PIERRE - Hot Spring residents cannot vote on a legal settlement reached last year between the city and the developer for an addition to the city's golf course, the South Dakota Supreme Court ruled Thursday.

The high court's 3-1 ruling upholds a circuit judge's finding that the 2008 settlement was an administrative decision that put into effect a 2002 agreement for construction of the golf course addition. Public votes can be held only on legislative decisions, not on administrative decisions, the justices said.

The city council's 2002 decision to develop the course addition could have been referred to a public vote, but no one filed petitions to hold a public vote, the Supreme Court said.

Chief Justice David Gilbertson dissented, saying he believes the 2008 settlement differs enough from the earlier agreement that it is a legislative act subject to referral. The original plan called for using golfers' fees to pay for the project, while the 2008 settlement shifts payment to city taxes collected from the general public, he said.

"This dispute has festered in the city government and the courts since 2002," Gilbertson wrote in his dissent. "It is time to end this dispute by the safety valve of a public vote rather than let it continue to fester into the future."

But the majority ruling said based on the limited facts presented in the appeal, no referendum election can be held.

The Hot Springs Common Council in June 2002 entered into an agreement with Steve and Carla Simunek for the construction of an additional nine holes to the Hot Springs golf course. The city was to pay the Simuneks half of the added gross income from golfing fees to cover the cost, estimated at $1 million to $1.5 million. The deal also involved a land exchange.

A 2006 state audit found that the land swap violated state law because the city failed to get property appraisals before the exchange was completed. It also found other problems with the golf court development deal.

The city sued the developers, but a settlement was reached last year that included a land exchange and required the city to pay a lump sum of $625,000 and take other actions.

Petitions were filed to refer the 2008 settlement to a public vote, but the council rejected the petitions.

Deborah and Darnell Okerson then sought a court order requiring the public vote.

However, Circuit Judge Jerome A. Eckrich III ruled the 2008 settlement could not be referred to a public vote because it was an administrative act that "merely put into execution" the 2002 agreement to develop the extra nine holes at the golf course.

The Supreme Court noted that only a limited record was submitted in the appeal. Based on that limited information, the justices said the circuit judge was correct to determine that last year's settlement could not be put to a public vote because it amounted to an administrative decision to carry out the 2002 deal.

In addition, courts have determined that a government body's decision to settle a lawsuit is not subject to a referral election, the high court said. Allowing public votes on settlements of lawsuits would create chaotic situations, the justices said.

In his dissent, however, Gilbertson said the switch in funding to general tax revenue made the 2008 settlement a legislative measure subject to a public vote.

Former Hot Springs Mayor Carl Oberlitner had been charged with neglect of duty or misconduct by a municipal officer, a misdemeanor, but the charge was dismissed on condition that he apologize to city residents for his role in the golf course expansion.

One of the developers, Steve Simunek, also pleaded guilty to four misdemeanors for failure to file sales tax returns or pay sales tax. He was sentenced to six months behind bars, with all but three days suspended.