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Competition heats up for California's land preservation dollars

by Chris Hinyub, published

The lethargic economy is threatening land conservation efforts and assistance for farmers in the heart of California's wine country. The Sonoma County Agricultural Preservation and Open Space District has managed to stay out of the red, but after bond payments and reduced revenue, the taxpayer-funded program that has so far protected more than 85,000 acres of undeveloped land will be left with a very limited budget for new land deals in the coming years.


The district has not been presented with such a “perfect storm” of fiscal challenges in its 21-year history, agency staff say. The five county supervisors who serve as the district's board of directors held a special meeting Monday to discuss priorities and plot a course for the future.


According to district spokesmen, there are two main factors driving the looming budgetary crisis: a sharp and sudden decline in sales tax revenue (the district's primary source of income) and debt obligations on a recent three-year deal with the state to finance land purchases and conservation easements from private landowners using bonds.


Efren Carrillo, president of the open space board, blames the district's woes on “Bad financial planning” – alluding to the bond-financed spending spree that has resulted in $98 million worth of debt. The district will be paying off those bonds over the next two decades at $7.5 million per year. From 2007 to 2009, the district used the bonds to finance several high-profile land purchases including Taylor Mountain, Jenner Headlands and add-ons to Sonoma Coast State Park and Tolay Lake Regional Park.


Director Valerie Brown wasn't willing to take responsibility for the botched budget. She maintained that the district's recently disbanded Open Space Authority was overseeing most financial decisions up until this year. Voters agreed to a five-year term limit on the authority when the district was renewed in 2006. That deal was supposed to give county supervisors more control over district expenditures. That control came at a price.


Debt payments (combined with staffing and program costs) are expected to siphon most of the district's annual revenue, meaning there's virtually no way to replenish cash reserves. With no more bond proceeds, the district must rely on cash reserves as its main source of project funding. These reserves have dropped from $77 million to $57 million in the past two years and planned projects will shrink that number to $35 million shortly.


This is a scary prospect for the district as Brett Wilkison of the Santa Rosa Press points out:


     “At current levels, assuming no growth in sales tax, that figure would support about five years of land purchases and easement projects on private land, a massive shortfall considering the district is supposed to live through 2031.”


A voter-approved quarter-percent sales tax will provide enough income to maintain ongoing expenses. The district is projecting that revenue from taxpayers will amount to $16 million next fiscal year – a 17 percent drop from peak levels in 2007.


District Manager Bill Keene wants to avoid what some supervisors are suggesting: a pause on land deals. His plan is to reduce operational costs while still being able to deposit about $1.5 million annually into reserves. Keene says this year's budget will stand at $18.9 million, half of that coming from previous contributions to reserves.


Currently, supervisors are looking at ways to trim operational costs. One suggestion that has gained traction is to transfer some of the district's own land holdings (some 6,700 acres) to another public entity or even to private hands.


Monday's meeting saw a packed audience of land conservationist, recreation groups and city representatives lobbying for their interests. But a large gathering of farmers came out to voice their concerns about vanishing project dollars. A common refrain from farmers and ranchers was that they were under-served by the district. As Steve Schwartz, executive director of California Farm Link said, “Ag needs its fair share of acquisition dollars.”


Upwards of 80 projects compete for district support each year. Of those, usually only eight make it to a list of finalists. Keene assured the crowd that the district has a guaranteed $35 million in uncommitted cash dedicated to land conservation projects. Competition for that money will likely be fierce.

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