Irrigation Leader July/August 2022 by Water Strategies

VOLUME 13 ISSUE 7

Rick Reinders: Watertronics’ High-Quality Pump Systems and Controls for the Irrigation Market

july/august 2022

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CONTENTS JULY/AUGUST 2022 Volume 13 Issue 7

Rick Reinders: Watertronics’ High-Quality Pump Systems and Controls for the Irrigation Market

5 T he Finance Issue By Kris Polly 8 R ick Reinders: Watertronics’ High-Quality Pump Systems and Controls for the Irrigation Market 14 H ow Irrigation Districts Should Develop Budgets and Raise Capital 20 R aising Infrastructure Funds by Issuing a Bond: A Conversation With Matt Lukasiewicz 22 H ow Kennewick Irrigation District’s Administrative Fees Reduce Workload and Raise Funds

26 T apping Opportunities at the Bureau of Reclamation’s WaterSMART Program 30 H ow the Colorado Water Trust Uses Market-Based Agreements to Benefit Rivers and Irrigators 34 M ike Mills: At Reinke Manufacturing, Sustainability Is a Global Goal 38 H ow the Middle Republic Natural Resources District Is Mapping the Ogallala Aquifer From the Air 43 JOB LISTINGS

Copyright © 2020 Water Strategies LLC. Irrigation Leader relies on the excellent contributions of a variety of natural resources professionals who provide content for the magazine. However, the views and opinions expressed by these contributors are solely those of the original contributor and do not necessarily represent or reflect the policies or positions of Irrigation Leader magazine, its editors, or Water Strategies LLC. The acceptance and use of advertisements in Irrigation Leader do not constitute a representation or warranty by Water Strategies LLC or Irrigation Leader magazine regarding the products, services, claims, or companies advertised.

4 | IRRIGATION LEADER | July/August 2022

an American company established in 2009.

STAFF:

Kris Polly, Editor-in-Chief Joshua Dill, Managing Editor Elaine Robbins, Copyeditor Tyler Young, Writer Stephanie Biddle, Graphic Designer Eliza Moreno, Web Designer Caroline Polly, Production Assistant and Social Media Coordinator Tom Wacker, Advertising Coordinator Patricia Bown, Media Assistant Eve Giordano, Media Assistant William Polly, Media Assistant Milo Schmitt, Media Assistant Amanda Schultz,Media Assistant

SUBMISSIONS:

Irrigation Leader welcomes manuscript, photography, and art submissions. However, the right to edit or deny publishing submissions is reserved. Submissions are returned only upon request. For more information, please contact our office at (202) 698-0690 or irrigation.leader@waterstrategies.com.

ADVERTISING:

Irrigation Leader accepts half-page and full-page ads. For more information on rates and placement, please contact Kris Polly at (703) 517-3962 or kris.polly@waterstrategies.com or Tom Wacker at tom.wacker@waterstrategies.com.

CIRCULATION:

Irrigation Leader is distributed to irrigation district managers and boards of directors in the 17 western states, Bureau of Reclamation officials, members of Congress and committee staff, and advertising sponsors. For address corrections or additions, please contact us at admin@waterstrategies.com.

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COVER PHOTO: Rick Reinders, Co-CEO, Watertronics. Photo courtesy of Watertronics.

irrigationleadermagazine.com

PHOTO COURTESY OF WATERTRONICS.

Do you have a story idea for an upcoming issue? Contact our editor-in-chief, Kris Polly, at kris.polly@waterstrategies.com.

Irrigation Leader is published 10 times a year with combined issues for July/August and November/December by

The Finance Issue

By Kris Polly

rrigation districts are not usually awash in cash, yet they face high capital expenses for the construction and maintenance of major infrastructure projects. In this issue, we take a look at the different budgeting methods and funding mechanisms that can help them fulfill their missions. First, in our cover story, we interview Rick Reinders, the co-CEO of Watertronics, a Wisconsin-based manufacturer of a wide variety of pump stations, control panels, and telemetry products for the agricultural, industrial/municipal, landscape irrigation, and golf irrigation markets. Kipp Drummond, a longtime finance professional who has worked in the public and private sectors, including at the Kennewick Irrigation District (KID), walks us through the process of budgeting for an irrigation district and gives us insight into the respective advantages of bonds and loans. Then, for a practical look at the same question, we speak to Matt Lukasiewicz, the general manager of three central Nebraska Reclamation and irrigation districts, about his experiencing issuing bonds. We then speak with Chuck Freeman, the secretary and district manager of KID, about how his district began charging administrative fees to control its urbanization-driven workload. We also speak with Dean Marrone and Josh German of the Bureau of Reclamation about the agency’s WaterSMART program, a significant source of funding for water efficiency, drought resilience, and watershed management projects. Finally,

“

Andy Schultheiss of the Colorado Water Trust tells us about how his organization enters into market-based agreements with irrigators to increase flow in rivers while preserving the agricultural industry. We also interview Mike Mills, Reinke Manufacturing’s director of sustainability solutions, about the company’s approach to sustainability, from manufacturing and recycling to deploying technology to help growers achieve maximum water application efficiency. Finally, we speak with Jack Russell and Alex Boyce of Nebraska’s Middle Republican Natural Resources District about the district’s recent work to carry out an airborne electromagnetic survey of local groundwater. Irrigation districts carry out vital work to support our nation’s agricultural producers, the economy, and our food security. Solid finances and access to funding mechanisms are important factors in making that possible. I hope you find our look at this topic interesting. IL Kris Polly is the editor-in-chief of Irrigation Leader magazine and the president of Water Strategies LLC, a government relations firm he began in February 2009 for the purpose of representing and guiding water, power, and agricultural entities in their dealings with Congress, the Bureau of Reclamation, and other federal government agencies. He may be contacted at kris.polly@waterstrategies.com.

The best lobbyist on your issues will always be you. All you need to be successful is the guidance of experienced people. That is what we provide.

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Kris Polly, Water Strategies

4 E Street SE • Washington, DC 20003 www.waterstrategies.com • (202) 698-0690 irrigationleadermagazine.com

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Rick Reinders: Watertronics’ High-Quality Pump Systems and Controls for the Irrigation Market

An 18,000-gallon-per-minute station with 350-horsepower motors.

isconsin-based Watertronics provides a wide variety of pump stations, control panels, and telemetry products for the agricultural, industrial/ municipal, landscape irrigation, and golf irrigation markets. In this interview, Watertronics Co-CEO Rick Reinders tells us about the company’s commitment to quality and service and its offerings for the irrigation market. Irrigation Leader: Please tell us about your background, your family, and the origin of Watertronics.

8 | IRRIGATION LEADER | July/August 2022

Irrigation Leader: What markets is Watertronics active in? Rick Reinders: Our four main markets are the agriculture, industrial/municipal, landscape, and golf irrigation sectors. In addition to supplying pumping stations to these markets, we also provide water reuse systems, including rainwater harvesting, water filtration, desalination, and purification systems. Irrigation Leader: Please tell us about some of your main product lines. irrigationleadermagazine.com

PHOTOS COURTESY OF WATERTRONICS.

Rick Reinders: Watertronics began in 1987 as a division of Reinders Inc., my family’s business, a green industry distributor of turf and irrigation supplies in the Midwest. Our company was originally founded in Elm Grove, Wisconsin, in 1866. Over the years, it evolved from a general store to a milling operation, and eventually became the green industry wholesale distributor that exists today. As Watertronics grew, its capital needs and sales geography necessitated that it become an

independent company. That separation occurred in 1994. The business grew over the years, and when my father wanted to retire, we sold the business to Lindsay Corporation in 2008. My business partner, Chip Carlson, and I stayed on to run it for over 9 years. We were fortunate to be able to buy back the company in 2018 and to continue to grow Watertronics as a global leader in the package-pump-station market.

Rick Reinders: Our product lines include vertical turbine pump stations; horizontal centrifugal pump stations; and submersible sled-mounted pump stations, which we call BlackMax systems. We also provide electrical control panels and telemetry controls. We can supply fully integrated skids with pumps, controls, filtration, and so on; in other cases, we just supply the control panel and telemetry. Our Watervision telemetry product can be installed on our equipment or on existing equipment in the field and allows the user to monitor, control, and troubleshoot equipment remotely. It can be used for pump stations, canal gates, temperature sensors, pressure sensors, and so on. In addition to enabling remote control, it also gives the user insight into how efficiently the system is running, whether there are any impending issues, whether it’s starting to vibrate or lose performance, and many other predictive failures. Watervision provides a graphical histogram of how the pump station is performing. Sensors can be added to record data such as energy usage, kilowatts consumed per acre-feet of applied water, salinity, pH, and much more. Customers tell us that the telemetry product is a force multiplier. It allows a single person to monitor and care for more equipment because they can do it on their iPhone, desktop, or tablet rather than having to drive from site to site. The system automatically notifies the user with a text message or e-mail when there is a problem. We also have a patented technology called dynamic demand control that involves a closed-loop control algorithm that allows us to sample flows and pressures in the field and adjust the pressure regulation setting at the pump station to precisely meet the varying requirements of the irrigation system. Irrigation Leader: What portion of your products are sold in an off-the-shelf form and what portion are custom designed? Rick Reinders: Around 25 percent of our products are offthe-shelf or catalog-type items. Those include our low-cost ag panel line (variable-frequency-drive-in-a-box products) and our WaterMax line (pump-in-a-box products). They have simple controls, usually involve a single pump, and integrate with Watervision, our cloud-based telemetry. We also have our vertical turbine quick-ship product, which comes with a standard set of options and configurations to choose from. This configured-to-order product is preengineered and avoids the typical 3–6 weeks of engineering time that our engineered-to-order products require. Irrigation Leader: What kind of preparation is needed to create an engineered-to-order system? Do you visit the potential customer’s facility? Rick Reinders: If we’re replacing or upgrading equipment in the field, we assess the customer’s existing equipment. If it’s irrigationleadermagazine.com

new construction, then we evaluate the infrastructure and the available power and water sources. About 70 percent of our business involves replacement or upgrade; the rest is new construction. Irrigation Leader: How can your pumps help reuse water or boost water use efficiency, particularly in the irrigation sector?

