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Home My WebLink About039 12 Ct l-tt ~ lJ.\r \~j STATE OF WASHINGTON County of Jefferson Dedication of Conservation Futures Funds to the } Boulton Farm Project as Authorized by } and in Accordance with Jefferson County Code } Section 3.08.030(7) to Provide a System of Public } Open Spaces } RESOLUTION NO. 39-[2 WHEREAS, conservation futures tax levy collections, authorized under RCW 84.34.230 are an important means of retaining community character and accomplishing the open space policies and objectives of the Jefferson County Comprehensive Plan that encourage the coordinated acquisition of key open space lands for long-term protection; and WHEREAS, Jefferson County is authorized by RCW 84.34.210 and 84.34.220 to acquire open space land, agricultural and timber lands as defined in RCW 84.34.220; and WHEREAS, the Conservation Futures Citizen Oversight Committee has reviewed project applications for 2012 and made its funding recommendations to the Board of County Commissioners in accordance with Jefferson County Code Chapter 3.08; and WHEREAS, under the provisions of the Jefferson County Conservation Futures Program, the Jefferson Land Trust, as project sponsor, requests funding towards the protection of 146 acres offarm land in Sec. 14, T. 28N, R. 2W with Assessor's Parcel Numbers 802141002, 802141006, 802141005,802144003,802144009,802231003,802242001, and 802133003 through the acquisition of a conservation easement; and WHEREAS, the County retains enough developable land to accommodate the Boulton Farm Project as well as the housing and employment growth that it is expected to receive, thus satisfying the requirements of Chapter 449, Laws of 2005; and WHEREAS, Jefferson County considers it in the best public interest to contribute financially to this open space project. NOW, THEREFORE BE IT RESOLVED, that: 1. Jefferson County hereby dedicates up to $69,000 in conservation futures funds for acquisition expenses contingent on a matching contribution of no less than the amount of conservation futures funds requested. Resolution No. 39- [2 re: Dedication of Conservation Futures Funds to the Boulton Farm Project 2. This dedication of funding may be nullified if a submittal for reimbursement, accompanied by documentation of matching funds sufficient to complete the acquisition, is not received from the sponsor within three years ofthe signing of this resolution. APp'ROVEDA1Y.I? ~DOPTED this 25 day of ~Il\~ ,2012 in Port Townsend, Washmgton.., ,_ ., ~ _ i'J " " t.",., -., """". SEAL:' "", -.. 'j 'c' t".{, ~. '. ' ";<\\ '.( :,.. 11 ~. -r \\ :) ~ i ~': $I "l . JI;;.,~'"' I' of> . \ (~~ I' f ' . I >, - :,,/1 , " ATTESr;: ).: ~.,.', ~,: """',..."~~ ,-4"...-\ , ~~~,~~ Clerk of the Board e." "'.' "\~ . c.... JEFFERSON COUNTY PUBLIC HEALTH 615 Sheridan Street 0 Port Townsend 0 Washington 0 98368 www,jeffersoncountypublichealth,org JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Phillip Morley, County Administrator FROM: Tami Pokorny, Environmental Health Specialist II DATE: June 25, 2012 SUBlECT: Conservation Futures Citizen Oversight Committee Presentation of Funding Recommendations for 2012 STATEMENT OF ISSUE: On June 25, 2012 John Wood, Chair of the Conservation Futures Citizen Oversight Committee (CF Committee), will provide the committee's funding recommendations to the BOCC. Environmental Health staff and the projects' sponsor will also be on hand to help answer any questions. A public hearing will immediately follow. ANAL YSIS/STRATEGIC GOALS: Three applications for funding were received in 2012 and a total of $355,900 requested to support open space projects in Jefferson County. The three applications are: 1. Boulton Farm, $69,000 towards the purchase of conservation easement on eight parcels totaling 146 acres of agricultural land at Highway 101 and Boulton Road. The proposed match is a landowner donation of conservation easement value appraised at $850,000. Jefferson Land Trust is the project sponsor. Project location: Sec. 14, T. 28N, R. 2W. 2. L. Brown Trust II, $24,900 towards the fee simple acquisition of 15.5 acres spanning Snow Creek near the intersection of Highway 101 and W. Uncas Road and $2,000 towards operation and maintenance costs. Proposed match would be a $126,100 grant from the Salmon Recovery Funding Board. Jefferson Land Trust is the project sponsor. Project location: NW1f4 Sec. 36, T. 29N, R. 2W. COMMUNITY HEALTH DEVELOPMENTAL DISABILITIES MAIN, (360) 385.9400 FAX: (360) 385.9401 PUBLIC HEALTH ALWAYS WORKING FOR A SAFER AND HEALTHIER COMMUNITY ENVIRONMENTAL HEALTH WATER QUALITY MAIN: (360) 385.9444 FAX: (360) 379.4487 .. --.. 