Protecting the Sonoran Desert: An exploration of open space

September 2002

EXECUTIVE SUMMARY

The following report is respectfully presented by The Financing Group to promote the implementation of the Sonoran Desert Conservation Plan (SDCP) and related open space measures. It includes general findings regarding methods used by other communities to successfully achieve open space and habitat conservation plan (HCP) goals. The report also provides suggestions that the County could utilize to further funding for such purposes.

To better assist the County Administrator and the Board of Supervisors, this organization's research includes considerations of State statutory and constitutional requirements and limitations. The report identifies particular legal and legislative parameters and provides recommendations for both immediate action and future state lobbying activity that are feasible within the scope of such requirements and limitations. Accordingly, the Financing Group's report includes not only recommendations of specific funding sources, but also addresses some of the benefits and weaknesses of each approach.

Although The Financing Group has conducted nationwide research, for purposes of comparative similarity the scope of the research focuses primarily on counties in Arizona, California, Colorado, Montana, Texas, Nevada New Mexico, and Utah.

Research reveals that the communities that are most progressive and successful in attaining their conservation objectives exhibit two traits: (1) they have identified multiple funding sources, and (2) they have benefited from strong and symbiotic partnerships between local government officials and committed citizens to further mutual conservation goals. Preliminary progress indicates that Pima County is capable of benefiting from these same traits.

The Financing Group is a diverse coalition of representatives from local environmental organizations: The Nature Conservancy, the Arizona-Sonoran Desert Museum, the Sonoran Institute, the Arizona Open Land Trust and the Coalition for Sonoran Desert Protection (CSDP), which includes over 40 neighborhood and conservation organizations within Pima County. This group undertook this research objective in good faith to assist the County Administrator and Board of Supervisors who have devoted considerable time and who continue to work meaningfully toward the implementation of the SDCP.

The Financing Group remains committed to collaborative efforts that preserve open space, accommodate population trends and economic development, and promote a sustainable community to further our collective quality of life.

TABLE OF CONTENTS

Overview of the Sonoran Desert Conservation Plan and the Importance of Conservation Funding

• The Need for Conservation in Pima County
• The Sonoran Desert Conservation Plan
• Overview
• Challenges
• Community Support for Open Space and Policy Implications
• Pima County Bond Initiative, 1997
• Sonoran Institute Poll, 2001
• Implications

Summary of Findings

• Description of Research
• Methodology
• Limitations
• Findings on Open Space Conservation Mechanisms
• Arizona
• California
• Colorado
• Montana
• New Mexico
• Texas
• Utah
• Findings Related to Habitat Conservation Plans
• California
• Nevada
• Texas
• Additional Funding Sources
• State, Federal and Private Grants
• Private, Non-profit Land Trusts

Statutory Guidelines and Bonding Capacity

• Overview
• Statutory Authority in Pima County
• Pima County's Bonding Capacity

Funding Recommendations for Pima County

Recommendations for Future State Lobbying Efforts

Endnotes

OVERVIEW OF THE SONORAN DESERT CONSERVATION PLAN AND THE IMPORTANCE OF CONSERVATION FUNDING

The Need for Conservation in Pima County

Research indicates that communities across the nation are increasingly recognizing the importance of and working toward the preservation of natural open space areas. A report by the Land Trust Alliance and the Trust for Public Land found that voters in 2001 approved 137 of the 196 local and state ballot measures for open space, committing almost $1.7 billion in funding for parks and open space conservation. Since 1998, voters have given their support to more than $19 billion in open space funding, passing 529 referenda.

Whereas a historical tension has existed between conservation advocates and the building and development industries, this tension results largely from a series of misperceptions and, oftentimes, an unwillingness to compromise. The most common misperception is that preserving open space inhibits and discourages efficient development, thereby rendering communities unable to respond effectively to population increases and raising housing prices to the detriment of lower-income groups.

In reality, the goals of preservation and responsible development are more complementary than antithetical. Natural and environmental entities--including views, available recreational activities, or the existence of natural geographic landmarks--are frequently critical determinants in an individual's or family's decision to relocate and positively contribute to housing values. Open space preservation seeks to maintain these values, which may attract new residents and necessitate responsible development. Similarly, the purpose of open space initiatives is not to impede or discourage development, but rather to foster responsible growth.

As contemporary and progressive communities demonstrate, responsible growth recognizes that infrastructure must keep up with expanding suburbs, transportation must accommodate fluctuations in population, and the correlation between a community's ecological well-being and its economic development objectives.

Population growth rates in Pima County highlight the increasing importance of protecting open space and preserving natural areas. Between April 1, 2000 and July 1, 2001, the number of Pima County residents increased by 26,800 individuals. Between late 1990 and late 2000, the number of new housing units increased by 86,000. Since 1998, over 30 square miles of natural Sonoran Desert landscape have been transformed to serve urban purposes.i If we are to accommodate future growth in a responsible manner, we must, as a community, take steps to mitigate the damage to our unique natural and cultural resources.

The Sonoran Desert Conservation Plan

Overview

The County Administrator and Board of Supervisors formally kicked off the SDCP planning process in 1998. The SDCP was initially viewed, and continues to develop as, an environmental blueprint that advances short-term activities within the purview of long-range planning objectives that further the coexistence of ecological preservation and urban population needs. In a memorandum dated October 9, 2001, the County Administrator reiterated the SDCP's fundamental purpose:

"The Sonoran Desert Conservation Plan is a comprehensive, local planning initiative to conserve the County's most valued natural and cultural resources, while accommodating the inevitable population growth and economic expansion of the community."

Challenges

Endangered Species Act, Section 10

Complexities emerge over the role of the Endangered Species Act (ESA) Section 10 permit. Some Pima County residents have expressed concern that, because the Section 10 permit is a legal component of the Endangered Species Act (ESA), the federal government will have an active role in implementing the SDCP, thereby imposing its own agenda on the County.

