Vermillion City Hall

Depending on what the Vermillion City Council decides later this month, citizens of Vermillion may decide more than who they believe should be the next president of the United States in November.

They may also be asked to determine whether the City of Vermillion should adopt a home rule charter.

The city council voted unanimously to accept a report and home rule charter draft prepared by a committee that has been studying the issue since March.

City council members will decide at their July 20 meeting to consider a motion to place the question of adopting a home rule charter on the Nov. 3, 2020 general election ballot.

A link has been placed on the city’s web page that allows the public to read the draft home rule charter document presented to the city council Monday. The Home Rule Charter Committee is working to offer a couple of Zoom presentations to explain the charter and take public questions. The schedule of those presentations has not yet been established.

Last year a home rule study committee was appointed to review the idea of whether it made sense for Vermillion to consider appointing a Home Rule Charter Committee to bring a home rule charter forward for voter consideration.

At the Jan. 20 noon city council meeting, the Home Rule Study Committee presented their recommendation to move forward with the process. The city council approved appointing a five-member Home Rule Charter Committee at the Feb 3, meeting.

The city council approved a charge for the Home Rule Charter Committee at the Feb. 18, meeting, and the Home Rule Charter Committee was appointed on March 2.

Committee members are Mike Card, Matt Fairholm, AJ Franken, Stacy Larson, Travis Letellier, and council member Steve Ward. Card serves as the committee chairman.

The Home Rule Charter Committee has met approximately every other Monday for the last couple of months to develop a home rule charter and a draft of that charter has been provided to City Attorney Jim McCullough to review.

The same report of the committee was presented to the city council at its noon meeting and its evening meeting Monday.

“The specific problem that we’re trying to solve with this draft home rule charter is that the council no longer has to find specific permission to act, and can enact whatever isn’t prohibited by state or federal law nor prohibited by the charter,” said Card.

Card told the city council at its Jan. 20 noon meeting that the committee met several times in October 2019 with the charge of studying the advantages and disadvantages of home rule in a community like Vermillion, the impact it would have on an aldermanic form of city government with a city manager and recommendations to make on the establishment of a home rule charter committee should the city wish to proceed and form a charter for home rule.

“Our plan of study was to read the home rule charters in existence in the state of South Dakota -- what were the commonalities and the unique features,” Card said at the January meeting. “We had several individuals read each charter; we compared notes to talk briefly about the findings and also to identify questions we could ask of city council members, mayors, their legal counsel, their administrators and their city managers.

“Basically what we wanted to know is how does the charter help meet community needs, what works well to solve when particular problems arise and what isn’t working well and what to do about that,” he said.

Card said that most of the things that communities with home rule charters have done could be labeled under the format of efficiency.

“Under state law and the U.S. Constitution, we operate under what’s commonly known as Dillon’s Rule -- that is, cities, counties, townships -- all forms of government below the state, are creatures of the state and can only do those things that are specifically authorized and those things that are indispensable to performing those activities,” he said. “Home rule allows the city to do what isn’t prohibited. Home rule allows a community to still be bound by prohibitions -- things that the state decides the city should not be able to do -- but also to be able to do things that the Legislature may not have authorized but the city council determines are in the best interest of the community.”

Most of the activities that have taken place in communities with a home rule charter, the committee discovered, have been creating specific conflict of interest laws for the city and authorizing the use of credit cards for payments of fees before the state Legislature had authorized that activity.

“That was a fairly common procedure -- to adopt something that seemed to be a good business practice for the municipal corporation but hadn’t been specifically authorized by the state Legislature,” Card said.

Home rule, the committee discovered, “enabled, perhaps, a more efficient delivery of services and enabled some services that the council determined were for the good of the city,” he said. “We looked at the communities that had city manager governments around the turn of the century … that’s when there was a flurry of activity to enact home rule charters.

“Essentially, the home rule charter changes the framework. The city can do what is not prohibited of it. That doesn’t prevent the Legislature from coming back and saying ‘no, you can’t do that.’”

