Sunday, November 28, 2010

Conservation Futures Saved!

A special thanks goes out to all of you that contacted the County Council Office to voice your concern and objections to the proposed raid on the voter-approved Conservation Futures Levy!  Council members Brenner, Mann, Larson and Weimer voted to return the levy to 2009 levels.  Thanks!

So, what's next?

Well, perhaps the County Council and County Executive should begin talking about a strategic plan for how this fund should be managed.  The fund has built up reserves due to neglect -- not due to lack of demand. 
Consideration might be given to managing the fund as proposed in 2001, where 50% of the fund is set aside for purchase of development rights in agricultural areas.  This ordinance was vetoed by Executive Kremen.  Having a dedictated fund would enable the county to bond against the fund and undertake significant purchases, boosting our local economy and farmers.
There are several other opportunities for the County Council and County Executive to manage this fund as the voters intended in 1996 when they approved the levy by 57.7% vote.  Contact the County Council, thanking them for their action, and asking that they get working on a strategic plan for how these funds can be put to use benefitting future generations and our local economy. 

It is time to strategically plan how these funds can best be used.  Inaction should not be an option. 

Saturday, November 20, 2010

No "future" for conservation?

This coming Tuesday, the Whatcom County Council is expected to put the finishing touch on huge cutbacks that will affect the future of conservation efforts in Whatcom County for generations to come.   I’m talking about the depletion of the voter-approved Conservation Futures levy, and the County is proposing the second year of reducing the levy by $543,000, a 56% reduction from previous revenue levels.
What is the Conservation Futures levy?
The Washington State Legislature authorized counties to acquire open space, farm and agricultural land and timber land for future generations.  When the development rights were acquired, they were called “conservation futures”, and were used as a tool for both salmon preservation purposes and agricultural protection.  The County was authorized to levy an amount not to exceed 6.25 cents per thousand dollars of assessed valuation.   
After two decades of significant growth in Whatcom County, resulting in a loss of open space and agricultural land, the Whatcom County Council requested in 1991 that the County Executive (Van Zanten) form a citizen group to explore strategies for the preservation of our natural heritage.  The County Executive appointed a geographically and philosophically diverse task force of individuals, chaired by Craig Cole.
After a year of meetings, involving the public and landowners, the task force delivered their recommendations on June 19, 1991.  Their report was called: ""Preserving a Way of Life": A Natural Heritage Plan for Whatcom County."   (Click here for plan -- 22 mb) The Whatcom County Council quickly passed a Resolution (91-044) endorsing the plan with minor modifications, including that the amount of bonded indebtedness be limited to what can be serviced by the Conservation Futures Levy. 
The Whatcom County Council began implementation by passing the Conservation Futures levy in 1992 (Ord1992-002).  The levy rate was set at the statutory level of 6.25 cents per $1,000 of assessed valuation.  The levy was used in the first three years to acquire Chuckanut Mountain Recreation Area and Squires Lake Park.
In 1995, following the last “Republican Revolution”, Whatcom County Councilmember Ward Nelson led the effort to repeal the Conservation Futures levy, saying that “people have made known their feelings that property taxation has reached a level that they no longer support.”   The ordinance (Ord95-056) was vetoed by Executive Van Zanten, citing the extensive public dialogue and broad support in developing the Natural Heritage Plan.
The Council then decided (Res1995-072) to put the question to voters on whether or not they supported this level of taxation.  In the fall election of 1996, the voters overwhelmingly approved the conservation effort, with 57.7% supporting the tax.
Through 2001, the fund was used for additional park and open space acquisitions, including Nesset Farm, Overby Farm, Canyon Lake Community Forest, Maple Beach, Stimpson Family Nature Reserve and Lookout Mountain. 
From 2001 through today, the fund has been used to acquire additional park land, such as Nugent's Corner Access, Sunnyside Land, Terrell Creek Heron Rookery, Jensen Family Forest Park, Lily Point Marine Reserve and Point Whitehorn Marine Reserve.
In 2001, the County Council implemented the Purchase of Development Rights program for agricultural lands, tapping into the Conservation Futures fund that had previously been used solely for park purposes.  Later that year, the Council passed an ordinance (Ord2001-032) that would dedicate 50% of those funds to the purchase of development rights of farm and agricultural land.  With a dedicated funding source, Whatcom County could bond against those funds to protect agricultural land from conversion, similar to the concept used for park land acquisition as recommended by the Natural Heritage Task Force. 
