Capitol News

Washington County Debating PDR; Lancaster County Success Story

By Jane Fyksen, Crops Editor

March 29, 2007

Washington County is hotly debating establishing the first, countywide initiative of its kind in Wisconsin to preserve farmland from urban sprawl.

On April 3, voters in that rapidly urbanizing county in southeastern Wisconsin will answer this referendum question: "Shall the Washington County Board of Supervisors allocate at least $800,000 per year for 10 years funded by either sales tax, long-term debt obligations and property tax, or a combination thereof, to preserve prime farmland, water resources and natural areas in the County through purchase of development rights, land acquisition or similar programs from willing sellers, on the condition that all County expenditures are at least equally matched by non-county funding sources?"

Since 1995, well over two square miles a year in Washington County, which sits on Milwaukee's doorstep, has been converted to urban or residential uses; that's double the rate of the previous 30 years. Almost half of the development in this county has been occurring on large unsewered lots in rural areas.

After several years of study, the county board chose in March last year to go down this farmland preservation path. However, following elections that resulted in a new county board chairman and nine new supervisors, this "new" county board just several months later repealed the earlier decision by just one vote. After further debate, the county board decided in January this year to let the voters decide the issue by referendum.

This issue remains controversial not just among county board supervisors and rural/urban interested, but within agriculture and even individual families.

Purchase of development rights (PDR) is a farmland preservation tool whereby the county would buy development rights from willing landowners and record a permanent land preservation easement on the property deed. The land would still be privately owned and on the tax rolls, but could only be used for agriculture or open-space purposes.

The proposed $800,000 amounts to 1 percent of total county expenditures and 10 percent of annual revenues from the county's existing 0.5 percent county sales tax. If this existing tax were used to fund PDR, the cost would average about $15 per household in the county per year, according to the Washington County Citizens for Farmland and Natural Areas, a grassroots group pushing for a "yes" vote on the April 3 referendum.

If county funds were matched by other funding sources, as required in the referendum, then $800,000 in county funding might allow for the purchase of development rights for about 290 acres a year (almost a half-square-mile).

Matching funds could come from state or federal land preservation program grants, local government contributions (i.e. towns and lake districts) or private donations from land trusts, businesses, organizations and individuals. What's more, when a farmer voluntarily sells land or an easement below market value, the discount would be considered a donation. Such a transaction is referred to as a "bargain sale" and can yield income tax benefits to the seller.

A land preservation easement limits future use of a property to farming or open space, preventing other types of development such as residential and commercial uses. The easement stays with the property even if it is sold or passed on through inheritance, thereby assuring that development won't occur in the future. Farm expansion and improvement generally isn't restricted by PDR, but farms typically have to meet applicable environmental standards, such as having a nutrient management plan.

How much does it cost to buy a farm's development rights? An appraiser determines easement value using "comparable sales" on similar properties in the area. He first determines the value of the property as farmland, then its value if it were developed. The difference is the value of the development rights or land preservation easement.

One of the most successful PDR programs in the country is run by the Agriculture Preserve Board of Lancaster County, Pa. PDR advocates in Washington County were, at Agri-View's Monday press deadline, bringing the chairman of that board, Gene Garber, to Washington County on Wednesday night this week to talk about how PDR has worked in Lancaster County, an agritourism area of national notoriety, known for its picturesque Amish and Mennonite-run farms.

On Monday, prior to his discussion in Washington County, Agri-View visited with this articulate proponent of preserving farmland. Garber is a life-long farmer, who grew up Mennonite but is no longer Mennonite. He and his sons operate 400 crop acres of corn, beans, wheat and barley, along with a layer operation with a capacity for 100,000 hens. He's been involved in farmland preservation efforts for 20 years in Lancaster County. He's been on the Agriculture Preserve Board for 15 years and, as noted, is currently chairman. He's also served on a nonprofit board, the Lancaster Farmland Trust. That's a nonprofit set up using private funds with which Amish farmers are willing to deal. The Amish were averse to working with government for the purchase of development rights to their farms, according to Garber.

Garber is called upon nationwide to offer advice on how his county established its PDR program, that's preserved over 900 farms and over 70,000 acres from development, and for farming. Garber says there are 400,000 acres of farmland in the county and between 5,600 and 5,800 farms. The average size farm is 78 acres, due in large part to the Amish influence.

The first farm was signed up in the early 80s. The county adopted its initiative in 1980 but it wasn't until 1985 that funding was actually appropriated. In 1989, voters in Pennsylvania approved a $100 million bond issue and a state program started with which Lancaster County could match funds. That's when, notes Garber, Lancaster County's program really caught on with farmers, because the easement value could fully take into account the appraised value of the property if sold for development. That program, like the one being debated in Washington County, is completely voluntary in terms of producer participation and sale of development rights on farmland.

