It is no surprise that city officials were lukewarm and the mayor was tone deaf on the offer by the Flandreau Santee Tribe to build a casino in Sioux Falls and share the profits with the City. This town has always shown it's position regarding gambling and casinos. We do not like it and we do not support it.
It is easy to get caught up in that factoid when reading the ARGUS LEADER article about the tribe's offer. The article is about whether the city can be bought by the image of dollar bills dancing in our heads. I think everyone knows the answer to that question. The answer is no.
The real issue behind this story is "Council members were not told about the meetings with the tribe."
Director Smith said there was no point in talking about it until it has the governor's support and they don't make private development projects public. The City Council gets to read about it in the local newspaper with the rest of us. It is really kind of humorous when you think about this story and the players. Darrin Smith used to be a city councilor and was all about being vocal on how the mayor's administration should keep the councilors informed on issues. Now he is a director and the shoe is on the other foot and he makes excuses for not informing councilor leadership.
Once again, the transparency promise is broken. This time to the City Council. That's the real issue behind this story.
Thursday, May 17, 2012
Thursday, May 10, 2012
Full Speed Ahead for the Event Center
I wonder if all those people who voted yes on the Event Center have remained engaged by watching the monthly EC updates presentation to the City Council. Once the vote was done, everyone has probably gone back to their daily lives and forgotten all about this big project. That's too bad because the really important details surrounding this project like design and cost are the meat and potatoes of the project and those details are beginning to come forward and will continue to be at the forefront until completion in Fall, 2014.
The May 8th Event Center Update presentation was very interesting. The design work is done and now Mortenson will be working on the cost estimate, bringing contractors on board, establishing the guaranteed maximum price, understanding the scope of the project and start moving forward with construction. They will be issuing 4 additional bid packages parallel to this action:
Mortensen presented the project construction progress in a 4D format. It was an excellent way to communicate to the public how construction will progress over the next year and a half. I encourage everyone to go to the city's website and watch the 4D presentation. It is a fascinating way to present the rising of the Event Center from a dirt base.
A couple of interesting points came up after the presentation. Councilor Karsky asked where the staging area for this massive project was going to be on the construction site for materials, equipment, contractors, etc. The response was that this is a big building for a small site and that it is an extremely tight site.
Contractors are going to have to find off site storage for their materials and equipment and only bring materials they need for a given week to the site because there isn't room on site to store their supplies. Can you imagine constructing this big of a project and not having any staging room for materials, supplies and equipment on site ? Where are the off sites going to be and how far away? And at what additional hidden cost in their bids because of this "extremely tight site?" No staging area on site for materials, supplies and equipment is astounding news.
Councilor Jamison asked now that Mortenson was working on the cost estimate for the construction based on the design with the knowledge of the $115 million parameter, who will determine what to do if the cost estimate comes in higher than $115 million. Who will determine what will have to be removed or changed in order to stay within the $115 million? Mortensen stated that some decisions are engineering decisions or construction decisions that they make every day in projects like this.
However, he said there will be a handful of value decisions that the city will have to make regarding do we do this alternate that might increase the aesthetics or do this alternate that will increase revenues generated, improve operational efficiencies, etc. It will be Mortenson's job and the architect's job to give the city the information in order to make an informed decision and the city's core team will make those decisions.
So who is the city's core team on this project - the ones who will make these kinds of alternate decisions? It was kind of like pulling teeth to get that information out. PW Director Cotter states that through the design phase, they have already been working on developing additional alternates.
I guess its a good thing that they are planning on cost overruns during the design phase. Cotter kind of went around the horn about who would be making the decision and when pressed by Jamison stated the core team was made up of himself, Director Cooper, City Attorney Pfeifle, Director Smith, DirectorTurbak, the Mayor, Assistant Attorney Leonard and Special Projects Manager Siemonsma. Cotter says he will keep the Council informed as to what these additional alternatives might be. This will be interesting information in future event center updates.
Council Entenman, the good administration foot soldier that he is, chimed in saying "the bottom line is we the city council and the voters, we approved $115 million and we will not exceed that according to this project, is that not correct?" Cotter responded, " That's right, the way it was wrote using public funds, is the $115 million and that's our budget at this point." At this point, huh?
It's inevitable that the core team will have to make some value decisions regarding this project. In every big project, there are cost overruns, unexpected site and/construction problems, cost estimates that come in over budget, whatever. Items and/or designs will have be altered or changed or cut out.
