Regular Meeting Board of Directors
December 6, 2023
Time and Location
This will be an in-person meeting located at
2150 River Plaza Drive, First-floor conference room, Sacramento, CA 95833.
4:00 p.m. – Executive Session (closed)
5:00 p.m. – Public Session (open)
Meeting facilities are accessible to persons with disabilities. If you require special assistance to participate in the meeting, notify the Conservancy’s office at (916) 649-3331 at least 48 hours prior to the meeting.
Executive Session (Closed)
1. Executive Session
Executive Session is scheduled for real estate matters pursuant to Government Code 54956.8.
Regular Meeting of the Board of Directors (Open)
2. Call to Order of the Regular Meeting of the Board of Directors
The Board Chair will call the meeting to order if a quorum is present. Announcements by the Board Chair or Executive Director may be made at this time. Board members may make announcements at this time as well.
3. Public Comments
Opportunity for members of the public to address the Conservancy’s Board of Directors.
4. Approval of the minutes
All items listed under the Consent Calendar, including minutes, are considered and acted upon by one Motion. Any Board member may request an item be removed for separate consideration.
The Board Chair will request approval of the minutes and consent items of the Board of Directors meeting of October 4, 2023.
Download the Conservancy’s October 4, 2023 Board meeting minutes (PDF, 189 KB)
5. Employee Benefits: Summary Plan Description
Annually the Conservancy staff take on what we call a “deep dive” into various areas of the organization, to review and assess any changes are needed in an effort to check and re-check practices and procedures to ensure full compliance with policies, regulations and legal requirements. This year management reviewed employee benefits to ensure compliance with laws and regulations, both state and federal. Management engaged Best, Best and Krieger (BB&K) to review the entire benefits package the Conservancy offers its employees. BB&K noted the only aspect of health insurance, retirement plan and all other benefit elements needed was a Summary Plan Description (SPD). The SPD is a compilation of all employee benefits into one over-arching document. The SPD that resulted from BB&K’s recommendation was presented to the Compensation & Governance Committee to review. The Committee will share its recommendations with the Board.
Download the Conservancy’s Summary Plan Description (PDF, 15 MB)
6. Whistleblower Policy Update
The Conservancy’s Whistleblower Policy was last updated and approved by the Board of Directors on August 7, 2019. This policy was presented to the Compensation & Governance Committee for review and approval. No changes are suggested by legal counsel at this time. The Compensation & Governance Committee will share its recommendations with the Board.
Download the Conservancy’s Whistleblower Policy (PDF, 66 KB)
7. Authorization for Farm Air to utilize landing strip on the Conservancy’s Bianchi West tract
The only remaining agricultural aircraft operator in the Natomas Basin is Farm Air Flying Service, Inc. The Conservancy and its tenants use Farm Air, and without the firm operating in the Basin, costs would likely rise, and delays in planting crops could also result. (Rice is frequently seeded by air.) Farm Air has requested permission to use the Conservancy’s portion of the Bianchi West tract landing strip for use in serving its customers, including the Conservancy and its tenants. Before acquiring the Bianchi West tract, the Conservancy completed Phase One and Phase Two environmental testing on the airstrip. This was done in order to ascertain the level, if any, of toxicants in the soil at the landing strip site. (The studies revealed acceptable levels, so the Conservancy moved forward with its acquisition of the tract.) With this baseline data, the Conservancy can keep track of the status of soils on and around the runway. Staff requests authorization to enter into an agreement with Farm Air Flying Service, Inc. to allow it to utilize the Conservancy’s portion of the Bianchi West landing strip. The authorization would include the following restrictions, among others:
- the authorization terminates December 31, 2025,
- only seed and fertilizer are permitted to be used on the landing strip,
- no pesticides may be used on the strip without the written authorization of the Conservancy’s Executive Director,
- only in-Basin sites may be served by Farm Air from the landing strip, and
- a properly executed agreement must be in the Conservancy’s office prior to Farm Air’s use of the landing strip, and that the agreement contain the Conservancy’s standard indemnification, hold harmless protections, and that the Conservancy be named as an additional insured on the relevant Farm Air insurance policy or policies.
The Executive Director expects no authorization request for pesticide use on the landing strip. However, there could be special occasions that might warrant such authorization, but only for the use by the Conservancy or its contractors and tenants.
8. Natomas Central Mutual Water Company Annual Meeting of shareholders
The annual election of Directors of the Natomas Central Mutual Water Company (NCMWC) takes place on February 13, 2024, at 10:00 am, location to be announced. The Conservancy holds 3,973 shares of stock in the Company (out of approximately 30,720). Conservancy staff recommends that votes be cast for candidates familiar with the NBHCP and sensitive to the Conservancy’s view of land holding and water rights in perpetuity. This action authorizes the Conservancy’s Executive Director to vote the Conservancy’s shares in the Conservancy’s interest.
9. Sacramento Tree Foundation
The Sacramento Tree Foundation (STF) provides tree counting services as specified in the Conservancy’s Implementation Annual Report. The estimated cost of services are $21,000.00 per monitoring year. This contract is for two years bringing the total contract to $42,000.00. The proposed contract with STF increased due to the newly acquired properties since the last contract.
Board approval of this agenda item authorizes the Executive Director or Chief Financial Officer to execute and deliver a contract with STF for tree counting services covering fiscal years 2024-2025 at $42,000.00.
