A Good Thing Going in Sioux Falls

The city just celebrated the completion of the first phase of the river greenway improvement between 6th and 8th Streets. It is beautiful down there and if you haven't had the chance to walk along the river front downtown, you must do so. The downtown area to Falls Park is a unique area that will only continue to revitalize our city and showcase Sioux Falls.

We didn't just get to this stage yesterday, however. At the dedication yesterday, our mayor was quoted as saying:

“Two years ago … I don’t remember anyone talking about expansion or growth (downtown),” Mayor Mike Huether said to the hundreds who came out for the ribbon-cutting. “That’s not the case today.”

Really? No one was talking about expansion or growth downtown before he got elected mayor? The river greenway improvements didn't just happen within the last two years. Nor did this mayor have the vision to make this latest expansion or growth downtown happen so shame on him for taking credit for it.

The Big Sioux River Greenway Plan was first adopted in 1975. The second Big Sioux River Greenway Plan was adopted in April, 1987. The Greenway & Riverfront Master Plan was adopted in 2004 and identified 4 Zones for development. Zone 1 was the Downtown Riverfront which encompassed approximately 2.5 miles from North Falls Park to 14th Street.


This expansion and river greenway improvement took years of planning by people who had the vision to see the potential of a river which meandered around and through Sioux Falls and a spectacular falls and park area that could become a focal point of interest for citizens of the city and visitors. People with vision have been planning the downtown revitalization development for years and have been talking about it long before this mayor took office.

Whether it's taking credit for putting up new directional signs for Falls Park because he says, “I’m a marketing guy, development guy and growth guy … or this latest completion of Phase 1 of the downtown greenway between 6th and 8th Streets, this mayor thinks he is a one man band for all that happens lately in Sioux Falls.

Sioux Falls' has had a good thing going for a long time and it has taken the collective efforts of multiple organizations, and people who had the foresight and dedication to see the what ifs, the potential in remaking and revitalizing the city's most important assets.

Downtown is the heart of this city and people recognized it and have planned it. This mayor just happens to be in office when Phase I was completed. Thank you, mayor, for not taking the money away from this project, but please don't take credit for a vision that was planned and nurtured and started long before you ever took over the mayor office.

City Pension Reform

There is a big pension reform decision that will come before the City Council and active city employees who are members of the city pension system. This is a complicated issue and one that is not easily understood unless you are administering the pension plans or are a duly elected or appointed member of one of two pension boards of trustees. At issue is how to effect pension reform with the goal of reducing and stabilizing future employer contribution rates.

The two pension boards of trustees have studied the issue of pension reform for the past two years. They have conferred with their actuary and hired an independent consultant to study benefit changes and made recommendations for pension reform for active employees and new hires.

At the February 12, 2012 Board of Trustees meeting for the Employee’s Retirement System and the Firefighter’s Pension Fund, boards recommended tiered benefit changes for current employees and new hires and recommended these proposals be forwarded to the mayor and the city council with the belief “that the resulting plan provisions will continue to provide the City and its career employees with a sound pension plan while meeting our compensation and benefit objectives.”

The mayor didn’t agree with the boards’ recommendation on the tiered benefit level changes for new hires and subsequently made his own recommendation to close the pension plans to new hires and send them to the South Dakota Retirement System.

As a result, multiple presentations were made at the Information Meeting and the Fiscal Committee to present both sides. Presentations by the boards’ consultant, Cavanaugh Macdonald, were made at an Information Meeting.  The board asked to meet with the City Council Fiscal Committee to fully discuss their rationale and analysis for their recommendations. Representatives from the South Dakota Retirement System were invited to the City Council Fiscal Committee to make a presentation on the state retirement system’s provisions and operations.

The conflicting positions of the mayor and the two pension board of trustees have thrown the city council into a difficult position which has now created a division among city councilors.

It is not too difficult to see where councilors fall on the issue of pension reform. On the City Council Fiscal Committee, it is split 2-2. Two councilors, Jamison and Aquilar support the recommendations of the two pension boards of trustees. Two councilors, Entenmen and Karsky, support the mayor’s separate and conflicting recommendation. It has been decided that two competing recommendations from the City Council Fiscal Committee will be sent to the full council for discussion on June 19^th.