Watertronics' pumps are painted with a high-gloss finish like a car.

Rick Reinders: First, it is important to select the right pump—whether it is a vertical turbine, a horizontal centrifugal pump, or a submersible pump—and to understand how it’s going to be used today and how its flow and pressure requirements may increase as infrastructure is built out. Taking into consideration the environmental conditions, selecting the right components, and evaluating the efficiency of the various designs are also parts of the decision process. Next, we address the control aspect, which is probably the most important consideration. That includes knowing how to sequence pumps and making sure you have the most efficient pump or series of pumps to meet the demand. Finally, it is important to be able to interface with and provide data to the other control programs that create the demand, such as pivot control systems, sprinkler control systems, or drip controller systems, so that they can deliver the proper amount of irrigation to optimize the efficiency of the pump station. A good example would be that if one of the pumps in a multipump pump station goes down for some reason, we want to provide information about its new capacity to the irrigation control software so that rather than demand more flow than the pump station is capable of, it can reprioritize and come up with a lower-flow program that would still allow irrigation to occur without causing a lowpressure shutdown. July/August 2022 | IRRIGATION LEADER

tune some of the parameters remotely to optimize the pump station’s efficiency. Irrigation Leader: Has Watertronics been affected by supply chain shocks and delays?

A large agriculture-related Watertronics installation in Angola.

Irrigation Leader: What kind of customer service do you supply to your customers? Rick Reinders: A pump station has a life cycle of 20 years or longer, and we feel that we have a responsibility to make sure our pump stations exceed that, so we provide and train a service network to maintain and service our products. We store and retain the data on every job to ensure that there is accurate information on the original build details, and we also retain all post-sale service-related data. We want to track failures in the field and make sure that we’re evolving the products to maximize their life cycle, and we want to make sure we select the construction materials that are appropriate for the water and power quality that is present. We are committed to educating our service network and our customers to help them more effectively and efficiently operate the systems. We routinely go above and beyond our warranties to make sure that we’ve exceeded the expectations of our customers. Many of our customers become repeat buyers because of our commitment to quality and after-sales support. We have a pump service network group that is dedicated to customer support. It’s an association of 350 highly trained independent field technicians who are certified by Watertronics and are required to come to the Watertronics factory once every 2 years for a weeklong course during which they update their training and knowledge.

Rick Reinders: Yes. We are able to go online with any of our pump stations that are equipped with WaterVision, our remote telemetry system, and assess running conditions and other aspects of operation. We can see the issues that lead up to shutdowns or failures, and then we can improve and fine-

10 | IRRIGATION LEADER | July/August 2022

Irrigation Leader: What should all irrigation districts know about Watertronics? Rick Reinders: We’re a well-rounded company with a lot of engineering know-how and resources that can help with the design and optimization of their pumping equipment, including packaged pumping systems, controls, telemetry, and advanced control algorithms for monitoring and operating systems. We work well with engineering firms and can leverage the knowledge we have gained from over 15,000 pump stations in the field to provide recommendations for field-proven solutions. Irrigation Leader: What is your vision for the future? Rick Reinders: My vision for the future is making our systems operate in a smarter manner by using the extraordinary amount of data that we’re collecting. For example, if we look at the data conditions that repeat themselves before pump failures, we can do a better job of predicting maintenance requirements before a catastrophic failure occurs. We can also look at the efficiency profile of irrigation cycles and provide solutions to allow the systems to operate in a more efficient manner. There are many opportunities for us to create a smarter operating system by looking at the data and developing a smarter scenario to operate the pump station. IL

Rick Reinders is the co-CEO of Watertronics. He can be contacted at rick.reinders@watertronics.com.

irrigationleadermagazine.com

PHOTOS COURTESY OF WATERTRONICS.

Irrigation Leader: In addition to your field technicians, can you provide some degree of tech support or customer service remotely, particularly for your telemetry systems?

Rick Reinders: We’re not immune; we experience the same supply chain woes that are affecting everyone else. To help mitigate that, we’ve invested many millions of dollars in extra inventory. We try to maintain 6 months’ to a year’s worth of inventory on our long-lead and critical-path items, such as motors, pumps, programmable logic controllers, and operator interfaces. That inventory is helping us meet our schedule and support our field service group’s needs for replacement parts. We have also seen an increase in our lead times due to the production capacity of our facility and the labor constraints that we’re under.

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How Irrigation Districts Should Develop Budgets and Raise Capital

Center pivots seen from above.

ipp Drummond has worked in finance in both the private and public sectors, including 6 years as the senior financial manager and comptroller for the Kennewick Irrigation District. In this interview, he brings his years of experience to bear to walk us through all the steps irrigation districts should go through to develop budgets and identify the best ways to raise capital. Irrigation Leader: Please tell us about your background and your experience in the different organizations you’ve worked for.

Irrigation Leader: Would you discuss the budget of an irrigation district and how it might differ from those of other organizations? Kipp Drummond: Irrigation districts, generally speaking, have a set number of customers and fixed revenue streams. Their

14 | IRRIGATION LEADER | July/August 2022

Irrigation Leader: How should an irrigation district organize and plan for budgeting? Kipp Drummond: The options include annual or biannual budgets. Personally, I prefer annual budgets that include multiyear projections of both revenue and expense beyond the budget year. And, of course, capital plans are typically budgeted for 5–7 years. On the broadest level, the organization’s long-term strategic goals and plan should inform and direct the budget process. A capital plan with the projected current year budget should be in place before the budget process starts. irrigationleadermagazine.com

PHOTO BY SAM BEEBE, LICENSED UNDER CC BY 2.0.

Kipp Drummond: I have experience in both the private and public sectors. I have kept green bar manual general ledgers and implemented new enterprise resource planning systems. I have worked for a construction company and software startups; for a city and a county government; and for the Kennewick Irrigation District. I’ve seen capital creation from stock issuance to $40 million bond offerings.

revenues are capped, subject to rate increases. They have massive infrastructure and the associated high maintenance and capital costs. The resources devoted to infrastructure maintenance each year, as opposed to operations and capital expansion, is a critical budget and strategic decision to be made by senior management and the board. Each budget will reflect the board’s decision on how much to allocate to annual maintenance and the replacement of existing infrastructure. Other factors to keep in mind are that operational staff are often unionized, and that many irrigation districts are governmental and therefore require extreme transparency and accountability.

The finance department, with direction from the executive director and input for the board, should also put together revenue projections with ranges and appropriate contingencies before budget process begins. The executive director should issue goals and rules for the budget process to lay out how the budget will permit the organization to meet the annual and long-term goals set by the board of directors. These goals and rules should cover process issues, required cuts, projects to be added or deleted, staffing changes, and so on. Area and division managers will have responsibility for their area budgets under the direction of the executive director. All employees who make purchasing or resource allocation decisions should be involved in the budget process. The public and customers should also be involved at the beginning and at the end of the process. Input from customers at the beginning may help shape the budget. Do the budget in layers, starting with absolutely critical items, then those that are very desirable but not required, those that are important, and those that it would be nice to do. Allocate funds to meet critical needs first, then very desirable items, and so on. If cuts need to be made, this provides a framework for what to cut.

PHOTO BY STEVEN PAVLOV, LICENSED UNDER CC BY-SA 4.0.

Irrigation Leader: Would you walk us through how to put together a budget? Kipp Drummond: First, the organization’s short- and long-term goals should be clearly defined and assigned to operational groups. Next, revenue projections should be completed in several layers, with contingencies built in. A capital plan should be in place, covering the current year in detail. So should projected payroll and benefit expenses for the budget year for projected staffing levels with contingencies. The executive director should issue goals, parameters, and processes for the budget process. Senior managers will submit draft budgets for their departments, consistent with the above, after consulting with all staff in their departments who make purchasing and resource allocation decisions. The executive director will assemble the budget based on these senior manager submissions and on meetings with senior managers. The budget should have contingency layers built in, including multiple future-year projections to show the future effects of current-year budget decisions. Next, the board finance committee will meet with the executive director and senior managers. There ought to be an opportunity for customer and community comment on the draft budget, after which the board finance committee will meet with the executive director and senior managers again. Finally, the budget will go to the board for approval at a public meeting. Irrigation Leader: Is the basic approach for addressing inflation to build slack into the budget, or is it acknowledging that certain discretionary spending items may be cut along the way? irrigationleadermagazine.com

West Canal in the Columbia Basin Project, Washington State.

