Council discusses TIFs, Septic Systems and Data Center Study

The Lennox City Council met Monday, Feb. 23, at Lennox City Hall. With all members present, Mayor Danny Fergen and Council members heard agenda items.

In old business, the council discussed its legislative position statement.

“This is a repeat of the item from the last meeting; nothing has changed on the memo or the legislative position. I would note that a lot of things have changed in the time since the time this was first published. So, for example, all but one of the TIF bills have been tabled and we’re putting the South Dakota Municipal League, EDPA, they’re all putting their support behind one specific bill at this point. There have been changes to a lot of things in here, but the general tone remains the same,” City Administrator, Nate Vander Plaats said.

 “Personally, I think I agree with pretty much all your comments. There’s one that I’m maybe on the fence on, or need to open discussion on, is the HB1198 talking about requiring certain facilities to obtain conditional use permits from adjacent political subdivisions, and I agree with all your comments that we want to control our own space and we should have the authority to do so. I think for Lennox, it’s less immediately critical, I don’t think we have anybody butting up against us that could be concerning,” said President Chad Swier. 

Vander Plaats agreed, stating should Worthing, Chancellor, and Tea grow to the point of it becoming a problem, a joint jurisdictional agreement would be put into place.

“I know TIF Districts is kind of a buzzword lately, but the city’s being pretty proactive about putting stuff out on social media, trying to explain things and have a good understanding of what that means for our community. Wilson Trailer was a TIF district, so what would have happened to the community if we didn’t have that?” Mayor Danny Fergen asked. 

“They’re paying $300,000 a year in property taxes right now, maybe $140,000 of that comes to the city, another $140,000 goes to the school, and then the rest goes to the county. Without those property taxes, without that revenue coming in, it has to be produced elsewhere. That’s the way our system is structured, so when you have that tax burden placed on a large industrial user, it takes the burden off of your residential and your other businesses,” Vander Plaats responded. 

“I think what you’re looking for is making sure the council is in agreement generally with the opinions you’re having on behalf of the city and I think, at least from my point of view, I agree with the comments you have and you’re advocating for the correct things to keep the control locally and allow us to have the town we want to have,” President Swier said.

Vander Plaats asked the Council to consider Ordinance 665 as the City of Lennox wishes to make the discretionary formula available to new commercial multi-family and affordable multi-family residential properties and must come into compliance with SDCL with regard to other classifications of property. 

“This is an update to our existing ordinance on the discretionary formula which does two things, updates the language to match current statute as it’s something that’s only been available to commercial and industrial users in the past. Talking with the county as one of these new residential properties developments may be coming into town and not using a TIF, they’d like to access the discretionary formula, but it’s not currently available,” Vander Plaats said. 

Motion was made to approve first reading of Ordinance 665 by Bill Daugherty, seconded by Swier, motion carried.

Vander Plaats requested the Council consider Ordinance 666 – Septic Systems as City Staff are requesting the ability to construct septic systems within City limits be prohibited. 

“As Lennox continues to develop residentially and commercially, the City expects to see new requests for septic systems in such plans. While such systems do allow the city to develop in areas that cannot currently be served by sewer, it poses challenges for the orderly expansion and development and for how wee bring those septic systems into a future system,” he said requesting the council modernize by no longer permitting new septic systems. “The ordinance as written prohibits new septic systems but would allow existing systems to continue up to their service life so long as they are kept in good condition. The ordinance has been reviewed by the City Utilities Superintendent, City Attorney, and City Engineer,” VanderP laats continued. 

“How long does a septic system last,” Swier questioned. 

“Depends on how good you take care of it,” Vander Plaats responded. 

Alderman Lauren VanDriel asked if a program would be put in place for cost assistance similar to the sidewalk assistance. 

“You could look into whether it could be special assessed over the course of time instead, and offer a favorable rate over what other options they would have,” Vander Plaats responded. 

Motion was made to table ordinance 666 by Daugherty seconded by Billy Welch, motion carried.

Vander Plaats requested the council consider Ordinance 667 – City Administrator as an official opinion issued by Attorney General Marty Jackley is relevant to the City’s current ordinances regarding the position of City Administrator and requires an amendment to our ordinances. 

“This comes about due to recent developments in Spearfish resulted in the City of Spearfish requesting an official opinion from the Attorney General regarding the ability and authority of the City Council or Mayor to terminate a City Administrator. The Attorney General’s opinion clarifies that state law indicates that only the mayor may terminate such a position, with or without the consent of the City Council. Our ordinance currently reads that such consent of the City Council is required and is thus in conflict with state statute. This ordinance changes that to reflect current state statue,” he said. 

“The scary thing when I read this was two years ago, we had nobody run for mayor, so if any random person with a been of you put in a petition last minute, you could be gone,” Swier said. 

“That could happen,” Vander Plaats responded. 

Vander Plaats and his team have researched the job titles and are asking the council to amend the position to city Manager. 

“To most people that doesn’t make a lick of difference, but it does if you are a City Administrator or a City Manager,” Vander Plaats said. 

“So what’s considered a better job,” Swier asked. 

“Neither, when you have a City Manager they act with more authority than a City Administrator does,” Vander Plaats said. 

Motion was made to table ordinance 667 by VanDriel, seconded by Swier, motion carried.

The Council discussed peddler permits as the city is considering an amendment to Chapter 4 of the Municipal Orders. 

“We’ve required a peddlers permit for some time for a variety of mobile and temporary businesses to operate in Lennox. The definition is very broad, including food trucks. As the demand for these businesses has grown, we’ve debated for some time whether the definition of peddler should be as broad as it is,” Vander Plaats said. 

Vander Plaats reported there are many reasons to not include the food trucks. 

“We need to confirm with the Department of Revenue that a food truck operating in Lennox files sales taxes for the sales in that community,” he said. 

“Is it the cost of the permit that we feel is making it more difficult for people to operate a food truck or pop-up business here in Lennox?” asked alderman Daugherty. 

“I think it could be if other communities are not requiring it. Sioux Falls has a separate process, they have their own health department, so they are inspecting these, and permitting them separately from others. Other local communities may have the same language we have, but are not enforcing,” Vander Plaats responded.

“I think if it’s an event and they’re parking on our streets, that event needs to talk that through with the city before that. If it is in a business parking lot, that’s their parking lot and I think it’s fine, but the door-to-door sales is where I would like to see this in place,” Mayor Fergen said. 

The council thanked Vander Plaats for bringing this to their attention and he will begin the process of updating the ordinance.

The City Council has authorized the City Administrator to secure a proposal for a data center feasibility study. 

“The proposal largely speaks for itself, a couple items to highlight from Lennox residents and experts, Scott and Heidi Sandal. The cost is not to exceed $25,000 as it wasn’t budgeted for 2026. I’m not terribly concerned about the added expense and would keep it in the General Fund under Economic Development. If things continue to go well in second penny this year, I’d be fine putting it there as well,” Vander Plaats said. 

Vander Plaats does not feel the community will be high on the list of potential sites without significant infrastructure upgrades from utility partners or the incoming data center. 

“Obviously there is a lot of fear mongering going around and a huge million square foot data center has a lot of drawbacks, especially to a town like us, that wouldn’t probably fly, but what would and what is the impact. Just like everyone else, I don’t want my electric to go up. I don’t want my water to go up. I don’t want to go outside and sit on the porch and hear a humming noise ringing in my ears and we need to find out at what level that is a problem and is that a non-issue. I think getting some of this data behind them of the different sizes is important,” President Swier said. 

Motion was to move forward with the data center feasibility study by Daugherty, seconded by VanDriel, motion carried.