- Associated Press - Saturday, July 2, 2016

CHURCHILL, Mont. (AP) - Sherwin Leep and his brother are third-generation farmers. His son and nephews will be the fourth. They’ve decided they love farming and their land more than the money they could make selling it.

“It’d break my heart to see this carved up for development. … I was born here,” Leep said recently as he looked across hundreds of acres of alfalfa hay and potatoes growing under the sun and pivot sprinklers. “To see the changes in my lifetime … the traffic, the people.”

Gallatin County’s population has grown by 10,000 people in the last five years, so the pressure for farmers to sell their land to home developers isn’t lessening, reported the Bozeman Daily Chronicle (http://bit.ly/28Z8vWV).

County taxpayers were concerned enough about sprawling development and dwindling open space that in 2000, and again in 2004, they approved a total of $20 million in new taxes to fund conservation.

That allowed Leep and dozens of landowners to take that money in exchange for a conservation easement - a voluntary legal contract between a landowner and a land trust or government agency that forever bars the development of the land. Some landowners, but not all, are paid a part of their land’s lost value.

Today, though, that money is almost gone.

According to official records, there are 144 conservation easements in Gallatin County, keeping 122,261 acres of private land from being developed. Forty-one of those have been partially funded by the county’s open space bonds.

In 2004, the Gallatin County Commission approved spending $1.8 million for a 10,500-acre conservation easement on the DeHaan Ranch north of Belgrade. And this year, commissioners approved $1.083 million for a 959-acre conservation easement on the Toohey family’s farm north of Bozeman. Other landowners ask only for processing fees, like the $39,000 the Brokaw family was given to place a 164-acre easement on their farmland along Pass Creek.

The decision by Leep and the other landowners to adopt the easements benefit all of us living here in the valley, conservation advocates say, because the easements block growth where it would affect the character of the community.

“It’s one of the reasons Bozeman is so popular,” said Penelope Pierce, executive director of the Gallatin Valley Land Trust. “Because we do have wildlife that people can see because we’re protecting wildlife habitat with these projects. And also scenic vistas; people come to Montana because they want to see big, wide open spaces.”

It also tames infrastructure costs by clustering growth.

“When you think about the cost of putting in a new water treatment facility or a new sewer service for a community, the cost of conservation, of open space, is very small by comparison,” said GVLT Associate Director Kelly Pohl. “We’re going to continue to grow. This community is always going to be a place people want to be for good reason. So we recognize that growth will always happen. If we can protect some pockets that make this place so special, that benefits all of us.”

Besides the 10,000 acres conserved in the Amsterdam-Churchill area, conservation easements along the East Gallatin River have created a buffer from residential development, helping protect water quality in an important fishery and wildlife area. And a package of land deals including conservation easements have kept the Bozeman Pass area undeveloped and safe for wildlife to pass from the Bridger Mountains to the Gallatin Range.

Plus county taxpayers are getting a bargain, paying about 20 cents on every dollar of conservation easement funded, Pohl said. That’s because the money was used primarily to match federal funding.

“When you look at measures across the country, this kind of match that we’re getting, this local match of 80 percent of the easement value is unparalleled,” Pohl said. “It’s really because we’re able to leverage other funding programs, federal and state funding programs, to compliment the county’s involvement.”

But the county’s contribution to open space conservation is on the verge of ending. The open space bond funds are nearly gone.

Of the $20 million in open space bond funds, $19.3 million has been spent, leaving only enough funds for a few more easements. The county’s open space program will soon be unable to help land trusts complete easements unless voters again go to the ballot box and approve additional bond sales. There is no plan to hold a vote in 2016 or after.

“Another measure to help incentivize private land conservation on those most important lands is something that this community should consider, that we hope this community will consider doing,” Pohl said. In the next two years would be optimal.

Leep agrees. “This is our window of opportunity,” he said.

So does Kathryn Kelly, the Greater Yellowstone manager for the statewide Montana Land Reliance. MLR has 50 conservation easements in Gallatin County. Eight of them have been funded with county open space funds and another two are in the works. In each, those county funds were the required local match for accessing federal funds.

Without a local match, it will be difficult to continue all of their work. Kelly said there’s still much more land to conserve and a new reason driving landowners toward easements. In December, Congress made permanent the tax benefits to landowners that accompany conservation easements.

For farmers and ranchers, the federal government is now allowing a 100 percent income tax reduction (less any compensation) until the value of the easement is reached or 16 years, whichever comes first.

For non-farming/ranching landowners, the reduction is a 50 percent income tax reduction for the same period. Plus, a conservation easement may also reduce a person’s estate taxes by up to 40 percent of the conserved land’s value.

“It took a long time to get that in place,” Kelly said. “The tax permanence helps planning where before there was no certainty. So now there’s even more interest in easements.”

“People do this because they love their land,” she said. “But the tax benefits and the compensation make it practical from a financial perspective.”

Right now, a $250,000 home in Bozeman pays annual taxes just over $17 on the county’s open space bonds. A $168,000 condo pays $11.42, which is 0.7 percent of total taxation. Of the county’s $20 million principal, $8 million has been repaid. Five bond issuances totaling the remaining $12 million are set to be paid in full in 2021, 2023, 2026 and 2036, respectively.

One strategy being discussed as politically palatable is to approve new bonds but sell them as the old bonds are paid off, so that property taxes stay flat.

Putting an open space bond measure on the ballot requires the unanimous support of our three county commissioners: Steve White, Joe Skinner and Don Seifert.

But the county commissioners are already preparing to ask voters to tax themselves for other needs. In November, city and county commissioners will back an estimated $65 million to $70 million bond measure for a new law and justice center. Next spring, the Bozeman School District will need $50 million to $100 million for a second high school, and public safety leaders are discussing a possible $20 million to $30 million radio system upgrade.

Skinner himself accessed the open lands money before joining the commission. Recently, he said he supports another open space bond to replace those that are paid off and going to be paid off, sold in a manner that will result in no increase in property taxes. He considers the program a success and would have been pushing for a vote this year but for the law and justice center bond election.

“If you look at the map, at Churchill, at Dry Creek, you can see that this has had a big impact. It’s the best land use strategy there is,” Skinner said. “It’s voluntary and everyone has some skin in the game. People care a lot about land use and they care about conservation.”

Commissioner Seifert looks back and sees success in the program, though he’s concerned about raising taxes too much and thinks some of the county-funded easements may have been on lands that were not headed toward development.

He also worried about pushing sprawl by preventing urban in-fill with future easements near the city limits, an unintended side-effect he calls “leap-frogging.”

“Ultimately, it’d be up to voters to decide (on the bonds),” he said. “I would like to see a bit more of a comprehensive plan first … but we need to begin to do this type of thing.”

Commissioner White said he has voted to approve all but one county-funded easement brought before him, basing those votes on whether the application met legal standards. But he’s not interested in asking voters to fund more and points out that not every easement was publicly financed.

“My focus right now is on the taxpayer and the ballot issues ahead on all the county’s infrastructure,” White said.

“I understand what they’re saying,” he continued, referring to the idea of replacing bonds at no increase in taxes, “but my focus is on bricks and mortar.”

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Information from: Bozeman Daily Chronicle, http://www.bozemandailychronicle.com

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