This concern is unwarranted for two reasons. First, the Section 10 permit is only one component of the SDCP. It neither represents the SDCP's primary purpose nor dictates its policy objectives. Instead, the Section 10 permit presents a logical tool for achieving a balance between the goals of preservation and the needs of our growing community. Second, aside from reporting and compliance requirements, the federal government's role is negligible in the attainment of a Section 10 permit. While Section 10 of the ESA does seek to ensure the protection of endangered or threatened species, it nevertheless grants considerable discretion to localities in terms of permitting necessary and reasonable community development. In this respect, the possibility of obtaining a Section 10 permit actually galvanizes a broader and more diverse array of citizen input and participation.ii Overall, then, the SDCP is an inherently community-based plan that can and will proceed absent significant federal government intervention.

Cost of SDCP

A second concern, the cost of SDCP implementation, raises multiple issues and warrants both short and long-term considerations.

Quantification of Benefits: One of the most problematic issues in assessing the true cost of the SDCP is that traditional economic analysis tends not to quantify many of the values involved in ecological or environmental cost benefit equations.iii In particular, environmental "goods" tend to lack the conventional market values. For example, it is difficult to quantify the value of clean air and water, or the intrinsic beauty of an area, due to insufficient or unavailable traditional economic measurements.iv Because opponents of the SDCP tend not to include these values as benefits resulting from implementation of the Plan, the general public is left with an incomplete--if not altogether erroneous--comparison of the SDCP's actual costs and benefits. This misinformation disserves the public, who is vulnerable to misuse and/or misrepresentation, and often produces rhetorical debate rather than substantive solutions.

Identification of Benefits: A second and related concern is that, while the costs of implementing the SDCP may be both imminent and apparent, the benefits of preservation do not trigger change and may not be as immediately obvious. Indeed, much of the value of natural and historic resources and open space is intrinsic and, therefore, easy to take for granted. Unfortunately, this disregard often results in the irretrievable loss of natural and cultural resources. Consequently, many efforts to implement preservation measures are reactive, and occur only after important resources have been either lost or compromised.v The SDCP, in contrast, is a proactive attempt to preserve important community lands and resources. The fact that some of the resulting benefits extend into the future enhances, rather than weakens, the legitimacy and necessity of the SDCP.

Community Support for Open Space and Policy Implications

Pima County Bond Initiative, 1997

Pima County's recent bonding history indicates a public willingness to support and fund open space measures. In May of 1997, Pima County voters approved a $27.9 million bond initiative for open space acquisition.vi This request for bonding authority was somewhat unique insofar as it earmarked specific dollar amounts for identified properties. This approach informed voters exactly where the County would spend the authorized funds; local governments can also use this method when requesting a one-time source of funds for a single property that is vulnerable to development.vii

Sonoran Institute Poll, May 2001

A poll conducted last year by the Sonoran Institute (SI) likewise suggests that voters generally favor the preservation of open space. SI conducted a poll in May 2001 to determine voters' positions on the SDCP and related growth and conservation issues.

Demographics: SI polled 300 citizens, 150 males and 150 females. Participants were divided into four age categories: 18 to 40 (90 respondents), 41 to 60 (135 respondents), and 61 and over (75 respondents). Of the three hundred participants polled, 120 identified themselves as registered Republicans, 135 identified themselves as registered Democrats, and five participants identified themselves as either independent or other voters. When asked to identify the range of their most recent total annual household income, 45 participants reported annual incomes less than $25,000, 73 participants had household incomes between $25,000 and $50,000, 59 individuals had incomes between $50,000 and $75,000, and 20 people reported household incomes that exceeded $100,000.viii The following selected questions and responses reflect the public's support for open space and funding for acquisition and preservation.

Questions and Results

Government Intervention: When asked to rate the importance of government planning for environmental protection and future growth (very important, somewhat important, or not at all important), 185 (62 percent) of respondents thought local planning is very important, 98 (33 percent) thought it somewhat important, 12 participants (four percent) said local government planning is not at all important, and five participants (two percent) were unsure.

As a follow-up question, respondents were asked who they think is better qualified to conduct planning for environmental protection and future growth. Eighty-two participants (27 percent) thought the Pima County government is better qualified, 40 respondents (13 percent) believed that the State government is better qualified, 36 (12 percent) participants selected the City of Tucson, 45 (15 percent) selected the University of Arizona Wildlife Professors, and 43 respondents (14 percent) thought that federal agencies such as the Fish and Wildlife Service are better qualified. Fifty-four (18 percent) of respondents selected another group, did not have a strong position, or refused to answer the question.

Sprawl: Another question SI posed to polling participants was whether suburban sprawl in the Tucson area is a big problem, somewhat of a problem, or no problem at all. One hundred and nine individuals (36 percent) said suburban sprawl is a big problem, 129 (43 percent) indicated sprawl is somewhat of a problem, and 56 respondents (19 percent) indicated that they do not view suburban sprawl as problematic. Six participants (2 percent) did not answer the question.

SDCP Goals: SI also asked polling participants specific questions about the SDCP. For instance, SI explained that, "Pima County's Sonoran Desert Conservation Plan would restrict development on over 1.28 million acres of land to preserve open space and protect habitat for 56 endangered species and plants. The Plan also includes historical and cultural preservation, expansion of county mountain parks, river and stream restoration, and ranch conservation. From this brief description, are you inclined to support or oppose the SDCP?" A majority of participants polled (206, or 69 percent) said that they would support the SDCP on the basis of the description provided. Only 64 respondents (21 percent) opposed the SDCP. Thirty individuals (10 percent) were uncertain as to whether they would support or oppose the plan.

