A water crisis that has bedeviled development in Lake Elmo, threatened the purity of the city's groundwater and tied up the city's legal resources won't stand in the way of a new elementary school, according to a statement from the state Department of Natural Resources.

The agency with regulatory authority over groundwater and water pumping said the school – which Stillwater district voters approved in a referendum last fall – wouldn't significantly add to the city's water consumption.

"The DNR is committed to working with the district and the city to ensure the water needs for the new school are met," the statement read.

The notion that the ongoing water shortage might kill the school plan has been debated at City Hall, on social media and in an impassioned plea for support last fall from Stillwater schools Superintendent Michael Funk to City Council members. For now, district officials said Friday that they're glad to have the DNR's approval.

"We're grateful to the DNR for their support of this project and we look forward to working with our community partners in the city of Lake Elmo," Funk said in a statement. "We've been a part of the Lake Elmo community for more than 100 years. We are excited to continue this tradition with a new, modern school that meets the needs of our students now and into the future."

Funding for the school was approved by 57% of voters last fall. The referendum question asked for $175 million to build a new Lake Elmo elementary school and a new elementary school in Bayport, and for improvements to Oak-Land Middle School and Stillwater Area High School. The need for the schools has been driven by growth, especially in Lake Elmo, one of the state's fastest-growing cities. The district's 8,300 students attend 12 schools, and 1,000 more students are expected in the next decade.

The referendum will add about $17 a month, or $201 a year, to the property tax bill of a $500,000 house, the median value for homes in the area, according to the district.

The DNR has been operating under a 2017 court order intended to protect White Bear Lake from falling water levels; it orders the DNR to restrict water appropriations in a 5-mile radius around the lake, including a portion of Lake Elmo. A special act of the Legislature last spring gave the DNR authority to grant a temporary increase to Lake Elmo's water appropriation while a greater regional effort is made to fix White Bear Lake's problems.

The city asked for a larger water appropriation in June, pointing to the new legislation, but the DNR didn't immediately provide it, saying at the time that it was looking for a solution that would satisfy both the legislation and the court's orders.

In its statement Thursday, the DNR reiterated that it must follow key requirements of the court order.

Adding to Lake Elmo's water demand, a plume of groundwater beneath the city is contaminated with per- and polyfluoroalkyl substances known as PFAS, requiring more homeowners to turn off private wells and connect to city water.

The city's water permit, issued by the DNR in 2018, allows the city to pump 260 million gallons per year. Last year, it pumped 543 millions gallons, said Clark Schroeder, interim city administrator.

The city asked the DNR in 2020 and 2022 if it could have authorization to pump more groundwater, but was denied both times.

The school district hasn't yet applied for needed permits from the city to start the design and construction of the school, but a spokeswoman said that work could begin as soon as March. The district hopes to open the school in the fall of 2026.