Does our mayor even understand Free Enterprise?

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Just another private-public partnership that makes our city so freaking great!

Yeah, I know, reading an interview with our mayor in Free Enterprise magazine is kind of like reading an interview with Gordon Howie in High Times magazine, but let’s get started with his words of wisdom;

What’s the structure of the Sioux Falls government?

We have a “strong mayor” form of government. I am basically the C.E.O. or the president of a large company, and that company is the City of Sioux Falls. We have roughly 1,200 city employees and 12 department heads, and a substantial budget. We’re responsible of running the day-to-day activities of a city with 170,000 people, and a metropolitan area with about 250,000.

He fails to mention the legislative body of city government, the city council, which shouldn’t surprise any of us. His disdain for them is evident in every city council meeting, where he shorts them on information, then cuts them off when they ask leading questions.

Economic development is probably one of the biggest challenges that I wanted to tackle when I was first elected. In corporate America, I was a growth and development guy,

You were a ‘seek and destroy’ marketing manager for the worst credit card company in the nation. Twist that how ever you want, but your practices in ‘corporate America’ were to prey on the fiscally ignorant, and stick it to them. That’s not economic development, that’s highway robbery.

Why has the city’s healthcare sector seen such impressive growth over the past decade?

Well, there are a number of reasons. For example, we’ve got a gentleman, Denny Sanford, who invested significantly in Sanford Health. So, he’s helped infuse millions of dollars into finding a cure for juvenile diabetes or breast cancer at that health center, and he wants to build one of the best and most respected research institutions in the Midwest. Then, at the same time, we have another organization in town called Avera McKennan, which is also investing millions into their research, infrastructure and vision.

This all ties into what happened during the recession: Though financial services, construction, and manufacturing were slowing down, other industries like agriculture, research, and healthcare were just kicking tail. These sectors really provided that balance that we needed to keep our head above water during the recession, and they also enabled us to get out of that water faster than anybody once the recession came to an end. We have recently been called “America’s Next Boomtown.”

Did you know that Sanford and Avera are some the lowest wage paying healthcare networks in the nation? And that is just the beginning of their issues, I could go into patient care and services. As for staying above the recession, that couldn’t be farther from the truth, we have remained stagnant in wages in SF since the recession, even with the low unemployment rate. More kids are eating free lunches in the schools, food banks are expanding, and the common worker just can’t keep up. I know the hilltop that Mike lives on may be doing well, but the rest of Sioux Falls is struggling to keep their heads above water.

And the ending couldn’t be any better;

What’s your secret to success?

There wasn’t much confidence in this area back in late 2009, early 2010. Now, we have a confidence level that is off the charts. When you go in confident, there are amazing things you can accomplish.

Really?! Quite honestly, I accomplished more in Sioux Falls before 2009, then after. In fact, the road has been a bit rough since 2009, and I ask myself everyday if I will ever have extra money for emergencies.

We also tackled some quality of life obstacles that had been eluding us for generations. We built a $117 million event center we had been talking about forever that opened last fall. We just recently passed a $24 million indoor aquatics center we’ve been debating since 1951!

Who passed the aquatics center? It wasn’t on the ballot. In fact the last two times it was actually on the ballot, it failed.

Additionally, through a public-private partnership, we just opened an indoor ice complex, and in March is the ribbon cutting of an indoor tennis facility.

Without mentioning he had the audacity to plop his name on a facility taxpayers gave $500,000 to.

Once again, Hubris.

 

Posted in: Mayor Hubris, Mayor Subprime Mike Huether, Mike Huether, Sioux Falls

Common Sense killed 135

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This failed for a reason, and it wasn’t the political power machine that killed it, it was many people with common sense behind the scenes lobbying against higher regressive taxes that just burden the working poor. It is counterproductive to fund projects on the backs of people paying higher taxes on food and utilities. If we really want to tap a hidden tax source it would be an income tax on corporations and high wage earners. Other then that, it astonishes me that the mayor of SF would support this, a person who is often telling us we are swimming in money. A little history lesson for Mr. Whitney (who apparently has no clue what has been going on in city politics for the past 10 years) We recently switched our water/sewer over to ‘enterprise funds’ this was a way to direct our fees into fixing infrastructure, which makes sense, though I think it was done to justify higher rates and to free up CIP money for ‘play things’. We don’t need higher sales taxes in Sioux Falls, especially under an administration that gets giddy every time they open the city checkbook. The next time the city needs extra money for NEEDED infrastructure, I suggest they cut elitist indoor tennis centers named after our esteemed emperor instead of looking for more ways to screw the poor.

