5,254,669 5,399,259 5,548,187 5,701,582 5,859,580
6,580,560$ Expense Grand Total 5,217,398$ 19,274,962 7,434,366 5,762,404 5,108,909 12,470,610
(750,854)$ Net Grand Total (198,108)$ (14,020,294)(2,035,107)(214,217)592,673 (6,611,030)
City of Brookings
Ends Policy 1, Financial Stability
Establishing what is to be done, for whom, at what cost, and
Executive Limitations to define unacceptable means
Guideline H: Appropriation and Subsidy Policy & Guidelines
Purpose. The purpose of this policy is to establish guidelines and criteria regarding the allocation and
use of municipal subsidies within the City of Brookings. These guidelines shall be used in
processing and reviewing applications requesting municipal subsidy assistance. Protecting the
financial interest is of the City of Brookings is of the utmost importance, so it is the intent of the
City to provide a minimum amount of municipal subsidies, as well as other incentives that the City
may deem appropriate, for the shortest term required for the project to proceed.
The City reserves the right to approve or reject projects on a case-by-case basis, taking into account
established policies, specific project criteria, and demand on city services in relation to the potential
benefits to be received from a proposed project.
Meeting policy guidelines or other criteria does not guarantee the award of municipal subsidies.
Furthermore, the approval or denial of one project is not intended to set precedent for approval or
denial of another project.
Whenever possible, it is the City’s intent to coordinate the use of municipal services with other local
governing bodies and taxing jurisdictions.
Objective of Municipal Subsidies. The City of Brookings is committed to providing a high quality of life
for its citizens and fostering a diverse economic base through innovative thinking, strategic planning,
and proactive, fiscally responsible municipal management.
To fulfill this commitment, the Brookings City Council will closely examine its goals and the goals of
its city departments to identify outcomes that will meet the standards as outlined in the mission
statement above.
The Council also recognizes that its support of programs and services outside the scope of its city
departments may be necessary to fulfill the commitment and achieve the desirable quality of life for
its citizens. As a matter of policy, the City of Brookings will consider using municipal funds to assist
in the following areas, but are not limited to, opportunities in the areas of:
Affordable Housing
Arts & Culture
Youth Development
Diversity
Economic Development
Education & Literacy
Environment
Government Stewardship
Health
Parks, Recreation & Open Spaces
Partnerships
Preservation/ History
Safety
Transportation/Transit
The Brookings City Council may choose to annually allocate a specified funding amount for a
specific category, regardless of the number of applicants for that particular programming area.
General Guidelines for the Allocation of Municipal Subsidies. The City of Brookings may allocate up to four
(4) percent of the annual General Fund expenditures to subsidize community needs and programs.
The City’s current and projected financial health and stability will be the key deciding factor in
determining its ability to provide funds to outside organizations.
In addition, the Council will consider a number of factors as defined in the City’s Funding
Application when making this decision. A key factor will be the applicant’s ability to provide a
service or outcome that improves the quality of life for the citizens of Brookings. The applicant
must also provide a “but for” analysis which demonstrates the need for public assistance. Other
factors include the applicant’s ability to become self-sustaining, the duration of the funding
commitment, and operating verses capital requests.
Municipal subsidy will not be used for projects that would place extraordinary demands on city
infrastructure and services.
Request for donations or subsidies from individuals, religious or political groups based out of the
City of Brookings will not be considered.
Request for donations or subsidies from qualified organizations outside of the funding timeline will
not be considered.
General Guidelines for Subsidies. The Brookings City Council evaluates program-funding proposals on
an annual basis for funding in the following calendar year. The City’s fiscal year is January 1 to
December 31. Proposals must be submitted to the City Clerk in accordance with the budget cycle
schedule and proposal format outlined below. Requests may only be made during this period of
time. Completed applications must be received on or before June 1st of each given year.
Following, a review by the City Manager and Finance Manager, the application shall be referred to
the City Council for further consideration during the annual budget meetings.
Organizations applying for a donation or subsidy must submit a completed Application for Funding
along with a detailed description of the project; a preliminary site plan; the amount requested; the
duration of the funding request; the public purpose of the project; verifiable funding sources and
uses; and a “but for” analysis which demonstrates the need for public assistance. Additional
documents which may be required include the organization’s current expense statement and budget,
Board of Directors listing, current Annual Report, and all other items specified in the City of
Brookings Application for Funding.
