PDRs 101: Informational sessions held

by Cat Urbigkit

About 20 people attended the first of three purchase of development rights (PDR) informational meetings, held Monday evening at the Sublette County Fairgrounds outside of Marbleton.

Tuesday afternoon's session drew a few more than the night before, but the evening session had about 40 people walk through the door to learn about PDRs.

The sessions were hosted by the Sublette County PDR Working Group. Members of this group were appointed by the Sublette County Commission to examine the idea of using tax revenues to purchase development rights from ranchers.

Sublette County Extension Agent Eric Peterson kicked the sessions off with some local statistics. For example, Peterson said that Sublette County is losing 18.6 acres of ranchland for each additional person residing in Sublette County, using 1982-1997 figures.

Peterson noted that the American Farmland Trust classified 94 percent of Sublette County's private land as "prime" ranch land, of which 50 percent could be developed in the next 20 years.

Extension agent and PDR advisory board member C.J. Mucklow of Routt County, Colo., was the first presenter. He said ranching is still important to the Routt County, which consists of 1.5 million acres in northwestern Colorado, (and includes the Steamboat area). He said there are 494 ranchers generating about $22 million in annual sales, mostly in cattle receipts.

Mucklow said the PDR program is one part of a larger agricultural land conservation program in Routt County. The program also includes value-added enterprises such a woolen mill and hay auction, and a community ag alliance and stewardship network. The county open lands plan also includes provision s for cluster development, a right to farm law, and the PDR program, he said.

Mucklow said the PDR program is funded through a one-mill property tax. The tax barely passed, failing in every rural district except one, Mucklow said. The tax was opposed by most rural property owners, he noted.

The program has now protected almost 5,000 acres and generates about $500,000 annually. The program has a 2007 sunset date and is administered by a citizen advisory board that provides recommendations to the county commissioners.

Criteria for the program include: leverage - for the use of federal, state and private funds; quality of the land resource; community values - historic places, scenic and natural areas; and the continuation of agriculture in the future.

Mucklow said the goal is to have a 10:1 leverage on a project.

Additional criteria include: minimum size of 100 acres; applicant must have sponsoring easement-holding organizations; qualified appraisal for the value of the conservation easement; complies with local government plans; and the land must have natural values.

Mucklow said the pastoral view around Steamboat was determined in one study to be worth about $7-10 million per year.

The PDR pays 32 percent of the appraised value of the easement, with a range of 20-80 percent, Mucklow said. The landowner donates about 40 percent of the value of the easement, with a range of 15-50 percent, he said. The average project totaled about $236,000 with an average of 454 acres per project. The PDR program in Routt County spent about $2.5 million for 5,000 acres. Various land trusts hold the conservation easements.

Mucklow said one big challenge for the program is the fact that there is not enough money, combined with rising land values. Another problem is that when a parcel of land is protected through a conservation easement, there has been an increase in the value of land near and adjacent to those properties.

Benefits of the PDR program include that it provides some funds to ranchers, protecting valuable ag lands, Mucklow said, and the local program provides a local match for available federal funding.

Mucklow cautioned that conservation easements are not a panacea for land management, and the fact that a conservation easement is in place "shouldn't be confused with good land management."

Mucklow also said a disadvantage is the "unintended consequences for future generations" ... which may actually increase rural development. When a parcel of land in a particularly beautiful viewshed is protected, it makes that land around it just all the more valuable for development, Mucklow said.

In addition, a PDR program is also not a tool to bring new/young ranchers into the agricultural industry, Mucklow said.

Mucklow said conservation easements are forever, so they need to be carefully analyzed by a financial advisor for tax implications.

In addition, many ranchers can't take full advantage of federal tax deductions because most ranchers don't have enough income.

The next part of the program involved a description of the PDR program in San Miquel County, Colo. Josh Sale of the Colorado Open Spaces Commission and founder of the county PDR program and rancher Jim Young described the southwestern Colorado area program.

Sale said the county is starkly divided, with the western portion a rural community, and the eastern portion, which includes Telluride, a tourist-driven and expensive area with rising land values.

The major goals of the PDR program are to encourage viable agriculture, protect open space, encourage/protect tourism, reduce estate taxes and reward resource management. Sale said in a survey, 97 percent of the visitors to Telluride cited the wide-open spaces and beauty as top reasons for visiting the area.

