MEMORANDUM

DATE: March 25, 2015 TO: LAFCO Commissioners FROM: Sara Lytle-Pinhey, Assistant Executive Officer SUBJECT: PROPOSED AMENDMENT TO POLICY 22 - AGRICULTURAL PRESERVATION

POLICY

OVERVIEW

At the January 28, 2015 LAFCO meeting, the Commission reviewed the Agricultural Preservation Policy and directed Staff to bring back additional information regarding an in-lieu fee methodology and a proposed amendment to the Policy.

The Policy currently states that for proposals using in-lieu fees as an agricultural preservation strategy, the fees must go to an established, qualified, mitigation program to “fully fund” the acquisition and maintenance of agricultural land, development rights, or easements. No set in-lieu fee amount is provided in the Policy, as it would be expected that in-lieu fees could vary based on the quality of farmland being preserved as well as land values. A concern was raised by the Commission that an applicant choosing this agricultural preservation strategy could propose an in-lieu fee that is significantly less than the cost to achieve 1:1 mitigation.

It was suggested that this section of the Policy may benefit from the addition of an in-lieu fee methodology to clarify how the fee will fully fund agricultural mitigation. It was further suggested by the Commission that the addition of this language could eliminate a potential loophole in the Policy.

Through the Commission’s discussion regarding in-lieu fees, three approaches emerged, as outlined below:

Option 1: Amend the Policy to Request Additional Information The Policy could be amended to simply request that an applicant provide additional information to substantiate how a proposed in-lieu fee will fully fund an agricultural easement. This information would become part of the Plan for Agricultural Preservation prepared by the applicant for the Commission’s review.

Option 2: Amend the Policy to Include an In-Lieu Fee Methodology Another option is to include a methodology in the Policy that would act as a guideline for calculating a minimum in-lieu fee amount for a proposal. The City of Hughson, Stanislaus County, and Yolo LAFCO each use similar in-lieu fee methodologies to assist in determining that a fee is sufficient to acquire and manage an agricultural conservation easement.

Option 3: Make No Changes to the Policy The Commission could make no changes to the existing language of the Policy, which states that an in-lieu fee must “fully fund” an agricultural conservation easement. Under the current Policy, the Commission would review proposals using in-lieu fees on a project-by-project basis. Should the Commission determine that a proposed in-lieu fee does not sufficiently accomplish agricultural preservation, the Commission could either deny the proposal or continue the item

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to another meeting in order to obtain further information. Given the broad authority of the Commission to impose conditions related to collection of fees, the Commission could also impose its own fee on a project-by-project basis.

PROPOSED POLICY AMENDMENT

The proposed Policy amendment is a hybrid of Options 1 & 2. It provides an in-lieu fee methodology for use as a guideline in calculating an adequate in-lieu fee. The proposed methodology is similar to those adopted by the City of Hughson, Stanislaus County, and Yolo LAFCO, which each use a percentage of average land values to determine the fee. The proposed amendment also recognizes that there may be instances where a lower amount may be sufficient (e.g. with the assistance of grant funds). Under these circumstances, the proposed amendment specifies that should an applicant propose an in-lieu fee that is less than the methodology, the applicant would be required to provide additional information demonstrating that the lower fee is sufficient.

Staff suggests the Commission consider adding the following paragraph to section B-2 of the Policy:

Proposed in-lieu fees shall fully fund the costs associated with acquiring and managing an agricultural conservation easement, including the estimated transaction costs and the costs of administering, monitoring and enforcing the easement. Should the proposed in-lieu fees be less than 35% of the average per acre price for five (5) comparable land sales in Stanislaus County, plus a five percent endowment, the applicant shall provide evidence that the lesser amount will in fact achieve the stated agricultural mitigation goals.

The entirety of the Policy, including the proposed amendment is attached as Exhibit A. As requested by the Commission, this report will discuss how the in-lieu methodology was determined and how it may be used as an alternative to direct acquisition of agricultural easements.

THE IN-LIEU FEE METHODOLOGY

The City of Hughson, Stanislaus County, and Yolo LAFCO have each adopted an in-lieu fee methodology as part of their agricultural policies that requires fees to be no less than 35% of the average per acre price for five comparable land sales in the area plus a 5% endowment. (See Exhibit B - In-Lieu Fee Methodology Examples.) This type of objective standard will ensure that an applicant’s proposed in-lieu fee is reasonable to sufficiently fund an agricultural conservation easement. The approach is also flexible enough to accommodate changes in the land values over time.

LAFCO Staff researched the original creation of the methodology, as well as reports and comments related to the methodology’s adoption by the City of Hughson (2013), Stanislaus County (2007), and Yolo LAFCO (2004, 2006). As part of this research, Staff also reviewed the following information to affirm that the methodology remains an appropriate guideline for easements in Stanislaus County:

Agricultural Easement Costs in the Area

Data Sources: Central Valley Farmland Trust (CVFT) Stanislaus County Farm Bureau South San Joaquin County Farmland Conversion Fee Nexus Study -

ESA, 2005

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Average Land Values in Stanislaus County

Data Sources: 2013 Trends in Agricultural Land Values and Lease Values - American Society of Farm Managers and Rural Appraisers (ASFMRA)

Sampling of Recent Land Sales in Stanislaus County

Data Sources: RealtyTrac, 2015 (for land sales throughout 2014) Agricultural Easement Costs in the Area The Central Valley Farmland Trust (CVFT) provided information regarding actual agricultural conservation easement costs in Stanislaus, San Joaquin, and Merced counties based on easements obtained from 2008-2013 (Attached as Exhibit C). The data shows that the average easement cost for all three counties was $6,919 per acre. For Stanislaus County, the average was slightly higher at $7,080 per acre. The Stanislaus County Farm Bureau estimates that easements in Stanislaus County range from $8,000 to $10,000 per acre. A South San Joaquin County Farmland Conversion Fee Nexus Study in 2005 also estimated easements in Stanislaus County ranging from $8,000 to $10,000 per acre, which it considered comparable to properties in South San Joaquin County. As part of the 2005 study, CVFT provided a slightly lower estimate for easements ranging from $6,000 to $9,000 per acre. A summary of other agencies that utilize in-lieu fees as agricultural mitigation is attached as Exhibit D. Following completion of a nexus study, the City of Stockton adopted an in-lieu fee of $9,600 per acre, which includes 5% for monitoring of the easement. San Joaquin County adopted a fee of $8,675 per acre, although applicants must show that they have first made a diligent effort to obtain an easement outright prior to using the in-lieu fee. Each of these fees is intended to mitigate for the loss of agricultural land at a 1:1 ratio. Of those cities using fixed in-lieu fees, Lathrop, Manteca, and Tracy each use a much lower fee of approximately $2,500 per acre. These cities originally adopted in-lieu fees of $2,000 as part of a settlement agreement ten years ago. Each city has an adopted ordinance reflecting the fee requirement and has implemented minor fee increases since this time (e.g. to reflect construction cost index increases). However, the ordinances for the in-lieu fees in each of these jurisdictions do not specify a mitigation ratio that the fee is intended to accomplish. Subsequent nexus studies and reports of actual easement costs have shown the fees as being roughly one-third of what it would cost to achieve 1:1 mitigation in the area. Average Land Values in Stanislaus County The California Chapter of the American Society of Farm Managers and Rural Appraisers (ASFMRA) produces an annual report identifying the trends in agricultural land values. The data is sorted by lands within irrigation districts (eastside, westside, federal sources, etc), lands relying on well water, as well as planting types (e.g. almonds, walnuts, row crops). An excerpt of the 2013 ASFMRA report with land values for Merced, Stanislaus, and San Joaquin Counties is attached as Exhibit E. The 2013 report identifies land values of $16,000-$24,000 per acre for cropland within the Modesto Irrigation District (MID) and Turlock Irrigation District (TID). The majority of lands within these Districts are considered Prime Farmland. Lower land values for the cropland category exist on the

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westside, particularly for areas relying on well water or Federal water sources. Higher land values exist for those lands planted in orchards. However, improvements on a property are not included as part of conservation easement value and are factored out of the calculation. The easement value itself is based on the underlying bare land. In reviewing data regarding average land values in comparison to actual agricultural easement costs, it becomes apparent that the value of agricultural easements falls within a certain range of the land’s value. LAFCO Staff consulted with the Central Valley Farmland Trust (CVFT) regarding agricultural easement costs and the percentage for the proposed in-lieu fee methodology. CVFT stated that when it discusses tentative conservation easements with landowners, it typically estimates the easement value to be between 30-40% of the fair market value of the underlying bare land. An estimated 5% is used for an endowment for the future monitoring and stewardship of the easement. CVFT considers the 35% (plus 5%) in-lieu fee methodology to be on the lower end of its conservation easement estimates. Thus, Staff is recommending that, similar to the Stanislaus County, Hughson, and Yolo LAFCO Policies, the methodology be used as a guideline for a minimum in-lieu fee. Sampling of Recent Land Sales in Stanislaus County In order to test the in-lieu fee methodology, Staff examined a sample of recent sales of Prime Farmland throughout the unincorporated areas of Stanislaus County. Each of these properties is located within the boundaries of an irrigation district and outside a city sphere of influence. Additionally, each is designated as Agriculture on the County’s General Plan. Improvements have been subtracted out of the sales price based on a ratio of assessed value of land to the total assessed value. The resulting land values align closely with those identified in the “2013 Trends in Agricultural Land & Lease Values” document produced by ASFMRA.