Budget Hearing Process. Brookings City Council budget meetings are held in the months of August and
September. All budget meetings are open to the public. Applicants may or may not be invited to
make a presentation on their funding proposal. Applicants are encouraged to attend all budget
meetings to remain informed during the process. Applicants should be prepared to answer
questions based on the application. Final action on the budget occurs at the last Council meeting in
September.
Brookings School District Subsidies. Appropriation of public funds can be set aside for specific purposes
which promote the City of Brookings mission and the local quality of life within the City of
Brookings. Brookings Municipal Utilities transfers funds each year to the General Fund as a means
to keep city property taxes at a low level for the citizens of Brookings. The City of Brookings may
annually appropriate up to 15% of the transfer from the Brookings Municipal Utilities to the
Brookings School District.
Economic Development/Promotions Subsidies. A subsidy from the 3rd B Fund shall meet the requirements
of the SD State Statute 10-52-8*. Funds will be appropriated from the 3rd B Fund to entities with
the capacity to promote and advertise the city, its facilities, attractions, and activities. In any fiscal
year, the City may require the unencumbered funds be returned to the City 3rd B Fund.
Subsidy Agreement and Reporting Requirements. The City of Brookings requires all recipients of
municipal funds to enter into appropriate agreements that identify the reason for the subsidy, the
public purpose served by the subsidy, subsidy payment schedule, final the specific performance
measurements to be attained, and final reporting on outcomes. Failure to provide final reporting of
funds and all other required reports will make applicant ineligible for future subsidies.
The City has established the policy that financial, service and program performance measures be
developed and used as an important component of decision making and incorporated into
governmental budgeting. The City encourages all departments to utilize performance measures. At
a minimum, performance measures should be used to report on the outputs of each program and
should be related to the objectives of each department.
The performance measurements should:
1. Be based on program objectives that tie to the City Council’s goals and program mission or
purpose;
2. Measure program results or accomplishments;
3. Provide for comparisons over time;
4. Measure efficiency and effectiveness;
5. Be reliable, verifiable and understandable;
6. Be reported internally and externally;
7. Be monitored and used in decision-making processes; and
8. Be limited to a number and degree of complexity that can provide an efficient and
meaningful way to assess the effectiveness and efficiency of key programs.
All agreements and reports shall be timely prepared and filed with the City Clerk. Failure to comply
with any of these requirements may result in the revocation of the requested subsidy as well as fines,
repayment requirements, and a determination that the organization is ineligible for future municipal
subsidies for a period of years.
* Applicable State Statute:
10-52-8. Additional tax on lodgings, alcoholic beverages, prepared food, and admissions -- Purposes -- Conformance with state sales and use tax.
Notwithstanding the tax rate limitations of §10-52-2 or 10-52-2.1, any municipality may impose an additional municipal non-ad valorem tax at the rate
of one percent upon the gross receipts of all leases or rentals of hotel, motel, campsites, or other lodging accommodations within the municipality for
periods of less than twenty-eight consecutive days, or sales of alcoholic beverages as defined in §35-1-1, or establishments where the public is invited
to eat, dine, or purchase and carry out prepared food for immediate consumption, or ticket sales or admissions to places of amusement, athletic, and
cultural events, or any combination thereof. The tax shall be levied for the purpose of land acquisition, architectural fees, construction costs, payments
for civic center, auditorium, or athletic facility buildings, including the maintenance, staffing, and operations of such facilities and the promotion and
advertising of the city, its facilities, attractions, and activities. Such taxes shall conform in all respects to the state sales and use tax on such items with
the exception of the rate.
SWIFTEL CENTER 2016 BUSINESS PLAN AND BUDGET
I. INTRODUCTION
The Swiftel Center is a public assembly facility owned by the City of Brookings operating under a
management agreement with VenuWorks, Inc. VenuWorks has steadily increased utilization of the facility,
improved programming and marketing and continues to work toward minimizing required financial
allocations from the City of Brookings.
Since the opening of the building in 2000, the Swiftel Center has seen tremendous growth. Through the
team’s remarkable sales effort, Swiftel Center has hosted over 3,000 events and in the last decade, has
averaged 314 event days per year.
The Business Plan for the 2016 fiscal year builds upon the progress made in the previous years and sets
agreed upon goals and objectives of VenuWorks, Inc. and the Swiftel Center.