10. 2024 NBHCP Finance Model and 2024 budget
The proposed 2024 Conservancy budget is presented to the Board for adoption. A draft of the 2024 Conservancy budget was shared with the Board at the October 4, 2023 Board of Directors meeting for review and discussion.
The Conservancy’s proposed 2024 budget is integrated with the NBHCP Finance Model, so that the document submitted for action is one document. The consolidation of the two documents was introduced in 2007 with the intention of reducing the chance of differing budget numbers and because of the consistency it afforded.
The matter of reserves for property taxes has been a substantial issue for the NBHCP Finance Model calculation over the last several years. This year, the Conservancy made no change in the following assumptions with respect to the Williamson Act’s impact on Conservancy-held property:
The fee is substantially influenced by land prices. The recommended fee, as proposed by Conservancy staff, is supported by work done by Bender Rosenthal, Inc., updated for 2024. Bender Rosenthal estimates the range for mitigation land acquisition in 2024 is $25,000.00 to $30,000.00 per acre. The NBHCP Finance Model presented assumes mitigation land acquisition at $27,500.00.
The price estimate for future-acquired mitigation land is based on an assumption contained in the NBHCP Finance Model. The NBHCP requires that the Conservancy purchase mitigation land within 12 months of demand. So, the Conservancy’s estimate for mitigation land acquisition costs are based on a “looking forward” methodology, while appraisal valuations are typically based on recent historical valuations.
The 2024 Conservancy Budget and NBHCP Finance Model are now submitted for Board acceptance, as is a request to the City of Sacramento and the County of Sutter to adopt the Finance Model’s indicated fee as follows:
Management provides the Board with two alternatives for its consideration. An alternative to the proposal (“Plan A”) would be to defer planned managed marsh construction from 2024 to 2025 (“Plan B”). This is expected to result in a reduction in the per acre cost of converting rice land to managed marsh from an estimated $25,000.00 to $18,000.00. The resulting new fee would be $46,946.00 per acre (full fee) and the land dedication fee would be $33,196.00 per acre.
A third alternative (“Plan C”) would defer planned managed marsh construction to 2026. It is anticipated that this would allow for the per acre cost of converting rice land to managed marsh to a more normalized $13,000.00 per acre. The resulting new fee would be $46,010.00 per acre (full fee) and the land dedication fee would be $32,260.00 per acre.
One further consideration applicable to all three alternatives the Board may choose to exercise would be to reduce the assumed cost of acquiring an approvable acre of mitigation land from appraiser’s recommended range of $25,000.00 to $30,000.00 per acre to the lower end of the recommended range rather than the middle of $27,500.00.
The Board is asked to:
Download the NBHCP Finance Model update (PDF, 1 MB)
Download the NBHCP mitigation fee recommendation to the City of Sacramento (PDF, 35 KB)
Download the NBHCP mitigation fee recommendation to the County of Sutter (PDF, 35 KB)
11. City of Sacramento Report
Report from the City of Sacramento regarding HCP-related activity and other topics.
12. County of Sutter Report
Report from the County of Sutter regarding HCP-related activity and other topics.
13. Financial Report
A financial statement will be provided for the period ended October 31, 2023 (unaudited). Additional financial information will be provided.
Download the Conservancy’s unaudited October 31, 2023 financial statements (PDF, 707 KB)
14. Proposed managed marsh construction projects
On the planned next managed marsh construction projects, the Conservancy has long targeted the following tracts: Nestor, Bennett North, Frazer South and Elverta. However, the economies of scale are so small on the latter two projects, and the costs of construction so high, that Conservancy management and its expert advisors have concluded it makes no sense to include them at this time. Rather, the Bennett North tract marsh renovation will be reconfigured so that an approximate equivalent number of acres is added that is comparable to the small Frazer South and Elverta proposed projects.
At this stage, design work is being done on the Nestor tract and Bennett North tract (conceptual designs have been worked and re-worked and are included in this agenda). Giant garter snake experts have been advised and the lead GGS expert consulted. Importantly, the Conservancy has been working with leadership and legal counsel in Sutter County to obtain a Development Agreement that will enable the Conservancy to convert land uses from agriculture to managed marsh with Sutter County Board of Supervisor approval. Also in the works are complex irrigation adjustments needed with the tenant farmer, adjacent farming operations, Reclamation District 1000 and the Natomas Mutual Water Company.
Conservancy management will brief the Board on the status of these efforts.
Action:
No action is requested.
Download the proposed managed marsh construction plans (PDF, 19 MB)
15. Meeting with legal counsel on Board responsibilities and obligations
For many years, the Board has periodically entertained briefings with respect to Board members’ responsibilities and obligations, including duty of care, duty of loyalty, and the business judgment rule among others. Adam Thomas of Best, Best & Krieger will provide Board members with a brief overview and will respond to questions.
16. Background briefing; acquiring and managing mitigation land
The Conservancy has devised a process for acquiring and managing mitigation land that follows the implementation of the HCPs and their IAs. The Conservancy’s Executive Director will present to the Board the first of several backgrounders on the topic.
Action:
No action is requested.
17. Executive Director’s Report
Various matters for Board members’ general information will be presented by the Conservancy’s Executive Director.
18. Adjournment of the Regular Meeting of the Board of Directors
Official adjournment of the Regular Meeting of the Board of Directors.
Upcoming Regular Meetings
- February 7, 2024
- April 3, 2024
- June 5, 2024