Taxpayers were not misled nor was the value of the Premier Center siding settlement overblown when it was announced two years ago.

That’s the case Mayor Mike Huether and his team of department heads and city attorneys tried to make during nearly two hours of testimony before the City Council Tuesday at Carnegie Town Hall, a hearing scheduled after a once-secret settlement with five event center contractors became public last month.

Premier Center settlement: Sioux Falls councilors demand answers

“The only thing I would change would be I would prefer to address this in a more aggressive fashion. ... I'd have done this a week ago,” Huether said defending the city’s decision to enter the confidential settlement he said netted taxpayers $1 million.

But councilors zeroed in on money from a contingency fund, which the primary contractor M.A. Mortenson used to make a portion of its contribution to the settlement. According to the settlement, Mortenson contributed about $515,000 toward the settlement using money from the construction manager contingency fund.

Deputy City Attorney Karen Leonard said while the contingency fund dollars belonged to the city and would have likely been retained by the city, a clause in Mortenson's contract stipulated that should other undiscovered deficiencies in the building arise, the contractor had a right to use that money to make fixes through 2024. By agreeing to the settlement, Mortenson forfeited its right to use those dollars in the future.

Premier Center settlement: City of Sioux Falls counted money that belonged to taxpayers

“Now they can’t recapture what they gave back as part of the settlement, and that was a big deal to the city. That was real dollars that came back to us,” Leonard said.

But for Councilor Greg Neitzert, that answer was a semantical one. The contingency money did belong to the city even though Mortenson would have had a right to it should the city ask for a building feature to be corrected, he said.

“We were going to get the $500,000 back if there were no latent defects anyway,” Neitzert said.

As to why the flawed paneling on the west side of the Premier Center was never replaced, Public Works Director Mark Cotter said it was deemed the deficiency was a cosmetic one and not a structural problem. That coupled with the estimated cost of replacement coming it at between $850,000 and $1 million, meant it didn’t make sense to replace them, he said.

To come to that conclusion, the city hired a forensic consultant out of Minneapolis for about $5,000. That report was never made public or disclosed to the council.

City Attorney David Pfeifle said that report was never formally completed and is only in draft form, meaning the city has no obligation to make it public.

“We will not be providing that draft report for public inspection because it was never completed,” he said.

Councilor Christine Erickson said that reluctance to share information about the decision-making process is what’s driving public distrust in the process. Releasing the report so the public can verify that the event center siding is structurally sound would go a long way toward giving the public confidence the right decision was made, she said.

“What assurance can you give the taxpayer that the siding is adequately protecting the event center?” she asked the mayor. “At the end of the day that will help people move on.”

Not everyone on the Council’s side of the dais was as critical. Councilor Rex Rolfing called media coverage of the siding settlement a "witch hunt" and said the administration entered a legitimate and legal settlement and has been as forthright as it ought to have in providing information to the public and the Council.

“Jesus, this isn’t a trial,” Rolfing said during Neitzert’s line of questioning.

With or without the approval of Rolfing, more hearings on the Premier Center siding settlement and what went wrong are likely. Councilor Starr called for another informational meeting with the mayor’s event center team on Oct. 19, and Councilor Michelle Erpenbach suggested more testimony be taken during a special working session.

Erickson, who conducted the meeting in the absence of Council chair Rick Kiley, said an agreeable time would be determined at a later date.

What else we learned:

$103,000 – Amount spent on outside counsel to negotiate the settlement.

$443,719 – Actual cash received by the city as a part of the settlement that went into Event Center Construction Fund.

$2.9M – Amount remaining in Event Center Construction Fund.

$850,000-$1M: 2015 estimated cost to replace warped panels

$450,000: Amount spent to-date from Event Center Construction Fund.

$1.9M: Estimated cost of event center improvement contracts underway or on tap.