The question to ask is……Why is the mayor inserting his own recommendation contrary to the Pension Boards’ recommendations?

Two years of study by the Firefighter’s Pension Board of Trustees and the Employees Retirement System Board of Trustees does not seem good of enough for the Mayor. Has the mayor attended two years of pension board meetings, read the pension board minutes, studied the actuary’s report or the report of the independent consultant before making his own independent recommendation?

City ordinance is clear regarding the administration of the city’s two pension systems and the fiduciary responsibilities of each pension board trustee:

Sec. 35-63. Administration of system. (Employee’s Retirement System)

The authority and responsibility for the administration, management and proper operation of the retirement system and for construing and making effective the provisions of this article shall be vested in the board of trustees.

Sec. 35-125. Administration. (Firefighter’s Pension Fund)

There is hereby created a retirement board whose duties shall be to administer, manage and operate the firefighter's pension fund and to construe and carry into effect the provisions of this article, subject to such powers as are retained by the council.

Sec. 35-77. Responsibility of fiduciary. (Employee’s Retirement System)

Every fiduciary shall discharge his duties solely in the interest of the participants and beneficiaries of this retirement system, for the exclusive purpose of providing benefits to participants and their beneficiaries and with the skill, care, prudence and diligence, under the circumstances then prevailing, of a prudent person familiar with such matters and acting in a similar capacity. For purposes of this section, the word "fiduciary" means any person or entity who exercises any discretionary authority control over the management of this system or its assets, any person or entity who renders investment advice to this system for a fee or other compensation, or any person or entity who has any discretionary authority or discretionary responsibility in the administration of this system.

Sec. 35-137. Responsibilities of fiduciary. (Firefighter’s Pension Fund)

Every fiduciary shall discharge his duties solely in the interest of the participants and beneficiaries of the system, for the exclusive purpose of providing benefits to participants and their beneficiaries and with the skill, care, prudence and diligence, under the circumstances then prevailing, of a prudent person familiar with such matters and acting in a similar capacity. For purposes of this section, the word "fiduciary" means any person or entity who exercises any discretionary authority control over the management of this system or its assets, any person or entity who renders investment advice to this system for a fee or other compensation, or any person or entity who has any discretionary authority or discretionary responsibility in the administration of this system.

The mayor contradicts the recommendations of the Board of Trustees for the Firefighter Pension Fund and the Employees Retirement System and comes up with his own recommendation.  He ignores city ordinance language that clearly states the administration, management and proper operation of the retirement systems and making effective provisions of the systems is VESTED in the board of trustees.

The board members have completed their fiduciary responsibility in extensively studying the issue of pension reform and have made recommendations with skill, care, prudence and diligence. Can the same be said of the mayor?

There is a compelling argument, on the surface, that the mayor’s alternative position sounds like a good idea. The SDRS has fixed rates and lower pension benefits. In the long run, it will get the city out of the pension business, albeit 30 years or more down the road. That is fine and dandy, except that is not the complete picture. What appears to be an immediate attraction to fixed costs is just one piece of the pension reform puzzle. One must also consider the fiscal viability and cost of the unfunded liability with the remaining active employees in the current pension plans.

There is a cost impact of closing the city’s two pension plans. The city must still continue to pay for the unfunded liabilities of current plans until such time as there are no remaining current employees – for next 15-30 plus years. As the consultant stated in its report, any cost savings from reducing benefits for new hires takes many years to manifest itself and the full impact is only realized after all of the current active members leave city employment and are replaced by employees covered by the new benefit structure.

The City Council cannot take any formal action on pension reform at the council meeting on June 19^th. Any change to benefit levels must be approved by a vote of the employee membership. That is state law. That means the employees must approve the benefit changes first, then followed by the City Council.  If the employees vote down the pension reform recommendations, the issue is dead.

