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HomeMy WebLinkAboutMinutes - 19940810 4 1 AP ROVED 8/23/94 MINUTES ORANGE COUNTY BOARD OF COMMISSIONERS PUBLIC HEARING ON THE PURCHASE OF DEVELOPMENT RIGHTS AUGUST 10, 1994 The Orange County Board of Commissioners met on Wednesday, August 10, 1994 at 7:30 p.m. in the new County Courthouse, Superior Courtroom, Hillsborough, North Carolina for the purpose of holding a public hearing on a proposed Purchase of Development Rights program. COUNTY COMMISSIONERS PRESENT: Chair Moses Carey, Jr. , and Commissioners Alice M. Gordon, Verla C. Insko and Don Willhoit. COUNTY COMMISSIONER ABSENT: Stephen H. Halkiotis, COUNTY STAFF PRESENT:, County Manager John M. Link, Jr. , Planning Director Marvin Collins and Deputy Clerk to the Board Kathy Baker. COUNTY ATTORNEY PRESENT: Geoffrey Gledhill Chair Carey convened the meeting at 7:40 p.m. He indicated that Marvin Collins would present a report on the concept of purchasing agricultural land for preservation purposes and using a bond issue to achieve that purpose. The recommendation of the Agricultural Districts Advisory Committee will also be presented. He stated that the newspaper reported that the County Commissioners had already decided not to use ad valorem property tax revenue to finance the payment and amortization of the bond issue. That has not been decided. The Board decided to hear from the public before voting to finance the amortization of the debt for a bond issue with ad valorem tax money. Marvin Collins stated that this program is for the purpose of farmland preservation. He indicated that he would discuss three aspects of the Purchase of Development Rights Program (PDR) proposal. Those aspects are 1) the history, defining what PDR is and is not, 2) what the Land Evaluation Site Assessment (LESA) System is and how it relates to the purchase program and 3) the means of financing the program. The impetus for this program started in the late 1970's with the creation by the Board of Commissioners of the Agricultural Districts Advisory Board. The Advisory Board developed a series of recommendations. The Purchase of Development Rights was considered an option, however, at that time it was not one of the recommendations of the Advisory Board. There was a specific proposal which required the drafting of enabling legislation for the County to have a farmland preservation program. The program that was proposed was similar to the Use Value Taxation Program which is in effect now. That program is authorized by the State and applies to all North Carolina counties. Because of the enabling act regarding Use Value Taxation, Orange County did not pursue its program. In lieu of that the General Assembly did create a Voluntary Agricultural Districts Program and authorized any county in the state to adopt and carry out a program of strictly voluntary districts. Orange County adopted an Ordinance several years later and has a Voluntary Districts Program in effect at this time. There have been 1,800 acres certified as qualifying 2 farmland. Approximately 800 acres have been designated as Voluntary Districts. When the Ordinance was first being considered, the Board of Commissioner reorganized the Agricultural Districts Advisory Board. Since the late 1980's/early 1990's that Board has been attempting to put together a purchase of development rights program. The specific charge for that program came in the form of a goal adopted by the Board of Commissioners in 1989. That goal charged the Advisory Board with developing the program. The first draft was presented to the Board of Commissioners in 1992. The Commissioners offered suggestions and comments for improvement. Since 1992, the Agricultural Districts Advisory Board has been working to finalize the proposal. Several charts were displayed to show the effect of loss of farmland in Orange County. In 1950 there were five acres of farmland per capita. That has declined to less than one acre per capita at the present time. Another chart showed the decline in total acreage in farmland from 180, 000 in 1950 to 81, 000 in 1987. The population has increased from 35, 000 in 1950 to more than 100,000 in 1994. He emphasized that the Purchase of Development Rights Program (PDR) is a completely voluntary program. There is nothing in this proposal that requires any landowner to participate. The total market value of a piece of property in a high development pressure situation here in Orange County was compared to total market value in a low development situation which would be found in rural areas of the state. The Fair Market Value is what a landowner has as a right to expect from developing his property. The Use Value of the property represents the value of the property for farm or forest purposes. The difference between Fair Market Value and Use Value is what is known as the Development Rights Value. A study has been completed for the county as a whole and the average market value of the property per acre is about $3,200 per acre. The Use Value is around $400.00 per acre. The difference between those two figures is the amount that would be paid for development rights. That is an average figure. It would vary from site to site and situation to situation. The purchase of development rights is always based on a site specific situation. There are a series of steps necessary for the operation of a purchase