1. December 2013

2. “Water is Nebraska’s life blood for our citizens and our economy” “LB517 is ambitious but the time is NOW to get a permanent system for funding NE water projects” “Sustainable water use is the key to our success” “LB962 lacked a funding mechanism.” “The Ogallala aquifer, an important water resource, is in trouble” Kansas City Star, Oct 22, 2013 “These 11 US cities may completely run out of water sooner than you think (Lincoln was #10)” Huffington Post, Dec 4, 2013

3. History of the Task Force 1.June 4, 2013 LB517 approved by the Governor 2.July 2013 Governor appointed the 34 member Task Force Task Force Members include: All Nebraska Natural Resources Commission Members Director of Department of Natural Resources Chairperson of the Natural Resources Committee of the Legislature Five Additional Members of the Legislature Eleven members representing water user groups 3. July 19, 2013 First of 20 Task Force Meetings Facilitation Support Services Contractor Selection Completed Olsson Associates with Vireo, FYRA Engineering, and LakeTech 4.December 5, 2013 Last Task Force Meeting 5. December 20, 2013 Recommendations submitted to the Legislature for 2014 Session “ Nebraska’s water resources are finite and must be wisely managed to ensure their continued availability for beneficial use.”

4. Who is the Task Force?

5. What is their Scope of Work? According to Legislative Bill 517, the Nebraska Water Funding Task Force will prepare the following recommendations for the next Legislative Session: 1.STRATEGIC PLAN Recommendations for a strategic plan which prioritizes programs, projects (PPAs), and activities in need of funding 2.PROJECT RANKING CRITERIA Recommendations for ranking criteria to identify funding priorities 3. PERMANENT STRUCTURE Recommendations for a permanent structure and process through which the projects will be provided with funding. 4. FUNDING AMOUNT AND START DATE Recommendations for the annual funding amount and the start date for distribution of funds 5. STATUTORY CHANGES Recommendations for statutory changes relating to regulatory authorities.

6. Final Recommendations Some said it would not be possible to get the group to come to consensus on the five important recommendations. 1.STRATEGIC PLAN 2.PROJECT RANKING CRITERIA 3.PERMANENT STRUCTURE 4.FUNDING AMOUNT AND START DATE 5.STATUTORY CHANGES After three months of negotiations, the Task Force came to consensus and approved the five recommendations!!

7. Yes I can live with it. No, what would it take to get you to live with it?

8. STRATEGIC PLAN FOR FUNDING 1. Recommendations for a strategic plan which prioritizes programs, projects, and activities (PPAs). Expresses a shared vision for funding priorities and financing mechanisms Identifies several options for a significant, stable source of funding to be deposited in the newly created Water Sustainability Fund. Funds need to be distributed to project sponsors based on the ranking criteria and geographically to represent the entire state Beneficiaries need to pay a part of the project cost Provides for meaningful roles in decision-making and fair representation for water users Identifies the need for Public Education on the water issues facing Nebraska

9. Project Ranking Criteria The highest priority criteria include: The extent to which the PPA contributes to the goals of water sustainability for the state of Nebraska by protecting the ability of future generations to meet their needs including: Remediating or mitigating threats to drinking water Meeting the goals and objectives of an approved IMP or GWMP The extent to which the PPA contributes to the goals of water sustainability for the state of Nebraska by protecting the ability of future generations to meet their needs including: Increasing aquifer recharge Reducing aquifer depletion Increasing stream flow The extent to which the PPA contributes to multiple water supply management goals including but not limited to flood control, agricultural use, municipal and industrial uses, recreational benefits, wildlife habitat, conservation of water resources, and preservation of water resources. The extent to which the PPA provides increased water productivity and otherwise maximizes the beneficial use of Nebraska's water resources for the benefit of its residents. The cost effectiveness of the PPA relative to achieving the state's water management goals. The extent to which the PPA assists the state in meeting its obligations under interstate compacts or decrees or other formal state contracts or agreements. The extent to which the PPA reduces threat to property damage. The extent to which the PPA improves water quality. 2. Recommendations for ranking criteria to identify funding priorities.

