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County of Santa Cruz BOARD OF SUPERVISORS

701 OCEAN STREET, SUITE 500, SANTA CRUZ, CA 95060-4069 (831) 454-2200 FAX: (831) 454-3262 TDD: (831) 454-2123

JOHN LEOPOLD FIRST DISTRICT

ELLEN PlRlE SECOND DISTRICT

NEAL COONERTY TONY CAMPOS MARK W. STONE THIRD DISTRICT FOURTH DISTRICT FIFTH DISTRICT

AGENDA: 1/13/09

January 5, 2009

BOARD OF SUPERVISORS County of Santa Cruz 701 Ocean Street Santa Cruz, CA 9 5 0 6 0

RE: FUNDING FREEZE ON CONSERVATION PROJECTS

Dear Members of the Board:

Attached is a letter and supporting material from the Land Trust of Santa Cruz County regarding the impact of the recent State funding freeze on the protection of 8 0 0 acres of farmland and wetlands, as well as the financial stability of the Land Trust itself. protecting almost 10,000 acres of agricultural and open space

The Land Trust has already succeeded in permanently

lands in the county.

Recently, the Land Trust, working cooperatively with land owners, has negotiated agreements to permanently protect 800 acres of farmland and wetlands in the Pajaro Valley. While several millions of dollars in private and foundation funding have been raised for these projects, a variety of State agencies have also agreed to contribute significant funding. Because the State funding has now been frozen, the projects themselves are in serious jeopardy . The loss of these projects if the State funding doesn't come through would be tragic, as would the damage done to the Land Trust itself. We think it is extremely important for the Board to take whatever actions it can to urge the release of the State funds for these projects.

Therefore, we recommend that the Board of Supervisors direct the Chairperson to write our State representatives, the Governor, and the members of the Pooled Money Investment Board urging them to

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BOARD OF SUPERVISORS January 5, 2009 Page 2

release the already approved funding for the conservation projects described in the attached letter.

Sincerely,

NEAL COONERTY, S ervisor ONY POS , Supervisor Third District

NC/TC : pmp Attachment

cc: Terry Corwin, Executive Director, Land Trust of Santa Cruz County

John Gilchrist, President, Land Trust of Santa Cruz County Board of Trustees

Governor Schwarzenegger Senator Maldonado Senator simitian Assembly Member Caballero Assembly Member Monning Michael C. Genest, Director, Pooled Money Investment Board

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LAND TRUST OF SANTA CRUZ COUNTY

Board of Trustees Katherine Beiers Val Cole Harriet Deck C'itlileen Eckhardt John Gilchrist Bernie Goldner Tion Hirsch Larrv Perlin Jim Rider Cindy Iiubin Melody Sharp Sue Sheuernian L 1 m d W i 11 i arm

Advisors Stcphany Aguilar J o h n Barnes K,iren Christensen A n g i e Christ rn a n n Diane Cooley Sa 111 Ea r iisli a w George Gallucci Fred Keeley Ken Kiines HON. John Laird B i d McCrary C n r 1 os Pa 1 a cxos Aria Veiitura Phares Daniel Press Miles Reiter Sctlly-Christine Rodgers Audrev Rust Mark Silherstein Robert Stepl-iens Jeffrey Werner

Supervisor Neal Coonerty 701 Ocean Street, Room 500 Santa Cruz, CA 95060

December 30,2008

Dear Supervisor Coonerty,

I am writing you today to request your help with urgent action to resolve the state funding freeze that is impacting several multi-million dollar conservation projects in various stages of the funding process.

Like all land trusts, we work with willing landowners to arrive at conservation outcomes for their lands. We have broad based support for our work from our community, earning letters of support from elected officials of both political parties, environmentalists, the farm bureau and city management officials. Founded in 1978, the Land Trust has helped to protect almost 10,000 acres of farm lands, working timberlands and habitats with high conservation value, favorably impacting water quality and water supply. We have raised several millions of dollars in private and foundation funding to match agency grants from the California Department of Conservation (DOC), the federal Natural Resource Conservation Service (NRCS), the California State Coastal Conservancy (CSCC) and the Wildlife Conservation Board (WCB).

The state funding freeze effective December 17 has put the protection of 800 acres of farm and wetlands and the financial stability of our organization in jeopardy. Following are major projects caught in suspense:

1. Cooley Farmlands: $1.7M in DOC (plus NRCS) funding for already approved grants for the protection of 3 16 acres of prime Pajaro Valley farmland and $10 1 K in associated reimbursable indirect costs are caught in the freeze, putting the future of the project and the potential for reimbursement of already expended funds in question.