Of course, let’s look at Whitney’s version as to why this went down (am I the only one who doesn’t laugh at his satire pieces but think his serious columns are hilarious?)

Consider the plight of Senate Bill 135, a sales tax measure that appeared reasonable enough when first submitted by Republican state Sen. Corey Brown back in January.

Yes proposed by Mr. South Dakota ALEC himself. An organization that likes to have taxes paid by the working class, while corporations run free from taxation. I can almost guarantee Brown saw this as a way to protect his corporate interests.

Bolstered by the South Dakota Municipal League, the bill would have granted cities and towns the ability to impose up to a third penny of general sales tax — if approved by voters — to pay for capital expenditures such as land acquisition, street or bridge repair and other infrastructure projects.

And that is the major flaw with the legislation, it’s wording, infrastructure projects can mean anything from a bridge, a sewer pipe or an indoor pool.

“Voters had to approve it, it was specifically for infrastructure, there was a hard sunset on it and it could not be extended or renewed,” says Yvonne Taylor, executive director of the South Dakota Municipal League

The ‘Sunset Clause’ song and dance. We know how that rolls. Remember the 2nd penny implementation for roads? Well we don’t entirely spend it on roads anymore, just a portion of it. Or the ‘entertainment tax’ that was used to pay off the Washington Pavilion bonds. Well that was paid off, but we are still paying the tax. The sunset clause is a ruse, because as soon as the project is paid for, government will find another project to spend it on. History has shown this. Do you study history Yvonne?

Gov. Dennis Daugaard, for all his talk about local control, wasn’t thrilled with the idea of cities being able to address their own revenue issues, especially with his push for highway and bridge funding taking top priority in Pierre. If someone was going to raise taxes, it was going to be him.

Well, I’m not one to defend our tight wad governor, but it seems he was using common sense by pointing out raising taxes and fees for road repairs on a state level then allowing municipalities to also implement a tax increase at the same time wouldn’t sit well with taxpayers. It doesn’t take a genius to figure that out.

Deputy state revenue director David Wiest opposed SB135 in Senate committee, saying consumers already pay four cents on the dollar in state sales tax and that collecting more locally would push the burden too high.

“That’s not going to work for citizens in the state,” he told legislators. “They won’t permit it.”

And he is right. I haven’t talked to one single person who thought this was good legislation. The other flaw pointed out to me by my conservative friends was that it should take a 60% majority to approve a tax increase, this was NOT in the bill, and I believe that is why a lot of legislators didn’t like it.

Throwing out a scary number (especially one that could not possibly come to fruition and that Taylor of the Municipal League called “mind-boggling”) was gimmicky politics at best, but the tactic was repeated in op-ed pieces and voter outreach spearheaded by the state chapter of Americans for Prosperity.

It may have been ‘gimmicky’ but not to far from the truth. In fact if we raised the taxes by a penny just in Sioux Falls, it would be around a $50 million dollar tax increase. That’s not a gimmick, that is the truth.

“It’s no secret that Sioux Falls would have reaped the rewards of this legislation, but cities and towns all across the state were clamoring for its passage as well,” Huether said this week. “It was a full-court press for local control.”

Local control?! Let’s talk ‘gimmicks’. Besides the public approving such a regressive tax increase, that is where our ‘control’ would end. We have a city administration that is famous for handing out money to special interests with little public input. In fact, our mayor is so brazen about it, after cutting a $500,000 check to the Indoor Tennis Palace, he slaps his name on the building. Now that’s local control!

Those projects total an estimated $100 million in a city that has about $30 million a year to take care of all of its maintenance, reconstruction and extension efforts, city public works director Mark Cotter told state legislators. To use public bonds, the city would spend more than “$52 million in interest alone” over 20 years to pay for the work, he added.

$30 Million? What did I say earlier about the 2nd penny? The fact is we have been robbing it (CIP) for play things and bond payments on those play things. If we truly spend ALL of the 2nd penny on it’s true intent, we would be driving on streets of gold, and they would be paid for. Instead we consistently rob the cookie jar for entertaining ourselves. The money exists for these projects, make no mistake, but it takes an administration willing to make prudent decisions about infrastructure instead of worrying about what color the bathrooms will be at the Events Center (something I heard he was very involved in).