Kipp Drummond: You can build your best estimates of inflation into individual budget line items; you can have inflationary contingencies for each line item or budget area; you can have an overall budget inflation contingency; or you can select items or areas that would be cut because of increased inflationary costs. Obviously, inflation will affect individual budget items differently. Using contingencies rather than just increasing line items will make it easier to track the effect of inflation. Tracking the effect of inflation will be important for senior managers, the board, and customers on an annual and multiyear basis. In extreme cases, you may want conduct budget reviews more frequently than the traditional monthly review. For governmental agencies, the question of how much of the cost of inflation can be passed on to the end user must be decided through a complicated board-level, executive-level discussion with input from customers and the community. Irrigation Leader: Would you explain what zero-based budgeting is and what the advantages of that approach are? Kipp Drummond: Zero-based budgeting is a way of ensuring that every projected budget expense is reviewed to confirm that it is both required and being delivered in the most economical way possible. The budget is built from scratch rather than on the prior year’s budget assumptions and numbers. Every expense is examined to see whether it is necessary and is being done as efficiently as possible. It is a way for managers to reexamine their assumptions; review processes and procedures; and possibly look for new, better ways to do things. Line and operational staff can be helpful in this review. It is a time to look at the deployment of staff and resources and to consider whether there might be new and better ways to meet the organization’s goals. Irrigation Leader: How should an irrigation district choose the best way to raise capital, for instance for a building or rehabilitation project? July/August 2022 | IRRIGATION LEADER

| 15

Kipp Drummond: You need to look at the project and ask what its short- and long-term fiscal effects are. (Obviously, the nonfiscal effects of a project can be important, too—increased safety, critical service delivery, and so on.) How much would it cost to do the project now versus in 3–5 years? How does the organization’s current cost of capital compare to what it is projected to be in 3–5 years? Would doing the project make the organization more efficient, thereby saving money in the future? Would it potentially decrease or increase costs in the future? Would it create revenue that could be used to repay project or capital costs? Then, you need to look at any existing or potential revenue streams within the organization. Are resources being used optimally? Do current resource allocations reflect the organization’s current goals and objectives? Should resources be reallocated or redeployed for the project under consideration?

Depending on how you raise money, there will be requirements for how quickly you spend it. Typically, you need to spend bond proceeds within 3 years. You might decide to take a loan with a slightly higher interest rate to avoid that. In some cases—for example, if regulatory permits prevent you from breaking ground for several years—you might even choose to raise money now and sit on it for several years if you think it’s cheaper now than it will be then. Again, trying to predict future interest rates is complicated. You need to find good advisors and get the board and senior management involved. Even if you’re not planning to look at capital in the next year or two, somebody in the organization needs to be following interest rates so that there’s a historical understanding when you get to the point where you might need it. Talking to peer organizations, including sewer districts, water districts, and cities, is also important. Irrigation Leader: Are there any other reasons why a district might prefer a loan to a bond?

This environment is making things a lot more complicated. If you’ve got a project that will run for 3 years, what will the cost of diesel be then? It’s impossible to know, but you will need to come up with assumptions and estimates. If you think inflation is going to continue to be high, then delaying the project for a year or two may add significant additional expense. All this involves attempting to make predictions about global markets and inflation, which are enormously difficult to understand. You need to find a few people whom you can consult. Ultimately, the executive director, the board, and senior managers need to be part of this process. They will need to be comfortable saying, “We don’t know what’s going to happen, but this is our best guess, and we will take this risk.”

16 | IRRIGATION LEADER | July/August 2022

Kipp Drummond is a retired finance professional. He can be contacted at kdrummondfinance@gmail.com.

irrigationleadermagazine.com

PHOTOS BY SAM BEEBE, LICENSED UNDER CC BY 2.0 AND KENNEWICK IRRIGATION DISTRICT.

Center-pivot irrigation along the Columbia River.

Kipp Drummond: Generally, loans can be closed more quickly and with less formal legal work, paperwork, and expense. Local and regional banks are potential sources for loans. Bonds are issued by regional and national investment banks. Bonds require more legal work and expense. Issuing bonds typically takes at least 3–4 months. Bonds are generally more regulated and have more ongoing formal reporting and documentation requirements. Typically, loans are for a more limited in time frame: 3, 5, 10, 12, or maybe 15 years. Bonds are typically 20–30 years. Repaying debt over a longer time period lowers the amount of debt repaid each month, thus lowering monthly costs, and increases the time over which interest is paid, thus increasing overall debt expense. Shorter loans increase the size of monthly payments. Longer loans and bonds increase overall interest costs. It is a tradeoff. Different loans and bonds will have differing requirements regarding how and how rapidly proceeds must be spent. Tax-free bonds generally require that bond proceeds be spent within several years of issuance. Taxable bonds do not have this requirement. This creates the option of borrowing money at a rate lower than those that are expected to available in the future and then sitting on the money for several years. Even though you will have to pay interest on it, the lower interest rate may decrease the overall cost of the project. IL

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Raising Infrastructure Funds by Issuing a Bond: A Conversation With Matt Lukasiewicz

Work on Milburn Dam in 2007. Due to the aggressive and abrasive flows in the Middle Loup River, major repairs are now required again, and the districts are seeking bonding to fund them.

The 60-year-old Arcadia Diversion Dam, which diverts water to Sherman Reservoir. Aging infrastructure is a major concern for the districts.

capacity of roughly 69,000 acre-feet. It delivers irrigation water to 53,868 acres. Sargent delivers to 14,625 acres with a directflow permit from the river. It can be difficult to create policies that apply to both a large district and a small district, one pulling directly from the stream and one being fed from a reservoir.

Irrigation Leader: Please introduce yourself and tell us how you came to be in your current position.

Irrigation Leader: What sorts of projects require you to raise capital, whether by issuing bonds or via other means?

Matt Lukasiewicz: I am the general manager of Loup Basin Reclamation District, Farwell Irrigation District, and Sargent Irrigation District. I’ve been at the districts for just over 11 years. Before this, I was a foreman for the city of Kearney, Nebraska, for about 7 years. That was my introduction to water and to understanding state and federal regulations. I grew up in this area, so I’m familiar with the irrigation systems and I know many of the farmers and producers. I think that’s what drew me back to the area.

Matt Lukasiewicz: Currently, we’re working to issue bonds for a major infrastructure rehabilitation project at the Sargent Irrigation District diversion dam. We’re not allowed to obtain loans from banks. I assume that has something to do with the fact that loans are taxed. We are tax exempt, so I don’t think we qualify. However, we are allowed to issue bonds. Generally, you get a better interest rate with bonds anyway. There are a couple of ways you can issue bonds. For example, we issued bonds to raise the funds to purchase our project from the federal government back in 2002. We were able to do that through Loup Basin Reclamation District, which has taxing authority, under a general obligation bond, meaning a bond that benefits both irrigation districts. We can’t issue a general obligation bond for the rehab project on our diversion dam because it only benefits one of our two irrigation districts. This one will be deemed a revenue bond, which is a little different. We still get a good interest rate; we just don’t have the benefit of additional taxing. I’m not aware of any other options for borrowing money. As a tax-exempt nonprofit, we are restricted in the type of financing we can seek out.

Irrigation Leader: Please introduce the three districts that you work for. Matt Lukasiewicz: I manage three districts, each of which has its own board of directors and its own operating budget. Loup Basin Reclamation District, which owns the water rights and all the infrastructure, has interlocal agreements with Farwell and Sargent Irrigation Districts. As far as I know, we are the only irrigation system in the country that operates under three governing bodies. Farwell, the larger of the two irrigation districts, stores its water in an off-stream reservoir with a

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irrigationleadermagazine.com

PHOTOS COURTESY OF MATT LUKASIEWICZ.

hen a nonprofit group of three Reclamation and irrigation districts in central Nebraska needed project financing, it turned to bonds. In this interview, Irrigation Leader speaks with general manager Matt Lukasiewicz about the process of issuing a bond.

