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uvu' OQQ::t o..f 'r Comments and Recommendations of the Natural Resources Commission The Commission believes that development of supplemental water supplies is an important investment in Nebraska's future. The funding and construction of economically feasIble water supply projects represents one of two methods by which the stale may achieve a more thorough use of one of our most valuable resources. The other method is water use efficiency, which will be addressed in an upcoming policy issue study. In generallhe Commission recognizes a higher level of state funding as the major element in any state eHort to expedite the development of supplemental water supply projects. A number of alternative funding mechanisms are presented in this report. Although we prefer some methods to others. we believe the question of what funding method to use is secondary to the obJective of actually providing increased funding. Many of our other recommendations would have diminished impact if additional monies are not provided. Because we believe water project funding is a key issue we are dividing these comments and recom- mendations into two sections. The first section presents a specific project funding package. This represents our best judgement of the manner in which the state should approach its future water project funding needs. We strongly endorse adoption 01 this package. The second section presents our comments and recommendations on each alternative contained in the Policy Issue Study on Supplemental Water Supplies. SECTfON 1 THE COMMISSION'S RECOMMENDED WATER PROJECT FUNDING PACKAGE From its experience as the oHicial state water plan- ning agency and the administering agency for the Resources Development Fund, the Commission has arnved at the following conclusions about the financ- ing 01 water projects in the state: 1) Greater state financial input into water resources project development is essential, but the magnitude 01 the need is not known because: fa) the status of federal cost-sharing (for both planning and construction) is unresolved: and (b) the number and cost of feasible Nebraska pro- jects is not known. 2) Appropriation of large sums now for project development cannot reasonably be expected when the needs can'l be quantified. 3) Sponsors of potential projects are not willing to commit large expenditures to project planning when there is no assurance that funds will be available for construction when planning is done and feasibility determined. This is a problem on non-federal projects and may be a problem lor federal projects if cost-sharing far federal pro.. jects if cost-sharing lor federal planning becomes common. Developed in response to these conclusions, our sug.- gested funding program has several major com- ponents, including: an inCreased funding level for the Resources Development Fund and a sinking fund lor aiding local projects. funding and implementation of a state project planning and design program, modifica- tion and then adoption oILS 545 (88th legislature), and authorizing the issuance or guarantee of general obliga- tion bonds for water projects. Our specifiC funding recommendations are as follows: COMPONENT #1 Fund and Implement the project planning and design component of the state water planning and review process. The $62.200 requested for this activity for the FY 85 budget should be considered a minimum. Priority will be placed upon scoping and designing this component in FY 84 even though no funds were specifically apppropriated therefore. Dollar needs for fiscal years subsequent to FY 85 will have to be deter- mined after the component is designed. This compo- nent might need to include provision of cash to satisfy federal cost-sharing requirements for planning. COMPONENT #2 Immediately increase the level of appropriation to the Resources Development Fund (total approprla- lion of 10 million per year suggested) and obtain III