The first purchase of development rights in agricultural lands took place in 2004.  Since that time, 671 acres of farmland have been put into a farmland conservation easement, ensuring that this land will continue in perpetuity be used for resource production. (Click here for an excellent overview of the PDR program.)
With such broad based, public support for the levy, why has Executive Kremen and the County Council not supported the Conservation Futures levy?
There are two reasons:  county budgets and weak political support from current elected officials for the need to save 100,000 acres of agricultural land.
When revenue does not increase or keep pace with expenditures, as has taken place for years in Whatcom County, a growing deficit begins to occur.  Large surpluses in reserve funds are now gone, and the County is faced with drastic expenditure reductions.  At the same time, the County Executive has been unwilling to raise property taxes, except, of course, for city residents.   Without raising property taxes, one way to balance the budget gap is on the back of conservation.
Equally driving this issue is the weak support from Executive Kremen and the current County Council regarding the preservation of agricultural land.  When the city and county planning directors jointly recommended to the Growth Management Coordinating Council that all jurisdictions adopt a policy of protecting 100,000 acres of land, Executive Kremen and Sam Crawford sided with the small cities in opposition to this policy. 
Although the County Council would later unanimously pass a resolution (Res2009-040) declaring their intent of maintaining at least 100,000 acres of agricultural land in Whatcom County, along with the recommendations of the 2007 Rural Land Study by the Agricultural Advisory Committee, Chair Crawford has stated publicly that his vote on this resolution was a mistake. 
This concept of acquiring agricultural development rights has consistently been endorsed by conservative and liberal members of our community:  Agricultural Advisory Committee, Purchase of Development Rights Committee, Technical Review Committee, and Whatcom Farm Friends. 
While the County budget revenue issues are serious, the lack of appreciation for the public input on Conservation Futures funding and the economic sense of keeping those funds is disturbing.   Sam Crawford is quoted in the Bellingham Herald as saying that what the money "is acquiring, basically, ...amounts to more expenditures for Whatcom County."   Either Crawford doesn't understand, or is misleading the public, in that 15% of the fund can be used for maintenance and operation of any property acquired with these funds. 
Acquisition of development rights in farm land reinvests our local tax dollars in our local economy.  The farmers that obtain these funds will usually reinvest those funds in their farm, building new structures, buying equipment, or perhaps buying additional land.  Acquisition of development rights in agricultural land requires no maintenance and operation costs, except for a nominal fee which goes to the Whatcom Land Trust to ensure that the terms of the Conservation Easement are being adhered to.   
It makes more economic sense to invest our funds in this PDR program than transferring the tax revenue to ongoing county expenses. 
Please let the County Executive and the County Council know that they should 1) respect the will of the voters that overwhelmingly approved the Conservation Futures levy in 1996 and 2) that the investment in open space and farmland is good for the economy and generations to come.  Ask that the funding be restored to 2009 levels, which is approximately $600,000 below the levy rate authorized by voters in 1996.

Tuesday, November 9, 2010

Great Questions

Some commenters on the Politics blog raised some great questions about growth.  I'm summarizing them and inviting discussion. 
  1. Is rural development ever economically feasible?
  2. Don't impact fees in a city work as a counter-productive penalty to urban development?
  3. Planning isn't precise, so shouldn't there be room for errors in assumptions?
  4. What part of this discussion is a regional planning issue, versus a local one?
  5. How can we make existing development in the suburbs more cost effective?
  6. How do we hold firm to zoning laws to protect our resource lands for generations to come?
  7. How do we establish laws that ensure an equitable sharing of development costs?

Thursday, November 4, 2010

Whatcom County Proposes $1 million tax shift to City Residents

The Whatcom County Executive has proposed a shift in tax levies that results in a significant tax shift to cities.  The Executive's budget message that the proposal is "revenue neutral" and does not rely on tax releases is false.

