Spearfish City Council Regular Session – February 2, 2026

The Spearfish City Council met in regular session on Monday, February 2, 2026, at 5:30 p.m. in City Council Chambers, 625 5th Street, Spearfish. Mayor Senden presided, and all six council members were present: Hafner, Hourigan, Jacobs, Klarenbeek, Myers, and Rath. Staff present included City Attorney Knox, Finance Officer DeNeui, Public Works Director McMahon, Police Chief Smith, and Community Development Director Wysocki. After an invocation by Pastor Mark Fuhr of Countryside Church and the Pledge of Allegiance, the council approved the agenda and declared no conflicts of interest.

Consent Calendar

• The council approved the consent agenda, including minutes from the January 14, 2026 study session and the January 20, 2026 regular session.
• The 2025 Spearfish Community Pantry Annual Report was approved. Pantry representative George reported that the number of families served, people served, food donated, and financial support all increased during the year, and that pantry needs are still being met, including in the St. Onge area.
• Added and adjusted wages were noted for informational purposes only: Lita Eddy, executive assistant, $32.04/hour; Abbey Larson, public works project engineer, lateral transfer; Sean Davis, firefighter, $31.25/hour.
• The 2026 Volunteer List for workers' compensation coverage was approved.
• Authorization to hire 2026 budgeted seasonal positions was approved, including 10–15 parks summer laborers, 40–45 lifeguards, 1 lifeguard coordinator, and numerous other seasonal roles.
• Authorization to hire three budgeted regular positions was approved: utilities operator at $28.32/hour, utilities operator at $26.95/hour, and customer service assistant at $22.12/hour.

Public Comments & Testimony

• The public comment period opened at 5:39 p.m. and closed with no comments.
• The public hearing for the Northern Hills Cinema liquor license transfer opened at 6:18 p.m.; no testimony was received.

Items from Visitors

• Mike Carlson of the South Dakota Department of Transportation presented planned improvements at Exit 10. SDDOT plans to construct a Reduced Conflict Intersection (RCI) in 2026, the first in South Dakota. The design removes the left turn from Old Highway 14, requiring drivers to turn right and make a U-turn, and adds a signal near the interchange. Carlson said doing nothing would create about 138 seconds of delay at the intersection by 2038, while the RCI would reduce delay to about 30 seconds. He also said a future public meeting will be held with a date to be announced. In response to a council question, he said the signal would create gaps for school traffic heading toward Creekside Elementary.

Discussion Items

City Attorney

• The council approved the first amendment to the development agreement with Stencil Group II, LLC. The amendment changes the booster station approach to a prefabricated unit, retains the city's 55% cost share, and caps the city's share at approximately $1.25 million. Staff said bids came in around $2.7 million versus the original estimate of about $1.2 million, and the new approach could save about $250,000. The booster station will be sized to support future development south of Hill Street. The motion passed 6-0.
• City Attorney Knox presented Attorney General Official Opinion 26-02, which required no action. The Attorney General concluded the city council does not have authority to terminate the city administrator; that authority rests with the mayor. The opinion also said the city's ordinance conflicts with state law because it gives appointment authority to the council instead of the mayor. Knox stated he concurred.
• The council approved the first reading of Ordinance 1416, amending Chapter 32 to make the mayor the appointing authority for the city administrator, with approval of the common council, and to allow the mayor to remove the administrator with reasons reported at the next regular meeting. The change brings the ordinance into compliance with state law.
• The council approved a Separation, General Release and Waiver, and Settlement Agreement with Robert J. Falcon. City Attorney Knox said Falcon had raised claims through his attorney; the city will pay $250,000, compared with a roughly $202,000 severance obligation, to obtain a full release and mutual non-disparagement. Knox recommended approval. A council member called it a large pill to swallow and a no-win situation, and expressed no interest in hiring another city administrator. The motion passed 6-0, and Knox said the resignation would be effective upon execution of the agreement.