The key to the success of the construction of the Event Center and keeping the public trust is transparency. This core team, which I am sure is headed by the mayor and not led by Cotter, needs to make a commitment to the city council and the public that they will communicate these alternate matters in their monthly updates and communicate their decisions and the reason why these alternates were necessary.
I'd like to know the $115 million is going to be enough to build the EC as designed or what has to be changed in order to stay within the $115 million budget. Transparency, please, because you would have to have your head in the sand if you think this project is going to come in under budget or right at budget without making some value decisions regarding alternates.
The May 8th Event Center Update presentation was very interesting. The design work is done and now Mortenson will be working on the cost estimate, bringing contractors on board, establishing the guaranteed maximum price, understanding the scope of the project and start moving forward with construction. They will be issuing 4 additional bid packages parallel to this action:
- Bid Package 2 for site and foundation will go out in June.
- Bid Package 3 for structural steel will go out in August.
- Bid Package 4 for enclosure on the building, roofing and interior framing of the building will go out in November.
- Bid Package 5 wrapping up all the interior of the building will go out the end of this year.
Mortensen presented the project construction progress in a 4D format. It was an excellent way to communicate to the public how construction will progress over the next year and a half. I encourage everyone to go to the city's website and watch the 4D presentation. It is a fascinating way to present the rising of the Event Center from a dirt base.
A couple of interesting points came up after the presentation. Councilor Karsky asked where the staging area for this massive project was going to be on the construction site for materials, equipment, contractors, etc. The response was that this is a big building for a small site and that it is an extremely tight site.
Contractors are going to have to find off site storage for their materials and equipment and only bring materials they need for a given week to the site because there isn't room on site to store their supplies. Can you imagine constructing this big of a project and not having any staging room for materials, supplies and equipment on site ? Where are the off sites going to be and how far away? And at what additional hidden cost in their bids because of this "extremely tight site?" No staging area on site for materials, supplies and equipment is astounding news.
Councilor Jamison asked now that Mortenson was working on the cost estimate for the construction based on the design with the knowledge of the $115 million parameter, who will determine what to do if the cost estimate comes in higher than $115 million. Who will determine what will have to be removed or changed in order to stay within the $115 million? Mortensen stated that some decisions are engineering decisions or construction decisions that they make every day in projects like this.
However, he said there will be a handful of value decisions that the city will have to make regarding do we do this alternate that might increase the aesthetics or do this alternate that will increase revenues generated, improve operational efficiencies, etc. It will be Mortenson's job and the architect's job to give the city the information in order to make an informed decision and the city's core team will make those decisions.
So who is the city's core team on this project - the ones who will make these kinds of alternate decisions? It was kind of like pulling teeth to get that information out. PW Director Cotter states that through the design phase, they have already been working on developing additional alternates.
I guess its a good thing that they are planning on cost overruns during the design phase. Cotter kind of went around the horn about who would be making the decision and when pressed by Jamison stated the core team was made up of himself, Director Cooper, City Attorney Pfeifle, Director Smith, DirectorTurbak, the Mayor, Assistant Attorney Leonard and Special Projects Manager Siemonsma. Cotter says he will keep the Council informed as to what these additional alternatives might be. This will be interesting information in future event center updates.
Council Entenman, the good administration foot soldier that he is, chimed in saying "the bottom line is we the city council and the voters, we approved $115 million and we will not exceed that according to this project, is that not correct?" Cotter responded, " That's right, the way it was wrote using public funds, is the $115 million and that's our budget at this point." At this point, huh?
It's inevitable that the core team will have to make some value decisions regarding this project. In every big project, there are cost overruns, unexpected site and/construction problems, cost estimates that come in over budget, whatever. Items and/or designs will have be altered or changed or cut out.
The key to the success of the construction of the Event Center and keeping the public trust is transparency. This core team, which I am sure is headed by the mayor and not led by Cotter, needs to make a commitment to the city council and the public that they will communicate these alternate matters in their monthly updates and communicate their decisions and the reason why these alternates were necessary.
I'd like to know the $115 million is going to be enough to build the EC as designed or what has to be changed in order to stay within the $115 million budget. Transparency, please, because you would have to have your head in the sand if you think this project is going to come in under budget or right at budget without making some value decisions regarding alternates.
Tuesday, May 8, 2012
Why Do It Just Because We Can
I am on the fence on this latest push to ban texting at the local level. It is not that I am opposed to the idea. In fact quite a long time ago I made the personal decision that I would not text while I was driving my car. I made that personal decision because I believed it was a safety issue and I knew that texting while driving was a clear, inherent danger not only to myself but to innocent people around me. Remember the Oprah Challenge?
