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Council annexes Munger Tract 4 and votes to notify rural co-op of intent to serve electric; Clay Union raises concerns
Summary
Vermillion approved annexation of about 37 acres known as Munger Tract 4 and authorized staff to notify Clay Union Electric of the city's intent to serve the area; Clay Union's general manager submitted written objections about timing and compensation.
The Vermillion City Council on Aug. 4 approved a resolution to annex Munger Tract 4, a parcel of nearly 37 acres at the northwest corner of South Dakota Highways 50 and 19, and separately authorized staff to notify Clay Union Electric of the city's intent to provide electric service to that annexed area.
City planner Jose said the owner intends to continue farming the land in the short term but that annexation would allow the city to serve the land with utilities if future development occurs. The property will be zoned Natural Resource Conservation (NRC) to allow continued farming; the owner acknowledged the city could later serve the area with utilities under state statute and any required agreements.
Following the annexation vote, Shane explained the city's practice and legal timeline: state law requires a city to notify a rural electric cooperative within one year of annexation if it intends to serve the property; without that notice the cooperative retains service rights indefinitely. Shane said the city's Light & Power department has historically elected to serve annexed areas since 1992 and budgeted for possible lost-revenue payments.
Chris Larson, general manager of Clay Union Electric, provided written comments read into the record. Larson wrote that he does not dispute the owner's written statement acknowledging the city will serve the property but objected to annexing farmland primarily to make it contiguous with adjacent AMS development. He expressed concern that if the owner does not develop soon, Clay Union would receive little or no compensation for service rights and he said he did not support the council's authorization to notify intent to serve.
Councilor Murn (Murrah) moved to approve the annexation; Councilor Price seconded and the motion carried on a voice vote. Councilor Lieber moved to authorize staff to send the notice of intent to Clay Union; Councilor Hellick seconded and the motion carried. Shane noted any payment for distribution property would be calculated per state statute and any agreement would be forwarded to Clay Union and then filed with the South Dakota Public Utilities Commission if both parties approve.
