Commission considers ARPA projects

One project Custer County will help fund through American Rescue Plan Act (ARPA) funding has its official green light, while a pair of others were formally presented to the Custer County Commission at the commission’s Jan. 26 meeting.
At the meeting the county unanimously voted to allocate $150,000 of ARPA funding to bring utilities from Washington Street up to the proposed new Custer County Housing project adjacent to Monument Health Custer Hospital.
The county received $1.7 million in ARPA funding from the federal government, and the U.S. Department of Treasury recently issued its final guidance regarding how the funds can be spent.
County Veterans Services officer Todd Fish, who, along with emergency management director Steve Esser, was appointed by the commission to investigate how the funds can be spent, said there are three projects still tracking—the aforementioned utilities project, a drinking water project in Hermosa and a water project in the Custer Highlands.
The county will have dueling proposals to consider in terms of drinking water projects in Hermosa, as the Town of Hermosa at a November commission meeting asked the commission for money to help fund and install a Water Remediation Treatment (WRT) system that will bring the radium and uranium in the water down to acceptable levels and keep them there.
At the Jan. 26 meeting, it was the Southern Black Hills Water System that was before the commission requesting funding to bring more water to Hermosa via the water system’s nearby wells.
This project would include bringing water from Paramount Point to Hermosa by laying line along Hwy. 79 as well as boring line under the highway. The total price tag would be in the $500,000 to $600,000 range, while the system town representatives pitched in November would be around $490,000.
Fish said he felt regionalizing water was a benefit to smaller towns, although he said Town of Hermosa officials may not agree with that stance.
The water system was represented by a board member, attorney Talbot Wieczorek of Gunderson, Palmer, Nelson & Ashmore and Kale McNaboe of Longbranch Civil Engineering.
Wieczorek said even using the Town of Hermosa’s own engineering studies, the Southern Black Hills Water System is the best route for the town to go, saying it would cost the town about $50 per month per user, whereas other alternatives would be around $80 per month, per user. Wieczorek said another benefit to the town would be operation and maintenance costs for a water system would be reduced.
Wieczorek said there is a connection fee of $250,000, while McNaboe said it would cost around $140,000 to bore 12 to 14-inch diameter steel casing under Hwy. 79 to the town’s water tanks. In addition, a pressure reducing station would need to be constructed at around the cost of $110,000 and 2,600 lineal feet of pipe would need to be laid to take the water up Hwy. 79. The casing bore and pressure reducing station will need to be installed regardless of which project happens in Hermosa, McNaboe said.
Wieczorek said the rate structure for the water system would guarantee the Town of Hermosa up to one million gallons of water a month, which would provide ample water for future town growth.
The Town of Hermosa and Southern Black Hills Water System are currently engaged in a lawsuit in which the water system claims the town illegally annexed land to poach customers.
As far as the Custer Highlands water source, Trent Bruce of DGR Engineering joined the meeting via videoconference to discuss whether the ARPA funding could still be used for the project despite the Department of Treasury’s final guidelines.
In order to be considered for ARPA funding and use State Revolving Fund money, the water has to be a public water system, for which there are special definitions of what a water system is and who can own them, of which the county is not one of those entities.
However, Bruce said there is a caveat in the rules that the state’s Office of Legislative Audit feels gives the county enough flexibility to move forward, as any entity that receives ARPA funding can funnel up to $10 million of the money into its general fund to compensate for a loss of revenue during the pandemic, although it already has been established Custer County did not suffer a loss of revenue, but rather, had the slightest of gains.
Bruce said the state has $600 million in funding it will start to allocate toward water and wastewater projects in the near future, some of which the City of Custer is receiving to help with its wastewater treatment plant project.
Bruce said with all the caveats and questions still swirling, he asked the commission to let DGR to continue to explore if ARPA money could be used for the project. The commission voted to move ahead with preliminary engineering on the project, which would see a well drilled at about 1,200 to 1,500 deep to create a non-potable water source for people in the area. Bruce said he would come back to the commission in a few weeks with his findings as well as cost estimates for the well.