Mayor Huether moving forward with admin building plans

Mayor Mike Huether affirmed his plans to move forward with financing for a planned city administrative building after a court earlier this week gave the all-clear.

Circuit Court Judge Mark Salter on Thursday ruled in favor of City Clerk Tom Greco, who last month threw out more than 6,400 petition signatures because they were collected on the wrong form. That decision paves the way for the city to sell bonds to finance and construct a new 79,000-square-foot city administration building.

Organizers of the failed petition drive say the City Council and mayor should honor the wishes of the signees – there would have been enough signatures to force a public vote had the correct circulation forms been used – and delay bond sales until a public vote can be held. But Huether said the scrutiny this project received from all three branches of local government – executive, legislative and now the judicial – with the same outcome each time illustrates the need to move forward.

“City government works at the highest level in Sioux Falls. It worked again during the two-year review of the City Administration building. This prudent investment has been fully vetted, so it is time to move forward and sell the bonds,” Huether said during a news conference Friday.

The expected construction cost of the project is $21.9 million, which is the amount the city will spend to design, construct, furnish and equip the new building. The mayor has authorization from the City Council to borrow up to $25 million for the project. The difference will be used as capital interest payments and to establish a debt service fund.

Van Eps Park and Dakota Avenue improvements will also be covered by the project financing.

Finance director Tracy Turbak said now that the dust is settled in the court case and the six-month window the Council set for more building options to be vetted has passed, the plan is to sell bonds through a competitive bid process in mid-October. And with favorable local economic conditions and low interest rates nationally, he expects the city will get a good deal from interested investors.

“The timing of this bond sale is very good, as interest rates are near historical lows. The city’s excellent credit rating will translate to even lower borrowing costs,” Turbak said. “Our strong and growing economy, including growing sales tax receipts, and our city’s prudent fiscal oversight and strong management have caught the attention of Moody’s and potential investors.”

The city has a credit rating of AA2, which is the third highest rating possible.

Construction is slated to start next spring.