Questions and answers: Brad Johnson, past member of the South Dakota Board of Water and Natural Resources

Capitol News Bureau
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PIERRE, S.D. (KELO) — Brad Johnson, a real-estate appraiser from Watertown, served for 16 years on the South Dakota Board of Water and Natural Resources. The board makes decisions on loan and grant applications from communities for water projects and for other environmentally beneficial projects. The members operate under authority the Legislature granted to the state Department of Environment and Natural Resources.

The Legislature gave the governor in office the power to appoint members. Governor Kristi Noem recently named Karl Adam of Pierre to replace Johnson effective July 1 (see page 8 of the July 8 issue of the Legislative Research Council Register). Jerry Soholt of Sioux Falls succeeded Johnson as chairman of the panel.

Here’s a lightly edited set of questions and answers between Brad Johnson and KELOLAND Capitol Bureau reporter Bob Mercer in Pierre about his time on the board, including 14 years as chairman.

When were you first appointed? Were you told by the then-governor what he expected of you on the board?

Governor Mike Rounds gave me no specific direction. I originally sought a seat on the board because of flooding and lake pollution issues in northeast South Dakota. I was first appointed on March 25, 2003. Gregg Greenfield from Sioux Falls was chairman of the board at that time. I was named chairman of the board in 2005 after Greenfield stepped down to pursue more bond related business with the state. I served 14 years as chairman. I’m not sure if that is a record for a continuous state chairmanship.

During your time on the board, many loans were made to communities. Have communities made sufficient progress in replacing outdated infrastructure for their water and sewer and storm sewer systems?

In my time on the board, I signed more than $1 billion in loans and grants to communities. We have made significant strides in brining communities up to date. There remains a lot of work to be done and our smaller communities are paying much higher water and sewer rates than those who live in Sioux Falls, Rapid City, Brookings, Watertown and our other larger communities. We have worked hard to use grant funds to help out smaller communities survive. There remains a lot of work to be done.

Much of our smaller town infrastructure continues to be 60 to 100 years old. The board’s focus on providing grants to help these small communities improve their old systems is a large part of why rural South Dakota continues to survive. There have been times that the board has had discussions about whether a community being given a 30 or 40-year loan will even be around at the end of the term.

We have been blessed as a state that of all the loans we have made, none have defaulted, with the exception of a couple of recycling projects. Those were later converted from loans to grants. On the recycling front the board by legislative decree is encouraged to fund recycling projects. Overall, South Dakota’s program is extremely successful and financially responsible.

One of the features of the Obama-era funding was loan-forgiveness. Was that an effective tool?

Yes. This created a source of additional grant money for the state. I am not sure why Congress chose to call it “principal forgiveness” as opposed to simply creating a grant fund. This money continues to be an important part of the state’s ability to help our smaller towns. Only the government can create a program where we say, we’ll loan you $2 million, but you only have to repay $500,000.

When I first joined the board, we would spend an evening after the first day of the board meeting having informal discussions of moving a mere $25,000 from one community to another, sometimes overruling staff recommendations on the second day. We no longer do that because the principal forgiveness and other grant programs have made it easier to meet demand.

I am not a big fan of government throwing a lot of money at any issue, but in the case of the Obama stimulus, the money was spent wisely and improved the lives of South Dakotans.

Would you have been willing to serve another term?

Yes. I made it known early on in the Governor Kristi Noem administration that I would be willing to continue to serve. I was notified by DENR administrative staff that Governor Noem did not intend to reappoint me. She did send me a nice thank you letter after I was replaced.

Were there any highlights — or low points — during the time you were on the board?

Highlights – We fully funded South Dakota’s portion of the Lewis and Clark Regional Water System, which allowed Sioux Falls and other communities in southeastern South Dakota to get a dependable source of drinking water, ensuring the ability of these communities to grow.

We hired a financial advisor, PFM Financial Advisors of Minneapolis, Minnesota, who guided us through $439 million in seven leveraged bond issues. They provided guidance to the board during the turbulent period of 2008-2009 when some financial companies seeking South Dakota’s business encouraged the board to take what in hindsight was a risky and wrong approach to financing. The conservative nature of our board and PFM’s advice helped us avoid adopting financial strategies that would have hurt our program.

From March 2009 to February 2010, we held 15 meetings, up from our usual five, to distribute the $39.7 million of American Recovery and Reinvestment Act Funds that were part of the Obama stimulus money. This was on top of the normal work and that year we awarded $149.1 million in grant and loan funds to finance municipal drinking water systems, rural water systems, wastewater facilities, watershed restoration, solid waste disposal, recycling and contaminated land restoration activities. These funds resulted in $354 million of total activity that year.

We supported DENR staff in 2017 in a creative effort to get Lewis & Clark water to Madison, a city that has struggled with good quality drinking water. The “Madison Wheeling Option” connected three regional rural water systems to deliver water to Madison.

Perhaps the most important, we spent more than $1 million to develop the Big Sioux Flood Implementation Model in 2018. This was the result of flooding issues near Dakota Dunes in 2011 in which the government built flood defenses often in the wrong places. The new modeling is an effective tool for the entire Big Sioux River corridor from above Watertown to Sioux City.

This tool has shown great accuracy in predicting flooding impacts and is important for Sioux Falls, Dakota Dunes, Dell Rapids, Brookings and Watertown. More money needs to be invested to expand its capability to predict flood impacts on places like Lake Poinsett and other glacial lakes that are connected to the Big Sioux but are a bit less populated. This tool is still a diamond in the rough. Future boards need to invest in expanding its capabilities.

The biggest disappointment? The two reasons I originally sought a position on the board were flooding and pollution of our lakes and streams. We have done very little to address either of these issues.

On the pollution front, South Dakota’s political leadership gives only lip service to preserving our surface water. This is directly attributed to the political power of the agricultural industry, which study after study says is the biggest cause of pollution in the river and our lakes.

South Dakota has the dubious distinction of being one of the few states to not have a pollution standard for nitrate pollution and phosphorous pollution. These two pollutants, often coming from feedlots and fertilizer, plus natural causes, and industrial plants and sewage treatment plants, are what causes the toxic algae blooms in our lakes. They also are a threat to human health.

We used to have a phosphorus standard until about 2006 when suddenly, it was removed as a pollutant standard. Ironically, the next year, the number of lakes meeting acceptable standards rose dramatically.

We cannot continue to turn a blind eye to the major issues threatening the health of our lakes, streams and rivers. The EPA 319 Watershed Protection Program has grown less effective during the time I served on the board. This is because Congress has earmarked equal or less money on an annual basis and the state of South Dakota has done very little to create extra funds to help clean up agricultural pollution.

The board did work with a group of conservation organizations to encourage a study of whether South Dakotans would support an additional sales tax to fund pollution cleanup. The study indicated that South Dakotans believe in clean surface water but that they believe it is the responsibility of fishermen and hunters to pay for it. This attitude has to change if we ever are to be serious about preserving out lakes and streams for future generations.

If there’s anything I should have asked but didn’t, please let me know.

I believe the current board is a group of good people who will continue to do good work. I believe the board should geographically represent the state. The current makeup is now two Sioux Falls, two Rapid City area, two Pierre area and one Brookings area representatives. For the first time in about 20 year, northeastern South Dakota, home to most of our glacial lakes, does not have a voice at the table. That is disconcerting to me.

NOTE: A recording of Johnson’s departing comments to the board, as well as a letter commemorating his time on it from since-departed DENR Secretary Steve Pirner, begins at approximately the 2:27 mark of the June 27, 2019 meeting archived here.

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