Sample of Prime Farmland Sales in Stanislaus County (2014)

General Area

Description Acres Sales Price

(2014)

Sales Price Minus

Improvements*

Land Value Per

Acre

North of Newman

Row crops, Prime Farmland, Central Calif. Irrigation District

151.87 $3,040,000 $2,371,200 $15,613

Between Modesto &

Del Rio

Peach orchard, Prime Farmland, Modesto Irrigation District

83.43 $2,800,000 $1,624,000 $19,465

East of Patterson

Open land, Prime Farmland, Patterson Irrigation District

75.83 $1,516,600 $1,516,600 $20,000

North of Denair

Almond orchard, Prime Farmland, Turlock Irrigation District

17.76 $939,000 $369,966 $20,831

West of Modesto

Almond orchard, Prime Farmland, Modesto Irrigation District

19.10 $760,000 $448,400 $23,476

Average: $19,877

* The ratio of assessed value of land to total assessed value was used to factor out the value of any improvements

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The average land value per acre in the sample of Prime Farmland sales is $19,877. Using the methodology as proposed, a minimum in-lieu fee of 35% results in $6,957 per acre. With the addition of a 5% estimated endowment, the minimum fee becomes $7,305 per acre. This resulting fee is nearly identical to the average actual easement costs in the area, as reported by CVFT. For contrast, Staff also researched a sampling of grazing land sales within Stanislaus County. The lands were each located outside irrigation districts and had poorer soil qualities. Using the same methodology resulted in a minimum in-lieu fee of $2,197 per acre for grazing land. Although variations are expected to exist in different locations in the County based on development pressure, soil quality, and availability of irrigation water, by stating the fee is the average of five comparable sales in the area, it ensures that the in-lieu fee remains tied to the current land prices. The averaging provision minimizes the effects of land purchased significantly below or significantly above the market rate. Staff believes that the proposed methodology is a reasonable guideline for a minimum in-lieu fee, should the Commission determine that clarification is needed for the Policy. Costs Relative to Projects A study completed by Hausrath Economics Group in December 2014 for Yolo County examined various policy options for agricultural mitigation programs and their potential costs. Yolo County has an existing in-lieu fee of $10,100/acre and is considering raising the mitigation ratio to 2:1 (thus creating a fee of $20,200/acre). The study found that only at a mitigation ratio of 8:1 did the costs for agricultural mitigation start to exceed five percent of the market value. In a similar analysis, the City of Hughson found that at a 2:1 ratio, the cost of mitigation was less than 1% of the cost of a typical single-family home. Accordingly, its study found that higher density development resulted in lower costs per residential unit. Using $10,000 per acre, identified as one of the higher easement estimates for Stanislaus County, one can apply the fee to theoretical residential projects to evaluate the cost to the end user. A typical low-density single-family residential zoning is 5 units per acre. Applying $10,000/acre divided by 5 residential units equates to $2,000 per unit, or less than 1% of the cost of an average home. By increasing the number of units per acre in a medium-to-high density residential zoning density (maximum 14-27 units per acre) results in $714 to $370 per unit, depending on actual density. The Hausrath Economics Group study noted that unlike other development costs (e.g. impact fees and infrastructure costs), a developer has the ability to seek out the most cost effective means of satisfying agricultural mitigation. The study also stated that when considering acquisition of easements versus payment of an in-lieu fee, most developers have a sophisticated understanding of the land market and therefore have the ability to strike an easement acquisition deal that best satisfies their bottom line as well as the goals of agricultural mitigation. COMMENT LETTERS RECEIVED LAFCO circulated copies of the proposed Policy amendment for public review on February 11, 2015. During this review period, Staff was contacted by Douglas L. White, Deputy City Attorney for Patterson, Newman, Riverbank, Ceres, and Oakdale, who stated he had been approached by many of the cities in Stanislaus County that had concerns regarding the proposed Policy amendment. These concerns included that LAFCO is encroaching on a city’s land use authority, that the Policy amendment would require easements to be obtained prior to annexations, that the

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cities should retain control over how, when, and if agricultural mitigation occurs, and that the Policy amendment would drive up the costs of agricultural conservation easements.

Attached as Exhibit F for the Commission’s review is a series of correspondence and comments submitted in opposition to the proposed Policy amendment. Also included is a letter from LAFCO Staff to the City of Riverbank intended to clarify and correct statements made in City Staff’s report regarding the Policy amendment. The City Council upheld its Resolution opposing the Policy amendment. Staff anticipates additional Resolutions similar to that adopted by the City of Riverbank will be submitted prior to and at the Commission’s March 25, 2015 hearing.

Below is a list of documents received as of March 17, 2015 and included in Exhibit F:

City of Riverbank Staff Report - City Council Agenda Item No. 6.4 dated March 10, 2015

Letter from Stanislaus LAFCO to the City of Riverbank dated March 9, 2015

City of Riverbank Resolution 2015-016

City of Waterford letter dated March 9, 2015

City of Patterson Staff Report - City Council Agenda Item 7.1b dated March 17, 2015

Letter from Douglas L. White dated March 16, 2015

LAFCO’S AUTHORITY

The comments received in opposition to the proposed Policy amendment each question LAFCO’s authority. LAFCO is expressly charged with preserving agricultural lands under its governing statutes, the Cortese-Knox-Hertzberg Act (Government Code Section 56000 et seq). Pursuant to these statutes, LAFCO must assess each proposal’s impact to agricultural lands. Further, the Commission is required by State law to establish written policies and procedures that encourage and exercise its powers in a manner that provides for planned, well-ordered, efficient urban development patterns with appropriate consideration for preservation of open-space and agricultural lands (Section 56300(a)). The Commission is also specifically empowered to adopt standards for evaluating proposals, including the effect of a proposal on maintaining the physical and economic integrity of agricultural lands (Sections 56375(g) and 56668(e)).

LAFCO has express authority to impose conditions consistent with its statutory authority when reviewing an annexation application or in setting sphere of influence boundaries (Sections 56375, 56886, 56885.5). LAFCO’s broad authority in its ability to provide conditions on “a virtually limitless array of factors”1 has long been recognized by the Courts. For example, LAFCO is empowered to condition proposals on the acquisition, improvement, sale, or transfer of any property, real or personal. The Commission may also condition a proposal on the disposition, transfer, or division of any moneys or funds (Sections 56886(h) and (i)). Through LAFCO’s express power to approve, disapprove and add conditions to proposals, LAFCO may impose conditions on an annexation or sphere of influence requiring or recommending agricultural preservation.2 The requirement to demonstrate mitigation for the loss of or impacts to agricultural land is not a direct regulation of land use, density or intensity, or subdivision requirements. Instead, the requirement is a method for LAFCO to ensure that it has met its statutory duty to preserve such lands by advising cities to address the issue with mitigation measures. LAFCO requires a standard by which it may determine the appropriateness of converting existing agricultural lands to urban uses while preserving other agricultural lands.

1 Board of Supervisors of Sacramento County v. Local Agency Formation Commission, 3 Cal. 4

th 903, 312 (1992).

2 Government Code Sections 56300, 56301, 56375, 56377, 56425, 56888; Op. Atty. Gen., No. 80-610.

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LAFCO is not requiring any change in land use or directing a city to rezone property, but is instead including standards and measures in its Policy to conserve existing agricultural lands.

Should an applicant choose to use 1:1 or in-lieu fees as its agricultural preservation strategy, LAFCO is not specifying what lands should be encumbered by easements. Lands to be placed under easement are done so on a voluntary basis by willing landowners. The existing Policy contains a minimum criteria for mitigation lands, including that said lands be of equal or better soil quality, have a dependable and sustainable supply of irrigation water, and be located within Stanislaus County. The Policy amendment serves to clarify that if an applicant proposes to use in-lieu fees, that the fees are of a reasonable amount to accomplish 1:1 mitigation. Concerns regarding the Policy amendment’s creation of a “newly created mandatory conservation easement market” are unfounded. The in-lieu fee methodology itself is not a new concept in Stanislaus County, nor is the existence or use of conservation easements. ENVIRONMENTAL ANALYSIS

Staff has determined that there is no possibility that the proposed amendment to the Agricultural Preservation Policy will have a significant effect on the environment. It is therefore found to be exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the State Guidelines. The proposed amendment is minor in nature and serves to clarify that if an applicant chooses to use an in-lieu fee as its agricultural preservation strategy, that either a methodology be shown for the minimum fee calculation or further information be provided to demonstrate that the in-lieu fee will “fully fund” the intended agricultural mitigation. The proposed amendment is consistent with the Cortese-Knox-Hertzberg Act, which requires LAFCOs to consider the effects that a proposal may have on agricultural lands (Government Code Sections 56425 and 56668(e)). Further, annexation and sphere of influence amendment proposals brought forth to LAFCO are subject to their own stand-alone CEQA review, which evaluates proposals on a site-by-site and case-by-case basis. A Notice of Exemption is the appropriate environmental document and has been drafted for filing should the Commission approve the proposal (Exhibit G). RECOMMENDATION FOR COMMISSION ACTION

As with any other factor that the Commission considers when reviewing a proposal, the adoption of specific policies is intended to ensure that the Commission has been provided with the complete information it needs to make the determinations required by State law to approve a proposal; helping to ensure that the Commission’s decision will withstand challenge. Similarly, these policies help to communicate the Commission's expectations to applicants in advance of a proposal’s submittal for Commission review. Should the Commission determine that the Policy amendment helps to better communicate its expectations, Staff recommends that the Commission, following the public hearing and consideration of all relevant information presented, approve the proposed amendment and adopt Resolution 2015-06 (attached as Exhibit H), which:

1. Finds the proposed Policy amendment is generally exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) and orders the filing of a Notice of Exemption;

2. Finds that the proposed Policy amendment is consistent with the overall goals and policies of LAFCO; and,

3. Adopts the proposed Policy amendment.

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Attachments: Exhibit A: Proposed Policy Amendment - pg. 9 Exhibit B: In-Lieu Fee Methodology Examples - pg. 17

Exhibit C: Central Valley Farmland Trust - Agricultural Conservation Easement Value Data (2008-2013) - pg. 33

Exhibit D: Other Agencies Using Agricultural Mitigation In-Lieu Fees - pg. 37 Exhibit E: Excerpt from ASFMRA’s “2013 Trends in Agricultural Land & Lease

Values” - pg. 41 Exhibit F: Correspondence & Comment Letters Received (as of March 17, 2015) -

pg. 45 Exhibit G: Draft Notice of Exemption - pg. 67 Exhibit H: Draft Resolution 2015-06 - pg. 71

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EXHIBIT A

Proposed Policy Amendment

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Stanislaus LAFCO

POLICY 22 - AGRICULTURAL PRESERVATION POLICY Agriculture is a vital and essential part of the Stanislaus County economy and environment. Accordingly, boundary changes for urban development should only be proposed, evaluated, and approved in a manner which, to the fullest extent feasible, is consistent with the continuing growth and vitality of agriculture within the County. LAFCO’s mission is to discourage urban sprawl, preserve open space and prime agricultural lands, promote the efficient provision of government services and encourage the orderly formation of local agencies. Additionally, Government Code Section 56668(e) requires LAFCO to consider “the effect of the proposal on maintaining the physical and economic integrity of agricultural lands.” Consistent with the legislative intent of LAFCO, the goals of this policy are as follows:

Guide development away from agricultural lands where possible and encourage efficient development of existing vacant lands and infill properties within an agency’s boundaries prior to conversion of additional agricultural lands.

Fully consider the impacts a proposal will have on existing agricultural lands.

Minimize the conversion of agricultural land to other uses.

Promote preservation of agricultural lands for continued agricultural uses while balancing the need for planned, orderly development and the efficient provision of services.

