Members of the South Dakota Legislature:
I want to let you know that I will be calling a special session of the legislature in late June because of developments with the construction of a new State Veterans Home in Hot Springs.
This legislative session, you appropriated $41.3 million to use for the construction of the new Veterans Home. This includes state funds and spending authority for a $23.6 million federal grant. I appreciated your support for this important project.
The State Engineer recently opened the bids from contractors for this project. The lowest bid was considerably above projections, leading to a total project cost of $51.3 million -- an overrun of $10 million or almost 25 percent.
Needless to say, I am very disappointed with our architect. My priority is to build a durable, quality facility for our veterans -- they deserve nothing less. I do not believe that we can cut $10 million from our plans and still build the facility that we need.
Fortunately, I do not believe that this setback needs to delay progress on building the new home. The State is approaching the end of the fiscal year, and we currently believe that our tax revenues will be $7-10 million higher than projected, and our expenses will be $7-10 million lower than projected. That means we will have $14-20 million at the end of the fiscal year.
Normally, those excess funds would go into reserves automatically. Instead, I will be asking the legislature to appropriate a portion of those funds to make up the gap for the construction of the Veterans Home.
In order to expedite this process, I will be calling a special session in late June, so that I can ask you to approve this appropriation. I do not believe that we can afford to wait until January to take action, because we would lose this construction season.
I have contacted your leadership about setting a date for the special session, which I believe can be completed in a single day, and we will let you know the date soon.
As we head into Memorial Day weekend, I'm sure we will all take time to remember the brave men and women who made the ultimate sacrifice for our nation. Expediting the construction of the Veterans Home honors all veterans by ensuring that South Dakota will continue to provide a quality home for those who need it.