Citizens seek vote on Hot Springs golf course deal

Grand jury reportedly involved in related investigation

By Steve Miller, Journal staff | Saturday, March 15, 2008

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A group of citizens is seeking a public vote on the terms of a legal settlement over the controversial Hot Springs municipal golf course addition, which reportedly is being investigated by a grand jury.

Petitions containing the signatures of 226 people were filed Friday at Hot Springs City Hall seeking a public vote on a Feb. 19 city council decision. The council accepted stipulations for a legal settlement with the developers of the back nine of the golf course.

City Finance Officer Cheryl Wait said 144 valid signatures are required to refer the matter to a public vote. She said the petition signatures will be checked Monday with the Secretary of State's office in Pierre. Valid signatures will be presented to the city council Monday night, Wait said.

The council could set a referendum for the city's next scheduled election June 3, or it could set a special election, Wait said.

The legal settlement, still pending, would end a lawsuit brought by the city in December 2006 and subsequent counter-suits filed by the defendants in the case, Steve and Carla Simunek and Kelvin Lorenz, who does business as Black Hills Hardscapes.

The Simuneks and Lorenz developed the back nine holes of the golf course in a deal with the city that since has been involved in controversy. A state audit in 2006 found that city officials violated state law in a land swap to expand the golf course and in the sale of the old Carnegie Library building.

The city, under guidance from state Attorney General Larry Long, sued the developers.

Earlier this year, the city council and the developers reached an agreement on the stipulations.

Among stipulations of a settlement the council agreed to in February, the city would pay the developers a lump sum of $625,000.

Gerald Collogan, one of those who filed the petitions on Friday, said the proposal needs to go to a vote of the people.

He said the city would have to borrow the $625,000 for the payment to the developers. "By the time we, the citizens, are through paying it off, it's going to be at least $1.1 million, with interest," Collogan said.

He said the original memorandum of agreement between the city and the developers called for the Simuneks to be paid through golf-course revenues. Collogan said he would still prefer that payment method rather than the city borrowing to pay a lump sum.

"I'd like to see our tax money going for capital improvements in the city," he said.

Collogan also said the stipulations call for eliminating the city's rubble pile along the U.S. Highway 18 bypass east of the golf course. He said there should be a plan to replace the landfill.

Other stipulations require an appraisal of the land involved in the land swap between the Simuneks and the city and details about when property in the subdivision around the golf course transfers from rural to urban tax district.

Collogan also said a grand jury is conducting an investigation related to the golf course matter, according to comments by a council member at a council meeting earlier this year.

The grand jury was also mentioned at a public forum last month, he said.

"I'm not sure exactly what they're looking into," Collogan said.

He said he hopes the city council schedules the referendum for the June election. "By that time, the grand jury's findings will be public," he said.

Fall River County State's Attorney Lance Russell declined to comment on the matter. Grand jury proceedings are secret until an indictment, if any, is issued. Grand juries also may investigate a matter without issuing an indictment.

City councilman Charles Easterby said he supports taxpayers' right to bring issues to a referendum.

"But I can't help but observe that a lot of time and energy is being spent in a negative way," he said.

He said he hopes voters choose to support the city and settle the lawsuit so the town can move forward on issues such as tourism. He said Hot Springs is poised to compete with destination towns such as Hill City and Spearfish, but the community division hurts the effort.

"I don't understand the mentality of some of the politics going on in our town right now," Easterby said. "It appears there are members of our community that don't know how to disagree and be civil to each other. I've never been sadder."

Contact Steve Miller at 394-8417 or steve.miller@rapidcityjournal.com