City tightens 2025 budget

Some challenging decisions were made by the Hill City Common Council (HCCC) to balance expenses and requests with the available funding for the city’s 2025 budget. It came to a preliminary total of $3,550,054.46. 

At the first budget meeting July 11, council president Lori Miner said the city completed water and sewer facility master plans earlier this year that outlined approximately $30 million worth of projects. These reports are going to be submitted to the State Water Plan this fall with a funding request for $18 million. 

“That’s a far difference from $30 million so I just want you to know that we’ve got some difficult decisions to make as a council as to how we’re going to complete our water and sewer projects. So please bear with us,” said Miner, adding that requests may not be met. 

Mayor Tana Nichols replied, saying, “Sufficed to say, I think everyone may need to sacrifice a little bit for the greater good, so to speak.” 

For the Municipal Gross Receipts or Triple B Fund, there was a five percent sales tax decline and a 20 percent gross receipts decline. 

At the third budget meeting July 25, city finance officer Stacia Tallon said she thought the city would make its projected sales tax budget but was surprised by the gross receipts decline. 

“I’m at a loss on that one. I’m surprised that we’re down that far,” said Tallon.

Since these numbers only reflected through July 15, Tallon said the city would not know if projections were hit until September. However, the budget needed to be approved before then. 

Hence, the council needed to consider bringing in reserve funds as well as tightening the 2025 budget.

In a separate conversation, Miner said every year Tallon gives the council a projected revenue number to work with based on her history with the city, the money that has come in and the money in the accounts. 

“There was much more ask than the dollars available, but it still had to be balanced. So we are still pulling in money from reserves to make it work,” said Miner. 

Within the Triple B Funds, the council allocated $215,000 to the Hill City Area Chamber of Commerce, which was $10,000 less than what was originally requested. 

According to the minutes of the July 25 meeting, “(Alderman Ethan) Walker talked with a few members of the chamber, and they felt like they could tighten their belts in some areas, and if they got $215,000, they would be able to qualify for the next tier of state money match for advertising.” 

The council also decided to deny the funding requests from the Hill City Arts Council for $18,000, Wine, Brew & BBQ for $8,600 and Black Hills Film Festival for $3,000, which came to a total of $29,600.

In a later conversation, Miner said, “If you look through historically how previous councils have talked about Triple B money, the Triple B money was supposed to be seed money. You know, ‘Hey, we’ve got an idea. Let’s get it started.’ When you’re a start-up, you need some funds.

“But these are long-running programs, all three of them, and there should be a point at which they’re self-sustaining. In order to make our budget work, to do the things I think we want to accomplish with the Triple B money, something had to go.”

Walker and alderman Justin Thiry agreed with this during the July 25 meeting. 

Additionally, Thiry said at the meeting, “When we pooled data from other neighboring towns, it seems like Hill City’s been the only one funding these types of events out of their Triple B fund.”

Historically, these groups have also been members of the chamber, and the chamber does offer support and advertising for their members. 

For the first time, $20,000 was pulled from the Triple B fund for the Hill City Center to cover maintenance and utilities. Expenses have increased since it was converted from a senior center to a community center. Miner said in a later conversation that she saw this as primarily tourist dollars, and this will free up general fund money.

As another change, funding for the Heart of the Hills Economic Development Corporation (EDC) was allocated out of the Triple B fund for the 2025 budget. This, again, will free up general fund money. 

The EDC requested $20,000. At the July 25 meeting, Shonna McBride, vice president of the EDC, said some of its projects are long-term, which makes budgeting and funding hard. 

One of the projects the EDC has worked on for over a year is the Strategic Housing Trust Fund. The EDC expects to receive $2 to 5 million from this for low-interest loans to develop affordable housing. McBride said this is a big accomplishment.

At the July 25 meeting Walker asked if there were any projects the EDC anticipated spending money on in 2025. McBride said it would have to update the housing study which would cost between $3,000 and $5,000, and the executive director’s salary would be paid with these funds. 

