Beresford staff outlines $2.32 million Lewis & Clark water payment, peak-day risks and options to sell excess capacity

Beresford City Council heard on Oct. 6 from city staff about changes to the city's reserved water allocation and a payment schedule tied to Lewis and Clark Regional Water.

Sarah, a city staff member who presented the analysis, told the council the city's reserved allocation would increase from 875,000 gallons per day to about 1,384,000 gallons per day after the Lewis and Clark plant expansion and that the city is currently responsible for payments totaling $2,323,000 through 2031.

The report centered on peak-day planning rather than average daily use. Sarah explained staff used a peaking factor to show how a single hot summer day can drive demand well above annual averages, and that peak-day projections make the expanded allocation important even if average use appears far lower. "The city of Beresford is currently responsible to pay, over 2,300,000.0 to Lewis and Clark between now and 2031 for a future water allocation and projections based on peak load show that the city of Beresford could grow at steady rate and continue to serve the dairy water at the same capacity through the year 02/1970," Sarah said during the presentation.

Council members asked about timing for access to the increased capacity and whether the city could sell portions of it to other users to fund the payments. Staff said the expanded capacity will not be available until Lewis and Clark finishes its construction work (staff estimated completion near the end of the next year) and that any sale of capacity would require contractual language, likely with sunset provisions. "If we sell our full capacity, I would think that you might want to have, like, a sunset . . . so that, into the future beyond that, you would save it," Sarah said when discussing sales to other communities.

Staff also told council members that the dairy currently accounts for a large share of the community's water use and that the existing contract with the dairy runs through 2040. Council requested modeling that excludes the dairy's billed water to show how much capacity the city would need under different growth scenarios.

On financing, staff described two broad approaches: a shorter-term financing schedule that concentrates payments over the next five years, or spreading debt over a longer bond term (15—20 years) to lower annual impacts. Staff said that spreading the cost could reduce the annual need for rate increases and that possible approaches included targeted surcharges for large users rather than a flat per-household add-on. Staff identified Colliers bond advisor Tom Grama as a consultant who has provided preliminary estimates for different debt terms.

Council discussion stressed the need to balance affordability for residents with the city's ability to retain water for future growth. Staff said the city will return with more refined numbers, including an estimate of the population that would correspond with particular capacity thresholds.

The council took no formal action on bonding or surcharges at the meeting; staff said they would follow up with more detailed scenarios and costs for the council to consider at a subsequent meeting.