Tax Collection and Spending

This question has surfaced before. In fact, during the campaigns for the new Civic Center Arena in 2015 and 2018, it came up no less than 100 times. Answers were provided, but the question lingers:

This Two Cents ‘author’ is apparently frustrated that the City isn’t funding our school needs. So, why don’t we?

Here is the answer, again:

The school district is a taxing entity. The City is a taxing entity. The County is a taxing entity. They are not the same taxing entity. A breakdown of property tax distribution from Rapid City collections could be helpful in understanding this.

Of your total Rapid City property tax bill:

The School District receives – 50.19%  ($44,378,854)

The County receives for county service provision – 29.78%  ($26,331,984)

The City receives for city service provision – 20.04%  ($17,719,709)

These figures do not include special taxing districts such as those served by volunteer fire department etc. This distribution is a product of state law.

The City uses this $17 million, plus another $26 million from one-cent sales tax along with some fees and charges to fund:

  • Police, Fire, Parks and Rec, Street Maintenance including repairs, cleaning and plowing, Public Works Administration, Community Development (planning and zoning), Finance Administration, City Attorney, Human Resources, Mayor’s Office and City Council, City Cemeteries, Library and Information Technology services.

One taxing entity does not fund another taxing entity. Doing so would adjust the distribution percentage and would ultimately undermine the intent of the law from which the distribution was born.

The City Vision Fund, which will fund downtown lighting, is derived from sales tax. To be exact, 42/100 of a penny on each dollar. This results in annual revenue of upwards of $13 million – $6 million of that will be used annually for the bond payments on the new arena, leaving nearly $7 million available for community projects.

The point: The City does not fund the schools, just as the schools do not fund the City. It’s separate, on purpose and for a reason.

The other point: People visit Rapid City’s downtown all year long. Spending happens, life happens and our downtown, one of the things we are becoming famous for, did not happen by accident. Our downtown is the heartbeat of our community.  Our downtown, however is dark at night and has been described as “Gotham.” The downtown is undeniably a growing, thriving area of town and will benefit from new street lighting. We all benefit from a thriving downtown.

The Two Cents ‘author’ might incorrectly believe the lighting project will benefit only Main Street Square, but the lights will be placed from West Blvd. to East Blvd on both Main Street and St. Joseph St. and will light not only the current core of downtown, but also the growing and changing East of Fifth area.

Citizens who made up the Vision Fund Committee as well as the City Council itself determined the lighting project was needed, and I agree.

Downtown 1950s Downtown pumpkinfest2013

 

 

The Social Justice Dilemma

It happened again. Someone said or did the wrong thing and it was captured on video and placed on social media.

Most recently, the Covington Catholic High School students were recorded in an apparent confrontation with Native American Nathan Phillips on the steps of the Lincoln Memorial. The first version of the video went viral covington_catholicand led to the wholesale condemnation of the students and their school. In contrast, it led to the elevation of Phillips to hero status. Later versions of released videos showed a different context, facts and circumstances. Now, there’s a backlash about who said what, who did what, what their intent was and why did he have a smirk on his face…

This is now common place. The goal- very clearly- is to destroy the Catholic school and specifically the young man featured in the video. Sides are being chosen, the battleground defined and we go one more day, one more week into the social justice abyss.

This set of circumstances is disturbing but so is the one that will occur tomorrow, the next day and the next week. So are those that have occurred over the past several social justicemonths and years. American social media members have become judge and jury based on photographic or video evidence, in some cases lasting only a few seconds. Facts are secondary to first impressions and this leads to premature but overt attempts at destruction of individuals and institutions. The entire video of the student/Native American incident lasted one hour forty-five minutes, but judgements were made from 30 seconds of video.

Most troubling of all is the people’s willingness to engage in social media lynch mobs. We leave our families, our employers and our friends to take time in social media crusades because after all, our opinions must be heard. We adopt these issues as our own. We bring them into our homes and share them with our families.

By participating, we are practicing judgment of others. The same judgment that many when-you-judge-anotheractivists oppose. The same judgment we are advised against in elementary school, Sunday school and at most dinner tables. We are judges and seem to be proud of it. We practice hypocrisy to point out that others practice hypocrisy. What other issues relevant to national security, the economy, or the welfare of our communities do we put as much effort into? None.

We get to decide today, and every day, if we want division or unification. We must choose every day and with every contact whether to divide or unify. We teach our children and those who seek our example how to behave. Our children are the future of our communities and of our country but just as importantly, so are the lessons they learn from us.

