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DELL RAPIDS, S.D. – Scott Buss can only imagine what this town north of Sioux Falls might have looked like – and how many jobs and taxes would have been generated – if there wasn’t a local shortage of available water.

Buss, executive director of the Minnehaha Community Water Corp., sat in the conference room of the rural water system based in Dell Rapids recently and ticked off the industrial and agricultural projects turned away due to a lack of water.

After hitting its limit on how much water it can provide a few years ago, the rural system has had to turn away proposed projects valued at hundreds of millions of dollars that offered an untold number of new jobs, he said.

The rejected projects include the Agropur Cheese plant that eventually opened in Lake Norden. A few proposed hog farms and dairy expansions in northern Minnehaha County were also stalled, Buss said.

Other proposals, most of which never came to fruition in South Dakota, included the $1.5 billion Gevo corn-based jet fuel plant, the $5oo million Wholestone Farms hog processing plant and a data center that at some point all eyed the Dell Rapids area for development.

“All the water rights are spoken for between Dell Rapids and Sioux Falls, so there was no more water to be had in Minnehaha County,” Buss told News Watch in an interview in June. “With all the (residential) development that was coming in, we realized that our well capacity and our treatment capacity was limiting our ability to take on new high water-use customers.”

Buss and the nonprofit corporation’s board of directors aren’t waiting around to potentially miss out on more opportunities.

In a unique arrangement, the corporation is partnering with the neighboring Big Sioux Community Water System to the north on a $170 million expansion project called Shared Resources. The expansion, started three years ago, will use new wells into the Big Sioux Aquifer to generate 8 million gallons of water more per day starting this fall.

“It’s going to be a huge and great benefit for Big Sioux and Minnehaha water,” said Jodi Johanson, director of the Big Sioux system based in Egan. “This project is going to make sure that down the road we have enough water for the future.”

2 systems get stronger together

The Minnehaha water corporation is still able to bring on new residential and retail customers who consume part of the 9.2 million gallons of treated water it can provide on a daily basis.

The system was formed by a group of farmers and landowners in the 1970s but sought a reliable way of providing more and cleaner water to residents of Minnehaha County outside of Sioux Falls who relied exclusively on individual wells. The system started with about 1,200 customers but has grown to more than 5,500 now in seven cities, mostly north of the Sioux Falls metro area.

Given the limits on water from the aquifer, and balancing the water needs of consistent housing and retail growth in northern Minnehaha County, the water system had to say no to developments that request 1 million or more gallons of water per day, Buss said. A million gallons per day is equivalent to the water consumption of about 4,300 homes, he said.

Billions needed to keep South Dakota taps flowing

South Dakota water systems will increasingly turn to the Missouri River to provide water for future population, agricultural and industrial growth. But plans will require billions of dollars and decades of construction to keep taps flowing freely.

As with other rural water systems in South Dakota, the aquifers the systems rely on for their water are either running low or are legally tapped out, or both.

In the case of Minnehaha water corporation, the Big Sioux River Aquifer has gotten drier, but state law is also preventing it from taking more water from the aquifer.

In 1996, the state Water Management Board allocated water rights, or withdrawal limits, to systems that take groundwater from the aquifer, Buss said.

Those limits have now been reached, meaning that Minnehaha water cannot take any more than the 7 million gallons per day it is drawing now.

The system also receives about 2 million gallons per day from the Lewis & Clark Regional Water System, making its daily maximum capacity of about 9.2 million gallons per day, which it sometimes reaches, especially during spring planting season or hot summer months.

Directly to the north, the Big Sioux Community Water System produces up to 2 million gallons per day for about 2,400 customers in Moody and Lake counties as well as some in Brookings County and in western Minnesota, Johanson said.

The system still has room within its water rights to draw more water, making it an attractive partner for Minnehaha water.

Though Big Sioux Community Water System has not turned away any large projects, it needs more water to serve a boom in residential growth in the region, Johanson said.

In the area around Lake Madison, near Madison, developers are considering projects that could someday bring 500 new homes and a new nine-hole golf course, she said.

The system also serves a number of dairies that use significant water and provides water to the Dakota Ethanol plant in Wentworth, which is undergoing an expansion. Farmers in the region are also using greater quantities of water to deliver chemicals onto their land, Johanson said.

“This is our first expansion,” she said. “We’re looking forward and we’re trying to find the solution before we face a problem.”

Federal government and customers pay the way

The biggest Shared Resources ticket item is a new $80 million water treatment plant that is nearly completed on 240th Street a few miles north of Dell Rapids.

A 20-inch pipeline from the plant to the east will end at a 1.5 million gallon water tower, and a 24-inch pipeline to the west will terminate at a ground-level storage tank with a 4 million gallon capacity.

Six new wells will draw the water, and the storage tanks will provide both pressure and the ability to adapt to changing demands without service interruption, Buss said.

As with most modern water projects, the costs will be shared by government and end users. The systems are funding the project with $49 million in grants from the Biden-era American Rescue Plan Act and $121 million in low-interest loans from South Dakota’s Drinking Water State Revolving Fund.

The two systems are sharing the cost of the project loans commensurate with how much water they will receive, meaning Minnehaha will pay 65% of the costs for its 5 million gallons per day while Big Sioux will kick in 35% for its 3 million gallons more per day.

Minnehaha water is assuming $87 million in new debt and Big Sioux will take on $42 million in new debt, Buss said.

The average residential consumer in both systems that uses about 7,000 gallons per month will see their bill rise to $135 a month, roughly double the cost in 2020.

“It’s a big project, and it’s a good example of how two systems can work together to have some economies of scale,” Buss said.

Ratepayers will see a significant increase in their monthly water bills. The average residential consumer in both systems that uses about 7,000 gallons per month will see their bill rise to $135 a month, roughly double the cost in 2020, Buss said.

A big project, but even more water needed

But both systems view the Shared Resources project as a temporary fix and both are looking toward proposed projects that will tap the Missouri River for more water in the future.

Buss said his system has applied for 10 million gallons more water per day from Lewis & Clark, which has two expansion efforts planned.

Minnehaha water has simultaneously applied to receive 10 million gallons per day from the proposed Dakota Mainstem Regional Water System, a potentially $10 billion project to carry Missouri River water to more than 50 communities and organizations across eastern South Dakota and parts of Minnesota and Iowa.

The dual application effort is to make sure Minnehaha water can rely on taking in more water from at least one of the two systems as they come online, Buss said.

Johanson said Big Sioux has also signed on to accept water from Dakota Mainstem, even if it takes 20 to 40 years for the water to begin flowing.

To ensure that steady supply of high-quality drinking water, four major projects are in progress to take more water from the Missouri River – including WEB Water in the northeast, Lewis & Clark and the proposed Dakota Mainstem in the southeast as well as the proposed Western Dakota Regional Water System in western South Dakota and the Black Hills.

The projects are part of a wide-scale increase in water service capacity now underway in South Dakota, where water managers of several systems are implementing plans to serve the state for the next 40 to 50 years.

Regional rural water systems such as Minnehaha and Big Sioux are critical components of those projects because they provide water to communities and individual customers at the end of the delivery system.

Alicia Deschepper, zoning administrator for Moody County, said the water system expansions should allow for more growth to occur in Moody and Minnehaha counties, which are seeing new single-family housing developed at a rapid rate.

“I think it will be a great thing for our county and hopefully enable us to bring in more bigger businesses as well as more homes,” Deschepper said.

South Dakota News Watch is an independent nonprofit. Read, donate and subscribe for free at sdnewswatch.org. Contact content director Bart Pfankuch: 605-937-9398/bart.pfankuch@sdnewswatch.org.

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