City delays vote on bond for new recreation, pool projects

Uncertainty around the upcoming November election — especially a vote to remove a tax on consumable goods in South Dakota — has prompted the city of Sioux Falls to delay a vote on funding two major pool projects, including an east-side recreation center.

The estimated $77 million aquatics bond was scheduled for a vote in September, alongside the Sioux Falls City Council’s vote on its 2025 budget.

The bond will fund a replacement outdoor aquatics center at Kuehn Park as well as replacing the outdoor pool at Frank Olson Park with a multigenerational recreation center that includes an indoor pool.

It also will reimburse funds that were used to acquire the Sanford Wellness Center at 8701 W. 32nd St.

Initially, the vote was scheduled for May before being postponed to September. Now, the plan is to vote in November, which still would allow design and construction to stay on the current timeline for opening the new pools in 2027.

“As we’ve had more conversations, we decided it would not be prudent for us to bring it forward until after the general election in November,” director of finance Shawn Pritchett said.

Elections can impact the bond market negatively , he said, so the city was “not planning … to actually fund the bond until very late this year or early next year anyway.”

But plans could be delayed again if voters pass Initiated Measure 28, which would prohibit a state sales tax on anything sold for human consumption, except alcoholic beverages or prepared food.

“It certainly is a factor,” Pritchett said.

The measure is written in such a way that it has created enough confusion to require either judicial clarification or action from the South Dakota Legislature, he said. Either or both of those would create “a major pause” as the city waits to learn whether its own sales tax revenue would be affected by the change.

“If it does impact us, then we have to go back and say ‘OK, based on what we expect the potential revenue loss would be, how are we going to mitigate that and is this bond something we can continue to fund?’” he said.

Debt service for the bond is included in the proposed budget.

The city also is seeing some softening in sales tax revenue, Pritchett said. It dropped 3.7 percent in July compared with a year ago, which reflects mostly sales in June — the largest month-over-month decrease in revenue since 2020.

The sense is that sales tax is returning to steadier levels seen before a spike during the pandemic, he said.

“We do prepare for these ebbs and flows of the economy and are able to continue the level of services that our residents expect while still planning for transformational initiatives,” Pritchett said.

“Just as our residents continually reprioritize where they spend their money based on their personal circumstances, the city follows these same practices.”

A first reading on the 2025 budget is scheduled for next week.