We are not justified being angry at something someone said or did; nor are we justified participating in the punishment of those suspected of doing it. To let these issues impact our lives and allow them to cause a visceral reaction from us is mere arrogance. We are practicing arrogance, and practice makes perfect.

The irony of the Catholic student/Native American confrontation taking place at the Lincoln Memorial should not escape you. Here is an excerpt of Abraham Lincoln’s speech given to the Republican State Convention:

“Mr. President and Gentlemen of the Convention.

If we could first know where we are, and whither we are tending, we could then better judge what to do, and how to do it.

We are now far into the fifth year, since a policy was initiated, with the avowed object, and confident promise, of putting an end to slavery agitation.

Under the operation of that policy, that agitation has not only, not ceased, but has constantly augmented.

In my opinion, it will not cease, until a crisis shall have been reached, and passed.

A house divided against itself cannot stand.

I believe this government cannot endure, permanently half slave and half free.

I do not expect the Union to be dissolved — I do not expect the house to fall — but I do expect it will cease to be divided.

It will become all one thing or all the other.

Either the opponents of slavery, will arrest the further spread of it, and place it where the public mind shall rest in the belief that it is in the course of ultimate extinction; or its advocates will push it forward, till it shall become alike lawful in all the States, old as well as newNorth as well as South.”

                                                                    -Abraham Lincoln, June 16, 1858

handcuffed

I submit to you we are enslaving ourselves to social “justice” and the unnecessary adoption of problems which are not our own, and about which we lack sufficient information to form a conclusion. If we do not first look inward to improve ourselves and those close to us, there can be no justice for anyone.

 

 

 

The Morning After (Election Day)

Someone will win, someone will lose, and initiated measures will either pass or fail. NowVoting Booth that the election is over: the world is neither a better or worse place. The Sun will rise in the morning. Nothing has changed in the overall scheme. The happiness or relief sought from this election cycle has not, and will not come.

There has been a great deal of political wrangling over fixing the broken system, ousting corrupt politicians or bringing about dominance of one political party over the other. Prepare to be disappointed as this is not the first, or last election cycle where these things are on the ballot.

As time goes on, it’s clearer to me the system is not broken as much as we, the people are. Social media has become the dumping ground for political rants, threats and conspiracy theories. Friends attack each other, relatives issue ultimatums over family member allegiance to a politician or a cause. Made up statistics, unverified “news“ accounts related to history or political activity have rendered social media perhaps THE primary tool of misinformation rather than a source of entertainment. Unfortunately, politicians must use the same platform.

Terms such as misogynist, hate, corruption, liberal, conservative, fascist, patriot, traitor and others have definitions that are now fluid, changing with each generation and antifa-nov5sometimes with each new noteworthy event. If you don’t accept something or someone, you hate them. If you disrespect a woman you’re a misogynist. If you stick up for women’s rights you are feminist. If you support the president, you’re a fascist. If you are against the president, you’re a traitor. These things have nothing to do with politics or the political system but have more to do with people and are sometimes byproducts of media-hungry consumers waiting to be fed by antagonists. Our ability to influence others seems to be decreasing while our need to be heard by others is increasing. This noise is drowning out civility in our communities.

I ‘m not saying we are headed for civil war but we can certainly expect more civil and social dysfunction over our obsession with self-relevance on social media. Here are some points which could be important for surviving the effects of social media storms resulting from the midterm elections and leading up to the next election cycle:

  1. It’s OK if you don’t express your opinion publicly.
  2. It’s OK if you don’t react or respond publicly to someone else’s opinion.
  3. Neither democrats nor republicans are ruining the country.
  4. Different opinions are not wrong, they are just different.
  5. It’s OK (and encouraged) for you to become involved in government policy making.
  6. Arguing with others on social media does not constitute being involved.
  7. A Google search is not the same as research.
  8. Attacking your friends and family, especially publicly, will only create loneliness and isolation.
  9. Check social media post sources before you read them, believe them and especially before you share them.
  10. When in doubt, post about cats or children.

Political Corruption & Amendment W,

“In any case of a conflict between any provision of this Article and any other provision contained in this Constitution, the provisions of this Article shall control.”

Critical debate of the transparency and accountability of our government structures are exactly the conversations voters should be having with those you elect. It is fair and right for the citizens to demand a government they can trust. I wish that was the conversation we were having about Constitutional Amendment W. But it isn’t. Unfortunately, Constitutional Amendment W is not as much about accountability and ethical oversight for our government as it is about an outside group committed to selling an agenda. By Celebrities2using popular spokespeople, they hope that you won’t see the creation of an unelected, all-powerful board. By feeding off national partisan politics, they are hoping you won’t see all the problems that will be permanently written into our Constitution. And, by playing on your fears of out-of-control fraud, they hope you won’t pay attention to the massive increase in government spending.

