Southern Black Hills Water System - History - As of 2025
  1. Given the difficulty with finding suitable water in many areas in the region and the number of people required to haul drinking water for people and livestock, in 2002 local citizens came together forming a group identified as Cascade Water Users. The Cascade Water Users contributed their funds to hire FMG Engineering to conduct a preliminary engineering study to consider supplying water to residents from South of Hot Springs to Edgemont. The study, completed by January of 2003, projected a $6.5 million cost and the funding amount was deemed too difficult.
  2. Building on this beginning, the first organizational meeting of Southern Black Hills Water (SBHW) occurred in February of 2004. Initial considerations were given to working with the Fall River Water Users District or City of Hot Springs. Eventually, it was decided that independence was the best option.
  3. In April of 2004 a steering committee formed to investigate interest in the task of creating a rural water system. A group of volunteers begin talking to the people in need of water service to determine whether they would pay a "good intention fee" sign-ups (a payment of $150 to cover cost and committing to connect if the system was built) to pursue possible funding options. Efforts included a trip for board members to meet with the SD Congressional Delegation in Washington, DC to generate positive support for the potential project. Having received support from the local citizens and laid the groundwork for state and federal support, SBHWS formally incorporated in March of 2005.
  4. By September of 2005, funding was secured from South Dakota Department of Environment and Natural Resources (DENR) to support preliminary planning for SBHWS.
  5. The original development area for SBHWS included western Fall River, all of Custer and a southern portion of Pennington Counties. At that time, six phases were proposed to develop most of the area.
  6. Based on extensive preliminary planning, SBHWS became eligible for up to $42 million of stimulus funds from the Recovery Act in 2009. This funding mechanism included a deadline for utilization toward construction.
  7. The South Dakota Board of Water and Natural Resources approved the Phase I and II projects in February of 2010 including the recommendation of $12 million in funding support.
  8. As the Phase II project area included the necessity of installing a mainline pipe in the ditch of a County road that ran over 2.6 miles of National Forest (USNF) property, the USNF required SBHWS to complete a study of that area duplicative of the study SBHWS had completed as part of its funding package with the State and Department of Agriculture, including a duplicate environmental survey at a cost of $150,000. While originally Phase I and II had been planned to be built at the same time, the need to complete another study required the separation of the projects. The USFS study took 6 years to complete. The study resulted in a finding of no significant impact (FONSI). Given the study completion date of September of 2012, SBHWS lost eligibility for the Recovery Act $42 million funds.
  9. Original studies in 2005, had indicated that a $60 monthly membership charge would be support the project. As a result of the lost Federal grant funding, it became necessary to seek financial support through the Rural Development Program within the US Department of Agriculture. Projections by RD indicated that it would now be necessary to bill users a monthly membership charge of $109 in order to satisfy loan repayments for 40 years.
  10. Considerable time was spent by the board in search of a water source for the project. Thanks to efforts by a long-time board member, the Streeter Well into the Madison Aquifer was ultimately chosen as the best option.
  11. In 2010, SBHWS purchased property on HWY 385 North of Hot Springs for a 120,000 gallon underground storage reservoir and for an office location. That purchase included a small Madison Aquifer well that could be used as a backup source of water.
  12. Phase I construction, including the treatment plant, main line pipe installation to the storage reservoir on HWY 385, service line south on HWY 385 and the first stretch of Argyle Road service line began in 2010 with a 2012 completion date.Phase II began in 2013, with the Argyle Road service line, 2 pumping booster stations, elevated storage tower and customer connections. Phase II was completed in 2014.
  13. Over the next several years with the support and grant funding by the South Dakota Department of Agriculture and Natural Resources (DANR), three water systems were added to SBHWS: Spring Creek Acres in 2016, Paramount Point in 2016, and Rushmore Ranch in 2017. The acquisitions of these systems have been financial assets to the system allowing better cash flow volume and assisting in keeping rates down throughout the system.
  14. A new Madison Aquifer well was drilled near the storage reservoir on HWY 385 in 2017 through a grant from SD DANR. To show the availability of water in the area, the small nearby Madison well was pump-tested 24/7 for 4 days producing 265 gallons of water per minute with excellent quality and no effect on nearby wells or water sources.
  15. In 2017 SBHW secured grant funds from SD DANR of $171,000 toward water infrastructure improvements for Paramount Point and paid for system wide strategic back-up generators with a cost of $151,000.
  16. An effort to improve water quality and supply for the Spring Creek Acres Development was initiated in 2022. The initial cost for these plans was projected at $3.6 million.However, legal challenges by the town of Hermosa delayed the project for two years, increasing necessary funding to $7.3 million. Improvement plans include: drilling a third well and building a new pump/treatment plant in Paramount Point, installing a main service pipeline to the Spring Creek area, plus a 250,000 gallon storage tank. This effort will support both Paramount Point and Spring Creek Acres users, as well as properties adjoining the construction route. This project is primarily funded with grant dollars and limited loan dollars.
  17. In 2023 Western Dakota Regional Water System, which is a proactive plan to bring Missouri River water to western South Dakota, asked SBHW to become involved with the planning. By teaming up with that group, SBWW has received indications of assistance with our development.
  18. The Fall River County Director of Equalization has verified that there is no direct increase in assessed property evaluations resulting from rural water availability.
  19. As of 2025, SBHWS has more than 130 miles of water service line serving approximately 500 users.