Sioux Falls council approves $68 million sales-tax bond for Keene, Frank Olson and West Side recreation projects

The Sioux Falls City Council on Tuesday approved second reading of an ordinance authorizing the issuance of up to $68,000,000 in sales tax revenue bonds to fund two new aquatics facilities and improvements to the West Side Recreation Center. The ordinance passed on an 8-0 vote.

City finance staff described the package as two major construction projects and modest improvements to an existing center. "The item before you for consideration tonight is second reading of the bond ordinance that would generate $68,000,000 of proceeds for design and construction of a new outdoor aquatics facility at Keene Park, a new indoor recreation and aquatics facility at Frank Olson Park, as well as, and to a lesser extent, improvements at the Westside Recreation Center," said Sean, a city finance staff member.

The bond ordinance authorizes use of sales and use tax proceeds to: (1) renovate, equip and/or furnish the West Side Recreation Center; (2) design and construct a new outdoor pool, pool house and related amenities at Keene Park; and (3) design and construct a new indoor recreation facility with an indoor pool, gymnasium and community space at Frank Olson Park. The ordinance authorizes issuing one or more series of bonds and establishing construction, debt service reserve and other customary funds. The ordinance specifies a construction-fund deposit "not to exceed $68,000,000."

Why it matters: Council members said the facilities are intended to expand space for lessons, competition and year-round swimming and to address aging pool infrastructure. In remarks before the vote, Councilor Branco said the city can afford the projects without raising taxes and emphasized the urgency of starting construction: "If building these pools required a tax increase, I would vote no... Each passing annum, building costs grow. Every season of delay brings us closer to exceeding the old pool's lifespans. Most importantly, each week lost in acrimonious debate is another week before kids can swim." The council voted yes: Thomason, Barranco, Bassey, Cole, McCuris, Sigourney (Sighetty), Sale and Spellerberg.

Council and staff clarified the ordinance divides the work into at least two bond series. Series A would cover Keene Park construction and West Side improvements; Series B would cover construction at Frank Olson and is conditioned on additional design approvals. City staff said the ordinance requires schematic-level design review for Frank Olson: the council must approve roughly 5% schematic design for the Frank Olson facility before the city would issue Series B bonds to start construction. Staff also said the city will form a design advisory group that includes council representation and Parks & Recreation staff to review the designs.

Public comment: Several residents and users spoke during the public-input period. Tim Stenga said he believes the West Side facility was described to the public as a "rec center" but that it functions more like a wellness center, and urged the council to delay the vote until the city clarifies the West Side program. He told the council, "If we're gonna get rid of the weights and we're gonna get rid of everything in there to make it a rec center, here we go again. We're gonna come back to you guys. We're gonna ask for more money because we gotta get rid of everything in there." Mike Zinner asked whether the bond package would go to the ballot and said, "Should the bonds go on the ballot, which would take a 60% vote of the voters..." (the council did not put the question to a ballot in this meeting; the ordinance approved the sale of bonds by council action.)

Next steps: With second reading approved, staff said the city will proceed with schematic design and form the design advisory group. If the council approves the schematic design for Frank Olson, staff may return to authorize issuance of Series B bonds to fund Frank Olson construction. The ordinance pledges a portion of the city's sales and use tax proceeds to repay the bonds and authorizes related documents including an indenture of trust and any supplemental indentures.

Votes at a glance: Motion to approve second reading of the sales tax revenue bond ordinance (motion by Councilor Sale, seconded by Councilor Sighetty) — Outcome: approved 8-0. Yes votes: Councilor Thomason; Councilor Barranco; Councilor Bassey; Councilor Cole; Councilor McCuris; Councilor Sigourney (Sighetty); Councilor Sale; Councilor Spellerberg.