Residents across Colman and the broader Colman-Egan School District are facing two major decisions that could shape the communitys financial future and directly affect local taxpayers for years to come.
The City of Colman is weighing whether to give away one of its only revenue-generating entities its municipal electric system to Sioux Valley Energy. At the same time, school leaders are exploring whether to move forward with purchasing land and building a new athletic complex just to the east of the school.
Both proposals could have lasting financial implications, potentially influencing future utility rates, taxes, and funding available for other city and school priorities.
Powering the debate
A standing-room-only crowd filled Colman City Hall this past Wednesday night for what many said was one of the most heavily attended city meetings in recent memory.
The issue: a proposed ordinance that would transfer ownership of the citys electric system for free to Sioux Valley Energy, a nonprofit cooperative based just east of town.
City officials said the idea came after a DGR Engineering study earlier this year suggested Colman could face $2.5 to $3 million in future electrical upgrades. Turning over the system, they said, could help avoid those potential costs and give residents access to Sioux Valleys 24/7 dispatch services, online energy management tools, and long-term reliability programs.
But Heartland Energy, Colmans current wholesale power provider, and nearly every resident who spoke at Wednesdays meeting urged the council to slow down. Many fear the move would eliminate one of the citys most dependable income sources and could result in higher electric rates down the line.
The citys electric utility in recent years has typically generated just over $100,000 in annual revenue, helping pay for operations and a portion of staff wages.
Heartland officials argue Colmans system is already in excellent shape and among the most modern in the region, with roughly 80 percent of its lines buried underground. The system, they say, is reliable, profitable, and one of the few city assets that consistently makes money.
Jim Thompson, Colman area resident and business owner, warned that giving away the system would mean giving up millions in value, millions in future revenue, and, most importantly, local control of electric rates.
Rates & reliability
Heartland Energy CEO Russ Olson maintains that no urgent repairs are needed and that the citys infrastructure is far ahead of schedule compared to other municipalities. Heartland hasnt raised rates since 2017 and doesnt expect to for several more years, and Colman currently boasts one of the lowest electric rates in the region.
By contrast, Sioux Valley Energy recently approved a 9 percent rate increase for 2025 and anticipates additional hikes tied to its wholesale suppliers, Basin Electric and East River Electric.
Heartland estimates that the average Colman household currently saves about $500 a year compared to what theyd pay under Sioux Valleys rate structure. For large customers like T&R Electric and even the school district the difference could total tens of thousands of dollars annually.
Mayor Mike Preheim acknowledged the communitys concerns but said the city must also look ahead. Colman remains under a 30-year contract with Heartland, meaning Heartland would continue supplying power regardless of ownership, and rates would likely remain stable. He and other city officials argue that transferring ownership could free Colman from future maintenance responsibilities and potential financial risks.
Transparency & trust
Heartlands Customer Relations Manager Kelly Dybdahl questioned how the transfer proposal advanced so far with limited public awareness, noting the company wasnt involved until the city attorney reached out to request its signature on a draft transfer document.
Mayor Preheim responded that all discussions have been public and within legal bounds. City Attorney Jennifer Nelson clarified that while a resolution for the transfer passed a first reading previously, it was tabled this past week to allow more time for public input. Because the transfer would be made to a nonprofit cooperative, state law does not require a public vote.
Thompson urged the council not to proceed without an independent valuation of the electrical system, which he estimates could be worth millions. Former council member Shaun Lebert agreed, saying the city should meet with Heartland to explore alternatives.
If we give it up, were not getting it back, he said.
Heartland CEO Olson confirmed he intends to follow up with city officials to pursue that conversation.
Both utilities and council members say they want whats best for Colman, but many residents appear to have left the meeting with more questions than answers particularly about what the move would mean for rates, revenue, and long-term city finances.
Athletic complex discussions continue
While city leaders debate Colmans power supply, school district officials are weighing another high-dollar decision whether to build a new athletic complex.
A recent community survey drew 415 responses: 56 percent supported the project, 30 percent opposed, and 14 percent were undecided, with many requesting more financial details.
The district has already surveyed and platted 10.48 acres for the potential complex and submitted the plan to the South Dakota Department of Transportation for review. Once approved, it will move to Moody County Zoning.
The land being looked at is east of S. Allen Street (behind the houses) and also connects along Highway 34 on the south. Currently, district officials are in the process of getting the plat approved by the entities involved before a purchase could happen. An entrance to the complex would come off Highway 34 and also from Cornell Street.
If built, the facility would include a new football field and track to serve the growing district. But with taxpayers still paying off a $4 million school addition, some are urging caution.
Resident Lora Zwart told board members that the projects estimated $3.5 million cost would equate to roughly $29,000 per event over 20 years. I think thats an obscene amount of money for something we dont need, she said. An athletic complex would be lovely, but it shouldnt be paid for by tax dollars.
What it all means for taxpayers
Both debates one over electricity, the other over athletics come down to the same core question: how to grow without overburdening residents.
If Colman transfers its electric system, the city could lose more than $100,000 in annual revenue and one of its only self-sustaining funding sources. Officials would need to make up that money elsewhere potentially through higher water or utility rates, service cuts, or future tax increases.
If the school district moves forward with a multi-million-dollar athletic complex, local taxpayers could face additional costs through bond financing or mill levy adjustments.
No final decisions have been made, but both issues appear to be reaching critical points and both could have long-lasting effects on Colmans bottom line.
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