The Commission encourages local agencies to identify the loss of agricultural land as early in their processes as possible, and to work with applicants to initiate and execute plans to minimize that loss, as soon as feasible. Agencies may also adopt their own agricultural preservation policies, consistent with this Policy, in order to better meet their own local circumstances and processes. The Commission shall consider this Agricultural Preservation Policy, in addition to its existing goals and policies, as an evaluation standard for review of those proposals that could reasonably be expected to induce, facilitate, or lead to the conversion of agricultural land. A. Plan for Agricultural Preservation Requirement

Upon application for a sphere of influence expansion or annexation to a city or special district (“agency”) providing one or more urban services (i.e. potable water, sewer services) that includes agricultural lands, a Plan for Agricultural Preservation must be provided with the application to LAFCO. The purpose of a Plan for Agricultural Preservation is to assist the Commission in determining how a proposal meets the stated goals of this Policy. The Plan for Agricultural Preservation shall include: a detailed analysis of direct and indirect impacts to agricultural resources on the site and surrounding area, including a detailed description of the agricultural resources affected and information regarding Williamson Act Lands; a vacant land inventory and absorption study evaluating lands within the existing boundaries of the jurisdiction that could be developed for the same or

Proposed amendments are shown as

bold and double-underlined text.

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similar uses; existing and proposed densities (persons per acre); relevant County and City General Plan policies and specific plans; consistency with regional planning efforts (e.g. the San Joaquin Valley Blueprint and the Sustainable Communities Strategy); and an analysis of mitigation measures that could offset impacts to agricultural resources. The Plan for Agricultural Preservation should be consistent with documentation prepared by the Lead Agency in accordance with the California Environmental Quality Act (CEQA). The Plan for Agricultural Preservation shall specify the method or strategy proposed to minimize the loss of agricultural lands. The Commission encourages the use of one or more of the following strategies: 1. Removal of agricultural lands from the existing sphere of influence in order to offset,

in whole or in part, a proposed sphere of influence expansion or redirection. 2. An adopted policy or condition requiring agricultural mitigation at a ratio of at least

1:1. This can be achieved by acquisition and dedication of agricultural land, development rights and/or conservation easements to permanently protect agricultural land, or payment of in-lieu fees to an established, qualified, mitigation program to fully fund the acquisition and maintenance of such agricultural land, development rights or easements, consistent with Section B-2 of this Policy.

a. In recognition of existing County policies applicable to agricultural land conversions in the unincorporated areas, as well as the goals of individual agencies to promote employment growth to meet the stated needs of their communities, an agency may select to utilize a minimum of 1:1 mitigation for conversions to residential uses.

b. Agricultural mitigation easements or offsets shall not be required for any

annexations of land for commercial or industrial development. 3. A voter-approved urban growth boundary designed to limit the extent to which urban

development can occur during a specified time period.

B. Commission Evaluation of a Plan for Agricultural Preservation

1. The Commission may consider approval of a proposal that contains agricultural land when it determines that there is sufficient evidence within the Plan for Agricultural Preservation that demonstrates all of the following:

a. Insufficient alternative land is available within the existing sphere of influence or

boundaries of the agency and, where possible, growth has been directed away from prime agricultural lands towards soils of lesser quality.

b. For sphere of influence proposals, that the additional territory will not exceed the

twenty year period for probable growth and development (or ten years within a proposed primary area of influence). For annexation proposals, that the development is imminent for all or a substantial portion of the proposal area.

c. The loss of agricultural lands has been minimized based on the selected

agricultural preservation strategy. For the purposes of making the determination in this section, the term “minimize” shall mean to allocate no more agricultural land to non-agricultural uses than what is reasonably needed to accommodate the amount and types of development anticipated to occur.

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d. The proposal will result in planned, orderly, and efficient use of land and services. This can be demonstrated through mechanisms such as:

i. Use of compact urban growth patterns and the efficient use of land that

result in a reduced impact to agricultural lands measured by an increase over the current average density within the agency’s boundaries (e.g. persons per acre) by the proposed average density of the proposal area.

ii. Use of adopted general plan policies, specific or master plans and project

phasing that promote planned, orderly, and efficient development.

2. For those proposals utilizing agricultural mitigation lands or in-lieu fees, the Commission may approve a proposal only if it also determines all of the following:

a. The mitigation lands must be of equal or better soil quality, have a dependable

and sustainable supply of irrigation water, and be located within Stanislaus County.

b. An adopted ordinance or resolution has been submitted by the agency

confirming that mitigation has occurred, or requires the applicant to have the mitigation measure in place before the issuance of a grading permit, building permit, or final map approval for the site, whichever comes first.

c. The agricultural conservation entity is a city or a public or non-profit agency that:

has the legal and technical ability to hold and administer agricultural preservation easements and in-lieu fees for the purposes of conserving and maintaining lands in agricultural production; and has adopted written standards, policies and practices (such as the Land Trust Alliance’s “Standards and Practices”) and is operating in compliance with those standards.

d. The agricultural mitigation land is not already effectively encumbered by a

conservation easement of any nature.

e. Proposed in-lieu fees shall fully fund the costs associated with acquiring and managing an agricultural conservation easement, including the estimated transaction costs and the costs of administering, monitoring and enforcing the easement. Should the proposed in-lieu fees be less than 35% of the average per acre price for five (5) comparable land sales in Stanislaus County, plus a 5% endowment, the applicant shall provide evidence that the lesser amount will in fact achieve the stated agricultural mitigation goals.

C. Exceptions

The following applications are considered exempt from the requirement for a Plan for Agricultural Preservation and its implementation, unless determined otherwise by the Commission:

1. Proposals consisting solely of the inclusion of lands owned by a city or special district

and currently used by that agency for public uses.

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2. Proposals which have been shown to have no significant impact to agricultural lands, including, but not limited to:

a. Proposals consisting solely of lands which are substantially developed with

urban uses. b. Proposals brought forth for the purpose of providing irrigation water to

agricultural lands. DEFINITIONS Agricultural Conservation Easement: An easement over agricultural land for the purpose of restricting its use to agriculture. The interest granted pursuant to an agricultural conservation easement is an interest in land which is less than fee simple. Agricultural conservation easements acquired shall be established in perpetuity (or shall be permanently protected from future development via enforceable deed restriction). Agricultural Lands: Land currently used for the purpose of producing an agricultural commodity for commercial purposes, land left fallow under crop rotational program, or land enrolled in an agricultural subsidy or set-aside program (Government Code Section 56016). As used in this section, “agricultural lands” also includes those lands defined in Government Code Section 56064 as “prime agricultural land” and those lands identified as “prime farmland”, “farmland of statewide importance”, and “unique farmland” as part of the California Department of Conservation’s Farmland Mapping and Monitoring Program. Agricultural Mitigation Land: Agricultural land encumbered by an agricultural conservation easement or other conservation mechanism acceptable to LAFCO. Primary Area of Influence: The area around a local agency within which territory is eligible for annexation and the extension of urban services within a ten year period. Prime Agricultural Land: An area of land, whether a single parcel or contiguous parcels, that has not been developed for a use other than an agricultural use and that meets any of the following qualifications:

(a) Land that qualifies, if irrigated, for rating as class I or class II in the USDA Natural Resources Conservation Service land use capability classification, whether or not the land is actually irrigated, provided that irrigation is feasible.

(b) Land that qualifies for rating 80 through 100 Storie Index Rating. (c) Land that supports livestock used for the production of food and fiber and that has an

annual carrying capacity equivalent to at least one animal unit per acre as defined by the United States Department of Agriculture in the National Range and Pasture Handbook, Revision 1, December 2003.

(d) Land planted with fruit or nut-bearing trees, vines, bushes, or crops that have a

nonbearing period of less than five years and that will return during the commercial bearing period on an annual basis from the production of unprocessed agricultural plant production not less than four hundred dollars ($400) per acre.

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(e) Land that has returned from the production of unprocessed agricultural plant products an annual gross value of not less than four hundred dollars ($400) per acre for three of the previous five calendar years (Government Code Section 56064).

Sphere of Influence: A plan for the probable physical boundaries and service area of a local agency, as determined by the commission (Government Code Section 56076). The area around a local agency within which territory is eligible for annexation and the extension of urban services within a twenty year period.

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EXHIBIT B

In-Lieu Fee Methodology Examples (City of Hughson, Stanislaus County, Yolo LAFCO)

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738712-2

FARMLAND

Purpose and Intent: The purposes of the Farmland Preservation Program (FPP) is to aid in slowing the loss of farmland resulting from urban development; and at the same time, require protection of farmland based on a agricultural use to a residential useeasements or other means This program establishesconservation easements purchased in accordance with the Fthe Farmland Mitigation Program adopted by Stanislaus County for ease of future coordination between jurisdictions.

Applicability: These guidelines shall apply to development projectacre in size to a residential land usesize of the legal parcel underlying a change in use from agricultural to a residential use.

Definitions:

Agricultural Preservation Agricultural land encumbered by an agricultural conservation easement or other conservation mecsynonymously with “farmland” in these guidelines. Agriculture Conservation Easement:An easement over agricultural land for the purpose of restricting its use to agricultureconsistent with these guidelines. The interest granted pursuant to an agriculturalconservation easement is an interest in land which is less than fee simple. Agriculturalconservation easements acquired in accordance with these guidelines shall be established in perpetenforceable deed restriction). Building Envelope:An area delineated by the agricultural conservation easement within which existingstructures may remain or future structures may be perm

1

CITY OF HUGHSONFARMLAND PRESERVATION

Purpose and Intent:

purposes of the Farmland Preservation Program (FPP) is to aid in slowing the loss of farmland resulting from urban development; and at the same time, require protection of farmland based on a 2:1 ratio to the amount of farmlandagricultural use to a residential use. The FPP is designed to utilize agricultural conservation

or other means granted in perpetuity as a means of minimizing the loss of farmland.

This program establishes standards for the acquisition and lconservation easements purchased in accordance with the Fthe Farmland Mitigation Program adopted by Stanislaus County for ease of future coordination between jurisdictions.

These guidelines shall apply to development projects which will acre in size to a residential land use. The acreage requiring preservationsize of the legal parcel underlying a change in use from agricultural to a residential use.

Preservation Land: Agricultural land encumbered by an agricultural conservation easement or other conservation mechanism acceptable to the City Councilsynonymously with “farmland” in these guidelines.

Agriculture Conservation Easement: An easement over agricultural land for the purpose of restricting its use to agriculture

h these guidelines. The interest granted pursuant to an agriculturalconservation easement is an interest in land which is less than fee simple. Agriculturalconservation easements acquired in accordance with these guidelines shall be established in perpetuity (or shall be permanently protected from future development via enforceable deed restriction).