II. MISSION
It is the mission of the Swiftel Center to enhance the quality of life for the citizens of the region by
providing a gathering place for cultural, recreational and educational events, thereby positively impacting
the economy of Brookings.
It is the mission of VenuWorks, Inc. and its subsidiaries to maximize the presentation of successful events
in client facilities for the cultural, recreational, educational, and economic benefit of the communities we
serve.
III. VISION STATEMENT
The Swiftel Center is a diverse facility that provides a positive economic impact to the City of Brookings
by hosting live spectator events, banquets, meetings, consumer shows, trade shows and conventions. In
addition, the Swiftel Center works to be a valued facility which provides a diverse, exceptional, positive
experience to all those who pass through its doors. To pursue the vision of the facility, the staff will
maintain these values:
• To be open, honest, responsible, ethical and accountable
• To treat each other with compassion, respect and sensitivity
• Continuous improvement of our services through initiative and innovation
• Foster an environment that maintains an open exchange of information and opinions
• Inspire others to reach their full potential
• To continue to treat clients and patrons with “Midwest Hospitality at its Best” as well as be the “Center
of Attention”.
IV. 2016 BUDGET – GOALS AND OBJECTIVES PROGRESS
Please note, at the time of submittal, the following 2016 Business Plan initiatives for the 2016 operating
year were either completed or in progress with completion projected by the end of 2016.
• Collaborate with local charitable and community organizations through volunteerism, community
service projects or their usage of the facility at a reduced rate or no charge. Status: In progress/On-
going
o Established co-promotion partnership with Sutton Rodeos to produce the annual Jackrabbit
Stampede Rodeo, utilizing SDSU Rodeo Club members to set up the event.
o The Daktronics Banquet Room and Swiftel Center equipment were made available at no charge
to the local American Legion and VFW for Memorial Day and Veteran’s Day programs.
o The Swiftel Center arena was made available at no charge to Brookings Radio for the community
wide Easter Egg Hunt. In addition, the event is co-produced by the Swiftel Center staff through
community donations and is offered free to the public.
o 4-H Achievement Days held in the Arena and Daktronics Banquet Room.
o 4-H Horse Show in the Arena/ 4H Dog Show held in the Arena.
• Continue to build marketing partnership through regular communication with the Brookings Area
Convention and Visitors Bureau to attract events to the Brookings Community, focusing more on
athletic tournaments and conventions. Status: On-going
• Concentrate on providing a diversity of events for the citizens of the region; family shows, concerts,
community events, consumer shows, sporting events, and conventions. Status: On-going
• Continue to be an in-house entertainment production entity for the sole purpose of promoting and/or
co-promoting shows and entertainment events. Status: On-going
• Increase use of Ticketmaster outlets, website, and phones for ticket purchasing utilizing marketing
programs available through Ticketmaster including email notifications, presale programs and
auctions. Status: On-going
• Increase ancillary revenues in the following areas: Status: On-going
o Catering income
o Concessions/bar service income
o Rental Equipment income
o Facility Maintenance Fee
o Merchandise income
• Continue to review and adjust rental rates and reimbursed labor rates to remain competitive. Status:
Completed
• Continue to provide outstanding customer service to the patrons, promoters, renters and users of the
Swiftel Center facilities. Provide employee training sessions with emphasis on customer service and
ADA assistance. Emphasis placed on customer service and ADA assistance at employee training
sessions. Status: On-going
• Continue to utilize our website and marquees to inform the community of upcoming events. Status:
On-going
• Increase use and awareness of social media aspects of networking with the community and fans to
include: Facebook, Twitter, Instagram, Pinterest, FourSquare, and LinkedIn. Status: On-going
V. 2016 BUDGET – GOALS AND OBJECTIVES
VenuWorks of Brookings LLC has established goals for the 2016 year. These goals are a combination of
new initiatives and continuing efforts initiated in 2016. The budget for the coming year has been carefully
prepared to reflect a comprehensive outline of anticipated revenues and expenses.
Initiatives for FY ‘16 are as follows:
• Continue to book programming for the facility. The Swiftel Center staff will aggressively pursue
events for the facility and will be researching alternative events (such as home grown events) sliding
scale pricing to fill non-event (“dark”) days. Sales efforts will be concentrated in the following areas
for the calendar year:
o 12Concert Events
o 7 Consumer Shows
o 14 Community Events
o 48 Sporting Events
o 75 Meetings/Conventions
o 18 Banquets
o 23 Wedding Receptions
• Continue to utilize Ticketmaster MailManager email system, facebook, marquees on HWY 14 and
22nd Avenue, facility flat panel TV’s and Swiftel Channel 3, City Channel 9 and Cubby’s Sport’s Bar
and Grill TV System to promote the facility and events for little or no cost.
