Facing a lawsuit from a major landowner, Wisconsin Department of Natural Resources officials have revised a decision on a controversial Fitchburg neighborhood plan to include more land for future development as part of a tentative out-of-court settlement.

The changes announced Monday would increase the number of acres that would be added to the city’s utility service area from 375 to 454 and would clarify many of the conditions of approval from the previous decision. Barring any significant changes resulting from a public comment period, the revised decision will resolve Fitchburg Lands LLC’s suit against the state agency.

The dispute emerged from a November 2014 decision by the Capital Area Regional Planning Commission to reject the city’s request to expand utility services — the first step of possible development — into 986 acres, some of them environmentally sensitive wetlands, between Highway 14 and Lake Waubesa. Then-Mayor Shawn Pfaff responded by appealing the decision on the Northeast Neighborhood plan to the DNR, which partially reversed CARPC’s decision by approving 375 acres last April.

Fitchburg Lands, which owns property in the area, sued the state agency in June, seeking approval of the city’s entire land request and asking the court to vacate certain conditions of the approval. The town of Dunn entered the case as a third party, concerned about protecting its downstream wetlands.

DNR Water Quality Monitoring section chief Tim Asplund said the revised decision, agreed upon by the DNR, the town and Fitchburg Lands, not only clarifies conditions of approval but provides better environmental protections for the area.

Fitchburg Lands has agreed to conduct stormwater monitoring prior to any construction, and the updated map includes expanded buffer zones around wetlands in the development zone.

“When we were considering the whole (986-acre) area there were a lot of concerns about wetland protections both in the proposed area and downstream,” Asplund said. “When we focused on some of those smaller areas, we were able to be more confident that those downstream areas would be protected.

“It was kind of a long process here, but I think the final outcome comes with even greater assurances, even though more (land) was approved.”

Fitchburg Mayor Steve Arnold, who campaigned largely on his opposition to the Northeast Neighborhood expansion, agreed that the additional monitoring will provide more certainty than the DNR’s original decision. But he still is concerned about the expense the city could incur by extending utilities.

“Those parties were discussing the issues and city politicians and staff weren’t really involved,” Arnold said. “I’m not really being given a choice. It’s going to be very, very expensive to extend water out there. We’re not where we want to be on utilizing infrastructure that we’ve already built.”

Dane County Executive Joe Parisi was less pleased by the revision, blaming the DNR under Gov. Scott Walker’s administration for “allowing developers rather than local officials and scientists to write the rules about how to protect Dane County’s lakes.”

Carl Sinderbrand, an attorney representing Fitchburg Lands, said the company is satisfied with the outcome. He noted the revised decision eliminates the requirement of a wetlands survey that would have removed some authority over any potential development from the city and Fitchburg Lands.

The DNR is allowing a public comment period through March 14. Asplund said the agency could issue a final decision by the end of March.