So I was all ready to do a blog post about some internal audits when I ran across the interesting graphic below (I highlighted and cropped it to fit my website). Remember what we were told?
The project also is on track to meet the project goal of 85 percent of the work performed by local contractors and suppliers.
Well if you add up the numbers of our own internal audit, it’s not quite 85%, in fact, it’s not even close. If you use just the actuals you will see we spent about $38.3 million on outside (of Sioux Falls and the state) contractors and supplies and about $59.6 million on local contractors.
But there is still some stuff missing. We have NO idea what amount of supplies and outside labor our local contractors used, I couldn’t even began to guess, but let’s lowball it at 25%, that would bring our local numbers to $44.7 million.
Then there is the little discrepancy with MJ Dalsin;
Wall panels/air barrier/roofing MJ Dalsin Roofing $3.1 million
According to them, they did perform much of this work, but deny ever installing the rippling siding. So who did? That contractor is conveniently left off the audit sheet, and so is the siding settlement.
Secrets, lies, and more secrets and lies. This audit isn’t worth the paper it is printed on.
But as our own auditor says about CMAR (Construction Manager at Risk);
The three biggest risks to the City in using the CMAR delivery method for construction projects are these:
• A poorly written contract favoring the CMAR is entered into by the City who may be inexperienced in the nuances of such contracts.
• Criticism of the process of selecting the CMAR. Since the selection is based upon the more subjective measure of best qualified rather than the objective cost criteria in a DBB project, there may be a perception of favoritism.
• A big problem in the field that the CMAR ignores or covers up. Such a big problem is the only way a CMAR is truly at risk.
A big problem in the field? You mean like poorly installed siding that is covered up in a secret settlement? Never happen 🙁
To remedy what Stoner called operational inefficiencies, SMG, the management company that operates the event center, and Spectra have been given the all clear by the city to use some of the $2.8 million left over from the construction budget to add up to 1,200 square feet of the storage space in various areas throughout the facility. The kitchen will also see about 1,900 square feet of additional space as a part of the planned upgrades.
Although he said there’s no estimated constructions costs that can be shared yet, Huber said it’s unlikely the work will eat up all of the $2.8 million “Day 2” funds, which include the $1 million settlement the city was reimbursed by event center contractors last year.
So, let’s review. We failed to build enough cooler space to begin with, so we are going to use money (that we already borrowed) that was given ‘back’ to us (on paper) in a siding settlement to build more cold storage space, at tax payer expense, (for a vendor that is rolling in the dough already in beer sales).
So why isn’t the city getting a cut of these beer sales to help offset the mortgage payment? Oh, that’s right, it’s a secret.
Argus Leader Media president Bill Albrecht wouldn’t rule out an appeal of Pekas’ decision, which he called disappointing while remaining steadfast that open record laws were violated when the city denied Argus Leader Media’s record request.
“We believe the public has the right to know what caused this million dollar transaction. It is a million dollars. Regardless if it is money spent by the city government, or money received by the city government, it is the public’s money and public needs – and has the right to know – the details,” Albrecht said. “The confidentially agreement was made outside of a lawsuit which does not garner it protection based on our interpretation of the statute.”
South Dakota Newspaper Association president Jeremy Waltner said regardless of the ruling, the city’s insistence that settlement details remain seals only keeps the door open to perceptions of impropriety among those involved in the event center construction, including the city government. Furthermore, Pekas ruling essentially says any government entity can contract through secrecy, he said.
“Whether it’s legal or not legal … all of that legal speak aside, the city should release the information. They should not hide behind this because all it’s doing is raising more questions,” Waltner said.
I think even if the Supreme Court were to rule in favor of the Argus, we could see a long challenge from the city. Not only that, there could be a significant white washing before the documents are handed over. Also, key players like city attorney Fiddle Faddle and Mayor Huether will be long gone.
I really think the Argus and the rest of the media in Sioux Falls missed the boat a long time ago when this was first brought to light (the siding issue) and when the consultant’s report hit the shredder. I think that report NOT being released was really the most damaging part of this whole deal. I think it was the key piece of evidence that the siding job was a pure sh*t show from the beginning.
Here is what we have speculated through this process from talking to contractors and engineers close to the project;
The original design was not used. If you look at early architectural drawings (above image), there were supposed to be large flat rectangular panels applied (about 8 x 16 Foot) giving the building an almost hexagonal look, and avoiding any unneeded bending of metal. It was dumped to save money. Several numbers have been thrown out there, anywhere from $1.5-3 million was saved. But saved for what? The rumor is to repair ‘other’ constingency problems in the building.
A couple of contractors who worked on the EC but did NOT apply the siding were pulled into the lawsuit. This is a real mystery to everyone, even the contractors. While there may have been some issues with the work they were doing in other parts of the building, they had nothing to do with the siding. Some may say it was punishment for agreeing to NOT do the work.
This isn’t cosmetic, something I think they are also covering up. It doesn’t take an engineer to tell you something has major holes in it. Just walk up to the building and see for yourself.
We think the consultant’s report was FULL of recommendations on how to fix the siding, but we also think once a price tag was put on the fix, they bailed.
The one million dollar settlement WAS NOT cash or transferred monies, it was a discount from Mortenson on the building. It would be like purchasing a $25 steak that was cooked wrong and the restaurant giving you a $26 coupon.
The irony is, even if all the speculation is correct, if the city was just honest from the beginning, I think most people would have forgiven and forgotten about the siding. But you know what they say about how many lies it takes to cover one lie.
