Sioux Falls water and sewer is funded thru enterprise funds (user fees). Those fees go towards maintenance, operation, general expansions and pipe replacements. They also go towards paying the salaries of the employees of this department (while all other city employees are paid thru the 1st penny operational fund).

While the concept of enterprise funds works well for normal operation, paying salaries and bond payments for major expansions out of this fund is what is draining the coffers and a cause for fee increases.

The 2nd Penny fund was created for road maintenance and soon got hi-jacked for all infrastructure projects. But that is what is it is for, major infrastructure like an expansion of our water and sewer plant.

This is really about allocation of tax money.

We say we need to pay down the bonds for this facility with user fees but we don’t use user fees to pay down the bonds for the Events Center, Pavilion, Zoo, Tennis Courts, Midco Aquatics and the list goes on.

It is ludicrous to have $80 million in a reserve fund for infrastructure projects while raising water rates to pay down bonds for a needed infrastructure project.


Why not re-finance the bonds thru the 2nd Penny fund and avoid a water rate increase? I wonder what Bloomberg thinks of that?

By l3wis

7 thoughts on “Sioux Falls water plant expansion should be bonded thru 2nd Penny”
  1. Theresa, Kermit, Janet and Pat always reminded everyone that the constant building of the play projects would ruin the 2nd penny and this is another way to show it.

    The use phony use of enterprise funds to let them “stand on their own” is letting the fake conservatives like PTH drain our pockets so they can have their names on more over priced bridges and bunker ramps.

    The enterprise funds should have been used for the Events Center and the 2nd penny for the infrastructure like it was supposed to be used for.

    There was talk about bonding for fixing streets and bridges because it was too much for the 2nd penny to absorb after the city had wasted so much on the play things. As we continue the boom-town mentality of letting the developers control city hall we taxpayers are going to be pushed out of the market.

  2. I live neighboring in Hartford. It’s small town principal and practice without complicated spending maneuvers. There was a recent substantial water rate increase. It was explained without Penny this and Penny that. There’s no bond. The rate hike is based on future cost. ONE Sioux Falls has needed an upgrade for a decade.

    Bloomberg would say ONE Sioux Falls doesn’t need water. Drink Coke ONE. Defund the water department and build another empty parking garage tower with a trillion Pennys and low grade bondo.

  3. It’s very, very, simple. Tax the little guy with water user fees and use the $80 million to potentially enrich the developers in this town.

    ( and Woodstock adds: “Yep, that’s how the game is played around here”… )

  4. The huge issue here, is that 99% of the bonds/loans we took for water and sewer expansion are from S.R.F loans.

    The State Revolving Funds which are monies that ‘we’ as a State took from the Federal Govt by means of the clean water act, is managed and controlled by the “State” or the Whole People of the State.

    By law, ‘we’ as a local subdivision are required to create a Enterprise Fund, if we are wanting to utilize the ‘state funds’, of which are managed by the entire population.

    In doing so, we must have sufficiant revenues in the Enterprise Fund itself, meaning, ‘we’ need to ensure the State that we have enough user fees, service fees, revenues within the fund itself, to pay off the S.R.F monies.

    State Law preempts us here, it sets the minimum requirement of ‘reserves’ we must hold in the fund, meaning we have to promise the entire populaiton of the state that we can pay off the S.R.F loan(s).

    If we furthermore, abide by the “state laws”, rules, and all administrative procedures, presribed within the loan itself, which is further directed by federal law, ‘we’ then get back 50% of the Interest of which we paid to the State. Meaning, we only pay 1% interest, rather than 2%.

    However, State Law governs over what ‘we’ can use that interest rebate for in the future.

    The CITY has taken out at least 2 S.R.F loans that I know of to invest capital in our own Water and Sewer Systems.

  5. VSG,

    technically, the ‘reserves’ are an ASSET…one has to understand the power behind a City. I try my best to explain it here…if you may,

    What is a City -

    The City is simply The PEOPLE agreeing to live an work together, investing in themselves, to profit from the land.

    Think what happens if a CITY ever becomes Dissolved – the debts, liabilities, expenses are all paid off, all collectables are collected, and the profits remaining, are proportioned out across the remaining Landowners, Property Holders, while the land resorts back to it natural state of being, or the previous townships.

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