"When we started to preserve farms and realized the amount of farmer interest," says Garber, Lancaster County quickly came to the realization that it had to determine where exactly development would be allowed. (Farmers in those predetermined areas wouldn't be eligible to sell preservation easements.)

Lancaster itself had to be able to grow, the same for smaller towns. "It took a great deal of comprehensive planning," says Garber, advising counties to look first at areas that already have infrastructure, so new development could tap into sewer and water.

"Farmland preservation is not a standalone program," Garber stresses. "It's just a piece of the land-use planning puzzle." Citizens mustn't get hung up on PDR but forge ahead with "comprehensive planning," he alludes. "You need good zoning in place, and once you decide what's zoned ag, you don't rezone just because someone wants to sell for development."

"Likewise, you don't preserve farms in areas designated for growth," he remarks.

Keeping preserved farmland and designated development separated, if you will, also results in fewer rural/urban neighbor disputes and animal rights threats to producers.

PDR is "not" a "stop-growth" effort, he states. It is, instead, carefully thought out growth.

Garber contends that money spent to buy preservation easements is an "investment" in the future of the county. Keeping those farms in agriculture brings money back into the county year after year. Farmers spend money. Agribusinesses are confident that farms are going to be around for the future, so ag infrastructure remains and can even expand, he notes.

He says people must decide how important agriculture and "the rural way of life" is to their county. Is having operating farms and farmland a factor in determining "quality of life?" he challenges.

In Lancaster County, that's very important, because, as noted, the farming landscape draws tourists nationwide. "Agriculture and tourism are our two main industries. One is dependent on the other," he says, noting that tourism depends on "keeping our heritage and way of life." If Amish farmers, in particular, move out in search of cheaper farmland elsewhere, tourism would be lost.

On the other hand, Lancaster County's close proximity to New York, Washington, D.C. and other big cities means it attracts retirees seeking peace and quiet in the country. The land squeeze has resulted in prime farmland in the county selling for between $14,000 and $18,000 an acre, whether or not it's been "preserved". That's land zoned ag that'll stay in ag. The development price within the county's growth areas is all over the board.

Garber says the county has been raising its money for PDR through bonding. "Our taxpayers are very willing to tax themselves to preserve farmland. It's cheaper to pay for this now than watching suburban sprawl take over," he remarks, calling that the "most costly development" because of the redundancies of required services demanded from county government.

Garber says "one thing people just don't understand" is that residential development comes first; there "aren't a lot of new stores and industry built where people aren't living." In other words, those homes out in the country cost local government money to provide services, and it could be years and years - maybe never - before stores and businesses (which bring in revenue) come on the scene.

Traveling the country, this farmer says he hears the argument all the time that development is needed to build tax base. In reality, expenses (for services) outpace any revenue potential from residential-spawned development.

While industrial development costs 15 to 25 cents for every $1 in revenue it brings in, willy-nilly residential-driven development costs perhaps $1.20 cents for every $1 it adds to the tax base. In other words, it's a drain on government, he believes.

On other hand, for every $1 a farmer pays in tax, he only gets back 5 cents in services. It's farmers in a county who are "subsidizing" development, he contends.

"We've done a terrible job in the U.S. planning out agriculture and where we're going to live," says Garber, stating that this country simply "can't afford to squander our (farm) land for homes on 2, 5 or 10 acres, or in the "not too distant future," the U.S. will be relying on "foreign countries for our food."

Garber has spent quite a bit of time in Wisconsin of late, what with Smart Growth and all. He says he's hearing all the same questions from Badger Staters that he heard in his county 20 years ago, and that he's heard in the other states in which he's been asked to provide insight.

It boils down to a matter of "not understanding the issues," he says of a lot of the opposition to farmland preservation and PDR specifically. "It's not something to scare people. You're not giving something up." The common fear is that if development potential is removed from a farm, nobody will want that farm when it comes time to sell, when, in fact, it's the exact opposite, he says. Farm buyers like knowing that farm will be there for the future and they won't be forced out by development in the future. They're willing to pay for that security, he suggests.

Ultimately, preserved-farm values creep back toward those of non-preserved farms in a "mature preserve program."

He does note that preserved farms need to be monitored to make sure they are indeed being maintained in farming per the easement. The government, however, has no other rights to the farm, other than a conservation plan. Garber notes that if, for instance, extreme erosion is noted during the monitoring, the board says something to the farmer and if it's not remedied, then it's mentioned to the conservation department and it becomes "their problem."

As for the expense of PDR, Garber compares the Lancaster County initiative to what was spent on a small bypass of Route 30 around Lancaster. That six-mile section of road cost about $110 million, and it'll need to be redone in the future. To preserve farmland, $150 million in public money has been spent to preserve close to 80,000 acres.

Farmers have used that money received to expand their operations or buy other farms, and he reiterates it's been "extremely important" to equipment dealers and mills and other businesses that depending on a thriving agriculture - knowing that "farming is going to last."