of development rights program. Those steps are as follows: STEP 1: Submission of application STEP 2 Ranking of Application using the LESA system STEP 3 Acquisition authorization STEP 4 offer to purchase/sell STEP 5 Acceptance of offer STEP 6 Closing These steps are further discussed in the handout "Questions Frequently Asked About A Purchase Of Development Rights Program" . This handout is located in the permanent agenda file in the Clerk's office. The development rights are not for sale to anyone without the property owners consent. They are for sale only to the, property owner who initially owned them and then only after twenty-five (25) years has elapsed from the original date of purchase. The Land Evaluation and Site Assessment (LESA) evaluation/assessment factors and ranking system was thoroughly explained. This system is currently being used in Forsythe County and Union County. It is a part of the zoning 3 ordinance in Union County. The LESA system consists of three issues. The first of these is agricultural significance which looks at a farm and studies the productivity of the soil for crop and forest purposes. It has a number of site assessment factors that look at farm characteristics. The area surrounding the farm is also taken into account. The total number of points that could be awarded a farm under the agricultural portion is 300. The second issue that is weighed is natural/cultural significance of the farm. The presence of natural areas, wildlife corridors, scenic viewsheds and roads, wetlands and historic sites and structures are weighed. The original proposal that the Advisory Board created did not include these factors, however, one of the rationales for considering natural/cultural significance is that much interest has been expressed by Orange County citizens in preserving these important aspects of the community. The Planning Board is currently involved in a project identify dentify scenic roads. The maximum possible points for these issues is also 300. Most of the parcels have been ranked between 90-- 120 for natural or cultural significance. The third ranking, overall significance, combines these two scores. Overall significance is actually looking at the parcel as being the best of everything; not only having productive soils, but also having natural and cultural features. The Advisory Board first used the farms of the four farmers on the Board. The second review included 8 other farms so that the LESA system could give a wider range of comparison. Those farms were located in Cedar Grove, Little River, Bingham and Chapel Hill Townships. The farms were grouped into ten productivity groups. Soil scientists using the Computer Assisted Land Evaluation System assisted in this review. A map showing the outcome of this review was discussed. There is a large amount of acreage that is productive particularly in the southwestern corner and in a band extending from Mebane to the northwest corner of the County. The LESA system also studies the uses of the land surrounding the farm in question. It looks at what is in crop, pasture, forest, residential and non- residential uses. Points are awarded based on the percentage of land within 1/2 mile of the farm that is in agricultural or forest use. The most productive lands for farm and forest are identified. Another map was displayed which showed the natural areas within the county. The wetlands and scenic roads were also identified. The Geographic Information System (GIS) plotted the portions within the farm and 1/2 mile of the farm that were visible from the road which constituted the scenic viewshed. Historic sites were also considered. From this information, the most significant areas, from a natural and cultural features perspective, were identified. This data on each farm was combined and a ranking for the 12 farms was established. A financial analysis of the Farmland Preservation Program is in its entirety in the permanent agenda file in the Clerk's office. The referendum would be held on November 8, 1994. There will be a second public hearing regarding the bond issue on September 6, 1994. If the bond is approved, the bonds will be sold for a twenty year period. The tax rate impact to pay the debt service on the bonds would require 5 development in the County with their taxes. He felt that this program will help to preserve Orange County as it is known today. Patrick Mulkey, a Bingham township resident, addressed the issue of the proposed 5 million dollar bond. He indicated that loss of land is only partly due to residential and commercial development. He feels that the local governing bodies are also partly responsible. The Cane Creek Reservoir was forced upon Orange County by OWASA and he feels that it was not necessary to build that reservoir. He stated that OWASA is not interested in preserving farmland in the watershed due to the run-off problem. He requested that the governing bodies reorganize OWASA. He believes that Orange County has enough water to supply its needs for decades to come if everyone works together. He also mentioned that the Landfill Site Search Committee has narrowed their review to 4 sites only one of which has no farmland. He felt that this program would benefit only 12 households directly. Chet Cavallito, an Orange County resident, indicated that although he does not farm in Orange County he does own 30 acres of woodland. He