Our cell phones have become an obsession. Why is it that we think just because we hear a ringtone that it must be answered at that very instant?
37 states have passed texting ban legislation. Are we surprised that South Dakota isn't one of them? South Dakota is the personal freedom state, except when it comes to women's issues and bedroom issues, but that is a blog for another time.
It is impressive that 16 corporations and institutions have endorsed the effort of the Citizens for Cell Phone Safety While Driving. I wonder if they were just as passionate about their endorsement at the state level in communicating their positions to state legislators.
Do we really want to have the city council establish a local ordinance on something that should be dealt with at the state level just because we can? Just because our home rule charter allows us to pass this legislation doesn't mean we should do it.
I find Councilor Erpenbach's position curious:
Sioux Falls City Councilor Michelle Erpenbach said it’s time for Sioux Falls to look at addressing the distracted-driving issue. Although the issue has failed in the Legislature, Erpenbach thinks it would be easier to pass at the city level because fewer votes are needed, and the council is open-minded and willing to take a risk.“There’s a risk that we’re maybe legislating too far, but at what point do we decide we’re going to do it anyway because we need to make a difference,” she said. “At least we’re having the conversation, we’re at a point where this is craziness, this stuff we’re doing when we drive.”
I commend the Citizens for Cell Phone Safety While Driving for continuing to push this agenda. I just think this agenda needs to be pushed at the state level, not at the local level. To pass an ordinance in Sioux Falls because our home rule charter makes it easier doesn't make it right. Ok, it has failed twice, but go back and try again. Don't take the seemingly easy way out and target home rule cities to get this done. That is a patchwork way of getting this done.
This is a state-wide issue, not a local issue. To me there is a clear delineation on what should be legislated at the state level and what should be legislated at the local level. It isn't just texting in a car that causes accidents. How far are you willing to go? Eating in your car, talking on a cell phone, reading a map, changing radio stations, talking to your children and other passengers, reading something in your car, listening to an audio book are all examples of distracted driving.
To pass a local ordinance makes Sioux Falls an island and puts law enforcement in a very difficult position to enforce it. Distracted driving falls under the reckless driving statute already. So, Councilor Erpenbach is excited about taking a risk and wanting to make a difference on this issue. Good for her. I just think she and the rest of the council can high five each other and then calm down and think about whether this is the right issue to legislate locally. I suggest they listen to their Police Chief on this matter and channel their energy into getting this issue legislated state wide.
If the City Council wants to take a stand, pass a resolution that states your position on distracted driving. Put together an education campaign through Channel 16, press releases and press conferences to educate the public on the dangers of texting while driving and OTHER distracted driving activities. There are others ways to make a difference locally to stop the "craziness, this stuff we're doing when we drive" than to pass a local ordinance. All it takes is little thinking outside the box instead of passing local legislation just because it's easier.
Our cell phones have become an obsession. Why is it that we think just because we hear a ringtone that it must be answered at that very instant?
37 states have passed texting ban legislation. Are we surprised that South Dakota isn't one of them? South Dakota is the personal freedom state, except when it comes to women's issues and bedroom issues, but that is a blog for another time.
It is impressive that 16 corporations and institutions have endorsed the effort of the Citizens for Cell Phone Safety While Driving. I wonder if they were just as passionate about their endorsement at the state level in communicating their positions to state legislators.
Do we really want to have the city council establish a local ordinance on something that should be dealt with at the state level just because we can? Just because our home rule charter allows us to pass this legislation doesn't mean we should do it.
I find Councilor Erpenbach's position curious:
Sioux Falls City Councilor Michelle Erpenbach said it’s time for Sioux Falls to look at addressing the distracted-driving issue. Although the issue has failed in the Legislature, Erpenbach thinks it would be easier to pass at the city level because fewer votes are needed, and the council is open-minded and willing to take a risk.“There’s a risk that we’re maybe legislating too far, but at what point do we decide we’re going to do it anyway because we need to make a difference,” she said. “At least we’re having the conversation, we’re at a point where this is craziness, this stuff we’re doing when we drive.”
I commend the Citizens for Cell Phone Safety While Driving for continuing to push this agenda. I just think this agenda needs to be pushed at the state level, not at the local level. To pass an ordinance in Sioux Falls because our home rule charter makes it easier doesn't make it right. Ok, it has failed twice, but go back and try again. Don't take the seemingly easy way out and target home rule cities to get this done. That is a patchwork way of getting this done.