• Increase use and exposure of facility through social media including Facebook, Twitter, Instagram,
Pinterest, FourSquare and LinkedIn.
• Continue to promote ease of Ticketmaster as an avenue for purchasing tickets. Increased
participation in marketing plans available to Ticketmaster clients to generate continued growth for
event attendance. Ticketmaster added Wal-Mart as a national outlet; Brookings store is currently up
and running.
• Collaborate with local charitable and community organizations through volunteerism, community
service or their usage of the facility at a reduced charge.
• Be a strong marketing partner with the Brookings Area Convention and Visitors Bureau to attract
convention and athletic events for the community.
• Continue to train mission and vision to full time and part time staff to instill values of Midwest
Hospitality at its Best.
• Concentrate on providing a diversity of events for the citizens of the region; family shows, concerts,
community events, consumer shows, sporting events, and conventions.
• Continue to be an in-house entertainment production entity for the sole purpose of promoting and/or
co-promoting shows and entertainment events.
• Continue to improve Guest Services within the Swiftel Center to assist patrons; including, but not
limited to, training part-time staff to answer questions about the facility and the community, providing
print materials of the facility with seating map, continue to provide print materials about the Brookings
community (to include local businesses, restaurants, hotels and attractions, and community driving
map), and other efforts to ensure patrons are well-informed about the facility and the community.
• Continue to increase ancillary revenues in the following areas:
o Catering income
o Concessions/bar service income
o Rental Equipment income
o Facility Maintenance Fee
o Merchandise Percentage
• Review and adjust rental, equipment and labor rates to stay competitive.
• Solicit equine and livestock events to utilize our holding barn as well as utilize the arena during the
summer month when dirt is in the facility.
• Continue to provide outstanding customer service to the patrons, promoters, renters and users of the
Swiftel Center facilities.
• Maintain facility in outstanding condition and efficiency.
• Review and adjust part time pay scales to retain employees, as well as stay competitive in the
market.
• Continue to speak at community functions or meetings (i.e. Rotary, Kiwanis) to educate public about
the Swiftel Center.
• Continue advertising and direct mail campaign to meeting planners in the tri-state region with goal to
increase event days in the Daktronics Banquet Room.
• Continue collaborative advertising in industry trade journals to target national touring events with
other VenuWorks facilities to share the expense.
• Encourage full time staff serve on at least one local board and participate in non-profit groups in the
Brookings Community.
• Continue to partner with Brookings Health System Foundation to raise money for Breast Cancer
prevention/training/remodel projects in partnership with the hospital and clinics.
VI. ORGANIZATIONAL CHART
The attached organizational chart reflects the following for the fiscal year 2016:
• Executive Director
• Associate Executive Director
• Director of Operations (Department Head) - Open
• Director of Sales and Marketing (Department Head) - Open
• Director of Food & Beverage (Department Head)
• Director of Finance (Department Head)
• Operations Manager
• Conversion Supervisor
• Operations Supervisor - Open
• Sales and Marketing Manager
• Box Office Manager
• Event Manager
• Event Coordinator
• Food & Beverage Coordinator
Brookings City Council
Brookings City Manager
Executive Director
Associate Executive
Director
Director of
Operations (Open)
Operations Manager
Operations
Supervisor
Conversion
Supervisor
PT Staff (Conversion)
PT Staff (Custodial)
Director of Sales and
Marketing (Open)
Event Manager
Event Coordinator
PT Staff ( Ushers,
Security, Public
Safety)
Sales and Marketing
Manager
Director of Food and
Beverage
Food and Beverage
Coordinator
PT Staff (Servers,
Bartenders,
Concessions)
Director of Finance
Box Office Manager
PT Staff ( TIcket
Sellers, Ticket
Takers)
Payroll & Benefits
Vendor
Venuworks
Corporate Office
Ames, IA
VII. 2016 BUDGET: LINE ITEM COMMENTARY
REVENUE
• FACILITY RENT: Category represents solely those monies collected from renting any part or all of
the Swiftel Center. Projection is determined by combining both existing business under contract with
anticipated monthly business yet to be contracted.