asked if this program was to save the farms or the beauty of this community. He stated that the population density is in the southeast corner of Orange County. If those people want to benefit from having beautiful land they would have to drive a distance to see it because the bond would purchase land in the northern potion of the county. He asked for detailed information on how successful similar ventures have worked in other counties. He asked that Orange County consider the possible tax and legal consequences to both the County and the farmer. He indicated that the Nature Conservancy has requested that he place his 30 acres in a protected class, which he has done. He pays development rate taxes which have increased 500% over the last 5 years. He indicated that there are tax disincentives for i keeping the land in a natural state. It is good financial business to timber but it is not attractive. Robert Nichols, a Cedar Grove farmer, spoke against this proposal. He indicated that he owns 205 acres in Cedar Grove Township and feels that if he sold his development rights to the County now he would be taking a huge financial loss on the future potential value of his land. In his opinion, selling the development rights would really mean selling the farm because the farmer could not afford to buy it back. He stated that Forsythe County is no longer using this program to preserve farmland. A copy of his statement is in the permanent agenda file in the Clerk's office. Commissioner Willhoit stated that this is a "present value program" designed for the farmer who is ready to get out of farming. The sale of development rights would be at current value. Mark Chilton of Chapel Hill said he appreciated Mr. Nichols' analysis of the tax and other financial implications of the proposal. However, he supports allowing the citizens to vote on a five million dollar bond referendum for the Purchase of Development Rights. • . 6 Keith Cook, a Cedar Grove resident, indicated that although he does not have a farm he does pay taxes and is in support of the preservation of land and open space. However, he felt that this proposal would benefit only a few people. He asked that the County pursue other ways of preservation that would help the larger community. As a member of the Recreation and Parks Advisory Board he has been involved in the search for soccer and baseball fields as well as parkland. He asked that if the development rights are going to be purchased, the County consider putting parks on some of that land. This program would benefit too small a group of citizens. Carl Walters, an Orange County farmer, indicated that he was not interested in selling his farmland to a developer. He wants to farm his land. Everything he purchases is going up in price each year. However, milk prices are at the same level they were in 1981. He predicted that in the next 20 years at least 20 large farms will disappear into development because of Estate Taxes. He mentioned that Dan Snipes, of Dairyland Road, was being forced to sell his equipment and cows to pay estate taxes. If this program is put in, farmers will be able to continue to farm. He supports this program saying that this would be the best thing that has happened to the farmer in a long time. Vic Knight stated that the bond and the development rights are two separate issues. He requested that the Board of Commissioners ask citizens to give their address and the number of acres that they own. He stated that this would give a clearer understanding of where the speaker is coming from in terms of the impact this program would have on them. He indicated that Commissioner Willhoit had mentioned that legislation could be considered in which public funds would not be required to deal with the transfer of development rights. He is opposed to the use of a bond for this program. He also has reservations about the transfer of development rights program itself and would like more information. Commissioner Willhoit indicated that the transfer of development rights would require special legislation prior to its implementation. The burden of payment would be transferred to the area where the higher density is being transferred. The purchase of development rights would benefit the county as a whole not just those who were selling their development rights. In response to the suggestion that citizens be asked to disclose their land holdings, he indicated that he felt that would infer that a value is being given to how much land a citizen owns and he has a problem with that inference. Dolly Hunter, Chair of the Agricultural Districts Advisory Board, thanked the Board for their interest in this proposed program. She indicated that the questions raised tonight would give the Advisory Board an opportunity to further refine this proposal. She indicated that they would attempt to better inform the citizens. The priority is the preservation of prime agricultural land. The most viable land needs to be preserved for the future. They have studied many farm preservation programs and chose to model the Orange County plan after R 7 the Forsythe County program. There are 92 farms on the waiting list to be funded in Forsythe County and that program has been very well received by the farmers in that County. She repeated that the PDR program is completely voluntary and the development rights will be held in a public trust protected