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Budget squeeze could slow open space deals

By BRETT WILKISON
THE PRESS DEMOCRAT

The Sonoma County Agricultural Preservation and Open Space District, the landmark taxpayer-financed effort that’s protected more than 85,000 acres of undeveloped land, has hit financial hard times and is looking at a major strategic overhaul, including a likely slowdown in new land deals.

The changes are driven by two forces: A steep drop in sales tax revenue, the district’s main source of cash, and the debt now coming due for a recent three-year bond-supported spending spree on land and conservation easements with private landowners.

In a special meeting Monday of the board of directors, district staff described those fiscal challenges alternately as a “perfect storm” and a “day of reckoning” for the district, which voters first authorized in 1990.

The district is still far from a deficit. But at no time in its 21-year history has it been so financially stressed, staff told the five county supervisors, who serve as the agency’s board of directors.

“Our reality is very different,” Conservation Program Manager Misti Arias said bluntly.

The stark news is another sign of the recession’s blow to county government, which faces a 25 percent drop in spending next fiscal year, due largely to a historic decline in property tax revenue.

But the district’s woes are slightly different and several supervisors suggested they were due to a lack of fiscal foresight.

“Bad financial planning,” said Efren Carrillo, who serves as president of the open space board.

Director Valerie Brown defended the board, saying a separate entity — the district’s Open Space Authority — had primary oversight of financial decisions, up until this year. The authority’s recent disbanding — a move granted by voters in their 2006 renewal of the district — gave supervisors tighter control over district finances, Brown said.

“It’s time for this board to really get down in the weeds,” she said.

The problems revolve around two related pots of money: the voter-approved quarter-percent sales tax that supports ongoing expenses and leftover money that goes into reserves.

The first pot is projected to remain at $16 million next fiscal year, down nearly 17 percent from its peak at $19.2 million in 2007.

But an even more costly hit to both pots is expected in July, when the district begins paying $7.5 million annually in debt for the next 20 years on $98 million in bonds. The 2007 financing was used through 2009 to fund many recent land purchases, including high-profile deals for the Jenner Headlands, Taylor Mountain and additions to both Tolay Lake Regional Park and Sonoma Coast State Park.

Combined with operational expenses, including staff and program costs of $7.2 million and other expenses, the debt payments are expected to consume most of the district’s annual revenue.

That would leave no source of money to replenish the cash reserves — the largest pot for project funding, now that the bond proceeds have been spent. In the last two years, those reserves have dropped from $77 million to $57 million. Planned projects could leave the balance with about $35 million in the years ahead.

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.

Supervisors discussed a “pause” on land deals to avoid that scenario, but District Manager Bill Keene headed off that proposal with assurances that such an immediate crisis is unlikely.

By holding operational costs down, Keene expects to deposit about $1.5 million annually into the district’s reserves, even as it pays off its bonds. In the past, those annual contributions have been $8 to $9 million.

The result: the district will have less money to spend on land deals. Its budget this year is $18.9 million — about half of it coming from previous contributions to reserves. In past years, the district has rarely spent its full allocation. But in any case, future budgets will likely be considerably smaller.

“We still have $35 million in uncommitted money to go land conservation projects,” said Keene. “Now the challenge is where do those dollars go?”

Comments from Monday’s packed audience, including representatives from farming, land conservation and recreation groups and cities, showed competition will only get tougher for the district’s dwindling money.

Already up to 80 projects compete for funding each year, with about eight making it to a list of finalists. Most speakers pressed for more support of their causes.

“Ag needs its fair share of acquisition dollars,” said California Farm Link executive director Steve Schwartz, echoing others who said ranchers and farmers were underserved by the district.

Supervisors approved work on a plan to guide district priorities in the next three years.

To trim rising management costs, they also agreed to look at transferring more of the district’s own 6,700 acres to private or other public hands, with protections.

The cash-strapped state parks likely won’t be a partner in that effort, several speakers said, but nonprofit groups might.

LandPaths’ leader Craig Anderson said his group, which manages 6,000 acres of public open space countywide, has saved state and local governments $4.3 million. The nonprofit will continue to “fill in the cracks where possible,” he said.

___

Sonoma County Agricultural Preservation and Open Space District

Sales tax revenue
2010-2011: $16 million
2011-2012: $16 million

Projected cash reserves
$57 million (as of July 1)

2011-2012 budget
- Land, easement purchases, matching grants: $18.9 million
- Planning, capital improvements on district-owned lands: $1.5 million
- Operations (staff, programs): $7.2 million
- Stewardship reserve fund: $500,000 (annual contribution)
- Debt services on 2007 bonds: $7.5 million





13 Responses to “Budget squeeze could slow open space deals”

  1. Lee Parker says:

    If the OSD staff had stuck to purchasing conservation easements, as the founders intended, and sold that concept to the business and ag community to get their support, the district would not be in this jam. And they would have protected far far more ag and open space (with the land owner providing the stewardship). Now they have burned-up all the money on fee purchases, at the top of the market.

