Council restricts $37.2 million PFAS settlement funds to water treatment, procurement

The Sioux Falls City Council voted unanimously July 15 to place the first $37.2 million payment from settlements with manufacturers of PFAS chemicals into a restricted account dedicated to water‑system needs. City staff told the council the funds are the initial installment of several anticipated settlement payments and that the ordinance confines use of the money to treatment projects and procurement of existing and future water sources. The measure was developed in consultation with the city attorney, finance department and outside counsel. Water staff said the restriction follows the city’s water master plan and is meant to ensure settlement dollars address contamination‑related treatment and capacity needs. The city’s water master plan projects the need to secure up to 40 million gallons per day of additional capacity to reach a 75–100 year planning horizon, which could involve bringing existing well fields back online, partnering in regional projects such as Lewis & Clark 2 or procuring treatment capacity from third parties. Director of Utilities staff said the restricted funds may be used for treatment technologies, procurement of capacity and investments to secure future sources; the city expects continued innovation in PFAS treatment and plans a layered approach to future investments. The ordinance directs the funds to the water fund and establishes restrictions and reporting requirements associated with settlement money. The ordinance passed 7-0. Council members said they favored preserving the settlement proceeds for long‑term water resilience and thanked staff for drafting the restriction language.