This coming Tuesday, the Whatcom County Council will be holding two hearings that affect the tax levy for city residents.  The first ordinance increases the General Fund property tax levy by $1 million.  The Executive calls this "revenue neutral" because he is proposing to decrease the Road Fund also by $1 million.  However, the Road  Fund is collected only in the unincorporated areas.  Thus, the increase in the General Fund property tax levy is being borne by city property owners, while county residents get a tax cut.

The lack of clarity and transparency in this budget gimmick is disconcerting.  The impact of the tax increase on city residents is not at all transparent.  In an effort to get to what it would cost a city resident, the Whatcom County Assessor was contacted to ask what the levy rates might be if this tax shift was done.  The response, received on November 1st, is that the "Levy rates cannot be calculated until budgets are set and valuations are certified."

How is the public supposed to provide public input on the ordinance this coming Tuesday that is advertised as an "Ordinance authorizing the levy of taxes for County and State purposes in Whatcom County for the year 2011"? 

The ordinance available to the public says that the "levies shall be fixed per "Exhibit A" which shall be prepared by the County Assessor, and attached and incorporated herein by reference."  On page four of the ordinance, it says:  "Exhibit A and B will be available after the first of the year 2011."

Thanks to the effort of Councilmember Ken Mann, we found that there are levy rates that are being used for this budget proposal, just not available for the public to see.  Councilmember Mann provided the following answer to my inquiry:

"In 2010 the levy rates were 1.02054 for general fund and 1.33610 for road fund.

"If there was a levy shift, the general fund would be 1.06042 and road fund 1.25771.

"For a 250,000 house in county, the tax goes from 255+334 to 265+314, for a $10 decrease.

"For a 250,000 house in city, the tax goes from 255 + 0, to 265+0, for a $10increase."  (Ken Mann, November 4, 2010)

Based on this information, I have completed rough calculations[1] as to how this tax shift affects cities in general.   

Total Assessed Valuation
% of County Tax Base
Cost of Tax Shift to City

$ 486,385

The second ordinance being heard on Tuesday is about limiting the 2011 General Fund Property Tax Levy.  This ordinance makes clear that the County general levy is increased by $1 million, which is a percentage increase of 3.9% from the previous year.

With the passage of Initiate 747, there are only two ways for a jurisdiction to increase property taxes by more than one percent (1%).   If the local jurisdiction has taken less than the maximum increase in the past, they have what is called "banked capacity".  The other way to increase property taxes is to do a levy lid lift through a vote.

The County Executive, in his proposed budget, acknowledged that the "General Fund levy will increase by $1 million, using banked capacity."  (2011-2012 Executive's Recommended Budget, Volume 1 - Page 28)  Under state law, the public does not have to vote on this use of banked capacity. 

But, early in 2010, the County Council passed an ordinance (Ord. 2010-025)  that placed local limits on the use of banked capacity.   This ordinance stated "the County Council recognizes that the will of the people shall be considered before property taxes are levied or increased."  It goes on to state that the County General Fund "be limited in....increases each year to a maximum amount equal to the previous year's tax levy plus one percent...any proposed tax levy increase to provide revenue for a future County budget year cycle, beyond the amount specified by this locally-imposed limitation, shall be put to a non-binding advisory vote of the people of Whatcom County by means of a ballot measure to be voted upon in a Countywide November General Election."

The ordinance goes on to say that the "capacity to increase these levies beyond this one percent limitation through accumulation or "banked capacity"...shall be implemented in current or future assessments only after the non-binding advisory vote of the people of Whatcom County."

Councilmember Mann informed me in his communication that council members believe that the final clause in this local ordinance is considered to allow this transfer.  It reads that "revenue neutral transfers between existing levies shall be exempt from the provisions of this ordinance."

A 3.9% increase in the General Fund levy that results in increased taxes from city property owners of approximately $486,000, is not revenue neutral.  The only ones benefitting from this proposal are the unincorporated property owners.  City residents are getting a higher bill and less services. 

Especially Bellingham residents.  Maybe that is the point.

[1] The  total assessed valuation is from 2010 County GIS data, and includes both taxable and non-taxable properties.  Adjustments to the valuation would need to be made to include only taxable properties.  For general purposes of tax shift burden, this analysis provides that information.