AN ORGANIZATIONAL ASSESSMENT OF THE SONOMA COUNTY AGRICULTURAL PRESERVATION AND OPEN SPACE PROGRAM
TABLE OF CONTENTS CHAPTER II - STAKEHOLDERS PERCEPTION OF PROGRAM CHAPTER Ill - ANALYSIS OF PROJECT SELECTION AND ACQUISITION PROCESS CHAPTER IV - EFFECTIVENESS OF ORGANIZATIONAL AND MANAGEMENT STRUCTURES CHAPTER VI - ASSESSMENT OF CURRENT PROGRAM STATUS CHAPTER VII - ASSESSMENT OF INTERRELATIONSHIPS OF DISTRICT WITH ADVISORY AND POLICY ENTITIES CHAPTER VIII - POTENTIAL FOR EXTERNAL FUNDING (GIFTS AND GRANTS) APPENDIX A - NAMES AND POSITIONS OF INDIVIDUALS INTERVIEWED This report comprises the observations of a management audit team that included senior staff of Hood and Strong LLP and Management Analysis Incorporated (MAI). The management audit examined the management practices of the Sonoma County Agricultural Preservation and Open Space District Staff as well as the relationship of District Staff to other entities within or associated with the Agricultural Preservation and Open Space Program. The management audit began on December 1, 1997 and extended over a six-month period. It is important for anyone reading this report to realize that the purpose of the study was not to provide a balanced assessment of the District's operations. Rather, the overriding objective of the audit was to identify key organizational problems that might exist and make concise, straightforward recommendations to enhance the District's effectiveness. Therefore, the report necessarily focuses on the District's problems, while giving little credit to the successes of the organization. A balanced assessment of the District would point out that tremendous progress has been made in the first six years of the District's operations. While there is some open controversy over the exact scope of the District's authorization due to alternative interpretations, there is no doubt that the accomplishments of the program are substantial. In fact, in comparison with other agencies with similar objectives, the more than 25,000 acres that are being 'protected' through the efforts of the District is quite impressive. Members of the 'oversight agencies," such as the Open Space Authority and Advisory Committee, are highly active. The staff is extremely committed and competent in most of the important aspects of their work. The team of consultants involved in this study together have assessed and assisted more than 100 government agencies at the federal, state, municipal and county levels. In their opinion, the District staff and operations compare favorably to other organizations. These consultants have also worked in similar capacities with private sector businesses, including Fortune 100 companies. While assisting their public sector clients they take the position that there is no reason why government agencies cannot operate as effectively as their private sector counterparts. The 'best in class' government agencies have achieved such performance levels. The District and the Authority should be applauded for taking the initiative to undergo an organizational assessment in such a proactive manner; that is, in the absence of any significant controversy or charges of ineffectiveness. It is a further indication of the considerable dedication to accountability and effectiveness of all those involved in the organization. One of the questions posed to the consultants was whether the District was meeting its mandate. The consultants concluded that question could not be answered due to the lack of clarity of the mandate and the selection and acquisition criteria, and the lack of policies on issues such as the environment, recreation and trails. In addition, there is no formal goal setting and planning process nor a means to measure progress against stated goals and objectives. However, there has been considerable progress made in the acquisition of easements as noted above. Notwithstanding the successes of the District to date, there are areas that need to be addressed. The most important of these are the following:
These issues are addressed throughout this report and are briefly summarized in the following paragraphs. Chapter I of this report provides background on the Program, describes the purpose of the study leading to this report, and criteria set forth by the Open Space Authority, the study sponsor. Chapter II describes the study team's observations as to how the Program is perceived by individuals with some knowledge of the acquisition process utilized by the District to acquire land and obtain easements. These individuals tend to represent groups or entities that could be affected by Program direction. Chapter III provides an analysis of the project selection and acquisition process utilized to obtain title to land or easement rights. The chapter includes sections on selection criteria, appraisals, and the acquisition process. The twelve (12) recommendations in this chapter are all significant, however, recommendation III.6 which points out the need for a comprehensive, automated acquisition project tracking/management system, is one of the Priority One findings of this study. Recommendation III. 1 regarding clear set of acquisition criteria is a second Priority One recommendation. A third Priority One recommendation is found in recommendation III.7 which stresses the need to continue to reengineer the acquisition process begun as part of this study. This effort should be an ongoing acquisition process enhancement tool to facilitate staff communication, eliminate misunderstandings and bottlenecks in the acquisitions of land and easements. Chapter IV examines the effectiveness of organizational and management structures associated with the District Staff. The growth