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.