Loopholes, Lies and Apathy

That is the best description I can give to the lastest from Sioux Falls city hall. I helped break this story, I first pressured Stormland TV news to do a story about it and they did their usual 5 minutes of digging. I want to applaud Ellis for taking a few months on this story to get it right;

Almost a year into the deal, developers had paid $301,000 in fees through November, or only 5 percent of what officials estimated they would pay into the arterial streets program this year. Through November, taxpayers had contributed $2.5 million to the program.

Oh, but it gets better;

What happened? Bad timing played a part. On Sept. 15, 2008, the same day the council voted on the tax and fee increases, Wall Street investment bank Lehman Brothers filed for bankruptcy, sending the nation’s financial system barreling off a cliff. Banks clamped down on lending, and development screeched to a halt.

Ironically, Lehman’s bankruptcy was brought up the night of the vote by a citizen, but apparently the 4 councilors and mayor that voted for the tax increase were too busy watching TV to listen (councilor Quen Be De Knudson, who consistently brags about how hard she works was busted watching the Olympics during public testimony).

“The developers,” City Finance Director Eugene Rowenhorst said, “are not doing that much nowadays.”

Thanks for the observation, short-timer.

But officials say there are other reasons for the big drop-off in development fees. Builders rushed to get land platted or replatted ahead of Jan. 1, 2009, when the new fees kicked in.

Imagine that, they promoted the new plan, then gamed the system. Maybe I should have bought all of my groceries for 2009 on December 31, 2008. Golly, I feel really stupid now.

But behind the scenes, some builders were upset with the city. Sioux Falls, they argued, was not moving fast enough to upgrade roads and utilities in areas primed for development. The lack of basic infrastructure was slowing growth.

Then pony up. If the city isn’t building a new road to your new development, build it yourself, or STFU. It’s not the ‘City’s money’ that builds new roads, it’s ‘My money’ that builds new roads.

Throughout much of 2007 and part of 2008, a group of developers met regularly with city officials to hash out a plan that would allow the city to spend more money on arterial roads and basic infrastructure.

This is news to me, but no surprise. As usual, joe-six-pack doesn’t have a say in the matter.

The first attempt at raising the sales tax failed in May 2008 on a 5-3 vote. Undeterred, city officials brought the package back a few months later. This time the council split 4-4, allowing Munson to cast the deciding vote.

Munson just couldn’t let it die, he just had to have that extra .08%. I betcha he lost sleep over the fact that he wasn’t charging the citizens of this city the maximum amount he could.

Munson said he would do it again. The tax increase and platting fees are in place and will begin generating more revenue when the economy picks up.

“You make decisions with the best information you have,” he said. “You don’t look at that vote of raising the second penny as immediate. It really was presented as a long-term solution.”

Where’s my f’ing shovel? The information you had was this; Major financial institutions were failing, development was down, the economy was down. This had nothing to do with roads, this had to do with your GREED!

Scott Ehrisman, a Sioux Falls resident who opposed the tax increase, said he’s not surprised the deal hasn’t worked as advertised. The city put up a Web site promoting the idea that taxpayers and developers would work together to pay for growth. Ehrisman calls that a ruse by city officials who wanted to raise taxes to their maximum.

Ehrisman notes that the city tried to raise the same tax in 2005 to pay for a recreation center, but the voters said no. This time, the voters didn’t have a say.

“I don’t believe the tax increase had anything to do with arterial roads,” he said. “They were planning on building those arterial roads with or without that tax increase.”

Ehrisman said the .08 percent increase should be rescinded until the development community has recovered enough to begin paying what the city promised it would pay.

“Developers have a choice,” he said. “They don’t have to build. They don’t have to pay the fees. But we have to pay the taxes.”

I also told Ellis that I believe someone ‘lied’ along the way. Don’t know who, but this was a freaking boondoggle from the beginning.

“I believe eventually we’ll get back to those historical growth rates that we had estimated to make this 60-40 split work,” Munson said.

Yeah, Dave, and Vernon Brown will be mayor, and the Unicorn Rainbow park will be built, the calendar will turn back to 1955 and monkeys will fly out of my ass. Do you really think people believe your bullshit? I know you are a self processed tea-toddler but I’m starting to wonder.

Long term, when the industry recovers, the split between taxpayers and developers will even out, predicts Chuck Point, a vice president with Ronning Cos.

“The market goes up and down,” he said. “The estimates of what the city might pay and what the developers might pay were just that – estimates. They were brought forth by the city, not the developers.”

Yeah, Chuck, because everything the developers have presented so far has been rock solid . . . . and BTW, if these were just ‘estimates’ can I tell a store clerk the next time I buy something, “I know I owe you an extra 8 cents, but I don’t have it, so let’s consider this close enough, because, yah know, this tax increase was just based on ‘estimates’.”

