The Conservancy’s Board of Directors recently recommended that the current HCP fee of $44,050 per disturbed acre (the “base fee”) be decreased to $37,547 per acre. The Board also decided to recommend a fee decrease from $26,550 per acre to $22,547 per acre with satisfactory land dedication (the “land dedication option”). The City of Sacramento, as in years past, will likely consider the request for implementation on or about May 1, 2011. The County of Sutter may do likewise if it anticipates land disturbance in its HCP-permitted area.
Most of the recommended fee reduction is attributable to the assumed reduction in the price of acquiring mitigation land inside the Natomas Basin. This land acquisition cost estimate is carefully considered with consulting economists and appraisers. In addition to an estimated decrease in the cost of acquiring mitigation land, 20 percent of the fee reduction recommendation is attributable to budget-tightening measures recommended by Conservancy staff and accepted by the Conservancy Board of Directors (see pie chart).
The HCP fee has, in recent years, settled in to a fairly stable narrow band in comparison with the early years of HCP implementation (see line chart). The exception was in 2010, when the State of California essentially eliminated Williamson Act subventions to the counties, thus creating an unexpected higher property tax outlook for the Conservancy. That issue today is more predictable, as Sacramento and Sutter counties have made certain decisions with respect to Williams Act contracts going forward. The Conservancy’s consulting economists and staff believe property tax payment eventualities are covered with smaller adjustments in the HCP fee.
The Conservancy is the Plan Operator of the Natomas Basin Habitat Conservation Plan (NBHCP) and the Metro Air Park Habitat Conservation Plan (MAPHCP). In order to carry out its mission, the Conservancy receives fees paid to it by those disturbing land inside the Natomas Basin which are designated by the federal and state governments as habitat land for up to 22 species. As required by the HCPs, each year the Conservancy evaluates the costs associated with implementation of the HCPs and determines if the fees are adequate. To facilitate this evaluation, the Conservancy re-calculates the HCP Finance Model, which is used to assess the adequacy of funds available to implement the HCPs.
When the fee is deemed to be in need of adjustment to permit continued successful implementation of the NBHCP, the Conservancy requests that the City of Sacramento and County of Sutter approve a fee level that is adequate. The Conservancy is required to issue a fee recommendation report to the fee collecting agencies each year by February.
For additional information on the history of the HCP fee, please refer to the Conservancy’s General Fact Sheet (PDF).