It also planned to survey downtown businesses and ask what was needed. Through this, McBride said the EDC would narrow down its initiatives to things businesses in Hill City could benefit from. 

Already looking at pulling from the reserves, the council discussed a variety of amounts to allocate and decided on $12,500.

“I don’t feel they came with a full list of projects, and at the same time, again, we have to try to balance the budget the best we can,” Miner later said. 

This brought the Triple B funds to a total of $247,500. 

“There is absolutely nothing wrong with any of the groups in town. It’s strictly a financial decision,” said Miner. “They’re all very worthy groups, and I’d love to be able to support them all. However, our dollars just don’t.”

Until September numbers are available, Miner said the council had to make its best guess as to how much money will come in next year. 

For the general fund, the total came to $2,158,424.09. This includes the common council, contingency, city administrator, finance administration, insurance and bonds, government buildings, law enforcement, fire department, developmental services, highway and streets, cemetery, ambulance, youth center, parks, community center, library and planning commission. 

One notable difference was the amount given to the Hill City Ambulance District. In 2024, the ambulance was allocated $20,000, and this year, it requested $35,000 to help fund construction and equipment costs. Ultimately, the council decided to give the ambulance $2,000, which is the same amount that the Hill City Fire District receives.

In a later conversation, Miner said the ambulance is already a taxing district and applied for an opt-out. Through this, the ambulance opted out of the tax limitation and residents were assessed more on their property taxes to provide extra funds to the ambulance district. 

Along with this, the ambulance has funding from loans, and the Supporters for the Hill City Ambulance to help them raise money. 

“The ambulance is a fine organization. I certainly want them in town. I certainly support what they do, but how do I make the city budget balanced?” said Miner. “My point was, I think they have sources of money. Again, while I’d love to support them as much as I could, I don’t think that’s reasonable with the money that we have to work with in the city budget.” 

The $90,000 allocated in the BID Fund was for an internal loan, and $195,802 was allocated for the Debt Service Fund which will be done in 2026. The Water Enterprise Fund was $325,000. 

During the July 25 meeting, Miner said, “I feel like we’re living paycheck-to-paycheck. As we look through all these individual pages, there’s really not anything to cut.” 

With the impending water facility projects, Miner encouraged the council to look ahead and think about where the money would come from down the road. The 2025 budget for water did include a backup generator that will turn on in case of a power outage. 

The Sewer Enterprise Fund for the 2025 budget came to $533,328.37. This was balanced by moving $134,328.37 from the sewer fund reserves.

The biggest debate was whether to purchase a jetter/vacuum trailer combo or an individual jetter trailer. 

In a later conversation Miner said as general maintenance, sewer lines should be jetted every few years to clear out any blockages and debris. 

“It just keeps your sewer lines moving better. It’s also a time when you get down into your sewer lines to look to see if there’s any leaking at the joints, whether there’s infiltration, because that can be a big source of water that has to be treated,” said Miner.

Meanwhile, the vacuum portion can be used for sewers and road repairs. 

Alderman Dennis Siebert said at the July 25 meeting it seemed like the jetter was a beneficial thing for the city, cost-effective and would provide a return on investment. To him, it seemed like money should be gifted from the general fund to the sewer fund for that purchase.

Ultimately, the council decided to take $70,000 from the sewer fund and $100,000 from the general fund street department to purchase the jetter/vacuum trailer combo.

This brought the total 2025 budget to $3,550,054.46. According to Tallon, $50,000 will be moved out of the park improvement reserves and $158,368.09 will be moved out of the general fund reserves to finance the budget along with the city’s other sources of revenue. 

The first reading of the 2025 budget took place at the HCCC meeting Aug. 12, and it was unanimously passed. The second reading will occur Monday, Aug. 26 during the HCCC meeting at city hall at 5:30 p.m.

All budget meeting agendas, minutes and recordings as well as the complete budget can be found at hillcitysd.org.