Spearfish City Council Regular Session - April 6, 2026

The Spearfish City Council held its regular session at 5:30 p.m. on Monday, April 6, 2026, in Council Chambers at 625 5th Street. Council members Hafner, Hourigan, Jacobs, Klarenbeek, Myers, and Rath were present, with Mayor Senden presiding. The agenda was amended to add item 18A, an update on the Main Street/Colorado Boulevard chip seal project. The meeting adjourned at 7:32 p.m.

Consent Calendar

• Approved minutes from the March 11 study session, March 16 regular session, March 16 Local Board of Equalization meeting, and March 17 Joint City Council and Planning Commission special session.
• Ratified Visit Spearfish sponsorships recommended by the Visit Spearfish Board: Spearfish Sasquatch $3,250; BH Youth Races $1,500; NH CASA Half Marathon and 5K $500; NH CASA Super 6 Bike Race and Trail Run $500; and Leading Ladies-Dakota Spirit Marathon, Half Marathon, Relay and 10K $1,000.
• Added Julian Winchester and Jennifer Snider to the 2026 Spearfish Volunteer Firefighter list.
• Motion by Rath, second by Klarenbeek, passed unanimously.

Public Comments & Testimony

• Stan Triplett raised concerns about the city's communication plan, saying the public had been told questions could be asked during meetings but that this was later walked back. He expressed frustration that residents with relevant experience cannot ask questions or get answers.
• Doug Markworth asked how Platinum Investments' withdrawal affected the city and other purchasers in the Sawmill-area TIF district. Finance Officer DeNeui responded that the lot becomes available for sale, the city will monitor TIF increments, and the district fund still has cash from prior sales, including about $833,000 from the McLaughlin sawmill office building sale to Lighthouse Construction. Councilmember Klarenbeek requested an update from economic development at a future meeting.
• Jeremy Smith spoke against Resolution 2026-10, arguing the Stone Ridge Commons TIF project plan did not meet statutory or city policy requirements. He said the fiscal impact statement was incomplete, the plan did not justify the street connection, and the city's TIF guidelines prioritize owner-occupied affordable housing rather than rental housing. He asked council not to approve the plan and to require a rewrite. City Attorney Knox, Finance Officer DeNeui, and Community Development Director Wysocki responded, citing Title 13 authority for affordable-housing TIFs, projected fiscal impacts, and the city policy's broader definition of affordability.
• During the chip seal discussion, several members of the public spoke:
  • Doug Markworth questioned the use of chip seal on Main Street, noted chip seal life of roughly 5-10 years versus 10-20 or more years for asphalt, mentioned a petition to asphalt the street, and asked council to consider what level of public support would change the approach.
  • Nathan Hoogshagen asked whether a contract change order could have the contractor chip-seal non-downtown sections while Main Street received a mill and overlay. He also asked about contractor response to particulate and scratches in downtown businesses, urged inclusion of downtown business and building owners in planning, and noted that June work would overlap the tourist season.
  • John Williams raised pedestrian safety concerns and supported a road diet, three-lane configuration, or center parking to slow traffic. He also urged treating the Main Street failure as an emergency rather than applying another chip seal over a failing surface.
  • Bill Klapperich, citing experience in Phoenix, criticized the chip seal equipment, inspection, and application quality, saying the tailgate chip spreader and inconsistent liquid asphalt distribution produced a poor result.
  • Nathan Hoogshagen also asked whether the city could reject a low bid from an unqualified contractor; City Attorney Knox said the legal process for such a determination is complicated.

