2008

Loany Bologna

l3wis December 31, 2008 0Comments

Monday night (January 5^th) the Sioux Falls city council will vote on an ordinance that would allow the city to borrow $38 million for needed infrastructure projects. Originally the money was budgeted and would not have had to be borrowed. Why the change? Munson and City Finance director Gene Rowenhorst claim that they need to borrow it now to make sure the projects get done next year. I’m all for the projects (levees and a bridge) I’m just suspicious of the timing and taking out a loan. Gene says we should not have ‘any worries’ because these projects were originally slated by the Corp of Engineers and since Obama is promising all kinds of infrastructure money we will ‘probably be paid back.’ I have a feeling that Obama will make good on his promise, but I also think that the money will go to communities who need it first (and those that are broke). Why give the city of Sioux Falls a check when they have paid for the project themselves? If I was the Federal Government I would be saying “You are doing fine on your own.”

What’s the solution then? Put off the projects until Washington’s check clears the bank. Yes, we need levees, but we have also been in a drought for the last four years, we ain’t flooding any time soon, we can wait another year.

I also think this is a diversion tactic by Munson to stop our initiative. State law is murky about borrowing money against an established municipal tax.

 5.   Irrepealable tax to repay debt of municipality or political subdivision.  Any city, county, town, school district or any other subdivision incurring indebtedness shall, at or before the time of so doing, provide for the collection of an annual tax sufficient to pay the interest and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or principal of any debt shall be irrepealable until such debt be paid

Article 13

We hope to get a clear and on the record opinion before Monday, cross your fingers.

Below is the extended version of the ordinance.

AN ORDINANCE OF THE CITY OF SIOUX FALLS, SD (THE “CITY”), AUTHORIZING THE ISSUANCE OF ITS SALES TAX REVENUE BONDS IN ONE OR MORE SERIES, AUTHORIZING THE USE OF THE PROCEEDS THEREOF TO PAY THE COSTS OF IMPROVEMENTS TO THE EXISTING DIVERSION DAM, CONSTRUCTION OF A NEW DAM AT THE CONFLUENCE OF SKUNK CREEK AND THE BIG SIOUX RIVER, REBUILDING THE 41ST STREET BRIDGE AND RAISING THE LEVEES TO PROVIDE ADEQUATE FLOOD RISK REDUCTION ALONG THE BIG SIOUX RIVER, SKUNK CREEK, AND THE DIVERSION CHANNEL IN THE CITY, PLEDGING A PORTION OF THE SALES AND USE TAX PROCEEDS OF THE CITY TO THE PAYMENT OF SAID SALES TAX REVENUE BONDS, FIXING THE TERMS OF SUCH SALES TAX REVENUE BONDS, AUTHORIZING THE EXECUTION AND DELIVERY OF ONE OR MORE

SUPPLEMENTAL INDENTURES BETWEEN THE CITY AND THE FIRST NATIONAL BANK IN SIOUX FALLS, AND AUTHORIZING THE SALE, EXECUTION, AND DELIVERY OF SUCH SALES TAX REVENUE BONDS.

WHEREAS, the City of Sioux Falls (the “City”) is authorized by Chapter 10-52 of the

South Dakota Codified Laws (the “Act”) to levy a non-ad valorem tax (as defined by the Act) on the sale, use, storage, and consumption of certain items taxed under Chapters 10-45 and 10-46 of the South Dakota Codified Laws, subject to certain exceptions, at a rate not to exceed 2.00 percent; and

WHEREAS, the City has adopted and enacted Ordinance No. 78-87, codified as

Sections 39-16 and 39-47 of the Revised Ordinances of the City imposing a sales and use tax authorized by the Act with the City at the rate of 1.00 percent, and Ordinance

Nos. 70-03, 14-04, 26-06, and 116-08, codified as Sections 39-16.1 and 39-47.1 of the

Revised Ordinances of the City (the “Second Penny Tax Ordinance”) imposing an additional sales and use tax authorized by the Act with the City at the rate of 1.00 percent effective January 1, 2009, (the tax imposed pursuant to the Second Penny Tax Ordinance being referred to herein as the “Second Penny Tax”); and

WHEREAS, the City is authorized to issue sales tax revenue bonds in anticipation of the collection of sales and use taxes pursuant to Section 10-52-2.10 and Chapter 6-8B of the South Dakota Codified Laws and to pledge the revenues from such taxes to the payment of such bonds; and

WHEREAS, pursuant to the Second Penny Tax Ordinance, the City is authorized to expend revenues from the Second Penny Tax for certain designated improvements, including the Project (as defined hereinafter), and the retirement of debt incurred for such improvements; and