The state’s Department of Natural Resources announced Wednesday it will allow Elko New Market to more than double the amount of groundwater it can pump each year, in preparation for a proposed Niagara water bottling facility.

The approval means Elko New Market can increase the amount of water it pumps each year from 135 million gallons to 365 million. The DNR’s approval also included a requirement the city make a plan to investigate and fix any well interference or water quality issues that arise as a result.

Elko New Market, a small but growing Twin Cities suburb in Scott County, uses about 125 million gallons of water a year. The City Council last year offered more than $3 million in subsidies to California-based Niagara Bottling, which sells bottled water to Walmart and Costco, to open a plant in Elko New Market. The company plans eventually to draw 310 million gallons of city water a year to bottle, ship and sell across the country.

The DNR wrote that the approval followed a “robust” application review process. It also stated the DNR examines if the increased pumping will harm water quality or availability. As part of this process, the DNR required the city to conduct aquifer tests in November and December to determine if increased pumping would be sustainable and comply with state laws. The results showed the proposed increase “would not negatively affect aquifer levels or water availability for lakes, streams or wetlands,” the DNR said.

The DNR found in its review that private domestic wells within a 1-mile radius of the city’s wells could run out of water, particularly in warmer months, but there was no indication that a well ran out during the tests, the DNR said.

Some residents of the area have raised concerns and said the tests caused poor water quality in their private wells. Jonathan Carlson, who lives just outside Elko New Market’s city limits, said he’s worried the increased pumping will lead to more discolored water for homeowners with wells.

“I’m not surprised, but I’m disappointed,” Carlson said. “It’s just not good on so many levels.”

In its letter, the DNR said the city is required to make a plan to investigate and respond to water quality issues or cases of a well running out of water due to the increased pumping. The DNR can suspend the permitted pumping amount or take other steps if the city doesn’t follow its plan.

Both Carlson and homeowner Janelle Kuznia said they have concerns about the new “Water Quality Response Plan,” which says the city is required to investigate water quality complaints only if they’re from a property within 2½ miles of a city well or if the DNR refers a complaint to it. The two said they live outside that radius and they worry it could exclude certain private well owners from having issues fixed.

Earlier this month, one homeowner reported that her water came out gray and thick with sediment during the test in December. Another resident reported yellow water from stirred-up rust, and several said they had to replace filters clogged with dark slime.

Sara Lofgren filled a bathtub with gray water that poured out of her faucets while the city of Elko New Market ran an aquifer test.

Jodi Lucast, one of the residents who said the tests stirred up manganese in her well, said Wednesday she remains “concerned that we are poisoning ourselves.”

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“I am very concerned. We have three households on my well; one had an infant living there,” she said.

Earlier this month, City Administrator Thomas Terry said Elko New Market is working out a response plan with the DNR that will lay out how it will investigate complaints and correct any problems caused by the city’s pumping.

Star Tribune staff writer Greg Stanley contributed to this story.