3. Tarboo Forest Conservation, $260,000 towards the purchase of a conservation easement on four parcels totaling 236 acres of forest land between Center and Dabob roads. Proposed match would be $494,035 in landowner donations of conservation easement value and acquisition related costs. Jefferson Land Trust is the project sponsor. Project location: Sec. 28, 29, and 31 T. 28N, R. 1W. This briefing packet contains: . June 14, 2012 memo from CF Committee Chair John Wood . CF Committee's April 11 meeting minutes and May 7 draft meeting minutes . Conservation Futures 2012 Program Manual . Conservation Futures 2012 Rating Sheet FISCAL IMPACT: The explicit purpose of the Conservation Futures Program is to fund acquisition projects to support a system of publiC open spaces. There is no impact to the General Fund for this effort. The balance for Conservation Futures Fund #308 at the end of May was $637,540.98. Funds available to 2012 projects equal $288,000 (at the start of the application cycle this amount was estimated to be $260,000). Of the total funds available to award this year, up to $34,619 may be used for 0 & M activities (15% of 2011 revenue). The three recommended awards total $262,900 which is within the amount of conservation futures funds available to new projects in 2012. An Emergency Budget Appropriation/Extension and Amendment was submitted June 1, 2012 that includes the recommendations, subject to BoCC approval. The following projects, totaling $436,000, would likely close during the remainder of 2012: Tamanowas Rock and Nicholson Short Plat (BoCC approved in 2010): $200,000 Boulton Farm (subject to approval in 2012): $69,000 Tarboo Forest Conservation (subject to approval in 2012): $167,000 The L. Brown Trust project, if approved, will not close until 2013. RECOMMENDATION: JCPH Management recommends that the BOCC hear the presentation by Chair John Wood. REVIEWED BY: 6~h Date COMMUNITY HEALTH DEVELOPMENTAL DISABILITIES MAIN: (360) 385-9400 FAX: (360) 385.9401 PUBLIC HEALTH ALWAYS WORKING FOR A SAFER ANO HEALTHIER COMMUNITY ENVIRONMENTAL HEALTH WATER QUALITY MAIN: (3601385.9444 FAX: (360) 379A4S7 JEFFERSON COUNTY PUBLIC HEALTH 615 Sheridan Street 0 Port Townsend 0 Washington 0 98368 www.jeffersoncountypublichealth,org To: Jefferson County Board of Commissioners From: John Wood, Chair Conservation Futures Citizen Oversight Committee Date: June 14, 2012 Subject: Conservation Futures 2012 Funding Round Recommendations This spring, the Conservation Futures Citizen Oversight Committee (CF Committee) received three applications for conservation futures funding ahead of the March 5 deadline. The purpose of this memo is to present the group's funding recommendations for your consideration. The committee's process for vetting and ranking the projects was consistent with past funding cycles. We reviewed the application materials in detail, heard presentations from the project spDnsor or applicant, and visited the sites, or viewed a video ofthe site visits. The projects are as follows: [. BDulton Farm, $69,000 tDwards the purchase Df conservation easement on eight parcels totaling 146 acres of agricultural land at Highway 10 [ and BDultDn RDad. The proposed match is a landDwner donation Df conservation easement value appraised at $850,000. Jefferson Land Trust is the project sponsor. Project location: Sec. [4, T. 28N, R. 2W. 2. L. Brown Trust II, $24,900 towards the fee simple acquisition of [5.5 acres spanning Snow Creek near the intersection of Highway [or and W. Uncas Road and $2,000 towards operation and maintenance costs. Proposed match would be a $126,100 grant from the Salmon Recovery Funding Board. Jefferson Land Trust is the project sponsor. Project 10catiDn: NWV. Sec. 36, T. 29N, R. 2W. 3. Tarboo Forest Conservation, $260,000 towards the purchase of a conservation easement on four parcels totaling 236 acres of forest land between Center and Dabob roads. Proposed match would be $494,035 in landowner dDnations of conservation