of acquisition activity since the early 1990's to the present level has outpaced the attention given to the institution of effective and efficient management processes and the application of advanced management tools. The basic organizational structure separates the professional staff into two groups; 1) Planning and 2) Acquisitions. While this takes advantage of specialization, it also results in cultural and attitudinal divisions within a small (ten person) staff that should work together with a common purpose. The chapter addresses, as related topics, organizational structure and human resources management, project management, accounting and performance tracking, planning and budgeting, information systems and technology, document management and standard operating procedures. There are twenty specific recommendations in Chapter IV. While each recommendation addresses a perceived efficiency and effectiveness need, Recommendations IV.8 and IV.12 are considered as Priority One requirements. Recommendation IV.8 calls for a comprehensive acquisition project tracking /management system and Recommendation IV. 12 calls for an automated cost accounting / tracking system. Both recommendations involve the expanded application of currently available information technology tools tailored to the specific needs of the District staff. Chapter V addresses the subject of District management of acquired land and easements. These activities frequently involve coordination with state and other Sonoma County agencies as well as the potential use of information and data bases developed external to the Agricultural Preservation and Open Space Program. There are seventeen (17) recommendations in this chapter. Most of these recommendations are designed to avoid or mitigate potential problems associated with land management. Chapter VI is a discussion of outreach and external relations. The chapter provides general observations and three recommendations. All three recommendations are geared toward perceptions as expressed by interviewees. The study team recognizes that perceptions, even if widely held, may be at variance with District management views and/or fact. The study team's perception is that the Program has achieved significant success. However, the District needs to improve its procedures, especially those that affect perceptions within the county or those related to staff effectiveness and efficiency. Chapter VII is an assessment of the interrelationships of District staff with advisory and policy entities. The principal weakness identified is an absence of clear-cut "roles and mission" guidance. This was also identified in Chapter V. This chapter makes several observations and three recommendations. Recommendation VII. 1 is Priority One. It provides a procedure for identifying unresolved policy issues and alerting the district Board of perceived needs for policy clarification. Chapter VII looks at the potential for external funding (gifts and grants). The principal thrust of the Chapter is that the District should explore various means to identify and encourage Federal and individual sources of funds to support the Open Space Program. The Sonoma County and Open Space Authority has engaged a consultant Team of Hood and Strong LLP and Management Analysis, Inc. (H&S/MAI) to conduct a management and organizational assessment of the District. The District is in its sixth year of operation. The District is an agency of Sonoma County with a Board of Directors comprised of the Sonoma County Board of Supervisors. District funds are maintained separately from County funds by the Open Space Authority to provide increased accountability and oversight. BACKGROUND The formation of the Sonoma County Agricultural Preservation and Open Space District was the result of the public's concern over the urbanization and the displacement of agriculture and open space in Sonoma Countyø Agriculture is of economic importance to the County and contributes to its rural character. Sonoma County is also recognized for its natural landscape and rich plant and animal communities. The primary purpose for creating the District was to further the State policy on the preservation of open space expressed in California Government Code 65562, and to implement the Open Space and Agriculture Resources Elements of the 1989 Sonoma County General Plan. In February 1990, the Sonoma County Board of Supervisors sponsored AB 3630, the enabling legislation for the Sonoma County Agricultural Preservation and Open Space District. The following August, the Board created the Open Space Authority to finance the acquisition of interests in agricultural and open space lands through a 1/4 percent sales tax. In November 1990, Sonoma County voters approved Measure A, which established the District, and Measure C, which called for a sales tax to fund agricultural preservation and open space acquisition over a 20-year period. Although Sonoma County itself has the authority to purchase open space, creation of the District was recommended to increase accountability; by separating District funds from general funds of the County, by placing strict limitations on selling or giving away open space lands, and by having the Board of Supervisors act as the Board of Directors. The District's Acquisition Program involves coordination among the Board of Directors, the Open Space Authority, the Advisory Committee and District staff. The Board of Directors, composed of the Board of Supervisors, is charged with general oversight of the District. The Open Space Authority is responsible for collecting the sales tax revenues, reviewing and approving the District's budget, and may conduct periodic audits of the