A key architectural element of the Denny Sanford PREMIER Center is precast, colored concrete. The white residue on the colored concrete is a common condition called efflorescence. Efflorescence occurs when salt migrates from within the concrete to the surface and forms a coating.
“The City is fully aware of the white residue on the building. It’s not uncommon to see this issue in the early years of recently constructed buildings. We are finalizing plans for it to be cleaned off the exterior,” says Mark Cotter, Director of Public Works.
Not sure if Gage Brothers is paying for the cleanup or not, I’m guessing they probably are due to the embarrassment of such work (if it really is their fault or not). But this 180 by the city is baffling hypocrisy. We find it necessary to clean up a little salt because it may ‘look bad’ but after receiving a $1 million dollar settlement for the dented up siding, we leave it, because it is a ‘design element’.
Second Circuit Court Judge John Pekas is scheduled to hear the case at 1:30 p.m. Monday in the Minnehaha County Courthouse.
No matter where you stand on the law or legal language of these statutes, it all seems irrelevant to me. Any document or settlement produced using tax payer money should be made public. It’s not like we are protecting the integrity of a man who shot himself with a 5-foot branch and a rifle in a grove of rural trees, this is about siding that was poorly installed on a building. Who are we protecting?
I also find it even more ironic we are spending MORE tax dollars on private attorneys to keep something a secret. Screw who won the spelling bee here, that should be a red flag enough to tell us something truly needs to be hidden.
M.A. Mortenson Cos. executive John Wood announced Friday that the gutter on the $1.1 billion building was leaky and needed about $4 million in repairs.
The leak sprung on the inner wall of the snow gutter on the roof of the building. The work will affect about 30 percent of the roof, most noticeably on the large eastern face where the black panels will come down.
Last fall, workers noticed dampness on the parapet wall and some pooling of water in the gutter, Wood said, adding that the water had yet to seep into the inside of the building.
“We’re happy they found it now; stuff happens on projects,” Wood said.
In coming weeks, the upper portion of the black face on the eastern side of the building will come down so crews can replace the defective vapor barrier. Mortenson will also need to temporarily take down the U.S. Bank logo to fix the barrier, Wood said.
As many homeowners know, determining the source and path of leaks is tricky. Wood said it took months of testing to diagnose the problem and then determine a suitable fix.
The cost doesn’t affect the Minnesota Vikings or the Minnesota Sports Facilities Authority; Wood said Mortenson and the design team would pay for the fix.
So what about our consultant’s report that we never got to see? Or how about the models we were going to see? That’s just it, we don’t know IF or WHAT kind of (water) damage the poorly sided Events Center has. On top of that, we got a settlement that we are NOT using to fix it. At this point, I couldn’t agree more with councilor Jamison that it is time to tear a hole in the wall and see if there is any damage.
Another fine city of Sioux Falls government document
As the Argus Leader reports today, they have attained 27 pages of change orders from the city on the Events Center (you can go over there and try to decipher the fun stuff). There are some things missing though.
No beginning costs on the change orders (for instance, the siding is only listed as warranty)
What was the original estimate on the siding? What was the final ‘changed’ price.
While Mortenson made 2.25% commission on building the place (over $2 million) There are no records of what subcontractors who were in direct business made/shared with Mortenson. In other words some of the subcontractors may have shared profits with Mortenson since they may have been in a business partnership together. Finance office, Tracy Turbak with the city mumbled about this on the SuFuStu show saying something to the effect of, “We don’t know what those numbers are.”
While it is all fine and dandy we got these documents, they are just the tip of the iceberg.
Goddammit! You will eat our moldy bread, drink our over-priced ruffied drinks, or you will sit in the car;
Guests will still see similar security procedures as they have for other concerts. Bags will be checked and hand held metal detectors will also be used upon arrival. But for this show, the new security element is a bag restriction. No bags larger than 13″ by 15″ or 6 inches deep will be allowed for this performance.
In other words, any bags that can carry in extra snacks, booze, bottled water or whatever will be monitored.
The honey moon period is over folks for the Events Center. How ironic that the concert they choose to implement this fascism is at an already duplicate act.
Let’s face it, I don’t think too many tax payers in Sioux Falls are that naïve or ignorant to think the Events Center will pay for itself (You know, cuz like, it is quality of life). Even with sponsorships, you have operating expenses, maintenance and mortgage payments, a steep bill that has to be paid for the next 30-50 years.
I think this is pretty obvious to anyone who owns a home or business, or for that matter a lawnmower or snowblower.
Paying 9 million in debt service to make 2 million in income doesn’t make you a financial genius, and surely not worth bragging about. Even if you factor in the supposed tax income of $1.5 million you are still at a $5.5 million dollar loss for the year. It would be like making a household income of $3,000 a month with a $6,000 a month home mortgage payment. Not sustainable, or even reasonable.
It’s dishonest to say ‘its in the black’ or ‘net income’. Now if you want to say the operations are in the black, that is perfectly honest, and believable. But don’t say it’s making a profit or ‘net income’. This word play effects people not knowing the distinction and creates the perception that it’s a wild success.
Also note, anyone who has read the prospective and then retrospective studies on all of these venues knows that the first two years don’t really mean anything. It takes until about the third year before you see what NORMALIZED operations will be. This is the honeymoon period and cannot be counted on as the norm going forward.
We should be honest. Don’t claim it’s making tons of money, it’s not. Why not say it’s costing us money, but it provides a quality of life, and it’s worth the cost (and you can agree with that or not).