A split position among the City Council sends a conflicting message to active city employees who will be voting on the recommendations. Anything short of a unanimous recommendation from the City Council sends a bad message to city employee members of the two pension systems. 

The mayor should have resolved his differences with the pension board of trustees before it ever came to the city council. This is no way to conduct such serious business as pension reform and sends a terrible message. Is the mayor going to bully the city council to conform to his position, ignoring two years of comprehensive study by two pension board of trustees vested with the fiduciary responsibility to manage and recommend change to the city’s pension funds?

The mayor needs to support the recommendation of the pension boards and assist the boards and the city council in effecting important pension reform that will subsequently save the city and the taxpayers money in the future.

If the city council can’t come to a unanimous position on pension reform, why should the employees vote yes to pension reform.

Partisan Politics in City Hall

Back in the “old” days, i.e. commission form of government, you could say without winking that local government was non-partisan. People did not walk around talking whether they were Republican or Democrat. You may have known someone was of one political persuasion or another, but it just wasn’t part of the commentary.

Democratic Chair Ben Nesselhuf was trying to build the Democratic Party in South Dakota, starting at the local level. So he met with the mayor of the biggest city in South Dakota to get his blessing. I guess winning the mayor’s race in Sioux Falls can make you the kingpin of the Democratic Party. It shows just how weak the Democratic Party is in this state. Like we didn’t already know that considering the fact that Republican newbie Kristi Noem took out seasoned Democrat Stephanie Herseth. Party affiliation trumps competence and experience.

The mayor said he didn’t have time to get involved in the elections. However, one could deduce from the meeting that he surely indicated what his preferences were to Nesselhuf based upon further actions and statements by Nesselhuf and the Huether.

“The one person I probably would have enjoyed working with was De Knudson,” Huether said.

Nesselhuf helped gather signatures to get Knudson, a Republican, on theballot. Nesselhuf served in the state Senate with Knudson’s husband, formerMajority Leader Dave Knudson, and is a family friend. There was no Democrat inthe race, and Nesselhuf said, “I didn’t have any problem helping her out.”

Three other candidates were approached and all three declined offers of support and help. One was specifically told that the intent was to get Councilor Jamison out of office. Only in South Dakota will you find the Chair of the Democratic Party helping get a Republican elected to office.

At least the local county officials have their heads screwed on right.

Tony Post, the Republican Party executive director, considered getting involved, too, but local officials in Minnehaha and Lincoln counties discouraged that.

“I asked around and they said, ‘No, you guys keep your nosesout of it,’ ” Post said. “We deferred to the locals.”That wasn’t the message Nesselhuf received when he met withHuether and Smith.

If you believe this meeting was about tea and crumpets and not about singing the Democratic kumbya song, then I have some land out by the Arena/Convention Center to sell you. You don’t have to read between the lines to figure out what the Democratic duo down at City Hall were doing. They can protest and spin it all the way to Pierre.

You know, I can accept the mayor being involved in this meeting because he wears the political designation like a second skin. But bringing Darrin Smith, the city’s director of community development and public parking along to the meeting is very telling.

City Directors used to be recognized and respected appointed career professionals. When you elect a partisan mayor like Huether you get a “political appointee” like Darrin Smith. A partisan appointment like Smith’s should have been more appropriately placed in the mayor’s office so as not to bastardize the director level of government.

Every mayor prior to this politically charged mayor, have recognized the importance of having directors who are educated, trained and have valuable relevant experience in their department field. The arrogance of Smith’s justification for being at the “political” meeting is offensive. Darrin Smith is a political opportunist and gained his current job as a “political payback gift” not because he was the “best qualified.”

Local elected officials need to work with everyone irrespective of one’s political leanings. You need to work with the SD congressional delegation which means tucking your political shirttail in and doing what is best for Sioux Falls, not your party affiliation.

This form of government promotes partisan politics. And we have a mayor and a city director to prove it. When you have to justify what you have done or previously said, you have either done something stupid or you have been politically motivated.

The Real Issue Behind the Tribal Offer

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.

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:

• 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.

Construction will actually begin in July of this year and will be completed in Fall 2014.

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.

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.

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.