Proposed project is cut off from funding source

HARTINGTON – A proposed rural drinking water project that would affect parts of northern Cedar and Knox counties has seen a dam go up on one of its potential funding sources.

The Cedar-Knox Rural Water Project, which is overseen by the Lewis & Clark Natural Resources District, has been cut off from a $7 million General Fund appropriation in fiscal year 2023-24 from the Nebraska Legislature to the state Department of Environment and Energy.

That appropriation was part of several line-item vetoes Gov. Jim Pillen announced on May 24 after he signed the state’s two-year budget for 2023-25.

“The budget passed by the Legislature and signed into law by me is one of the most fiscally conservative budgets in our state’s history,” Pillen said in a press release. “This budget treats nickels like manhole covers.

“During a period of extraordinary inflation, we managed to limit budget growth to under 2 percent,” he said. “To cut the growth of government and deliver transformative tax relief, we need the courage to say no. I urge senators to sustain these vetoes.”

Scott Fiedler, Cedar-Knox’s project manager, noted Pillen’s veto of the $7 million will impact the project.

“That $7 million would’ve gone a long ways to help us out,” Fiedler said. “It would really help the impact on our rates that we have to pass on along to our customers.

“The governor is pretty fiscally conservative,” he said. “It didn’t come as a total shock, but at the same point, it was a little bit of a surprise, too.”

Pillen’s full veto message to the Legislature explained why one of his line-item vetoes was for the $7 million appropriation for Cedar-Knox’s proposed project.

“This project has already seen significant investment from the state, which is utilizing (American Rescue Plan Act) and Drinking Water State Revolving Fund funding, which exceeds $32 million,” Pillen said in his message.

Fiedler explained what kind of funding Cedar-Knox has received so far for its proposed project, including pre-approval of a $25 million loan from the Nebraska Drinking Water State Revolving Loan Fund.

“We have been able to secure additional funds for the project, including a $7 million grant through ARPA funds and $8.4 million in Water Sustainability Funding from the (Nebraska Natural Resources Commission),” he said, noting the latter requires a 40 percent local match.

The estimated price of Cedar-Knox’s proposed project was initially about $32 million, but Fiedler noted the final cost would likely be much more than that amount.

“We’re working on some new estimates,” he said. “Our numbers are from 2018. A lot’s changed since then.”

Fiedler noted Cedar-Knox will keep searching to identify funding sources for the proposed project, including working with District 40 Sen. Barry DeKay of Niobrara to possibly help designate more state money for it.

DeKay is the person responsible for the $7 million General Fund appropriation being considered in the first place for the proposed project through Legislative Bill 768, which he introduced on Jan. 18 during the 2023 session.

“At this point, I am not going to pursue overriding the veto on that,” he said, noting LB 768 had been attached to LB 814, the budget bill.

DeKay noted he would like to be able to help get “a project off the ground that’s not going to jeopardize quantity or quality of water” for the people who live and work within Cedar-Knox’s service area.

“What I was wanting to be involved with is trying to secure some funds that would help that project go forward to be beneficial for everybody in that area,” he said.

DeKay noted he would be willing to pursue all avenues of funding he could to help push the project forward.

“If this project gets off the ground and the players involved in it have their plan together and everybody’s in agreement with it, I would love to be able to help with that project up in that area,” he said.

“We will see after all their meetings and testing where they are going to go and what the needs are and what has been spent and what’s already been given to them through grants, the federal government and through the state,” he said.