Aberdeen approves $2.5m water-tower loan backed by $1.75 monthly surcharge
Aberdeen, South Dakota · Meeting date: November 2, 2026 · Published: November 3, 2026
Aberdeen City Council has adopted the bond and rate ordinances required to draw a 20-year Drinking Water SRF loan for its Water Tower and Transmission Line Project. The $1.75 monthly DW-05 surcharge will begin on 1 January 2027 and remain until the revenue bonds are repaid.
Key points
- Council approved up to $2.5 million of revenue bonds supported by a Drinking Water SRF loan at an expected 3.75% rate over 20 years.
- A $1.75-per-user monthly surcharge will take effect on 1 January 2027; it will be reviewed annually and may be modified to meet debt-service requirements.
- The financing analysis lists total project cost at $14.5 million and requires 110% debt-service coverage from the surcharge.
- Council also approved a $495,489.12 payment to Landmark Structures for water-tower and transmission-line works that staff said were about 98% complete.
Full report
Aberdeen City Council has completed the financing and rate actions needed to secure a $2.5 million Drinking Water State Revolving Fund loan for the Water Tower and Transmission Line Project, approving both a revenue-bond ordinance and a dedicated monthly water-system surcharge.
The loan was approved in September at an expected interest rate of 3.75% over 20 years. Council's action authorises revenue bonds of up to $2.5 million, with the project surcharge segregated from other water-system revenues and used to repay principal, interest and the administrative surcharge on the debt.
Under the companion rate ordinance, customers who use or benefit from the water-tower improvements will pay a DW-05 surcharge of $1.75 per month from 1 January 2027. The charge will remain in force until the bonds have been paid in full. It will be collected alongside normal utility charges and reviewed at least annually, with the city able to modify the amount as needed to meet debt-service requirements.
The Drinking Water Facilities Funding analysis puts the total project cost at $14.5 million. It states that the $1.75 monthly charge is intended to provide 110% debt-service coverage. Current rates were listed at $48.25 per 5,000 gallons; the analysis said the surcharge would bring the overall rate to $50.00.
The adopted bond ordinance says the debt is a limited obligation payable from the project debt-service account rather than from Aberdeen's general credit or taxing power. It also requires the city to maintain rates or special charges sufficient for bond payments, operation and maintenance, repairs and depreciation.
Construction is nearing completion. Council separately approved a $495,489.12 payment to Landmark Structures of Fort Worth, Texas, for Schedule B of the Water Tower and Transmission Line contract. The payment covers chamber-room work, tank coating, exterior backfill, the mixing system, electrical controls, chamber piping, lighting and site grading.
City Engineer Leif Redinger said the project was about 98% complete and roughly three weeks ahead of schedule. Staff had inspected the work, including the tower, and the contractor was planning an initial fill followed by bacteria testing. The tank has a capacity of 1.5 million gallons.
Council also adopted a new utility customer-classification framework covering residential, multifamily residential, commercial, institutional and industrial accounts, while distinguishing domestic, irrigation and bulk-water service types. The ordinance does not itself change rates or establish fees, but is intended to improve data used in utility billing, cost-of-service analysis, rate studies and planning.
This summary was generated by AI based on the source document and may contain errors.
Source: Aberdeen City Council Meeting - November 2, 2026 - Agenda for Regular City Council Meeting at 5:30 P.M., Aberdeen