LB701 transfers authority to Republican River NRDs

While parts of the legislation apply to all NRDs, only the Republican River Basin NRDs are allowed to issue what are referred to as River Flow Enhancement bonds.

The specific projects for which these bonds can be used are to lease or purchase groundwater use rights and surface water use rights. They could also be used to purchase or lease the management of an irrigation district, to pay for vegetation management or to fund augmentation projects.

These bonds can be repaid with a combination of per acre fees on irrigated ground, called an occupation tax, and increased property tax levy. The maximum acre fee is $10 and the maximum property tax levy is 10 cents.

Initially, there will be some increased property tax. Because funding water projects with bonds is a new concept for the NRDs and there is no history of collection of the occupation tax, the bond companies will need the reliability of the property tax levy to get a good rating on the bond. I am confident in the future that the property tax levy will be reduced to a very small amount as the history of collection is established for the occupation tax. For this first bond we will use a combination of both taxes.

This first bond will be used for surface water buy out. We have agreements with Frenchman Valley and Riverside.

We are working on an agreement with Frenchman Cambridge Division, but that process is a little slower because of the additional steps that must be taken with the State and the Bureau of Reclamation.

We continue to work on an interlocal agreement between the NRDs that will set up a controlling entity for issuing and paying of the bonds. We are also working with the County Officials Association to develop the software that the County Assessors will need to track the per acre fee.

We continue to work with the local irrigation districts, the State and the Bureau of Reclamation on projects for 2008 and beyond. It is a new process and it takes time to develop. We do plan on scheduling informational meetings this summer.

The recent rains, while doing some damage, have been beneficial for the basin. Our overall allocation has increased and the rains last week sent about 4 thousand acre feet across the border into Kansas. That water will be a credit for us. We may very well achieve balance with our allocation this year with a little more cooperation from the weather and continued efficient application of water by the producers.

Also, we can make up for any shortfall this year and reduce the over uses from previous years with the surface water buy outs. While we had an average of 13 inches in allocation, our producers have only used 8.9 inches in 2005, 10.4 inches in 2006 and hopefully we can be at that 10 inch level or lower this year.

No changes are planned for the 2007 crop year. Many producers have called in and said they heard that we had taken away the reserve water or unused allocation from this period. That is not true.

Whatever water you have left from this first 39 inch allocation can be carried forward to the next allocation in 2008 and beyond. The only limit on this water is that a maximum of 13 inches is all that could be carried forward.

A committee of directors is meeting with the state trying to determine what our allocation for 2008 will be and we are still not in a position to identify that number. Because of the process being developed in LB701 and not knowing whether it would be approved or not we were forced to consider a number of scenarios that we hoped we would never have to use. In general if we stayed in even a mild drought situation our allocation could have been 6 inches or less. With the possibilities that come with LB701 we hope to keep the allocation at a higher number. I expect there will be a reduction from our current 13 inch average but not a severe reduction.

While some may say that LB701 is a mistake, I would say that it good for Nebraska and good for the Republican River Basin. The Governor and the Legislature have indicated a reluctance to provide more than the limited funding we have seen and the only other option that remained was to do nothing. I believe the "do nothing" option was not one that should even be considered.

With that option I'm sure Kansas would have went back to the courts and the most likely first step would have been an injunction on water use both surface and ground water. That would have been devastating to the economy. A recent economic study funded by the NRDs indicated that the reductions proposed in December would have cost the basin $80 million and result in the loss of about 500 jobs. Agriculture is important to the basin. The tax base of irrigated agriculture helps with our schools. The largest employers in many of our communities are the local school and the local Coop.

One only has to drive back and forth on B Street in McCook to see how important agriculture is to that community. From a farm supply on the west side to a irrigation manufacturer on the east, most of the businesses you see are related in some respect to farming. Do I wish the state had taken a more active role in addressing the concerns? Of course I do but with state involvement, comes state control. While our ability to make changes is somewhat limited we still have local boards making the final decisions. I also wish the state would provide unlimited funding but that hasn't happened in the last three years and I don't expect that to ever happen. The NRDs are charged with ground water management by statute and we are working toward the most reasonable actions at this time. Short term compliance is only possible by these buy outs, regulation cannot bring Nebraska into compliance over the short term. Our existing rules and regulations with some minor adjustments along the way are about where we need to be for long term compliance. With the drought we were never able to get close enough to see the impact of those controls.

We need your help and support. The fees and the new taxes are not what anybody would readily support but they are necessary to bring Nebraska into balance for this year. With your patience in this first bond issue, we will be able to establish a history for repayment and determine what works best and how to minimize the impact of repaying the bonds. Continued action probably some additional bonds in the future will be necessary to bring us into compliance. We will all benefit from a viable and stable agricultural community. There are many differences across the basin and even in this NRD but those differences are primarily hydrologic and geographic. From livestock feedlots to ethanol to dairies to grain storage and transportation, a strong agriculture is good for all of us.