This is a state-wide issue, not a local issue. To me there is a clear delineation on what should be legislated at the state level and what should be legislated at the local level. It isn't just texting in a car that causes accidents. How far are you willing to go? Eating in your car, talking on a cell phone, reading a map, changing radio stations, talking to your children and other passengers, reading something in your car, listening to an audio book are all examples of distracted driving.
To pass a local ordinance makes Sioux Falls an island and puts law enforcement in a very difficult position to enforce it. Distracted driving falls under the reckless driving statute already. So, Councilor Erpenbach is excited about taking a risk and wanting to make a difference on this issue. Good for her. I just think she and the rest of the council can high five each other and then calm down and think about whether this is the right issue to legislate locally. I suggest they listen to their Police Chief on this matter and channel their energy into getting this issue legislated state wide.
If the City Council wants to take a stand, pass a resolution that states your position on distracted driving. Put together an education campaign through Channel 16, press releases and press conferences to educate the public on the dangers of texting while driving and OTHER distracted driving activities. There are others ways to make a difference locally to stop the "craziness, this stuff we're doing when we drive" than to pass a local ordinance. All it takes is little thinking outside the box instead of passing local legislation just because it's easier.
Thursday, May 3, 2012
A Hope and a Prayer and A Little Lawsuit
The mayor needed to do something about that Oaks Hotel eyesore laying out there in the middle of his grand scheme of Event Center economic development. The City of Sioux Falls is suing the owner of the Oaks Hotel in the hopes of cleaning up the property until someone buys it for development. The owner of the property says he has no immediate plans to develop the property and intends to sit on it while he waits for the $300 million in development plans to magically appear.
What has been developed in that Russell Street corridor of Sioux Falls? Not much of anything. The Oaks Hotel closed down in 2008 and the property has fallen into such disrepair that the City has to sue the owner to get it to have some curb appeal. A councilor says we need to do something to pretty the area up for visitors. A little lipstick on a pig doesn't magically mean it will look like Ms Piggy.
The asking price for that little piece of hot hotel property is $2.3 million. The fact that the mayor stood out on that property with the owner when he promised to build a new hotel on that site in 2010 seems to have made little to no difference. No midas touch there. Today, the buildings are dilapidated and it has become a poster child for the city's nuisance patrol.
The recently approved TIF district is hoped to spur accelerated growth and development in the newly approved Event Center economic bubble. That couple from Cannistota has the same hope when they put their Burnside property on the market. This mayor believes the Event Center is the panacea for nearly everything economic in an area that has had no sustainable growth in decades.
It's like who comes first, the egg or the chicken. If we build it, they will come. The Event Center is supposed to be the catalyst for the economic boom in the Russell Street Corridor. The creation of the TIF District is supposed to incentivize the developers. Time will tell. It sure would have been nice if there had been some economic growth activity out there before we decided to build the Event Center out there.
The mayor had no choice, he had to initiate the lawsuit against the Oaks Hotel owner. He is like the farmer that tries to get something to grow in an area that hasn't turned out a crop in years.
A hope and a prayer that something will happen in an area where nothing has happened for decades. Maybe money from the lawsuit can be put towards the EC debt.
What has been developed in that Russell Street corridor of Sioux Falls? Not much of anything. The Oaks Hotel closed down in 2008 and the property has fallen into such disrepair that the City has to sue the owner to get it to have some curb appeal. A councilor says we need to do something to pretty the area up for visitors. A little lipstick on a pig doesn't magically mean it will look like Ms Piggy.
The asking price for that little piece of hot hotel property is $2.3 million. The fact that the mayor stood out on that property with the owner when he promised to build a new hotel on that site in 2010 seems to have made little to no difference. No midas touch there. Today, the buildings are dilapidated and it has become a poster child for the city's nuisance patrol.
The recently approved TIF district is hoped to spur accelerated growth and development in the newly approved Event Center economic bubble. That couple from Cannistota has the same hope when they put their Burnside property on the market. This mayor believes the Event Center is the panacea for nearly everything economic in an area that has had no sustainable growth in decades.
It's like who comes first, the egg or the chicken. If we build it, they will come. The Event Center is supposed to be the catalyst for the economic boom in the Russell Street Corridor. The creation of the TIF District is supposed to incentivize the developers. Time will tell. It sure would have been nice if there had been some economic growth activity out there before we decided to build the Event Center out there.
