Government and Real Estate

County’s PDR funding has drawn attention

Program’s allocation is key item for some in new general fund budget.

November 15, 2013
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At the end of 2009, Kent County commissioners allocated $275,000 to the Purchase of Development Rights program for the 2010 fiscal year.

The allocation came on the heels of a three-year, $1 million plan the board received to preserve county farmland and orchards. It was one option that came from the county’s Open Space Subcommittee that looked into how the program could be funded. The option wasn’t adopted by the board.

However, the allocation marked the first time tax dollars were designated to buy development rights; taking that action was prohibited when commissioners created the ordinance in November 2002.

The following year, commissioners allocated another $275,000 to the PDR program. The figure was $75,000 less than supporters wanted, and they reluctantly admitted the three-year, $1 million recommended goal likely wouldn’t be reached.

“I’d like to say they promised us money last year, but they really didn’t promise it. That was a recommendation from a subcommittee that they’d give us $1 million over three years. Yes, we would have liked to have gotten $350,000 this year. We got $275,000 instead,” said Gabe Hudson, chairman of the county’s Agricultural Preservation Board, after the 2011 allocation.

The board then funded the preservation effort with $150,000 from the general fund for the 2012 fiscal year, which brought the three-year total to $700,000, or $300,000 short of the subcommittee’s funding recommendation.

The slide in PDR funding continued into this fiscal year, as commissioners approved $50,000 to buy development rights and $37,000 to administer the program. The allocation for next year is lower still.

Commissioners will gather Thursday to adopt the 2014 general fund budget, which is structurally balanced at $161.5 million. The budget contains only $25,000 for the PDR effort as it now stands, and that figure brought the program’s supporters and opponents out in force to air their views at a public hearing held recently on the budget.

“I’ve never seen this many people in this room before,” said Commissioner Tom Antor.

Because of the crowd’s size, Commission Chairman Dan Koorndyk restricted each side to a total of 15 minutes at the podium. The program’s supporters easily outnumbered its opponents; nearly 30 stood while a handful of PDR advocates addressed the commission.

Former state representative and senator Patty Birkholz told commissioners farming is a primary economic activity and more than 1 million acres are being farmed across the 13 counties that make up West Michigan. She said the funds allocated for the program will leave it without the ability to preserve any acreage next year.

“For us, we look at the PDR funding as critical to the county budget. We feel that PDR funding is very important,” said Jill Norris, general manager of Grove, one of the restaurants owned by the Essence Restaurant Group of Grand Rapids.

Commercial Alliance of Realtors President John Francis told board members his organization is opposed to tax dollars being used to support the program because it imposes on the free market. He also said once property becomes preserved, there isn’t a guarantee the land will ever be used for any reason, including farming.

A few more PDR opponents, including some who identified themselves as members of the Grand Rapids Association of Realtors, pointed out that farmland preservation inhibits future development.

Much of the program’s funding over the years has come from outside sources. Roughly half of the dollars spent to preserve farmland in the county has come from USDA Farmland Protection Program grants, while local foundations have kicked in respective shares of the purchase prices.

In fact, the Grand Rapids Community and Frey foundations each awarded the county a three-year grant several years ago to help with the preservation costs. However, those grants came with a funding stipulation for the county, as foundation officials felt the commission had to have more financial skin in the PDR game.

GR Community Foundation awarded the county a $300,000 grant in 2010 — $100,000 annually for three years — if commissioners funded the program with $350,000 in 2011 and 2012. The Frey Foundation also gave the county a $250,000 grant — $85,000 annually for three years — if the board allocated $300,000 to the program each year for those years.

Commissioners didn’t designate that much for either year, so the foundations pro-rated their grants in 2011 and 2012 to the amount of funding the board allocated for each year. Some commissioners said not meeting the foundations’ funding requirements meant the county was leaving money on the table.

Over the PDR program’s life, the price to buy development rights has dropped dramatically. Back in 2005, 2006 and 2007, prior to the housing market’s collapse, the price to preserve an acre topped $4,000, peaking at $5,000 an acre in 2008, once the financial market toppled. By 2011, the average price for an acre fell to $1,500 or $1,700, depending on the property’s quality. It has since risen to $2,500 per acre in the most recent development-rights purchase, which is going through the closing process now.

Price, though, hasn’t been a major issue for the commission. A contentious discussion took place among commissioners a few weeks ago when a local farmer donated 83 acres to the PDR program, even though the transaction wouldn’t cost the county anything.

“I still don’t understand why this is such a big deal when it’s such a small amount of money in the budget,” said Koorndyk about the divisiveness surrounding that discussion that took place last month.

Although the taxable value of property throughout the county has fallen the past four years, the one land category that came through the Great Recession basically unharmed was agricultural. Its value grew slightly during each of those years, while residential and commercial values fell.

“The agriculture values have essentially been the most stable,” said Matt Woolford, director of the county’s equalization bureau, following the budget’s public hearing.

County Administrator and Controller Daryl Delabbio opened the hearing with his take on the county’s financial position for the upcoming fiscal year, which starts Jan. 1.

“There are far more needs than there are resources,” he said. “We’ve seen flat property tax growth, and the county relies on property taxes.”

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