    Lee Parker, one of the 19 original founders of the OSD.

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  2. NOTUTOO says:

    @Lets be Reasonable…You have me wrong, I do believe that tax payer monies should go to the betterment of Sonoma County. I just don’t see it happening. I guarantee there was more about the Open Space District in this article than there was in the voters pamphlet.

    @Bear, I agree with your statements, although I might have changed one word; appalling for appealing.

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  3. Lets be Reasonable says:

    @bear – This money was voted in on an election, to be used for this purpose. Makes it hard to use for anything else, unless it was specifically written that way. Not sure I would blame the politicians for this one…

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  4. bear says:

    Notutoo:

    It is worse where I’m living.

    A lot of my old friends in Sonoma city and county government have been laid off, or are retiring under duress. Not good if you think experience is needed to solve problems.

    So it is appealing to think that there’s $35 million out there that might help.

    But you should blame elected officials, and these special interests who fund initiatives. That money is out of reach – as is a lot of money that is restricted to specific purposes (eg. roads). You name the need, the funding may be retricted to other purposes. Yes, not smart.

    But most elected officials are not smart.

    Staff people are usually VERY smart. Yet their ideas are not welcome if they disturb local politics.

    These comments submitted with respect.

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  5. James Bennett says:

    Google:The Wildlands Project to get the REAL plan for our open space(and us).It’s nice to pretend there’s a political Democratic process though, just for old times sake.

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  6. Lets be Reasonable says:

    @NOTUTOO – you get that 3rd vote everytime we have elections. Open Space was voted for in an election. You obviously don’t believe that tax payer money should go to the betterment of Sonoma County, but thankfully, a majority of voters disagreed with you.

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  7. Lisa Ramirez says:

    $7.2 million for salaries & administration costs? Of course this is where that LOSER Valerie “can’t live on my own, must take public money” Brown wound up. CUT THE ADMIN SALARIES LIKE VALERIE BROWN!

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  8. NOTUTOO says:

    Hey Bear…I wonder how it would do if we held a third vote. I’m not saying it’s tyranny, I’m saying they have $35 million of OUR dollars and county government is begining to crumble all around us. Hundreds of county jobs set for layoffs. All this yacking about pensions costing too much. Well I’ll tell you what’s costing us too much, Open Space and Redevelopement. I think I read where you said that you moved from the county because of the high cost of living here. Do they have this where you live? Respectfully…

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  9. bear says:

    The Open Space District is actually a very democratic and conservative venture. It was approved TWICE by a vote of the people, compensates landowners for not “developing” everything in sight, and helps contain cities that would otherwise sprawl.

    Sonoma County is the envy of the nation, where many other locales have been consumed and abandoned by free market capitalism. Google “rust belt cities.”

    All of Rohnert Park was once “ag land.”

    But the 2006 ballot measure gave direct control of the purse strings to the Board of Supervisors? And now there are financial problems? “Bad financial planning” says newbie Supervisor Efren Carrillo. Anybody else see the irony there?

    But go back 5 years and ask who saw the “Great Recession” coming? Or the full cost of an “aggressive” foreign policy? Or that tax cuts, on whatever level, do not seem to have generated good jobs or economic prosperity?

    No doubt there are ways to reduce the cost of government while minimizing the tax burden on ALL citizens. But how is it that we all paid more taxes than GE last year?

    If you love the land that is Sonoma County and you want your granchildren – and their children, to see it – you need to support this slightest of taxes. Not kick the District for problems that nobody saw coming.

    Or move to Fresno? Or Vegas? Or LA? This is the case of a problem we should be grateful to have.

    The 85,000 acres are all around you.

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  10. GAJ says:

    Anyone even BEEN on any of these 85,000 acres?

    How many of those 85,000 acres were zoned agricultural anyway?

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  11. Jason Valez says:

    Yes, government is best at throwing money away. Our taxes go to make lands unusable, sound logical?

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  12. BigDogatPlay says:

    Budget squeeze could slow open space deals????

    Good… the taxpayer funded, government land grab needs to be brought to heel. And how about helping to service that debt by allowing some productive, public use of those 85,000 acres?

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  13. NOTUTOO says:

    “We still have $35 million in uncommitted money to go land conservation projects,” said Keene. “Now the challenge is where do those dollars go?”

    Incredible…The County is poised to lay off hundreds, the Sheriff’s helicopter is certain to be cut, the roads are going without repair and Open Space has $35 Million that they don’t know what to do with. It boggles the mind.

    Now I don’t know what I hate more, Open Space or Redevelopement.

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