by a recorded easement that cannot be violated or broken in the future by other Boards or citizens. Only the farmer has the right, after 25 years, to change the development restrictions by buying the development rights back at market value. The farmer could also be counseled, through the Planning Department, to establish the best payment plan for him or herself. Installments could be paid over many years in order to ease the burden of estate taxes or capital gains. The five million dollar bond goes purely toward the purchase of farmland. No administrative costs are included in that figure. She mentioned that if a farmer can no longer farm the land and cannot find anyone to lease it, several options are available. It can be turned into managed or unnmanaged forest. The agricultural rights could be sold. One other feature of this proposal is that four residences could be placed on each 100 acres. This would allow minifarms or clustered lots with open space. The rights could also be sold to a Conservancy for protection or the County for a park. Farms are evaluated on quality and productivity, continued economic viability, level of development pressures, and the natural scenic and historic resources as determined by the LESA system. Agricultural value receives the greatest weight, which assures that the best farmland will qualify for purchase. The acreage committed to the program will be taxed under the Use Value for farmland. She asked that PDR be viewed as a timely, financially competitive alternative for farmers to choose. Elizabeth Walters, a farmer and member of the Agricultural Districts Advisory Board, stated that Dolly did an excellent job presenting the Advisory Board's thoughts on the program. She mentioned that in 1990 the Federal Government passed the Farms of the Future Act. North Carolina was the only state in the southeast region to pass legislation to qualify for those federal funds. Under this program the Federal Government will put in two dollars for every dollar that the state provides for the purchase of PDR. The local government must also have matching funds. Vermont has received all of the money for this program to date. However, Orange County could qualify for this money if the State of North Carolina receives any of these funds. She requested that the County adopt a PDR program that awards points for farmers in agricultural districts. She feels the County should take the necessary steps to qualify for funds available to the state of North Carolina and to the counties. The North Carolina legislature set up provisions for the Preservation Trust Fund in 1991. It is important to provide a link with the program. Eventually, points for farms in agricultural districts will need to be implemented in order to qualify for this program. Future Farms of America funds can only be used in rural areas of the county. Local funds could be used to purchase farms that did not qualify as rural. She urged the Board to consider the Farms of the Future provision and support the Purchase Of Development Rights proposal. a • . 8 Max Kennedy, a builder in Orange County, indicated that this program would not particular affect his work as a builder. However, he believed that it would greatly affect the future homeowner. He believes that fewer citizens will be able to afford homes in Orange County if the PDR program is approved. He requested that this program not be approved. He stated that he had more confidence in a free market economy than one managed by government. Don Cox, indicated that he owns 13 acres of land in Orange County and has many ancestors buried in this County. He fully supports this method of purchasing development rights to preserve farmland. He stated a fear that if transportation costs rise, it would not be possible to plant food on enough land to feed the local population. This proposal will ensure that the good farmland will stay in farm use. John Hartley, a local developer and builder, stated that there is extreme pressure toward growth in the County. He feels there is a need to pass this proposal so that the County does not lose its most valuable asset of open space. He fully supports the Purchase of Development Rights. Don Collins, an Orange County resident, stated that he lives in the Rural Buffer south of 1-85 on Old 86. He indicated that he needs more information in order to make a decision about this program. Until he is better informed he will oppose it. Bruce Peters, a local resident, indicated that he owns a large farm in upstate New York and is involved in a similar program. He suggested that they not involve the Federal Government in this program. Chair Carey repeated that this is a voluntary program. Each farmer has the right to choose which portion of his farm he wants to include in a transfer of development rights program. Lyn Jaffey, an Orange County resident, indicated relief and excitement that the County is considering this program. She is in support of the program and requested that this program not be stopped because of perceived drawbacks. She asked if development rights could be sold to the developers. There being no further comments the meeting was adjourned. The next regular meeting of the Board of Commissioners will be held on August 23, 1994 in the Orange Water and Sewer Authority's Community Meeting Room, Carrboro, North Carolina. Moses Carey, Jr. , Chair Beverly Blythe, Clerk