A Massachusetts-based group called Represent US claims that Constitutional Amendment W would give the power back to the people. Wrong. Constitutional Amendment W gives power to professional campaigners by forcing an election every time any of the many details within the Amendment become outdated or the unintended consequences are realized. Campaign organizations, like Represent US, make millions promoting ridiculous measures across the country. Campaigning is an industry, and it is feeding on South Dakota, to the detriment of informed dialogue.

Celebrities 6I can’t help but take offense when people who couldn’t live further from the values of South Dakotans tell me the answer to our corrupt government is to give absolute authority over it to a Board with no oversight itself. And to give the Board guaranteed tax-payer funds that increases each year. Constitutional Amendment W would require the state to fund the Board at a pre-determined level without any say from the Legislature. What does this say about us? That we value a Board with absolute power over all levels of government more than we value educating our children or keeping our citizens healthy and safe.

The Rapid City Journal recently endorsed Constitutional Amendment W claiming in part that the State Government Accountability Board would be transparent because they are subject to open meeting laws. So is every level of government that they claim needs oversight. I’ve been unable to find, in the 8-page amendment, what guarantees this board is so ethical that it does not need to be subjected to checks and balances. Here’s an excerpt from the proposed amendment: “In any case of a conflict between any provision of this Article and any other provision contained in this Constitution, the provisions of this Article shall control.” This amendment literally overrides the South Dakota Constitution. I do not support the status quo, but this is serious overreach… all brought to you by celebrities and out of state interests.

Represent US has confused trust with agreement. Disagreement does not mean unethical action or behavior. It means we are having a thorough conversation about effective ethics and campaign reforms, where we agree on some things and disagree on others. Instead of letting South Dakotans’ work with our own system, they spend millions to promote a measure so they get their way regardless of negative impact to South Dakota.

Constitutional Amendment W gives power to an unelected Board to investigate citizens at every level of government, costs the taxpayers hundreds of thousands annually, and writes flawed legislation into our Constitution. We can do better. Please join me and others in voting NO on W.Vote No on w image

Campaign Over. Issue Settled

RPCCAfter several long months of information sharing, presenting, advocating and campaigning, the day has come and the outcome of the new arena vote is here. 17,000 citizens voted and approved the new arena by a 64% to 36% margin.

There have been literally hundreds of volunteers giving their time, talents and money to promote the new arena. VoteYesRapidCity started as a campaign slogan, but morphed into a movement. An idea. Perhaps a way of thinking about the future of Rapid City.

VoteYesRapidCity is, in fact a campaign committee that will file its final report with the state and officially dissolve. But we, as stakeholders of Rapid City should keep the momentum moving. We owe it to ourselves and future generations.

It is always more comforting to stick to the past and go through life with as few changes as possible. No one likes change…no one over 25 anyway. We have to acknowledge we are all aging and the current community leadership should not only have today’s needs in mind, but should have also a strategy for tomorrow. Humans are short-term beings with daily needs taking priority in our lives. Long-term thinking is not natural and not everyone is cut out for it.

Last night’s victory was not about an arena. It was about progress. The voters spoke loudly and clearly: they want change. They want us to be known as the community that thinks ahead and doesn’t seek to stay in the past.

Something I have been taught, something that has been modeled for me and something I hope to pass on to others is this: Attitude is everything!

Rapid City could use a different attitude. We need younger people on the school board, in the legislature, on the county commission, on the city council and yes, in the mayor’s office. We need people from all walks of life, of all ages to take Rapid City by the reins and ride it into the future!! This cannot be done by relying on retired folks or career politicians. We need you to be a community leader!