• BOX OFFICE COMMISSIONS AND FEES: This category includes:
o Monies charged to show promoters for using the box office
o Box office labor charges
o Ticket handling charges
o Monies received from Ticketmaster for orders placed by phone or internet within 12 days of an
event, which must be picked up at Box Office
• REIMBURSED CREDIT CARD FEES: Represents monies from promoter that cover fees incurred
from the sale of tickets by credit cards.
• PROMOTED/CO-PROMOTED EVENTS: This line item used to show monies generated from the
promotion/co-promotion of Swiftel Center events.
• CATERING INCOME: Category represents gross sales of catered food and beverage at the Swiftel
Center.
• CONCESSIONS INCOME: Category represents gross sales of concession items at the Swiftel
Center; also includes income generated from pop machines.
• NOVELTIES: Category represents monies collected from commissions paid on novelty sales
occurring at the facility; i.e. t-shirts, programs, CDs, etc.
• FACILITY MAINTENANCE FEE: Represents a surcharge added to the ticket price of paid public
events.
• COUNTY ALLOTMENT: Represents monies paid by Brookings County for maintenance and custodial
services for the Brookings County Resource Center.
• REIMBURSED EVENT LABOR: Represents labor charged to clients for Swiftel Center in-house staff.
• REIMBURSED CONTRACT LABOR: Represents charges to clients for contract labor such as police,
medical, fire, electrician, dirt hauling, and non-profit cleaning groups.
• REIMBURSED OUTSIDE EXPENSE: Represents charges to clients for equipment rentals through
outside agencies; i.e. spotlights, chairs, stalls, tables, etc.
• REIMBURSED INSURANCE: Represents monies paid by promoter to cover costs incurred by
additional insurance purchased.
• EQUIPMENT RENT: Represents charges to clients for rental of in-house equipment.
• REIMBURSED UTILITIES: Monies collected from charges to clients and/or exhibitors for hookup to
electrical, gas, water, telephone or data services. Represents the labor and any additional parts and
labor needed in order to make the utilities connection for the clients and/or exhibitors.
• REIMBURSED ADVERTISING: Monies received from clients for advertising placed through our in-
house advertising agency.
• SPONSORSHIPS: Represents monies from event sponsors.
• SIGNAGE: Represents monies from signage sponsors.
• BUSINESS CENTER SERVICES: Represents monies realized by providing internet, fax, copy,
collating, stapling, printing, shipping, receiving, common carrier or other related services to clients,
exhibitors or patrons during events at the Swiftel Center.
• EARNED INTEREST INCOME: Represents monies realized from Swiftel Center money market
account or other investment vehicles.
• NAMING RIGHTS: Represents monies from naming rights sponsor.
• POUR RIGHTS: Revenues from the competitive letting of soft drinks rights for the facility.
EXPENSES
• FULL TIME LABOR: Administrative and operations full-time salaries.
• SUPPORT LABOR: Represents payroll for part-time employees in all departments including
marketing, operations and administration related to day-to-day operations.
• CONVERSION LABOR: Represents payroll for part-time set-up/tear down/cleanup labor.
• PART TIME FOH EVENT LABOR: Represents payroll for part-time labor directly reimbursed by an
event.
• EVENT LABOR – CATERING: Represents payroll for part-time catering labor.
• EVENT LABOR- CONCESSIONS: Represents payroll for part-time concession and bartender labor.
• TAXES & BENEFITS: Taxes and benefits that include FICA, FUTA, SUTA, and Workman’s Comp,
health, dental, vision, life, disability, 401K, EAP.
• POSTAGE/SHIPPING: Projected expenses for United States Postal mail, overnight and two day
delivery services, common carrier shipping and postage meter expenses.
• OFFICE SUPPLIES: Defined as disposable items, such as staples, paper clips, paper, etc.
• PRINTING/COPIER: Maintenance expense on copy/fax machines.
• SUBSCRIPTIONS: Industry trade magazines, journals or publications as well as local, regional,
national or financial newspapers and periodicals.
• DUES & MEMBERSHIPS: Participation in professional organizations and association memberships
(i.e. IAAM, INTIX, etc.) as well as local organizations such as the Brookings Area Chamber of
Commerce.
• EMPLOYEE TRAINING: Projected expenses related to tuition, registration, enrollment fees, etc.
incurred during business trips for continuing education, professional memberships.