easement value and acquisition related costs. Jefferson Land Trust is the project sponsor. Project location: Sec. 28, 29, and 31 T. 28N, R. [W. At a public meeting at the Tri Area Community Center on May 7, the CF Committee met to rank projects and develDp a funding recommendation. Each question from the ratings sheet was read and discussed in turn. Members adjusted their own scores as desired. A final score for each of the three projects was developed frDm the grand total of scores for all of the questiDns divided by the number of scorers. Project Score Boulton Farm Brown Trust II TarbDo Forest ConservatiDn 270 234 232 COMMUNITY HEALTH DEVELOPMENTAL DISABILITIES MAIN: (3601385.9400 FAX: (360) 385.9401 PUBLIC HEALTH alWAYS WORKING FOR A SAFER AND HEALTHIER COMMUNITY ENVIRONMENTAL HEALTH WATER QUALITY MAIN: (360) 385.9444 FAX: (360) 379.4487 The CF Committee voted unanimously that all three projects submitted this year deserved funding. We recommend full funding for the Boulton Farm and the L. Brown Trust II projects. We voted unanimously to ask that the remainder of2012 funds be cDmmitted to the Tarboo Forest Conservation project. The committee also voted not to commit any funds from the next funding cycle at this time. We would welcome the opportunity to review a new applicatiDn for funding in 2013 from the sponsor and applicant for this project, the Jefferson Land Trust and Northwest Watershed Institute respectively. This year, the applications represented three distinct project types - agriculture (Boulton Farm), wildlife habitat (L. Brown Trust II), and forestry (Tarboo FDrest Conservation). Each project has strong merits and would contribute to the "preservation of lands that have significant regional or community benefit" (JCC 3.08.040). The BDulton Farm would maintain the availability of prime sDils for farming by reducing the develDpment pDtential of six agriculturally zoned parcels. The L. Brown Trust II project provides funding for the Jefferson Land Trust to acquire a key parcel spanning critical summer chum habitat in Snow Creek. The Tarboo Forest CDnservation project would ensure that up to four parcels (236 acres) of timberlands in the Tarboo Creek watershed are managed in perpetuity for forestry and wildlife habitat. At the June 25 hearing, project sponsors, committee members and staff would be happy to answer any questiDns you may have. I look forward to seeing you then. COMMUNITY HEALTH DEVELOPMENTAL DISABILITIES MAIN: (360) 385-9400 FAX: (360) 385-9401 PUBLIC HEALTH ALWAYS WOIIIIH& FO~ A SAFER AND HWIHIER COMMUNITY ENVIRONMENTAL HEALTH WATER QUALITY MAIN: (360) 385-9444 FAX: (360) 379'4487 /:ff/~(..L_.~~;\ 2012 Jefferson Cou nty Conservation Futures Program ::C' j"'i Property Acquisition and/or \Z~!!~.~$S:t/ Operations and Maintenance Project Application Please complete thefollowing application in its entirety. Be sure to answer "N/A "for questions that don't apply to the project. Incomplete applications will not be acceptedfor consideration. Unless directed otherwise, use as much space as needed to answer each question. Contact program staff at 385-4498 or tpokornv(iiJ,co.fefJerson. wa. us with questions. 1. Project Title: Boulton Farm 2a. Conservation Futures Acquisition Request: $69,000 b. Consenration Futures O&M Request: NA 3. Total Conservation Futures Request: $69,000 4. Please indicate the type of interest contemplated in the acquisition process. _ Warranty Deed X Easement _ Other (Please describe below.) In whose name will the property title be held after acquisition? John Boulton with a conservation easement held by Jefferson Land Trust. 5. Applicant Information Name of Applicant or Organization: John Boulton Contact: Same Title: Landowner \\.'; ~I\. U Address: 3590 E Quilcene Rd., Quilcene, Wa. 98376 Phone: (360) 765-3394 Fax: none Email: none 6. Sponsor Information: ((ld~tlerent than applicant) Organization Name: Jefferson Land Trust Contact: Sarah Spaeth Title: Executive Director Address: 1033 Lawrence Street Phone: (360) 379-9501, ext. 101 Fax: (360) 379-9897 Email: sspaeth@saveland.org This application was approved by the sponsor's legally responsible body (e.g., board, council, etc.) on February 21,2012. 