For Farmers Affected by Irrigation Tunnel Collapse, Federal Repair Funding Comes With Strings Attached

Feb. 5, 2020, 5 p.m. ·

Irrigation disruptions dried out over 100,000 acres of cropland, including soybeans and sugarbeets. (Photo by Christina Stella, NET News)

Senator Deb Fischer’s office announced $2.3 million of federal funding this week that will go toward repairing an irrigation tunnel near Scottsbluff.

Rick Preston, who manages the Gering-Ft. Laramie Irrigation District, felt happy to see the email. It's been a turbulent few months after the second of the system's three irrigation tunnels collapsed, cutting off water to over 100,000 acres of cropland in western Nebraska and Wyoming last July. He said the journey is peppered with many phone calls to elected officials and meetings with the Bureau of Reclamation.

"It was a great relief knowing that Senator Deb Fischer has made efforts to bend the ears of everyone involved to get the Bureau's budget increased," he said.

But while he's relieved to have cash on hand to continue repairs this year, some of the feeling faded when he realized the funding would actually be a loan.

"So our patrons in our district will have to front the cost of having to repay that. Is that a hardship? Absolutely."

The Gering-Ft. Laramie Irrigation Distract was already bracing to borrowing millions for temporary and long term repairs to its infrastructure. In conversations with the Bureau of Reclamation, Preston was initially told there would be no federal assistance offered, as the federal government had turned over operation and maintenance responsibilities to the district decades ago.

That reality has sent Preston scrambling to find alternative sourcing options. He's crunched the numbers many times: the district is currently looking at about $4.5 million of debt to pay off over the next fifty years.

But some state-funded grant money will likely come through. About $3.8 million hangs in the balance under Governor Pete Ricketts' pending appropriations bill, which would go toward temporary repairs to tunnel two, and upgrades to number one. As for the $2.3 million in federal funds for tunnel three, Preston said the announcement doesn't change how much water prices will need to be raised to pay debts back.

"We're looking at about $3.50 per acre, every year, for 50 years...this is just an estimate," Preston mused.

Plus interest, the full amount farmers in the region will fork over will likely be much higher.

"You're probably looking at somewhere around $15 million that is going to be paid back."

The numbers worry him. He's doubted whether some farmers will survive any hike in water prices.

"The financial burden will probably affect a tremendous amount of producers, especially those who are right on the edge of surviving after last year," Preston said.

Fisher’s office said in an email it’s not clear yet if part of the loan will be a grant, or if all $2.3 million will need to be paid back eventually. Preston still intends to pursue as much grant funding as possible to offset current debt estimates.

"If we can find enough grants to cover everything but the $2.3 million, we can survive," he said.

"But when you start getting into the $4.5 million, or $6 million, or the $8 million, there's no way we can make that work."