MINUTES
TRUSTEES PRESENT:
Lloyd C. Jones, Jr.,
Acting Chairman
Allen H. Cohey
Mildred H. Darcey
Jerry Klasmeier, representing Comptroller Schaefer
Lewis Logan,
representing Treasurer Kopp
Judith C. Lynch
Joseph K. Scott
Joseph F. Tassone, representing Secretary Scott, Maryland Department
of Planning
Douglas H. Wilson,
representing Secretary Riley, Maryland Department of Agriculture
Robert E. Wolf
TRUSTEES ABSENT:
Maurice L. Wiles
OTHERS PRESENT:
Bill Amoss,
Harford
Jocelyn Beland, Cecil
Tammy Buckle,
Lisa M. Collison, Queen Anne's County Department of Planning and
Zoning
Joy Levy, Howard
Wally Lippincott,
Carla
Barbara Polito,
Bill Powel, Carroll
Radhika Sakhamuri,
Queen Anne's
Chuck Ward, Wicomico
County Department of Planning and Zoning
Roxana Whitt, Calvert
County Department of Planning and Zoning
John Zawitoski,
Carl
Shelley McDonald, Town
of
Chris Rogers, URS
Corporation
Mark Edwards,
Eileen Powers,
Amanda Smith, Linaues & Blocker
Jim Dieter, Maryland
Department of the Environment
Erik Balsley,
Maryland Department of Planning
James A. Conrad, MALPF
Executive Director
Iva L. Frantz, MALPF
Administrative Officer
Elizabeth D. Weaver,
MALPF Administrative Officer
Nancy Forrester,
Assistant Attorney General,
Craig Nielsen, Assistant
Attorney General, Maryland Department of Agriculture
Lloyd C. Jones, Jr., Acting Chairman,
called the meeting to order at
I. APPROVAL OF
MINUTES/ADDITION OR DELETION OF AGENDA ITEMS
A. APPROVAL OF
MINUTES,
Motion #1: To approve
the minutes of the
Motion: Allen
Cohey Second: Robert Wolf
Status: Approved
Motion #2: To approve
the minutes of the
Motion: Lewis
Logan Second: Mildred Darcey
Status: Approved
B. ADDITIONS OR
DELETIONS OF AGENDA ITEMS
No additions or
deletions of agenda items.
Doug Wilson,
representing Lewis Riley, Secretary of Agriculture, discussed the status of the
program. The Board of Public Works
approved 68 option contracts from the offers already made. The Foundation has Board of Public Works
items scheduled for the both the 3rd and the 17th of September to get through
as many of the offers made as possible before the deadline for the new
legislation to apply to easement offers.
The Foundation has very few offers still pending from previous offer
cycles. The last option contracts note
yet returned will have to come in under the statutory restrictions and the
revised easement language.
Mr. Wilson noted that a
new situation has arisen concerning the installment payments. An afterthought conversation led to a meeting
in Mr. Logan's office with bond counsel and lawyers. The issue is that bond money cannot be used
to pay an installment payment because money the state has borrowed cannot be
invested. That is precluded by the rules
of the way that bonds are issued. The
Foundation has met with the Treasurer's Office to work through how to work
around this. After that meeting, he is
convinced that accounting methods can be used to get around the restrictions
that using bond money places on installment payments. The Foundation has enough money to settle on
pending offers C that's not the
issue. It's the color of the money that
makes the difference. So the Foundation must
be very careful when a client wants installment payments. The installment paid at settlement can come
from bond money, but the money sent to the Treasurer to invest to pay the
future installment payments has to come from the matching funds provided by the
counties.
The Foundation may have
to ask the General Assembly to forgo offering installment payments options to
clients if it continues to receive bond money for easement offers but county
matching funds diminish. About 10-15% of
the clients request installment payments. We may no longer be as flexible to
let clients change from lump sum to installment once the initial decision has
been made, because the County matching funds may already be all committed, so
additional installment payments may not be possible after a certain point.
Jim Conrad, Executive
Director, noted that after today any new offers will be under the new
easement. The Foundation now has about
$321,000 in state money that will probably be rolled over into round two. The earliest that round two offers could
start would be at the September meeting.
