NRDs turn to bonds to ease Republican River water woes

 8 comment(s)  
 E-mail Story
 Print Story
  Share

 digg it!
 Facebook
 del.icio.us
Seed Newsvine
Fark It
Reddit

Text Size: 

Tools Sponsor

BY ART HOVEY / Lincoln Journal Star

In south-central and southwestern Nebraska, where water might already be as precious as oil, the guardians of groundwater are trying something new to secure their future.

Through bond sales to investors that will be announced next month, people as far removed from the Republican River Valley as a dentist from Illinois or a software executive from Massachusetts could soon be involved in financing leases and purchases of Nebraska water rights.

A new state law allows natural resources districts based at Imperial, Curtis and Alma to turn to Ameritas in Lincoln to put together a $9.7 million bond package for that purpose.

[+]Enlarge

Three states - Colorado, Nebraska and Kansas - claim rights to water in the Republican River. (LJS file)

Three states - Colorado, Nebraska and Kansas - claim rights to water in the Republican River. (LJS file)

The ultimate objective is to keep enough water in the Republican to meet the terms of a river compact agreement with Kansas and to keep that state’s finger off the lawsuit button.

Using bonds to acquire rights to river flows that would otherwise be routed to irrigators in 2008 and beyond is one way to get that done. The opportunity is there only for the Republican River Basin and not for the state’s 20 other NRDs.

“I think some of these more creative solutions are going to be necessary to comply with some of the state’s agreements on water,” said Jasper Fanning, general manager of the Upper Republican NRD at Imperial.

Although the bond pay-off period is set up over four years, the local groundwater groups hope to wipe out their debt in a single year. The money would come from a combination of property taxes and a new occupation tax of up to $10 per acre that owners of irrigated land must pay.

That way, they can shave off much of the expected interest cost of about $1 million.

The bonds will show up on the property tax bills of all NRD residents, not just irrigators. Next door in the Middle Republican, for example, the cost will amount to about $47 for the owner of a $100,000 home.

Fanning acknowledged a new type of tax burden for people outside agriculture, but he said he’s hearing few complaints.

“We’ve heard some, but I think most of the folks out here realize that, in our area, without irrigation, they’d be subject to moving and finding a job elsewhere.

“I can’t think of a job that’s not related to or fully supported by agriculture.“

Annie Longan, mayor of Imperial, couldn’t find much room to disagree. Residents there don’t see the water situation as a problem that agriculture created and agriculture should solve, she said.

“I don’t think we have that mentality at all. We know how much our agriculture, our farmers, how much they contribute to our city. And I don’t think there’s anybody in town that feels in any way that if they have to pay a small tax — no, I don’t think we have that.“

Dean Edson, based in Lincoln as executive director for the Nebraska Association of Resources Districts, is among those endorsing a plan for more purchases of surface water to appease Kansas.

It should be noted that the state of Nebraska bought water from irrigation districts for the same purpose in 2006 and 2007.

“That’s the quickest way to get water in the river,” Edson said. “Buy water that’s already there.“

Mike Jess, associate director of the Water Center at the University of Nebraska-Lincoln, is more skeptical about a strategy that involves going into debt to pay for water on a a regular basis.

“The household I grew up in, you borrowed money to acquire things on a permanent basis,” Jess said.

He recalled turning the bond-lease pairing into a recent question for students in one of his classes at UNL: “Who here is borrowing money to pay your rent?“

A forest of hands did not immediately shoot up.

Jess suggested a different and longer-lasting approach that has already been used for the Sherman Reservoir in central Nebraska by the Farwell Irrigation District: Buy the dams and other parts of the Republican’s irrigation assets from the federal Bureau of Reclamation.

“It would take a lot of coordination and effort by the NRDs to directly acquire those assets,” he said, “but it’s certainly not impossible.“

No matter how matters are resolved, it seems apparent that many local boards that manage groundwater use in Nebraska are encountering new and substantial financial obligations as they try to balance irrigation with other water priorities.

The leadership of the Central Platte NRD in Grand Island, for example, recently approved the largest one-year budget increase in its history.

Among the financial pressures behind that move is the state’s determination that the Central Platte is over-appropriated, that it has more demands for water than it has supply.

Lurking in the background are a cooperative agreement for managing the river with Colorado and Wyoming and the related need to keep enough water in the Platte to support threatened and endangered species.

The new budget for the Central Platte will increase the annual tax bill for the owner of a $100,000 home from $32 to $58, said NRD Manager Ron Bishop.

“Part of that is the water bank we needed to offset depletions to the river that resulted from it being over-appropriated in the western part of the natural resources district,” Bishop said.

Reach Art Hovey at (402) 523-4949 or ahovey@alltel.net