When respondents were presented with two arguments, one in favor of the SDCP ("stricter environmental laws are necessary because the environment is important and needs to be protected") and one against it ("stricter environmental laws cost too many jobs and could hurt the area's economic future"), a majority (one hundred and eighty-seven individuals, 62 percent of those polled) indicated that the argument in favor of the SDCP was closer to their view than the opposing argument. Ninety-two (31 percent) of participants said they identified more closely with the argument opposing the SDCP. Thirteen individuals (four percent) said that neither of the arguments reflected their view or said that they had a different perspective of the SDCP, and eight respondents (three percent) were undecided.

SDCP Cost: SI then addressed the cost of the SDCP. Interviewers asked participants to choose between two positions: first, that the estimated cost of the SDCP--$500 million over five years--is a reasonable price to pay to protect the environment and endangered species and to plan rationally for future growth, or second, that the estimated cost is likely to end up raising property taxes in the County too much. Whereas 49 percent of the respondents believe that the cost of the SDCP is reasonable, 41 percent think the cost will result in overly high property taxes.

Implications

One might infer from this data that citizens are philosophically in favor of open space and preservation. They are, however, concerned about the economic costs of implementation, both in terms of community job losses and the rate of their own property taxes. These are valid concerns, and they deserve to be addressed through public outreach and education about the SDCP and its long-term community benefits. In addition to increasing its outreach efforts, the County government may increase public confidence by building stronger partnerships with each of the surrounding municipalities and working collaboratively with them toward shared open space objectives.

SUMMARY OF FINDINGS

Description of Research

Methodology

The Financing Group focused the scope of its research on communities in Arizona, Colorado, New Mexico, Utah, Nevada, California, Texas, and Montana.ix These states were selected because of their geographical similarity and proximity; the counties within them were selected because of their populations and land areas. The Financing Group utilized data from the National Association of Counties (NACo) website for each county's population rate and land size.x For the most part, contacts were made with county, rather than city, representatives.xi The decision to contact representatives directly by phone resulted from the realization both that initial proposals or recommendations for open space measures do not consistently reflect the methods that a community actually implements and that many communities make changes to and build upon successful open space approaches through a fluid and dynamic process.

A consultant for The Financing Group conducted the telephone interviews. To locate the appropriate representative, the consultant made initial contacts with each county's Planning and Zoning, Parks and Recreation, Community Development, or Finance departments. Once the appropriate county representative was identified, the consultant asked each representative what funding mechanisms the community had selected and/or implemented to further its open space or conservation objectives. Usually, but not always, the response included a brief overview of the community's respective history regarding open space efforts and initiatives.

Next, the consultant inquired about the community's conservation "tools", the means by which the locality preserves open space. Conservation tools may be either voluntary or regulatory and can include but are not limited to active programs to solicit or buy conservation easements, transfer development right programs, and fee in lieu of land requirements.xii Finally, the consultant encouraged each representative to provide any other or additional information the representative believed significantly contributed to the community's success.

The consultant informed each representative that she was conducting research for a nonprofit environmental coalition and that the information might be used in a report to the Pima County Board of Supervisors. Virtually all representatives were told that the consultant would convert the notes from the telephone conversation into a concise summary and asked whether they would be willing to confirm the information they had provided.xiii All contacted representatives received an email copy of the summary and were invited to provide feedback to ensure accuracy of the information.xiv

In the case that the consultant was unable to speak directly with a representative, information was collected through various community documents. These communities are distinguished in the subsequent section General Findings with one asterisk (*) which corresponds to the endnote listing where the information was obtained.

Limitations

A paid consultant spent four months and approximately 200 hours making initial contacts and gathering and organizing preliminary information. Results indicate that the amount of available resources, publications, and references warrant additional study and research. Similarly, whereas the this report provides a brief descriptive overview of the funding mechanisms many localities are using for open space acquisition and preservation, it is not a comprehensive list of all cities or communities in the pertinent states with habitat conservation or open space plans. The Pima County Board of Supervisors and their constituents would be well-served by a commitment of greater resources to produce an even more detailed and broader-based report.

Findings on Open Space Conservation Mechanisms

A community's open space and conservation efforts, as well as their successful implementation, are largely dependent upon local political and constituent support. In addition, a county or city's authority to enact comprehensive open space provisions requires strong state enabling legislation, a healthy local economy, and is dependent upon the community's borrowing history and tax base.xv Overall, communities that have greater degrees of fiscal power and discretion, higher bonding capacities, and broader tax bases have greater success in gaining approval for public funding measures and more flexibility to design creative and innovative open space provisions. The following summaries provide descriptions of the approaches other communities have adapted for open space preservation:

Arizona

Apache County: The County's comprehensive plan does not currently address funding for conservation issues.

Cochise County: There is currently no official County funding mechanism in place for open space and conservation. The County supports people who voluntarily downzone and favors cluster subdivisions (although there are no formal development policies for such divisions). Also, the Upper San Pedro Partners, a coalition of agencies dedicated to preserving water resources, is actively involved and sometimes provides consulting advice to the County regarding conservation issues.

Coconino County: The only source of funding the County has utilized for open space purposes was a one-time Heritage Fund grant for land acquisition. The County accepts application and trail conservation easements, but has no funding mechanism in place to promote the application process.

Gila County: Gila County does not have a source of funding for open space or conservation.

Maricopa County: The County has no official funding mechanism in place and has not sought public funds for open space preservation.

Mojave County: Because there are approximately 13,000 miles of open land within County limits, the public does not perceive a need for open space acquisition or preservation. Therefore, the County has not used public funds or any other dedicated funding source to finance open space issues.

Pinal County: While the County has developed a comprehensive plan that identifies sensitive land areas and public resource land designations that should be complete by the end of this calendar year, the plan does not address specific sources of funding. However, the County previously received a small grant (less than $100,000) from the Arizona Heritage Fund for trail development. The County has not applied for any new Heritage Funds grants because the competition is strong and the grants are small. The Superstition Area Land Trust, a community nonprofit organization, regularly works with the County and has taken an active role in conservation and preservation issues.