10. Project Ranking Criteria Additional criteria include: The extent to which the local jurisdiction has utilized all available funding resources to support PPA. The extent to which the local jurisdiction has plans in place on that support sustainable water use. The extent to which a PPA addresses a statewide problem or issue. The extent to which the PPA contributes to the state's ability to leverage state dollars with local or federal government partners or other partners to maximize the use of its resources. The extent to which the PPA has been approved for, but has not received funding through an established state program. The extent to which the PPA contributes to watershed health and function. The extent to which the PPA utilizes objectives described in the Annual Report and Plan of work for the Nebraska State Water Planning and review Process issued by DNR. 2. Recommendations for ranking criteria to identify funding priorities (continued).

11. Permanent Structure 3. Recommendations for a permanent structure and process through which the projects will be provided with funding. EXPANDED Natural Resources Commission ROLE: Administers all new (LB517), existing NRDF and other DNR funds REPRESENTATION: Expands Representation to include all water user groups by adding appointed representatives Elected members = 13 watersheds Appointed members = 14 Agribusiness, Agriculture, Groundwater, Irrigation districts, Manufacturing, Metropolitan Utilities District, Municipalities (Large), Municipalities (Small), Outdoor Recreation users, Public power, Public power and irrigation districts, Range, Surface Water, and Wildlife Conservation

12. Permanent Structure and Process 3. Recommendations for a permanent structure and process through which the projects will be provided with funding. Short-term Long-term Funding only to finish out approved projects

13. Permanent Structure and Process Project sponsors will apply to the Water Sustainability Fund through a two step process: 3. Recommendations for a permanent structure and process through which the projects will be provided with funding. Projects ranked based on ranking criteria Project grouped into four categories Project Proposal Application Project funding application includes justification of need Funding distribution tracked statewide Project Funding Application

14. Four Program, Project or Activity Categories: Rehabilitation or restoration of water supply infrastructure, new water supply infrastructure, or infrastructure maintenance Conjunctive management, storage, and integrated management of groundwater and surface water Compliance with interstate compacts or agreements or other formal state contracts or agreements Research, data, and modeling needed to assist the state in meeting its water management goals Permanent Structure and Process

15. Funding Amount and Start Date 4. Recommendations for the annual funding amount, the start date for distribution and potential revenue sources. Requested information on estimated Water Project Funding needs from Municipalities, Irrigation Districts, and Natural Resources Districts Total Proposed Projects: $907.6 Million Proposed Projects In 10 Years @ 3% Inflation: $1.22 Billion Proposed Projects in 20 Years @ 3% Inflation: $1.64 Billion

16. Funding Amount and Start Date 4. Recommendations for the annual funding amount, the start date for distribution and potential revenue sources. By generating $50M a year into a Water Sustainability Fund: It would take about 12 years to implement the proposed projects as identified today with 40% local cost share Start date for fund distribution -> 2015

17. Funding Amount and Start Date 4. Recommendations for the annual funding amount, the start date for distribution and potential revenue sources. Fund revenue from 25 sources reviewed and the Task Force narrowed to 6: A portion of Existing Sales Tax (1/8¢) Dedicated to Water Projects Removing the sales tax exemption from bottled water and/or soft drinks A Severance Tax (sand and gravel, oil and gas, uranium, and trace elements) An Excise Tax on Ethanol and/or similar products A Fertilizer Tax (both commercial and residential use) Additionally, the Task Force recommended establishing a Revolving Loan Fund for water sustainability projects

18. Statutory Changes 5. STATUTORY CHANGES Recommendations for statutory changes relating to regulatory authorities Statutory changes to accomplish the changes to the NRC membership Statutory and/or rule and regulatory changes that would allow the DNR to fund feasibility studies through the Water Sustainability Fund for sponsors that justify the need. Statutory changes to implement the various recommended revenue sources.

19. Sustainability is the Key to Success LB517 working definition of Sustainability:  Water use is sustainable when current use promotes healthy watersheds, maintains water quality and protects the ability of future generations to meet their needs.

20. Why is this important?

21. Questions/Comments? www.dnr.ne.gov/LB517 What you can do –>contact your senators to support Water Sustainability Funding during the 2014 Legislative Session!