SECTION 1. PURPOSE AND AUTHORIZATION

The purpose of the PDR Program is to preserve open space, including natural and scenic areas and productive agricultural land, through the purchase of development rights from voluntary applicants. Through a PDR Program, private landowners can receive compensation for their role in providing open space protection while continuing to use their land. The fee title to these lands remains in private ownership.

SECTION 2. DEFINITIONS

For the purpose of this Program, certain words and phrases are defined as follows:

(1) Agricultural Land: Land whose use is devoted to the production of crops, livestock, and vegetables, as well as to dairy, poultry and horticultural products, equestrian activities and alternative products of the land.

(2) Conservation Easement: A nonpossessory interest of a holder in real property imposing limitations or affirmative obligations the purposes of which include retaining or protecting natural, scenic, or open-space values of real property, assuring its availability for agricultural, forest, recreational, or open-space use, protecting natural resources, maintaining or enhancing air or water quality, or preserving the historical, architectural, archaeological, or cultural aspects of real property. (Minnesota Statutes, Chapter 84C.)

(3) Corridor: Protected areas of open Space linked together throughout the community.

(4) County Board: The Washington County Board of Commissioners.

(5) Development: An activity which materially alters or affects the existing conditions or use of any land.

(6) Development Rights: An interest in and the right to use and subdivide land for any and all residential, commercial and industrial purposes and activities which are not incident to agriculture and open space.

(7) Eligible Land: Properties for which the purchase of development rights is authorized pursuant to the Purchase of Development Rights Ordinance.

(8) Open Space: Land used for agriculture, natural habitat, pedestrian and/or scenic views, that is undivided and permanently protected from future development.

(9) Resource Values: The values that a conservation easement is intended to protect, as defined and recorded in the baseline documentation. Values may include but are not limited to natural habitat, productive agricultural land, scenic views and connections to or extensions of existing parks or protected open space.

(10) Selection Round: A cycle of the Purchase of Development Rights Program, from initial advertisement of the program through completion of offers to purchase development rights conservation easements.

SECTION 3. SCOPE AND COVERAGE OF THE PROGRAM

Specific criteria that were used to define the Washington County Opportunity Areas include:

• high quality soils
• MN County Biological Survey sites and areas
• large blocks of contiguous agricultural land
• large blocks of contiguous natural habitat
• presence of vegetated stream corridors
• trout streams
• undeveloped lake shore
• presence of erosion prone soils
• ground water sensitivity
• scenic areas valued by County residents
• grasslands
• forest interior

SECTION 4. ROLES AND RESPONSIBILITIES

The administration of the PDR program involves the County Board of Commissioners, a PDR Advisory Committee, and County staff. The administrative roles and responsibilities of each of these groups are outlined below.

County Board of Commissioners
The County Board of Commissioners is the policy-making body for the County. The County Board originates the PDR Program through ordinance and has oversight authority for the Program. Other responsibilities include:

• Overseeing program administration
• Approving program rules
• Appointing PDR Advisory Committee members
• Establishing yearly funding levels
• Establishing the 'split' between the countywide program and any matching grants to local governments
• Directing appraisals or valuations of easements
• Approving easement purchases
• Awarding matching grants
• Approving financing mechanisms and accepting grants

Program Staff
County staff will administer the PDR program on a day-to-day basis. Staff will provide support to the PDR Advisory Committee and County Board. The capabilities of staff could include, program administration, planning, and resource management. Additionally, it is desirable for staff to have knowledge of land conservation programs and financing, and knowledge of agriculture and ecology.