The San Miquel County PDR program is a voluntary program in which individual landowners provide sealed bids once a year.

"We take it or leave it," Sale said. "We don't negotiate with our landowners."

Bids are selected based on value, Sale said, with the goal the most "bang for the buck" with extra credit available in the review criteria.

The landowner gets to keep their land but uses a land trust of their choice to hold the conservation easement. To be eligible, the land must be in a mapped area for special values such as wildlife habitat, riparian area, or be traditional ag lands of 100 acres or greater. Extra credit is available if it is home to a rare species, has scenic vistas or provides wildlife habitat.

Landowners do compete for limited funds, and the purchase can't exceed the market value. Other considerations include the urgency, parcel size, whether the land buffers public or protected land, the landowner's commitment to agriculture, public access, commitment to best management practices, and protection of historic areas. Bids don't have to meet all these criteria.

A review committee sends recommendations to the county commission, which is then expected to "rubber stamp" those recommendations, Sale said. All bids are kept in confidence, and only the awards are made public.

Funding for a small mill levy providing $200,000 per year passed the voters by a large margin in November 2001, Sale said. Sixty-five percent of the voters supported the program.

Young said in a countywide survey, conservation was the top priority with respondents, even more so than fire protection, police, schools, roads or other services.

Sale said his county's PDR program tried to carve out the minimal role for the county government, not having the county negotiate or hold easements or perform other tasks.

The last presenter was Mike Lane, a fourth-generation cattleman from Gallatin County, Mont. His county is experiencing a huge boom in growth and is becoming far more urban and less rural. Gallatin County has been determined to be the most threatened county in the West due to development pressures, according to the American Farmland Trust.

A bond issue was passed in the county to provide funds for the PDR program. Although the funding passed, "It failed miserably in 14 rural precincts" Lane said, but these areas had the minority vote. In fact, the rural vote was two-to-one and three-to-one against it, Lane said.

Sublette County residents asked questions of the speakers. Curt Parsons of Big Piney inquired if the easements had to be written in a way to forever preclude development, using the example of the severed mineral estate which can be joined back to the surface if need be. The presenters explained for the landowner to get the federal tax benefit, the easement must be in perpetuity instead of a term lease.

Term easements have been debated, Mucklow said, but there is little public support for use of public funds for a term easement.

Rita Donham pointed out that all three counties represented had large urban centers and were somewhat resort or college towns (Telluride, Steamboat and Bozeman). She noted that the urban populations were voting the PDR programs in and questioned what the chance Sublette County voters would approve such a measure, "because we are not like your county."

Sublette County Commissioner Gordon Johnston said, "I think there are a lot of folks in our county ... who have no idea what we're talking about now." He questioned how they could be educated about the issue. It was noted that the Trust for Public Lands can help in polling and designing an advocacy program.

Rancher Dave Noble said agricultural viability is what needs to be addressed because "you'll never get enough money to protect everything that you would like to."

Noble said he hopes someday to see agriculture valued, rather than devalued.

Rancher Doug Vickrey asked about how much money a landowner actually receives once out-of-pocket costs are factored in and the federal government takes a chunk of it.

Lane said one project in Montana had a rancher receive $2 million in funding and the rancher donated the value of another $1 million. Apparently he was able to walk away with $2 million of the $3 million deal. Sale pointed out that it costs $15,000 to $25,000 to donate a conservation easement, because of out-of-pocket expenses, surveys, appraisals and contract costs.

Vickrey also asked whether the county has the statutory authority to purchase conservation easements. Sublette County Attorney Dale Aronson delivered his opinion to the county commissioners Tuesday, stating, "Yes, but that is only my opinion, since the authority has not been tested in our courts."

Tucker Smith said he has a conservation easement on his property "and it's not a scary thing." He said it is his right to protect his property in perpetuity, and added that subdivisions are created in perpetuity as well.

Participants at sessions were asked to fill out a questionnaire created by the Sublette County PDR Working Group. The answers to those questionnaires will help the group decide what its next steps will be and what recommendation it will make to the county commission about the development of a PDR program for Sublette County. The next PDR meeting is slated for Tuesday, Dec. 3 at 6 p.m. in Pinedale.