We have a few round one offers still to address in the executive session
today. The acceptance rate is very high. People seem to be aware that money is short
and there won't be any offers made again very soon, increasing the acceptance
rate. One round two offer
has been made. Though letters have gone
out notifying applicants that the offer cycle has been completed, because there
were a few rejections, a few additional offers will be made.
II. DISTRICT /EASEMENT AMENDMENTS
A.
1. 10-11-01-09 TROUT,
Richard H. & Kathleen V. 213.73
acres
Request to swap district
acreage for acreage excluded at district establishment
Mr. Conrad presented the
request of Richard and Kathleen Trout to swap district acreage for acreage
excluded at district establishment. This
is a 213/214 acre parcel under a district agreement. The Trouts are the
original owners. The district size is
slightly increased with slightly better soils.
The staff recommends approval because this change does not compromise
the agricultural operation of the farm and results in slightly more acreage
with slightly better soil. In response
to a question, Mr. Conrad noted that the owners were not sure how to configure
the property when they originally put it into the district; they now know what
they want to do on the property and wish to arrange the lots on the property
before offering to sell the easement to MALPF.
They are changing the location of a lot for their son and excluding
acreage around a different pre-existing house.
Motion #3: To approve
the request of Richard and Kathleen Trout to swap 4.9316 acres of district
property for 7.9 acres of non-district property
Motion: Robert
Wolf Second: Joe Scott
Status: Approved
B.
1. 12-03-83-02 O'NEILL,
John H. & Lois M. 110.11
acres
Request for the
exclusion of a 2-acre child's lot from easement property
Mr. Conrad presented the
request of John and Lois O'Neill to exclude a two-acre child's lot from their
easement. They are the original
owners. The lot is for the personal use
of their daughter. Two child's lots have
been excluded. They do not own any other
district or easement property. There
will be little or no impact on the farming operation. Two acres are required under
Motion #4: To approve
the request of John and Lois O'Neill to exclude a two-acre child's lot from
their easement for the personal use of their daughter, Carolyn Nelson.
Motion: Allen
Cohey Second: Mildred Darcey
Status: Approved
C.
1. 14-03-89-03e
Request for the
exclusion of a 1-acre child's lot from easement property
Mr. Conrad presented the
request of John and Clara Bergen to exclude a one-acre child's lot from their
easement. They are the original
owners. The lot is for the personal use
of their daughter, Nancy McDonald. One
child's lot and one owner's lot have been excluded. They do not own any other district or
easement property. There will be a
minimal impact on the farming operation.
Staff recommends approval. Mr.
Conrad noted that the staff recommendation suggests that this is a two-acre
exclusion request, but that this is incorrect.
It is for the exclusion of a one-acre lot.
Motion #5: To approve
the request of John and Clara Bergen to exclude a one-acre child's lot from
their easement for the personal use of their daughter, Nancy McDonald.
Motion: Joe
Scott Second: Allen Cohey
Status: Approved
D.
1. 22-15-95-02 SIMMS,
Lee N. & Juliana R. 114.77
acres
Request to swap 2 acres
of easement property for 2 acres of non-easement property
Mr. Conrad presented the
request of Lee and Juliana Simms to swap two acres of easement property for two
acres of non-easement property. They are
the original owners. At the time of
district establishment, they excluded ten acres for "future financial
security." They are requesting this
swap because of perc and siting
issues, primarily perc issues for the house they are
building. Looking at the map in the
supporting documentation, the Simms are asking to put
two acres on the road under the easement, and remove two acres at the rear of
the lot from the easement. This swap
will have no impact on the farming operation.
The soil classifications of these two parcels are equivalent. This request was approved by the local
board. The staff recommends
approval. Mr. Tassone
asked about access. Mr. Conrad responded
that the access would not change, because direct road access remains on the
lot.
Motion #6: To approve
the request of Lee and Juliana Simms to swap two acres of easement property for
two acres of non-easement property as shown in the request documentation.
Motion: Robert
Wolf Second: Lewis Logan
Status: Approved
E.
