Sunday, May 8, 2011

To Vote or Not to Vote – That is the Question.

Everybody is speculating on just what the event center finance package is going to look like. In addition, there are a lot of rumors whether this whole thing is even going to a vote of the public. The finance package will determine whether there is a vote or not by the public.

The mayor has identified money for the Event Center coming from the General Fund Reserve, Private Donors and Bonding.  Bonding the project with an issuance of bonds may require a vote of the public per state law.
Now, there are rumors surfacing that to get out of a public vote, the financing would be done using the general fund reserve and sales tax. Issuing bonds covered by sales tax would not require a public vote unless it is referred.

If the mayor and city council intend to issue bonds, state law requires an election with 60% of the voters in favor of the bond issuance unless otherwise provided.
6-8B-2. Election required for issuance. Unless otherwise provided, no bonds may be issued either for general or special purposes by any public body unless at an election sixty percent of voters of the public body voting upon the question vote in favor of issuing the bonds. The election shall be held in the manner described by law for other elections of the public body.
If the city council wishes to issue bonds for the event center project they would need to declare the necessity to issue bonds by resolution or ordinance at a regular city council meeting or by special meeting. Sioux Falls City Charter requires an ordinance for this activity.
6-8B-3. Resolution or ordinance declaring necessity of bond issue--Contents--Election. If it is determined by the governing body to be necessary or expedient for any public body to issue its bonds the governing body at a regular meeting thereof or a special meeting duly called may by resolution or ordinance declare the necessity thereof and may submit the question of the issuance of bonds to the voters of the public body at any annual election or at a special election called for that purpose. The resolution or ordinance shall set forth clearly the purpose for which the bonds are to be issued and the maximum amount of the bonds. The resolution or ordinance may also include the maximum rate of interest which they draw, and the maximum time within which they shall become due and payable or other matters the governing body determines relevant to the bond issue.

State law also provides that the authorization of bonds for the purpose of construction of a building or facility includes authorization to expend the proceeds of the bond for any equipment and furnishings, the purchase of any land, and the payment of all fees and expenses reasonably necessary to complete the building or facility. (6-8B-6)
Financing the construction of the event center, paying for equipment and furnishings for the building, purchase of any land and other fees and expenses necessary to complete the event center using general fund reserve and sales tax from the Capital Improvement Program raises serious red flags. The general fund is the city’s primary operating fund and to use these operating funds for construction purposes should be highly questionable as other funds have been put in place to fund capital improvements.
The first penny sales tax and property tax provides the primary revenue source for operations. The second penny sales tax primarily supports the Capital Improvements for general fund departments and is also used for debt retirement. User fees (water, sewer, electricity, parking and landfill) are second highest level of revenue support in the capital improvements program.
The only money in the 2011-2015 Capital Improvement Plan for the Event Center is $500,000 in 2011 and $500,000 in 2012. It would seem that serious realignment of capital projects programmed in the 2012-2016 capital plan and the years moving forward will need to be significantly adjusted if the Event Center project is going to be funded using second penny sales tax.
So where do you think the mayor and his team is going to propose getting the necessary funds to build his vision?  I say pay attention general public. The next couple of months will be very interesting.


  1. ...there are rumors surfacing that to get out of a public vote, the financing would be done using the general fund reserve and sales tax. Issuing bonds covered by sales tax would not require a public vote unless it is referred.

    If the mayor and city council intend to issue bonds, state law requires an election with 60% of the voters in favor of the bond issuance unless otherwise provided...


    A super majority vote result of 60% will cancel that option being put on the table. The only other option will seal his fate if he has visions of a second term. His dream will soon be his nightmare.

    Thanks again Jennifer. Did not know a super majority of 60% was needed at the polls.

    Is not our sales tax, by current law, already maxed out?

    Polly Amalo

  2. Has anyone done a study to see what the revenue will probably be, what events SF will get because of the new events center, what will happen if the costs outweigh the revenue, etc? Event centers in other venues have not always lived up to their promise.

    I heard on the news about the proposed sports complex being built privately. Will this take away some of the event centers' options?

    I too doubt the wisdom of obligating general fund dollars for an expense like this for years to come. What will happen to the infrastructure etc that the general fund is supposed to pay for? Kinda like obligating a school's capital outlay fund for a new school building, and then wondering why there isn't enough money for another building project before the first is paid off.

  3. So, now the No Vote options is what is the likely scenario? Does anyone know how many signatures to refer? My guess is an attempt at that would be likely.

  4. What concerns me is that we all know our streets went to potholes, the new library in the southwest is delayed, our sewer system needs work, etc. This was all delayed without events center bond money coming out of the CIP. When you take the events center bond payments out of the future CIP's you can be sure much needed work will go without repair. Sorry, the events center bonds need to have their own source of revenue...not the CIP.

  5. It just proves what I have said all along, 'There is no need for a new EC' If there was, you would see the public fighting tooth and nail to get it on the ballot through petition drives, etc. If there is such a NEED, wouldn't the public be begging for this facility? You don't see that. Seems like abortion, the EC will be talked about forever in elections from here on out.

  6. Have you driven down Cliff by Avera? My goodness, that road is in horrible shape but the really bad thing is, drive down most streets in town and you will find they are all pretty much in horrible shape. How are these roads going to get fixed if the mayor is taking money out of the budgets for his EC vision? This is really outrageous!

  7. The street department usually hires summertime part time help to keep up with needed street repairs. This year they hired none.

    More money for that EC cookie jar.

    Polly Amalo