District's management practices or financial affairs. The Authority is also required to determine General Plan and Expenditure Plan consistency for proposed acquisitions. The 17-member Citizens Advisory Committee, appointed by the District Board of Directors, is comprised of representatives from various interest groups and the cities. Responsibilities of the committee include advising the District Board and staff on policy matters and making recommendations for proposed land and easement acquisitions. Two standing subcommittees have been created to concentrate on specific topics: Acquisitions and Stewardship. The agreement between the District and the Open Space Authority stipulates that an Acquisition Plan be prepared prior to acquisition of rights in land or easements by the District. The Acquisition Program was developed in two phases: the Interim Acquisition Plan, approved in October 1991, and the subsequent Acquisition Plan, adopted in December of 1992 and due to be updated. PURPOSE FOR THE STUDY Over six years of operation, the District has aggressively acquired land and become an important player in land management in the County. The Authority believed that the time had come to conduct an independent assessment of the effectiveness of operations. While no specific issues or concerns were targeted, the Authority wished to be proactive in ensuring accountability and efficiency in all of the District's operations. The key areas of this study may be summarized as follows: 1. Provide an assessment of whether the District's original mandate is being carried out to date. As part of this investigation, the consultants were asked to assess whether all the various stakeholders, in particular the oversight entities are in accord in their perception of the District's mandate. There are a number of such stakeholders including the Authority, the County, the Advisory Committee, the Board of Supervisors, public interest groups, landowners, agricultural interests, and the general public. Discrepancies in their respective perceptions of the District's mandate could potentially be a source of great conflict and dissatisfaction in the future. The study also assessed whether appropriate milestones and performance goals have been established and are being met, in terms of acquisitions pursued or completed. 2. Evaluate the effectiveness of organizational and management structures. The consultants were asked to analyze: 1) staff'rag and organizational structure; 2) management systems; and 3) planning. Specific recommendations were made concerning project management and tracking, cost accounting/tracking, staff utilization, personnel and management policies, automation, planning and budgeting, and training. 3. Analyze the project selection and acquisition processes This is the core activity of the District. Among the key areas investigated were:
4. Assess interrelationships with the various advisory and policy bodies. The interrelationships and roles of the various advisory and policy bodies -- namely the Open Space Authority, the Board, and the Advisory Committee --- can have a significant impact on the District's effectiveness. In part due to legal prerogatives, but also to ensure accountability and community involvement, there is a considerable oversight structure for the District. Assessment of their interrelationships was a key part of the study. The perceived roles of the various entities were evaluated against legislation and resolutions that define their respective roles. The degree of overlap, gaps in the level of needed support or oversight, and other characteristics of the interrelationships among the District, the Authority, the Board of Supervisors, and the Advisory Board were also evaluated. The intention was to assess whether the nature of the roles was clearly understood, and whether they were supportive of effective oversight and provided good policy and management direction. 5. Assess the external relations efforts of the district The external relations effort of the District is absolutely critical to its future effectiveness. Its continued existence requires continued public and political support. External relations are needed to educate the District's constituency and build awareness of its activities. They need to promote continued support for the District's programs by explaining the benefits. Information also needs to travel in the other direction. The District needs feedback from its stakeholders in order to be certain that their priorities are being considered. This can be used to increase future support. The study investigated: the District's relationships with local jurisdictions, special interest stakeholders, and the general public; its public outreach and education program; and its use of the local media. Most importantly through numerous interviews with local interest groups, landowners, and public advocates, the consultants gained very valuable insights regarding overall public perception regarding the efforts of the District. APPROACH TO THE STUDY The key elements of the approach to the study were to interview a cross-section of stakeholders and to analyze relevant internal documents. The contract called for interviewing 100 individuals, selected by the Authority, who represented the cross-section of relevant interests. (The list of individuals interviewed and their affiliations is included as an Appendix to this report). The approach consisted primarily of the following tasks: Interviews with District staff. Every staff member of the District was interviewed, in many cases multiple times, on issues ranging from their day-to-day duties to their perspectives on the various issues being investigated in the