The largest opposition to home rule charters nationwide is that it’s believed to be a backdoor by its opponents that allows communities to establish new forms of taxation.

“In South Dakota, there are specific statutes that prohibit communities or specify how new taxes and fees are to be enacted by a community,” Card said. “What a state or national government prohibits is still prohibited. What is otherwise not prohibited is possible for the city to consider.”

A feature of home rule that caught the committee’s notice, he said, was the ability to enact emergency procedures without waiting for a presidential or a gubernatorial action.

“The basic reason is to create flexibility for the city to handle the needs of the citizenry,” Card said.

He presented a very similar message to the city council at its Monday meeting.

“Many people have asked ‘what brings the issue of a home rule charter?” Well, South Dakota statutory law provides for five varieties of charters for cities the size of Vermillion,” Card told the city council, which met via a video teleconference Monday night, “and several more for smaller municipal governments. Each of these specifies what a municipal corporation -- a city -- can do and offers some specificity about how it can go about accomplishing those tasks.”

Those guidelines, as he first explained back in January, are known as Dillon’s Rules To Charters, named after an Iowa judge who set out the rules most clearly.

“In South Dakota, the South Dakota Supreme Court stated that without home rule -- that is a Dillon’s Rule charter -- local governments are allowed to have only the authority specifically granted to them by the state Legislature,” he said. “Home rule charters, by contrast, are authorized by the South Dakota Constitution to allow local governments to engage in activities that are not specifically authorized but still not allowing the local government to engage in activities prohibited by federal or state law or the charter itself.”

Card said that if a city engages in an unauthorized activity, it faces certain “not so nice” outcomes.

“There may be an audit exception, there may be a lawsuit that the city has to engage in and, since the city can’t make an expenditure for an item that isn’t authorized by law, we place whoever we’ve contracted with in an awkward position.”

Card said the committee’s recommendation is to pursue a Dillion’s Rule home rule charter “which is akin to the likelihood that if it’s not prohibited either by the charter or by federal or state law, then it’s allowable.”

The committee discovered that Sioux Falls, under its home rule charter, was able to issue bids more quickly and therefore save taxpayer money.

“Sioux Falls is also an example of what can happen if you don’t have a home rule charter,” he said. “Before their charter was approved by their voters, Sioux Falls contracted to remove a buried fuel tank and they should have done competitive bids due to the value or cost of removing the tank. However, Sioux Falls couldn’t pay the contractor for removing the tank, leaving the contractor who should have known, apparently, that this should have been bid out, holding the bill.

“Under home rule, we can specify certain provisions dealing with competitive bids as long as it follows state law or isn’t specifically prohibited,” Card said.

He explained that a home rule charter in Vermillion would require the city council to put the charter proposal in front of city voters on the Nov. 3 general election and the charter would have to be approved by a majority of Vermillion residents voting on the issue.

“It would be effective the day of the official canvass of votes,” he said.

Card said the city council shouldn’t pursue a home rule charter is “not something you should do just because it feels nice.

“To make democracy function properly and reflect the will of the people, we need people to follow what’s going on in the city, read the notices, review the meeting agendas that are posted and communicate their preferences,” he said. “They have to pay attention to what the council does in order to make a representative democracy work.

“Dillon’s rule charters are what the Legislature has determined meets most of the needs of municipal governments and as Gov. Noem has indicated so strongly very recently, South Dakota is very diverse in many areas -- geographically, recreationally, economically, as well as many other features and factors. The Dillon’s rule charter may not meet the needs of the city’s residents or the needs that a city council determines are best for the city and its residents.”

Card told council members that to meet the needs that the citizenry wants, if they aren’t specifically authorized, “you either have to go to the Legislature to have the law changed so that those activities are specifically authorized, or enact a home rule charter that’s required for a few areas.”

During his presentation, as he mentioned earlier this year, Card noted that citizens often think city councils approve home rule charters as a way to “sneak in a tax that the voters haven’t voted upon.

“South Dakota law specifically prohibits city councils and commissions from engaging in that sort of activity,” Card said, “so if there is a new tax that is created, that would have to go in front of the voters.”

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