The Yolo Habitat Conservancy (YHC) has been working to address an identified 2018-19 funding shortfall since September 2018, resulting from the lack of development and the high cost of Yolo Habitat Conservation Plan/Natural Community Conservation Plan (Yolo HCP/NCCP) implementation. Conservancy staff consulted with the city managers and County Administrator and returned to the Conservancy Board with potential solutions in November 2018, which include a 2nd round of loans or pre-payment of mitigation fees from the member agencies to the Conservancy. For the County this requires Board approval of a transfer of contingency funds to countywide general funds to make the loan. Fees from member agencies are listed in the following table:
Table 1: Summary of Member Agency Loans and Pre-Payments
| |
Pre-Payment or Loan #1 |
Amount #1 |
Pre-Payment or Loan #2 |
Amount #2 |
Grand Total |
| City of Davis |
Loan |
$51,039 |
Loan |
$50,350 |
$101,389 |
| City of West Sacramento |
Pre-Payment |
$49,115 |
Pre-Payment |
$50,350 |
$99,465 |
| City of Winters |
Loan |
$10,745 |
Pre-Payment |
$10,600 |
$21,345 |
| City of Woodland |
Pre-Payment |
$52,952 |
Pre-Payment |
$50,350 |
$103,302 |
| County of Yolo |
Loan |
$51,039 |
Loan |
$50,350 |
$101,389 |
| Total |
|
$214,890 |
|
$212,000 |
$426,890 |
Overview of Recommendations:
Conservancy staff identified the following options at the September 2018 YHC Board meeting:
- Request a grant from the Wildlife Conservation Board
- Reduce costs by deferring projects
- Request an additional loan or pre-payment of fees from the member agencies
- Hire staff or request member agency staff help to complete this work rather than rely solely on consultants
Conservancy staff have deferred as many projects as possible to 2019-20 or beyond. Staff also successfully secure a $93,000 Local Assistance Grant for implementation work, the second such grant from the California Department of Fish and Wildlife in the last 18 months. California Wildlife Conservation Board staff are also recommending a $275,000 implementation grant to the Conservancy at the March 2019 meeting. These grants will help the Conservancy minimize expenditures from the two loans/pre-payments that the cities and the County provided to the Conservancy to assist with start-up costs.
To fill the remaining funding gap, staff worked with the city managers and County Administrator to develop the following proposal, adopted by the YHC Board in November 2018:
- Secure a second round of short-term contributions from each member agency;
- Finish the implementation work listed in this staff report;
- Complete a request for proposals in early 2019 to allow non-profit organizations and member agencies to “bid” on administering the Conservancy after the current Executive Director, Petrea Marchand, completes her service in September 2019;
- Compare the bids to a refined standalone operating model for the Conservancy;
- Develop a long-term system for member agency financial support if grants and fee revenue are insufficient to support administration.
The Conservancy released the request for proposals on February 4, 2019 and responses are due March 25, 2019. An interview committee consisting of the Executive Director, three city managers, and a representative from the Municipal Resources Group will interview candidates on April 11, 2019 followed by a Board decision in May. The Board of Directors, city managers and County Administrator are concerned about the long-term viability of Conservancy finances and believe the above recommendations will allow the Board of Directors to select the most cost-effective approach for sustaining the Conservancy over the next 50 years. The Board also decided to postpone the hiring of a new Executive Director in favor of the RFP approach.
Update on Potential Revenue:
The Board adopted the 2018-19 budget in June 2018 after over 18 months of discussions regarding potential implementation costs. Staff identified the need for loans and pre-payment of mitigation fees totaling $212,000 from the member agencies to fund the first year of implementation based on work with the planning directors to identify the timing of projects that would pay the HCP/NCCP fee. Conservancy staff and planning directors determined that no projects would pay the fee in the 2018-19 fiscal year, but recent discussions with the Sacramento Area Flood Control Agency and PG&E may result in the payment of fees for two “Special Participating Entity” projects: remediation of the Bryte Landfill and two small PG&E maintenance projects. These projects could result in up to $400,000 (and possibly more) in revenue. In addition, the following is an updated list of 2019-20 projects with a high likelihood of paying the fee.
- Pioneer Village/Spring Lake (Woodland) – 50 acres
- Lake Washington (West Sacramento) – 18 acres
- Stone Lock Phase 1 (West Sacramento) – 26 acres
- Oliwu Tentative Subdivision (West Sacramento) – 20 acres
If these projects paid the current fee, they would generate approximately $1.5 million in revenue. The following development projects are likely to pay the HCP/NCCP fee in the 2020-21 fiscal year:
- Nishi (Davis) – approximately 45 acres
- West Davis Active Adult Community (Davis) – approximately 75 acres (if approved by the voters on 11/6/18)
- Yarbrough (West Sacramento) – approximately 530 acres
If these projects paid the current fee, it would result in approximately $8.4 million in revenue. The Conservancy’s financial structure requires the Conservancy place a certain portion of this revenue in accounts that are set aside for contingency and long-term management and monitoring. If the Conservancy is prudent about setting aside funds and invests them in the Silicon Valley Community Foundation as authorized by the Board of Directors, the Conservancy will build a reserve to help sustain the organization through downturns in the economy.
Update on Conservancy Implementation Tasks:
While Conservancy staff worked to identify the timing of revenue, staff also have clarified the needs of the Conservancy to fully prepare for implementation of the Yolo HCP/NCCP by working with sister conservation agencies and talking with consultants who helped write the Yolo HCP/NCCP and are helping other California HCP/NCCPs during implementation. As a result of this work, as well as discussions with the Management Committee, staff have identified the following list of projects the Conservancy must accomplish in the 2018-19 fiscal year with mitigation fees and/or loans from member agencies:
- Identify additional resources for 2018-19 implementation (in progress)
- Develop new financial system (in progress)
- Complete internal audit (postponed to 2019)
- Resolve Section 6 grant issue (complete)
- Organize signing ceremony (complete)
- Finalize GIS metadata (complete)
- Evaluate proposal for Yolo Land Trust and RCD services (complete)
- Provide Local Assistance Grant cost share (in progress)
- Develop web-based covered activity tracking system (postponed to 2019)
- Create a geobrowser (postponed to 2019)
- Develop public, private, and Special Participating Entity permit applications (public and private applications complete, still need SPE application)
- Complete MOU with City of Davis (complete)
- Complete member agency workshops (complete)
- Develop policy to allocate costs to landowners selling easements (complete)
- Develop easement acquisition guide (postponed to early 2019)
- Finalize creation of non-profit organization (in progress)
- Certify consistency with the Delta Plan (complete)
- Update the Science and Technical Advisory Committee pre-acquisition evaluation (starting in 2019)
- Complete the CDFW mitigation lands application (in progress)
- Prepare 2018-19 Local Assistance Grant application (complete)
- Create new Advisory Committee (postponed to first six months of 2019)
- Assist applicants inquiring about permitting process (outside of applicant deposits) (ongoing)
- Assist landowners interested in selling easements (outside of landowner deposits) (ongoing)
- Member agency assistance (ongoing)
- Regular financial administration and other costs (e.g. rent) (ongoing)
Conservancy staff estimates the additional cost to implement these activities ranges from between $208,000 to $354,000 above and beyond the current $227,000 in funding available to the Conservancy through grants and other resources, hence the request for the additional $212,000 in loans or pre-payments of fees from the member agencies.
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