• In addition to staff assigned directly to the PDR Program, support will be needed from the following County staff:
• Attorney's Office - review of easement language
• Assessment, Taxpayer Services and Elections Department - appraisals/easement value
• Recorder's Office - ensuring easements are recorded
• Transportation and Physical Development Department - land use and land management
• Public Health Department - groundwater and surface water issues
• Real Estate Acquisition Committee - review of recommended easement purchases

The specific responsibilities of PDR Program staff will include:

• Creating and distributing materials to promote the program
• Overall administration of program and financial management
• Soliciting applications - advertising, publicity
• Advising applicants and potential applicants
• Initial screening of applications for eligibility
• Initial evaluation of eligible parcels according to criteria; preparation of reports to Advisory Committee
• Negotiations with landowners of eligible parcels - easement prices, bargain sales, additional development sites, etc.
• Determining easement value
• Soliciting comments from local governments, watershed associations, etc.
• Support to Advisory Committee -- mailings, meeting coordination, minutes, etc.
• Seeking County Board approval of the recommended easement purchases
• Assisting the Minnesota Land Trust in negotiating conditions of easement with landowners and oversight of the Minnesota Land Trust as easement holder and monitor, if chosen to assist the County with these duties
• Environmental risk analysis (due diligence)
• Ensuring that easements are recorded
• Ensuring that subdivisions or plats clearly identify parcels on which development rights have been sold and extinguished
• Seeking additional outside funding

PDR Advisory Committee
The County will use an expended Parks and Open Space Commission as its PDR Advisory Committee. A liaison from the Planning Advisory Commission will be added. Additional members may be added to achieve representation from the following interests:

(1) farmers;

(2) landowners;

(3) local units of governments, including but not limited to cities, towns, and water management organizations;

(4) citizens at large with knowledge or experience related to the purpose of the program;

(5) conservation organizations;

(6) residents of each County Commissioner's district;

(7) a Soil and Water Conservation District Board member; and

(8) a member of the Washington County Board of Commissioners.

Each member may represent one or more of the above interest groups.

The Advisory Committee will also include non-voting technical advisory members from agencies involved in land and water protection activities, such as the Natural Resources Conservation Service, the Soil and Water Conservation District, and the Department of Natural Resources.

The Advisory Committee shall be appointed to staggered three-year terms. The initial members shall be appointed to one-year, two-year and three-year terms so that no more than five members' terms expire in one year. Each member may serve a maximum of two consecutive three-year terms.

The PDR Advisory Committee is assigned the following duties and responsibilities:

• Make recommendations to the County Board regarding selection criteria;
• Review applications that meet the initial eligibility criteria;
• Visit and evaluate sites based on "Phase 2" criteria as outlined in Section 5 of this document;
• Evaluate applications based on available funding and potential for bargain sale or additional funding;
• Review comments from local units of governments and watershed management organizations;
• Recommend parcels to County Board for purchase of Conservation Easements;
• Assist in seeking funding opportunities; and
• Provide input to County on all program activities.

SECTION 5. ELIGIBILITY AND PRIORITIES

The following criteria shall be considered in determining which offers to consider in any Selection Round.

Initial Eligibility
Threshold eligibility requirements for the PDR Program define which landowners can submit applications to sell their development rights. All of the following factors must be present for a property to be considered for purchase of development rights:

(1) A voluntary application is submitted by the property owner;

(2) The property is included within the Green Corridor Opportunity Area;

(3) The minimum parcel size corresponds to the minimum lot size of the applicable zoning district, except in cases where it can be demonstrated that the parcel fills a significant gap between, or is adjacent to, other protected high-value resources or open space; and

(4) The parcel must have some development rights remaining under current zoning. Parcels that have been developed to the maximum allowed under density-based zoning are not eligible. Preferences will be given to parcels that have the ability to serve multiple public purposes, such as storm water management, recreation, etc. (to be determined by field survey, comments from local government units and additional research), and are adjacent to waterways, bike trails, County parks and other public facilities.

Natural Resource Values

(A) Within areas of substantial forest interior, as defined on "Forest Interior Criteria Layer," Green Corridor Project map.

(B) Frontage along a lake, river or stream, as defined in the Department of Natural Resources Protected Waters Inventory.

(C) County Biological Survey site or area, as defined in the Department of Natural Resources Minnesota County Biological Survey for Washington County.

(D) Presence of erosion-prone soils and steep slopes, as defined in the Washington County Soil Survey.

Agricultural Values

(A) Within large blocks of active agriculture, as defined on "Large Blocks of Agriculture Criteria Layer," Green Corridor Project map.

(B) Prime or significant farmland soils, as defined in the Washington County Soil Survey.

