Spearfish City Council Town Hall on April 29, 2026

Finance Officer Michelle DeNeui presented a detailed overview of the City of Spearfish's 2025 preliminary financial statements, budget performance across all funds, debt portfolio, and the status of the Sky Ridge Tax Increment Finance (TIF) District. The session was conducted as an open dialogue, allowing council members and the public to ask questions throughout the presentation.

Public Comments & Testimony

• Council Member Doug asked about the difference between the projected $8 million use of cash on hand discussed in 2024 and the actual $500,000 decrease in general fund balance.
• Dean asked for clarification on the components of the 24% personnel cost share of citywide expenses.
• Council Member Doug raised questions about the funding strategy for the future $40 million wastewater treatment plant expansion and the potential application of a new Capital Improvement Tax (Caps Tax).
• Jeremy asked about the accounting classification of TIF revenues in financial reporting.
• Council Member Doug asked about the status and future plans for the remaining 80-acre parcel at the Sky Ridge development.

Discussion Items

• 2025 Financial Statements: DeNeui explained the state-mandated reporting format, distinguishing between governmental funds (which use a current resources method, excluding long-term assets) and proprietary enterprise funds (operated like a business). The citywide modified accrual basis financial statements required significant year-end journal entries to comply with accounting standards.
• Budget vs. Actuals: Total citywide expenses were just over $57 million. Capital projects (streets, rec center, skate park, water wells) accounted for a dominant share of expenses. Sales tax provided 24% of citywide revenue and is the primary funding source for the General Fund. Property tax is 8% of citywide revenue and 14% of General Fund revenue. The city maintains one of the lowest mill levies in the state ($1.87 per $1,000) by taking all available growth annually. Enterprise funds for water, sewer, solid waste, airport, campground, and hydro were reviewed, with most showing positive operational results.
• Debt and Sky Ridge TIF: Total city debt decreased from $35 million to $18 million in 2025 due to the statutory expiration of TIF District 1. DeNeui reviewed the Sky Ridge TIF district financial outlook, noting that lower-than-projected TIF increments—driven by declining mill levies and a pause in home construction—have created a funding gap. The workforce housing component is projected to break even while the sports complex component is projected to have a small deficit. An estimated $10.8 million transfer from the general fund or hospitality tax fund is currently projected to address the overall gap.

Key Outcomes

• The preliminary financial statements were presented for public review ahead of their formal adoption recommendation at the City Council meeting on the following Monday (May 4, 2026).
• DeNeui committed to continued transparency, directing residents to monthly sales tax and treasure reports available on the city website, and noting that a new budget software system is being implemented to enhance public data access.
• The Finance Officer invited community input on future town hall discussion topics and encouraged public participation in the upcoming budget cycle.