Spearfish City Council Regular Session - December 15, 2025

The Spearfish City Council met in regular session on Monday, December 15, 2025, at 5:30 p.m. in the City Council Chambers, 625 5th Street. Mayor John Senden presided. Councilmembers Hafner, Hourigan, Klarenbeek, Myers, and Rath were present; Councilmember Jacobs was absent. City Administrator Falcon, City Attorney Knox, Finance Officer DeNeui, and department directors also attended. The council amended the agenda to move the relocation agreement ratification from the consent calendar to the City Attorney section. No conflicts of interest were declared. Public comment was held from 5:35 p.m. to 5:42 p.m.

Consent Calendar

• Approved the minutes of the December 1, 2025 regular session.
• Authorized the Mayor to sign documents to initiate electric service to the city's well and well house under construction in the Sky Ridge neighborhood.
• Approved the Treasurer's Report dated November 30, 2025.

The relocation agreement for Piotr Wysocki was moved to Item 10H and approved separately.

Public Comments & Testimony

• Doug Markworth expressed concern that the council does not allow question-and-answer dialogue and criticized repeated spending increases. He said the city budget went from about $58 million to $66 million, calculated the overage as $1,385 per household, and called the trend unsustainable.
• Greg Moselle said the city went from a $3 million budget surplus in 2021 to an $8 million deficit, questioned claims of fiscal conservatism, and urged the council to explain its budget decisions to younger residents.
• Councilmember Klarenbeek later disputed the characterisation of an $8 million deficit and said the matter could be discussed further.
• Public hearings for the SEDC lease amendment and the retail wine/cider license drew no public testimony and were closed.

Discussion Items

• Spearfish Community Foundation: Kari Engen and Dave Donat presented the Foundation's 2026 projects, including an accessible inclusive picnic area at Spearfish Creek Falls, a water bottle refill station, continued AED and CPR training, and a dementia-friendly community project. They noted the Foundation has contributed approximately $1.3 million since 1998 and that the picnic area project would be fully funded by the Foundation, likely exceeding $20,000.
• SEDC Lease Amendment: City Attorney Knox explained the amendment reinstates the city's lease of the Atlas building to SEDC retroactively to October 21, 2025, extends it through August 31, 2033, with an option for an additional 10 years, maintains the $1 per year base rent, and adds a payment-in-lieu-of-taxes provision for private tenants.
• Economic development property items: The council approved the First Amendment to the Real Estate Purchase Agreement with Schipporeit Investments, Resolution 2025-50, the Crow Peak Lodge sign removal agreement, the Real Estate Purchase Agreement and TIF District Development Agreement with Jayhawk Holdings Corporation for Lot 5 in TIF District #8, and Resolution 2025-51. The Jayhawk Holdings transaction covers 4.7 acres at a purchase price of $438,867.
• Piotr Wysocki relocation agreement: The council approved a $7,500 relocation stipend for the Community Development Director position, with repayment required if employment ends within the first 12 months. The salary was described as approximately $178,000. The vote was 4-1, with Councilmember Myers dissenting.
• Finance: The council approved the second reading of Ordinance 1411, supplementing the 2025 appropriations ordinance, including $6,000 in donations for CrossFit equipment and approximately $587,000 for TIF District #1 increment payments. Finance Officer DeNeui reported TIF District #1 will close December 31, 2025, was 100% developer-funded, and its expiration will contribute to a projected 7.5% increase in property tax growth for 2026.
• Wine and cider license: The council approved the application from Seli Mind and Sole Sanctuary and Boutique, LLC for a retail on/off sale wine and cider license at 226 W. Illinois Street.
• Elections: The council approved the first reading of Ordinance 1413, moving municipal elections from April to June to comply with House Bill 1130, effective in 2027. It also approved the Combined Election Agreement with Lawrence County.
• Parks and Recreation: The council approved the certificate of completion for the rec center rooftop unit project. The contract price was $348,620 with no change orders, and the one-year warranty start date was set as September 24, 2025. Rec center membership was reported at just under 3,300.
• Planning and Zoning: The council approved the first reading of Ordinance 1412, rezoning the Christianson Campground and associated manufactured home park parcels from PUD and agriculture to R3, enabling development of the remaining seven acres. It also approved a minor plat in the Extraterritorial Jurisdictional Area for Lots 1 through 3 of Gov't Lot 2, Less Tract A.
• Public Works: The council approved Resolution 2025-60, authorizing application for the 2026 Bridge Improvement Grant Program for improvements to the Grant Street Bridge. It also approved a $12,000 Interstate Engineering proposal for the Campground Water Main project. Discussion included an estimated loss of about 100,000 gallons of water per month, campground revenue of roughly $650,000 to $700,000 per year, and the project being funded through the enterprise fund.
• Snow Committee: Public Works Director McMahon reported that the committee developed seven options but reached no consensus, mainly over funding. Discussion covered two plow trucks out of service, replacement lead times, snow gate experiences in other communities, and possible public outreach. It was agreed to present refined cost estimates at a study session.
• Downtown BID Board appointments: The council appointed Corey Brost, Tiara Heckenlaible, Leland Ruzicka, Terri Dunwoody, Dylan Mattson, Mark Kazmer, Dorcie Dardis, and John Williams to the Downtown Business Improvement District Board for three-year terms expiring December 31, 2028.
• Mayor's statement: Mayor Senden publicly apologized for an earlier response during public comment, addressed transparency efforts, expressed support for City Administrator Bobby Falcon, and noted that the city's bond rating improved one notch in late 2024.

Key Outcomes

• Approved the amended consent calendar unanimously.
• Approved the SEDC lease amendment, Schipporeit Investments agreement amendment, Resolutions 2025-50 and 2025-51, Crow Peak Lodge sign removal agreement, and Jayhawk Holdings purchase and development agreements unanimously.
• Approved the Piotr Wysocki relocation agreement 4-1.
• Approved Ordinance 1411 on second reading unanimously.
• Approved the Seli Mind and Sole Sanctuary and Boutique, LLC wine and cider license unanimously.
• Approved Ordinance 1413 on first reading and the Combined Election Agreement with Lawrence County unanimously.
• Approved the rec center certificate of completion, Ordinance 1412 on first reading, the ETJ minor plat, Resolution 2025-60, and the $12,000 Interstate Engineering proposal unanimously.
• Approved the December 15, 2025 bill list totaling $821,206.90 unanimously.
• Appointed eight members to the Downtown Business Improvement District Board.
• Agreed to combine the year-end meeting and study session into one meeting on Tuesday, December 30, 2025, at 4:15 p.m.
• Held an executive session from 7:10 p.m. to 7:47 p.m. under SDCL 1-25-2(3) for legal consultation on proposed or pending litigation or contractual matters, then adjourned at 7:47 p.m.