About 35 people crowded into a small conference room Thursday at the Twin Platte NRD headquarters in North Platte.
Most of them were there to urge the board of directors to sell NCORPE land, so it would generate business activity as well as property taxes.
“Please sell that property and put it back on the tax rolls,” said Kirk Olson, who chairs the group, Landowners for a Common Purpose. “Let it generate income and be a stimulus for Lincoln County.”
The NCORPE project is governed by four voting members of its board, representing the four natural resource districts in southwest Nebraska.
The landowners group is talking to each of the four NRD boards.
Three of the natural resource districts are along the Republican River. The fourth district is the Twin Platte NRD – in the area of the North and South Platte Rivers.
NCORPE was created in 2012 to buy nearly 19,000 acres of farmland and start pumping water from below ground.
Because NCORPE is a government entity, it maintains it does not have to pay property taxes on its land. NCORPE currently pays property taxes, but does so under protest.
Taxes on the land are now assessed at the non-irrigated rate. Formerly, it was irrigated, with a much higher taxable valuation.
Those factors have caused concerns about funding schools and shifting the tax burden to other taxpayers. The amount of criticism continues to increase.
“Why would you want to be in the land business?” Olson asked the board. “We don’t think that is the intention of Natural Resource Districts.”
Olson said there are other reasons for the board to sell the land as well.
He said the NCORPE board is holding preliminary discussions about a wind generating farm, and possibly a hog farm on the land. Consequently, the project stands to directly compete with private landowners, he said.
Landowners for a Common Purpose asked for the land to be sold at public auction.
Also, Ernie Goss, a former Creighton University economics professor who is now an economic consultant, presented a study showing the Wallace school district would lose $2.3 million in tax revenue over seven years (2014-21), if NCORPE does not pay taxes.
Goss also said the Maywood school district will lose $486,000 in revenue and the Hershey school district will lose $226,000 over those seven years.
Goss computed the total amount of lost income in Lincoln County.
The land is virtually idle, so there are fewer jobs and fewer ag products sold in the county, as well as lost tax receipts. Also, irrigators in Lincoln County pay a $10 per acre tax that funds the water project.
Goss said all of those factors — lost business activity and the taxes — adds up to a whopping $124 million cost of the project to Lincoln County over seven years.
Board member Jerry Weaver asked Goss if he calculated the benefit from NCORPE, which includes avoiding penalties the state would pay for failure to comply with other states over the amount of river water.
Those penalties would be taking land out of irrigation, or cutting back on the amount of water allowed for irrigation all across the district.
“It would be fair to look at both sides,” Weaver said.
Goss said no, that the study looked at the costs of the project to Lincoln County, not the benefits of meeting the state’s requirements.
Goss said to be fair, the costs of the NCORPE project should be spread across all 93 counties in Nebraska, because the project is helping the entire state.
In reply, Weaver said former Gov. Mike Johanns seemed to favor the entire state sharing the burdens, but former Gov. Dave Heinemann agreed that NRDs would fund it, so the NRDs were “stuck.”
Goss stressed again that Lincoln County is paying an inordinate share of the costs of the project. Repeating a comment made by Lincoln County Commissioner Joe Hewgley at a previous meeting, Goss said the Nebraska-Kansas-Colorado compact has in effect become a Lincoln County-Kansas-Colorado compact.
And, Goss said the costs to the county will continue to increase over coming years.
He said the lost productivity comes at a particularly bad time now, as the state looks for ways to deal with lower income and sales tax revenues, because overall ag income has fallen for four straight years.
Attorney Ryan McIntosh of the Mattson Ricketts law firm in Lincoln said no legal prohibition exists that would prevent NCORPE from returning the majority of its land to private ownership, while retaining the water rights to continue pumping.
McIntosh gave the board a copy of a deed for about 300 acres of land that NCORPE sold in 2014.
NCORPE retained the water rights in that deal.
Lincoln County Assessor Julie Stenger said the NCORPE board apparently knows it would be best to pay taxes, but doesn’t know how to do it.
She said the best course would be to put the land back in production.
Sen. Mike Groene also spoke. First, he thanked the NRD board for putting restrictions on water pumping, which they did at the beginning of the meeting. Implying that it should have been done years ago, Groene also said there is no point in looking back.
He said the sale of the land would not harm the water augmentation project in any way.
Groene noted that the NCORPE land comprises 30 square miles. A significant portion of the irrigated land tax base in Lincoln County has been lost, he said.
After the meeting, Stenger told the Bulletin that 6% of the county’s taxable irrigated land will be lost to NCORPE, if NCORPE’s tax appeal is successful.
Groene also assured the board that NCORPE could keep its water rights if they sold their land. He cited a similar situation in western Nebraska. He also said as a landowner, he could buy water rights from another landowner under existing state laws, which shows the water rights can be separated from the land.
He said water rights are like mineral rights. They can be bought and sold separately.
Groene said if the land were sold, NCORPE could reduce the cost of its $1.4 million operation, thereby lowering the $10/acre tax that funds NCORPE’s operation.
Groene said that occupation tax could be reduced to $6-7 an acre, which would be closer to the original goal of a $4-5/acre tax, he said.
NRD Board Member Jim Meismer said board members were told that paying property taxes would be illegal.
“We never objected to paying taxes,” Meismer said. “We want to make sure we wouldn’t be sued for paying taxes.”
Meismer asked Groene, “What if we could get the tax down to $7 an acre without selling the land?”
Groene said the occupation tax could be even lower if the land were sold. Regardless, he wants taxes to be as low as possible.
“What is the policy reason to own the land?” he asked. “You don’t need the headaches.”
Marvin Knoll, who owns farmland near NCORPE, spoke briefly, noting that NCORPE is trying to manage its operation using “our money.”
Another neighbor, Dan Estermann, thanked the board for capping the amount of water that can be pumped, and he also thanked NCORPE General Manager Kyle Shepherd for contacting him to see what could be done about the Russian thistle tumbleweeds that blow off NCORPE onto the neighbor’s land.
There are thousands of tumbleweeds on the property, which have grown profusely on the sandy soil now that crops are not raised. Native grasses have been seeded with somewhat mixed results.
The thistles spread seed as they tumble along. Estermann said thistles also represent a fire hazard. Burning thistles from NCORPE could blow to his land in six minutes on a windy day, far faster than rural firefighters could respond, he said.
NRD Chairman Dennis Schilz told the group that the board would seriously consider their request, but cautioned that it would take a considerable amount of time. He asked the landowners to be patient.
Boardmember Shane Storer told the landowners group he appreciated their comments.
Also, Boardmember Joe Walhgren looked at the audience and deliberately said he would give serious consideration to their request.
Before public comments ended, some people in the audience asked where to find the public NRD meeting documents.
Estermann said the NRD staff told him the documents were available on the internet for 24 hours before the meeting, but he couldn’t find them when he looked late the night before the meeting.
TWPNRD water program specialist Ann Dimmitt said she publishes documents during the day of the meeting. She said they remain posted on the internet until midnight after the meeting.
After that, only the agenda and minutes of the meeting are available by computer, TWPNRD General Manager Kent Miller said.
(This report was updated, with further clarifications, on Monday.)