1. 02-07-80-02B MURRAY,
Sally, et al. 66.00
acres
Request to increase the
size of two lots and relocate three septic reserve areas
Mr. Conrad presented the
request of Sally Murray to increase the size of two lots approved to be
excluded from the easement and to relocate three septic reserve areas. She is the original owner of the
property. The release of additional
acreage for the pre-existing dwelling can be done administratively; however,
the increase in required acreage for the child's lot and the relocation of the
septic reserve must be done by Board approval.
The requests have been approved by the local advisory board and meet
local requirements. The changes
represented by these requests are to satisfy the requirements of the Health
Department. A map is included in the documentation
showing how this request will affect the property. The staff recommends approval. Mr. Logan, representing Treasurer Nancy Kopp,
asked Assistant Attorney General Craig Nielsen if he would approve this
request. Mr. Nielsen responded that he would. Mr. Tassone asked
why the septic reserve area is being changed.
Iva Frantz, MALPF staff; responded that it was
required by the Health Department. Mr.
Conrad responded that the impact is actually an improvement to the farming
operation because the septic reserve has been moved closer to the road with
less of an impact on the cultivated field.
Motion #7: To approve
the request of Sally Murray et al., to increase the size of the already approved
child's lot by an additional 0.4 acres and to relocate three septic reserve
areas to satisfy the requirements of the Health Department, as shown on the
documentation accompanying the request letter.
Motion: Lewis
Logan Second: Joe Tassone
Status: Approved
F.
1. 07-01-90-03e DAVIS,
David P. & Mae C. 277.00
acres
Request to allow
wastewater spray irrigation on easement property
Mr. Conrad presented the
request of David and Mae Davis to allow treated wastewater spray irrigation
(WWSI) from the Town of
Staff recommends
approval contingent on the following:
(1) MALPF shall be a party to the agreement between the landowner and
the Town; (2) any future industrial discharge to the system shall be reported
to the Foundation and an impact analysis completed prior to acceptance of the
industrial wastewater; (3) the agreement shall have a provision for renewal as
part of the MDE permitting process, which is conducted every five years (the
renewal will be reviewed by MALPF staff; any modifications to the agreement
must be agreed to by the Board of Trustees; should MALPF find that the Town or
the landowner is in breach of the agreement, MALPF may terminate the
agreement); (4) a statement in the agreement that addresses repair of any
damage to the soils as a result of an accident or malfunction or other
circumstances related to the application of the wastewater; (5) a statement in
the agreement that the application of the wastewater shall be conducted in such
a manner to prevent bodily injury or endangerment to human health; and (6) the
adoption of a Water and Sewer Plan by Cecil County, which includes the Cecilton wastewater spray irrigation project.
Mr. Wilson asked if the
participants are okay with the conditions specified for Foundation
approval. The representatives responded
that they saw no problems. Joe Tassone directed a question to Dr. Tien,
representing the Department of the Environment, concerning the potential future
discharge of industrial wastes. Dr. Tien noted that the testing of any additional material and
changes to the wastewater flow was part of the regulatory function of the Dept.
of the Environment, whether or not such wastewater was disposed on easement
property. Mr. Wilson thanked all of the
participants in developing and implementing this policy. It demonstrates the seriousness with which
MALPF takes its responsibilities about activities on easement properties that
can have an impact on agricultural land.
Also, the Foundation appreciated the cooperation it received from its
sister agencies. Mr. Wilson noted that
this was a policy that was created across two administrations that had very
different views of the world. At the vote
on the motion, Mildred Darcey opposed the motion.
Motion #8: To approve
the request of David and Mae Davis to allow wastewater spray irrigation on
their easement property on behalf of the Town of Cecilton
with the following conditions: (1) MALPF
shall be a party to the agreement between the landowner and the Town; (2) any
future industrial discharge to the system shall be reported to the Foundation
and an impact analysis completed prior to acceptance of the industrial
wastewater; (3) the agreement shall have a provision for renewal as part of the
MDE permitting process, which is conducted every five years (the renewal will
be reviewed by MALPF staff; any modifications to the agreement must be agreed
to by the Board of Trustees; should MALPF find that the Town or the landowner
is in breach of the agreement, MALPF may terminate the agreement); (4) a
statement in the agreement that addresses repair of any damage to the soils as
a result of an accident or malfunction or other circumstances related to the
application of the wastewater; (5) a statement in the agreement that the application
of the wastewater shall be conducted in such a manner to prevent bodily injury
or endangerment to human health; and (6) the adoption of a Water and Sewer Plan
by Cecil County, which includes the Cecilton
wastewater spray irrigation project
Motion: Joe
Tassone Second: Judith Lynch
Opposed: Mildred Darcey
Status: Approved
G.
