City Officials Address Council Questions On Premier Center Settlement
"I believe the public trust has been violated"
SIOUX FALLS, S.D. – After years of staying quiet, Mayor Mike Huether’s administration is opening up about the Denny Sanford Premier Center settlement. Back in 2015, the city signed a $1 million settlement with multiple construction agencies, for the warped outdoor paneling on the west side of the building.
Council members had the chance Tuesday to get some answers, but some still say it isn’t enough.
“I believe the public trust has been violated,” says councilor Theresa Stehly. “I’ve been out talking with people, they are very concerned.”
For more than an hour and a half, the city explained why a settlement regarding the event center siding was needed during Tuesday’s informational meeting.
“We came back to [the siding] is functionally and structurally doing what it’s supposed to do,” says Public Works Director, Mark Cotter on why the city didn’t fix the siding.
Some councilors want more proof that the decision made was best for taxpayers’ dollars.
“I think that we need to have an audit,” says Stehly. “We need to have an independent audit to come in to determine what actually took place.”
“If you can release a report, why not, what’s the risk,” adds councilor Christine Erickson.
“At some point in time you move forward,” responds Mayor Mike Huether.
Huether says without the settlement, the city could have spent $300,000 to $400,000 in legal fees.
“Litigation is normally the last and least preferred resort,” he says.
During the presentation, the city broke down where the $1 million dollars is coming from.
Four construction companies involved are paying the city $443,719, which is going back into the event center through a fund called the Events Center Construction Fund.
“Some of the projects that are completed include improvements to the security system, metal detectors, additional radio equipment and a new score table was acquired for the building,” says City Financial Director, Tracy Turback. “The cooler, storage and kitchen expansion project is nearly completed, and the parking lot lighting, the bid for that project has been awarded.”
The Events Center Construction Fund currently has a balance of approximately $2.9 million.
The city also received $41,285 in debt forgiveness. And $514,996 dollars will be transferred back to the city from Mortenson Companies, the fifth contractor involved, Contingency Fund. That’s a $1.5 million fund the construction company set aside in case any problems were to arise with the Premier Center.
“The value of the settlement to the citizens, it was real,” says Huether. “It was considerable back then.”
So the big question on some councilors’ minds; why make the settlement private?
“The city did not ask for it, the other parties did,” explains Huether.
“This is going to cost all of us, all of you, more money to do any project from now,” adds councilor Rex Rolfing.
The South Dakota Supreme Court required the city to release the settlement documents. Now that private settlements seem to be off the table, the city fears any upcoming projects will be more expensive.
“Every contractor is going to build in 5,10, 20 percent more into their bids just so they can cover the cost of litigation that may happen, because we cant’ mitigate, negotiate a settlement like this in the future,” says Rolfing.
What’s next? Councilors are deciding whether another informational meeting, or a special working session, is needed to further understand the settlement.