The requirements to be a community leader are fairly basic:

  1. Own Rapid City. I mean really own it. As if it were yours – because it is. Make it better, every day. It may only be smiling at someone, or it may be changing someone’s tire. It could be helping to recruit volunteers, or helping with a campaign or perhaps running for office. There’s a reason small business owners invest so much of themselves into the business: because they own it and its success or failure is a result of their efforts, skills, investments and their attitude.
  2. Show up. It is essential you make yourself available. Today, America is a nation of opinions. We take the time to share them on social media and take time to chastise others for theirs, but what good is it if we avoid the real responsibility of taking a stand and offering ourselves to the service of others. Being involved with your own blood, sweat and tears is hard when the cost/benefit ratio suggests you’re an idiot. Don’t over-think it. Show up. Serve.
  3. Set the standard. Nearly 100% of America is made up of people in communities like ours. If we focus on that fact and focus on raising the bar in our communities… we raise the bar in our nation. We can set community standards for who we are, how we communicate and how we feel about important issues. We need healthy differences of opinion in order to achieve the best plans. We must be future-focused. We must realize we are, like it or not, going to hand this nation over to people who are at this moment children. Our eyes should be open to the concept that communities produce candidates for local, county, state and national offices The power starts with the local community. The foundation of effective governance is local people, raised in an environment of service and strength.

Today, you have a right to be proud of yourselves. But come tomorrow – get back to work. There are new ideas, not yet developed. New plans, not yet made. And new people, not yet engaged.

Thank you to everyone who worked tirelessly to make the new arena a reality. The progress made would not have been accomplished without you. Thank you to the thousands of voters who participated in the process. And finally, a special thank you to my wife Shirley for enduring the last year of late nights, work on weekends, sometimes countless hours of answering question and concerns on social media or the phone. I would not be who I am or where I am without you.

Yes, We Can afford a New Arena

The City of Rapid City currently enjoys a AA credit rating. This rating is given to cities such as ours for historically demonstrating responsible bonding/borrowing/repayment for projects Credit Ratingshistorically. Cities in South Dakota do not get bank loans, they sell bonds through an underwriter in order to create funding. There are generally two types of bonds to be used in this scenario:

Revenue Bonds

Revenue Bonds: The City sells bonds through an underwriter to create funding for a project. The City is responsible for paying the principal and interest to the bond holders through a trustee (usually 1st National Bank). If the City fails to pay the bonds, the bond holders sue the City.

Certificates of Participation

Certificates of Participation (COPs): The City sells bonds through an underwriter to create funding for a project. The City is responsible to pay the principal and interest through a lease agreement with a trustee (usually 1st National Bank). The trustee is responsible for paying the principal and interest to the bond holders. The trustee in this case is regarded as a lessor and the City is a lessee. If the City fails to make the payment, the project, in this case the arena, becomes the property of the Trustee. Similar to a person securing a bank loan for a car or a home and then failing to make payment. There is a repossession or foreclosure.

It is important to note that certificates of participation were used to fund, in part, the original Civic Center campus. Also, the state of South Dakota uses only certificates of participation when bonding is necessary for large projects. This is a legitimate and necessary funding mechanism and is not a “scheme” as two of the former mayors, Alan Hanks and Jim Shaw fondly referred to it. More importantly, the City has the ability to fund the entire project through cash down payment and revenue bonds. The decision of what bond types to use has not been made, and will not be made until it’s time to access the funds.

In 1972, voters approved a one-half cent sales tax to be used to build the Civic Center complex. At that time, the fund generated less than $1 million annually. When the Civic Center was paid off, the tax reverted to the citizens. Former Mayor Ed McLaughlin put the issue back on the ballot and Rapid City voters approved reinstating the tax in 1992. The new version of the ½ cent tax became known as the vision 2012 fund. In 1995, this fund generated $3.5 million annually. In 2017 the Vision Fund generated $12.8 million.

In March 2015 voters denied the City’s attempt to build a new 19,000 seat arena for $180 million in construction costs. There was no alternative plan at the time. In January 2016 the Civic Center Resolution Task Force was formed and charged with investigating options for moving forward with the Barnett Arena ADA compliance and marketability issues. Approximately one year later, the task force submitted their findings to the Mayor’s Office. We then put the findings into a presentation and began engaging the public on this important issue.

The funding mechanism consists of using just over 50% of the annual Vision Fund revenue collection. An annual bond (debt) payment of $6 million was chosen because it’s affordable and allows us to continue to fund important community projects with the other half of the fund. It also provides an important barrier in the event of a major recession.

Since early 2016, and in anticipation of an upcoming large expense, the City has been able to save $25 million in vision funds. The new arena being proposed will cost $130 million, and will include a 20% down payment. The City seeks to sell bonds through an underwriter for a maximum of $110 million in bond proceeds and will be paid over an anticipated 30 year period at $6 million annually.