1. 03-05-98-04c LIPPY
BROTHERS, INC. 134.00
acres
Request to allow the
installation of a fire suppression tank on easement property
Mr. Conrad presented the
request of Lippy Brothers, Inc., to allow the installation of a fire
suppression tank on easement property.
There was an initial review of this request at the last Board
meeting. The Lippy Brothers are the
original owners of the property. The
30,000 gallon fire suppression tank would be installed on behalf the Baltimore
County Volunteer Fireman's Association.
The Foundation staff recommends approval based on approvals of similar
overlay easements, the policy of which is included with the supporting documentation. The approval recommendation stipulates that
the tank be required to be removed if the tank is no longer being used for fire
suppression, and the land returned to full agricultural use. While it is recognized that some agriculture
is possible over the top of the buried tank, since only a single pipe will be
sticking up, the only appropriate agricultural use would be for pasturage,
which is not consistent with the current farm operation.
Motion #9: To approve
the request of the Lippy Brothers to install a fire suppression water storage
tank on their easement property on behalf of the Baltimore County Volunteer
Firemen's Association using an overlay easement with the stipulation that the
tank be removed if it is no longer used for fire suppression and the land be
returned to full agricultural use.
Motion: Robert
Wolf Second: Joe Tassone
Status: Approved
III. AGRICULTURAL PRESERVATION DISTRICT
PETITIONS
Mr. Conrad presented the petitions to
establish agricultural preservation districts.
A.
1. 07-06-04-01 TRUSLOW, Ella Mae 45.16 acres
2. 07-09-04-02 BROWN, Mary E. 59.57 acres
Motion #10: To approve
the requests of Ella Mae Truslow and Mary Brown to
establish agricultural land preservation districts on their respective
properties.
Motion: Joe
Scott Second: Robert Wolf
Status: Approved
B.
1. 19-13-04-01 NELSON, James T. & Cheryl B. 192.3 acres
Motion #11: To approve
the request of James and Cheryl Nelson to establish an agricultural land
preservation district on their property
Motion: Lewis
Logan Second: Joe Tassone
Status: Approved
2. 19-13-04-02 REVELL'S NECK LLC 59.57 acres
Mr. Conrad noted that
there are six acres being withheld for future homesites,
relevant in particular because of the size of the property. The property satisfies the minimum
eligibility requirements of the program.
Motion #12: To approve
the request of Revell's Neck, LLC, to establish an agricultural land preservation district on its property
with the stipulation that no additional lots would be approved on the property
by the Foundation if an easement is sold on the property.
Motion: Joe
Tassone Second: Lewis Logan
Status: Approved
C.
1. 10-15-04-01 WEBER, John C. 71.31 acres
2. 10-15-04-02 SEXTON, Kenneth G. & Doreen G. 57.50 acres
3. 10-15-04-03 FREE, Ronald L. & Susan S. 94.55 acres
4. 10-08-04-04 TRESSLER, Martin L. & Carla L. 178.00 acres
5. 10-17-04-05 DOTTERER, Paul R. & Karen L. 238.00 acres
6. 10-22-04-06
7. 10-17-04-07 GROSSNICKLE, Charles D. & Gerry S. 147.00 acres
8. 10-08-04-08 EYLER, Sr., Robert E., & Betty J. 138.16 acres
Motion #13: To approve
the requests of John Weber; Kenneth and Doreen Sexton; Ronald and Susan Free;
Martin and Carla Tressler; Paul and Karen Dotterer; Allen Family Land, LLC; Charles and Gerry Grossnickle; and Robert and Betty Eyler,
Sr., to establish agricultural land preservation districts on their respective
properties.
