Agent: Authorized taxes won't all be needed

Paying off bonds that could be sold to lease water rights in the Middle Republican Natural Resources District may not require the full 10-cent property tax levy and $10 per acre assessment on irrigated land allowed under LB701.

Al Eveland of Ameritas Financial Services told MRNRD board members and about 20 members of the public at an MRNRD meeting Tuesday evening, "You're not going to need to go full-tilt 10 cents and $10 an acre." Dan Smith, executive director of the MRNRD, said there may be "lots of variations on the theme."

Eveland said that the $8.7 million dollar bond sale would be a "hybrid," a combination of a tax-backing and a revenue bond, yet a bond that would ultimately rely most heavily on the assessment on irrigated acres.

However, MRNRD board member Gayle Haag pointed out that if the $10 per acre assessment is challenged in court, the bond payoff could fall back onto property taxes.

Eveland said that bonds based on an assessment is a new idea, one that could be a "hard sell," but not impossible, to bond buyers.

Eveland said the bond sale is based upon a three-year amortization, but that the bonds can be paid off in one year without penalties.

All funds generated by the tax levy and acreage assessment would be earmarked for debt service only.

The board approved a funding formula that would make the Upper Republican responsible for 44 percent, the Middle Republican responsible for 30 percent, and the Lower Republican responsible for 26 percent of the repayment of the bonds.

The board tabled a decision on leasing water rights from the Frenchman Cambridge Irrigation District until all the decisions can be made regarding agreements and the sale of bonds.

The MRNRD would lease, for one year, 8,000 acre feet of water, at $80 per acre foot, for a total of $640,000, from the Frenchman Valley Irrigation District; and 2,000 acre feet of water, at $63 per acre foot, for a total of $126,000, from the Riverside Irrigation Co.

The other agreement, with the Frenchman Cambridge Irrigation District, would total about $7.8 million.

Smith said the MRNRD would pay the irrigation districts and company, and the districts and company would then pay its customers.

"While the purchase of water rights is an option, one-year or long-term lease is a better approach," Smith said. Not buying out an irrigation district keeps the district viable, he said.

Buying and/or leasing water rights also reduces Nebraska's consumptive use of Republican River basin water, which is a goal of the NRDs as they work to comply with the settlement of a lawsuit filed by Kansas over Nebraska's overuse of river basin water, water that is divied up among Kansas, Nebraska and Colorado in a 1943 compact.

Board members approved a draft of an interlocal agreement with the Upper and Lower Republican NRDs, although they want it amended to require two voting delegates, not one, and one alternate from each of the three NRDs.

It would be the decision of this interlocal board whether Conservation Reserve Enhancement Program -- CREP -- acres are assessed at a reduced rate or are exempt from assessment, Smith said.

Smith said new computer software being developed by the Nebraska Association of County Officials for use by county assessors will identify certified irrigated acres to be assessed and allow CREP acres to be excluded this summer.

The board pondered for a long time an even more controversial topic -- the possible reduction of water allocations on top of the tax levy and assessment of irrigated acres. No decision was made.