6. 2022 NBHCP Finance Model and 2022 budget

The proposed 2022 Conservancy budget is presented to the Board for adoption. A draft of the 2022 Conservancy budget was shared with the Board at the October 6, 2021 Board of Directors meetings for review and discussion.

The Conservancy’s proposed 2022 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:

1. The State of California’s Williamson Act subventions to counties remains unfunded or largely unfunded in this and future State budgets.
2. Counties with which the Conservancy has Williamson Act contracts (Sacramento and Sutter) make no additional change to existing contracts.
3. Counties permit no newly-acquired properties to be enrolled in Williamson Act contracts and to enjoy the property tax benefits such participation affords.
4. All new properties acquired by the Conservancy for HCP mitigation purposes enjoy no Williamson Act property tax protection and are assessed at their full value at the time of acquisition.
5. Sutter County’s Williamson Act contracts are reduced by 10 percent.

The fee is substantially influenced by land prices. The recommended fee, as proposed by Conservancy staff, is supported by work done by Stephen Harrington, MAI, updated for 2022. Harrington estimates the range for mitigation land acquisition in 2022 is $30,000 to $33,000 per acre. The NBHCP Finance Model presented assumes mitigation land acquisition at $32,500.

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. There are no exceptions or extensions provided for. 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 2022 Conservancy Budget and NBHCP Finance Model are now submitted for Board acceptance, as is a request to the City of Sacramento to adopt the Finance Model’s indicated fee as follows:

• The NBHCP mitigation fee for 2022 is recommended to increase from $40,032 per developed acre in 2021 to $43,968 per developed acre.
• The NBHCP mitigation fee with land dedication for 2022 is recommended to increase from $25,032 per developed acre in 2021 to $27,718 per developed acre.

The Board is asked to:

1. approve the proposed 2022 Conservancy Budget;
2. accept the 2022 NBHCP Finance Model recalculation;
3. adoption of a resolution to be submitted to the City of Sacramento requesting the above noted NBHCP fee adjustments (see attached resolution); and
4. should County of Sutter express an interest in initiating its use of the NBHCP’s Incidental Take Permit acres, an identical resolution is approved for the County of Sutter as well, changing out only the City of Sacramento references to County of Sutter references.

The NBHCP Finance Model for 2022 is available upon request.
Please email your inquiry to: Email [email protected]

Download the NBHCP mitigation fee recommendation resolution (PDF, 128 KB)