After the efforts made in Sioux Falls and the personal involvement of Huether to articulate the importance of the bill to the state’s largest city, those votes did not go unnoticed.

“Sioux Falls brought out the big guns to promote the passage of this critical bill,” Huether said. “Then to find out it was some of our very own legislative team that didn’t even let us enter the corral for the gunfight was very disheartening.”

Oh Yes Mike, it’s always about you, isn’t it? This bill was defeated because it just wasn’t fiscally responsible. Besides, what gun fight did you get into? Did you testify in Pierre on it’s behalf? I don’t recall hearing about that?

Darrin Smith, the city’s community development director, said that the bill’s defeat is a setback for Sioux Falls growth.

“I don’t think there’s any question that this will put significant economic development opportunities we have at risk,” Smith said. “This would have allowed us to invest even more in infrastructure to create more jobs and diversify our economy, but you can’t be successful if you’re afraid to lead, so we’ll do the best we can now.”

Wow! Darrin, did you just read what you said? If we were so afraid of risking economic development in Sioux Falls, why did we borrow $117 million for an Events Center? Or rob Federal levee paybacks to build an indoor pool? Or have $37 million in surplus accounts? I don’t think we are risking anything, except over extending ourselves on play things.

“I cheer for our governor more often than not, but this is one topic where I respectfully disagree,” Huether said. “I am not fighting against my governor, but rather fighting hard for South Dakotans, east of the Missouri and west. I know he is too.”

Mike, you cheer (and cry) for one person, and we know exactly who that is.

Posted in: Daugaard, Mayor Hubris, Mayor Subprime Mike Huether, Mike Huether, South Dakotans, Taxes

Is the city overusing consultants when we already have overpaid professionals?

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I know I have brought this up several times over the years, in fact, I believe in Councilor Staggers 2nd term (he is in his 3rd now) there was some numbers presented to the city of what they were spending on consultants, and it was staggering (excuse the pun).

You have to realize that the departments that use consultants, outside counsel and professional advice are the engineering, the legal and finance department.

According to the January 2015 salary report (DOC: 2015-Wages-January) Read this a few times and your stomach will churn) there are these many people on the payroll in each department;

Engineering; 73

Finance; 29

City Attorney’s office; 13

You would think that with this many ‘professionals’ working for the city in each of these departments they wouldn’t need ‘consultants’ to tell them what to do?

So why is that?

Well the obvious, they need an outside consultant to give them the answers they want, and if they get their tits in a wringer, with a decision they make, they can always blame the consultant.

But get this. If a consultant sends a plan to the city, let’s say an architect’s plan, and a city engineer signs off on it, if something goes wrong due to the plans, the city engineer is liable due to their sign off. Which of course doesn’t mean a hill of beans for the consultant or the engineer, but costs the taxpayer in the end (EX: Events Center siding fiasco).

Let’s look at some examples. On Tuesday the city council watched a presentation on the parks. The consultant charged around $59K. In his presentation he pretty much said the city was doing everything right, which is fantastic. So councilor Staggers asked, “So if we are doing everything correctly, why should we pay you to tell us that?”

Another example is the water rate increases, which the city was WAAAAYYY off on. Why is it that our water department can’t get with the finance department and figure out how much money needs to be raised for the enterprise funds to maintain water and sewer? This is simple accounting, projecting and algebra, but we had to hire a consultant (who was wrong) to justify the increase.

Lastly, it’s story time on DaCola, and Ol’ Man Detroit is going to tell you a story about a hole in the wall. Recently a former city employee told me about how their department needed a hole in the wall at one of their department branches and it had to be done to a load bearing wall. When they approached the engineering department about plans, they referred them to an outside architect who came in and essentially chuckled and said, “This is a hole that needs to be made, you need to contact an engineer.”

So I ask again. Do we need all of these consultants? Or better yet, do we need all of these ‘do nothing’ city employees?

Posted in: SF City Council, Sioux Falls

Councilor Rolfing makes ignorant offhand comment, but I’m not surprised

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I left after the public testimony last night for a reason, I knew a majority of the council would get out their rubber stamps and approve the pool and ambulance service. Fortunately Med-Star will have their day in court.