Finance

• The council approved the transfer of the retail on/off sale malt beverage and South Dakota farm wine license for Northern Hills Cinema from Steele Inc. to Northern Hills Cinema LLC, located at 1830 N. Main Street. No public comments were received.
• The council ratified moving the January 24, 2026 ChinookFest BeerFest special event on-sale liquor licenses for Spearfish Public House and Spearfish Canyon Lodge from the Lookout Amphitheater to the Tretheway Pavilion because of weather.
• The council approved property tax abatements for 10 months on 10 city-owned parcels in Sky Ridge Subdivision. Finance Officer DeNeui said the total factored valuation was $64,090 and the abatement amount was $53,408, with taxes still due for two months of taxable ownership.
• The council approved the engagement agreement with Ketel Thorstenson, LLP for the 2025 audit services by a 6-0 roll-call vote. The finance officer said $55,000 is budgeted and total cost is anticipated to be about $50,000.

Public Safety

• The council authorized funding for three police officer positions not currently funded in the 2026 Police Department budget, at a maximum cost of $309,765, with actual budget supplements to be determined after the positions are filled. Police Chief Smith said the department has 22 sworn positions, calls for service increased from about 11,000 in 2020 to about 13,000 in 2025, violent crimes increased from 314 to 401, two officers typically cover an entire shift, and overtime was about $147,000 in 2025. Finance Officer DeNeui estimated one officer costs about $8,605 per month; a March 1 hire would cost about $86,046, and a July 1 hire about $51,628. Chief Smith noted two applicants are available for one current funded vacancy and that hiring and training generally take about a year. One council member said the unbudgeted nature of the request caused some heartburn, while several council members voiced support for approving the positions to keep the community safe and retain qualified applicants. The motion passed 6-0.
• The council approved the first reading of Ordinance 1415, amending Chapter 92 of the city ordinances. The amendment adds a 14-to-18-foot clearance standard for vegetation over vehicle rights-of-way and creates a new property maintenance section for vacant lands, covering grass, weeds, and fire-related maintenance. The motion passed unanimously.

Public Works

• The council approved Resolution 2026-03, authorizing submission of a BUILD grant application for Colorado Boulevard reconstruction. Staff said the 2023 corridor study recommended five lanes from Exit 14 to Rainbow Road and three lanes from Rainbow Road to Highway 85. The BUILD grant can provide up to $25 million with no local match; full corridor improvements were estimated around $41 million. The phased application would start with a three-lane section and intersection improvements. Funds would need to be secured by 2030 and expended by 2035, with future council approvals.

Bills and Financial Approvals

• The council approved the February 2, 2026 bill list totaling $1,272,551.37 by a 6-0 roll-call vote, including an insurance renewal of $577,859.10.
• The council approved January 2026 salary expense, bank fees, and credit card fees totaling $1,250,722.62 by a 6-0 roll-call vote.

Snow Removal Discussion

• Mayor Senden and Public Works Director McMahon led discussion of snow removal options from the Snow Removal Committee that were presented at the January 14, 2026 study session. The discussed option included a subscription service for driveway clearing for residents who need help; officials noted there are roughly 4,500 to 6,000 driveways in the city. Council directed staff to bring options to the February 11, 2026 study session for firm estimates and public input, followed by formal adoption at the February 17, 2026 council meeting. Staff also plans to bring forward an ordinance revision to remove a conflict with the 2010 initiated measure.

Departmental Discussion

• Community Development Director Wysocki reported that the Safety Action Plan public comment period closed and final adoption is targeted for February 17. The planning commission agenda includes a TIF application for an affordable housing project and continued zoning and subdivision regulation discussions. The first Building Board of Appeals meeting elected a chair and vice chair and adopted bylaws.
• Public Works Director McMahon reported a force main break on Colorado Boulevard. Repairs will take at least two days, and residents in the Exit 17 area are asked to conserve water to reduce sewer flows during repairs.

Key Outcomes

• Agenda, consent agenda, and routine financial approvals passed unanimously or by 6-0 roll-call votes as noted above.
• The council approved the Stencil Group development agreement amendment, Ordinance 1416 first reading, Falcon settlement, Ordinance 1415 first reading, and Resolution 2026-03.
• The council authorized three additional police officer positions with a maximum cost of $309,765, with budget supplements to be brought forward after hiring.
• Snow removal options will be refined at the February 11, 2026 study session and considered for formal adoption on February 17, 2026.
• The meeting adjourned at 7:16 p.m.