A $55 million construction contract, a $75 million federal ask, and two different price tags for the same city budget.
Rapid City SD – Rapid City’s Common Council meets in special session Wednesday, August 26, at 6:30 p.m.
It’s not a regular Monday meeting, and the agenda is short — but the four items on it carry more combined weight than most full council nights do. Here’s what’s in front of them and what the documents actually say.
1. The Contractor Is Set — The Price Isn’t (CC082626-01)
Council is being asked to authorize the Mayor and Finance Director to sign a Construction Manager at Risk (CMAR) agreement with Scull Construction Service, Inc. for the Rapid City SportsPlex.
This is the piece that’s been missing since the Sanford Health naming-rights announcement three weeks ago — coverage at the time said it would come to Council “next week.” It didn’t arrive until now.
The master agreement doesn’t set a final price — the actual Guaranteed Maximum Price isn’t due until May 2027 — but it does lock in the financial framework around it.
The Owner’s budget is listed at $55.3 million, up $5.3 million, or 10.6%, from the April RFP’s $50 million estimate. The Construction Manager’s Fee is 2.5% of the Cost of the Work, with preconstruction fees set at $12,000 for the programming phase and $68,000 for the design phase.
Substantial completion is required no later than June 30, 2029, with liquidated damages of $1,300 per working day for missing it.
A few more terms worth knowing: retainage is set at 5%, disputes go to litigation rather than arbitration, there’s no termination fee if the City ends the contract for its own convenience, and Scull is permitted to self-perform work under $100,000 without competitive bidding, per state law.
Missing Insurance Limits
The insurance exhibit (Exhibit B) has three coverage categories — pollution, maritime, and aircraft liability — where the dollar limits weren’t filled in by whatever software generated the document. The contract literally reads “$NaN.” Two optional coverage sections (Extra Expense Insurance and Soft Costs Insurance) also carry apparent drafting notes — “include,” “yes try and include” — in the margin next to boxes that were never actually checked. Two separate copies of this exhibit carry identical production timestamps and document IDs, meaning if a corrected version exists, it hasn’t surfaced yet.
Open questions: Whether those placeholder figures were filled in before signature, whether the Extra Expense and Soft Costs coverages were ultimately included or dropped, and why the contract took three weeks longer to reach Council than officials indicated in early August.
2. Applying for $75 Million, Terms Unknown (CC082626-02)
This item authorizes the City to apply for the Department of Justice’s FY26 Model Cities Initiative — not to accept an award, just to submit a proposal. Staff’s own memo is explicit about that distinction.
MCI is a $300 million nationwide program, with DOJ set to select 2 to 4 cities for three-year cooperative agreements, no matching funds required.
The Rapid City–Pennington County application requests up to $75 million over three years, organized around projects including a Real Time Crime Center, North Substation improvements, a regional training facility with an Emergency Vehicle Operations Course, and subawards to community nonprofits.
Staff cites insufficient detail from DOJ on terms and conditions as the reason it isn’t recommending acceptance of any award yet — any actual award would come back to Council for a separate vote.
Possible Federal Conditions
Outside reporting on MCI, not local coverage but outlets that track DOJ grant programs nationally, has described the initiative as carrying conditions tied to the current administration’s law-and-order priorities: expanded surveillance technology, enforcement against homeless encampments and urban camping, coordination with ICE, and adoption of assisted-outpatient or civil-commitment standards.
Rapid City’s own application lists “homeless and housing support” and “neighborhood stabilization, crisis and behavioral-health response” among its funded categories — the kind of line items that tend to draw those conditions elsewhere.
Staff’s own stated uncertainty about DOJ’s “level of detail” lines up with that outside reporting, though nothing in the local memo confirms which conditions, if any, would attach to Rapid City’s application specifically.
Open questions: What conditions DOJ would actually attach if the application is funded, whether Council gets to review full award terms before any acceptance vote, and how much runway that review would have — DOJ’s application deadline is September 1, just days after this vote.
3 & 4. One Budget, Two Totals (CC082626-03 & -04)
Council will discuss the Mayor’s proposed 2027 budget and hold the first reading of Ordinance 6748, the formal FY2027 Appropriation Ordinance. Second reading is scheduled for September 8.
The budget Mayor Salamun presented to Council on July 20 totaled $312,332,582. The ordinance actually up for first reading tomorrow totals $317,681,368 — a difference of $5,348,786 between the number Council was briefed on and the number they’re being asked to formally adopt.
Between the July 20 presentation and Wednesday’s ordinance, the budget also went through four days of department-level review sessions — July 27 (Fire, Police), July 28 (The Monument, Public Works), July 29 (HR, IT, Mayor’s Office, Parks and Recreation), and July 30 (City Attorney’s Office, Community Development, Airport, Library, Finance).
No votes were taken at any of those sessions. Somewhere in that window, the total moved by $5,348,786, with nothing in the public record documenting where or why.
Data from the Proposed Budget
A few more notes from the budget documents: the certified property tax levy is $26,721,317, and sales tax collections are up 21.3% since 2022 — the fastest growth of South Dakota’s six largest cities — which the City says is letting it skip both a CPI increase and a growth-based mill levy increase for 2027.
The SportsPlex appears in the budget breakdown as a $76 million line item, with “$66 million+ secured to date.
Separately, a document detailing the Vision Fund’s Round VIII allocation lists the “Economic Development” half of the Summit Arena Bonds line at $416,414,323 — almost certainly a typo, since the Community Projects side of the same split lists $16,414,323, the two halves are supposed to be equal, and the category has to net to the Round’s stated $90,999,036 total over five years.
Open questions: What accounts for the roughly $5.3 million gap between the presented budget and the ordinance — whether it’s a scope change, a rounding/reporting difference, or something else — and whether the Vision Fund figure gets corrected before the document is finalized publicly.
Sourcing
AIA Document A133-2019 (Standard Form of Agreement Between Owner and Construction Manager as Constructor) and Exhibits A through G, City of Rapid City and Scull Construction Service, Inc.; 2027 Appropriation Ordinance (Ordinance 6748), City of Rapid City; Model Cities Initiative Memo for Council, City of Rapid City staff; Aug. 26, 2026 Special City Council Meeting Agenda, rcgov.org; City of Rapid City SportsPlex Request for Proposal for Construction Manager at Risk Services, April 28, 2026; 2027 City of Rapid City Budget detail; U.S. Department of Justice, Office of Public Affairs; additional MCI context via BiometricUpdate.com, “US DoJ ‘Model Cities’ initiative links policing technology to federal enforcement priorities” (https://www.biometricupdate.com/202606/us-doj-model-cities-initiative-links-policing-technology-to-federal-enforcement-priorities), and IBTimes UK, “DOJ Unveils $300M ‘Model Cities’ Grant: Ban Progressive Policing, Round up Homeless, Assist ICE Extraditions” (https://www.ibtimes.co.uk/us-cities-face-tough-choices-300-million-grant-1813312).
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