7. Site Location 1 , Street Address or Description of Location: 381, 780, 940 Boulton Rd. Quilcene, WA. Driving Directions from Port Townsend: Head south on Highway 19. Take the Highway 20 turn toward Discovery Bay. At the junction of Highway 20and State Route 101 turn left. Follow Highway 101 until just south of Crocker lake. Turn right onto Boulton Road. The Boulton Farm property begins shortly north of the first farm house on the left and continues south beyond where Boulton Road rejoins Highway 101. Section: 14 Township: 28 Range: 2W Assessor's Parcel Number(s): 802141002, 802141006, 802141005, 802144003, 802144009, 802231003,802242001,802133003 8. EXISTING CONDITIONS New Site: Yes X No Addition to Existing Site: Yes No X Number of Parcels: 8 Acres to Be Acquired: 146 Total Project Acreage (if different): 204 Current Zoning: Agriculture 1 :20, Forest 1:40 Existing Structures/Facilities: Three residences, Barn, shop and agricultural outbuildings Any current covenants, easements or restrictions on land use: Boulton Farm is currently zoned agricultural and agricultural production and rural forestland. Current Use: A!;:lriculture, Forestry and Residential Waterfront (name (?fbody of water): Shoreline (linearfeet): Andrews Creek - 2000 ft Owner Tidelands/Shorelands: 9. Current Property Owner X is _is not a willing seller. 10. In one-half page or less, provide a summary description of the project, the match, overarching goal, and three top objectives. Project Description: Mr. Boulton and Jefferson land Trust (Jl T) are requesting CFF grant funds for the acquisition of a conservation easement on a portion of the 204-acre Boulton Farm, located in Jefferson County on Scenic Highway 101 south of Discovery Bay, a farm since the early 1900's. The Boulton Farm is one of the larger parcels remaining in single ownership in Jefferson County, and this size allows for more diverse agricultural uses now and in the future. 146 acres of prime agricultural land on the Boulton Farm, shown on the attached map, will be retained in single ownership and protected for prime agricultural soils, riparian habitat of Andrews Creek some associated forestland on the agriculturally- zoned acreage, farm infrastructure and housing. The remaining acreage, zoned commercial forestland, may be sold separately. 100% percent of the agricultural acres on the Boulton Farm property have been identified by the USDA as Prime Farmland or Farmland of Statewide Significance, based on the soils. The sub-surface irrigation and soils types found on the farm are suitable for multiple agricultural 2 uses, including pasture and hay crops, fruit, grain, vegetable production, and animal husbandry. The Boulton Farm has a long history as pasture for cattle grazing and for hay crops. It is currently being leased by Dharma Ridge Farms for dry-land grain and vegetable production and some animal husbandry. When other areas of Jefferson County are dry and needing irrigation, the Boulton Farm is still green. The site is also ideal for vegetable seed production, due to its isolation from other operations. The farm has a historic barn that is currently used for hay and equipment storage, a shop, corrals, and silos. Two historic farm houses and a newly re-built home are also located in the area proposed for the conservation easement. The proposed conservation easement would designate three residential envelopes around the existing homes and farm area, and allow for agricultural related uses and structures outside of the building envelopes, while preventing further residential, industrial or non- agricultural commercial uses in the easement area. Proposed Match: Mr. Boulton is interested in selling. the conservation easement at a bargain sale rate (below the appraised value) and the difference between the appraised value and sale price is the match for the CFF grant request. Over-arching Goal: Permanent protection of the agriculturai values of the historic Boulton Farm through a conservation easement is the over-arching goal and desire of Mr. Boulton. The conservation easement will provide him peace of mind that he is leaving a legacy for future generations of farmers. . Three Objectives: 'Secure grant funding for the easement . Finalize easement language and boundary through survey 'Permanently protect the Boulton Farm to help landowner reach goals of farm legacy and access to farmland for next generation. 