Irrigation Leader: What is the process you go through to issue a bond? Matt Lukasiewicz: It depends on who is issuing the bond and whether it is a general obligation bond or a revenue bond. I’ve never actually had to issue a general obligation bond, since Loup Basin’s bond was issued before my time at the district, but with a revenue bond, you consult with your bonding agency. It talks to its legal representatives, and you must submit your budgets and audits to demonstrate your financial capabilities. Since irrigation districts in the state of Nebraska don’t have bonding authority, a council needs to be established with representatives from the Reclamation and irrigation districts. Eventually, the irrigation district and the council need to adopt an interlocal management agreement and a resolution for the purchase of bonds. At that time, the bond agency goes out and seeks investors and then comes back with final dollar amounts, which will be officially determined at closing. The agency offers different repayment options, determining whether the bond is to be repaid over 1 year, 3 years, or as many as 15 years, how much interest and principal are included in each payment, and whether you want to be able to make the bonds callable at any point. Irrigation Leader: When you’re thinking about issuing a bond, how far in advance do you have to begin working with your board? Matt Lukasiewicz: For the project I’m currently working on, we knew that we needed to issue a bond to complete a rehab project. The first thing we wanted to do was get a dollar amount to put on the table. Our engineers and contractors did an inspection to determine what needed to be repaired. After we received construction bids from contractors, we knew what the cost was going to be. It exceeded what we could afford, so we knew that we would need to seek out bonding. We accepted a bid in January and started the bonding process. We haven’t secured any funds yet, but I have it on the agenda for next month. It took about 6 months to get to this point in the process. Irrigation Leader: Did you have a preexisting relationship with the bonding agency? Matt Lukasiewicz: Yes. I went back to the company that issued the general obligation bonds for the title transfer in 2002. The company has treated us well over the years and has helped us refinance a couple of times. We have saved millions of dollars by refinancing and will be making our final payment on the 2002 bond at the end of next year. Irrigation Leader: Is your existing revenue sufficient to cover the debt servicing? irrigationleadermagazine.com

Matt Lukasiewicz: Yes. The bonding agency will set a payment schedule, so we know in advance how much we are paying on principal and interest each year. We can build that into our annual budget. With this new bond, debt servicing may be something we have to consider, depending on how we structure the financing. If we decide to repay the bond over a shorter period of time, it’s going to make up a big portion of the budget. I also intend on pursuing grant opportunities to help with funding this rehab project. One grant that is newly available thanks to a bill that was passed this year is specifically designated for infrastructure repairs for irrigation districts in the state of Nebraska. It’s a 90/10 grant, meaning the Nebraska Department of Natural Resources pays for 90 percent of the project, and we just have to come up with the other 10 percent. Other possible options are WaterSMART grants from the Bureau of Reclamation and Water Sustainability Grants from the State of Nebraska. If we were to obtain some of those grants, it would help us to pay off our bond in the next year or two. Irrigation Leader: What advice do you have for other irrigation districts that may not have experience with issuing bonds? Matt Lukasiewicz: Start the process early. It’s not the same as going to the bank for a loan and getting the money the same day. It’s not a difficult process, but there are some hoops to jump through, and a district should put time and care into building the repayment schedule. There are a lot of options for structuring the repayment, and doing it right can help you budget for those bonds. Irrigation Leader: Is there anything you would like to add? Matt Lukasiewicz: Build your reserves. It’s kind of like a retirement fund; you always want to be putting money into it. The way I look at it, you may not think you have an issue now, but you may in the future, so start preparing for that. Every year is a different situation. Unexpected circumstances, such as what we have experienced this year with drought and wind, can affect your budget. We all have aging infrastructure, and it’s just a matter of time before something happens. A general rule is to have at least 2 years of operating expenses in reserves. Having those reserves, planning, and making a line item in your budget to put away money every year is important, because you never know what next year is going to bring. IL Matt Lukasiewicz is the general manager of Loup Basin Reclamation District, Farwell Irrigation District, and Sargent Irrigation District. He can be contacted at mluk@qwestoffice.net or (308) 336‑3341.

July/August 2022 | IRRIGATION LEADER

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How Kennewick Irrigation District’s Administrative Fees Reduce Workload and Raise Funds

Housing development along KID water delivery infrastructure.

ennewick Irrigation District (KID) is located in the rapidly growing Tri-Cities area of Central Washington. In response to the ballooning of administrative tasks related to urbanization and property transfers, KID instituted several administrative fees and set up a web portal to supply relevant information to title companies. In this interview, KID Secretary and District Manager Chuck Freeman explains how a judicious introduction of service fees can improve service levels, reduce workload, and raise money. Irrigation Leader: Please introduce KID.

Irrigation Leader: How does KID raise funds?

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Irrigation Leader: You also charge a fee for certain administrative tasks. Have you always charged for these things, or was the fee implemented in response to an increase in the workload? Chuck Freeman: We added some administrative fees after we determined the level of service we wanted our district to provide. During the level-of-service conversation, I discovered that we employed a full-time customer irrigationleadermagazine.com

PHOTOS COURTESY OF KID.

Chuck Freeman: KID’s service area covers 20,201 acres, with 12,000 acres of production agriculture and 8,201 acres of high-density urban and rural suburban subdivisions. The district has over 25,000 customer accounts.

Chuck Freeman: We assess and charge customers based on the size of their parcel. We follow a tiered toll system, so prices vary for urban customers depending on their parcel size. In addition, we levy a flat rate for each parcel to fund our capital improvement fund and our new water infrastructure supply fund, which supports the identification of new water sources and the enhancement of our water supply from the Yakima and Columbia River systems.

service representative whose entire job was to interact with title companies. We average 300 property transfers per month, and title companies are always in a hurry to close their transactions. Since we couldn’t charge the title companies for each call, we worked with our vendor, TruePoint Solutions, to create a web portal that has all the information a title company needs, such as outstanding balances. Now, we inform the title companies that public records laws in Washington State allow us 5 days to provide responsive records to their requests. If they don’t want to wait 5 days, they need to register at no cost for our web portal and use that resource to look up the information themselves. That has vastly reduced the workload related to property transfers and has saved over $75,000 per year in labor costs. Property transfers also require us to create or transfer accounts within our TruePoint database. Even when the work with the title company is complete, a customer service employee still has to note that a customer moved from one address to another. We started to assess $10 for an existing customer transfer. Now, that fee is $15. New customers are assessed a $25 fee for the setup of their accounts. We have nearly 400 new accounts per year. New account fees and existing customer transfer fees provide approximately $64,000 a year in previously unrealized revenue. Also, Washington State law allows irrigation districts to charge fees for late payments. KID assesses $25 for late payments. We only bill once a year, and we send reminders because assessments are split; the first half is due April 30, and the second half is due in late October. When we introduced the fee, of course, people threw a fit, but there’s a way around the fee: just pay your bill on time. The late payment fee generates funds that are used to offset the cost and staff time necessary to track and account for customer delinquent accounts. Irrigation Leader: Are these charges in large part a response to urbanization in your district? Chuck Freeman: Yes. The South Columbia Basin Irrigation District, which is across the river from us, covers 269,000 acres and has less than 5,000 customers. We cover less than 10 percent of that area and have 25,452 accounts, so you can see that we’re much more heavily urbanized. Irrigation Leader: Are any other tasks becoming more onerous to the point that you would consider charging for them? Chuck Freeman: I don’t anticipate needing to start charging for anything else. We recently implemented a phone system called interactive voice response (IVR). It has what is called screen pop, meaning that by the time a call is answered by a customer service representative, the customer account pops up on the representative’s computer screen. In addition, IVR allows customers to pay bills over the phone at no charge; irrigationleadermagazine.com

The Tri-Cities are undergoing rapid growth, creating a significant administrative workload for KID.

they can also pay online or in person. Starting just in the last few weeks, we take checks over the phone at no charge to the customer. The technology we have added over the last 7 years has taken pressure off the customer service staff and has allowed us to not have to increase staff in that critical area. Irrigation Leader: Are you aware of any other irrigation districts taking a similar approach to charging for administrative tasks? Chuck Freeman: At a recent Irrigation Leader urbanization training, we and the Salt River Project of Arizona were the only organizations implementing these charges. Most districts don’t charge fees this way, and even those that do don’t do it to the same extent. Irrigation Leader: What advice would you have for an irrigation district that might be interested in establishing a similar setup to yours? Chuck Freeman: First, its executive staff and the board need to be on the same page. Second, the district has to have discussions on the level of service it provides within the existing billing regimen. Lastly, ease into the charges gradually. IL Chuck Freeman is the secretary and district manager of the Kennewick Irrigation District. He can be contacted at cfreeman@kid.org.

July/August 2022 | IRRIGATION LEADER

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Tapping Opportunities at the Bureau of Reclamation’s WaterSMART Program

he Bureau of Reclamation’s WaterSMART program includes a wide variety of funding opportunities for water efficiency, drought resilience, watershed management, and water reuse. Over the next 5 years, WaterSMART will disburse an additional $1.9 billion thanks to the Infrastructure Investment and Jobs Act, commonly known as the Bipartisan Infrastructure Law. In this interview, Josh German, the coordinator of WaterSMART Grants, and Dean Marrone, the manager of Reclamation’s Water Resources and Planning Office, give us the inside scoop on the different WaterSMART programs and provide advice to irrigation districts on how to put together a successful application. Irrigation Leader: Please tell us about your backgrounds and how you came to be in your current positions. Josh German: I have worked on WaterSMART programs since 2010. For the majority of that time, I have served as the program coordinator for WaterSMART Grants, a multimillion-dollar grant program focused on water conservation and sustainability. Dean Marrone: I am the manager of Reclamation’s Water Resources and Planning Office. We coordinate WaterSMART by working with other Reclamation offices and collaborating with Reclamation’s partners, who propose and carry out projects. I’ve been with Reclamation for 17 years. Irrigation Leader: Please give us a brief overview of WaterSMART.