The mayor had no choice, he had to initiate the lawsuit against the Oaks Hotel owner. He is like the farmer that tries to get something to grow in an area that hasn't turned out a crop in years.
A hope and a prayer that something will happen in an area where nothing has happened for decades. Maybe money from the lawsuit can be put towards the EC debt.
Wednesday, May 2, 2012
Still Talking About that $4 Million Surplus
A discussion about what to do with a $4 million surplus in the Capital Improvement Plan has now been going on since March. You all may recall that the mayor wanted to use the $4 million surplus towards the event center debt. The city council never got to see what the directors' recommendations were for the money. The mayor wouldn't tell them. He had his own plan on what to do with the surplus money. That didn't sit very well with some of the councilors. So, six of the eight city councilors voted no to the mayor's proposal. So, now the ball is in their court on where to designate the surplus money.
At the April 2nd Fiscal Committee meeting, they talked about the need for a better process and tasked council budget/audit staff to gather information to establish a policy regarding surplus/unobligated CIP funds in a calendar year so they don't have to revisit this issue/problem every year. And they asked the administration to bring forth some recommendations on how to use the money. Tick, Tock, as we go into the second quarter of the year with no decision yet on what to do with that surplus money. Still talking.
At the May 1st Fiscal Committee meeting, the city finance director presented 3 options to the city council on how to spend the surplus money:
Back and forth, back and forth they went trying to find a date. When the date went to the middle of June, Councilor Karsky spoke up and said why can't we do this sooner? They finally settled on a May 21st working session.
The calendar year will be, at a minimum, half over before a decision is made regarding that surplus money. Not much leeway time for public works to get those projects cranked up and shovel ready. There has got to be a better way to deal with this issue and yes, a policy might help them get there since it seems they can only talk about it a month at a time. This whole thing is a good example of government moving at a snails pace and never getting anything done.
I have an idea for a policy. The minute the finance department identifies a surplus in CIP funds, the finance director notifies the mayor who in turn requires directors to identify priorities/needs, whether it be ongoing projects, infrastructure or building maintenance needs that have cropped up since the plan was adopted, or emergency capital needs. The administration would present their recommendations to the City Council, who would review the administration's recommendations, and set the priorities for how the surplus money is to be spent. How hard is that?
Then maybe, the city council won't have to spend half a year talking and talking about what to do and citizens can see a little pro-active action in city government. Oh, and it would be nice if the mayor doesn't hijack the information flow to the city council. After all, the city council is the final decision maker on all fiscal matters. Although the council is taking their sweet time resolving this matter, the blame for this delay lays squarely with the mayor who wouldn't even share information regarding directors' recommendations on where the surplus money should be directed to in the first place.
This whole thing is not a good representation of effective government and business acumen.
At the April 2nd Fiscal Committee meeting, they talked about the need for a better process and tasked council budget/audit staff to gather information to establish a policy regarding surplus/unobligated CIP funds in a calendar year so they don't have to revisit this issue/problem every year. And they asked the administration to bring forth some recommendations on how to use the money. Tick, Tock, as we go into the second quarter of the year with no decision yet on what to do with that surplus money. Still talking.
At the May 1st Fiscal Committee meeting, the city finance director presented 3 options to the city council on how to spend the surplus money:
- Option A moves $300,000 to the current 2012 CIP because there is not enough money for the 14th Street project between Minnesota Ave and Phillips Ave. The remainder of the money would go to arterial street construction projects.
- Option B identifies 8 different public works projects related to street improvements, including the 14th Street project that needs an infusion of additional money.
- Option C sets aside money for quality of life projects like an aquatics center at Spellerberg Park, etc.
Back and forth, back and forth they went trying to find a date. When the date went to the middle of June, Councilor Karsky spoke up and said why can't we do this sooner? They finally settled on a May 21st working session.
The calendar year will be, at a minimum, half over before a decision is made regarding that surplus money. Not much leeway time for public works to get those projects cranked up and shovel ready. There has got to be a better way to deal with this issue and yes, a policy might help them get there since it seems they can only talk about it a month at a time. This whole thing is a good example of government moving at a snails pace and never getting anything done.
I have an idea for a policy. The minute the finance department identifies a surplus in CIP funds, the finance director notifies the mayor who in turn requires directors to identify priorities/needs, whether it be ongoing projects, infrastructure or building maintenance needs that have cropped up since the plan was adopted, or emergency capital needs. The administration would present their recommendations to the City Council, who would review the administration's recommendations, and set the priorities for how the surplus money is to be spent. How hard is that?