study. In addition, a number of consultants to the District were interviewed, including appraisers and baseline consultants. One day workgroup meeting. A one day meeting was convened in which all of the District's technical and professional staff discussed the acquisition process. Previous to this meeting the staff were asked to document in writing as best they could the major steps to the acquisition process. Interviews with District oversight agencies. All of the members of the Board of Supervisors and of the Open Space Authority were interviewed. Nearly all of the members of the Advisory Committee and a number of former Advisory Committee members were also interviewed. Interviews with stakeholders. More than 60 interviews were conducted with stakeholders to get their perspectives on the District's operations, performance thus far, and customer service issues. This was perhaps the most important part of the study. They included agricultural interests, environmental groups, recreation and parks interests, real estate professionals, economic development agencies, city officials in Sonoma County, taxpayers associations and others. In addition, members of the general public that have historically shown great interest in the District or have had previous encounters with the District were interviewed. In making the selections of potential interviewees, the objectives were to include the full range of interests in Sonoma County and to make certain that those that have shown the most interest in, and have had the most involvement with the District had an opportunity to talk with the consultants. In addition, the consultants interviewed a number of individuals, including landowners and sellers to the District, that have gone through the acquisition process with the District, including some transactions that proved controversial. Review of Internal Documents. The consultants formally requested approximately 30 documents to provide additional insight. The results of this research have been developed into this report to the Open Space Authority. CHAPTER II - STAKEHOLDERS PERCEPTION OF PROGRAM Urban growth is threatening Sonoma County's agricultural lands and the open spaces. The development of the District was a response by citizens to maintain these areas. The various stakeholders are very concerned with and interested in the program operated by the District. Stakeholders' perception of the program is influenced by many factors. Other than by guiding their perception via public education, many of these factors are largely outside the control of the District. One complicating factor is the public's awareness of different environmental issues, and their expectation that the District is mandated and capable to react to all of them. For example, even within those groups that support the Distxict's attempts to protect Sonoma County's natural resources, there are signs of competition between the supporters of such items as vernal pools, California oaks, and freshwater shrimp. In addition, there is contention between the groups who want the District to buy forestland in order to protect timber and those who want to buy the land in order to harvest the timber for income to the County. Each group perceives the need to guide the acquisition process towards properties containing one or more of their championed resource. There is nothing wrong with this attitude, and it does help to publicize the need for the District overall. The District, however, must develop some type of policy material that helps to explain how these resource protection efforts are only one of the District's several mandates, and that there is not enough funding to protect every endangered species at the Districts expense. This would be an ideal oppommity to work with other conservation groups to identify lands that can be acquired by the District to meet several high priority mandates, with the conservation groups taking on the challenge to fund acquisition of the other properties. Several of the environmental group representatives interviewed felt that stakeholder groups (such as themselves) ought to have the right to review each list of properties being proposed to the Advisory Committee and to be able to present their pros and cons on each property. This perception persists even though the District makes property information available when the staff has completed its review. Several of the farm group representatives interviewed stated that part of their concern about the District and its mission is its responsiveness when an owner makes an initial contact. They perceive the period between contacts by District staff and the overall length of time to get into the program to be excessive. In addition, some stated that they felt they were getting mixed messages from the staff about the issue of potential public access on their lands. While the District's public policy has been to not to pursue trails as a requirement for participation, there is an unconfirmed perception among Farm Bureau members that agreeing to allow a trail on an easement is one of the only ways to get your project moved up in the prioritization process. For those owners who initially looked to the District as a possible last resort to stay in business in the County, the long lead-time for project closure may result in dwindling participation of owners. Similarly, there is a faction that adheres to a very wide interpretation of the statutes. This group holds that the size of the original wording on recreation can and should be interpreted wide enough to support using "public access" and "recreational development opportunity" as a suitable marketing and/or negotiating tool, regardless of whether recreation