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Dell Rapids leaders begin 2025 budget process, cite sales-tax uncertainty and major capital needs
Summary
City administrator Steve Rainer laid out the 2025 budget calendar, planning approach and multi-year CIP modeling, warning that a likely grocery sales-tax repeal could cut general fund revenue by an estimated $200,000 and that major capital projects will require careful funding decisions.
City administrator Steve Rainer presented the council with an initial framework and timeline for the 2025 budget, asking for council feedback on priorities and describing a collaborative process with department heads and external consultants. Rainer proposed a special budget meeting around Aug. 12 and suggested a winter strategic retreat to establish multi‑year priorities that staff would use to tie capital requests to council direction.
Rainer highlighted the city’s sales tax trend, noting a six‑month moving average near $1.9 million but recommending conservative budgeting because of a likely ballot measure seeking to eliminate the grocery sales tax; staff estimated that repeal could reduce general fund revenue by roughly $200,000. He said staff will forecast sales tax in the $1.6–$1.7 million range for 2025 if that measure passes. Rainer urged multi-year forecasting and use of fund balance as a guardrail, noting Dell Rapids’ general fund balance is unusually healthy but being drawn down to complete the new city hall project.
The presentation also addressed the capital project list (CIP), placeholder numbers for park and street projects, and large water/sewer needs such as the Orleans project and a western utilities expansion. Rainer said the city will need to decide how to fund large projects — borrowing, rate increases, grants or other offsets — and staff will model scenarios across a five-year projection. "We want the net operating income gradually going up," he said, explaining the levers staff used to test sustainability.
Council members and staff discussed department-level budgeting rules under South Dakota law, audit review timelines and the role of fund balances. Staff said utility funds may need modest rate adjustments to avoid future large increases and that the city will present the auditor’s 2023 findings as the base for the five-year projections. Council members stressed prioritizing critical infrastructure such as water and sewer repairs while balancing quality-of-life projects downtown.
Rainer closed by asking council to review the proposed calendar and be prepared to offer feedback at the next meeting and the planned budget session in August.
