How the cost of expanding the water treatment plant increased by $56 million

Megan Raposa -

Simplified: Expanding the water reclamation plant is going to cost about $56 million than originally planned when the project was first announced in 2018.

Why it matters

  • The expansion to the treatment plant will allow the city to keep up with a growing population both in Sioux Falls and the region, said Mark Cotter, director of public works.
  • The project will expand the treatment center's capacity by 50 percent, from 20 million gallons per day to 30 million.
  • In the four years since the initial project plan, costs have gone up substantially, Cotter said.
  • That's due largely to: supply chain issues, increased material and labor costs, and inflation. Even since the last time the City Council was updated in January, there was another 5 percent cost escalation, he added.
"The escalation in price is largely contained in ARPA ( the American Rescue Plan Act, i.e. federal COVID-19 relief) funds," Cotter said.

Where will the extra money come from?

As Cotter said, most of it comes from federal relief funds.

  • $6.8 million comes from the ARPA funds the city received.
  • The city is also eligible for another $5 million grant from the state.
  • And the largest expected chunk of changes comes from a statewide, lawmaker-approved fund for water projects. The fund in total is $600 million, and Sioux Falls is hoping to get $36.9 million, Cotter said.

The new budget for the project is $215 million, up about 35 percent from the initial proposed cost of $159 million.

The remaining $7.3 million cost increase not covered by ARPA funds will fall to the city.

What happens next?

A groundbreaking event for the treatment plant expansion is planned for May 3, Cotter said.

The event will also include public tours of the facility.