Then maybe, the city council won't have to spend half a year talking and talking about what to do and citizens can see a little pro-active action in city government. Oh, and it would be nice if the mayor doesn't hijack the information flow to the city council. After all, the city council is the final decision maker on all fiscal matters. Although the council is taking their sweet time resolving this matter, the blame for this delay lays squarely with the mayor who wouldn't even share information regarding directors' recommendations on where the surplus money should be directed to in the first place.
This whole thing is not a good representation of effective government and business acumen.
Tuesday, May 1, 2012
Letter From BNSF to the Mayor of Sioux Falls
April 5, 2012
Mayor Mike Huether City of Sioux Falls 224 West 9th St. Sioux Falls, SD 57117-7402
Dear Mayor Huether:
Thank you for arranging to bring representatives of the City, U.S. Senate offices and consultants to Minneapolis on March 30 to discuss the Sioux Falls Yard Relocation project. We believe the meeting was very productive as a means to explain and understand each other’s goals and needs.
As noted at the meeting, this is the City’s project and BNSF will continue to cooperate to the extent we reasonably can. BNSF Railway’s primary objective is to maintain our current operating capability, capacity, and growth potential, to continue to serve rail customers in the region, with no interference with our overall rail network.
The purpose of this letter is to summarize BNSF Railway’s analysis of the various options and to put focus on BNSF’s preferred options of the Timberline Yard and a siding to the South of town.
Yard Location: Between the Timberline Yard and the E&E Yard options, Timberline Yard is the preferred location once the design details have been worked out with BNSF Engineering. At some point in the history of the project, the option of locating the yard south of town (in the area where the siding is currently being proposed) was removed from consideration. This option was not thoroughly discussed at the meeting and remains as a viable option. Relocation of the yard to the Corson Subdivision (northeast) necessitates the construction of additional infrastructure either as a wye connection or a siding to allow traffic to move from the Madison Subdivision to the Corson Subdivision (northwest to northeast).
Bridge Over River Options: Construction of a wye would also require construction of a bridge over the Big Sioux River. The bridge options currently envisioned posed significant engineering and operational problems. The bridges would have extreme track curvature plus steep descending and ascending grades. Those conditions would cause tremendous lateral forces on rail cars traversing the bridge and can increase the chances of derailment. An additional concern was the placement of switches on the bridges themselves. For these reasons we do not believe the bridge options are viable.
Siding Options: In lieu of a wye with bridge, a siding could be built, either extending a current industry track in the downtown area or construction of a new siding to the south of town.
The downtown siding option was taken off the table as it would be disruptive to the community. There would be excessive, long-term blockage of S Cliff Ave and Cherry Rock Park.
The two southern siding options remain as viable options. The siding would be on BNSF right of way and extend either from East 57th St. down to 85th or from East 69th St. to 271st. The first option appears preferable to BNSF. The second option poses concerns that must be researched. First, the city has expressed their desire to maintain access from the west for the neighborhood paralleling the main line. Building an overpass at 85th is an expensive proposition and has been estimated by the City at approximately $10 million. As discussed, the City should investigate creating access via 271st. The other concern is whether this more southerly location is within the “switching limits” of the yard. Under our labor agreements, this location could trigger additional operating costs.
The City suggested that rather than replace the infrastructure necessary for certain train movements, the City could compensate BNSF for the additional costs of crews, locomotives, fuel, etc., to perform those activities. Apparently it had been thought that such moves would be infrequent. As we noted, that is not the case and we anticipate the frequency will grow. This option would require us to do switching on our main line. That would interfere with our system network and run afoul one of our primary objectives. It would also be costly and less efficient, costing the city several hundred thousand dollars a year in labor costs in addition to over $1 million per locomotive. Crossings would also be blocked for extended periods of time, particularly in winter, for these movements.
Conclusions
As we explained at the meeting, since BNSF’s sole objective in this project is to preserve the same capability and capacity that we currently have while accommodating the City’s redevelopment efforts, there is no economic basis for BNSF to contribute to this project.
Over the years, BNSF has cooperated with the City in this effort, providing funding for the underpass project in Pasley Park, engineering work, assistance on real estate transactions and with federal regulatory issues involving track removal. It is our intent to maintain that cooperation as the City moves forward.
BNSF looks forward to continuing to work with the City on finalizing the MOU once these deal points are better refined, but please note that this letter is not intended to be binding upon BNSF and that nothing in this correspondence shall be deemed as a submission by BNSF to the jurisdiction of any state or local body or a waiver of the preemptive effect of any state or federal law.