Santa Cruz County: The County does not engage in land acquisition (although it does have a Preservation District) and thus has no dedicated funding source for open space purchase or preservation. Santa Cruz County does utilize planned area development to set aside open space areas. Pursuant to these ordinances, developers must set aside 25 percent of the land they own for open space; in this way, the County encourages cluster development. The planned area developments go over existing zoning regulations and apply to commercial, industrial, and residential development areas.

Yavapai County: The County has no specific funding sources for open space.

Yuma County: As of now, the County has not identified sources of funding specifically for open space and preservation purposes.

City of Phoenix*: voters approved the Phoenix Parks and Preserve Initiative in 1999, which authorized a one-tenth of one percent increase in the privilege (i.e. sales) tax to fund acquisition. The duration of the tax is ten years, and it is expected to generate $256 million in revenue over that time. The Initiative provides that the City allocate the revenue funds in the following manner: 60 percent to acquire preserves from the Arizona State Land Department; 30 percent for the development of eight regional parks; and 10 percent to the neighborhood and commuity parks district. The Initiative also provides for an oversight Parks and Recreation Board and a citizens' oversight committee.

City of Prescott: In 1998, voters approved a $15 million general obligation bond initiative that allowed the City to purchase two area lakes as well as the land surrounding them. The City proposed a one-percent sales tax on the 2000 ballot, and voters approved the tax by a narrow margin. The sales tax revenue is used for both open space acquisition and road improvements. Current annual revenues generated from the sales tax equal $8 million; 2/3 of last year's resulting revenue was used for road development and improvement, and the remainder of the revenue was used for land acquisition. The City is authorized to spend up to $40.7 million and the sales tax is in effect until 2015.

City of Scottsdale: The City of Scottsdale has proposed five ballot initiatives for the McDowell Sonoran Preserve. The first such initiative occurred in 1995, when City voters authorized a .2 percent sales (privilege and use) tax for up to 30 years for land acquisition and preservation. Then, in 1996, voters approved the sale of revenue bonds, repayable with the dedicated sales tax, to accelerate acquisition. In 1998, City voters approved the Charter Amendment to prohibit the sale of preserve properties without a public vote; citizens also voted to more than double the acres in the preserve and authorized the expenditure of the dedicated sales tax to acquire land in the expanded area. Voters then approved the sale of $200 million in general obligation bonds to acquire land for the preserve in the 1999 election.

California

City and County of San Francisco: In 2000, City voters approved a $13 million bond issue for the acquisition and development of urban parks. San Francisco City and County also benefit from Propositions A (open space) and C (bond funds.) The City of San Francisco also supplements its open space funds with bonds, philanthropic donations and a variety of grants.

Colorado**

Adams County: Within the past two years, County voters approved a .2 percent sales tax to fund conservation and open space. This sales tax is the first countywide sales tax increase, and annual tax revenues equal approximately $5.5 million. The County also receives $3.5 million a year from Colorado Lottery (GOCO) funds. The County secures conservation easements, purchases transfer development rights (although there is no formal or established TDR program) and, to a lesser extent, engages in fee simple purchasing.

Boulder County: Boulder County has used a quarter cent sales tax to fund conservation and open space since 1993. Voters have also approved four bonds, ranging from $34 to $50 million. The County uses planned unit developments, transfer development rights, and conservation easements (the State legislature approved a Conservation Easement Tax Credit, which promotes the donation of easements).

Douglas County: In November 1994, voters approved a .17 sales and use tax (one-sixth of a cent); this tax currently generates annual revenues of $6.5 million. Eighty percent of the revenue is used for the acquisition of new land, and 20 percent is used for active parts. In 1996, the voters authorized the County to bond up to $25 million on the sales tax revenue; in the November 2001 election, voters approved increasing the Countys bonding authority to $43 million. Recently, the County Commissioners agreed to earmark $1 million in general funds for the designated purpose of building trailheads and related trail development; these allocations will occur on a yearly basis and are not long-term committed funds. The County receives $10 million from a GOCO legacy grant and some funding through federal and state grants. In terms of conservation tools, the County uses conservation easements and fee simple purchasing.

Jefferson County: A one-half of one percent sales tax funds land acquisition and development. A 1998 voter initiative allows the County to use a portion of the sales tax revenue for $160 million bond issuance. Since 1998, the County has issued $100 million in bonds and used these bonds for acquisition. Jefferson County also uses GOCO funds and utilizes the Open Space Foundation, a nonprofit organization, to serve as an alternative conservation trustee for citizens who want to donate land but wish not to donate to the government. The County purchases lands through fee acquisition and has a few conservation easements (most of which are donated); the Planning and Zoning department also worked for a cluster rule to set aside 2/3 of property for conservation easements.

Larimer County: A 1995 citizen initiative resulted in a quarter of a cent sales tax to fund conservation and open space. A second citizen initiative in 1999 extended the sales tax through 2018 for open space, natural areas, habitat, and parks and trails. 2001 revenues are estimated to be $7 million; the County will use this revenue for both open space programs and the long-term management of designated areas. The County also uses GOCO funds. The County has a transfer development unity program (similar to a traditional TDR program), a rural land use process, and a parklands fee in lieu of land dedication. Lastly, the County uses conservation easements and purchases land in fee simple titles (the County obtained half of its acquired land through conservation easements, and the remainder through fee simple titles).

Pueblo County: The County has not proposed any initiatives that require public funds for conservation or open space. Instead, the County preserves open space through the use of conservation easements. The County also uses a rural land development process to deal with large lots of land (e.g. 35 acres plus subdivision).

Weld County: Weld County has not identified or implemented any funding sources for conservation purposes.

Montana

City of Billings: Residents of the City of Billings approved a $599,000 bond in 1999 to fund bike trails. The purpose of the bond was actually to provide the necessary matching funds required for some of the City's federally funded programs.

