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Page 2 farmland preservation report ;) 1 C September 2000 Michigan counties at work to qualify for farmland grants continued from page 1 procedure, a scoring system for selecting proper- ties, and a method for establishing Basement offers that can include appraisals, a bidding system, or a points -based appraisal, or formula, used now by many localities in Maryland for determining easement values. Localties must also have adopted or updated a comprehensive plan within the last 10 years before applying for a grant. Local funding will also be part of the grant equation. While no per- centage of local matching funds is required in the law, the state board will consider amount of local contribution in its selection criteria. Another significant change is the authorization of installment purchases of easements. Localities will need to show interest to the state in using installment purchase agreements (IPAs) to pay farmers, so that limited money can by stretched. Installment purchase agreements allow farm- ers to receive semi - annual payments of tax -free interest, and payment of principal in 20 to 30 years, enabling them to defer capital gains tax. Local government benefits by stretching limited dollars to purchase more easements more quickly. According to Daniel P. O'Connell of Evergreen Capital Advisors Inc., Michigan's $5 million in current funds could purchase $25 million worth of 30 -year U.S. Treasury obligations, increasing the amount of easement purchasing power immedi- ately by 400 percent. The state program, he said, could help locali- ties by setting up a standardized IPA option, something O'Connell has put together for the Pennsylvania Bureau of Farmland Protection to establish a plug -in finance arrangement all coun- ties can use (see accompanying story). "Pennsylvania is showing the way for a state PDR program to leverage funds. By encouraging its counties to use grants to buy zeros, Michigan could quadruple the number of acres put under easement in its next round," O'Connell said. Counties gearing up Several Michigan counties are gearing up to be first to apply for grants. Ken Mitchell, a farmer in Lenawee County in southern Michigan, said he is urging his county to update of its long -range plan. The county's plan- ning commission, he said, "has just been reaction- ary" in the past. "Hopefully we'll get them to go further." Most counties in Michigan are organized as a "general law" county, with a board of commis- sioners as the chief decision - making body. Most counties also have a planning commission, but effectiveness varies widely throughout the state. In Clinton County, lifelong farmer and retired engineer Russ Bauerly is optimistic about his county's chances "to be first to take advantage of the state program." Bauerly served on the Board of Commission- ers for time and continues to be active in civic affairs. Last year an 18- member committee was appointed to study farmland loss and it recom- mended a PDR program, a parks and recreation plan, an economic development initiative focusing on value -added opportunities, and an advocacy initiative, "to do a little lobbying" for farmland preservation in the state legislature. A subcommittee is working on getting a PDR program established, he said, and an effort is underway to get funding in the 2001 budget to hire someone to draft a greenspace plan. The PDR subcommittee "will put policies together and then go forward with a public information program." Bauerly is even optimistic about taking a millage proposal to voters in two years to fund PDR. "I'd like to see this thing through. I'd like to see Clinton County get in a position to do some- thing." In Lapeer County, near Flint, county adminis- trator John Biscoe said an effort is afoot to estab- lish a local program, but "it's not just farmland preservation in the traditional sense — we're in the early stages of trying to pull together a compre- please continue to next page