Motion: Joe
Tassone Second: Mildred Darcey
Status: Approved
IV. PROGRAM POLICY/EASEMENT OFFERS
A. Revised easement
Mr. Conrad presented the
easement revision. The recommendations
made at the last Board meeting were incorporated into the document. One recommended change B that the Board be given approval rights if an approved lot changes hands
within five years of the release B was determined by Nancy Forrester and Craig
Nielsen, the Assistant Attorneys General, to require statutory change to implement. This Board request has been drawn up to be
introduced as departmental sponsored legislation. All of the other requested changes have been
made. The staff recommends approval so
the easement can begin being used.
Mr. Tassone
asked if the language in the easement that applies to the transfer of lots
would then be different than what is currently shown. Mr. Conrad responded that the language would
not change, because it is sufficiently ambiguous as to allow for a continuation
of the current release policy and any changes to lot release policy that would
be introduced by new legislation. Nancy
Forrester, Assistant Attorney General, responded that now we have no further
hold over a landowner once a lot has been released. Mr. Tassone stated
that he thought we need to have pretty compelling information and documentation
to make a very compelling case for this change to the legislature and think
about who we need to network with for this change. Mr. Tassone doesn't
think that failing to pass a bill necessarily means that the legislature has
sent a clear message as to the interpretation of a particular policy. It was also suggested that it would be useful
to get Task Force support for this legislative proposal. Mr. Conrad noted that the proposed legislation
does not mean that a property owner cannot transfer the lot before five years, only that approval must be obtained from the
Foundation's Board before it can be transferred. Mr. Wilson noted that the legislation can be
written in a way to give sufficient flexibility to the Board to take into
consideration the individual special circumstances that could justify the
ability of a landowner to transfer the lot.
Motion #14: To approve
the draft easement revision for use with option contracts approved by the Board
of Public Works after
Motion: Joe
Tassone Second: Robert Wolf
Status: Approved
V. INFORMATION AND DISCUSSION
A.
Easement offers and resale values
Joe Tassone
presented material concerning (1) where the Task Force recommendation from the
last legislative session came from, and (2) why he votes against certain
individual offers made by the Foundation in the interest in protecting the
investment of the State. The first chart
handed out is a bar graph representation of all FY2002 offers as a percent of
fair market value (FMV). Out of 156
easement offers, 37 offers or 25% were above 70% of the FMV. He is using 70% because it was the easement
value cap recommended by the Task Force.
He noted the critical measure is the amount that the offers over 70%
actually cost the Foundation:
$1,502,644. The second chart
pulls out just the offers above 70% so one can see in which counties they are
located. Some of these offers are in the
high eighties and over ninety percent of FMV.
The highest values are mostly located in metropolitan and what the Task
Force called "transitional" counties, which were once rural and are
not yet rural, but are rapidly changing.
This means
Bill Powel, program
administrator in
Carl DeMatteo
from Maryland Farm Bureau asked what the effect on offers the new ranking
system would have. Mr. Conrad responded
that the incentive to discount would be reduced or eliminated for individual
counties, meaning that offers would almost certainly be higher as a percentage
of FMV. This average would be expected
to rise over time. In preparing to
respond to a question at the Board of Public Works along this line, he compared
MALPF offers to Rural Legacy offers as a percentage of FMV. Rural Legacy has averaged between fifty and
sixty percent. MALPF offers also average
between fifty and sixty percent, but because MALPF uses the bid process, the
variance for MALPF is much wider around the mean. On the chart, the variance is from 15% to 95%
of FMV. The entire chart will move
upward as will the average as people respond to the reduced incentive to
discount.
Mr. Wilson noted that
everyone, including the legislature, has been telling MALPF to focus on the
best farms, not the most steeply discounted farms. This will necessarily have the result of
raising the offers as a percentage of FMV.
MALPF is now trying to focus on particular areas and kinds of
properties, instead of just taking the least expensive.
John Zawitoski,
Mr. Tassone
returned to the handout material. The
third chart shows of the amount over 70% for individual properties as the green
portion of the bar chart, giving an idea of the absolute value of those
offers. The data so far for FY2003 is
replicating the trends from FY2002.
