Fayette County

Lexington makes changes to $80 million farmland preservation program

PDR Farm at 6284 Russell Cave Rd. in Lexington, Ky., Monday, August 15, 2016.
PDR Farm at 6284 Russell Cave Rd. in Lexington, Ky., Monday, August 15, 2016. cbertram@herald-leader.com

Three years after a federal audit questioned spending in the city’s $80 million farmland preservation program, a Lexington council committee voted Tuesday to make changes to the program aimed at stepping up oversight and minimizing conflicts of interests.

Some of the changes include requiring board members who oversee the program to wait one year after leaving the board before applying to get money from the program and eliminating the use of second appraisals, which land owners have sometimes used to negotiate more costly conservation easements.

It also would add two members to the Rural Land Management Board, which oversees the program, who are appointed by the Lexington-Fayette Urban County Council. A member of the council would also serve as a non-voting member.

Other tweaks include making it clear landowners must have a minimum of 20 acres to apply to the program.

Lexington’s Planning and Public Safety Committee voted unanimously to approve the changes during its Tuesday meeting. The committee has debated the issue for more than a year.

The changes still must be approved by the full council, which hasn’t yet scheduled a vote.

Some of the changes stem from an October city audit, which recommended the one-year wait period for outgoing board members and prohibiting landowners from using the results of their own land appraisals to negotiate better deals.

Since its creation in 2000, the Purchase of Development Rights program has spent nearly $80 million in federal, state and local money to buy the development rights to protect approximately 30,000 acres of Fayette County farmland. The city spends an average of $2 million a year on the program. The federal government, through the National Resource Conservation Service, picks up roughly half the tab to purchase the development rights.

Questions about oversight of the program first surfaced more than three years ago, when a 2015 federal audit by the National Resource Conservation Service found Fayette County had overcharged the federal government $350,000 in two land transactions. The federal government later decided not to charge Fayette County because it had made a good faith effort to correct the problem.

The federal government has not allowed land owners to use second appraisals when negotiating an easement deal for several years, but those appraisals were used in the land deals questioned by the federal government.

In addition, a September 2017 Herald-Leader article found that six current or former members of the Rural Land Management Board had received $6.4 million from the program. None of the board members were serving on the board at the time they received money from the program, but several have rotated on and off the board for years. They received payment for their conservation easements between stints on the board.

Members of some other local boards, including those who serve on the city’s affordable housing fund, must wait six years before applying for city money.

Beth Overman, director of the PDR program, said it takes landowners at least two to three years after applying to receive a conservation easement. “The time it takes to close will add several years,” Overman said.

Overman was not the director of the program at the time of the federal audit.

Another recommended change from the October audit includes striking language that would allow a farm owner to receive payments over time. There is a legal question about whether the council can obligate future councils to set aside money to buy development rights. Overman said the rural land management board may make some tweaks to the language to make it clear payment over time is only allowed if funding is available — for example, if the city ultimately has a dedicated funding source.

That issue came up two years ago. The owner of the more than 1,000-acre Castleton Lyons horse farm wanted the city to pay it up to $5 million in city money for its development rights over several years. The council ultimately opted not to purchase the farm’s development rights.

Beth Musgrave has covered government and politics for the Herald-Leader for more than a decade. A graduate of Northwestern University, she has worked as a reporter in Kentucky, Indiana, Mississippi, Illinois and Washington D.C.