activities were shown to be consistent with the property's 1989 General Plan designation. In addition, they believe that there are legal grounds to pursue recreational opportunities on easements as well as the District's fee-owned lands. The group with the narrow interpretation of the legislation professes the opinion that the current tri-agency Recreation Plan Study is a backdoor attempt to change the rules of the game. This group believes that attempt to modify the General Plan to designate additional areas for potential recreational opportunities not only goes against the intent of the District's founders, but also provides "trails" supporters an unfair opportunity to promote recreation on private property without consulting neighboring land owners and without performing the otherwise required Environmental Impact Studies. At this point, parties on both sides of the issue seem willing to await the issuance of the Recreational Study. Another issue which was raised was the lack of information available to decision makers on public attitudes on the planned targeting of areas for more directed marketing activities. While the targeting can be focused on properties for community separators or agricultural land preservation, there may be support for targeting other land management concepts, such as wildlife or natural resource protection. Targeting of property groups for more intensive marketing involves analyzing where there is a deficit in the Districts overall acquisitions. This practice is perceived by many stakeholders as a more cost-effective and goal-oriented approach to acquiring lands in compliance with the original authorizing legislation. This question of public perception leads to another concern raised, which was the degree to which the public participates in the District's decision making process. While all meetings of the Advisory Committee and Authority are open to the public, the number of citizens who attend varies greatly. There is no formal "public hearing" system built into the meeting structures. In order to assist the Board of Directors in bringing the various factions together to discuss priorities and relative amounts of staff and fiscal resources to devote to one priority or another, the District needs to be able to show where its resources have been spent in the past. The District needs to provide the Board and the public a summary of its acquisition accomplishments and its costs by category and by General Plan designation. This would also assist the Board in setting a policy on priorities for the next five to ten year period. CHAPTER III - ANALYSIS OF PROJECT SELECTION AND ACQUISITION PROCESS The core activity of the District is the protection of open space and agricultural land either through outright land acquisition or through the use of easements. This is the reason for its existence and a critical activity for the District. Currently, there is considerable dissatisfaction with the "acquisition process." This dissatisfaction is voiced by a broad cross-section of the constituency. The areas of dissatisfaction can be grouped together as follows:
The following recommendations are designed to address these areas as well as the concerns outlined in Chapter I. Some of these recommendations are contained in other chapters as well but are repeated to highlight the importance to the acquisition process. Rec III.1 Develop clear set of criteria and priorities for acquisitions There are several documents that deal with guidelines for selection criteria. However, in out interviews with management, staff, committee members, etc. there was a lack of clear understanding as to the criteria used and the District's mandate. The difference exists within groups (e.g. staff) as well as between groups (e.g. staff and Advisory committee). We recommend the development of criteria that not only selects projects to be pursued, but also provides for a ranking of the projects. The criteria need to be specific; understood by all parties; and provide a basis for consistent application and evaluation. A project should receive the same "ranking" regardless of when it is being considered, other projects in the pipeline, pressures from interest parties or a variety of other factors that currently influence the selection criteria. This ranking would also provide a basis for determining the priority of projects and amount of time/effort/cost to allocate to the project. One the criteria and ranking methodology are in place, the District can develop a proactive multi-year strategy for acquisitions. This strategy would prioritize offers by owners and identify target projects for focused marketing efforts. It would also provide a basis for rejecting offers for properties which do not contribute to the long-range plan. REC III.2 Clarify the role of the district with respect to environmental issues and public access. The lack of clarity of the role of the District exists in broad terms. There is confusion regarding the protection of open space and agriculture, and the role of the District with respect to such issues as protection of the environment and public access. Is the role of the District to acquire easements, protect the environment, both? Is one of the mandates to provide access to the open space? The lack of clarity hinders both the initial selection of a project as well as the completion of projects. These are needs to be addressed and are as important as the establishment of selection criteria in item III.1 above. REC III.3 Update the acquisition plan. The current acquisition plan was developed in 1992. It is important to update this plan to reflect current public support. This also provides an opportunity for public