By Russ Pankonin
    The Imperial Republican
     The Upper Republican Natural Resource District board approved an interlocal agreement last week to join with other Republican River basin NRDs in issuing bonds to pay for surface water purchases.
     The agreement creates a joint agency between the Upper, Middle and Lower Republican NRDs with the authority to issue bonds. The power was granted to the NRDs under the recently passed water bill, LB 701, sponsored by Sen. Mark Christensen of Imperial.
     Under the agreement, each of the NRD boards will have to vote to approve the sale of bonds.
     URNRD manager Jasper Fanning said the administrative and operating costs of the agency will be split equally between the three NRDs. He anticipated the operation will be handled among existing NRD staff in the districts.
     The actual cost of issuing the bonds and repayment will be split according to the depletion allocated to each NRD under the state's groundwater model-44 percent to the Upper, 30 percent to the Middle and 26 percent to the Lower.
    $8.7 million to purchase water
     Fanning said the NRD anticipates issuing a bond of up to $8.7 million to cover surface water purchases this year.
     Planned purchases include $7.7 million for 12,500 acre feet from the Frenchman-Cambridge Irrigation district and about 10,000 acre feet of surface river flows from the Frenchman Valley and Riverside Irrigation districts in the Palisade area.
     The cost for the Frenchman Valley purchase is projected at $640,000 with $126,000 to the Riverside District.
     Fanning said the districts may use some existing cash to pay for the purchases rather than bonding the entire amount.
     The bonds will be paid off with new levy authority of up to 10 cents per $100 of assessed valuation and a $10-per-irrigated-acre occupation tax. Both were included as part of LB 701.
     Al Eveland, a bonding representative with Ameritas in Lincoln, was present at the May 1 meeting to discuss the bonding procedure.
     Because collection of the levy and fees will be a new process, he suggested the initial bond sale to cover this year's buyout be structured over a three-year payback period.
     He didn't expect a three-year period would be needed but said the cushion would protect the new agency's bond rating if it wasn't able to pay it off all in one year.
     Revenues from the per-acre fee and/or levy are expected to generate enough money to pay off the bonds in one year.
     He said a bonding firm will likely use a trustee to handle receipt of the funds from county treasurers and in making the bond payments.
     If the bond sale were to occur in the near future, he projected an interest rate of 4.1 percent.
     If the agency were doing a sale of long-range bonds for the permanent buyout of surface water, he said rates would not exceed 4.75 percent today. However, he noted that could change over the next 18-24 months before such a sale is expected.
     Eveland commended the NRDs and the people in the basin for stepping up to endorse the program outlined in LB 701. He said it was a "generous" step to take to help address the compact compliance issues in the Republican basin.
    Building project reviewed
     During last week's meeting, Architect Steve Granger of CG Architects in North Platte reviewed the building project with board members.
     He said they calculated costs for a metal building compared to an insulated concrete form (ICF) building.
     He said the ICF design helps clean up the building because there are no tapered steel beams to finish around in a steel building.
     The estimated cost for the steel building was projected between $830,000 to $930,000.
     The estimated cost for the ICF design was projected between $760,000 and $880,000.
     Neither of these two estimates included land costs, any contingency leeway or architect fees.
     The board is still looking at several sites for the location and will discuss the project more at the June meeting.