Informational Meeting

MINUTES Informational Meeting Tuesday, October 15, 2019 at 4:00 PM Carnegie Town Hall, 235 West 10th St., Sioux Falls, SD 57104 1. Call To Order Council Members Present: Janet Brekke, Christine M. Erickson, Greg Neitzert, Marshall Selberg, Curt Soehl, Pat Starr, Theresa Stehly Council Members Absent: Rick Kiley Council Chair Marshall Selberg called the meeting to order at 4 p.m. 2. Committee/Commission Reports A. Public Services Committee: Tuesday, October 8, 2019 (Council Members: Soehl (Chair), Brekke, Erickson, Stehly) Committee Chair Curt Soehl said microblading was discussed at their last meeting. Committee Member Theresa Stehly said there would be an example of microblading given when it is presented at an Informational meeting. She added that she has received mostly positive feedback from the public about this and that this was an example of something that should have been presented to the entire Council at an Informational Meeting. B. South Dakota Municipal League Board of Directors: Tuesday, October 8, 2019 (Council Member Erickson) Council Member Christine M. Erickson provided a summary of the meeting. She said they spoke about: the upcoming South Dakota Municipal League Conference; the upcoming joint meetings with the Counties in December and how Rapid City and Sioux Falls are leading the way in relationships with the Counties; the Code Enforcement Project update, there are currently six cities signed up for it and they should have funds for the position; update on the Buffalo Chip municipality case, which was heard before the State Supreme Court in Vermillion; the City of Sioux Falls was well represented; how she and Council Member Janet Brekke are on the same General Government Committee and they are going to work on issues associated with open space concept buildings, like the Levitt Shell Pavilion; and conversations regarding open meetings and social media. 3. City Council Open Discussion Stehly spoke about: participating in the Native American Day Parade with Council Member Pat Starr; attending and presenting a Proclamation at the annual "Take  Back the Night" event against domestic violence; attending the Neighborhood Summit; and the pilot Project Trim test area. Starr spoke about the parade and dances at the Multi-Cultural Center; working with different groups and media stories regarding a struggling part of town; and the need to address housing issues in the community. 4. Presentations A. Rail Yard Development - Rail Yard Flats and Cherapa II by Jeff Eckhoff, Director of Planning and Development Services; and Jeff Scherschligt, Founder & Managing Partner, Pendar Properties Presentation: Approximately 20 minutes followed by discussion Eckhoff provided a brief synopsis of the Railyard Redevelopment Area. He said it is a 10 acres site that has been split in to five different parcels, labeled A through E. The focus of the presentation is on Parcels B, adjacent to Sixth Street, and C, adjacent to Eighth Street. The City has entered into a two part agreement with Scherschligt. The plan is to close on Parcel C by the end of the year with development beginning in the Spring. Scherschligt will then have two years to create a project for Parcel B. Eckhoff introduced Scherschligt who explained the plans for Parcel C. Scherschligt began with a brief history of the public/private partnership that led to the building of Cherapa Place, which ended up serving as a catalyst for the development of the East Bank and River Greenway projects. He spoke about the guiding principles of his company and how they have made a difference in the community. Scherschligt mentioned the design and construction teams that have been formed for the Railyard Flats and Cherapa II projects. A video was shown regarding the vision of the project. He provided the project details for Railyard Flats: 7,500 square feet of office rental; 42 apartments and indoor parking spaces; 40 additional lot spaces; total square footage of 71,000; and an approximate cost of $13,000,000. The proposed details and cost for Cherapa II were also revealed. It's slated to be 150,000 square feet, 75+ indoor parking, a potential for 300+ jobs, with a proposed project cost of $40,000,000. The project will begin as soon as a tenant has been established. Dustin Powers, Urban Planner, spoke about the Offer to Purchase. The City and Scherschligt have agreed to a $10 per square foot price for both projects with a total approximate land sale price of $1,586,800. Parcel C is slated to close in December 2019, with construction of Railyard Flats beginning in the Spring. Parcel B will close prior to the end of 2021. Powers explained to the Council what items will be coming before them and when. Discussion followed regarding: land appraisal and how the price was established; the beauty of the landscaping of Cherapa Place; earnest money for Parcel B and a 2-year option to purchase; quiet zones; rental pricing; where the money goes that the City receives from Scherschligt; what if a better deal comes along; East Bank Aerial Comparison; Class A apartments; butterfly and bee friendly plants; Industrialization of Falls Park; Whittier Neighborhood; Quartzite; syndication; and the rate of return.  B. Audit Report 18-03 Purchasing Card Program by Shana Nelson, Internal Audit Manager Presentation: Approximately 20 minutes followed by discussion Nelson provided highlights of the report, which focused on purchasing card transactions from July 1, 2017, through June 30, 2018. She began by providing background, which included: 264 cards were issued to employees, who are responsible for purchasing goods and services for the City; 12,609 transactions were conducted; and $5,661,822 was spent. The benefits of the program were that it saves time, increased efficiency, and there was a rebate program. The City has received approximately $360,490 in rebates, since 2014, with the money going into the General Fund. Nelson reviewed the objectives, which were to: determine if purchasing card transactions were appropriate and in compliance with City policy and procedures; determine if City purchasing card program controls adequately mitigate risk, and to determine whether the City's purchasing card program is operating effectively in accordance with leading business practices and that cardholders have purchasing limits in accordance with actual purchasing activity. The audit revealed that there were: inconsistencies in cardholder training by the Purchasing department; two people, who had purchasing cards in their name and access to the credit card allocations in financial system, were allocating their own purchasing card transactions; and there wasn't any direction in the City's Purchasing Guide regarding the process for an employee to get an increased spending limit, if the need arises. Three recommendations were made in regards to training, ensuring segregation of duties, and a new purchasing card policy regarding higher spending limits. The report concluded that: overall, adequate controls exist over the purchasing card process; many leading practices recommended by the Government Financial Officers Association (GFOA) are being followed; and that the audit recommendations will provide additional assurances that controls are in place to mitigate risks. Discussion followed regarding: compliments on the Audit Summary and highlights provided to the Council; purchasing card allocation with departments; qualifications for getting a purchasing card; daily purchasing card transaction maximum; what items were looked at for the audit; ways to get more rebates for credit card useage; what credit card the City use; any vendors who don't accept the credit card; revamping of the audit report; and purchasing card super users. 5. Public Comment There was none. 6. Executive Session A. Consulting with legal counsel or reviewing communications from legal counsel about proposed or pending litigation or contractual matters pursuant to SDCL 1-25- 2(3) The Executive Session was canceled. 7. Adjournment Council Chair Marshall Selberg adjourned the meeting at 5:52 p.m. Denise D. Tucker, MMC, Assistant City Clerk