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Agency staff advances reimbursement policy draft; WIFIA funds for easements remain uncertain
Summary
Agency staff reported progress on a draft reimbursement policy, work on the growth management plan update, and ongoing negotiations with WIFIA over use of loan proceeds for right-of-way/easement acquisitions.
Agency staff told the Sarpy County and Cities Wastewater Agency during its May meeting that a draft reimbursement policy is close to completion, but that use of remaining WIFIA funds for right-of-way and easement purchases is uncertain.
Executive Director Dan Hoynes said staff had solicited written comments from city members on the proposed reimbursement policy, received drafts from the agency attorney informed by other jurisdictions, and planned additional finance meetings before circulating a final recommendation to administrators and the board. “When we get that done here probably the next week, then I'll ship that draft off to all the administrators,” he said.
Why it matters: The reimbursement policy will guide how the agency shares or reimburses development-related costs with member cities and developers. The policy work ties directly to the agency rate model and to near-term capital planning for phases 1B and 2 of the regional project.
WIFIA modification, right-of-way funding
Hoynes reported agency staff asked a WIFIA modification to permit use of remaining WIFIA funds for design, permitting and easement acquisitions (the DPE package). He said the total DPE modification request is about $13.7 million and that WIFIA had indicated reluctance "to allow us to use the $6,000,000 for the actual easement acquisitions." Hoynes said agency staff are continuing negotiations and that he planned to meet with Tim Gay in Lincoln on May 8 to seek funding alternatives.
Mark Sedout, the agency treasurer, said the FY25-26 budget still includes an $8,000,000 right-of-way acquisition line and that adoption of the budget assumed the agency would use loan proceeds for that purpose. "If they change their mind, then we gotta deal with that issue," he said, noting staff would return to the board if WIFIA denies the use.
Rate model and staffing
Sedout provided an updated rate-model summary showing three favorable drivers since April 2024: higher-than-expected connection fee revenue (projected $2.2 million surplus), lower actual project expenses (value engineering and reduced contingencies), and lower-than-forecast WIFIA borrowing rates. Together, those changes improve the agency's debt-service coverage ratio compared with prior forecasts and reduce near-term pressure around a previously projected covenant "pinch point." Sedout said the agency still expects to use cash on hand to subsidize several years of operations as connection fees ramp up.
Growth management plan update
Hoynes said he appointed a committee to update the agency's growth management plan; members received consultant drafts and each member jurisdiction will assign two to three representatives to the committee. Hoynes said the update will be an "arduous process" expected to take several months.
Ending
Staff emphasized that although the agency budget and rate model are trending more positively than earlier projections, final funding for easements depends on WIFIA's decision and staff will return to the board if assumptions change.