One of the common concerns heard from citizens, is that the City should be putting this money into road repairs rather than a new arena. For perspective, please understand this:

  • The City’s annual operating budget is approximately $166 million.
  • The City will spend $180 million (same cost of the arena principal and interest financing) on roads and infrastructure over the next 6.5 years

Over the 30-year financing period, the City will make payments on the new arena, but it will also spend $1.16 billion on streets and infrastructure. The City has a need and responsibility to balance its interests, just like we all do. Putting all the money into one priority at the expense of other priorities is no way to live, no way to do business and no way to run a city government. Your city council understands this and I understand it. Not everyone can be made happy.

The Civic Center and other attractions bring outside money into our economy; without outside money, the economy cannot grow. This plan has never been pitched as the economic “magic pill” but it is an important plan for the long term well-being of the Civic Center, which is an important cog in the local economic wheel.

Also important to note: there will be no new taxes required to fund the arena or the ongoing Street and infrastructure expenses.

 

 

Parking Improvements come with New Arena

Parking lotFighting words to many Rapid Citians, parking is a hotly contested issue at the Rushmore Plaza Civic Center. Statistically, we have as much or more parking at our civic center than any other event center in the region. Our local customers have expectations relating to local parking that they do not have for other venues such as Sioux Falls, Billings, Casper, Bismarck and others. Everyone seems to expect that in other cities they will park and walk or ride a shuttle bus; in Rapid City however, we demand upfront, on-site parking.

One thing is certain: A 1000+ space parking garage makes the new arena proposal unaffordable, and wouldn’t solve the perceived problem. In addition, building an arena somewhere else, for example near the interstate is also unaffordable and is operationally illogical and not feasible.

Nevertheless, it is important to address the people’s desires related to parking as much as possible. The following will be accomplished if a yes vote is achieved on June 5th:

  • A new parking lot will be built immediately to the north of the Civic Center Arena offering 240 additional parking spaces.
  • Sufficient staging space will be built so that traveling show trucks and buses will no longer consume hundreds of parking spaces during events as they currently do.
  • A new shuttle route will be added which will create convenient access to over 1000
    New Shuttle Route
    New shuttle route

    additional parking spaces for evening and weekend events.

  • The northern orientation of the new arena will also make on-street parking a closer and perhaps even more convenient option for many event attendees.
  • Premium parking will be offered, for a fee. As part of the event ticketing process, future attendees will be able to select premium parking as an option; reserved parking can be purchased with an additional ticket at the time of event ticket purchasing. At the time of the event, Civic Center management will know how many spaces to reserve, and the spaces will be the closest spaces to the building outside of the handicap spaces. When the premium parking attendees arrive in the Civic Center lot, they will be met by a parking attendant who will direct them to their space.

Event parking will be made as efficient as possible. It is far less expensive to make better use of the parking we do have, rather than add thousands of parking spaces for periodic use.

In addition to available parking spaces, our issue with parking at the Civic Center is compounded by two other factors: traffic flow in and out of the lots and pedestrian safety.

A plan has been developed to meet these issues head on:

  • North Mt. Rushmore Road will be closed during large events. Access to the Civic Center and Central High School parking lots will be accessed as usual from the south from Omaha St. and from the north, from North Street. This will create a wide safety barrier for pedestrians on N. Mt. Rushmore Rd.
  • Exiting the N. Mt. Rushmore Rd. parking lots will be metered for safety and volume. The northern-most lots will be required to exit to the north while the southern lots will exit to the south. On the 5th Street side, right turns only from the main lot and also from the east lots will allow a smooth transition and will meter the volume on the 5th and Omaha St intersection.

These improvements will allow a safer, smoother flow of vehicle and pedestrian traffic and will make more parking spaces available.

Food for thought: we have spent some time comparing our parking availability to other event centers in the region. I can understand people’s desire for more parking, but IRC and SF Parking comparison cannot understand those that demand we spend $30 million on a parking structure. I cannot support this due to the cost vs. benefit factor. How can I, as an elected public official justify having more available parking than any other event center? What makes us different? How is Sioux Falls’ arena and convention center so successful with LESS parking than we have? Seriously, if you have an answer to these questions, please comment on this post and share your thoughts.

I believe we will make the most efficient use of our existing parking and will benefit greatly from not spending millions on more parking when it is not fully justified. A wise man recently told me: “You don’t build a church for Easter Sunday” meaning your building and parking lots should be sized for the crowd you will get most of the time, not if everyone comes at once.

If you have concerns over parking, you are not being ignored: we have evaluated parking since the citizens task force was appointed in 2016. If you feel there is not, or will not be enough parking for a new arena, especially after the above improvements are in place, the question becomes: will you vote to deny the desires of a majority of residents who believe parking is or will be adequate?  I hope not.