Irrigation Leader: Please give us a sense of the overall amounts of funding available through WaterSMART and

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Dean Marrone: In fiscal year 2022, the total final appropriations for all WaterSMART programs was about $159 million. A large portion of that is for WaterSMART Grants, the Drought Response Program, and the Title XVI program. For each funding opportunity that’s made available to potential applicants, Reclamation lists the amount of funding that can be requested for a particular project. Under Water and Energy Efficiency Grants, for example, entities can now request up to $5 million, which is a higher limit than it’s been in the past. Previously, the most an entity could request for a project was $2 million in federal funding, with a nonfederal cost-share required alongside that. Reclamation’s implementation of the Bipartisan Infrastructure Law enables us to offer larger amounts of funding. That’s the case for Water and Energy Efficiency Grants; Drought Resiliency Projects; and a new category of funding, Environmental Water Resources Projects. Irrigation Leader: Does Reclamation intend to maintain that higher upper limit of $5 million past this year? Dean Marrone: Once applications have been received this summer, Reclamation will be assessing project sponsors’ level of interest in larger amounts of funding. But with higher amounts of funding available, it is likely that the maximum of $5 million per project will continue beyond this year. The Bipartisan Infrastructure Law includes $400 million over a 5‑year period for grants that include Water and Energy Efficiency Grants, Drought Resiliency Projects, Environmental Water Resources Projects, and others that Reclamation carries out under the authority of the SECURE Water Act. There’s also $100 million, again over 5 years, for Cooperative Watershed Management Program projects. The Bipartisan Infrastructure Law includes $550 million for water reuse projects under the existing Title XVI program and $450 million for a new category of funding for large-scale recycling and reuse projects with at least $500 million in total project costs that Reclamation is currently working to implement. And then there are others. There’s a new authority for multibenefit projects related to watershed health that’s getting $100 million as well. Each year, Reclamation’s spend plan will include an allocation of Bipartisan Infrastructure Law funding across the various categories that are included in that appropriation. For fiscal year 2022, Reclamation’s spend plan included $160 million of the $400 million for Water and Energy Efficiency Grants, drought projects, and similar projects. irrigationleadermagazine.com

PHOTOS COURTESY OF THE BUREAU OF RECLAMATION.

Dean Marrone: Through WaterSMART, Reclamation works with states, tribes, irrigation districts, municipalities, nongovernmental organizations, and other local entities as they carry out actions to address water management challenges. The program includes a number of different categories of funding. Those include, among others, the WaterSMART Grants program, which supports improved water efficiency; the Drought Response Program, which provides assistance for drought planning and projects that build drought resilience; the Cooperative Watershed Management Program, which encourages diverse stakeholders to form local solutions to address their water management needs; and the Title XVI Water Reclamation and Reuse Program, which typically focuses on large water reuse projects across the West. WaterSMART also includes the Basin Study Program, which involves studies of the major river basins in the West, which are conducted by Reclamation and its partners, and funding for projects that use applied science to develop modeling and forecasting tools.

the amount that an irrigation district might be able to secure for a particular project.

Irrigation Leader: What cost-share amounts do the recipient entities generally have to contribute? Dean Marrone: Reclamation is authorized to provide grant funding under the SECURE Water Act, which generally limits Reclamation to providing 50 percent of the cost of a project. Recent amendments to the SECURE Water Act allow applicants to request federal funding of up to 75 percent for projects that are expected to have environmental benefits. We’re implementing that through a new category of funding for Environmental Water Resources Projects. There are other exceptions. The Title XVI program, which is under a different authority, limits federal funding to 25 percent of the cost of a project. As I mentioned, those water reuse projects tend to be large, with total project costs of $100 million or more. Reclamation has worked to set up WaterSMART so that it fits with various types of projects being planned by water managers and works for various entities, including districts, municipalities, tribes, and others. For example, one category of funding for small-scale water efficiency projects is limited to no more than $100,000 per project with a 50 percent cost-share. Irrigation Leader: WaterSMART grants cover a broad range of areas. Are there specific types of projects you focus on? Dean Marrone: As Reclamation has developed WaterSMART over the years, the general approach has been to leave the project categories as open ended as possible, recognizing that we don’t know all the types of water management improvements that might be contemplated. The funding opportunities tend to list categories of projects without being prescriptive. Most of the funding opportunities don’t necessarily focus on a particular type of project. Water and Energy Efficiency Grants, for example, are open to lots of different types of projects, from canal lining or piping projects to the installation of automated gates. In the municipal setting, we fund things like the installation of residential water meters and turf replacement programs. Josh German: Given how many different funding opportunities there are, sometimes entities have questions about which is the best fit for their particular project. There is a lot to navigate, and often it might not be entirely clear to a particular entity which is the right program to apply to. It’s always good to reach out to our staff. We’re available and happy to have that conversation. Irrigation Leader: You mentioned the recycling and reuse program that Reclamation is currently developing. When is that going to get off the ground, and what’s that going to look like? Dean Marrone: We are expecting to have draft program guidance available for public comment later this summer, with the first funding opportunities likely to follow this winter. irrigationleadermagazine.com

Irrigation Leader: What are some of the best ways for an irrigation district to make a successful application? How should they target their projects? Josh German: First, they should familiarize themselves with the different aspects of WaterSMART and identify what program or programs may be a good fit. We have lots of resources about each program available on the website. Our staff is always available to talk through the options and provide guidance regarding a particular project or program. We also host webinars throughout the year. After we post a funding opportunity announcement, we usually do a webinar on that specific funding opportunity within a few weeks. I would encourage any entities that are thinking of applying to look at the latest information on the website and to reach out to our staff. Reclamation’s local area offices and regional offices can be a great resource as well. Dean Marrone: On the WaterSMART website, there’s also an interactive map where potential applicants can see previously funded projects. You can go to the map, zoom in on a particular area, and click on the dots to get more information about each project that’s been funded. You can also see the applications that were successful in their funding requests. The requirements and the criteria change a little each year, but this can be a useful place to start to see the sorts of descriptions that applicants have given in the past and the way that they’ve responded to the selection criteria. Irrigation Leader: Is there anything you’d like to add? Josh German: The WaterSMART program has been successful because of stakeholder involvement. It’s encouraging to see that so many entities are interested in undertaking these different types of projects across the West. In just the last 2 years, for example, partners have been able to initiate 300 new projects through the program, including planning efforts to prepare for drought, the development of new tools, and on-the-ground projects that will help increase flexibility for water managers. IL

Josh German is the WaterSMART Grants coordinator at the Bureau of Reclamation. He can be contacted at jgerman@usbr.gov.

Dean Marrone is the manager of the Water Resources and Planning Office at the Bureau of Reclamation. He can be contacted at dmarrone@usbr.gov.

July/August 2022 | IRRIGATION LEADER

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How the Colorado Water Trust Uses Market-Based Agreements to Benefit Rivers and Irrigators

he Colorado Water Trust makes agreements with water rights holders to buy or lease water to keep in the state’s rivers and streams. It negotiates deals with water rights holders—usually farmers and ranchers, who own 85 percent of the water in Colorado—to obtain rights for instream flow. The approach benefits farmers, fish, and everyone who depends on healthy rivers. Andy Schultheiss, the executive director of the Colorado Water Trust, tells us more. Irrigation Leader: Please tell us about your background and how you came to be in your current position. Andy Schultheiss: I come from the political side of the environmental movement and have more than 20 years of experience in the private, public, and nonprofit sectors. I have worked across the American West for organizations including the League of Conservation Voters and the National Parks Conservation Association, usually on projects involving local communities and natural resources. I was chief of staff and district director for our current governor, Jared Polis, when he was a member of the U.S. House of Representatives. I left to become a local government consultant. When the executive director job at the Colorado Water Trust was posted in 2017, I applied, and over the past 4 years, I’ve slowly learned about water in the West. Water rights are a complicated and highly political issue in the West, and I think that people are gradually realizing how much they don’t know about the water issues in their state. I am interested in trying to find solutions that will allow agriculture to thrive while also preserving some water for rivers and for growing cities. Irrigation Leader: Please introduce the Colorado Water Trust.

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junior rights, so they aren’t satisfied in years when there’s a water shortage. The second way to acquire rights is by buying or leasing older rights from willing current users. For the first 30 years after instream flow rights became established in law, those acquisitions were extremely rare, and the state agency had no time to go out and try to find water rights owners willing to cut deals with them. That’s why the Water Trust was founded. Irrigation Leader: Does that mean you acquire these rights and then deliver them to the Colorado Water Conservation Board? Andy Schultheiss: While that was the original intention, we don’t always deliver the rights to the board. Sometimes, we just cut deals with water users to allow more water to stay in rivers. However, we usually go through the board, because it is the only entity that is legally allowed to hold the water for environmental use. irrigationleadermagazine.com

PHOTOS COURTESY OF THE COLORADO WATER TRUST.

Andy Schultheiss: The Colorado Water Trust is a small private nonprofit founded to restore flow to Colorado’s rivers by buying or leasing rights from current water users. We were founded in 2001 and finalized our first deal in 2008. Today, we have roughly 25 permanent projects, with more coming on all the time. Convincing people that it’s possible to share the water while still holding themselves harmless financially and maintaining their full rights to the water in the future takes a great deal of time and trust. We work closely with the Colorado Water Conservation Board, which is uniquely empowered to hold water rights for environmental benefit. The board acquires those rights in one of two ways. The first way is by creating new rights, which is called appropriating rights. Those new rights tend to be

The Colorado Water Trust has worked to increase flow in the Yampa River through reservoir releases.