(C) Enrollment in Metropolitan Agricultural Preserves or Green Acres programs.

(D) Historic farmstead or landmark as defined in the National or State Historic Register of Sites or the Washington County History Network Historic Site Inventory.

Spatial Values

(A) Proximity to parks or other protected Open Space (adjacent to or within ½ mile).

(B) Application size of 80 acres or more (could include multiple contiguous parcels under single ownership).

(C) Public access provided (enhancing existing recreational opportunities receive greater points).

(D) Presence in a corridor designated scenic by congressional or state legislative action, by local unit of government resolution, or some other formal method (existing corridors include St. Croix Riverway and County Road 21).

(E) Planned for municipal sewer service (a negative point value).

Planning and Zoning Considerations

(A) Comprehensive plan designation for agriculture, resource protection or an equivalent designation.

(B) Zoning densities of 1 unit per 10 acres or lower (densities receive greater point values).

Phase 2 and Site Visit Ranking Criteria
The following criteria shall be considered for use in conjunction with site visits, to determine final ranking of parcels recommended for conservation easement purchase. Point values will be established by resolution of the County Board prior to each Selection Round.

(1) Additional natural values, based on field survey.

(2) Additional scenic or historic values, based on field survey and research.

Factors such as the willingness of the landowner to offer a bargain sale, opportunities for leveraging additional funding, or multiple applications from the same general area, will be considered in developing a list of "Recommended Parcels".

SECTION 6. APPLICATION AND SELECTION PROCESS

Acceptance of Applications.
County staff will accept applications during a set period within a Selection Round. Applications are intended to indicate an interest in participating in the Program, and do not represent a binding commitment or offer to sell a conservation easement.

Screening and Phase 1 Ranking of Applications.
County staff will screen applications for eligibility and rank the eligible parcels using the criteria in Section 5, Eligibility and Priorities. This Phase 1 ranking will result in a list of "Candidate Parcels" that are ranked in order of relative priority. County staff will solicit comments on all "Candidate Parcels" from the applicable local units of government and water management organizations.

Site Visits and Phase 2 Ranking of Candidate Parcels.
County staff will coordinate site visits by the PDR Advisory Committee for all "Candidate Parcels". The PDR Advisory Committee will rerank the "Candidate Parcels" using the Phase 2 - Site Visit Criteria listed in Section 5 and the local unit of government comments. This Phase 2 Ranking will result in a list of "Recommended Parcels" that will be submitted to the County Board for review and approval to pursue conservation easement valuations.

Real Estate Acquisition Committee Review.
The Washington County Real Restate Acquisition Committee reviews parcels of land that the County is considering for purchase. It screens for such things as unpaid takes, survey problems, pollution concerns, abandoned wells, and title problems. This Committee will review each parcel on the "Recommended Purchases" list prior to purchase offers being made to landowners. Major problems that are uncovered will be brought to the attention of the County Board prior to making an offer to purchase development rights.

Conservation Easement Valuations and Negotiation.

(1) Conservation Easement valuations will be conducted as described in Section 7. An agent of the County will negotiate price and conservation easement terms with landowners. Landowners may make offers to sell at a price lower than the conservation easement value (bargain sale) during this period.

(2) Based on conservation easement values, bargain sale offers, availability of additional funding for specific purchases, comments from local government units, and other factors, the PDR Advisory Committee will prepare a prioritized list of "Recommended Purchases" for approval by the County Board.

(3) The County Board may accept the list of "Recommended Purchases" or modify the list by removing sites or adding any sites from the list of "Candidate Parcels." The County Board will approve the purchase of conservation easements based upon available funding. Those not funded will be placed on a waiting list.

Offers to Purchase.
Upon County Board approval, offers to purchase conservation easements will be tendered to the landowner. Based on negotiations with the landowner and other factors, an offer may specify terms, contingencies and conditions not contained in the original application, but only after approval by the County Board. A period will be established within which landowners may accept or reject offers to purchase. If an offer is rejected, funds will be reallocated to the next available parcel on the waiting list.