2. Cheung Wetlands and Farmlands: $ l . lM funding from the CSCC and $.5M from the WCB was approved in November by their respective boards to fund this critical slough and farmland project. We brought $1.5M in private funding to this deal that was due to close January 8,2009. Now that the state funding has been frozen,

E.~ccu tive Director Terry Corwin

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our option to purchase will expire, with the potential for the landowner to change course.

3. Tai and Bryant Wetlands and Farmlands: These two projects combined with the Cheung would add 484 acres of protected wetlands and agricultural directly to the west of the growing city of Watsonville. Funding for these projects has also been approved by the CSCC and WCB. With the uncertainty of the state’s ability to deliver on its commitments, all these Watsonville Slough projects are in jeopardy of becoming unraveled.

4. Borina Farmlands: The status of $137K of reimbursable indirect transaction costs under contract with the DOC is in suspense, representing over 1 0% of our organization’s operating budget.

Much energy and many financial resources have been invested by private landowners, the Land Trust, community members and partners and state agency professionals to create these agreements. The successful completion of the above projects will create a legacy of conservation for future generations. While some irreversible damage may have already been caused to these significant proj ects (and our financial resources), by the funding freeze, action now will help minimize the impact. Please bring what pressure you can to bear on resolving this wasteful impasse as quickly as possible.

Sincerely,

w. Terry Corwin Executive Director

John Gilchrist President, Board of Trustees

Enclosures: Budget Freeze Notice Slough campaign brochure San Jose Mercury News article

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L 1 SUBJECT: INTERIM LOANS FOR GENERAL OBLIGATION AND LEASE REVENUE BOND PROJECTS

UDGET ETTER

I REFERENCES:

08-33 NUMBER:

DATE December 18,2009

SUPERSEDES:

TO: Secretary of State Department Directors State Controller State Treasurer Superintendent of Public Instruction Administrative Office of the Courts Agency Secret a ries Office of the President, University of California Chancellor's Office, California State University Board of Governors, California Community Colleges

All GO Bond Financing Committees California Institute for Regenerative Medicine Departmental Budget Officers Departmental Accounting Officers Department of Finance Budget Staff

FROM: DEPARTMENT OF FINANCE

Budget Officers are requested to forward this Budget Letter (BL) to their Department Facilities, Construction, and Contract Managers.

The Pooled Money Investment Board (PMIB) voted yesterday to freeze all disbursements from AB 55 loans (Pooled Money Investment Account (PMIA) loans) with the exception of accrued interest and necessary administrative costs. The PMlB took this action to preserve necessary cash resources to pay the day-to-day operational needs of the state for the balance of the fiscal year pending further PMlB action in January. If loan disbursements continue at the current pace, the state's portion of the PMIA is projected to run out of liquid cash before the end of the current fiscal year (cash held in the Local Agency Investment Fund will remain). No future loans or higher amount of loan renewals will be approved until the budget crisis is resolved in a manner sufficient to allow the state to resume issuing bonds.

AGENCY LIABILITY

Please be advised that any expenditure not in compliance with this BL could result in your department's or agency's operating budget being obligated to pay that expenditure.

PROJECT SUSPENSION AND FREEZES

Effective immediately, all state entities that have expenditure control and oversight of General Obligation and lease revenue bond programs shall:

1. Cease authorizing any new grants or obligations for bond projects, including new phases for existing projects.

2. Suspend all projects, excluding those for which Department of Finance (DOF) authorizes an exemption based on criteria described unless the contracting entity can continue with non-state funding sources (private, local, or federal funds).

STATE OF CALIFORNIA 9

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3. Freeze all disbursements on AB 55 loans that were not authorized nor submitted to the Controller for payment prior to December 17, 2008.

4. Instruct all grant or loan recipients not to enter into any new construction, other agreements or contracts that would be funded from AB 55 loans.

State entities are not permitted to substitute cash in special funds for previously approved AB 55 loans. Utilizing cash in other state special funds that are in the PMIA would not comply with the PMIB’s actions taken yesterday.

EXEMPTIONS

Immediately report to your DOF Program Budget Manager any project, which if suspended, will subject the state to unacceptable legal liability, fines or penalties. Such projects will be reviewed on a case-by- case basis to determine if continued funding is appropriate or feasible.

In the next few days, additional project information and status will be required so that the PMIB may determine what additional expenditures will be authorized to comply with its direction that all future AB 55 disbursements not exceed $500 million through June 2009.

Additional information and direction will be forthcoming.

/s/ Michael C. Genest

MICHAEL C. GENEST Director

etcu 0215

Wetlands on the Tai property in Watsonville provide habitat for a snowy egret and other waterfowl. The property on the west side of Highway 1 will be purchased by the Land Trust of Santa Cruz County and preserved.

