Amount of SRF loans Valley Springs receives will dictate surcharges
Brace yourselves, Valley Springs city utility customers: your monthly utility bills may see an increase next year. But just how much of an increase is yet to be determined.
That was the message that Sean Hegyi, community development manager with the Southeastern Council of Government (SECOG), shared with commissioners on Tuesday, Dec. 9.
The increase is tied to the city’s application to the State Revolving Fund for planned Drinking Water and Clean Water projects.
Sean Hegyi, community development manager with the Southeastern Council of Governments (SECOG), provided rate increases related to a 100 percent loan, a 75 percent loan/25 percent grant, 50 percent loan/50 percent grant, and 25 percent loan/75 percent grant for both the drinking water and the clean water projects. The Department of Agriculture and Natural Resources will determine the amount of loan money and grant money the city will receive, Hegyi said.
The application for funding for both drinking water and clean water endeavors is due Jan. 1, and Hegyi said Valley Springs should know by late March on the percentage of loan and grant dollars for both projects.
The city will apply for $1,262,000 for the drinking water project, which will have a 4 percent interest rate and be paid back over 30 years with annual payments of $72,424.13.
Here’s a breakdown of the potential monthly surcharges for drinking water:
• 100% loan: $18.04 per month
• 75% loan/25% grant: $ 13.52 per month
• 50% loan/50% grant: $9.02 per month
• 25% loan/75% grand: $4.51 per month
Possible scenarios for clean water surcharge monthly increases are as follows”
• 100% loan: $34.85
• 75% loan/25% grant: $26.14
• 50% loan/50% grant: $17.42
• 25% loan/75% grant: $8.71
City Finance Officer Donna Van Hout reminded the Commission the city does not have to accept the loan/grant funding.
Allen Severtson asked if there is a limit to surcharges.
“Valley Springs didn’t do projects for quite a while, so now we’re playing catch up,” Van Hout said. “I know it’s not fair.”
Severtson responded, “There needs to come a point where residents don’t want to pay any more money, so you have to look at that, too.”
Commissioners approved Resolutions 2025-09 and 2025-10, which are tagged to funding for the drinking water and clean water. The resolutions essentially authorize Mayor Rick Larsen and Commissioner Jeff Shawd to sign related paperwork.
In other business, the Commission:
• Approved the 2026 law enforcement contract in the amount of $51,480 with the Minnehaha County Sheriff’s Office. Van Hout said $52,000 was budgeted.
• Approved a request to shoot off fireworks on Jan. 6, 2026, by the Serbian Church.
• Adjourned until 6 p.m. Tuesday, Jan. 6. Meetings are conducted in the Valley Springs Legion Hall and are open to the public. Time is always reserved for public input.