Gallatin County: Voters approved a $10 million bond to fund open space in the 2000 election. In that same year, the Montana legislature introduced specialty license plates and agreed to use the resulting revenue for open space purposes. The Gallatin County Open Space Lands Board is currently trying to leverage the bond monies for conservation easements.

New Mexico

Bernalillo County: In 1998, voters approved a .50 mill levy that increased property taxes by $16 per $100,000 of assessed value and provided that the County use the resulting revenue for conservation and preservation purposes. Approximately $7.8 million in revenue resulted from this mill levy. In 2000, voters renewed the mill levy and approved a .25 percent increase that increased individual property taxes by another $8 per $100,000 of assessed value. The County implemented impact fees in 1996 and now requires developers to pay $434 per each single-family dwelling unit. The County purchases all land in fee simple interest.

Santa Fe County: Voters approved a $12 million public finance general obligation bond to preserve open space and trails in 1998 and an $8 million bond to be subsidized through an increase in property taxes in 2000. The County recently implemented a TDR program that focuses on lands along the highway corridor. The Santa Fe government purchases land in fee simple titles, accepts applications for conservation easements, relies on private groups to play a significant role in conservation-related matters, and is researching the feasibility of purchasing development rights.

Texas

Dallas County: Citizens have approved three separate bonds for open space measures: a $2 million exploratory bond in 1977, a $4 million bond in 1985, and a $5 million bond in 1991. The County no longer relies on bond monies because it has earmarked $1 million of the general fund for conservation and open space purposes. Dallas County leases preserves to the host cities where they are located for 99 years; the host cities are responsible for land maintenance and upkeep. The host cities may acquire the preserves or can renew the contract after the 99-year period. The County also has a zoning green space program, whereby cities and developers can trade building density for the dedication of floodplains to parks or open space.

Tarrant County: The County has commissioned an inventory of parks and open space, but does not have a designated funding source for these measures. State statutory limitations prohibit counties from engaging in land use planning in unincorporated areas, and municipalities are responsible for land acquisition.

Utah

Salt Lake County: In 1992, the Central Utah Completion Act resulted in $7 million in federal funds to promote the acquisition of wetland areas. In 1998, voters authorized a $7 million bond to fund the County's trail program. The Salt Lake City Watershed Acquisition Program purchases non-urban watershed areas, and its control over watershed issues supercedes that of the state. To accomplish its objectives, City officials implemented a fee program, whereby citizens in designated watershed areas pay a surcharge for the water they use; the resulting revenue is then used to purchase new areas of land. In addition to the City of Salt Lake, several nonprofit agencies also have significant roles in acquiring and preserving land and open space.

Utah County: The County recognizes a tax break for individuals who farm their land. Also, if lands within the county limits are designated critical areas, the property falls within a different service area and may be subject to a lower mill levy. Utah County has a TDR program that is designed around local needs (and therefore functions differently than more traditional TDR programs) and uses A-40 zones to encourage developers to cluster farm labor housing.

Findings Related to Habitat Conservation Plans

Although the attainment of a Section 10 incidental take permit is becoming an increasingly significant component of many open space measures, funding for mandatory habitat conservation plans (HCPs) deserves its own consideration. Even though the funding for a community's HCP will be subject to many of the same considerations discussed above (e.g., political will and community support), HCPs also frequently require a greater infusion of federal funds, involve greater areas of state and federally owned lands, and may necessitate ongoing partnerships with federal agencies. For these reasons, funding for HCPs is discussed as its own category of conservation funding below:

California***

In 1991, California passed the Natural Communities Conservation Planning (NCCP) Act, designed to conserve natural communities at the ecosystem scale while accommodating compatible land use. The Act targeted the counties of Orange, San Diego, Los Angeles, San Bernardino and Riverside. For appropriate comparative purposes, Los Angeles, Riverside and San Diego counties' multi-species habitat conservation plans (MSHCPs) will be examined.

Los Angeles County* (expected 2002): The proposed Portuguese Bend Natural Preserve represents an effort to set aside 800 acres of undeveloped land as permanent open space. Although the adoption of the proposal will result in the largest natural lands preserve within the Los Angeles area as well as the completion of the Los Angeles County Natural Communities Conservation Plan (NCCP), the Palos Verdes Peninsula Land Conservancy and the City of Rancho Palos Verdes actually developed the proposal. City officials, landownders, nonprofit representatives, and other local, state, and federal agencies have regularly attended monthly meetings and have been actively engaged in the planning process. The price of the Portuguese Bend properties, which must be purchased in order to conserve the land, ranges between $39,000 and $90,000 per acre. The City of Rancho Palos Verdes has spent in excess of $225,000 to fund the proposal and its related components, but the proposal still requires an "appropriately funded conservation transaction." (Publication date March 2001.)

West Riverside Countyxvi (expected 2002): The West Riverside MSHCP identifies 510,000 acres of land for conservation. Of the 153,000 acres of private land needed to complete the conservation goal, 41,000 acres will be obtained through a development review process (i.e. mitigation for private development), leaving 112,000 acres of additional private land to be acquired. The County will be responsible for conserving 56,000 of these acres, estimated to cost $599 million to $721 million (avg. $8,500-$13,000 per acre).

Methods and Incentives for Land Conservation

In addition to full acquisition, the County will incorporate several other tools to meet this requirement. Conservation and flood control easements, entitlements, deed restrictions, land exchanges, transfer or purchase of development rights, safe harbor agreements, long-term leases, and dedication of private property have also been identified as appropriate methods of land conservation. Density bonuses, density transfers, density credits, tax credits, County management of land and fast-track processing for clustering development on the least environmentally sensitive portion of lands or conserving all or a portion of the property are incentives that the County intends to use on a case-by-case basis to promote land conservation.

