Mayor Bob Nelson said the council should move forward with the project application “as submitted,” while acknowledging council members’ concern about preserving alternate discharge options.

The council voted to submit the State Water Plan application by the Jan. 1 deadline using the alternative approved at the public hearing that would discharge treated effluent to Fall River. City Administrator Ariel Ellison and staff said the Black Hills Council of Local Governments and the Department of Agriculture and Natural Resources (DANR) indicated the proposed alternative can be submitted now and that AE2S can prepare an addendum to evaluate other options—including sending effluent to the city’s existing wastewater ponds—before environmental review if necessary.

Why it matters: the Infrastructure Investment and Jobs Act (IIJA)-linked funding approved in 2021 provides enhanced principal forgiveness that may expire after 2026; officials said being on the Jan. 1 application list gives the city its best chance at the larger subsidy available in the early disbursement window.

What the council debated: several councilors, including Mayor Nelson, said the city should preserve a second option in case the ponds or distribution infrastructure fail in future decades. Council members and public works staff noted the ponds and distribution line are about 40 years old; staff said that, if required, testing of ponds to meet grant cost-effectiveness and environmental review could be expensive. A staff estimate given in the meeting placed potential pond-testing costs as high as about $100,000, and AE2S work beyond its original facility-plan contract would be an additional cost.

Staff explanation and next steps: staff read DANR’s guidance that if the city and AE2S remain confident the current alternative is cost-effective, it can be signed and submitted while AE2S prepares an addendum evaluating the ponds; completing the addendum before a funding award is beneficial but not strictly required. Council directed staff to proceed with the Jan. 1 submission and to ask AE2S to prepare the addendum and estimate additional costs for pond inspections and testing. The council noted the addendum, if required, could affect project scope, costs and whether a new public hearing would be needed.

Council context: Mayor Nelson acknowledged he would “take a hit” for championing the adopted alternative but said he supports moving forward while preserving options. Multiple council members emphasized the need for a backup plan and clearer cost estimates before final construction decisions.

What remains unresolved: staff did not provide a final price for AE2S’s addendum work at the meeting; the council was told testing requirements and the number of pond sampling sites remain undetermined. The timeline for any amended application or environmental review will depend on DANR’s requirements and AE2S’s cost/timeline estimates.

The council adjourned after agreeing to submit the application and return with cost estimates and a contract amendment request if AE2S’s addendum work is required.