Board of Directors Agenda
1. 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.
2. Public Comments
Opportunity for members of the public to address the Conservancy’s Board of Directors.
3. Approval of the minutes
*All items listed under “Action by Consent,” 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 2, 2019.
4. Authorization for Farm Air to utilize landing strip on TNBC’s Bianchi West tract
The only remaining agricultural aircraft operator in the Natomas Basin is Farm Air Flying Service, Inc. TNBC 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 TNBC’s Bianchi West tract landing strip for use in serving its customers, including TNBC and its tenants.
Before acquiring the Bianchi West tract, TNBC 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 TNBC moved forward with its acquisition of the tract.) With this baseline data, TNBC 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 TNBC’s Bianchi West landing strip. The authorization would include the following restrictions, among others:
- the authorization terminates December 31, 2020,
- 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 TNBC’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 TNBC’s office prior to Farm Air’s use of the landing strip, and that the agreement contain TNBC’s standard indemnification, hold harmless protections, and that TNBC 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 TNBC or its contractors and tenants.
5. RD 1000 security contract with Brookman Protection Service, Inc.
Since 2006 Reclamation District 1000 has contracted with Brookman Protection Service, Inc. to provide Basin-wide security services. The Natomas Central Mutual Water Company and the Conservancy contribute to that effort. In the past the Conservancy has contributed up to $20,000.00 per year as its share of security costs, payable to RD 1000. Staff requests approval for 2020 service not to exceed $20,000.
6. 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 11, 2020, at 9:00 am at the Four Points by Sheraton, 4900 Duckhorn Dr., Sacramento, CA 95834. The Conservancy holds 3,396 shares of stock in the Company (out of approximately 31,262). 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.
7. Bylaws update
The Conservancy, in consultation with Best, Best and Krieger, have proposed amendments to reflect current legal and procedural changes. The Compensation and Governance Committee will have reviewed them prior to presentation to the full Board. Management recommends approval of the proposed amendments to the Bylaws.
8. Amending the threshold for “land dedication” from 50 acres to 20 acres
This proposes that the Conservancy recommend to the City of Sacramento that it amend its ordinance where small developers using 50 acres or less of the NBHCP not be required to provide acceptable land for its mitigation, but rather, make the threshold 20 acres. This idea was raised by Board members, increasingly aware of the difficulties in acquiring acceptable mitigation land caused by new development, new proposed development and costs, largely outside the 17,500-acre “Permitted Area” portion of the Natomas Basin.
If approved by the Board, the Conservancy will convey to the City of Sacramento that as it deals with the recommendations regarding the HCP fee for 2020, it consider amending its relevant ordinance and policies in such a manner that the threshold for qualifications to not be required to identify and convey suitable mitigation land under the HCPs be lowered from 50 to 20 acres.
9. 2020 NBHCP Finance Model and 2020 budget
The proposed 2020 Conservancy budget is presented to the Board for adoption. A draft of the 2020 Conservancy budget was shared with the Board at the October 2019 Board of Directors meetings for review and discussion.
The Conservancy’s proposed 2020 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 State of California’s Williamson Act subventions to counties remains unfunded or largely unfunded in this and future State budgets.
- Counties with which the Conservancy has Williamson Act contracts (Sacramento and Sutter) make no additional change to existing contracts.
- Counties permit no newly-acquired properties to be enrolled in Williamson Act contracts and to enjoy the property tax benefits such participation affords.
- 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.
- 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 2020. Harrington estimates the range for mitigation land acquisition in 2020 is $28,000 to $32,000 per acre.
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 2020 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:
• Increasing the NBHCP fee to $40,032 per developed acre, from $33,091 in 2019.
• Increasing the NBHCP fee with land dedication to $25,032, from $21,841 in 2019.
The Board is asked to:
- approve the proposed 2020 Conservancy Budget;
- accept the 2020 NBHCP Finance Model recalculation; and
- adopt a resolution to be submitted to the City of Sacramento requesting the above noted NBHCP fee adjustments (see attached resolution).
This item anticipates that should Sutter County express an interest in initiating its use of the NBHCP’s Incidental Take Permit acres, an identical resolution is approved for it as well, changing out only the City of Sacramento references to County of Sutter references.
10. SAFCA Implementation Agreement #3 Pappa Rosa – Amendment #1
This proposed amendment to the SAFCA Implementation Agreement #3 Pappa Rosa will change the following:
- Funding – Previously the operations and maintenance funding for this agreement ran through 2038, this amendment extends it to 2054. Previously the endowment portion of the funding began in 2038, this amendment moves that date to 2054.
- Sewer easement – An easement for the construction, operation and maintenance of a septic system within a portion of the property is included in this amendment.
- Conservation easement – The original agreement considered a conservation easement, the amendment moves to record the conservation easement as soon as practicable.
- Increase the farmable acreage – The original agreement provided for 35.77 farmable acres, the amendment increases that by 7.9 ares to 43.67 farmable acres.
SAFCA Implementation Agreement #3 Pappa Rosa – Amendment #1 has been approved by SAFCA’s Board. Staff is recommending Board approval of the SAFCA Implementation Agreement #3 Pappa Rosa – Amendment #1 as presented.
11. City of Sacramento report
Report from the City of Sacramento regarding HCP-related activity and other topics.
12. Financial statement review
Financial statements will be provided for the period ended October 31, 2019 (unaudited). Additional financial information will be provided.
13. Executive Director’s Report
Various matters for Board members’ general information will be presented by the Conservancy’s Executive Director.
14. Executive Session
Executive Session is scheduled for real estate matters, as well as, performance review and evaluation of the Executive Director. Executive Session for the performance review is pursuant to Government Code Section 54957, Employee performance evaluation and report out to the Board of Directors.
15. Employment agreement
Results of the Executive Session for performance evaluation will be reported. Recommendations will be made and proposals advanced with respect to an employment agreement between the Conservancy and the Executive Director.
Official adjournment of the meeting.