• SALES TAX ADJUST: Monies paid to the state for taxable line items per state regulations.
• TELEPHONE: Regular (land based) telephone lines, Sprint PCS (mobile) telephones, and long
distance services.
• UTILITIES: Projected expenses for gas, electric, trash removal, water, sewer services, cable.
• EQUIPMENT PURCHASES: Projected expenses for any equipment purchased under $5000.00.
• EQUIPMENT REPAIR AND MAINTENANCE: Projected expenses and purchases for building
equipment such as tables, chairs, two-way radio repair, sound system, microphones, forklift,
scrubber, scoreboard, vehicle, elevator and above maintenance contracts.
• BUILDING REPAIR AND MAINTENANCE: Projected expenses for repair to the facility or permanent
fixtures of the facility such as overhead doors, exit doors, windows, railings, bleacher seating, drywall,
concrete block, plumbing, electrical, roof, HVAC and contractor’s labor.
• GROUNDS MAINTENANCE: Projected expenses to maintain Swiftel Center properties such as lawn
service, snow removal, ice control, parking lots, lock service and general grounds maintenance.
• COUNTY MAINTENANCE EXPENSE: Projected expenses for operations, labor, maintenance, repair
and upkeep of the space utilized by Brookings County. Expenses associated with 4-H Horse Show
and Achievement Days (which is included under labor). Category does NOT include utilities, as this
area is metered separately and is paid directly by the County.
• MAINTENANCE CONTRACTS: Projected expenses for all contracts pertaining to maintaining the
facility, such as HVAC, elevator, fire alarm, sprinkler system, pest control, scoreboards, web site,
computers, etc.
• INSURANCE: Includes property damage, general liability, director’s and officer’s liability insurance
premiums from the City, (less County managed space) and liquor, general liability, umbrella, crime
and employer and employee negligence from VenuWorks, Inc.
• TRAVEL: Projected expenses for transportation (air and ground), housing and meals for continuing
education conferences, seminars, association meetings and conferences and community
partnerships.
• VEHICLE COSTS: Projected expenses related to the use (gas, oil, propane, and diesel) of any
Swiftel Center automobile, van, truck or service related vehicle (bobcat, forklift, sweeper, etc.).
• PROFESSIONAL FEES: Annual audit fees, payroll processing through Merit, any contracted legal
representation, corporate travel, etc.
• LICENSES AND PERMITS: Cost of licenses including beer, wine, liquor, BMI, event related licenses.
• CONTRACT LABOR - EVENT: Represents costs for contracted services such as police, medical, fire,
electrician, dirt hauling and non-profit cleaning groups reimbursed by events.
• RENTAL EQUIPMENT: Projected expenses for equipment rented by facility for daily
use/maintenance not related to an event.
• JANITORIAL SUPPLIES: Non-administrative or office related supplies used throughout the facility;
i.e. brooms, mops, buckets, rags, wax, stripper, paper goods, disinfectants, degreaser, and general
sanitizing solutions, etc.; also includes rug and laundry service.
• OPERATION/SHOP SUPPLIES: Supplies used throughout the facility for operational purposes; i.e.
light bulbs, duct tape, extension cords, zip ties, tools, etc.
• OUTSIDE EXPENSE – EVENT: Event expenses related to equipment rented, such as extra staging,
barricade, chairs, tables; and services charged by outside decorators, parking, lighting, spot lights,
audio-visual and sound companies, stalls and livestock bedding.
• EVENT INSURANCE: Expenses associated with insurance purchased through Holmes Murphy for
an event.
• UNIFORMS: Projected expenses related to uniform purchase or rental for full-time and part-time
employees.
• CATERING EXPENSE: Expense directly related to catered events at the Swiftel Center including cost
of food, cost of non alcoholic beverages, linens, equipment, and other supplies.
• CONCESSIONS EXPENSE: Expense directly related to concession events including cost of food
product, supplies, alcoholic beverages, also includes expense for pop machines.
• ADVERTISING: Expense is directly related to show advertising (usually reimbursed through
promoter).
• MARKETING/PROMOTIONS EXPENSE: Expenses related to in house advertising of the Swiftel
Center. Client recognition gifts, holiday cards and photo processing. The placement of industry-
related trade journal advertisements budgeted for this fiscal year. Expenses related to travel and
incidental expenses to solicit events or promote the Swiftel Center at conventions and trade shows,
• COMPUTERS: Hardware and software, troubleshooting, and DSL connection.
