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HomeMy WebLinkAboutComm No 0024.085 - Testimony - CA-9 - staff for PONC fund and Maintenance fundDoug Sensenig 65-1226 Puuki Place Kamuela, HI 96743 dougsensenigOgmail.com 207-706-6432 January 25, 2019 Testimony re: Proposed Charter Amendments CA -7, CA -9, CA -13 I'm Doug Sensenig and I live in Waimea. I have been involved in land conservation over 30 years, as an attorney, land trust board president, and executive director of two land trusts, one of which was Hawaii Island Land Trust. I am here today to speak to you about CA -7,9, and 13. I will speak to CA -7 and CA -13 first because they have many of the same failings. Unfortunately, they both seem to have been written without the assistance of anyone who knows how land conservation works, and they ignore the history of why the voters of Hawaii County decided, by substantial margins, to place the Fund beyond the grasp of the administration. CA -7 has two fatal flaws that require it to be dropped. First, you have already heard that the provision to allow lands acquired with the Fund to be sold will drive matching funds away. So far, we have had $10.7 million dollars in matching funds, which have saved the taxpayers about $2,300 an acre on the property acquired so far. The additional leverage provided by matching funds means the taxpayers have gotten over a 30% bump on their money. Not bad! I don't think the second fatal flaw has been discussed. The flaw arises from ignorance about the way conservation easements are structured. As you may know, conservation easements allow a landowner to sell OR DONATE various development rights on their property in a way that benefits the public, whether for watershed protection, scenic values, habitat, etc. The conservation easement allows a farmer or rancher to protect their land for the public good while being able to remain on the land, manage it, and pass it on to their heirs if they wish. When conservation organizations work with a landowner to protect land, one of their tools is a charitable tax deduction for any interest that the landowner donates rather than sells. This can work to lower the overall cost of the deal to, in our case, the County, and other funders. For example, a rancher decides to protect her land with a conservation easement. She needs some cash up front, because she's land rich and cash poor. But she also likes the idea of being able to offset up to 100% of her ranch income with a deduction that can be carried forward up to 15 years. This special treatment of the donation was enacted by Congress a few years ago, specifically to help farmers and ranchers. So she says, "I'll take 1� of the cost of the easement up front, and take the other 1/2 as a charitable deduction." Bingo. The County is able to save, in this case, 50% of the money it otherwise would have to spend if the deduction were not available. CA -7 must be dropped because the The Internal Revenue Service requires that ALL conservation interests that are donated MUST be in perpetuity if the deduction is to be available. Period. I'm sorry the drafter of CA -7 did not know this, or 1 am sure they never would have proposed it. Comm. No. 24.85 CA -7 will deprive Hawaii Island ranchers and farmers of tens of millions of dollars in potential funding for protection of their land for the public benefit. It will drive away matching funds. And what is the corresponding benefit to the people of this County from such an amendment? Nothing. CA -13 is also fatally flawed. Again, it shows a lack of understanding of land conservation by allowing money to be diverted from the Fund whenever the administration deems there to be an emergency. This idea superficially sounds sort of reasonable. However, it really makes the Land Fund inoperable, and here's why: Land protection deals sometimes take years to complete. Sometimes decades. How can a project ever be completed if there is no certainty that the money for it will even be in the Land Fund? How can the County, in good faith, sign a purchase and sale agreement with a willing landowner if the money might be removed from the Land Fund at any time? It can't. No landowner and no conservation organization is going to invest the immense amount of time and money it takes to do land protection if the necessary funds to close the deal might be taken away at any time. Mayor Kenoi raided the Land Fund and the voters went to the polls to prevent it from happening again. Now this administration is trying to resurrect the very loopholes the people sought to close with previous votes. I am reminded of the old saying, "A lack of planning on your part does not make an emergency on my part." The administration has seen fit to divert money from the emergency fund to balance the budget. Shouldn't we use the emergency fund for ... emergencies? Shouldn't the taxpayers have confidence that money they MANDATED to be spent a certain way will be spent that certain way? Doesn't this Commission have an ethical obligation to respect this clear mandate from the voters, especially when they've spoken three times? CA -7 and CA -13 are at best fatally flawed and at worst a cynical attempt to thwart the will of the voters and promote irresponsible development. They must not be allowed to proceed. I'll be very brief about CA -9. In contrast to CA -7 and CA -13, it improves the operation of the Land Fund and increases its effectiveness. There will be a County employee dedicated to and expert in the operation of the Fund. This will be a great help in attracting matching funds and willing partners to take on some of the burden of these projects. You should also know that a group of island citizens, of which I am a part, is organizing a conservation organization dedicated only to Hawaii Island. It will work directly with the County on projects benefiting us all. CA -9 allows the Fund to pay for staff time, a critical component of getting large projects done in a timely manner. So please support CA -9 and support, rather than hinder, the taxpayer's expressed intention that the Land Fund not be drained away for other uses, contrary to their belief and expectation. Thank you!