Irrigation Leader: Where do you get the funds to purchase those rights? Andy Schultheiss: The money comes from a variety of sources, including corporations, private donors, and the Water Conservation Board itself. Our staffing and various other operational costs are covered by funds from private donors and foundations. Irrigation Leader: How do instream flow rights differ from other water rights?

Irrigation Leader: Is the mechanism you use to acquire these rights as simple as going out to the market, finding a right, and buying it? Andy Schultheiss: We almost never buy a right in fee simple. For example, there was recently a ranch for sale for around $8 million near Rocky Mountain National Park, and more than half the property’s value was water. Buying that water outright, especially a senior right like that one, is beyond most people’s capacity. For a nonprofit like ours, a purchase like that is usually not in the cards, so we often lease a water right instead. Essentially, we buy the use of that senior right to use for one season or perhaps for half a season, or we cut deals with irrigators and ask them to not irrigate for a month or two during the year and compensate them for that. There’s often a framework and agreement that lasts more than 1 year, but the decision to run a project in any given year is always up to the water right owner. Irrigation Leader: How do you determine the compensation offered?

The Colorado Water Trust has worked to increase flow in the Crystal River through a diversion coordination project.

Andy Schultheiss: Instream flow rights keep water in rivers and streams rather than taking it out for some consumptive use. They typically apply to a few miles of a river and are designated for sections of rivers where Colorado Parks and Wildlife determines that extra flow will be valuable for the fish and other wildlife that rely on it. The beauty of these rights is that they don’t differ from other water rights: They are regular water rights that were created by an act of the Colorado legislature in the early 1970s. Water rights for consumptive uses have existed since the 19th century, so instream flow rates came late to the scene. That means they’re junior rights, and when there isn’t enough water, which is often the case, they don’t get satisfied. That’s where the acquisition and repurposing of older rights comes in. Irrigation Leader: Do similar instream flow rights exist in other states? Andy Schultheiss: Colorado’s water rights system is more advanced and legally developed than those of other mountain West states. One other western state that has a highly developed system like Colorado’s is California. irrigationleadermagazine.com

Andy Schultheiss: The prices of water rights in Colorado vary dramatically. An acre-foot of water that has come over from the west slope and is now on the Front Range of Colorado might cost $20,000 or more, while an acre-foot in a certain area of the west slope might cost $60. It depends on factors such as who owns it, where it’s located, and how high the demand is. The Water Trust pays market rate whenever we can. It’s an important part of our model. Irrigation Leader: Please tell us about how you build relationships with irrigating farmers, irrigation districts, and other water users across the state. Andy Schultheiss: It’s taken 20 years to build our relationships with clients, and we’re still working at it. Farmers or ranchers are never gullible; they’re always rightly suspicious of folks trying to acquire their water rights. Irrigators own the right to use most of the water, about 85 percent in Colorado, because their rights are the oldest and get satisfied before most of the cities’ rights. But farming and ranching in the high country of Colorado do not have large margins, and the farms and ranches are typically small. Their owners sometimes feel they’re targeted because of the large volumes of this precious resource they control. Because of that, we have spent years building up trust by ensuring that we design our projects to be financially viable for farmers and ranchers. Our contracts also give our clients the right to decide every year whether they want us to do the project or not. If we didn’t give them that kind of flexibility, I don’t think we would be where we are now. Irrigation Leader: It sounds like you work entirely within the framework of existing water rights law rather than seeking to change the law. July/August 2022 | IRRIGATION LEADER

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Andy Schultheiss: Yes, we’re on the vanguard of what’s called market-based environmental work. Instead of spending all our efforts on politics and trying to change the law, we work within the system. We don’t get into politics. We make a point of being a water rights user like any other user. It has taken 20 years, but as a result, we’re now viewed differently from other environmental groups, even though our goals are often the same. Irrigation Leader: How do you identify areas of rivers that would benefit from the extra water? Andy Schultheiss: All of them would. There may be some high up in the Rocky Mountains that are still fine, but for the most part, anywhere we look, we see rivers in need. That being the case, our outreach is widespread, and we are for the most part opportunistic about where we work. We don’t preselect streams to work on, because that makes rightsholders in the area feel like they have targets on their backs. We get tips from people associated with water users, such as water lawyers or water engineers, regarding a water user who might be interested in a creative solution. We also do generalized outreach, which people sometimes respond to by contacting us. When we investigate further, we usually find a river that would benefit from our work. Irrigation Leader: Do you work statewide, or mostly just in the Colorado River watershed? Andy Schultheiss: We are statewide, although we only have two projects outside the Colorado River watershed: one on the Cache la Poudre River, which heads east toward the Mississippi, and one on the Alamosa, which heads south to the Rio Grande. Irrigation Leader: How has the drought in the Colorado River basin affected your work?

32 | IRRIGATION LEADER | July/August 2022

Irrigation Leader: Looking back over the last 20 years, what are the Water Trust’s main accomplishments? Andy Schultheiss: Last year was our biggest year ever. There were more than 10,000 acre-feet that would not have run in rivers if not for us. In fact, there were times when more than half the Yampa River through Steamboat Springs was water that we had bought and released from a reservoir. Sadly, despite these achievements, the amount of water in the rivers is constantly decreasing. Irrigation Leader: What are the best ways to balance irrigated agriculture with environmental preservation? Andy Schultheiss: Of course, there’s a third factor we haven’t talked about: residential and industrial use, which is growing along with the population. I think that the paradigm needs to shift toward people sharing water in smart, efficient ways with compensation, because nobody wants a western Colorado with no ranches. That would be a catastrophe for the communities in that part of the state. There are ways to share water smoothly, particularly late in years when rivers are low. Much of the productive growth in agriculture is early in the year anyway, which allows us to create promising agreements called splitseason contracts. It’s also important to implement creative methods of using water from reservoirs, such as projects that retime flows so that there is always a minimum in the river. Another tactic is to use municipal and industrial water multiple times, which is something cities are doing all over the Front Range. All these different strategies need to greatly expand. There is enough water in Colorado for Colorado, but we need to use it more wisely. IL

Andy Schultheiss is the executive director of the Colorado Water Trust. He can be contacted at aschultheiss@coloradowatertrust.org.

irrigationleadermagazine.com

PHOTO COURTESY OF THE COLORADO WATER TRUST.

Andy Schultheiss: As water gets scarcer, people feel more water threatened. Growers start thinking much more seriously about their futures and whether they and their children have one in agriculture. Particularly on the west slope of the Continental Divide, the average age of an agricultural water user is quite high. In a lot of cases, they shouldn’t be farming anymore, but they continue anyway. In that sense, there’s been more interest in what we do, because we don’t take their water permanently and we maintain the ecological integrity of their land. However, we are in competition with hedge funds and other entities all over the world that see water as a financial opportunity. There are people out there who can afford to buy large senior water rights outright and just hold them. We can’t pay ranchers and farmers millions of dollars for their water. It’s a huge controversy right now, but farmers

and ranchers are slowly selling out. To do so is their right, but it would be a disaster for the state’s rural economy if it continues. If enough people sell their water rights in a certain area, the whole economy falls apart. That’s something we’ve seen in the eastern plains of Colorado. A couple of decades ago in Crowley County, some Front Range cities basically bought out all the farms and their water rights. Now, most of the economy is gone, and weeds and dust rule. All the agricultural businesses, the diners, and so on closed. We’re trying to prevent that from happening again.

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Mike Mills: At Reinke Manufacturing, Sustainability Is a Global Goal to understand changing needs and to help growers use irrigation sustainably. My goal is to help them increase productivity while being responsible with the resources that are available to them. I also monitor our sustainability efforts as a manufacturer, and I help our growers understand that doing business with Reinke supports their sustainability efforts through the entire pipeline from manufacturing through product deployment. Irrigation Leader: How does Reinke manufacture sustainably?

Reinke's Reincloud remote monitoring system helps producers organize their operations by property, zone, and equipment.

einke’s irrigation systems can help growers save water while increasing yield. That, says Mike Mills, Reinke’s director of sustainability solutions, is a winning formula at a time when ending global hunger as well as conserving water are top worldwide sustainability goals. In this interview, Mr. Mills speaks with Irrigation Leader about Reinke’s approach to sustainability, from manufacturing and recycling to deploying technology to help growers achieve maximum water application efficiency. Irrigation Leader: Please tell us about your background and how you came to be in your current position at Reinke.

34 | IRRIGATION LEADER | July/August 2022

Irrigation Leader: In addition to being good for the environment, do your sustainability efforts benefit the company? Mike Mills: There are some benefits to Reinke Manufacturing—some of our recycling processes do provide a small revenue stream—but the main motivation for us in being a green manufacturer is the responsibility we feel to the environment and to the community where we live. We want to make sure that our presence doesn’t detract from but enhances the environment in which we exist. irrigationleadermagazine.com

PHOTOS COURTESY OF REINKE MANUFACTURING.