TRUST BUYS FERTILE 1 I SANTA CRUZ COUNTY

PROPERTIES By Paul Rogers

The largest privately owned wetlands area in Santa Cruz County - a sprawling inix of ilisdies, wiiivw trees and bulrushes thick with mallard ducks, egrets and other wild- life - will be protected under a unique agreement announced Monday that pairs farmers and environmentalists.

Under the deal, the Land Trust of Smta Cruz County will pay $14.5 million to ac- quire 486 acres west of High- way 1 in Watsonville.

Much of the land is owned by Vincent Tai, 'a developer with offices in San Francisco and Hawaii. It was at the cen- ter of a bitter controversy that began In 1995 aft_!,T,ai pro-

II/IL7.mry News

Under terms of the deal, farming on some of the most fertile land in California will be allowed to continue. Much of the produce grown on the land is organic. 9 '

posed a golf there, farmers will pay to help re- environmental groups and store and expand the proper- an eventual voter-approved ty‘s wetlands. Corwin said un- measure that limited new de- like in many other such deals, velopment on Pajaro Valley’s the land trust will not resell or rich farmland. give the property to a govern-

“These lands have a big ment agency, but rather will impact on water quality and continue to own it, and will col- water supply. They are im- lect the rent that the farmers portant for migratory water- have been paying to Tai. fowl. Now they’ll have perma- After expenses, that nent protection,” said Terry money, about $100,000 a Corwin, executive director of year, will go to help expand the nonprofit Land Trust of the wetlands areas and to re- Santa Cruz County. duce soil erosion. The land re-

The uplands portion of mains on the tax rolls, farming the property is currently be- can continue, and the wildlife ing farmed by four farmers restoration efforts receive a who have leased the ground regular stream of money at a to grow strawberries, cauli- time when state and federal flower, lettuce and broccoli.

In an unusual twist, the See WETLANDS, Page4

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Continuedfiom, Page I -

that we’re really excited about,” Corwin said. .

County-Farm Bureau, sal! he

will continue and the Sloughs will be restored. It’s really a win-win situation. You need farming for the economic Terry Corwin, executive director of the Land Trust of part of the valley, and it is im- Santa Cruz County, left, and state wildlife biologist portant to keep the sloughs as Jeannine DeWald at the property on Monday. pristine as possible.”

The Pajaro River flows most of those wetlands, leav- come back to wetlands.” The from southern Santa Clara ing only perhaps 30 percent property, which is actually County and SanBenito County today, by some estimates. four parcels, contains several through Watsonville to the The property sits west endangered species, includ- ocean, bypassing some of the of Highway 1 iieay Harkins ing the California red-legged richest farmland in California. Slough Road, just south of frog. Other sensitive species,

The river’s name, which Pajaro Valley High School. such as the burrowing owl, means “bird” in Spanish, Already, the state, federal brown pelican, peregrine fal- dates back to 1769, when a government and county own con and steelhead trout, are Spanish ,expedition led by about 449 acres of wetlands expected to benefit froin the Capt. Gaspar de Portola wan- adjacent to the site of Mon- project, DeWalcl said. dered through the area from day’s purchase. With the new Funding came from a va- San Diego, en route to discov- deal, the total preserved area riety of‘ sources. The Califor- ering San Francisco Bay, and will reach about 935 acres, an nia Coastal Conservancy last stumbled upon a deserted area nearly the size of Golden week awarded the project $6.5 Indian village where a bird Gate Park in San Francisco. million from Proposition 84, a with a six-foot wingspan was The p!an is to grdually ex- state water boiid apprwtd by prominently displayed. No- pand the size of the wetlands voters in 2006. The Natur’e body knows exactly why the areas that flood in the winter, Conservancy has commit- stuffed bird, which may have while leaving the farming, ted $1.5 million, and the state been a condor, was there. But much of which is organic, on Wildlife Conservation Board the region bears the name thehillsides. is expected to grant $5.5 mil- “Pajaro Valley” to this day. [‘‘There’s excellent poten- lion next week, also from state

At that time, the valley tial for restoration in the ar- bond funding. The land trust is contained six major fresh- eas that are inundated,” said working to raise an additional water slough systems that Jeannine DeWald, a biologist $500,000 in private donations, teemed with elk, grizzly bears with the state Department Convin said. and thick flocks of ducks and of Fish and Game. “The seed geese. As the town of Watson- bank is there. We might have Coiztact Paul Rogeis at ville grew up, development to plant some willows and progers@mell-cu13/rzews.conz or and farminggradually filled in other plants, but it wants to (408) 920-5045.

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