Homework for Adults

OK, this is the age of opinions. I get it. Social media has created a platform for everyone to feel like an expert on the topic of their choosing.  60 seconds of scrolling should make any sane person question why they spend so much time arguing with friends, family and mostly, total strangers about politics, or other crimes against humanity.

As your friend and fellow community member, before you dive knuckles-deep into your keyboard and publicly embarrass yourself, I urge you…. no, beg you, please  take five extra minutes to try and understand the topic of which you are preparing to launch a tirade! It not only makes you look stupid, it makes us all look stupid.

Some of us remember the days of helping our kids with homework. If math and science weren’t challenging enough, there was an occasional research paper requiring citations, none of which could be Wikipedia. Remember citing sources? A source is a place where you find reliable information relevant to the chosen topic. Keyword: reliable.

In this example: The building and naming of the new Civic Center Arena.

98B07701-3548-48AD-B8CA-E4CFA8B02781

Todays Two Cents ‘author’ falsely believes the Civic Center Arena will be built with property tax revenue.  Further, that naming the building after Regional Hospital is some kind of tribute to them. If only this person would have paid attention to one relevant article or TV news story in the past four or five years, they could have learned the following:

The original Civic Center was built using the same funding source that will be used to build the new arena: sales tax revenue. To be exact, a little less than 1/2 penny of your sales tax contribution, otherwise known as the Vision Fund. All of the many additions over the last 40 years have been built either with the same fund, or revenue generated by the Civic Center. No property tax.

Regional Health is the region’s largest employer with well over 5,000 employees and growing. Yes, they are a non-profit hospital and they are exempt to property taxes, but their thousands of employees do, in fact , pay sales tax and property tax. And a lot of it. Some of our community’s highest wage earners work there and those positions cause the creation of other good paying jobs and more importantly, the generation of cash flow in our economy.

Regional Health, as part of their system-wide re-branding, has purchased the rights to name the current Civic Center campus. $3.6 million over ten years is a much neededArena boost to the Civic Center operation which is paid for by revenue generated from events held there and a supplement of BBB tax, our tourism tax. In other words, Regional – soon to be Monument, is paying $1,000 per day for the right to have their name on the buildings. It’s good for the City and good for Monument. It is a marketing contract.

I’m sure the person who used a few of their precious moments on earth to contact the Rapid City Journal’s “Two Cents” about this property tax atrocity will soon be attacking something else with the same ignorance and vigor as they did this topic, and nothing I can say or do can change that. I am simply pleading with you to use calm discernment before going off half-cocked. We will all be smarter for it.

 

 

 

 

 

 

 

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.

 

 

New Arena will Benefit Local Economy

Part One of Three: Economic Benefits of a New Arena

In just one week, we will know the outcome of the primary election and the future of the Rushmore Plaza Civic Center. On the ballot is an issue to authorize the City to bond for up to $110 million to build a new arena on the Civic Center complex.

A “yes” vote gives the complex new life and sets us on a course for larger and improved events, more economic impact and enhanced quality of life. A “no” vote, will place a Band-Aid on the Barnett Arena and will keep its current decline in progress. By my Arena Pro Formaestimation, in as few as 10 years we may be faced with the decision to infuse General Fund tax dollars into it, board up, or demolish the Barnett Arena. This would certainly close what has been historically a very popular, well-used and beneficial component to our community. A new arena will be financially self-sufficient and will not increase taxes.

To date, I have held a total of 57 presentations on the matter, and have spoken to over 2100 people face-to-face about this issue. I have come to learn that there are still sticking points and need a better explanation or justification. One of them is economics.

Rapid City is a visitor destination and we have been regarded as such since 1890. In Pennington County, there are 10,131 jobs that directly or indirectly exist due to the visitor industry.

In a 2017 scientifically-valid survey, Rapid Citians rated economic stability and growth as the number two priority behind Public Safety. Rapid City has little problem attracting visitors during the “on season” and since 46% of our general fund budget revenue is Survey Chartmade up of sales tax, we are left with significant reductions in revenue following the tourist season until Christmas and after Christmas until the beginning of tourist season. Rapid City doesn’t need to spend a great deal of time and energy trying to get more visitors here during June July and August. The off-months are the challenge and are historically the months when the majority of arena activity occurs. With the slow but steady decline in the usage of the Barnett Arena due to it’s outdated architecture, this is only making matters worse. A new arena, although never promoted as a ‘magic pill’, would certainly serve to bring visitors into our area in the off-season. Our visitors spend money, and a great deal of it. What’s more, the 10,100 people employed in full or in part by the visitor industry spend a great deal more money all year long.

A local economy is a closed system until it figures out how to bring in outside money. This can be done with exports such as manufacturing widgets to sell to people from other states or countries; it is done with agriculture when we export our livestock, farm goods and trees. This is also done with tourism, yet we don’t have to manufacture anything other than providing a welcoming destination for visitors from all over the world to travel. An economy only grows with outside money, it remains stagnant with the lack of it.

Building a new arena is a smart economic decision. It will benefit us all, even if we don’t attend events there. More sales tax revenue means less dependence on other revenues, such as property tax. It also provides more options for entertainment, recreation and quality of life.

Tomorrow’s topic: Parking