relations and to promote the work of the District to date. The Plan should be updated every 5 years so that the District does not lose touch with current voter sentiment. We understand that plans are in place to obtain public input and revise the current plan in 1998. REC III.4 Develop proactive plans to acquire high priority proiects. Currently, the District operates in a reactive mode to projects that are brought to the District. Once clear criteria are established, we suggest that the District identify and actively pursue projects that are given a high ranking. This could include talking with the landowner to understand their interests and acquisition potential; tracking land values; tracking ownership and changes within the area. A plan could then be developed to "watch" the property based upon information obtained. The information may indicate a very low probability of future acquisition. In this case, the District can identify alternative high priority projects that might help satisfy similar objectives. THE ACQUISITION PROCESS Currently, the acquisition process takes approximately 18 months to complete, once the project is started. There is additional time (6-18 months) of waiting prior to the actual commencement of the project, due to the process a backlog of projects to start. Many landowners lose interest when faced with the long, drawn out process. We found general agreement among all parties that we interviewed, that the process was too long and needed to be revamped. The recommendations regarding clarification of criteria, project ranking, role of the District with regards to environmental issues, etc. will definitely have a positive impact on the acquisition process and the length of time. However, there are many areas that the process can be improved. REC III.5 As noted in REC IV.8 formalize project management by implementing a comprehensive, automated acquisition project tracking/management system. The District needs to be able to understand where projects stand, the amount of time the resources required, elapsed time for various steps, and current use of resources. There is also a need to establish benchmark information for future projects. Currently, there is minimal information on the component costs of individual projects completed or underway, and there is no methodology in place to develop a cost estimate for projects which have been approved but are not yet started. At this time, it is not possible to explain (from the data currently tracked) which parts of the acquisition process consume the most resources, both for in-house and contract labor costs. All properties would be given a project number and tracked in the database. This would include properties identified by the initial inquiry from a landowner to target properties identified by the District. Information as to status, discussions, issues would be tracked and shared among all project team members. This would also identify elapsed time on a project. Reasons for discontinuing a project would be documented. This would provide ongoing information as to total number of projects, number of successfully projects and general information for management in the allocation of resources. This project tracking/management system would be integrated with a time/billing system. This would track time spent by staff on the project, classified by type of activity, and other costs of the project, e.g. appraisals. An hourly rate would be developed for all district staff. Staff would maintain "time sheets" and charge their time, classified by an activity code, to the specific projects as well as general and administrative duties. This will provide information as to use of resources and the cost of the various projects. This will also provide management with information as to use of resources and how District staff is spending time. From the information, estimates of time requirements (under average, not best case conditions) should be developed for each step of each process and used to develop process milestones. An analysis of the costs (e.g. labor, contracts, County Counsel, and materials) associated with each step of projects would be tracked in order to develop "cost estimating relationships" (CER). This analysis of CERs (e.g., cost per acre per process step) would allow the District to estimate the total cost of acquisition for future projects of a similar type. REC III.6 Continue to reengineer the acquisition process As part of our study, we held a meeting of District staff to discuss the acquisition process and how to improve it. While this was not a formal reengineering session, the purpose was to introduce the concept and to start discussion among the participants. The concepts of reengineering are to identify and eliminate roadblocks, rework, and take a critical look at the process. We recommend that the District formalizes the reengineering process, plan and budget time for it and make it a priority. We also recommend the use of a facilitator in the discussions. It should be noted that the actual process is important. The discussion improves team-building and an understanding of the various roles in the process. It highlights areas of misunderstanding. Generally the people who are closest to the process can develop the best recommendations for improvement. It should be understood that this is an ongoing process. There will be more time required initially as the process is revamped. However, there should be time budgeted for ongoing review of the process. Various recommendations resulted from this initial meeting, as follows:
