South Dakota’s $694 Million in ARPA Water Grants Now Fully Allocated, Deadline Looms
- Steve Jurrens
- 7 days ago
- 4 min read
By Todd Epp, Northern Plains News
South Dakota has allocated all of its nearly $694 million in American Rescue Plan Act funding for water infrastructure, and now officials are racing to spend it before a 2026 federal deadline.
Why It Matters: The money represents the largest single appropriation in state history and will benefit about 85 percent of South Dakotans when projects wrap up. But it covers less than a quarter of the state’s $3.08 billion in identified water infrastructure needs. With the federal money running out, lawmakers are already scrambling to figure out how to pay for what comes next.
All ARPA funds available to the state Board of Water and Natural Resources have been allocated, according to the state Department of Agriculture and Natural Resources. The ARPA grants have supported more than $1.8 billion in total project costs across 141 water systems statewide.
Racing the Clock
The state has until December 31, 2026, to spend all the ARPA water funds or send the money back to Washington. Last February, with hundreds of millions still unspent, Sen. Helene Duhamel, R-Rapid City, told South Dakota News Watch the deadline was keeping her up at night.
“Hundreds of millions of ARPA dollars are still unspent, so until it’s done, none of us can feel comfortable,” Duhamel said. “It’s a nail-biter.”
State officials say they’re confident they’ll meet the deadline. Andy Bruels, DANR’s financial and technical assistance director, pointed out that the projects don’t have to be finished by 2026 — just the money needs to be spent, South Dakota News Watch reported.
Historic Investment
Lawmakers unanimously approved the ARPA allocation in 2022 through Senate Bill 62, dedicating $600 million to water, wastewater, stormwater and nonpoint source projects. The state announced the final chunk of ARPA water funding last June, when DANR handed out more than $105 million to communities across the state.
Under Governor Noem’s leadership and with strong legislative support, South Dakota allocated a total of $689,384,221 from ARPA funds for local water and wastewater projects, according to Underground Construction magazine.
“It’s an historic investment in the water and sewer infrastructure across the state, and it’s got long-lasting impacts,” Bruels told South Dakota News Watch in February 2024.
The biggest grants went to Shared Resources, which got $49.4 million for a water treatment plant and infrastructure; WEB Water Development Association, which received $26.3 million for the Water Investment in Northern South Dakota project; and Aberdeen, which landed $18.9 million for wastewater treatment upgrades, according to The Dakota Scout and DRGNews.
Projects stretch from Webster in the northeast to Oral in the west. The Board of Water and Natural Resources kept approving more funding throughout 2025 — nearly $19 million in January, according to South Dakota Public Broadcasting, and nearly $140 million in March, according to The Dakota Scout.
What’s Next?
With ARPA money running out, lawmakers are working on ways to fund future water infrastructure.
Duhamel introduced Senate Bill 202 in February to create a water infrastructure fund that would allow the state to save for future billion-dollar projects gradually. A legislative committee backed it unanimously in February, South Dakota Searchlight reported. However, the bill was later defeated 10-3 by the House Agriculture and Natural Resources Committee in March 2025, according to South Dakota Searchlight.
Right now, the state awards $10 million to $12 million a year for water projects through its regular budget — nowhere near enough for infrastructure projects that cost billions, Duhamel said.
The Western Dakota Regional Water System shows just how big these challenges are. The project aims to pipe Missouri River water to western South Dakota. Like the Lewis and Clark Regional Water System, which took more than 20 years to finish, these massive projects need steady funding over decades.
Tracking all the ARPA spending has been tough. During a July hearing, Sen. Taffy Howard, R-Rapid City, asked how people could find out where all the grant money went.
“That’s a great question, and honestly, it is one of the shortcomings of our existing accounting system,” Jim Miesner of the Bureau of Finance and Management told her, according to South Dakota Public Broadcasting.
Smart Spending
South Dakota put most of its ARPA money into one-time infrastructure projects instead of ongoing programs, which means the state won’t face budget holes when the federal money’s gone.
“I think South Dakota had the wisdom and the leadership of both the governor and the Legislature to realize we’re not going to start anything new,” Sen. Jean Hunhoff, R-Yankton, who co-chaired the Joint Appropriations Committee, told South Dakota Searchlight in March 2024.
Sen. Reynold Nesiba, D-Sioux Falls, said the ARPA water funding was transformational. “We’ll look back and see that regardless if you like him or not, Joe Biden has been one of the most consequential presidents for the state of South Dakota in our history,” Nesiba told South Dakota News Watch. “It is once-in-a-generation funding.”
Besides water infrastructure, the state put ARPA funds toward $50 million in broadband expansion, $50 million in workforce housing, and $35 million in tourism marketing.
The state got $1.25 billion total in ARPA funds — $974.5 million went directly to the state government, and $171.8 million was split among the state’s 66 counties.