We appreciate the city’s diligence in working with BNSF on this project.
Sincerely,
Sarod Dhuru BNSF Railway
CC: City Council Chair Sue Aguilar, Sen. Tim Johnson, Sen. John Thune, Rep. Kristi Noem, Sweeney, Hegeman, Albanese, Wright, Perry, McBeth
Mayor Mike Huether City of Sioux Falls 224 West 9th St. Sioux Falls, SD 57117-7402
Dear Mayor Huether:
Thank you for arranging to bring representatives of the City, U.S. Senate offices and consultants to Minneapolis on March 30 to discuss the Sioux Falls Yard Relocation project. We believe the meeting was very productive as a means to explain and understand each other’s goals and needs.
As noted at the meeting, this is the City’s project and BNSF will continue to cooperate to the extent we reasonably can. BNSF Railway’s primary objective is to maintain our current operating capability, capacity, and growth potential, to continue to serve rail customers in the region, with no interference with our overall rail network.
The purpose of this letter is to summarize BNSF Railway’s analysis of the various options and to put focus on BNSF’s preferred options of the Timberline Yard and a siding to the South of town.
Yard Location: Between the Timberline Yard and the E&E Yard options, Timberline Yard is the preferred location once the design details have been worked out with BNSF Engineering. At some point in the history of the project, the option of locating the yard south of town (in the area where the siding is currently being proposed) was removed from consideration. This option was not thoroughly discussed at the meeting and remains as a viable option. Relocation of the yard to the Corson Subdivision (northeast) necessitates the construction of additional infrastructure either as a wye connection or a siding to allow traffic to move from the Madison Subdivision to the Corson Subdivision (northwest to northeast).
Bridge Over River Options: Construction of a wye would also require construction of a bridge over the Big Sioux River. The bridge options currently envisioned posed significant engineering and operational problems. The bridges would have extreme track curvature plus steep descending and ascending grades. Those conditions would cause tremendous lateral forces on rail cars traversing the bridge and can increase the chances of derailment. An additional concern was the placement of switches on the bridges themselves. For these reasons we do not believe the bridge options are viable.
Siding Options: In lieu of a wye with bridge, a siding could be built, either extending a current industry track in the downtown area or construction of a new siding to the south of town.
The downtown siding option was taken off the table as it would be disruptive to the community. There would be excessive, long-term blockage of S Cliff Ave and Cherry Rock Park.
The two southern siding options remain as viable options. The siding would be on BNSF right of way and extend either from East 57th St. down to 85th or from East 69th St. to 271st. The first option appears preferable to BNSF. The second option poses concerns that must be researched. First, the city has expressed their desire to maintain access from the west for the neighborhood paralleling the main line. Building an overpass at 85th is an expensive proposition and has been estimated by the City at approximately $10 million. As discussed, the City should investigate creating access via 271st. The other concern is whether this more southerly location is within the “switching limits” of the yard. Under our labor agreements, this location could trigger additional operating costs.
The City suggested that rather than replace the infrastructure necessary for certain train movements, the City could compensate BNSF for the additional costs of crews, locomotives, fuel, etc., to perform those activities. Apparently it had been thought that such moves would be infrequent. As we noted, that is not the case and we anticipate the frequency will grow. This option would require us to do switching on our main line. That would interfere with our system network and run afoul one of our primary objectives. It would also be costly and less efficient, costing the city several hundred thousand dollars a year in labor costs in addition to over $1 million per locomotive. Crossings would also be blocked for extended periods of time, particularly in winter, for these movements.
Conclusions
As we explained at the meeting, since BNSF’s sole objective in this project is to preserve the same capability and capacity that we currently have while accommodating the City’s redevelopment efforts, there is no economic basis for BNSF to contribute to this project.
Over the years, BNSF has cooperated with the City in this effort, providing funding for the underpass project in Pasley Park, engineering work, assistance on real estate transactions and with federal regulatory issues involving track removal. It is our intent to maintain that cooperation as the City moves forward.
BNSF looks forward to continuing to work with the City on finalizing the MOU once these deal points are better refined, but please note that this letter is not intended to be binding upon BNSF and that nothing in this correspondence shall be deemed as a submission by BNSF to the jurisdiction of any state or local body or a waiver of the preemptive effect of any state or federal law.
We appreciate the city’s diligence in working with BNSF on this project.
