Blair Water: Where Will The Money Come From?

IMPORTANT: LB672 is not finalized, is not passed, and is still in the “negotiating stage.” There is no promise to Blair, there is no guarantee to Blair, about any amount of money, that may be available, or an amount that the city of Blair would have access to, request, or be given to fund any projects discussed in this article. If LB672 is passed, and if the funds are available, then it may be that Blair could use some of those funds, however, the amount available, and any potential amount requested is yet to be determined, although some general numbers are discussed.

In the face of growing water demand, the city of Blair, Nebraska, is in the process of expanding its water treatment plant, seeking to address both industrial and residential needs. The expansion aims to ensure a consistent water supply for all customers, according to Mayor Mindy Rump. Despite the concerns of critics who argue that the focus on industrial needs comes at the expense of residential ones, the city appears to be committed to maintaining a balance between the two.

The Blair Water Treatment Plant is currently undergoing several projects, totaling an estimated cost of $67 million. These projects are divided into four major phases:

1. Construction of a new water intake structure on the Missouri River: Al Schoemaker, Director of Public Works for Blair, explained, “The new intake is being constructed six feet lower than the current intake structure to allow us to get water from the Missouri River at a much lower level than the current intake structure can draw.” The estimated cost of this project is $15 million.
2. Expansion of the treatment plant’s capacity: “We are increasing the treatment capacity from 20 million gallons per day to 27 million gallons per day of treatment capacity. The additional 7 million gallons per day of treatment capacity is both for the industrial need and Blair’s own needs,” said Schoemaker. The estimated cost of this project is $44 million.
3. Development of a new 30-inch industrial water main to the Cargill Bio Campus: “The new water main will run from the water treatment plant to the Cargill campus,” Schoemaker stated. The estimated cost of this project is $4 million.
4. Addressing the EPA requirements for discharging lime solids into the Missouri River: According to Schoemaker, “The City is in the process of constructing an equalization basin to hold the lime solids and only allow them to be discharged in a slow trickle to the river.” The estimated cost of this project is $4 million.

To fund these projects, Blair has secured $44.55 million from various sources, including State Revolving Loan Funding, grants, and the Economic Development Association. However, this leaves a $22.45 million shortfall, which the city is attempting to close by seeking an additional $30 million from the state (via LB672). If state funding is not obtained, the city will consider issuing revenue bonds, which may result in higher water rates for residents.

Legislative Bill 672 (LB 672), proposed by State Sen. Ben Hansen of Blair, Nebraska, seeks to establish a $30 million revolving loan fund through the Nebraska Department of Environment and Energy. The purpose of the fund is to assist communities in expanding their water systems to address water supply challenges. Under the provisions of LB 672, up to 50% of the loan amount could be forgiven.

Blair is experiencing a need for additional water supply due to the success and potential expansion of the Cargill/Novozymes corn-processing campus. The campus currently contracts for 15.5 million gallons of water per day, and a proposed $300 million expansion would require an additional 1 million gallons of water per day. Blair officials are seeking state assistance to keep water rates low and remain competitive, in hopes of attracting the expansion project to Blair rather than to other locations.

Schoemaker clarified the usage requirements further, “The water treatment plant expansion is seven million gallons per day with five million allocated to the Cargill Bio Campus and two million to the city of Blair for future growth. Cargill added four million gallons per day to their total above Novozymes request to allow them to have additional water for future expansions as well without having to expand the water plant every time they add to their campus. Sometimes requirements for additional water to accommodate growth on the Cargill campus is not practical because the size of increase in water demand is too small to be practical and economical for plant expansions.”

The total cost of the water expansion project in Blair has escalated in part due to inflation and supply chain issues, and the city is hoping to obtain millions from the state loan fund which would be created by LB 672. The project would include the installation of a new intake from the Missouri River to handle new, lower flows during the winter months. Repayment of the loan costs would be made through fees paid by Cargill.

(We spoke with Senator Hansen’s office about LB672, and a spokesperson replied, “LB672 is still in the negotiation stage.”)

When asked about the possibility of raising water rates locally to cover the extra cost, Schoemaker clarified that the water fund is an enterprise fund or utility fund funded by user fees, not taxes. “There most likely will need to be an increase in water rates to pay the city’s portion of the improvements being made at the water treatment plant, but the exact amount of the increase is yet to be determined once the final costs are identified and allocated to either industrial or city water,” he said.

Schoemaker also addressed concerns about the balance between industrial and residential needs. “Without the industrial partners of the community, we do not have jobs for our citizens, we do not have a tax base for schools, county, and city operations, and we do not have a local economy for retail and local businesses—all very important in the overall health of the community,” he said.

Regarding the question of whether industrial users like Cargill and Novozyme would be required to pay a portion of the total amount needed to upgrade the water treatment and delivery in Blair, Schoemaker confirmed that both Cargill and other users would see rate hikes to cover the costs of these projects. However, the exact amount of the increase will not be determined until 2024, when the final costs of the projects are known.

With a timeline set for the completion of these projects by the end of 2024, the city of Blair is working diligently to ensure a consistent water supply for its growing community. As Schoemaker stated, “At this time, we are not anticipating delays in completion dates, but if they arise, we will have to deal with them individually and see what impacts those delays have on the water system.”

The city’s efforts to balance the needs of both industrial and residential customers reflect its commitment to maintaining a healthy local economy while addressing the water demands of a growing population. By investing in its water infrastructure, Blair aims to provide its residents with a stable and reliable water supply while supporting the industries that contribute to the city’s overall well-being.

The expansion of Blair’s water treatment plant represents a significant undertaking for the city, with a focus on addressing both industrial and residential needs. With the support of various funding sources and a commitment to balancing the interests of all stakeholders, the city is poised to tackle the challenges of providing a consistent water supply for its residents and industries alike. As the projects progress, the city will continue to assess and adjust its plans to ensure the successful completion of these vital infrastructure upgrades.

By Don Harrold, for BlairToday. Email blairtoday@mail.com for corrections or story ideas.