Some developers have tried to avoid the fees by claiming their changes are “minor plats,” which are not subject to the new fees.

“We’re trying to redefine our definition more clearly of what is a minor plat,” Huwe said. “Now, everybody comes in and says, ‘Here’s my minor plat.’ And we say, ‘No, it’s not.’ “

You tell em’ Huwe. “Because, like, we have to start cracking down on you fellas since this story is in the newspaper and all.”



10 comments ↓

#1 scott on 01.03.10 at 9:01 am

you need to run for council! you and kermit would rock!!!

#2 Scott on 01.03.10 at 11:18 am

Fucking incredible.

#3 John2 on 01.03.10 at 11:27 am

Nicely done. Yet another perfect example of how development never pays for itself, but rather is merely a vehicle to privatize profits while socializing costs on the rest of us.

#4 Plaintiff Guy on 01.03.10 at 2:09 pm

City operations focus on a few corrupt developers. Competitive bidding has been eliminated. City projects are exorbitant cost because of this syndicate. The city is a ponzi public entity formed from home rule funded by unsuspecting cheated taxpayers. Taxation without representation, unconstitutional harrassment/raids, and ridiculous fees/fines are all that can be expected from this socialist regime.

Go get em l3wis. Sioux Falls must return to constitutional democracy. It will take Home-Rule repeal or charter revocation. Some day, voters can stop tax hikes and the city council will have checks and balances power.

#5 Poly43 on 01.03.10 at 3:51 pm

Plaintiff Guy says:

City operations focus on a few corrupt developers. Competitive bidding has been eliminated. City projects are exorbitant cost because of this syndicate.

With you so far and agree completely.

The city is a ponzi public entity formed from home rule funded by unsuspecting cheated taxpayers. Taxation without representation, unconstitutional harrassment/raids, and ridiculous fees/fines are all that can be expected from this socialist regime.

Go get em l3wis. Sioux Falls must return to constitutional democracy. It will take Home-Rule repeal or charter revocation.

This part I guess I do not quite understand. Must be because I do not know EXACTLY what “home rule” is. Could someone explain just exactly what it is, and if it is so bad…why do we still have it? AND….how could something other than “home rule” have prevented this latest cluster fuck?

#6 Plaintiff Guy on 01.03.10 at 6:17 pm

Poly43

Home Rule is ‘strong mayor rule’. The mayor has absolute power over the council and citizens. He has implemented a no appeals process such that any action against the city cannot be appealed into court. City hearings violate every aspect of the SD civil procedures act and 2 amendments to the US constitution. Voters voted for Home-Rule in 1994 not realizing that, with a marxist in power, it could become full blown socialism. There are half a dozen pending constitutional cases in progress. It used to be that there were only 2 lawyers in the state who would go up against the city. Now, there are dozens. Future city expenditure will not be infrastructure, streets, events center, etc.. It will be litigation and punitive damages into and beyond 2012. The mayor hides from public appearances because he knows he can expect a creme pie in the face most any time.

#7 Poly43 on 01.04.10 at 5:46 am

Plaintiff Guy says:

Home Rule is ‘strong mayor rule’. The mayor has absolute power over the council and citizens.

To a degree I understand exactly what you are saying. Without a doubt our council is embedded with “special interest” types, and needs an overhaul. But does the mayor have absolute power over them? I didn’t think so. Correct me if I am wrong, but don’t the eight elected council members adopt ordinances by majority vote…the mayor only voting to break a tie? And even if a measure is vetoed by the mayor, that veto can be overridden by the council?

#8 Ghost of Dude on 01.04.10 at 10:06 am

I have to say I was surprised to see this story on the front page of the sunday paper.

I’d have thought the Argus would just parrot propaganda from city hall and the developers. Maybe that’s just the broadcast media.

The city really seems to have screwed the pooch on this one. The money for those roads should have been paid as matching funds to what developers paid. If they don’t pony up, they don’t get anything from the city.

#9 l3wis on 01.04.10 at 10:51 am

IMO the story should have came out 4 months ago. Also, I think developers should pay 100% of new road costs (within the development) and pass that cost onto the new homeowners then gift the street to the city to maintain. That is how it used to be.

#10 Plaintiff Guy on 01.04.10 at 11:24 am

Poly43

Wrong about the mayor. Yes, he can break a tie vote. However, he can also go against the council’s vote. He did recently regarding animal shelter expansion. 4 (majority) of the council are part of his ‘el developer’ network in that they are unethically involved business-wise. Despite the corruption, voting often looks fair. Nevertheless, the mayor can overrule the council. City government is not a constitutional democracy.