Building Envelope: An area delineated by the agricultural conservation easement within which existingstructures may remain or future structures may be perm

CITY OF HUGHSON PRESERVATION PROGRAM

purposes of the Farmland Preservation Program (FPP) is to aid in slowing the loss of farmland resulting from urban development; and at the same time, require the permanent

:1 ratio to the amount of farmland converted from an P is designed to utilize agricultural conservation

granted in perpetuity as a means of minimizing the loss of farmland.

standards for the acquisition and long-term oversight of agricultural conservation easements purchased in accordance with the FPP. It is purposely patterned after the Farmland Mitigation Program adopted by Stanislaus County for ease of future coordination

which will convert agricultural land over 1 The acreage requiring preservation shall be the overall

size of the legal parcel underlying a change in use from agricultural to a residential use.

Agricultural land encumbered by an agricultural conservation easement or other Council. “Agricultural land” is used

An easement over agricultural land for the purpose of restricting its use to agriculture h these guidelines. The interest granted pursuant to an agricultural

conservation easement is an interest in land which is less than fee simple. Agricultural conservation easements acquired in accordance with these guidelines shall be

uity (or shall be permanently protected from future development via

An area delineated by the agricultural conservation easement within which existing structures may remain or future structures may be permitted to be built.

granted in perpetuity as a means of minimizing the loss of farmland.

It is purposely patterned after

agricultural land over 1

uity (or shall be permanently protected from future development via

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738712-2

Development Interest: The property owner, developer, proponent, and/or sponsor of a discretionary development project subject to these guidelines. Land Trust: A nonprofit public benefit 501(c)(3) corporation or other appropriate legal entity operating in Stanislaus County for the purpose of conserving and protecting land in agriculture, and approved for this purpose by the City Council. Legal Parcel: A portion of land separated from another parcel or portion of land in accordance with the Subdivision Map Act. A separate Assessor’s Parcel Number alone shall not constitute a legal parcel.

Methods of Farmland Preservation: Farmland preservation at a 2:1 ratio shall be satisfied by using one or more of the following techniques: 1) Where the total land area subject to an application which would result in the conversion

of agricultural land to a residential use, and is less than 20-acres in size, farmland preservation shall be satisfied by direct acquisition of an agricultural conservation easement or purchase of banked mitigation credits as set forth in these guidelines. Payment of an in-lieu mitigation fee may be authorized by the City Council only when the development interest can show a diligent effort to obtain an agricultural conservation easement or banked mitigation credits have been made without success. Facts the City Council may consider in making a decision regarding a request for payment of an in-lieu fee include, but are not limited to; a showing of multiple good faith offers to purchase an easement or banked mitigation credits having been declined by the seller(s).

2) Where the total land area subject to an application which would result in the conversion

of agricultural land to a residential use, and is 20-acres or more in size, farmland preservation shall be satisfied by direct acquisition of a farmland conservation easement as allowed by these guidelines and the Land Trust’s program. It shall be the development interest’s sole responsibility to obtain the required easement.

3) Alternative Farmland Preservation Methods - Alternative methods may be authorized by

the City Council provided the land will remain in agricultural use consistent with this program. Any request for consideration of an alternative Farmland Preservation Method shall be reviewed by the Planning Commission for consistency with this program prior to a decision by the City Council.

� Direct Acquisition (In-Kind Acquisition):

1) The City Council may approve the acquisition of any agricultural conservation easement intended to satisfy the requirements of these guidelines.

2) The location and characteristics of the agricultural preservation land shall comply with the provisions of these guidelines. 3) The development interest shall pay an administrative fee equal to cover the costs of administering, monitoring and enforcing the farmland conservation easement. The fee amount shall be determined by the Land Trust and approved by the City Council. 4) The Planning Commission shall review each agricultural conservation easement for consistency with these guidelines prior to approval by the City Council. The Commission shall make a formal recommendation to the City Council for consideration.

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738712-2

� In - Lieu Fees: The payment of an in-lieu fee shall be subject to the following provisions: 1) The in-lieu fee shall be determined case-by-case in consultation with the Land Trust and approved by the City Council. In no case shall the in-lieu fee be less than 35% of the average per acre price for five (5) comparable land sales in Stanislaus County. 2) The in-lieu fee shall include the costs of managing the easement, including the cost of administering, monitoring and enforcing the farmland conservation easement, and a five percent (5%) endowment of the cost of the easement, and the payment of the estimated transaction costs associated with acquiring the easement. The costs shall be approved by the City Council based on information relating to the costs provided by the Land Trust. 3) The Planning Commission shall review the final in-lieu fee proposal for consistency with this program prior to approval by the City Council. The Commission shall make a formal recommendation to the City Council for consideration. 4) The City Council shall approve the final amount and other terms of the in-lieu fee. 5) Projects that qualify to pay the in-lieu fee shall be subject to a 2.5% administration fee.

Use of In-lieu Fees - In-lieu fees shall be administered by the Land Trust in fulfillment of its programmatic responsibilities. These responsibilities cover, without exception, acquiring interests in land and administering, monitoring and enforcing the agricultural conservation easement or other instrument designed to conserve the agricultural value of the land for farmland preservation purposes and managing the land trust. The location and characteristics of agricultural preservation land shall comply with the provisions of these guidelines.

� Agricultural Preservation Land Credit Banking: preservation land credits may be banked and utilized in accordance with the following provisions:

1) Purpose - The purpose of establishing a method of banking preservation land credits is to equalize the imbalance between the acreage size of farmland suitable, and available, for purchase of farmland conservation easements and the amount of acreage required to meet a 2:1 ratio. 2) Process - Any project requiring the acquisition of an agricultural conservation easement in accordance with this program may be approved by the City Council to bank conservation credits on the acreage in excess of the acreage required for the original project. The conservation credits shall be held by the individual/entity purchasing the agricultural conservation easement. 3) Credit Value - Each acre in excess of the required acreage for farmland preservation may be utilized at a 2:1 ratio to satisfy the conservation requirements of another development. 4) Negotiations - Negotiations to purchase agricultural preservation land credits shall not involve the City and shall be subject to free market values. The City shall make available a contact list of individuals/entities with banked credits on record. The sale of banked credits shall not alter the terms of the original farmland conservation easement which generated the credits. 5) Authorization - The City Council shall accept purchased credits upon

21

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738712-2

receipt of a sales agreement, provided the credits have been banked within Stanislaus County. 6) Records - The City shall maintain a record of banked credits and purchased credits to insure the Farmland Preservation Program is maintained whole.

Agricultural Preservation Lands - Locations and Characteristics:

1) Location - Agricultural preservation land shall be: A) located in Stanislaus County; B) designated Agriculture by the Land Use Element of the Stanislaus County General Plan; C) zoned A-2 (General Agriculture); and D) located at least one-half mile outside a Local Agency Formation Commission (LAFCO) adopted Sphere of Influence of a city.

2) Allowable Uses - Agricultural Mitigation land shall be in conformance with the

Stanislaus County’s A-2 zoning district. Any legal nonconforming use of the property shall be abandoned prior to execution of the agricultural conservation easement and shall not be allowed to reestablish except as authorized within a building envelope. The type of agricultural related activity allowed on preservation land shall be specified as part of the agricultural conservation easement and shall not be less restrictive then the A-2 zoning district.

3) Parcel Size - Agricultural mitigation land shall consist of legal parcel(s) of twenty (20) net acres or more in size. Parcels less than twenty (20) net acres in size shall only be considered if merged to meet the minimum size requirement prior to execution of the farmland conservation easement. Any building envelope allowed by the Land Trust shall not be counted towards the required parcel size. 4) Soil Quality - The agricultural preservation land shall be of equal or better soil quality than the agricultural land whose use is being changed to nonagricultural uses. Priority shall be given to lands designated as ‘prime farmland’, ‘farmland of statewide importance’ and ‘unique farmland’ by the California Department of Conservation’s Farmland Mapping and Monitoring Program. 5) Water Supply - The agricultural preservation land shall have an adequate water supply sufficient to support the current agricultural use of the land. The water rights on the agricultural preservation land shall be protected in the farmland conservation easement. 6) Previous Encumbrances - Land already effectively encumbered by a conservation easement of any nature is not eligible to qualify as agricultural preservation land.

Final Approval: Final approval of any project subject to this program shall be contingent upon the execution of any necessary legal instrument and/or payment of fees as specified by this program. Final approval shall be obtained prior to whichever of the following shall occur first: (1) the issuance of any building grading or encroachment permit(s) required for development; (2) recording of any parcel or final subdivision map; or (3) operation of the approved use.

Legal Instruments for Encumbering Agricultural Preservation Land:

Requirement - To qualify as an instrument encumbering the land for agricultural preservation: 1) all owners of the agricultural preservation land shall execute the

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5

738712-2

instrument; 2) the instrument shall be in recordable form and contain an accurate legal description of the agricultural preservation land; 3) the instrument shall prohibit any activity which impairs or diminishes the agricultural productivity of the agricultural preservation land; 4) the instrument shall protect the existing water rights and retain them with the agricultural preservation land; 5) the interest in the agricultural preservation land shall be held in trust by the Land Trust in perpetuity; 6) the Land Trust shall not sell, lease, or convey any interest in the agricultural preservation land except for fully compatible agricultural uses; and 7) if the Land Trust ceases to exist, the duty to hold, administer, monitor, and enforce the interest shall pass to the City of Hughson to be retained until a qualified entity to serve as the Land Trust is located.

Monitoring, Enforcing, and Reporting:

1) Monitoring and Enforcing - The Land Trust shall monitor all lands and easements acquired in accordance with these guidelines and shall review and monitor the implementation of all management and maintenance plans for these lands and easement areas. It shall also enforce compliance with the terms of the conservation easement or agricultural preservation instruments. 2) Reporting by the Land Trust - Annually, beginning one year after the adoption of this program, the Land Trust shall provide to the Hughson City Manager an annual report delineating the activities undertaken pursuant to the requirements of this program and assessment of these activities. The report(s) shall describe the status of all lands and easements acquired in accordance with this program, including a summary of all enforcement actions.

Stacking of Conservation Easements: Stacking of easements for both habitat conservation easements on top of an existing agricultural easement granted in accordance with these guidelines may be allowed if approved by the City Council provided the habitat needs of the species addressed by the conservation easement shall not restrict the active agricultural use of the land.

� The Planning Commission shall review all stacking proposals to insure the stacking will not be incompatible with the maintenance and preservation of economically sound and viable agricultural activities and operations. The recommendation of the Planning Commission shall be considered by the City Council.