Mike Mills: I spent the first half of my career designing, selling, installing, and maintaining irrigation systems for golf courses and commercial landscape. After the housing market crash in 2009, I moved over to the agriculture sector. I came to work for Reinke and spent 13 years as the southeast territory manager. I was recently promoted to the position of director of sustainability solutions. My job in my new role is to make sure that Reinke is positioned

Mike Mills: Reinke has always had a corporate culture of reducing waste, reusing items, and being responsible for how we use resources. We employ lean and efficient manufacturing processes and make responsible investments, above and beyond the requirements. One example of that is our new laser cell, which is used for cutting various components used in the manufacturing process. It requires nitrogen to operate at peak efficiency. We made a significant investment in a nitrogen generator that captures nitrogen from the atmosphere, uses it in production, and then releases it back into the atmosphere. Another example is that when we built our galvanizing facility, we made significant investments in making it a state-of-the-art facility capable of capturing the off-gassing from the galvanizing process. We process those gases with scrubbers so that the air we release is cleaner than the air we take in. We felt a responsibility to do that for the people in the community we live in as well as for our environment. We use or recycle all the scrap left over from the production process, including the dross that we scrape from our galvanizing kettle. End-of-life electronics are separated by type and properly disposed of. In the office, we are in the process of converting all our lighting to LED lighting, which is going to reduce our energy consumption significantly. We shred and recycle 100 percent of the paper waste that comes out of our office. We also do our own onsite wastewater management.

Irrigation Leader: In what ways does your technology allow farmers to produce more sustainably?

water in their fields and significantly increase yield while still respecting sensitive areas.

Mike Mills: In the past, sustainability, as it pertains to irrigation, was viewed simply as using less water. But when we look at some of the worldwide sustainability goals that have been established by government agencies and environmental groups, we find that sustainability is now defined as more than that. We need to be able to produce food for consumption and fiber for clothing and shelter to support the world’s population today and in the future. We’ve all heard the statistic that we need to double production by the year 2050. What that means is that as an industry, agriculture needs to be responsible for how it invests resources to generate a significantly higher yield over a given land area. We have many products that can help growers achieve that goal—from something as basic as making sure that a sprinkler package is appropriate to the soil type to prevent runoff to the use of our Reincloud remote monitoring system with RC10 remote control for efficient operation or the use of our highest level of variablerate irrigation technology. Using our products, farmers can adjust their water application based on soil types in the field so that the plants achieve their maximum yield capability based on the soil water-holding capacity.

Irrigation Leader: What are some of the next frontiers in conservation and sustainability technology that Reinke is working on?

Irrigation Leader: Would you say that your recent advances in sustainability are driven by advances in software, advances in materials and design, or both? Mike Mills: Both. We’re finding that more durable product materials are available, so they’re able to withstand some of the punishment that it takes to put highly specialized technology in the field. There have also been advancements in accurate positioning technology, GPS monitoring, and pivot location monitoring. We can also deploy precise technology in protective packaging directly into the soil to monitor current moisture and other conditions, and through innovative software, we can interpolate real-time data in much better ways so that we’re applying water exactly when and where it needs to be. Irrigation Leader: How have these sustainability efforts opened new opportunities? Mike Mills: Elements of variable-rate irrigation have provided new opportunities. Historically, there were often protected wetland areas within farm fields where water could not be applied. That precluded the deployment of any mechanized irrigation, because it applied water to the entire field. Now that we have GPS position monitoring and specific sprinkler device control, we can deploy a mechanized irrigation system to a field, monitor its location, and shut off individual sprinkler devices at certain times to avoid applying water to certain areas. That has allowed growers to invest irrigation irrigationleadermagazine.com

Mike Mills: We’re seeing tremendous growth in soil moisture monitoring. That technology enables growers to interpret field soil data to predict when irrigation water applications are needed. It allows them to more accurately monitor the moisture that’s available at the root zone, not just at the surface of the soil. With our increased knowledge of plant physiology, we can better predict evapotranspiration requirements. Combined with more accurate weather forecasts, that can help growers decide whether an irrigation cycle is needed. These technologies are producing significant results beyond just reducing water use: They also improve yield. They keep available water in the healthy zone of the soil rather than flooding the roots near the top, which can sometimes cause oxygen depletion. Beyond monitoring soil moisture, managing fertility and other micronutrients directly at the root zone is the frontier of sustainable technology development. Irrigation Leader: What is your overall attitude toward sustainability? Mike Mills: I think we need to look at the big picture of sustainability: ending poverty, reducing hunger, and improving responsible consumption and production, meaning that we need to look at the entire process, not just individual parts of that process. We must understand how resource investment directly affects yield productivity. We’re looking at sustainability from that macro perspective. Irrigation Leader: What is your vision for the future? Mike Mills: We see technology being invested in all aspects of agriculture, right down to the irrigation level. My vision for the future is that growers should be able to quantify the environmental investment in a crop beyond the financial input costs, including energy inputs, water investments, and soil fertility needs. That information will allow growers to produce a crop at a high volume while being able to measure environmental investment as well as financial investment. We want to use those numbers together to create a sustainable production operation. IL Mike Mills is the director of sustainability solutions at Reinke Manufacturing. He can be contacted at mikemills@reinke.com.

July/August 2022 | IRRIGATION LEADER

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How the Middle Republic Natural Resources District Is Mapping the Ogallala Aquifer From the Air

hen the Middle Republican Natural Resources District (MRNRD) in Nebraska wanted to get a better picture of its groundwater supplies, it hired Aqua Geo Frameworks to do an airborne electromagnetic (AEM) survey. The district will use that information to better manage groundwater extraction and irrigated farming on the surface. In this interview, MRNRD Manager Jack Russell and Engineering Hydrologist Alex Boyce tell Irrigation Leader about their experience with the new technology and how it will help them help irrigated farmers in their service area. Irrigation Leader: Please tell us about the MRNRD. Jack Russell: Nebraska’s natural resources districts (NRDs) were created in the early 1970s by the State of Nebraska. The MRNRD is 1 of 23 NRDs across the state. Our service area is about 2.4 million acres and covers 41/3 counties. About 50 percent of that area is cropland, with 12.5 percent being irrigated cropland. Alex Boyce: We have about 240,000 certified irrigated acres that are watered with groundwater, and the majority of that water is pumped from the Ogallala aquifer. We grow mostly corn, milo, and soybeans, along with some winter wheat. The NRDs in the Republican River basin and the State of Nebraska have a compact with the States of Kansas and Colorado called the Republican River Compact, according to which we are only allowed to pump as much irrigation water as we did back in 2004, so we have a moratorium on expanding wells and certified acres. On top of the 240,000 groundwater acres, we have another 40,000 acres or so that are irrigated with surface water. Unlike the case with groundwater, the MRNRD doesn’t have jurisdiction over surface water, but we work closely with surface water companies. We have had to install meters on every one of our wells, and we have to measure deliveries of surface water, so we actually have a full accounting of how much water is pumped in our district.

Aqua Geo Frameworks carries out an AEM survey of the aquifer in the MRNRD’s service area.

understand the factors that influenced those declines. It would be an added benefit to know what areas of our district have available groundwater that could support additional irrigation. Under the terms of the Republican River Compact, no new irrigation can be developed in the MRNRD, so understanding the factors that affect water balance is critical. Alex Boyce: When I first joined the district, we started developing groundwater models and subregional watershed models. We noticed that our geology and 3‑D modeling lacked some information. We decided to start drilling some test holes to figure out where the weak spots in the data were. From there, we stumbled across a company that does AEM surveying and decided that was a more cost-effective way to get an idea of the aquifer’s properties. Instead of going out and drilling hundreds of thousands of test holes, we could just fly a helicopter over the aquifer and collect data rapidly.

Jack Russell: In certain areas of the NRD, there are groundwater declines of up to 20–30 feet. That may not be a lot of decline over decades, but we wanted to better

Irrigation Leader: Were you being proactive in doing this survey, or were you already running into problems with wells going dry or ground subsidence?

38 | IRRIGATION LEADER | July/August 2022

irrigationleadermagazine.com

PHOTOS COURTESY OF THE MRNRD.

Irrigation Leader: Please tell us about your work using AEM to map and measure your aquifer. Why did you want this survey done?

Jack Russell: We already have rough information on the aquifer; now, we’re trying to take it to the next level and come up with a model that will help us predict the effects irrigation will have on it.

Jack Russell: I would say we’re being proactive. We hadn’t experienced wells going dry or ground subsidence, but some NRDs and other states around us have, and we wanted to make sure that we wouldn’t reach that level. This project fits well with our current telemetry irrigation flow-meter project, which will provide accurate, real-time irrigation flow measurements to water users.

Irrigation Leader: What are you doing with those results, other than deciding where to drill wells?

Irrigation Leader: What company did you work with?

Jack Russell: We received a grant from the Nebraska Natural Resources Commission’s Water Sustainability Fund that covered AEM for areas where we had groundwater declines and recharge potential. We’re getting ready to fly the rest of the NRD this summer. The project includes developing a final model combining the two projects. Currently, Alex can use the raw data working with producers.

