Why All The Talk About Purchase of Agricultural Conservation Easements (PACE)? New state program to support local purchase of permanent agricultural conservation easements. Proposal is for Calumet County to adopt an ordinance outlying a process to preserve the best farmland in the county through PACE.

State’s goal is to seed and support local programs; therefore, the intent of the proposed Calumet County PACE code is to establish a local program. DATCP will not work directly with individual landowners on easements. Rather, DATCP will work in partnership with cooperating entities to support their efforts. State PACE Program

What is PACE? Landowner voluntarily sells development rights on agricultural property to a local government or charitable organization. Land itself remains in private ownership, and, remains on the tax roll.

How Does PACE Work? Land owner sells their development rights via a recorded easement: – –Is attached to the deed – –Land can be sold or passed down to heirs – –But all future landowners are bound by the easement

How Does PACE Work? The easement is tailored to each property and the interests and needs of landowner: – –Can retain building sites – –Allows for building and expansion needed for long-term agriculture – –Prohibits development that would interfere with ag use

How Are PACE Easements Valued? Once an agreement is reached on what easement(s) to pursue, an appraisal determines the value of the development rights: Difference between “highest and best” and restricted value is the value of the easement

Value determined by varies with each property and the easement restrictions Value determined by varies with each property and the easement restrictions For example, value might be higher in Woodville than Chilton For example, value might be higher in Woodville than Chilton Average in Wisconsin (2010) = $2,050/acre Average in Wisconsin (2010) = $2,050/acre 80 acre farm = $164, acre farm = $164,000 Valuing Easements Development Value - Ag. Land Value = Easement Value

What are the Advantages of PACE to the Land Owner ? – –Voluntary – –Non-regulatory – –Compensates landowners – –Land is kept in private ownership

What are the Advantages of PACE? – –Landowners can liquidate capitol without selling land – –Keeps farming affordable for other farmers, including heirs – –Encourages other farmers and ag business to reinvest in operations

How Do Farmers Use PACE Money? Findings from Massachusetts – –67% paid off debts – –57% reinvested in farm (land, equipment, etc.) – –50% added to savings and investments – diversified their assets – –33% put toward retirement “We should think of PACE as an economic development tool. PACE is not and should not be just about conserving land”

More Findings From Massachusetts – –92% said they would participate again – –80% said PDR (PACE) was important in improving operation – –80% said PDR increased farm profitability

What are the Downsides of PACE? – –PACE is expensive. If qualifying, state pays 50% value; other agencies available to help fund remainder. Donated value counts towards county match – –Can’t be done in isolation. PACE only makes sense where there is a strong foundation of land use planning and agricultural zoning – –Only works where you can protect “critical mass” – continuous blocks of land – –Transactions are time consuming; easements must be monitored and enforced over time

PACE Programs in Wisconsin Examples: – –Town of Dunn – –Town of Bayfield – –Town of Windsor – –Rock County – –Jefferson County – –Waupaca County – –La Crosse County

Interest in PACE is Growing in Wisconsin As of spring 2010: – –26 towns have included PACE in local plans or are exploring PACE – –18 counties are in various stages of considering PACE

New State PACE Program Goal is to support local purchase of permanent agricultural conservation easements through matching grants to: – –local governments – –non-profit conservation organizations

What Costs are Eligible for Cost Share? Up to 50% of the FMV of the Easement Transaction costs: e.g. surveys, appraisals, title verification, closing fees, baseline documentation

Range between $5,000 and $15,500 Range between $5,000 and $15,500 Transaction costs LowHigh Appraisals $1, $ 5, Surveys $2, $ 5, Title Insurance $ $ 1, Title Search $ $ Attorney fees $ - $ 2, Closing Fees $ $ Recording fees $ Baseline Documentation (existing land uses) $ $ 1, Environmental Hazards Assessment $

What can be used as “match” for state PACE grants? Federal grants Local contributions Private donations Landowner contributions as part of a bargain sale

What Land is Eligible for PACE in Calumet County? Zoned EA or GA Implementing Best Mngmnt Practices Actively farmed Within an ag area per SG; farmland preservation area in FP Can not be in a SSPA Other requirements per funding source (i.e. state requires at least 50% of land in crop, pasture or grassland; receive Gross Farm Revenues of $6,000/year)

What Criteria will Be Considered By County Program? – –Soil Suitability: At least 80% of your soil must score 42 or higher (highest is 50) or you are not even considered. Thereafter, the more prime the soils, and the more of those prime soils, the higher you rank. – –Threat of conversion – –Distance to other protected land, incl. PACE – –Stewardship: no viols, more pts. – –Historical significance: crop history, multi-gener. farm – –Fund leveraging: donated easement

What is the Status of the PACE Program? Recommended in SG and FP State Program in 2009, in 2 nd year Ad Hoc Group met 10x in 2010 Planning and Zoning Committee: Public Hearing March 2 nd County Board March 15 th Needs budget approval for transaction costs (Max $75,000/ first yr.)

Transaction costs are up to $15,000; state might pay half (if eligible) Transaction costs are up to $15,000; state might pay half (if eligible) If state pays half, county needs $7500/easement (10 easements) If state pays half, county needs $7500/easement (10 easements) If state doesn’t pay half, $15,000 = 5 easements If state doesn’t pay half, $15,000 = 5 easements Interested farms, at Interested farms, at least the initial ones, are much larger than the state average, meaning we need to be ready for increased transaction costs Adjust after first year Adjust after first year Why $75,000?

–County has received much interest. Interest ranges from 40 ac. to 850+ –Initially Land Trust can process about 3/year –Farms which sat down and specified specific acreage/interest: >850, 490, 145, 103 (State ave. 360) –If easements on all 4, at state average: 1588 x $2050 = $3,255,400 –Goal: At least one farm/yr. –Partner’s Max Load: 3 –Reality: 2 large, or 3 small to medium –ALL FUNDING DEPENDANT Realistically, How Many Easements Should We Expect?

How Does the Process Work? Ten Step Process Interested farmer contacts the Planning Department. Program Administrator (Planning Director) determines if they qualify to apply (located in farm pres area, etc.) Application submitted. Application ranked. List of ranked parcels submitted to PACE Committee (PZ Committee) for recommendation to County Board.

How Does the Process Work? (…continued) Board decides which ones to pursue negotiating a price. Program Administrator works with Non-Profit Conservation Organization (aka ‘Land Trust), who in turn orders appraisals. Price negotiated with owner. May include donated land. PZ Committee reviews, recommends to Board, who decides which parcels to purchase, pending funding. Once funded, paperwork completed and easement recorded in the Reg. of Deeds Office.

Questions?