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24

7-36 Appendix "B"Farmland Mitigation Program Guidelines

Stanislaus CountyFarmland Mitigation Program Guidelines

Purpose and Intent:The purpose of the Farmland Mitigation Program (FMP) is to aid in mitigating the loss of farmlandresulting from residential development in the unincorporated areas of Stanislaus County byrequiring the permanent protection of farmland based on a 1:1 ratio to the amount of farmlandconverted. The FMP is designed to utilize agricultural conservation easements granted inperpetuity as a means of minimizing the loss of farmland.

The intent of these guidelines is to establish standards for the acquisition and long-term oversightof agricultural conservation easements purchased in accordance with the FMP.

Applicability:These guidelines shall apply to any development project requiring a General Plan or CommunityPlan amendment from ‘Agriculture’ to a residential land use designation of the Stanislaus CountyGeneral Plan. The acreage requiring mitigation shall be equal to the overall size of the legal parcelsubject to the land use designation amendment and not the portion of parcel actually beingdeveloped.

Definitions:

Agricultural Mitigation Land:Agricultural land encumbered by an agricultural conservation easement or otherconservation mechanism acceptable to the County. “Agricultural land” is usedsynonymously with “farmland” in these guidelines.

Agriculture Conservation Easement:An easement over agricultural land for the purpose of restricting its use to agricultureconsistent with these guidelines. The interest granted pursuant to an agriculturalconservation easement is an interest in land which is less than fee simple. Agriculturalconservation easements acquired in accordance with these guidelines shall be establishedin perpetuity (or shall be permanently protected from future development via enforceabledeed restriction).

Building Envelope:An area delineated by the agricultural conservation easement within which existingstructures may remain or future structures may be permitted to be built.

Development Interest:The property owner, developer, proponent, and/or sponsor of a discretionary developmentproject subject to these guidelines.

Land Trust:A nonprofit public benefit 501(c)(3) corporation or other appropriate legal entity operatingin Stanislaus County for the purpose of conserving and protecting land in agriculture, andapproved for this purpose by the Board of Supervisors. The County may be designated asa Land Trust.

25

7-37 Appendix "B"Farmland Mitigation Program Guidelines

Legal Parcel:A portion of land separated from another parcel or portion of land in accordance with theSubdivision Map Act. A separate Assessors Parcel Number alone shall not constitute alegal parcel.

Methods of Mitigation: Farmland mitigation at a 1:1 ratio shall be satisfied by using one of thefollowing techniques:

1) Where the total land area subject to a General Plan or Community Plan Amendment is lessthan 20-acres in size, farmland mitigation shall be satisfied by direct acquisition of anagricultural conservation easement or purchase of banked mitigation credits as set forth inthese guidelines. Payment of an in-lieu mitigation fee may be authorized by the Board ofSupervisors only when the development interest can show a diligent effort to obtain anagricultural conservation easement or banked mitigation credits have been made withoutsuccess. Facts the Board may consider in making a decision regarding a request forpayment of an in-lieu fee include, but are not limited to, a showing of multiple good faithoffers to purchase an easement or banked mitigation credits having been declined by theseller(s).

2) Where the total land area subject to the General Plan or Community Plan Amendment is20-acres or more in size, farmland mitigation shall be satisfied by direct acquisition of afarmland conservation easement as allowed by these guidelines and the Land Trust’sprogram. It shall be the development interests sole responsibility to obtain the requiredeasement.

3) Alternative Farmland Conservation Methods - Alternative methods may be authorized bythe Board of Supervisors provided the land will remain in agricultural use consistent withthese guidelines. Any request for consideration of an alternative Farmland ConservationMethod shall be reviewed by the Planning Commission for consistency with theseguidelines prior to a decision by the Board of Supervisors.

• Direct Acquisition (In-Kind Acquisition):

1) The Board of Supervisors shall approve the acquisition of any agriculturalconservation easement intended to satisfy the requirements of these guidelines.

2) The location and characteristics of the agricultural mitigation land shall comply withthe provisions of these guidelines.

3) The development interest shall pay an administrative fee equal to cover the costsof administering, monitoring and enforcing the farmland conservation easement.The fee amount shall be determined by the Land Trust and approved by the Boardof Supervisors.

4) The Planning Commission shall review each agricultural conservation easement forconsistency with these guidelines prior to approval by the Board of Supervisors.The Commission shall make a formal recommendation to the Board forconsideration.

26

7-38 Appendix "B"Farmland Mitigation Program Guidelines

• In - Lieu Fees: The payment of an in-lieu fee shall be subject to the following provisions:

1) The in-lieu fee shall be determined case-by-case in consultation with the Land Trustapproved by the County Board of Supervisors. In no case shall the in-lieu fee beless than 35% of the average per acre price for five (5) comparable land sales inStanislaus County.

2) The in-lieu fee shall include the costs of managing the easement, including the costof administering, monitoring and enforcing the farmland conservation easement, anda five percent (5%) endowment of the cost of the easement, and the payment of theestimated transaction costs associated with acquiring the easement. The costsshall be approved by the Board of Supervisors based on information relating to thecosts provided by the Land Trust.

3) The Planning Commission shall review the final in-lieu fee proposal for consistencywith these guidelines prior to approval by the Board of Supervisors. TheCommission shall make a formal recommendation to the Board for consideration.

4) The Board of Supervisors shall approve the final amount and other terms of the in-lieu fee.

Use of In-lieu Fees - In-lieu fees shall be administered by the Land Trust in fulfillment ofits programmatic responsibilities. These responsibilities cover, without exception, acquiringinterests in land and administering, monitoring and enforcing the agricultural conservationeasement or other instrument designed to conserve the agricultural value of the land forfarmland mitigation purposes and managing the land trust. The location and characteristicsof agricultural mitigation land shall comply with the provisions of these guidelines.

• Mitigation Credit Banking: Mitigation credits may be banked and utilized in accordancewith the following provisions:

1) Purpose - The purpose of establishing a method of banking mitigation credits is toequalize the imbalance between the acreage size of farmland suitable, andavailable, for purchase of farmland conservation easements and the amount ofacreage required to meet a 1:1 ratio.

2) Process - Any project requiring the acquisition of an agricultural conservation

easement in accordance with these guidelines may be approved by the Board ofSupervisors to bank mitigation credits on the acreage in excess of the 1:1: ratiorequired for mitigation of the original project. The mitigation credits shall be held bythe individual/entity purchasing the agricultural conservation easement.

3) Credit Value - Each acre in excess of the required 1:1 ratio for mitigation may beutilized at a 1:1 ratio to satisfy the mitigation requirements of another development.

4) Negotiations - Negotiations to purchase mitigation credits shall not involve the

County and shall be subject to free market values. The County shall make availablea contact list of individuals/entities with banked credits on record. The sale ofbanked credits shall not alter the terms of the original farmland conservationeasement which generated the credits.

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7-39 Appendix "B"Farmland Mitigation Program Guidelines

5) Authorization - The Board of Supervisors shall accept purchased credits uponreceipt of a sales agreement.

6) Records - The County shall maintain a record of banked credits and purchasedcredits to insure the Farmland Mitigation Program is maintained whole.

Agricultural Mitigation Lands - Locations and characteristics:

1) Location - Agricultural mitigation land shall be: A) located in Stanislaus County; B)designated Agriculture by the Land Use Element of the Stanislaus County GeneralPlan; C) zoned A-2 (General Agriculture); and D) located outside a Local AgencyFormation Commission (LAFCO) adopted Sphere of Influence of a city.

2) Allowable Uses - Agricultural Mitigation land shall be in conformance with the A-2zoning district. Any legal nonconforming use of the property shall be abandonedprior to execution of the agricultural conservation easement and shall not be allowedto reestablish except as authorized within a building envelope. The type ofagricultural related activity allowed on mitigation land shall be specified as part ofthe agricultural conservation easement and shall not be less restrictive then the A-2zoning district.

3) Parcel Size - Agricultural mitigation land shall consist of legal parcel(s) of twenty(20) net acres or more in size. Parcels less than twenty (20) net acres in size shallonly be considered if merged to meet the minimum size requirement prior toexecution of the farmland conservation easement. Any building envelope allowedby the Land Trust shall not be counted towards the required parcel size.

4) Soil Quality - The agricultural mitigation land shall be of equal or better soil qualitythan the agricultural land whose use is being changed to nonagricultural uses.Priority shall be given to lands designated as ‘prime farmland’, ‘farmland ofstatewide importance’ and ‘unique farmland’ by the California Department ofConservation’s Farmland Mapping and Monitoring Program.

5) Water Supply - The agricultural mitigation land shall have an adequate watersupply to support the agricultural use of the land. The water rights on theagricultural mitigation land shall be protected in the farmland conservationeasement.

6) Previous Encumbrances - Land already effectively encumbered by a conservationeasement of any nature is not eligible to qualify as agricultural mitigation land.

Final Approval:Final approval of any project subject to these guidelines shall be contingent upon the execution ofany necessary legal instrument and/or payment of fees as specified by these guidelines. Finalapproval shall be obtained prior to any of the following: 1) the issuance of any building, grading orencroachment permit(s) required for development, 2) recording of any parcel or final subdivisionmap, or 3) operation of the approved use.

28

7-40 Appendix "B"Farmland Mitigation Program Guidelines

Legal Instruments for Encumbering Agricultural Mitigation Land:

Requirement - To qualify as an instrument encumbering the land for agricultural mitigation:1) all owners of the agricultural mitigation land shall execute the instrument; 2) theinstrument shall be in recordable form and contain an accurate legal description of theagricultural mitigation land; 3) the instrument shall prohibit any activity which impairs ordiminishes the agricultural productivity of the agricultural mitigation land; 4) the instrumentshall protect the existing water rights and retain them with the agricultural mitigation land;5) the interest in the agricultural mitigation land shall be held in trust by the Land Trustand/or the County in perpetuity; 6) the Land Trust or County shall not sell, lease, or conveyany interest in the agricultural mitigation land except for fully compatible agricultural uses;and 7) if the Land Trust ceases to exist, the duty to hold, administer, monitor, and enforcethe interest shall pass to the County to be retained until a qualified entity to serve as theLand Trust is located.

Monitoring, Enforcing, and Reporting:

1) Monitoring and Enforcing - The Land Trust shall monitor all lands and easementsacquired in accordance with these guidelines and shall review and monitor theimplementation of all management and maintenance plans for these lands andeasement areas. It shall also enforce compliance with the terms of the conservationeasement or agricultural mitigation instruments.

