PDR funding should show focus soon

February 6, 2011
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Now that Kent County commissioners have offered purchase options to three more farms this year as part of its Purchase of Development Rights program, board members are likely to begin looking for permanent funding sources for it soon.

Commissioners will receive a report this week on that topic from a commission subcommittee that spent 10 months examining the issue. According to that report, private funding from sources such as the Frey, Grand Rapids Community and Wege foundations have been the “backbone” of the program since its passage in late 2002. Those private grants have totaled almost $1.6 million and have accounted for 37 percent of the $4.27 million that has been spent on the PDR effort from 2003 through last year.

But the subcommittee’s chairman, Commissioner Jim Talen, said that source is likely to dry up in a few years, and the county needs to find a replacement for those dollars. He also said, however, that the most talked about option some feel would resolve the funding problem — a dedicated millage — is not in the cards now. The subcommittee felt not enough residents are familiar enough with the program to make an educated decision about funding it.

Other sources are on the table, and some are for the long term. Here is a quick look:

  • The Grand Valley Regional Biosolids Authority has indicated an interest in partnering with the county to preserve farmland. Funding over 10 years from GVRBA could reach $312,500; those dollars would be used to set aside 2,500 acres.

  • The Kent County Agricultural Preservation Board has a $50,000 endowment fund that is managed by GR Community Foundation. The idea is to grow that fund to reach $10 million.

  • The Kent County Real Estate Transfer Tax could be used. A portion of that levy, which is estimated to produce $1.5 million this year, could be dedicated to preserving farmland.

  • Coordinated zoning and planning efforts could implement conversion and impact fees. This would involve funding commitments from cities and townships, as the county doesn’t do either function. “We need to find ways to have townships become a significant funder of PDR,” said Talen.

  • Establish an Agricultural Preservation Tax-Increment Financing Authority. This would operate in a manner similar to a downtown development authority in that it would capture a portion of the property tax within a defined district and then use those dollars for improvements within the district. The state would have to create legislation to make it a reality.

  • Preserve farmland through installment purchase agreements instead of making full payments at closing. This would allow payments to be made to farmers over time.

  • Go to the bond market for funding, preferably to purchase a zero-coupon bond.

The report noted that, in the short term, the county will likely continue to leverage private grants, apply for federal grants from the USDA Farmland Protection Program and allocate funding from the general operating budget. Over the last two fiscal years, the county has awarded the PDR program $550,000 from operations, including $275,000 for this year. But if state lawmakers eliminate statutory revenue sharing, as they are likely to do, then that appropriation will probably be discontinued, as the general operating budget would lose at least $11 million on an annual basis.

Talen said the subcommittee had other possible funding sources that should be pursued. He said the county should make it a priority to get the state involved again. Early in the PDR program, the state preservation office gave the county a grant of $253,000. But state funding has gone away since then.

Talen said another source would be to dedicate the property-tax receipts the county receives from agricultural landowners to the program. Talen said they were billed a total of $782,000 in 2010. Yet another source is the landowners who are selling their development rights to the county. In the last two purchase rounds, property owners have contributed more than $150,000 toward the transactions.

Joining Talen on the PDR funding sustainability subcommittee were commissioners Tom Antor and Bill Hirsch, and former Commissioner Bob Synk. Talen said it would cost about $55 million to preserve the program’s original goal of 25,000 acres.

“We can get to our goal of 25,000 acres in just about 20 years,” he said. “We can do this.”

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