Closing and Payment.
Settlement will occur following the landowner's acceptance of the County's offer to purchase a conservation easement, and is contingent upon due diligence, environmental audit, a title search, mortgagee's consent to the conservation easement, and any other evidence that may be necessary to clear title. Payment terms may be by lump sum, by installments, or by other arrangements satisfactory to both parties.

Recording and Monitoring.
The County's acquisition of a conservation easement shall be recorded in the County Recorder's Office. Monitoring will be conducted as specified in Section 9.

SECTION 7. VALUATION AND PAYMENT METHODS

A. Valuation of Easement Cost
At the beginning of each Selection Round, Washington County will choose a valuation method for determining the cost of purchasing development rights easements. One method for establishing the value of the development rights is through a parcel-specific appraisal. Under the appraisal method, a certified appraiser is chosen by the County to establish the value of the development rights in a before/after appraisal process. The appraiser first evaluates the fair market value of the unrestricted propertybefore development rights are sold, then the appraiser establishes the restricted value of the property based upon the agricultural or conservation activities that could occur on the property under the terms of the conservation easement. The difference between the unrestricted value and the restricted value is the value of the development rights. The appraisal method is highly justifiable since each parcel is examined in detail. The method is, however, costly and time-consuming.

The County may choose to use an alternative method of establishing value. For example, a set price per development right purchased could be established. The set price could vary according to zoning classification. The set price would be established based on a set of actual or sample appraisals and/or on assessors' data. This method would be less costly and take less time.

Landowner Appraisals.
Whatever method is used, landowners may obtain their own appraisal at their own expense from a qualified appraiser for purposes of comparison and negotiation, and/or for the purpose of calculating tax benefits.

B. Payment Methods
Payments to landowners for purchase of development rights may be made in one lump sum or through installment payments. The use of installment payments may allow the Program to protect more parcels sooner. Installments could be for periods of 10, 15, 20 or 30 years. The landowner would receive tax-free payments of interest only each year and a balloon payment at the end of the term. The installment payment contract could be sold to local brokerage firms after an initial restricted period if landowners wish to "cash out." An installment contract also may enable landowners to defer capital gains taxes. By financing installment sales with the purchase of zero-coupon bonds, the County could increase the amount of land protected each year by a factor of as much as 6 or 7.

SECTION 8. NATURE OF CONSERVATION EASEMENT RESTRICTIONS

A. General Conditions
The restrictions placed on parcels on which development rights are sold are in the form of a conservation easement. A conservation easement is a written agreement that separates the right to develop the parcel from the fee title to the parcel.

The terms of the conservation easement will be negotiated with each landowner and will be based on the resources demonstrated in the application and through the criteria ranking process. The terms of the easements may vary from parcel to parcel. At a minimum, residential development and non-agricultural commercial and industrial development will be prohibited on land covered by the easement. Additional easement terms that may be negotiated, include, but are not limited to:

• requiring the preparation of a conservation plan according to National Resources Conservation Service standards for agricultural land;
• requiring the preparation of a forest stewardship plan;
• allowing additional farm buildings; or
• allowing remodeling, replacement or enlargement of existing buildings up to a specified percentage increase in size of buildings.

B. Prohibited Uses of Land.
The following land uses shall be prohibited on lands under a conservation easement:

(1) Additional residential units (other than the existing residence, if present) are not permitted within the designated conservation easement area. The applicant must designate any areas to be set aside for residential development at the time of application. The area must be subdivided from the eased property prior to closing. Any remaining density left unused on lands under conservation easement shall be extinguished under the terms of the conservation easement.

(2) Non-agricultural commercial or industrial development are not permitted within the designated conservation easement. The applicant must designate any areas to be set aside for non-agricultural commercial or industrial development at the time of application. The area must be subdivided from the eased property prior to closing.

C. Permitted Uses.
Lands under a development rights conservation easement may continue to be used for the following purposes, except as regulated by the specific terms of the conservation easement and as restricted by local zoning requirements and other applicable regulations:

(1) Customary agricultural uses, including seasonal agricultural businesses and customary home occupations, as defined by the Washington County Development Code or ordinances of other local units of government.

(2) Land conservation and management activities, as specified in the terms of the conservation easement.

(3) The landowner's residence or farmstead.