2) Reporting by the Land Trust - Annually, beginning one year after the adoption ofthis chapter, the Land Trust shall provide to the County Planning Director an annualreport delineating the activities undertaken pursuant to the requirements of theseguidelines and assessment of these activities. The report(s) shall describe thestatus of all lands and easements acquired in accordance with these guidelines,including a summary of all enforcement actions.

Stacking of Conservation Easements:

Stacking of easements for both habitat conservation easements on top of an existing agriculturaleasement granted in accordance with these guidelines may be allowed if approved by the Boardof Supervisors provided the habitat needs of the species addressed by the conservation easementshall not restrict the active agricultural use of the land. • The Commission, with input from the County Agricultural Advisory Board, shall review all

stacking proposals to insure the stacking will not be incompatible with the maintenance andpreservation of economically sound and viable agricultural activities and operations. Therecommendation of the Commission shall be considered by the Board of Supervisors.

I:\PLANNING\GENERAL PLAN\Agriculture Element\Appendix B - Ag Element FMP.wpd

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COUNTY OF YOLO LOCAL AGENCY FORMATION COMMISSION AGRICULTURAL CONSERVATION POLICY PAYMENT IN LIEU FEE METHODOLOGY

In lieu of the dedication of agricultural conservation easements that would otherwise be required by the Agricultural Conservation Policy, the Commission may permit the payment of fees as set forth in this Schedule to fully fund the acquisition and maintenance of farmland, development rights or agricultural conservation easements.

Per Acre Mitigation Fee No less than 35% of the average per acre price for full and unencumbered fee title price in the last five (5) unimproved land purchases plus a five percent (5%) endowment of the cost of the easement, and the payment of the estimated transaction costs associated with acquiring an easement. The purchases must be within the general vicinity of the annexing entity and of a size equal to or greater than the total acreage of prime soils within the subject territory. Payment of the In Lieu Fee is to be made directly to an agricultural conservation entity that meets the criteria set forth in Section IV(F)(6) of the Yolo County Local Agency Formation Commission’s Agricultural Conservation Policy. The agricultural conservation entity receiving these funds must present to the Commission a letter stating its intention to use these funds for the acquisition of farmland, development rights or agricultural conservation easements in Yolo County whose prime soils are reasonably equivalent to the proposal area’s soils and that the location of the easements will be within the general vicinity of the annexing entity and in an area within the County of Yolo that would otherwise be threatened, in the reasonably foreseeable future, by development and/or other urban uses.

Prepared by Yolo County LAFCO Staff Updated by Yolo County LAFCO – January 23, 2006

Yolo County LAFCO Agricultural Conservation Policy June 25, 2007 Page 12 of 12

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32

EXHIBIT C

Central Valley Farmland Trust -

Agricultural Conservation Easement Value Data (2008-2013)

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34

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EXHIBIT D

Other Agencies Using Agricultural Mitigation

In-Lieu Fees

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Other Agencies Using Agricultural Mitigation In-Lieu Fees

Agency Mitigation

Ratio Fee Per Acre Notes

City of Brentwood 2:1 $6,408 Can be adjusted yearly, up to 10% increase

City of Davis 2:1 (no set fee) Project-by-project, based on appraisal of adjacent mitigation land or recent land transactions near city limits plus an inflator.

City of Gilroy 1:1 (no set fee) Project-by-project, based on appraisals in area, must include costs to administer and monitor

City of Hughson 2:1 In-Lieu Fee

Methodology Minimum 35% land value + 5% endowment, only allowed for projects <20 acres.

City of Lathrop N/A $2,508-$3,762

Originally adopted at $2,000 as a result of litigation, fees updated annually and vary based on location, no ratio specified

City of Manteca N/A $2,512/acre Originally adopted at $2,000 as a result of litigation, actual fee specified in City Council resolution for projects, no ratio specified

City of Tracy N/A $2,638/acre Originally adopted at $2,000 as a result of litigation, actual fee specified in City Council resolution for projects, no ratio specified

City of Stockton 1:1 $9,600/acre For projects <40 acres, includes a 5% administrative/monitoring contingency

San Joaquin County 1:1 $8,675/acre Applicant must show that they have made a diligent effort to obtain an easement outright, prior to using in-lieu fee

San Luis Obsipo LAFCO

1:1 (no set fee) Must “fully fund” conservation easement

Santa Clara LAFCO 1:1 (no set fee) Must “fully fund” conservation easement, include provision to adjust fee to reflect land value changes and must show methodology

Stanislaus County 1:1 In-Lieu Fee

Methodology Minimum 35% land value + 5% endowment; only allowed for projects <20 acres.

Yolo County 1:1 $10,100/acre Currently considering increasing its mitigation ratio to 2:1

Yolo LAFCO 1:1 In-Lieu Fee

Methodology Minimum 35% land value + 5% endowment

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EXHIBIT E

Excerpt from ASFMRA’s

“2013 Trends in Agricultural Land & Lease Values”

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VALUES: LAND and LEASE

LAND USE VALUES PER ACRE ACTIVITY / TREND RENT RANGE ACTIVITY / TREND

MERCED

Cropland - Well Water (ENID & CWD) $8,000 - $12,000 Limited/Sl. Increasing $175 - $250 Stable/Stable

Cropland - Merced ID $8,000 - $16,000 Limited/Sl. Increasing $175 - $300 Stable/Stable

Cropland - Turlock ID (Hilmar, E. Turlock, Delhi) $15,000 - $22,000 Limted/Stable $250 - $500 Moderate/Sl. Increasing

Cropland - Westside, Exchange Contractors $7,000 - $11,000 Limited/Stable $200 - $325 Stable/Stable

Cropland - Westside, Federal and Other $4,000 - $7,500 Limited/Sl. Increasing $125 - $200 Stable/Stable

Rangeland - West County $500 - $1,200 Limited/Stable $6 - $20 Stable/Stable

Rangeland - East County and Mariposa County $700 - $1,500 Limited/Stable $18 - $35 Stable/Sl. Increasing

Almonds $15,000 - $22,000 Limited/Sl. Increasing 20% to 30% Stable/Stable

Walnuts $15,000 - $25,000 Very Limited/Sl. Increasing 20% to 30% Stable/Stable

STANISLAUS Cropland - Non-Federal Water (Westside, includes Gustine) $13,000 - $15,500 Moderate/Sl. Increasing $250 - $300 Moderate/Increasing

Cropland - Well Water and Federal (Westside) $5,000 - $12,500 Very Limited/Stable $150 - $250 Moderate/Stable

Cropland - Well & OID (Eastside) $10,000 - $16,500 Moderate/Sl. Increasing $250 - $400 Moderate/Increasing

Cropland - MID and TID $16,000 - $24,000 Moderate/Sl. Increasing $250 - $500 Moderate/Sl. Increasing

Almonds - Minor Irrigation Districts and Wells $15,000 - $20,000 Limited/Stable 20% to 30% share Limited/Stable

Almonds - MID and TID $18,000 - $25,000 Moderate/Sl. Increasing 20% to 30% share Limited/Stable

Walnuts $17,000 - $26,000 Very Limited/Stable 20% to 30% share Limited/Stable

Cling Peaches $16,000 - $21,000 Very Limited/Stable 20% to 30% share Limited/Stable

Wine Grapes (District 12) $15,000 - $20,000 Very Limited/Increasing 20% to 30% share Limited/Stable

Rangeland - Westside $1,000 - $2,000 None/Stable $10 - $18 Limited/Stable

Rangeland - Eastside and Tuolumne County $1,000 - $2,000 None/Stable $15 - $35 Limited/Stable

SAN JOAQUIN

Cropland - Lodi Region $11,000 - $15,000 Very Limited/Stable $250 - $350 Limited/Stable

Cropland - South/Central $12,000 - $20,000 Limited/Sl. Increasing $200 - $300 Limited/Stable

Cropland - Westside $10,000 - $16,000 Very Limited/Sl. Increasing $200 - $300 Limited/Stable

Cropland - Eastside $12,000 - $20,000 Limited/Increasing $200 - $300 Limited/Sl. Increasing

Delta Lands $4,000 - $10,000 Very Limited/Sl. Increasing $175 - $250 Limited/Stable

Almonds - South/Central $18,000 - $30,000 Limited/Sl. Increasing 25% to 30% share Limited/Stable

Almonds - Other $14,000 - $22,000 Very Limited/Sl. Increasing 25% to 30% share Limited/Stable

Walnuts $15,000 - $25,000 Very Limited/Sl. Increasing 25% to 30% share Limited/Stable

Cherries $25,000 - $38,000 Very Limited/Stable 25% to 30% share Limited/Stable

Wine Grapes (District 11) $16,000 - $25,000 Limited/Sl. Increasing 25% to 35% share Limited/Stable

Rangeland $4,000 - $8,000 Limited/Sl. Increasing $15 - $25 Limited/Stable

DAIRIES (Merced, Stanislaus and San Joaquin Counties) Dairies (per lactating cow - without underlying land) $650 - $1,950 Increasing/Stable at low level $8 - $18 Moderate/Stable

1

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2013 TRENDS in Agricultural Land & Lease Valueswww.calasfmra.com 43

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EXHIBIT F

Correspondence & Comment Letters Received

(as of March 17, 2015)

City of Riverbank Staff Report - City Council Agenda Item No. 6.4 dated March 10, 2015

Letter from Stanislaus LAFCO to the City of Riverbank dated March 9, 2015

City of Riverbank Resolution 2015-016

City of Waterford letter dated March 9, 2015

City of Patterson Staff Report - City Council Agenda Item 7.1b dated March 17, 2015

Letter from Douglas L. White dated March 16, 2015

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RIVERBANK CITY COUNCIL AGENDA ITEM NO. 6.4

SECTION 6: NEW BUSINESS Meeting Date: March 10, 2015 Subject/ Title: A Resolution of the City Council of the City of Riverbank,

California, Opposing Proposed Amendments to the Agricultural Mitigation Policy by Stanislaus County Local Agency Formation Commission