Funding Sources

The County will meet the need for land conservation and plan implementation through fees for local transportation projects, $1.50-per-ton tipping fees from two landfills, County developer fees, and donation from the County's General Fund for density bonuses. The County has also made an agreement with surrounding cities for monies to be contributed from development projects. In addition, another landfill is in place and expected to generate additional income and the County is exploring a new regional funding source.

Additional Points of Interest

Riverside County has taken an approach similar to Pima County, in that the MSHCP is one of three components of the three-year Riverside County Integrated Project (RCIP). The goals of RCIP are "to create a high-quality, balanced and sustainable environment for the Citizens of Riverside County and to make Riverside County's communities great places to live, work and play", alongside an anticipated doubling in the area's population by 2020. One quote by Riverside County Supervisor, Bob Buster, rings with similar sentiment to Mr. Huckelberry's October 9, 2001 SDCP Update:

"We could take a minimalist approach in satisfying federal, state, and local regulations in order to build our communities and public works projects. We ought to challenge ourselves to go beyond that. The RCIP is a vehicle to show the public that we can create a county that is an outstanding place to live."

The other two components of the RCIP are an update of the County's General Plan and the establishment of a transportation corridor. Notably, the County representative indicated that public support for the MSHCP increased when citizens realized that improvements in infrastructure could not occur in the absence of an MSHCP.

Even with this support, a ballot measure is unlikely due to the fact that County representatives believe it is important to prove the benefit to the public without creating resistance through tax increases. (Also, County voters authorized a few bonds in the 1990s--one for $100 or $200 million and another for $300 million--to fund the MSHCP, but these amounts were insufficient to fulfill significant aspects of the MSHCP.)

San Diego County*: San Diego County is in the process of developing an MSHCP for the entire County. For this purpose, the County has been divided into three Sub-Areas. The first Sub-Area Plan, implemented in 1998, includes Lake Hidges, Metro-Lakeside-Jamul and South County, and is currently the only Sub-Area for which a funding analysis has been performed.

The approved Sub-Area MSHCP targets approximately 101,268 acres targeted for conservation. Of the private lands in the preserve system, 22,450 were scheduled to be conserved through the county by contributions from developers for mitigation, leaving 18,850 acres of private land to be conserved by other means. The 1998 Implementing Agreement called for the County to be responsible for conserving one half, or 9,425 acres, of this land, estimated to cost $91 million to $125 million (avg. $9,700 to $13,300 per acre).

Funding Sources

The Implementing Agreement listed potential funding options for the County as: benefit assessment by a regional park or open space district, habitat maintenance assessment, a community facilities district special tax, an ad valorem property tax, and an increase in sales tax. This regional funding source was to be established within 36 months of the agreement.

To date, none of these have been attempted, mainly due to indecision and fear of political infeasibility by the County. The only significant County contribution for open space funding has been direct allocations from the County's General Fund. The main form of conservation used with these funds has been the acquisition of grazing or development rights.

Instead, the County is relying more heavily on state conservation funds, which have significantly increased with the recent approval of several bond measures. The County representative indicated that this increased reliance on state funds has become a point of contention, since the state also has obligations toward conserving the remaining half of private acres and there is now more ambiguity about whose responsibility these monies should count toward. These feelings are exacerbated in light of the fact that the County has not yet even attempted to secure a local funding source.

Nevada

Clark County (approved 2000): This HCP varies from many others, in that there was not a designated number of acres targeted for conservation. This was because 90% land in Clark County is federally owned (mostly BLM) and had some protected status initially. However, for private lands that are targeted for conservation, the primary tools used by the County are conservation easements of grazing and development rights, a land exchange program, and some fee simple purchases.

Funding Sources

The County MSHCP program started with a state loan of $3 million. The County is now required to spend $2.04 million annually. The County's biennium budget included $10 million for all HCP conservation measures in the following (approximate) designations: $5 million for the HCP fund, $1 million for the Section 7 Fish and Wildlife Service funds, and $4.6 million for the Public Lands Management Act funds and the federal agencies' science contractor.

This money comes from developer fees, infrastructure fees for projects within and surrounding Clark County, money that went toward the Desert Conservation Plan (which was incorporated into the MSHCP), as well as local initiatives to rehabilitate and restore specific habitats. The County also receives $4.6 million (beginning in 2001) for HCP development resulting from congressional approval of the South Nevada Public Lands Management Act, which provides monies from the sale of federal lands scattered in urban areas.

Texas

Travis County (and the City of Austin, approved 1996): The Balcones Canyonlands Conservation Plan (BCCP) identifies 30,428 acres of land for conservation. Because much of the Countys designated sensitive areas lie within City limits, the County and the City have a collaborative partnership. As such, responsibility for conservation of these lands was not specified by jurisdiction. By summer, 2001, the preserve had reached 26,385 acres.

Funding Sources

In the early 1990s, both the City and the County requested bonding authority to acquire undeveloped land. The City's $42 million bond initiative passed, but the County's bond initiative was not successful. Following the failed bond initiative, the County implemented and utilized alternative funding structures that are compatible with the County's long-term conservation objectives and do not require voter approval. In particular, the County developed the Tax Increment Financing Plan (the TIF) to generate funds for acquisition. The TIF consists of a portion of the taxable value of property improvements for tracts participating through the BCCP; the TIF increases over time in direct relation to the amount of development that occurs within the County.

Revenue from the TIF program is combined with the County's portion of Participation Certificate fees and, to date, the County has acquired one-half of its preserve acreage through the combination of locally generated participation fees, TIF funding, and federal grants. The County currently uses TIF funds solely for acquisition, but TIF monies will eventually be used for operation and maintenance.

Additional Points of Interest

During the interview process, the County representative said that the original cost estimate for land conservation had not proved to be accurate. Due to increased development and business investment, land values in the western part of the county have increased beyond foreseeable expectations. The representative stressed that, for this reason, funding mechanisms should be flexible to adapt to fluctuations in land prices so that conservation goals may be achieved.

