After much discussion, the Calvert County commissioners finally set pricing for a program designed to control growth and protect farmland from development on Tuesday.
The Purchase and Retirement Fund price was set to $3,037 per transferable development right, much lower than the agricultural community-recommended price and the average first and second quarter sales for 2019, $3,130, $3,250 respectively.
The PAR fund is a resource used for purchasing, retiring and permanently removing transferable development rights from the development market. This year, Calvert County has $4.5 million available for PAR fund purchases.
For the FY 2020 PAR cycle, the Calvert County Agricultural Preservation Advisory Board recommended that the commissioners set a purchase price of $5,500 per TDR.
None of the commissioners motioned for the APAB recommended price, amid concerns the recommended price does not accurately reflect the TDR market, and that recent past history of TDRs have been priced at $3,750.
“I don’t agree with the people that would benefit from this program setting the price,” Commissioner Mike Hart (R) said. “I believe the market should set the price.”
Hart said he does not think he should be involved in setting the price and said the highest past market rate was $3,264. He also questioned whether the objective of the program is to slow down growth or eliminate growth.
Past market rates for TDRs were $3,264 in 2014; $3063 in 2015; $3,100 in 2016; $2,755 in 2017; and $2,981 in 2018.
Commissioners’ Vice President Kelly McConkey (R) asked why should the county pay more than someone else for the TDRs.
“If the builders and them can negotiate a better price, I would like to see us negotiate a better price for taxpayers also,” McConkey said, suggesting the county fall in line with the market rates from the past five years.
Concerned that Calvert’s program, funded by taxpayers’ dollars, allows for the building of accessory items such as garages, apartments and commercial businesses, Hart pointed to the state of Maryland’s preservation program and said it was focused on eliminating growth.
“That’s why they spend the money,” Hart said. “This system is broke. It doesn’t work. This thing in place is not fair to the people that own TDRs that went into this, to the taxpayers asked to pay for it.”
Hart, who also noted he would be fine evaluating the program further, said if he had to act on it, he would support “what the market bears” with restrictions put on the property.
From 2015 to 2017, the PAR price was $3,750. There was a total of 800 TDRs retired for that three-year period. The county’s goal for this cycle alone is to retire 800 TDRs, exhausting the entire $4,452,654 allocated for the program.
Commissioner Steve Weems (R) desired to have more engagement on why certain price points were not acceptable, suggested streamlining the TDR process, and to conduct a review of an audit of the PAR program.
“My 20%, I’d like to find out why they are not participating,” Weems said.
At the program’s inception in the early ‘90s, the initial price per TDR was $2,350. Staff calculated an adjusted PAR price of $4,228.20 if they added in the U.S. inflation rate by year through July of 2019.
County rural planner Ron Marney also calculated consumer prices based on the last three par cycles.
Weems motioned $3,750 and then $3,500, but gained no support from fellow board members.
Hart introduced $3,037, the average of the market rate, and to adopt restrictions used in Maryland’s land preservation program which was not permitted. McConkey voted in favor of Hart’s motion. Weems also voted in favor of the lowest price, citing that he just wanted something to be done.
“We are trying to serve two masters. We have developers on one side, and we’re trying to get them to be able to build houses, and obviously they need to make money off those houses in order to stay in business,” Commissioners’ President Thomas “Tim” Hutchins (R) said. “On the other side, we’re trying to take a program that exists and has for time, even though I have my reservations about personally, … and use it in order to take density off the table. That density equates to houses, cars, impact on infrastructure, [and] impact on schools.”
Hutchins pushed for balance and for a TDR price that was attractive enough for sellers to sell to the county, just before entering a no vote on Hart’s motion.
Commissioner Earl “Buddy” Hance (R) abstained from the vote due to conflict of interest because he owns TDRs. The motion passed 3 to 1 to 1, which set the TDR price for the FY20 cycle at $3,037.
“The number one reason farmers do not sell TDRS is price,” APAB Chairman Steve Oberg said in an interview with The Calvert Recorder.
Oberg said the price of TDRs for PAR has been constant at $3,750, since 2015.
“That price has generated very little interest from the farming community. Coming in with a PAR price that is less than what hasn’t worked in the last five years makes no sense,” Oberg said, noting that it is backwards.
Oberg said the $4.5 million available for PAR fund purchases is the most money ever available in a PAR cycle, but he anticipates there will be little to no participation.
“The PAR price where ever it is set is usually higher than the market price,” Oberg explained.
The APAB chair said a happy medium and what would have been appropriate was a TDR price in the mid-$4,000s. Oberg said a higher price should have been offered in an effort to retire upward of 800 TDRs.
“Let’s not forget that retiring a TDR by way of the PAR fund means you are permanently removing density … houses, from our county,” Oberg said.
Oberg said that it is not an “us versus them argument” and explained “the development community does not want to see TDRS retired. It is not in their best interest. It is their best interest to keep the TDRs out in the community for them to acquire at some point in time.”
Last week the county commissioners deferred a decision to set pricing and directed staff to get answers on numerous questions.
Oberg attended that meeting and said it was embarrassing how uninformed some of the commissioners were, but applauded Hutchins for getting up to speed on the issue.
“At the end of the day it all comes down to priorities,” Oberg said. “It is clear that the majority of this board does not place a priority on agricultural preservation despite some of the goals of the comprehensive plan, despite election campaign promises — it’s just not a reality.”