Summit panelists say federal funding for rural water projects is likely to tighten

SIOUX FALLS — South Dakota and its communities may wind up paying more for rural water projects because of a thirst by a Republican-led Congress and the proposed Department of Government Efficiency to rein in spending.

Staffers with South Dakota’s U.S. Senate delegation and a leader with the state Department of Agriculture and Natural Resources delivered that message Tuesday morning to a gathering of economic development leaders at the Sanford Event Barn in Sioux Falls.

Most of the money for water pipeline projects like the Lewis & Clark Regional Water System or Mni Wiconi Rural Water has come from the federal government. In the past, state and local governments have often been tasked with cobbling together 20% of the funding, with the feds picking up 80%.

But Benjamin Ready, southeast region director for Sen. John Thune, said GOP majorities in the U.S. House of Representatives and U.S. Senate, an incoming Republican president and the nation’s ballooning debt could change that.

“There’s probably going to be a push in D.C. about a higher local match than what is currently out there,” Ready told the assembled audience at the Sioux Metro Growth Alliance’s “H20: What you Should Know” summit.

The possibility of more matching dollars is one signal of change in the federal government’s approach to spendy, long-term projects like the Lewis & Clark, which completed the first phase of its pipeline system three decades after its initial incorporation and is looking to expand again.

Keith Moore, who leads the southeast region team for Sen. Mike Rounds, told the crowd to “pay attention” to the actions of the proposed Department of Government Efficiency (DOGE). President-Elect Donald Trump announced shortly after his election win that he’d turn Tesla CEO Elon Musk and former GOP presidential candidate Vivek Ramaswamy loose to search for efficiencies in government operations.

There is no official blueprint at this point for the entity Musk dubbed “DOGE” as a nod to the billionaire’s preferred cryptocurrency, but Musk and Ramaswamy have vowed to cut $2 trillion from the federal budget. DOGE would not be an actual government department, but rather an entity outside government.

For local and regional leaders who plan for rural water development projects, Moore said, “it’s going to be really important to pay attention to what gets cut and what’s changing.”

With $35 trillion in debt, Moore said, it’s going to be more difficult to convince Washington to pony up funding for local water projects.

“We need more money, we need more water, and I think that’s going to continue to be a challenge going forward,” Moore said.

Moore, Ready and South Dakota Department of Agriculture and Natural Resources Financial and Technical Assistance Director Andy Bruels each told attendees that communities could improve their odds for federal support by having their projects buttoned up and ready when the time comes to ask for money.

Each spoke to the reality that Congress routinely fails to pass budgets on time and the political popularity of earmarks for local projects is often in flux. Being prepared and convincing community members of the need upfront will be critical, according to Bruels.

“We’re going to need that local buy-in from the project owners, from the community,” Bruels said.

Residents will need to rethink the way they think about their water bills, Bruels said. People don’t think twice about paying their cell phone bill, but Bruels said he’d rather go a day without his phone than without water.

Water is a resource, securing it and delivering it costs money, and Bruels said citizens should look at higher bills as a necessity.

“We have to get beyond the idea that water is free,” he said.

There are several projects in the works that aim to tap into South Dakota’s unused Missouri River water rights, said Lewis & Clark Executive Director Troy Larson.

Other states like Colorado and New Mexico are eyeing Missouri River water, Larson said, and South Dakota needs to stay ahead of them — or potentially partner with them to build water pipelines beneficial to both parties — in the interest of economic growth.

“When it comes to economic development, if you don’t have water, you don’t have anything,” said Larson

The city of Sioux Falls has partnered with Lewis & Clark for years. Between that partnership and its Big Sioux River aquifer water access, Public Works Director Mark Cotter said, the city has about 40 years’ worth of water supply buttoned up.

Even so, the city recently signed on as a supporter of one of the proposed rural water expansion projects, called the Dakota Mainstem , which incorporated last year.

Cotter said a city staffer in her 30s recently offered an informative take on the 40-year supply.

“Her response was, ‘I can’t believe that’s all we have,’” Cotter said. “That’s a really important perspective for us to have. They’re looking to us to plan for what those next generations are going to need.”

Derick Wenck doesn’t have the luxury of 40 years’ worth of water. The Harrisburg mayor said the rapidly growing city south of Sioux Falls has turned away businesses over worries about water availability since he took office in 2020.

The city gets all of its water from Lewis & Clark, but has access to a backup supply from Lincoln County Rural Water System if needed.

When asked during a break when his city will need more water, Wenck said “soon.”

Like Sioux Falls, Harrisburg has signed on to support Dakota Mainstem.

“We need to be thinking about 40, 50 or 100 years out,” Wenck said.

There is hope that the federal government will continue to offer at least some measure of support for rural water, Dakota Mainstem Director Kurt Pfeifle said during a panel discussion.

Less funding for water feels certain, but Pfeifle said he likes South Dakota’s odds of being heard knowing that Sen. Thune will serve as Senate majority leader in the next Congress.

Trump’s selection of North Dakota Gov. Doug Burgum as Interior secretary might also be helpful. Burgum’s state has its own funding needs for rural water, but his state has had to consider many of the same issues South Dakota has.

“Would we have a sympathetic ear there? I don’t know, but I know we would have a learned one,” Pfeifle said.

EDITORS NOTE: This story first appeared on South Dakota Searchlight.