REC III.7 Identify characteristics of successful / unsuccessful projects This is one of the concepts discussed at our initial meeting as noted above. However, this is a key concept and needs to be addressed by the leadership and management of the District. Projects are currently not evaluated based upon any probability of success. There is no process to evaluate the reasons that projects fail. In addition, issues are allowed to continue unresolved. This results in considerable time and energy being spent on projects that ultimately are not completed. We recommend that management give this are high priority in the near term in order to redirect time where there is the greatest change of success. REC III.8 Use project leaders on all projects This recommendation is discussed in Chapter VI in detail. However, it is repeated to underscore the importance of this concept to the acquisition process. This person would be responsible for tracking, monitoring and completing the project. The Assistant General Manager should not be the project leader. However, the Asst. GM would be responsible for the overall status of projects and resolving resource allocation issues. The individual assigned, as overall project team leader, should be responsible for resourcing and coordinating the planning and acquisition phases of the project. This person would also be the contact for the owner. REC III.9 Clarify priorities among the various activities of the District Currently, District staff and primarily the Assistant General Manager, are involved with activities other than the acquisition process. These include easements from the county planning department and the Outdoor Park and Rec Plan. Another activity is stewardship. The priority of these areas and acquisition is not clearly defined. Time for the various activities is not budgeted. While there is no method to actually identify the amount of time, it appears through discussions with the various staff that considerable time is spent on County easements and the Outdoor Rec Plan. This is taking away time from the acquisition process, particularly for the Planners. If the District agrees that these are activities that the District should undertake, they need to be adequately identified, budgeted and prioritized. APPRAISALS Appraisals and the resulting price paid to the landowner are the third primary area of the acquisition process over which there is considerable controversy. Currently, outside appraisers are used to value the conservation easement and the fee simple value. A detailed document was prepared in 1996, "Guidelines and Specifications for Appraisals." The District maintains an "approved appraiser list." Generally, two or three bids are sought for the appraisals. The District relies on the expertise of outside appraisers to value the property. According to several members of the real estate community in Sonoma County, there is a perception that the District's acquisition staff is excellent at developing strategies to assist the landowners to complete the closure of their project. However, these experts also felt that the appraisers were, in many cases, over valuing the parcels and therefore the District was paying too much for them. REC III.9 Obtain agreement with the landowner as to prohibited and permitted uses, exact development rights being valued, as well as agreement within the District on environmental issues to obtain the appraisals. One of the reasons for controversy over the appraisal is the lack of clear definition of the development rights being valued. This is the result of either the District not having a clear definition, changes made during or after the appraisal, or both. Without a clear definition, an accurate appraisal is impossible. This may require more time being spent with the landowner to reach agreement prior to requesting the appraisal. This will also require management's commitment to adhere to that agreement. If changes are made to the P & P's after the appraisal, a new appraisal should be required. Consideration should be given to charging the landowner for this additional appraisal. In any event, the District should not agree to the price to be paid before the P & P's are final. REC III.10 The District should seek appraisers who are experienced in the valuation of conservation easements whenever possible. This is a complex area and the appraisal of conservation easements is much more involved than the appraisal of a typical house or commercial property. The District does maintain a list of qualified appraisers. However, selection of the appraiser is based upon various criteria, including price, timing and "spreading the work around." The District is dealing with acquisitions that can involve considerable amounts of money. The criteria involving experience and expertise should be given the most consideration in awarding the contract, even if it requires more money or a longer time to receive the appraisal. Spreading the work around should only be among appraisers whom the District knows and has confidence in. The District staff maintain that they currently use the best appraisers in the area; real estate professionals and appraisers interviewed suggested otherwise. It was not possible to make a determination within the scope of this study, indicating the possible need for further investigation, including an audit of appraisals to date. REC III.11 The District staff should receive training on reviewing appraisals. Even with the best appraiser and well-defined criteria, there is considerable judgment applied to the process on the part of the appraiser. The staff need to understand and be alert to assumptions made, and critique and challenge the analysis and conclusions reached by the appraiser. This should be done on all appraisals. Adequate time should be budgeted for this process. |