Sincerely,
Sarod Dhuru BNSF Railway
CC: City Council Chair Sue Aguilar, Sen. Tim Johnson, Sen. John Thune, Rep. Kristi Noem, Sweeney, Hegeman, Albanese, Wright, Perry, McBeth
Saturday, April 21, 2012
TIF's - Quantity vs. Value Added
I would venture to guess that when city officials
talk about TIF’s the general public doesn’t have a clue what “TIF” means. TIF
is an acronym for Tax Increment Financing.
Tax Increment Financing is used as an incentive
tool for development or redevelopment in areas of the city that have been
difficult to development for whatever reason. Listen to the February 2012 Inside Town Hall program and you will hear former Economic Development Manager
Erica Beck and Councilor Michelle Erpenbach talk about TIF’s.
The first TIF District approved by the city
council was in 1989 and encompassed the entire downtown area. Historically, the
city has used tax increment financing for the core of the community. The
downtown area which was also defined The Urban Renewal Area was the first TIF because it was an
area that had, for years, been the most difficult to re-develop.
The process for approving a TIF district requires
the plan to first go through the Planning Commission. If the Planning
Commission approves the TIF District boundary and plan it will then go to the City Council
for adoption. The City Council approves the boundary of the TIF District and
approves the project plan which defines eligible items (public improvements and associated expenses) and the
projection on how long each district will last. TIF’s can last up to a maximum
of 20 years. Typically, past TIF Districts have lasted 10-12 years. Just because a TIF District is created doesn't mean the plan will be implemented. 3 TIF District plans, #4 , #6 , and #9, created in 2005, 2006 and 2008 respectively were never brought to fruition.
Property taxes are collected and disbursed to the
county, the school district and the city. In a TIF District, the developer pays
all property taxes every year and the portion attributable to the development that
increased in value prior to the project is set aside in a special fund at the city. This fund may reimburse the developer for specific costs they have
incurred in the project as per the plan. It is a reimbursement program where the developer incurs the cost and pays the bill prior to TIF reimbursement.
There have been a total of 15 Districts approved
for tax increment financing, 8 of which are currently active. If you visit the
city’s website, the Community Development/Economic Development page you will
only see 4 active TIF districts listed when there are actually 8 active TIF Districts. One of those four listed on the city's website has been terminated although it still shows up as active on the website. Where are the other 5 districts and why
aren’t they on the website?
The four "active" TIF Districts on the city's website are:
- #5 Cherapa created in 2005
- #7 Dunham's Minnesota Centre created in 2007 (First Bank & Trust/VeraSun)
- #8 Uptown at Falls Park (This TIF District was actually terminated when TIF District 12 was created in 2011 so it is no longer active. This TIF was incorporated into TIF District 12)
- #10 CNA Surety/Lumber Exchange created in 2010
- #11 Bancroft Place Partners LLC (housing across from Redlin Elementary School created in 2011)
- #12 8th to North of 4th between Phillips and Main, excluding 1/2 block east of Phillips from the Albert House to just north of 4th. This district was created by terminating TIF District 8 above) created in 2012
- #13 Raven Industries created in 2012
- #14 Hilton Garden Inn/River Ramp Demolition created in 2012
- #15 Sanford Sports Complex area created in 2012
TIF’s are popular because it is a tool for local government to finance public investment in new private investment. It uses increased property taxes that a new development generates to finance certain public costs of the development. It also affords all taxing entities (city, county, school district) to maintain their current tax revenue during the life of the TIF.
At a recent Good Morning Sioux Falls program sponsored by the Chamber of Commerce, City Director Darrin Smith stated that in the past 18 months the city has approved six new Tax Increment Finance Districts which compared to 9 TIF’s approved between 1989 and 2009. He stated that although the city will continue to be selective on the TIF’s approved, the city wants to be aggressive in promoting economic development.
Establishing TIF districts is serious financial business. This financing tool should be used cautiously and conservatively with very specific criteria in place to justify the establishment of a TIF District. The danger with emphasizing quantity is all developers will want a TIF created, i.e. hotels, strip malls, cafes, bars and other commercial activity. The way Director Smith sounds, it’s a competition to see which administration can create the most TIF’s.
As I heard on late night TV one night, it's not the size of the boat but how it rides the waves that is important. In the case of TIF Districts, it's not quantity but whether the investment added dollars to the community that's important. It's not the number of TIF Districts you create that is important, it's the total value added in the development that's important. That is what the economic development czar should be talking about, not how many TIF Districts he has created lately.
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