Additional Funding Sources

It has been previously mentioned that a secure funding plan for land acquisition requires a variety of revenue sources. While it is important for counties to secure local funding sources, there are other outside sources that can be utilized to reach conservation goals which deserve mention.

State, Federal and Private Grants

There are many states that have established funds specifically for conservation purposes, many of which allow counties to apply for a portion of these funds. In addition, there are federal funds, such as the Land and Water Conservation Fund and National Fish and Wildlife Challenge Grants that can provide additional resources for land acquisition and management. However, as highlighted in the San Diego MSHCP, there should be adequate communication between these agencies beforehand to ensure that land conservation responsibilities are met in a way that all parties consider equitable. Several private, non-profit organizations, such as the National Fish and Wildlife Federation, also provide grant money and/or technical assistance for conservation projects.

Private, Non-profit Land Trusts

Private, non-profit land trusts have also been of great assistance in conserving lands. The Land Trust Survey, conducted by the Land Trust Alliance, found that by the year 2000, over 6.2 million acres of land had been protected by local and regional land trusts alone in the United States; over 4 million of those had been conserved since 1990. These organizations can effectively preserve lands facing immediate threats, either holding the title themselves or selling to a local jurisdiction when adequate funds have been generated. They can negotiate conservation easements or the purchase of other property rights that are a more cost-effective method of conservation that outright acquisition. By serving as an independent third party in negotiating willing-seller agreements, these organizations can prevent jurisdictions from encountering a possible conflict-of-interest in its dealings with the property owner. Finally, they can offer critical support in securing voter-approved local funding sources for land acquisition and encouraging policymakers to implement tax incentives and other programs for conservation.

STATUTORY GUIDELINES AND BONDING CAPACITY

Overview

The importance of state enabling legislation in relation to a county or municipality's ability to identify innovative sources of funding for open space and conservation merits reiteration. Although a county can design and implement ordinances for land acquisition and preservation, its decisions regarding funding mechanisms ultimately depend upon statutory authority and its degree of discretion in leveraging local public funds. In some communities, like San Diego, support from the state legislature promotes the greater infusion of local funds. In other communities, where the state legislature may not necessarily be as supportive of strong local governments, citizen initiatives and targeted lobbying efforts can influence legislation to create greater flexibility and opportunities for county and city governments.

Arizona State enabling legislation is lacking and, perhaps in light of current budgetary constraints, the State legislature has not indicated much willingness to contribute to the advancement of local conservation objectives. In fact, none of the Arizona counties included in this report have dedicated sources of funding for open space acquisition or preservation. Instead, cities such as Scottsdale and Prescott have taken the lead in open space efforts. The cities of Scottsdale, Prescott, and Phoenix currently use a sales tax--ranging from one-tenth of one cent (.1 percent) to one-fifth of one cent (.2 percent)--to fund open space.xvii

The implementation of the SDCP in Pima County will also require funding from multiple sources. The following section will discuss the County;s bonding authority and capacity, but it is important to note here that the County can statutorily request authority to levy a sales (privilege and use) tax to implement the SDCP and to achieve related conservation goals. Whereas the imposition of a sales tax may not seem politically desirable because of the immediate public response, the implementation of the SDCP necessitates a longer-term analysis of political viability and economic cost-benefit comparisons. As discussed earlier, there is a definite relationship between the preservation of natural and historical resources and the infusion of new residents and the quality of life for existing residents. This connection to economic development, as well as the knowledge that the cost of losing natural resources results in irreplaceable aesthetic and ecological value, presents real and compelling economic and philosophical reasons to promulgate proactive measures to preserve open space.

Statutory Authority in Pima County

The County's authority to levy a sales tax is set forth in A.R.S. §42-6103. The pertinent parts of this section provide:

A. A county having a population of less than one million five hundred thousand...on a unanimous vote of the board of supervisors, may levy and, if levied, the department shall collect a county general excise tax on each person engaging or continuing in the county in a business taxed....

B. The excise tax levied pursuant to subsection A...shall be at a rate applied as a percentage of the rates prescribed by section 42-5010...not to exceed ten percent.xviii

In addition to its ability to levy a sales (privilege and use) tax, the County has statutory authority relating to the acquisition of open space land and associated fees pursuant to the Growing Smarter legislation. Two Growing Smarter provisions that merit further consideration and have potential to advance the implementation of the SDCP are A.R.S. §§11-935.01 and 11-937. Section 11-935.01, Open Space Land Acquisition, states:

The acquisition of interests or rights in real property for the preservation of open spaces or areas constitutes a public purpose for which public funds may be expended or advanced. For the purposes of this section, "open space lands or open area" means any space or area characterized by great natural scenic beauty or whose existing openness, natural condition or present state of use, if retained, would maintain or enhance the conservation of natural or scenic resources, or the production of food and fiber.

Clearly, this provision provides tremendous discretion to the County to acquire undeveloped open space areas. There are no internal cross-references to other statutory sections, there are no historical or statutory notes, and there are no notes of decisions pertaining to §11-935.01. Since there is similarly no requirement that County officials obtain voter approval prior to the expenditure of public funds, this provision presumably permits the allocation of general funds for the purpose of acquiring designated open space areas. Section 11-935.01 represents a tremendously useful piece of state enabling legislation to further the County's interest in open space acquisition and preservation and should be used as a resource to promote and implement the SDCP.

Section 11-937 addresses a tax levy and appropriations and lends additional support for the feasibility of implementing a tax for acquisition and open space preservation. This section provides:

The governing body of a county or municipality may levy a tax for the acquisition and maintenance of public parks in the manner provided by law for the levy of taxes for other county or municipal purposes, or it may appropriate otherwise unappropriated funds for such purpose.