Alex Boyce: We worked with Aqua Geo Frameworks, based in Fort Laramie, Wyoming. They are geophysicists who conduct AEM surveys for groundwater modeling all over the United States and have worked with other NRDs in the past. Irrigation Leader: How does Aqua Geo Frameworks gather the data? Alex Boyce: It has a big, octagon-shaped device that is carried beneath a helicopter. The helicopter flies about 50 feet from the ground at about 50 miles per hour, covering planned flight lines and collecting measurements at different points. We select flight lines 1 mile apart and then connect points in the crosssection area. I went to every power district in our NRD and asked for maps of the power lines, because they interfere with the electromagnetic signal used in AEM surveying. Aqua Geo Frameworks plans its flight lines around power line locations and the geography of the area to get the best results. It then goes through the AEM survey and removes any unusual data. The survey collects information on resistance values through the ground. Different types of soil have higher or lower resistance depending on the composition of the aquifer. The University of Nebraska–Lincoln (UNL) uses machine learning to compare the resistance values from the AEM survey and test hole logs to create the best fit for the information. Once UNL knows the type of aquifer material, the data can then be used to create an underground 3‑D map of the aquifer. Knowing the type of aquifer material tells us about properties such as transmissivity, which is how easily water can flow through the aquifer. We are going to develop a groundwater model of the entire NRD based on the AEM survey. The process basically spits out a groundwater model file that we can plug into a groundwater model, and then the engineering firm will calibrate the model based on how the model reacts to the properties measured by AEM. The AEM results are a great starting place for model development. Instead of just using information from a small number of test holes and guessing in the areas where there aren’t any, we will have a full coverage map. Jack Russell: Aqua Geo Frameworks correlates the information it gathers through AEM with information from our observation wells and other existing wells for which we have profile information. The company is pretty intense about ensuring that its AEM measurements are accurate compared to actual conditions. irrigationleadermagazine.com

Alex Boyce: We use them to help farmers figure out the best way to use water. When farmers tell us they can’t get enough water out of the aquifer, I’ll show them the data so that they can figure out whether they need to move.

Irrigation Leader: Would the groundwater model be able to help you predict the effects of any new well on the overall aquifer? Alex Boyce: Yes. It actually creates a full groundwater budget that allows you to project groundwater levels in different areas 10 or more years into the future. Irrigation Leader: Is the practice of doing AEM surveys of aquifers using helicopters widely known among irrigation districts and other water managing entities? Jack Russell: It’s probably been used in Nebraska for several years. We initiated our project in 2020. The NRDs adopted it mostly because of our work with groundwater management. Alex Boyce: A groundwater model is only as good as the information you put into it, and this is better information than what we had in the past. I believe we’re going to see a more widespread adoption of this technology to create groundwater models going forward. IL

Jack Russell is the manager of the Middle Republican Natural Resources District.

Alex Boyce is the engineering hydrologist at the MRNRD. He can be contacted at aboyce@mrnrd.org.

July/August 2022 | IRRIGATION LEADER

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JOB LISTINGS

Does your organization have a job listing you would like to advertise in our pages? Irrigation Leader provides this service to irrigation districts, water agencies, and hydropower facilities free of charge. For more information, please email Kris Polly at kris.polly@waterstrategies.com.

FRWMB

FLATHEAD RESERVATION WATER MANAGEMENT BOARD WATER RESOURCES MANAGER/ENGINEER Salary: $120,000–$150,000 Location: Ronan, MT Deadline: Until filled Summary: The Water Resources Manager/Engineer is responsible to the Board to accomplish the work necessary to meet the goals of the water compact by performing, facilitating, delegating, and reviewing the work product of others. The Water Resources Manager/ Engineer is the lead staff person with ultimate authority for the operation of the office and inherent functions. Apply: http://dnrc.mt.gov/divisions/water/water-compactimplementation-program/docs/cskt/updates-news/ fwmb-water-resources-manager-position-description.pdf

ARVIN-EDISON WATER STORAGE DISTRICT GENERAL SUPERINTENDENT Salary: Based upon qualifications Location: Arvin, CA Deadline: Until filled Summary: Under Management direction, the General Superintendent plans, organizes, directs, and coordinates the Operations and Maintenance (O&M) functions of the district, including, but not limited to, environmental compliance, safety compliance, repairs and construction. Apply: https://aewsd.org/job-openings/job-openings/

SOFTWARE DEVELOPMENT ENGINEER Salary: Dependent upon qualifications Location: Deshler, NE (Global Headquarters) or Kearney, NE Deadline: Open until filled Summary: Are you ready to make a big difference for growers worldwide? You would be responsible for new and sustaining product development on highperforming water management machines in this role. Your experience will directly impact application and embedded software, targeting various platforms and using a wide range of programming languages. irrigationleadermagazine.com

Value-added results for growers utilizing the latest technology are paramount. This is a diverse company role that includes a variety of project assignments across several platforms, web-based applications, and interfaces in and out of database repositories. Apply: https://www.reinke.com/opportunities.html

CORPORATE SOCIAL RESPONSIBILITY MANAGER Salary: Dependent upon qualifications Location: Vancouver, WA Deadline: Until filled Summary: The Corporate Social Responsibility Manager will help drive the Company’s Social and Governance visions and will partner with other leaders in the organization as we seek to clarify our Environmental, Social, and Governance (ESG) strategy, measure output, and report results externally. Apply: https://www.nwpipe.com/careers/

COST ANALYST I/II Salary: Dependent upon qualifications Location: Orem, UT, Houston, TX or Vancouver, WA Deadline: Until filled Summary: The Cost Analyst will provide support to Manufacturing Operations Management by developing, reporting, and analyzing operating results in areas such as plant profitability and inventory management. The Cost Analyst will work with Operations Management to understand cost drivers and develop meaningful metrics. In addition, the person in this position will play a key role in ensuring compliance with internal controls at the manufacturing facility by reinforcing expectations and the reasons for the controls. The person will participate in month-end accounting activities, monthly forecast reviews, will play a key role in physical inventory counts, and will support quarterly reviews and the year-end audit by our independent accounting firm. Apply: https://www.nwpipe.com/careers/

For more job listings, please visit: irrigationleadermagazine.com/job-board/. July/August 2022 | IRRIGATION LEADER

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Upcoming Events July 4–8 Zone Atelier Bassin du Rhône and Graie, I.S Rivers Conference, Lyon, France July 11–13 North Dakota Water Resource Districts Association and North Dakota Water Education Foundation, Joint Summer Water Meeting and Executive Briefing, Fargo, ND July 20–22 Groundwater Management Districts Association, Summer Conference, Copper Mountain Resort, CO July 21–24 National Association of Counties, Annual Conference and Expo, Adams County, CO July 25–27 National Water Resources Association, Western Water Seminar, Fairmont, MT July 28 North Dakota Water Resource Districts Association, Water Day at the North Dakota State Fair, Minot, ND August 1–3 National Conference of State Legislatures, Legislative Summit, Denver, CO August 8–11 Tristate Seminar, Las Vegas, NV August 17 The California-Nevada Section of the American Water Works Association, Water Education Seminar, Santiago Canyon, CA August 23–24 Colorado Water Congress, Summer Conference, Steamboat, CO September 13–15 Husker Harvest Days, Grand Island, NE September 14–17 European Irrigation Association, GaLaBau Landscaping, Maintenance, and Construction Expo, Nuremberg, Germany September 15–16 World Academy of Science Engineering and Technology, International Conference on Drip Irrigation for Agriculture, Zurich, Switzerland September 16 Agribusiness and Water Council of Arizona, Annual Meeting and Water Conference, Tempe, AZ September 19–22 Nevada Water Resources Association, Fall Week of Water, Reno, NV September 26–28 National Drilling Association Convention, Pittsburgh, PA September 26–29 National Rural Water Association, WaterPro Conference, National Harbor, MD October 3–10 Irrigation Australia Committee on Irrigation and Drainage, International Congress on Irrigation and Drainage and International Executive Council, Adelaide, Australia October 4–5 Oregon Water Resources Congress, Annual Elmer G. McDaniels Memorial Golf Tournament and Technical Seminar, Bend, OR October 4–7 Irrigation Australia, International Conference and Exhibition, Adelaide, Australia October 5–7 Texas Water Conservation Association, Fall Conference, San Antonio, TX October 9–13 International Desalination Association, World Congress, Sydney, Australia October 18 Utah Water Users Association, Utah Water Summit, Layton, UT October 23–26 The California-Nevada Section of the American Water Works Association, Fall Conference, Sacramento, CA October 28 Agribusiness and Water Council of Arizona, H2Open Golf Tournament, Casa Grande, AZ

Past issues of Irrigation Leader are archived at IRRIGATIONLEADERMAGAZINE.COM /IrrigationLeader

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Irrigation Leader July/August 2022

Articles inside

Tapping Opportunities at the Bureau of Reclamation’s WaterSMART Program

How the Colorado Water Trust Uses Market-Based Agreements to Benefit Rivers and Irrigators

The Finance Issue

JOB LISTINGS

How Kennewick Irrigation District’s Administrative Fees Reduce Workload and Raise Funds

Rick Reinders Watertronics’ High-Quality Pump Systems and Controls for the Irrigation Market

How the Middle Republic Natural Resources District Is Mapping the Ogallala Aquifer From the Air

Raising Infrastructure Funds by Issuing a Bond: A Conversation With Matt Lukasiewicz