But what get me every time is the continued sour grapes over Drake Springs pool, it’s one thing for the public to be misinformed about the situation at that park, but when the mayor and councilors say stupid crap they know isn’t true, (or maybe they don’t) it really chaps my hide.

Councilor Rolfing jokingly insisted that we budget extra money last night so we could fix the mistake we made at Nelson Park and build an indoor pool there. The crowd laughed and applauded. I laughed to, but not with you, but at you for your ignorance.

As our outside aquatics consultant said in their report to the city, there is groundwater issues at Nelson Park that would prevent us from building an indoor pool there, because of maintenance issues. Councilor Staggers even pointed out they are having maintenance issues already with the outdoor pool there.

So please, enough with Drake Springs already, your own consultant even said it was a bad idea. Thank God Stehly stopped the indoor pool at Nelson Park, just think of the millions we would be on the hook for now fixing it.

nelsonpark

Posted in: Rex Rolfing, SF City Council, Sioux Falls, Sioux Falls Parks and Rec

The Events Center ‘Investment’

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There was often a lot of talk to the run-up to the vote for the Events Center about ‘economic impact’. But was that ‘impact’ ever really broken down? And who is benefitting (economically) the most?

In all fairness the mortgage on this facility, to reach probably well over $180 million (not including operations and maintenance over the next 30 years) will be paid for out of the CIP, one of two pennies the city gets from sales taxes.  So in some ways visitors to our city and EC will help pay that mortgage. But even if the sales generated from the EC (lodging, fuel, food, tickets, etc.) was around $200 or $300 million a year that is only $2-3 million into the CIP, a far cry from our $10 million dollar mortgage each year. The comparison kind of reminds of how much taxpayers have put into platting fees versus the developers.

Also factor in whether the place will stay in the black with operations, maintenance, upgrades, etc. Even with sponsorships, it may squeak by, and on a generous note, if the EC actually makes the city a profit each year, will that money go into the CIP to help pay the mortgage? A question that has only been vaguely answered by several city officials saying the same thing, “That’s a possibility.” Which means . . . NO.

Let’s face it, if the facility does make a profit, we may never know, because profits will quickly be eaten up by the managing companies that run the facility and promoters. I have a feeling we will magically always end just a little in the black each year, with someone else besides the lowly citizens of SF enjoying the spoils.

So besides the public supposedly benefitting from this economic impact (we will get to that in a moment) who else has REALLY benefitted (economically) from the EC’s construction?

– The bonding company that sold the bonds gets a percentage of the sale, instead just a flat fee.

– Mortenson and several contractors have benefitted, and depending on how the siding gets fixed, they may also come out smelling like roses on that also.

– Hotels, restaurants and other businesses that see an uptick in business when an event comes to town.

– Ticket brokers and scalpers are making a mint from the convoluted way the EC sells tickets. Pre-sales to fan clubs, naming sponsor employees and several other ‘gimmicky’ ways tickets are pre-sold. Something the city claims they ‘can do nothing about’ even though they could implement a city ordinance that bans out-of-state ticket sales until after tickets are sold to the general public.

So what benefit is there to the General Public?

Besides the trickling in of a few million to the CIP, the public really isn’t getting any economic benefit from the Events Center, except another bond to pay off, money that could be spent on better parks, roads, water and sewer, and host of all kinds of other things that actually improve quality of life in Sioux Falls besides a top-40 country concert or a bull riding circus. And most of these things we don’t have to pay for out of pocket after standing in line for 18 hours.

Okay, so we determined the economic impact to our personal wallets isn’t really there, so what about quality of life? Is overpaying and finding it difficult to purchase affordable tickets to the EC for a couple of concerts a year really worth our mortgage? Personally I don’t think it is, and that is why I voted against the facility. The math wasn’t just fuzzy, it just doesn’t add up.

But even those who voted for the place and are willing to go see the latest ass in cowboy hat play the place, do you find any value in the facility or how it may have improved your life? That will be the hard question we will be asking over the next couple of years, as tickets get more expensive, maintenance and operational costs go up and a possible lawsuit that we will probably lose over the siding come to surface.

So enjoy your new events center Sioux Falls commoner, because we sure are paying a Helluva a lot for it and not getting much in return except a mortgage bill.

Posted in: Event Center, Sioux Falls