(4) Replacement, expansion or modification of existing buildings within the immediate area of the house site or farmstead, up to a specified percentage of the original building footprint(s), which shall be negotiated as part of the terms of the conservation easement.

(5) Customary agricultural buildings shall be permitted as specified in the terms of the conservation easement.

(6) Other activities and alterations that may occur on the property shall be defined by the terms of the conservation easement. In general, such activities shall be permitted to the extent that they do not lessen or degrade the resource values the conservation easement is intended to protect and are permitted uses under the Washington County Development Code and ordinances of the applicable local unit of government.

(7) A conservation plan prepared according to the standards of the Natural Resources Conservation Service or similar agency shall be required for all agricultural land under conservation easement.

SECTION 9. MONITORING AND ENFORCEMENT

The conservation easements will be held by Washington County and may be co-held by the Minnesota Land Trust, local governments, or any non-profit land conservation organization qualified under Internal Revenue Code Section 1.170A and Minnesota Statutes Annotated Chapter 84C. The County will co-hold all Conservation Easements. Other local units of government may also co-hold a Conservation Easement.

At the time the easement is purchased, a baseline data package will be compiled to document the condition of the property at the time of easement purchase and to detail the natural values of the parcel. Baseline data preparation and monitoring activities should comply with the current standards of the Land Trust Alliance, the national standard-setting organization for land trusts, or similar accepted standards.

A conservation easement is only effective if it is enforced. The County could contract with the Minnesota Land Trust, another organization, or individual for monitoring parcels in the PDR program. A yearly inspection of each parcel, scheduled with the landowner, will occur and be documented. Periodic updates of the baseline data will also be done to keep an ongoing record of the natural values. New landowners should be educated on the terms of the easements. If violations occur, enforcement of the terms of the easement must be undertaken. Enforcement can range from meeting and negotiating with the landowner to court-enforced remedies.

The Minnesota Land Trust (MLT) is a non-profit land conservation organization that negotiates and holds conservation easements. MLT began in Washington County and has a very active Washington County chapter which holds and monitors over 20 conservation easements in the County. Washington County could consider having the MLT hold, monitor and enforce the development rights easements. The County could also "contract out" negotiation of easement terms or certain other program functions to MLT.

The responsibilities of MLT could also include:

• Preparation of draft easements
• Establishing baseline documentation for monitoring program
• Establishing monitoring program -- periodic site visits or contacts with landowners -- annual monitoring of sites
• Educating future landowners about restrictions when parcels are sold
• Addressing any violations -- notifying landowner and, if necessary, enforcing through the court system
• Negotiating the specific terms of the easements with landowners (above and beyond the County terms) and draft the easement
• Educating landowners on conservation easements

MLT currently requests a stewardship fee which goes into an endowment fund to cover long-term monitoring/enforcement costs.

SECTION 10. FUNDING FOR THE PROGRAM

A. County Program
The Washington County PDR Program is proposed to be funded through a dedicated property tax increase of $1.50 per month per $100,000 of assessed value. This amount would fund the program at approximately $1.8 million annually. Based on an assumed development right value of $10,000 per acre, this would protect at a minimum 180 acres per year if lump sum payments were made to landowners. If the value per acre were $8,000, 225 acres could be protected with lump sum payments. More acres could be protected if installment payments were made, or funds from other sources were used, or if the landowner chose to sell at a bargain sale. An estimate of the maximum number of acres would be 2,500 per year at $10,000 per acre, or 3,240 at $8,000 per acre.

Additional sources of funding that may be pursued would include:

• Matching funds from new or existing state programs
• Matching funds from new or existing federal programs
• MPCA or Metropolitan Council penalties levied for pollution
• Cooperation with wildlife and sporting organizations
• Corporations
• Private foundations
• Individual donations for specific projects

B. Local Match Program
Using a portion of the funds (perhaps 20%) received through additional property tax revenues, the County will provide matching grants to local units of governments for acquisitions. This program would target acquisitions of parks, open space or easements outside of the Green Corridor Opportunity Areas that meet local protection goals.Guidelines for the matching grant program would be developed separately from the PDR Program. The County Board would establish funding levels yearly.