Discussion Items

• Added or adjusted wages: Council approved the budgeted 2026 wage addition for a part-time Customer Service Assistant at $22.12. The published wage list under SDCL 6-1-10 also included regular new hires and numerous seasonal hires effective April 7, 2026, including lifeguards, camp attendants, parks laborers, and seasonal firefighters.
• Termination Agreement with Spearfish Economic Development Corporation and Platinum Investments LLC: Approved unanimously. City Attorney Knox explained that Platinum Investments wanted to withdraw from real estate purchase and development agreements, and the city will receive earnest money and terminate the agreements, resolving potential claims.
• Health Care Services Agreement with Monument Health Rapid City Hospital: Approved unanimously. Knox said the agreement allows Spearfish hospital services to continue participating in the 340B drug discount program through a satellite clinic arrangement, with no direct financial impact on the city.
• Spearfish Valley Estates water service agreement: Approved unanimously. The approximately 62-unit mobile home park outside city limits will connect to city water, be master-metered, pay connection and inspection costs, and disconnect its underproducing private well before service begins.
• Resolution 2026-07: Adopted unanimously to establish Tax Increment Financing District Nine for the Stone Ridge Commons affordable housing project. Ricky Quintana of Lloyd Companies said the project will have 94 rental units, 23 garage stalls, open space, a dog park, and infrastructure connecting Paramount and Platinum drives. The site's current valuation is $152,700, with a projected year-20 valuation of about $18.3 million. The developer committed to 10-year affordability at or below 80% of area median income, double the state's five-year requirement.
• Resolution 2026-10: Adopted unanimously to approve the Stone Ridge Commons TIF District Nine project plan, authorizing up to $3,233,053 in tax increment revenues. Lloyd Companies said the affordable-housing TIF request was about $4 million less than the up to $7.3 million that could have been available under an economic-development TIF classification. The project is structured as pay-as-you-go.
• Aviation memorabilia donation: Approved unanimously. The city will accept a collection of Clyde Ice aviation memorabilia from the Howard and Jane Ice Family Trust for educational display at the Black Hills Airport-Clyde Ice Field terminal.
• South Dakota Community Foundation grantmaking fund agreement: Approved unanimously. The foundation will help administer the city's external grant process for an annual $500 fee plus a $7,500 affiliate fund administration fee. Staff estimated the city's general fund external grants at $70,000-$100,000 annually. The agreement can be terminated with 30 days' notice.
• Crow Peak Brewing special event license: Approved unanimously for the Pine Island Gravel Odyssey on June 13, 2026, from 7:00 a.m. to 5:00 p.m. at Spearfish City Park.
• Matthews Opera House special event licenses: Approved unanimously for the Festival in the Park on July 17, 18, and 19, 2026, from noon to 8:00 p.m. each day. The mayor initially read the dates as June in the live meeting but corrected it; the agenda and minutes state July.
• Board of Adjustment minutes: A motion to approve a revised version of the March 16, 2026, Board of Adjustment minutes failed 1-5, with Jacobs voting yes and Hafner, Hourigan, Klarenbeek, Myers, and Rath voting no. The original staff-drafted minutes remain in place.
• Spearfish Trails Coalition Trails Hub location: Approved unanimously. The trail hub will be on city-owned property directly south of the existing parking lot at the southeastern corner of Canyon Street and Winterville Drive. Kevin Jasper of STC spoke in support, noting the location is adjacent to the rec path and future trails and that no trees are expected to be removed. The Park, Rec and Forestry Advisory Board unanimously recommended approval on March 26, 2026.
• Spearfish Creek Preservation Plan Phase 2: Approved unanimously an ISG proposal at $62,988.40, about $7,000 under the $70,000 budget. Phase 2 will include public engagement, concept sketches, and development of a Spearfish Creek master plan.
• HDR Engineering independent fee estimate services: Approved unanimously at $4,600 for the Airport Apron project, a reimbursable FAA grant requirement.
• DGR Engineering services: Approved unanimously for construction staking, materials testing, and administration services for the Sawmill Road Project at a cost not to exceed $84,500, funded from the TIF 8 fund.
• Sawmill Avenue Project bid: Awarded unanimously to Johner & Sons, Inc. for $752,271.45. The engineer's estimate was $1.18 million and the budget was $1.5 million, funded from TIF 8.
• Resolution 2026-06: Approved unanimously as a resolution of intent to enter into a private hangar ground lease with Lookout Mountain Composite Squadron, Civil Air Patrol. A public hearing was set for April 20, 2026, at 5:30 p.m. The lease would expire October 1, 2026, to allow the building to be removed or relocated for the apron expansion project.
• Bill list: Approved unanimously the April 6, 2026, bill list totaling $895,930.56.
• March 2026 salary expense, bank fees, and credit card fees: Approved unanimously. The grand total was $1,130,290.70, including $1,112,573.82 in gross wages and benefits, $92.67 in banking fees, and $17,716.88 in credit card fees.
• Main Street/Colorado Boulevard chip seal update: Mayor Senden acknowledged the project did not meet expectations and apologized for challenges caused to downtown business owners. Public Works Director McMahon said staff and the contractor, Dakota Asphalt, are still evaluating the cause and solutions, with consultation from state DOT experts. Work cannot start before May 1 due to seasonal limitations and asphalt plant schedules. Options include contractor refund, reapplication of chip seal, mill and overlay, chip seal plus overlay, or concrete surfacing. A rough estimate for mill and overlay was $100,000-$200,000. Staff said a determination is expected in April, with work potentially starting in June. Council members pressed for a firm timeline and asked about contract, warranty, and performance bond protections. No formal decision was made on the repair method.

Key Outcomes

• The council approved all consent items, wage additions, contracts, resolutions, licenses, and bill payments except where noted.
• The council adopted TIF District Nine for Stone Ridge Commons, capping reimbursable tax increment at $3,233,053 and imposing a 10-year affordability requirement at or below 80% of area median income.
• A proposed revision to the March 16 Board of Adjustment minutes was rejected 1-5; the original minutes stand.
• The city will continue evaluating the downtown chip seal failure, with staff aiming for a determination in April and possible repair work starting in June. The contractor must first be given the opportunity to perform warranty repair, and a performance bond exists if the contractor fails or refuses.
• A public hearing on the private hangar ground lease was scheduled for April 20, 2026, at 5:30 p.m.