When you buy an
easement, how much is the property worth with the easement in place? Data has been obtained from the Department of
General Services and from Farm Credit.
These agencies came up with the value of just the land portion of eased
land and compared it to the value of unrestricted land in the county at the
same time, 1999-2002. What it shows is
that restricted easement property sold from about 29% to 116% of prevailing FMV
of unrestricted land. The average is
that restricted property sold for 62% of the sale value of unrestricted
property. Unfortunately, there are not
many properties in this sample from
If one looks at the next
graph (with the three bars in blue and red), restricted land that sold for the
lowest percentage of unrestricted land (29%), if the landowner received 70% of
the FMV in easement payment, the value of that property would be 99% of the FMV
when he/she resold the property. If that
landowner received the average percentage of unrestricted land (62%), the value
of that property would be about 132% FMV.
If the property sold for the highest resale price, the value of the
restricted property would be 185% of its FMV when you include the easement
payment. When the program was initiated,
the program took the unrestricted FMV and the restricted FMV, and the easement
value was the difference between the two values. That resulted in easement offers that were
too low, particularly for
To see the results of a
70% cap on offers, look at the last bar chart.
For the properties getting offers above 70%, the total land value would
fall from about 140% to about 132% with a savings of $1.5 million that could be
spent for additional easements for FY2002 and about $2.2 million for FY2003
depending on how
Mr. Tassone
concluded that the legislative intent for easement values does not allow for
such excessive offers. He feels that it
is the Board's responsibility not to pay more than what the legislature
intends. This was also the information
behind the Task Force recommendation in FY2002.
Mr. Tassone
noted in response to comments from several participants that one of the reasons
the Task Force legislation proposed that counties could supplement the offer
made by MALPF was in recognition that there may be cases where the property was
of adequate significance that the county would be willing to make up the
difference to what was necessary to purchase the property's easement.
Mr. Tassone
stated that, if the Board believes that making offers over 70% of FMV is a bad
investment of State money, the Board has the authority and the responsibility
not to do that B why we are a
discretionary Board. He believes that
everyone would like to move forward with legislation to address this issue, but
the Board can do it on its own should it choose to do so.
Mr. Conrad said that,
while the Board has the discretion to say "yes" or "no," it
has to set a magic arbitrary number to treat everyone equally above which no
one will get an offer. But we have no
mechanism at this point to set such a cap, and if we did so, we have some
counties with high easement values where setting such a cap is simply saying to
those counties, "sorry, but you don't get any offers this year at
all," unless the counties unilaterally set the cap themselves in how they
send properties forward. As long as
everybody is following the system set out in statute, the Board has no
discretion to negotiate a price. It can
only accept or reject making an offer, nothing in between. In such a case, people who follow the rules
of the game end up having the Foundation not making an offer because the
possible offer is above some magic percentile.
Mr. Tassone
thought this would not happen at all as long as the Board states up front what
it is going to do, and then people can adjust to it. However, his intent is not to say how the
Board should proceed or even to make a decision, but simply to get the issues
out on the table. Some Board members are
aware of the discussion, such as LC, but others are not familiar with the
discussion.
Mr. Wilson noted that
the Foundation's program is founded in its partnership with the counties. When the Board has gone sideways on this,
some jurisdiction who feels aggrieved by something that the Foundation has done
drops a bill in the hopper to try to correct that perceived injustice. Before you know it, you have our friends
fighting with each other. And usually
that's not good for agriculture, this Foundation, the farmers, etc. Agriculture is different in different
jurisdictions; without broad consensus, you end up with bad legislation trying
to address specific jurisdictional problems which will undercut the State
program at the expense of everyone.
Motion #15: There being
no further non-Executive Session business to discuss, the regular session
meeting should be adjourned.
Motion: Douglas
Wilson Second: Lewis Logan
Status: Approved
The regular session Board meeting was adjourned
at approximately
Respectfully Submitted:
__________________________________________
Iva L. Frantz,
Administrative Officer
__________________________________________
James A. Conrad,
Executive Director