Pima County's Bonding Capacity

Whereas the economic definition of a county's bonding capacity typically depends upon, first, the property tax base and existing debt and, second, the percentage of debt service relative to the overall percentage of the budget, Pima County's bonding capacity also incorporates legal considerations. Specifically, Article 9, §8 of the Arizona State Constitution imposes limitations on a community's ability to incur public debt. According to the following text of this section:

(1) No county, city, town, school district or other municipal corporation shall for any purpose become indebted in any manner to an amount exceeding six percent of the taxable property in each county...without the assent of a majority of the qualified electors....(emphasis added);

(3) Under no circumstances shall any county...become indebted to an amount exceeding fifteen percent of such taxable property....xix

This section thus prohibits the County from incurring an outstanding general obligation debt that exceeds either six percent of its net secondary assessed valuation in the absence of voter approval or fifteen percent of the secondary assessed valuation overall. The government utilizes secondary property taxes to pay off bonded indebtedness, to apply when budget expenditure is exceeded, and for operating and maintaining particular special districts. In contrast, primary public taxes consist of all other ad valorem taxes.

The County's legal debt margin, projected at June 30, 2002xx is:

6% Limitation / 15% Limitation

Secondary Net Assessed valuation $4,491,395,307 $4,491,395,307

Debt Limit 269,483,718 673,709,296

Outstanding General Obligation Bonds (192,625,000) (192,625,000)

Assets Available for Principal 2,184,000 2,184,000

Debt Applicable to Limit (190,441,000) (190,441,000)

Available Legal Debt Margin 79,042,718 483,268,296

Outstanding General Obligation Bonds $ 192,625,000

Secondary Net Assessed Valuation $ 4,491,395,307

Legal Debt Margin Percentage: 4.3 %

FUNDING RECOMMENDATIONS FOR PIMA COUNTY

Impose a Sales Tax. Pima County should impose a sales tax to fund open space acquisition, preservation, and maintenance pursuant to A.R.S. §§ 42-6103 and 11-937. The City of Phoenix has implemented a .1 percent sales tax and anticipates revenue of $256 million over a ten-year period. Adams County, in Colorado, has an established .2 percent sales tax and generates annual revenues of $5.9 million. Although the sales tax functions as a regressive tax (i.e. is more detrimental to lower-income people), this characteristic is offset by the fact that a sales tax would capitalize on the County's tourism industry. As well, Pima County has expressed a commitment to reinvestment, affordable housing, and other issues of concern to lower-income residents. Concerns about the regressive nature of the sales tax could be allayed if the County makes a concerted effort to address these issues.

Philosophically, tourists visit the County because of its unique desert location. A sales tax would generate revenues from these non-county residents that could then be used to preserve the areas and the resources that attract out-of-towners. Likewise, other communities have found that the real estate industry ultimately favors a sales tax because the preservation of open space continues to draw new residents and allows property to be sold at higher prices due to considerations such as location and scenic views.

Importantly, Pima County might also follow the example of counties in Colorado that return a portion of the county's sales tax revenue to the municipalities. This approach not only appears to garner greater public support for the imposition of the sales tax (see Larimer and Adams Counties), but it also cultivates cooperative relationships between a county and the surrounding municipalities. Sharing open space revenues provides a mechanism whereby counties and cities can work cooperatively toward attaining important open space and conservation objectives without duplicating efforts.

Issue a General Obligation Bond. Given the County's success in passing the $36.3 million open space and conservation general obligation bond in 1997, the County should request authority to issue a bond in either 2002 or 2003 for an amount significantly higher. The constituent support for the 1997 bond suggests that voters recognize the importance of open space and are willing to pay for it. Furthermore, the increase in bonding authority is justified for at least three reasons: $36.3 million proved insufficient to acquire all of the identified parcels of land in 1997, it is fair to assume that the price of land has and continues to increase, and the County has the sufficient bonding capacity to support the increase.

Pursue Private Funding. A potentially important aspect of proposing both the sales tax and general bond initiative is utilizing private foundational resources. In particular, several counties credit the Trust for Public Land's (TPL's) leadership and assistance as a major factor in their successful sales tax or bond elections. TPL's assistance includes conducting polls, performing voter outreach and marketing, and providing general consulting advice. TPL is an excellent resource, and its track record merits the consideration of including TPL as a significant actor in Pima County open space and conservation elections.

Dedicate a Designated Amount of General Funds for Open Space. A.R.S. §11-935.01 allows the County to "expend or advance" public funds to acquire property for public open space purposes. The County should take advantage of this provision and annually earmark a portion of its general funds for open space purposes. Although the amount may not significantly contribute to the overall cost, this dedication may increase public support for the SDCP and confidence in the County Administrator and the Board of Supervisors if residents perceive the dedication as the government's commitment to open space and its willingness to pay for it out of the County budget rather than through tax measures alone.

Also, while the statute specifies that monies must be spent for acquisition purposes, the additional amount of funding under §11-935.01 could offset another pot of money such that the County could allocate the equivalent amount of funds from another source to create an Open Space citizens advisory board; the funding could be used to cover the board's administrative costs. The creation of a citizens' advisory board may inspire greater citizen participation in open space issues and, because the board would serve as an intermediary between the government and private citizens, may provide the public with a greater sense of buy-in and of accountability for open space funds.

Dedicate a Designated Percentage of Current Property Taxes for Open Space. The Board of Supervisors can designate that a percentage of current property taxes go toward the purchase of open space. This would allow for a dedicated and secure funding source.

Implement a Tax Increment Financing Program (TIF). The County should implement a TIF that functions in ways similar to that which was enacted in Travis County, Texas. This would require approval by the Arizona State legislature to create a special tax district. The appeal of a TIF program is that it acts as a continuing funding mechanism to acquire and maintain open space lands. Because a TIF program does not require voter approval, its implementation represents the government's commitment to securing and preserving open space. (See description of Travis County for additional information on the structure and benefits of that community's TIF program.)