• CREDIT CARD FEES: Directly related to the fees incurred for tickets sold for events at the Swiftel
Center; also includes any fees for use of the building credit card machine.
• BANKING FEES: Security Courier System, Checking and Savings Account Fees and Wire Transfer
Fees.
• CASH OVER & SHORT: Related to the ticket sales in our box office.
• SIGNAGE EXPENSE: Related to costs incurred to install signage for advertisers and in-house
signage within the Swiftel Center.
• MANAGEMENT FEES: Management fee and performance incentive paid to VenuWorks, Inc per
management contract.
• SALES TAX: Monies paid to the state for taxable line items per state regulations.
ADJUSTMENT AFTER REVENUE AND EXPENSES:
• CITY ALLOCATION: Represents monies transferred by the City of Brookings to offset the deficit
incurred by the operation of the Swiftel Center
SC - Detailed Budget
7/16/2015
10:47 AM
SWIFTEL CENTER
FISCAL YEAR 2016 BUDGET WORKSHEET
ESTIMATED BUDGET
16-Jul-15
10:47 AM
TOTAL
REVENUE:
Facility Rent 169,250
Box Office Comm./Fees 36,200
Reimbursed Credit Card Fees 3,995
Promotions/Co-Promotions Events 46,600
Catering Income 423,785
Concession Income 641,920
Novelties Income 18,750
Facility Maintenance Fee 53,175
County Allotment 18,920
Reimbursed Event Labor 138,130
Reimbursed Contract Labor 72,705
Reimbursed Outside Expense 29,040
Reimbursed Insurance 6,750
Equipment Rent 72,855
Reimbursed Utilities 17,750
Reimbursed Advertising 79,500
Sponsorships 28,850
Signage 72,000
Business Center Services 500
Interest Income 480
Naming Rights 50,000
Pour Rights 15,000
Total Revenue 1,996,155
OPERATING EXPENSES:
Personnel services:
Full time labor 673,120
Support Labor 22,530
Conversion Labor 80,020
Event labor - FOH 90,194
Event Labor - Catering 76,145
Event Labor - Concessions 93,840
Taxes and Benefits 258,696
subtotal 1,294,545
SC - Detailed Budget
7/16/2015
10:47 AM
SWIFTEL CENTER
FISCAL YEAR 2016 BUDGET WORKSHEET
ESTIMATED BUDGET
16-Jul-15
10:47 AM
TOTAL
General and administrative:
Postage/shipping 1,540
Office supplies 3,600
Printing/copier 2,400
Subscriptions 820
Dues & memberships 3,590
Employee Training 4,850
Sales Tax Adjust 5,100
subtotal 21,900
Occupancy:
Telephone 21,225
Utilities 115,100
Equipment Purchases 18,000
Equipment R & M 18,000
Building R & M 24,000
Grounds Maintenance 32,648
County Maintenance 4,625
Maintenance Contracts 29,980
Insurance 32,620
subtotal 296,198
Travel and motor vehicle:
Travel 19,000
Vehicle costs 3,900
subtotal 22,900
Services/operations:
Professional fees 20,100
Licenses 4,596
Contract labor - event 90,200
Rental Equipment 3,200
Janitorial Supplies 16,000
Operation/Shop Supplies 7,500
Outside Expense-Event 37,715
Event Insurance 7,550
Uniforms 7,000
SC - Detailed Budget
7/16/2015
10:47 AM
SWIFTEL CENTER
FISCAL YEAR 2016 BUDGET WORKSHEET
ESTIMATED BUDGET
16-Jul-15
10:47 AM
TOTAL
Catering Expense 134,187
Concession Expense 171,070
Advertising 79,200
Marketing / Promotions 40,140
Computers 3,600
Credit card fees 4,295
Banking Fees / Bad Debt 300
Cash short/(over)0
Signage (expense)3,600
subtotal 630,253
Total operating exp 2,265,796
Profit (loss) before Mgmt Fee (269,642)
Management Fee 98,508
Variable Management Fee 0
Commissions (5%)6,850
Operating profit (loss)
including fee (375,000)
Other Income
City Allocation 0
City - Capital Improvement Allocation
Other Income
Total Other Income 0
Other Expense
City - Capital Improvement Allocation
Other Expense
Total Other Expese 0
Operating Loss/Over (375,000)