From: Jill Anderson, City Manager Submitted by: Douglas L. White, Deputy City Attorney RECOMMENDATION It is recommended that the City Council adopt a Resolution opposing proposed amendments to the Agricultural Preservation Policy by Stanislaus County Local Agency Formation Commission (“LAFCO”) and directing staff to prepare a letter expressing opposition to the proposed amendment for the Mayor’s signature. BACKGROUND Every County in California has a Local Agency Formation Commission. The commissions were established by the State to oversee the creation of new cities and special districts, as well the expansion of existing cities, to promote orderly growth, prevent sprawl, preserve agriculture and open space, and assure efficient, sustainable public services. On March 25, 2015, Stanislaus LAFCO will consider an amendment to its Agricultural Preservation Policy. The current policy requires, as a condition to annexation, that each City establish 1:1 agricultural mitigation, or payment of an in-lieu agricultural mitigation fee. The other options are to form an urban growth boundary or remove territory from the City’s sphere of influence with each annexation. For any city wishing to grow beyond its current boundaries, however, agricultural mitigation or adoption of an urban growth boundary are the only viable means for satisfying the current LAFCO policy. The proposed amendment will require in-lieu fees for agricultural mitigation to fully fund costs associated with acquiring and managing a conservation easement, including estimated transaction costs, and the costs of administering, monitoring and enforcing the easement. If Stanislaus LAFCO determines that the in-lieu fee is less than 35% of

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the average per-acre price for five comparable land sales within the County, cities will be required to provide evidence that the in-lieu fee will in fact achieve 1:1 mitigation. ANALYSIS The proposed amendment raises troubling policy implications that will be detrimental to the City and all other Stanislaus cities, for numerous reasons. First, the proposed amendment will drive up already inflated costs for acquiring conservation easements. The proposed amendment will require the City to show, at the time of annexation for all future territory, that the in-lieu fee is comparable to comparable land sales within the County. Under the proposed amendment LAFCO will be the agency with discretion to determine what constitutes a comparable land sale. Moreover, the proposed policy will send a signal to farm owners throughout the County to maintain artificially high prices for agricultural easements. Second, for in-lieu fees that the County determines to be lower than 35% of the average per-acre price for five comparable sales, the City will be required to provide evidence, at the time of annexation, that the in-lieu fee will in fact achieve 1:1 mitigation. This will practically require annexation applicants to have conservation easements in place at the time of annexation. By requiring developers to pay significant up-front in-lieu fees prior to receiving any entitlements or permits, the proposed policy will deter the future growth of the City, and as an unintended consequence, the proposed policy may signal greater development in unincorporated areas because developers would not have to pay the fees at such an early stage. This can create unintended consequences such as urban sprawl and haphazard future annexations. Third, this policy signals the County’s increased involvement in the City’s administration of its land use authority. The City should retain exclusive control in how it utilizes mitigation fees and implements agricultural mitigation. For example, some cities may wish to bank mitigation fees in order to acquire a larger parcel, whereas the proposed policy will dictate conservation easements for smaller properties. Therefore, it is recommended that the City Council adopt the attached Resolution officially opposing Stanislaus LAFCO’s proposed amendment to its Agricultural Preservation Policy. ALTERNATIVES The City Council may choose to do any of the following:

1) Adopt the current resolution, as proposed; 2) Adopt a revised resolution, as directed by the City Council;

3) Take no action to adopt a resolution.

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ENVIRONMENTAL DETERMINATION Adoption of the Resolution, which opposes a proposed LAFCO policy, is not a project subject to environmental review under CEQA. FINANCIAL IMPACT Adoption of the Resolution will have no financial impact on the City. However, if LAFCO adopts the proposed policy it could deter future annexations to the City of Riverbank that would prevent opportunities for revenue growth needed to provide municipal services to the residents and businesses of Riverbank. ATTACHMENTS

1. Resolution 2. Stanislaus LAFCO Proposed Amendment to Policy 22 – Agricultural Preservation

Policy

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CITY OF RIVERBANK

RESOLUTION

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RIVERBANK, CALIFORNIA, OPPOSING PROPOSED AMENDMENTS TO THE

AGRICULTURAL MITIGATION POLICY BY STANISLAUS COUNTY LOCAL AGENCY FORMATION COMMISSION

WHEREAS, on September 26, 2012, Stanislaus LAFCO adopted an Agricultural Preservation Policy; and

WHEREAS, the Agricultural Preservation Policy requires cities in Stanislaus County to prepare a Plan for Agricultural Preservation as a condition to annexation; and

WHEREAS, the Agricultural Preservation Policy provides two options for growing

cities in preparing a Plan for Agricultural Preservation: (1) adopt a voter-approved urban growth boundary, or (2) establish a plan for agricultural mitigation at a ratio of at least 1:1, through the acquisition of agricultural land or conservation easements, or the payment of in-lieu fees, to permanently protect agricultural land; and

WHEREAS, Stanislaus LAFCO now proposes to amend the criteria for in-lieu

fees to require, at the time of annexation, that proposed in-lieu fees will fully fund the costs associated with acquiring and managing an agricultural conservation easement, including the estimated transaction costs and the costs of administering, monitoring and enforcing the easement; and

WHEREAS, Stanislaus LAFCO proposes to add the requirement that in-lieu fees

that are determined by LAFCO to be less than 35% of the average per-acre price for five comparable land sales in Stanislaus County, plus a 5% endowment, shall require evidence that the amount will in fact be used to acquire agricultural easements; and

WHEREAS, the City Council finds that the proposed amendment to the

Agricultural Mitigation Policy would unreasonably interfere with the City’s ability to implement and administer an agricultural mitigation plan; and

WHEREAS, the City Council finds the requirement to show evidence of in-lieu

fees and easement acquisitions at the time of annexation will deter annexations and future growth of the City; and

WHEREAS, the City Council finds that the proposed policy will inflate the

already-high costs of agricultural mitigation, deterring future growth of the City; and WHEREAS, the City Council finds that the proposed policy may incentivize

development in unincorporated areas prior to annexation, eroding the City’s control over

50

land use matters and the efficient administration of public infrastructure and services; and

WHEREAS, the City Council finds that, overall, the proposed amendment to the

Agricultural Preservation Policy will be detrimental to the City. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of

Riverbank as follows:

1. The City Council formally opposes the proposed amendments to LAFCO’s Agricultural Mitigation Policy that require the City to show evidence that conservation easements will be acquired at the time of annexation.

2. The City Council directs staff to prepare a letter expressing opposition to the

proposed amendment for the Mayor’s signature. Passed and adopted by the City Council of the City of Riverbank at a regular

meeting held on the 10th day of March 2015, by the following vote: AYES: NAYS: ABSENT: ABSTAIN: Attest: Approved: _____________________ _____________________ Annabelle Aguilar, CMC Richard D. O’Brien City Clerk Mayor

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55

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57

58

59

60

61

62

63

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EXHIBIT G

Draft Notice of Exemption

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CEQA NOTICE OF EXEMPTION

TO: Lee Lundrigan, County Clerk-Recorder FROM: Stanislaus LAFCO Stanislaus County 1010 Tenth Street, 3rd Floor 1021 “I" Street Modesto, CA 95354 Modesto, CA 95354 (209) 525-7660 TITLE: STANISLAUS LOCAL AGENCY FORMATION COMMISSION AMENDMENT TO

POLICY 22 - AGRICULTURAL PRESERVATION POLICY DESCRIPTION: The Stanislaus Local Agency Formation Commission (LAFCO) will consider an amendment to its existing Agricultural Preservation Policy (identified as Policy 22 within the Commission’s adopted Policies and Procedures document) to clarify language regarding the use of in-lieu fees as an agricultural preservation strategy. The proposed amendment describes the intended use of the in-lieu fees, a standard methodology for their calculation, and requests further information substantiating a proposed fee amount should an applicant deviate from the methodology. The proposed amendment is being made in accordance with the Cortese-Knox-Hertzberg Act (Government Code Section 56000 et. seq.), which requires LAFCOs to consider the effects that a proposal may have on agricultural lands (Government Code Sections 56425 and 56668(e)). LOCATION: Countywide

PUBLIC AGENCY APPROVING PROJECT: Stanislaus Local Agency Formation Commission

CONTACT PERSON: Sara Lytle-Pinhey, Assistant Executive Officer, (209) 525-7660.

ENVIRONMENTAL DETERMINATION: In this case, it has been determined with certainty that there is no possibility that the policy amendment may have a significant effect on the environment and therefore it is found to be exempt from CEQA pursuant to Section 15061(b)(3) of the State Guidelines. The Local Agency Formation Commission will file this Notice of Exemption upon approval of the policy amendment. REASONS FOR EXEMPTION: LAFCO approval of such policies is encouraged under Government Code 56000 et seq. The policy amendment does not involve, authorize, or permit the construction of any facilities associated with any property. The policy amendment is minor in nature and serves to clarify that should an applicant use an in-lieu fee as its agricultural preservation strategy that said fee must cover the actual costs for acquisition and management of an agricultural conservation easement and provides a standard methodology to calculate said fee. Approval of this policy amendment has no possibility of affecting the environment directly or indirectly as LAFCO is not proposing the approval of any application or engaging in any activity. The Cortese-Knox-Hertzberg Act calls for LAFCO to discourage urban sprawl, preserve open space and prime agricultural lands, promote the efficient provision of government services and encourage the orderly formation of local agencies. The Act also requires LAFCOs to establish written policies and procedures to exercise its powers consistent with its purpose. The policy amendment is consistent with the intent of the Act.

Signature: Date: Name & Title: Marjorie Blom, Executive Officer

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EXHIBIT H

Draft Resolution 2015-06

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STANISLAUS LOCAL AGENCY

FORMATION COMMISSION

RESOLUTION

DATE: March 25, 2015 NO. 2015-06

SUBJECT: Adoption of Amendment to Policy 22 - Agricultural Preservation Policy On the motion of Commissioner _______, seconded by Commissioner _______, and approved by the following: Ayes: Commissioners: Noes: Commissioners: Absent: Commissioners: Ineligible: Commissioners:

THE FOLLOWING RESOLUTION WAS ADOPTED:

WHEREAS, the Cortese-Knox-Hertzberg Local Government Reorganization Act (Government Code Section 56000 et seq.) is replete with provisions that grant to a Local Agency Formation Commission (LAFCO) the authority to consider and provide for the preservation of agricultural lands;

WHEREAS, Section 56375(g) of the Government Code authorizes Stanislaus LAFCO to adopt procedures and standards for the evaluation of proposals, including the effect of a proposal on maintaining the physical and economic integrity of agricultural lands;

WHEREAS, Stanislaus LAFCO has adopted Policies and Procedures in accordance with the Cortese-Knox-Hertzberg Local Government Reorganization Act and desires to adopt a policy to more specifically address preservation of agricultural lands;

WHEREAS, the Commission conducted a noticed public hearing on March 25, 2015 to consider an amendment to the Commission’s Policy 22 - Agricultural Preservation Policy (“Policy”);

WHEREAS, the Commission has considered the written staff report and testimony and evidence presented at the public hearing held on March 25, 2015 regarding the proposed Policy amendment;

WHEREAS, adoption of the Policy amendment is generally exempt from the California Environmental Quality Act (CEQA) pursuant to Guideline 15061(b)(3) as there is no substantial evidence that the proposed Policy will have a significant effect on the environment; and,

WHEREAS, annexation and sphere of influence amendment proposals brought forth to LAFCO are subject to their own stand-alone CEQA review, which evaluates proposals on a site-by-site and case-by-case basis.

