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NRD votes 9-2 to buy, retire farmland

Wednesday, October 24, 2012

Jasper Fanning, director of the Upper Republican NRD
McCOOK, Nebraska -- The Middle Republican Natural Resources District board of directors voted 9-2 Tuesday morning to participate with three other NRD's in the purchase of a 19,500-acre southern Lincoln County farm so that the water used now to irrigate its crops can be piped to the Republican and South Platte rivers.

The "Nebraska Cooperative Republican Platte Enhancement Project" (N-CORPE) is the largest stream flow augmentation project of its kind in the state.

Dean Edson, executive director of the Nebraska Association of Resources District, called the project "historic," addressing "the most serious water availability issues facing the region" and capitalizing on the potential for stream enhancement in both the Platte and Republican river basins.

Brian Dunnigan, director of the Nebraska Department of Natural Resources, said, "Cooperative, proactive efforts among NRD's present the state with the best opportunity to comply with interstate water agreements, and this project exemplifies those efforts."

Dan Smith, manager of the MRNRD, said, "Our district's approval of this project sets the stage for long-term compact compliance in the Republican Basin, and provides the Twin Platte NRD with the action they needed for the Platte Basin. I think it's great that districts can work together to address problems that have a statewide impact."

The MRNRD was the last of the four NRD's -- the Middle, Upper and Lower Republican NRD's on the Republican, and the Twin Platte NRD on the Platte -- to agree to cooperatively buy the "Lincoln Farm" from owner/investors in Delaware for $83 million. The farm's irrigation water (on 15,800 of the 19,500 acres), instead of watering potato crops, will be used to help the two river basins ensure compliance with two interstate water agreements, the Republican River Compact (1943) and the Platte River Recovery Implementation Program (1997).

NRD officials estimate the project can add approximately 45,000 acre feet of water to both rivers in years when it's needed to comply with these water agreements:

* On the Republican, the virgin water supply of the river is divvied up among the three states: Colorado, 11 percent, Kansas 40 percent, Nebraska, 49 percent.

* On the Platte, NRD's are responsible for returning that basin to water supply-and-demand conditions that existed in 1997.

Dan Smith told the 40-or-so gathered for a special MRNRD meeting that the water available to the Republican River through the new N-CORPE program can help alleviate the need for irrigation reductions/restrictions in compact call years (when, because of weather conditions and storage levels at Harlan Reservoir, some curtailment of surface water and ground water may be needed in Nebraska to ensure compact compliance). Smith said, "I can't tell you we'll never have to restrict water again, but we'll come pretty close. The likelihood of significant reductions may be eliminated by this project."

Approximately 10,400 of the irrigated acres are located within the Middle Republican NRD; another 5,360 irrigated acres are in the Twin Platte NRD.

Smith said the farm is located in a region of plentiful groundwater where the saturated thickness of the groundwater aquifer is approximately 600 feet. It is expected that less water will be pumped as part of the stream flow enhancement project than what otherwise would have been pumped had the ground remained in irrigated crop production. Jasper Fanning, manager of the Upper Republican NRD, said Tuesday that the project has no intention of pumping more water than has been historically pumped on the property.

Fanning said that water depletions will not increase, and, at the least, should remain constant. "Our (NRD's) goal for 35 years has been a balance of (water) uses and recharge, not to increase depletions." He said it's best to do it slowly, over time, so that people and the economy have the time and opportunity to adapt.

The four NRD's will share equally in the purchase price of the farm, and it will be funded with the occupation tax on irrigators that NRD's are authorized to levy (state law authorizing the occupation tax requires that the tax be used to help enhance stream flow). Smith said that an occupation tax of approximately $4-6 per irrigated acre is expected to be needed in each of the NRD's to pay off the project. The project could be paid for in a shorter time frame, of course, he said, if a higher occupation tax is levied. The $4-6 occupation tax will not be in addition to the $10 per acre tax now levied; the occupation tax lid under state law is $10 per irrigated acre, according to Smith.

Smith said that the property purchase is contingent on the NRD's securing financing for the project that is now actively being sought.

Fanning said that any member of the group can walk away from the contract for any or no reason by Nov. 2. Banks will provide interim financing, he said, although they have not nailed down an interest rate and terms yet. It won't be "much different than market," Fanning said. "It won't be expensive money. The fees and costs of the money will be about the same as interest."

The NRD's expect to close on the property purchase within the next several weeks. The four NRD's will share the cost of the $8.3 million earnest deposit.

The farm's 15,800 irrigated acres will be retired from irrigated production and reseeded to native grasses. Smith said that by retiring all or a significant portion of the acres, the NRD's will be able to store, underground, water that otherwise would have irrigated and been consumed by crops on the farm. That "saved" water, then, can be transported to the Republican River via a tributary such as Medicine Creek, and to the Platte River. Possible pipeline lengths will vary depending on routes, Smith said, but it is possible that approximately 17 miles of pipeline will be needed to transport water to both rivers.

Joe Anderjaska of rural Hayes County, a MRNRD board member and president of the Nebraska Association of Resources Districts, said, "The ability to manage the augmentation releases when and if they are needed, to guarantee that our obligations will be met, will definitely protect the economic viability of our basin."

Officials of the four NRD's feel that water supply alternatives to meet legally-mandated objectives in both the Platte and Republican basins could be much more expensive than costs associated with the purchase of the Lincoln County farm. Including land acquisition, project development and operations, producing water under the project for both river basins could cost between $300 and $500 an acre foot. By comparison, leasing surface water from irrigation districts can cost between $2,000 - $3,000 an acre foot. Permanently retiring irrigated acres close to streams without piping the water and instead allowing groundwater to seep into rivers and tributaries to increase flows can cost approximately $3,000 an acre foot, or more.

The four NRD's will form a joint public agency to purchase the farm and manage the N-CORPE project.

Fanning said the project will be good for irrigators, as they won't have restrictions imposed that might have been implemented otherwise.

One Wallace-area irrigator told the MRNRD board, "I don't want to go to three inches of water. I want water. I want water to raise some irrigated corn."

MRNRD board members James Uerling and Steve Cappel voted against the purchase of the Lincoln Farm property. Uerling also voted "no" on motions to pledge funding for the project, consider the interlocal agreement to create N-CORPE and purchase real property, and (with Cappel again) on the transfer of funds for the earnest deposit.

Using ballots, MRNRD board members elected Buck Haag (7-4 over Kevin Fornoff) as its voting representative to N-CORPE, and Bill Hoyt (6-5 over Fornoff) as alternate.

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The $83 million is about $5000 for every man, woman and child in the 3 NRDs. Vote wisely in November.

-- Posted by dennis on Wed, Oct 24, 2012, at 1:52 PM

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