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.
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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
24 | IRRIGATION LEADER | July/August 2022
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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.