NOW, THEREFORE, BE IT RESOLVED that this Commission:

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 2

1. Finds that the proposed Policy amendment is generally exempt from the California Environmental Quality Act (CEQA) pursuant to Guideline 15061(b)(3).

2. Directs the Executive Officer to file a Notice of Exemption with the Stanislaus County Clerk Recorders Office.

3. Finds that the proposed Policy amendment is consistent with the overall goals and policies

of LAFCO.

4. Adopts the amendment to the Agricultural Preservation Policy, to be included in the Stanislaus LAFCO Policies and Procedures Manual, effective immediately.

ATTEST: __________________________ Marjorie Blom Executive Officer

Attachment 1: Proposed Amendments to Policy 22 - Agricultural Preservation Policy

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 3

Stanislaus LAFCO

POLICY 22 - AGRICULTURAL PRESERVATION POLICY Agriculture is a vital and essential part of the Stanislaus County economy and environment. Accordingly, boundary changes for urban development should only be proposed, evaluated, and approved in a manner which, to the fullest extent feasible, is consistent with the continuing growth and vitality of agriculture within the County. LAFCO’s mission is to discourage urban sprawl, preserve open space and prime agricultural lands, promote the efficient provision of government services and encourage the orderly formation of local agencies. Additionally, Government Code Section 56668(e) requires LAFCO to consider “the effect of the proposal on maintaining the physical and economic integrity of agricultural lands.” Consistent with the legislative intent of LAFCO, the goals of this policy are as follows:

Guide development away from agricultural lands where possible and encourage efficient development of existing vacant lands and infill properties within an agency’s boundaries prior to conversion of additional agricultural lands.

Fully consider the impacts a proposal will have on existing agricultural lands.

Minimize the conversion of agricultural land to other uses.

Promote preservation of agricultural lands for continued agricultural uses while balancing the need for planned, orderly development and the efficient provision of services.

The Commission encourages local agencies to identify the loss of agricultural land as early in their processes as possible, and to work with applicants to initiate and execute plans to minimize that loss, as soon as feasible. Agencies may also adopt their own agricultural preservation policies, consistent with this Policy, in order to better meet their own local circumstances and processes. The Commission shall consider this Agricultural Preservation Policy, in addition to its existing goals and policies, as an evaluation standard for review of those proposals that could reasonably be expected to induce, facilitate, or lead to the conversion of agricultural land. A. Plan for Agricultural Preservation Requirement

Upon application for a sphere of influence expansion or annexation to a city or special district (“agency”) providing one or more urban services (i.e. potable water, sewer services) that includes agricultural lands, a Plan for Agricultural Preservation must be provided with the application to LAFCO. The purpose of a Plan for Agricultural Preservation is to assist the Commission in determining how a proposal meets the stated goals of this Policy. The Plan for Agricultural Preservation shall include: a detailed analysis of direct and indirect impacts to agricultural resources on the site and surrounding area, including a detailed description of the agricultural resources affected and information regarding Williamson Act Lands; a vacant land inventory and absorption study evaluating lands within the existing boundaries of the jurisdiction that could be developed for the same or similar uses; existing and proposed densities (persons per acre); relevant County and City General Plan policies and

Proposed amendments are shown as bold and double-underlined text.

Attachment 1:

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 4

specific plans; consistency with regional planning efforts (e.g. the San Joaquin Valley Blueprint and the Sustainable Communities Strategy); and an analysis of mitigation measures that could offset impacts to agricultural resources. The Plan for Agricultural Preservation should be consistent with documentation prepared by the Lead Agency in accordance with the California Environmental Quality Act (CEQA). The Plan for Agricultural Preservation shall specify the method or strategy proposed to minimize the loss of agricultural lands. The Commission encourages the use of one or more of the following strategies: 1. Removal of agricultural lands from the existing sphere of influence in order to offset, in whole

or in part, a proposed sphere of influence expansion or redirection. 2. An adopted policy or condition requiring agricultural mitigation at a ratio of at least 1:1. This

can be achieved by acquisition and dedication of agricultural land, development rights and/or conservation easements to permanently protect agricultural land, or payment of in-lieu fees to an established, qualified, mitigation program to fully fund the acquisition and maintenance

of such agricultural land, development rights or easements, consistent with Section B-2 of

this Policy.

a. In recognition of existing County policies applicable to agricultural land conversions in the unincorporated areas, as well as the goals of individual agencies to promote employment growth to meet the stated needs of their communities, an agency may select to utilize a minimum of 1:1 mitigation for conversions to residential uses.

b. Agricultural mitigation easements or offsets shall not be required for any annexations

of land for commercial or industrial development. 3. A voter-approved urban growth boundary designed to limit the extent to which urban

development can occur during a specified time period.

B. Commission Evaluation of a Plan for Agricultural Preservation

1. The Commission may consider approval of a proposal that contains agricultural land when it determines that there is sufficient evidence within the Plan for Agricultural Preservation that demonstrates all of the following:

a. Insufficient alternative land is available within the existing sphere of influence or

boundaries of the agency and, where possible, growth has been directed away from prime agricultural lands towards soils of lesser quality.

b. For sphere of influence proposals, that the additional territory will not exceed the

twenty year period for probable growth and development (or ten years within a proposed primary area of influence). For annexation proposals, that the development is imminent for all or a substantial portion of the proposal area.

c. The loss of agricultural lands has been minimized based on the selected agricultural

preservation strategy. For the purposes of making the determination in this section, the term “minimize” shall mean to allocate no more agricultural land to non-agricultural

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 5

uses than what is reasonably needed to accommodate the amount and types of development anticipated to occur.

d. The proposal will result in planned, orderly, and efficient use of land and services.

This can be demonstrated through mechanisms such as:

i. Use of compact urban growth patterns and the efficient use of land that result in a reduced impact to agricultural lands measured by an increase over the current average density within the agency’s boundaries (e.g. persons per acre) by the proposed average density of the proposal area.

ii. Use of adopted general plan policies, specific or master plans and project phasing

that promote planned, orderly, and efficient development.

2. For those proposals utilizing agricultural mitigation lands or in-lieu fees, the Commission may approve a proposal only if it also determines all of the following:

a. The mitigation lands must be of equal or better soil quality, have a dependable and

sustainable supply of irrigation water, and be located within Stanislaus County. b. An adopted ordinance or resolution has been submitted by the agency confirming that

mitigation has occurred, or requires the applicant to have the mitigation measure in place before the issuance of a grading permit, building permit, or final map approval for the site, whichever comes first.

c. The agricultural conservation entity is a city or a public or non-profit agency that: has

the legal and technical ability to hold and administer agricultural preservation easements and in-lieu fees for the purposes of conserving and maintaining lands in agricultural production; and has adopted written standards, policies and practices (such as the Land Trust Alliance’s “Standards and Practices”) and is operating in compliance with those standards.

d. The agricultural mitigation land is not already effectively encumbered by a

conservation easement of any nature.

e. Proposed in-lieu fees shall fully fund the costs associated with acquiring and

managing an agricultural conservation easement, including the estimated

transaction costs and the costs of administering, monitoring and enforcing

the easement. Should the proposed in-lieu fees be less than 35% of the

average per acre price for five (5) comparable land sales in Stanislaus

County, plus a 5% endowment, the applicant shall provide evidence that the

lesser amount will in fact achieve the stated agricultural mitigation goals. C. Exceptions

The following applications are considered exempt from the requirement for a Plan for Agricultural Preservation and its implementation, unless determined otherwise by the Commission:

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 6

1. Proposals consisting solely of the inclusion of lands owned by a city or special district and currently used by that agency for public uses.

2. Proposals which have been shown to have no significant impact to agricultural lands,

including, but not limited to:

a. Proposals consisting solely of lands which are substantially developed with urban uses.

b. Proposals brought forth for the purpose of providing irrigation water to agricultural

lands.

DEFINITIONS

Agricultural Conservation Easement: An easement over agricultural land for the purpose of restricting its use to agriculture. The interest granted pursuant to an agricultural conservation easement is an interest in land which is less than fee simple. Agricultural conservation easements acquired shall be established in perpetuity (or shall be permanently protected from future development via enforceable deed restriction).

Agricultural Lands: Land currently used for the purpose of producing an agricultural commodity for commercial purposes, land left fallow under crop rotational program, or land enrolled in an agricultural subsidy or set-aside program (Government Code Section 56016). As used in this section, “agricultural lands” also includes those lands defined in Government Code Section 56064 as “prime agricultural land” and those lands identified as “prime farmland”, “farmland of statewide importance”, and “unique farmland” as part of the California Department of Conservation’s Farmland Mapping and Monitoring Program. Agricultural Mitigation Land: Agricultural land encumbered by an agricultural conservation easement or other conservation mechanism acceptable to LAFCO. Primary Area of Influence: The area around a local agency within which territory is eligible for annexation and the extension of urban services within a ten year period. Prime Agricultural Land: An area of land, whether a single parcel or contiguous parcels, that has not been developed for a use other than an agricultural use and that meets any of the following qualifications:

(a) Land that qualifies, if irrigated, for rating as class I or class II in the USDA Natural Resources Conservation Service land use capability classification, whether or not the land is actually irrigated, provided that irrigation is feasible.

(b) Land that qualifies for rating 80 through 100 Storie Index Rating. (c) Land that supports livestock used for the production of food and fiber and that has an annual

carrying capacity equivalent to at least one animal unit per acre as defined by the United States Department of Agriculture in the National Range and Pasture Handbook, Revision 1, December 2003.

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LAFCO Resolution No. 2015-06 March 25, 2015 Page 7

(d) Land planted with fruit or nut-bearing trees, vines, bushes, or crops that have a nonbearing period of less than five years and that will return during the commercial bearing period on an annual basis from the production of unprocessed agricultural plant production not less than four hundred dollars ($400) per acre.

(e) Land that has returned from the production of unprocessed agricultural plant products an

annual gross value of not less than four hundred dollars ($400) per acre for three of the previous five calendar years (Government Code Section 56064).

Sphere of Influence: A plan for the probable physical boundaries and service area of a local agency, as determined by the commission (Government Code Section 56076). The area around a local agency within which territory is eligible for annexation and the extension of urban services within a twenty year period.

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