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Carroll introduces new ag preservation easement formula

Carroll County will soon switch to a formula-based approach for determining the fair market value of farms whose owners wish to permanently preserve them as agriculture land.

But several county commissioners are concerned the formula, as presented to them last week, could inadvertently promote the creation of so-called "green belts" around municipalities and designated growth areas, thus hindering the development of those localities.

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"I would hate to see us extinguish the growth potential of towns with an ag preservation program that needs a little bit of refinement," said Commissioner Richard Rothschild, R-District 4.

Although no official vote was held, the majority of the commissioners expressed belief that the formula needed tweaking, and asked county Land and Resource Management staff to remove language that provided more points — and therefore a higher monetary value — to farms within three miles of designated growth areas and towns.

Staff will return to the commissioners with an amended version of the formula, but a date has not been chosen for that presentation.

Deborah Bowers, program manager for the county's Agricultural Land Preservation programs, said during the Oct. 29 meeting that the decision to move away from the traditional appraisal approach of determining a farm's value will save Carroll about $25,000 a year by eliminating the fees appraisers charge, and cut the time between application acceptance and easement placement by an average of two to three months. The process currently takes about a year to complete — and sometimes longer — Bowers said in a previous interview.

The formula approach will also be more effective at determining the fair market value of farms, as appraisals can vary drastically, said Tom Devilbiss, director of the Department of Land and Resource Management.

"This will level the playing field to eliminate these problems from continuing and to get away from complicated appraisals," Devilbiss said.

The formula assigns point values to certain aspects of a farm, including its development potential and location, soil features and farmability, and natural resource characteristics and special attributes. A farm can be awarded up to 1,000 points, with half coming from the number of lot rights a property has. The overall goal of the program is to extinguish these lot rights to preserve the land as agricultural for the indefinite future.

Rothschild said he questioned the weight that the formula gives to a farm's proximity to a designated growth area and municipalities, as this could lead to the establishment of green belts surrounding these areas. In effect, the placement of easements predominantly on farms surrounding these areas would not conform to the county's Master Plan because the creation of green belts is not explicitly stated in the document.

Bowers said landowners, not county government, would be creating green belts.

"We don't target properties and where they are; we don't target properties period," she said. "When you see green belts being created around towns, it's because the landowners are putting their farms into preservation."

The concentration of easements on farms surrounding these growth areas tends to be related to the high-quality soil in and around towns, Bowers said. Historically, the most productive and therefore the most profitable farms are located on the edge of growth areas, she said.

Rothschild disagreed with Bowers and said the adoption of a formula that gives additional points based on a farm's proximity to a town or growth area would favor some farms over others.

"If we are giving points for the creation of the green belt, then we are using tax money to encourage the creation of green belts," he said.

Commissioner Richard Weaver, R-District 2, reminded Rothschild that the purpose of the program is not to preserve or create green belts, but to preserve agri-business. While Rothschild agreed with Weaver, it doesn't change the fact that property owners would be paid more money for a farm closer to a growth area, Rothschild said.

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"If we have two identical farms characteristically, and one of them is three miles out of a town and the other is right up against the town boundary, in this case the second would get more points," Rothschild said. "It arguably doesn't do more to promote the furthering of agriculture but makes it more difficult to allow these small towns to expand."

Bowers said she and her staff included additional points for properties close to growth areas because appraisals tend to value these farms more. In a way, the formula is trying to mirror appraisals, just without the often wide variance in value, she said.

Commissioner Doug Howard, R-District 5, said the formula represents an opportunity to move completely away from appraisals.

"The purpose of an appraisal is different than what we are trying to do," Howard said. "An appraisal is to give someone a fair value based on what the owner can do with it, while with the program it means more to us in some respects to find farms that aren't on top of towns. The argument is when it comes to growth you don't want to pin in a town."

Weaver said if the commissioners recommend removing these points for a farm's proximity to a town or growth area, it would lessen the value of some farms. This could result in a property owner being made an easement offer below fair market value, thus limiting their property right to have an easement placed on their farm.

Rothschild disagreed with Weaver and said "property rights are not connected to the artificial incentives or policies we put in place to purchase land that could have a detrimental effect to towns."

Howard echoed Rothschild's sentiments and said farm owners don't have a natural property right to be brought into agricultural preservation.

"It is an elective program we offer based on certain criteria," Howard said. "This is not denying rights, just qualifying it with that criteria. Not that I would ever suggest this, but we could have no program at all and that wouldn't be denying someone's property rights."

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Details of new formula:

Carroll County's new formula to determine the fair market value of farms to be placed in the agriculture preservation program will be based on multiple categories, including development potential and location, soil features and farmability, and natural resource characteristics and special attributes.

The categories will be assigned point values that total 1,000 points, with about half awarded based on the number of lot rights the property has.

Each category consists of multiple factors, according to Deborah Bowers, program manager for the county's Agricultural Land Preservation Program.

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The farm's development potential and location will score a farm based on its number of lot rights, proximity to a town and whether it's adjacent to another easement or multiparcel deed.

A property's soil features and farmability will be scored according to the acreage of the property, the quality of its soil and adjacent land use.

A farm's natural resources will also be heavily weighted, and includes its proximity to streams, woodlands and wetlands.

A number of special attributes that not all farms have in common will also play a part in determining the fair market value, and includes its closeness to tourist and historic sites, whether it's an add-on to an existing easement, if it's adjacent to a county park or state-protected land, and several others.

The formula utilizes an acreage value multiplier to determine the final offer price. Based on decades of appraisal reviews conducted, Bowers and her staff have determined that the average price per acre is $6,110 in the northwest region of the county; $7,110 in the northeast region; and $7,330 in central Carroll.

"If a farm got 950 points, you would multiply that by 6.11 then by the number of acres for the fair market value," Bowers said.

The county's policy is to offer 70 percent of the fair market value, and that is not expected to change as a result of the formula, she said.

In fiscal year 2016, the county has received 20 easement applications and approved 18. This will be the first batch of applications whose values are determined by the formula, Bowers said.

The use of a formula is becoming more common, she said, and is already used in Carroll's Rural Legacy Program. Several counties — including Montgomery, Harford and Howard — also utilize a formulaic approach, Bowers said.

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