McCOOK — The Middle Republican Natural Resources District directors voted 9-2 Tuesday morning to join three other NRDs and buy a 19,500-acre Lincoln County farm so the irrigation water can be piped to the Republican and South Platte rivers.
“I think it’s great that districts can work together to address problems that have a statewide impact,” said Dan Smith, manager of the MRNRD.
The MRNRD was the last of the four NRDs — the Middle, Upper and Lower Republican NRDs 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 corn, soybean and potato crops, will be used to help the two river basins ensure compliance with interstate water agreements -- the Republican River Compact (1943) and the Platte River Recovery Implementation Program (1997).
The new government water farm will be funded with an occupation tax on irrigators of approximately $4-6 per irrigated acre, but the tax could be raised to pay the land off sooner, Smith suggested.
But Smith also said the $4-6 occupation tax will not be in addition to the $10 per acre tax now levied in Republican River NRDs; the occupation tax lid under state law is $10 per irrigated acre.
Smith said that the property purchase is still contingent on the NRDs securing financing for the project in the next few days. He said any NRD could withdraw without financial penalty before Nov. 2.
NRD officials estimate the project could add approximately 45,000 acre feet of water to both rivers in years when it’s needed to comply with the long-standing water agreements.
Smith told the 40-or-so gathered for the special 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.
Compact call years occur because of weather conditions and when storage levels at Harlan Reservoir decline. In those times, 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 (for crop farmers), but we’ll come pretty close. The likelihood of significant reductions may be eliminated by this project.”
Approximately 10,400 of the farm's 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 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 that the project has no intention of pumping more water than has been historically pumped on the property.
Not every one was pleased with the proposed purchase.
Wallace Public Schools are worried about lost taxes; a Middle Republican NRD board member is concerned that the project may jeopardize Nebraska’s ability to comply with the Republican River Compact; and two Lincoln County farmer/ranchers expressed concerns about the “unknowns” and think the NRDs are rushing into the deal.
Todd Porter, superintendent of Wallace Public Schools, asked how he is to educate his students when a public entity purchases private land, that land is taken off the tax rolls and the school loses the tax money associated with the land.
Porter is concerned about response to school taxes that would need to be increased to cover the shortfall.
“How long?” Porter asked. “Forever? How do I explain this to my patrons?”
Porter believes he could be looking at a loss in property tax revenue of approximately $200,000.
Jasper Fanning, the manager of the Upper Republican NRD, said the four NRDs cooperating on the purchase want the least impact on the school district.
“We will work with Wallace Schools to address their shortfall,” Fanning said. “It’s an issue we can work through."
The school will collect irrigated taxes on this property next year, MRNRD board member Joe Anderjaska said. The potential loss will become an issue as the school sets its tax levy for 2014, he said.
Fanning said that the NRDs have the ability to enter into an in-lieu-of-taxes situation or an interlocal agreement to provide funding for entities adversely affected. It is the intent of all NRDs involved to take tax losses into consideration, Fanning said.
Smith said the discussion of taxes for the Wallace school will continue at the November meeting of the new joint public agency created by the four NRDs -- Nebraska Cooperative Republican Platte Enhancement Project, or N-CORPE.
Porter said the Dundy County-Stratton School District went through a similar situation when the Upper Republican NRD purchased what it calls its “Rock Creek Project” and retired 10 irrigation pivots.
“They (the school) lost about $26,000 in taxes,” Porter said. “We could be looking at more than 100 pivots, and 10 times that amount.”
MRNRD board member James Uerling is concerned that the special water master overseeing the Kansas v. Nebraska lawsuit has not yet made his decisions regarding the Republican River.
“His decision may change the whole dynamic of our water policy,” Uerling said, reading from a prepared statement.
Other points Uerling made:
• This augmentation project does not have Republican River Compact Association (RRCA) approval. If this project is approved by the RRCA, it is doubtful that Nebraska will receive 100 percent credit of the water pumped.
• Augmentation water will bypass the MRNRD’s irrigation districts and the continued pumping of a full allocation by upstream wells will further deplete stream flow, adversely affecting surface water deliveries. This will in turn jeopardize Nebraska’s ability to comply with the three-state compact. 0 surface water deliveries = 0 return flows to the Republican River.
• All irrigators depending on stream flow to recharge their wells in the MRNRD will be adversely affected because upstream wells will be allowed to pump a full allocation, further depleting stream flow.
• The City of McCook depends on stream flow to recharge its well field and will be adversely affected by upstream irrigators’ wells continuing to deplete stream flow. Towns along the Republican River need stream flow for their wastewater treatment plants to function property.
Uerling concluded, “Well, irrigators are important to our local economy, but all users of Republican River water should be considered in MRNRD decisions.”
Stockman Joe Estermann of rural Wellfleet urged MRNRD members to “let nature take its natural course,” because, he said, the Republican is “gaining water from the Platte watershed anyway.” He said, “You’re just taking money out of one pocket and shifting it to another.”
Dan Estermann, also a Wellfleet farmer/rancher on the Medicine Creek, questioned why there has been no extensive economic study done on the proposed project and its impact on southern Lincoln County.
Estermann has asked how much water might flow into the Medicine Creek, but hasn’t had any firm answers.
“You don’t know the cost of the farm,” he said. “You don’t know when and how much water will be used by this augmentation project.”
Estermann said the area has “been short of corn” since 2008, which is needed in ethanol production and by livestock feeder operations. He said the retirement of 115 pivot irrigated quarter sections could reduce crop production in the Upper Republican NRD by 13-20 percent.
About a third of the land in is corn, Estermann estimated, with the rest in potatoes and soybeans.
Estermann also said that Lincoln Farm paid $420,000 in taxes, much of which would be lost to the counties, to Wallace and Mid-Plains Community College.
He also noted that the Delaware investors will pocket about $31 million in profits.
“You’re setting them up with that,” he said. “They can sail to the Cayman Islands on their yachts, and we’ll end up paying for it.”
Estermann said 20 families will no longer have jobs, nor will truckers, harvesters, etc.
“The economic impact will be widespread” he said.
Estermann said that the costs and benefits of this project have not been investigated, adding, “This come pretty fast... pretty fast.”
Ben Miller of North Platte Livestock Feeders agreed that the project is “moving way too fast. It’s basically an $83 million project and there’s no proof it can help comply with compacts. There’s not enough information that it will do what you want it to.”
Travis Barger, who has business and family interests near Culbertson, chimed in, “It could be a good plan, but it’s too quick on the gun. We need to know what Kansas will accept.”
Bulletin Editor George Lauby contributed to this report.