Questions over NRD Collection of Federal Farm Subsidy Payments on Rock Creek Augmentation Land Arise at Commissioner’s Meeting

     The Dundy County Commissioners and officials from the Upper Republican Natural Resources had a detailed discussion about the URNRD’s In lieu of property tax payments on the land owned by the entity for the Rock Creek Water Augmentation Project north of Parks during the board’s regular meeting on Monday, Oct. 7.
     Jasper Fanning, General Manager of the Upper Republican Natural Resources District and Joel Burke, Attorney for Upper Republican NRD, attended the meeting to present a resolution for the board to consider, involving classifying the Rock Creek property as “Tax Exempt”. Fanning explained that the resolution was necessary for the URNRD to be able to make the In Lieu of property tax payments for the years 2016 and 2017. “Technically, we can’t make In Lieu of payments until those parcels have been dealt with somehow,” said Fanning. “I think we all agree that it doesn’t make sense to spend legal expenses to go into the court for those years.” He said for the URNRD to pay to In Lieu of taxes they need the county board the approve a resolution that states that in 2016 and 2017 we concur with the courts ruling for the years 2013 through 2015 and classify those parcels as tax exempt. The board directed the URNRD attorney and Dundy County Attorney Gary Burke to work together and prepare a resolution.
During the discussion County Commissioner Jerry Fries presented a question involving the URNRD capturing Federal Government Farm Subsidy payments on the land the URNRD acquired for the Rock Creek Water Augmentation project. He referenced an article that ran in a recent issue of the North Platte Bulletin regarding the much larger N-CORPE water augmentation project in Lincoln County. Fries stated, “It said (the North Platte Bulletin Article) that you (Fanning) asked about capturing government payments being added to the leases. Jasper continued that their current tenants on Rock Creek collect those funds and their lease stipulates that they (NRD) is to get 75% of said funds. Fanning said they received about a half-a-million dollars.”
     Fanning explained that the URNRD probably gets a high rent payment on that property because the property has “base acres” and most pasture doesn’t have that.
     Fries asked if the URNRD was collecting Federal Farm subsidy payments on that property based on if it was “irrigated acres”.
     “No”, said Fanning. “The tenant of the land is,” said Fries. “No”, said Fanning.
     “Where do they get that, is almost three-quarters of a million dollars a year,” said Fries.
     “That farm has base acres on it so the tenant is able to enroll in the Farm Program,” said Fanning.
     Fanning went on to explain how the original purchase agreement and the lease agreement with the tenants were adjusted since 2011 because the transition of the land from farm acres to grass didn’t go as planned. “Most pasture was never farmed,” said Fanning.
     “But, is there still irrigated base on that ground?” asked Fries. “Yes, said Fanning.”
     “So, you are collecting irrigated base payments?” asked Fries.
     “We aren’t, the tenant is,” said Fanning. “ I will tell you that our rent is significantly higher, because they are receiving that versus what it would be if they weren’t receiving it.”
     “Then my question is, why are we taxing that as pasture ground if it is collecting irrigated ground payments?” asked Fries.
     “It’s not collecting irrigated rent,” said Fanning.
     “Well it’s collecting dry land and dry land farm ground is valued higher then grass,” said Dundy County Board Chairmen Scott Olson. “It is collecting a dry land farm payment, so why wouldn’t it be a different classification.”
     “I think that is an assessor question,” said Fanning.
     “O.K., we will ask the assessor,” said Olson.
     “I am going to guess though that your assessor on all the pasture land out there doesn’t have verification as to if there is base acres or not,” said Fanning. “And, the same for dryland or irrigated farms and farmland that doesn’t have base acres.”
     “So, we should be looking into that and getting substantially more in lieu of taxes then,” said Fries.      
     “You would have to have a valuation change,” said Olson.
     “You would have to have a classification with irrigated for base acres, irrigated without base acres, dryland with base acres, dryland without base acres, pasture land with base acres, and pasture without base acres,” said Fanning.
     “There is ground out there that has base acres as grass,” said Olson.
     “There has to be a bunch of it to get that kind of a payment,” said Fries.
     “You have been collecting irrigated payments off this ground since 2011,” stated Fries.
     “The tenant has,” said Fanning. “You are taking something out of an article that hasn’t been substantiated.”
     “The reason it was in the paper was it was deleted out of the original minutes,” said Fries.
     “No”, said Fanning. “It was originally put in draft minutes and those minutes were edited and still draft minutes and then the board (N-CORPE) later approved the official minutes,” said Fanning.
     “So, why did you leave that part out?” asked Fries.
     “I didn’t,” said Fanning.
     “Why did the board?” asked Fries.
     “Because, how it was originally in there wasn’t an accurate reflection of the discussion,” said Fanning.
     “Does your lease agreement with N-CORPE say that you get 75%?” asked Fries.
     “No”, said Fanning.
     “That is what you want to change, you want to recapture that now,” said Fries.
     “I suggested to the N-CORPE Board that it is in the taxpayers best interest if the rental agreements allow for the capture of government payments on the base acres on that (Lincoln County) Property,” said Fanning. “If N-CORPE could generate another half-million or a million dollars of revenue through their lease agreements, it would be a reduction in the occupation tax that we could pass on to the people paying for that project.”
     “My point is that we get in lieu of taxes and if you are getting government payments based on irrigated acres, then we need to look at the valuations and they should be valued accordingly, which is dramatically different than considering it is just grass,” said Fries.

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