11. Estimate costs below, including the estimated or appraised value of the propert(ies) or property right(s) to be acquired, even if Conservation Futures funds will only cover a portion of the total project cost. In the case of projects involving multiple acquisitions, please break out appraisals and estimated acquisition costs by parcel. a. Estimated or Appraised Value of Propert(ies) to be Acquired: $890,000 b. Total Estimated Acquisition-related Cost (see Conservation Futures Manualfor eligible costs): $29,000 c. Total Operation and Maintenance Cost: to be determined d. Total Project Cost: $919,000 Basis for Estimates (include information about how the property value(s) was determined, anticipated acquisition-related costs, general description of operation and maintenance work to be performed, task list with itemized budget, and anticipated schedule for completion of work): An appraisal was completed by John and Greg Halberg of Halberg Appraisal Services at the end of February. Anticipated acquisition related costs include; appraisal, survey, baseline documentation, title insurance and closing costs, excise tax and recording fees, legal costs, project management and administration. 0& M funds for this project may be requested at a later date. We hope that the excess match provided with this application can be banked to match future 0& M requests. 3 Acquisition related costs Ti meli ne Est. Cost . Conservation easement Summer 2012 $40,000 Appraisal March 2012 $4,000 Survey May 2012 $7,000 Baseline July 2012 $3,000 Title insurance and closing costs, excise tax, etc July 2012 $8,000 Project Management, Admin and legal fees 2007 - September 2012 :p7,OOO 12a. Sponsor or other organizations 2'; will _will not contribute to acquisition of proposed site and/or operation and maintenance activities. b. If applicable, please describe below how contributions from groups or agencies will reduce the need to use Conservation Futures program funds. landowner is contributing matching resources through a bargain sale of the conservation easement. c. Matching Fund Estimate Acquisition O&M % Conservation Futures Funds Requested $69,000 8% Matching FundslResources* $850.000 92% Total Project Acquisition Cost $919.000 100% * If a prior acquisition is being proposed as match. please describe and provide documentation of value, location, date of acquisition and other information that would directly link the match to the property being considered for acquisition. d. Source of matching Amount of funds/resources contribution Landowner Donation $850.000 Contribution approved? Yes 2'; No If not, when? Contribution available now? Yes 2'; No If not, when? $ $ $ Yes No Yes No Yes No Yes No Yes No Yes No NOTE: Matchingfunds are strongly recommended and a higher rating will be assigned to those projects that guarantee additional resourcesfor acquisition. Donation of property or a property right will be considered as a matching resource. Donation of resources for on-going maintenance or stewardship ("in-kind" contributions) are not eligible as a match. 13a.Sponsoring agency 2'; is _is not prepared to provide long-term stewardship (maintenance, up-keep, etc.) for the proposed project site. 4 b. Describe any existing programs or future plans for stewardship of the property, including the nature and extent of the commitment of resources to carry out the stew~rdship plan. JL T will conduct stewardship, monitoring and maintenance including at least annual monitoring of the property by professional staff and trained volunteers, extensive data collection and management, help with stewardship, enhancement and restoration goals and legal defense of the conservation easements should it become necessary. JL T has a legal defense fund of nearly $350,000, and continues to build this fund with each new easement acquisition, recognizing the legal oblig'ation and responsibility of protecting conservation values in perpetuity. 14. Describe the sponsoring agency's previous or on-going stewardship experience. JL T, an accredited land trust will hold the conservation easement on the Boulton Farm and has been holding and stewarding conservation easements since 1989. JL T currently holds and monitors 48 conservation easements in Jefferson County, in addition to conducting monitoring and stewardship activities on the nearly 200 acres it owns. The Hoh River Trust and Washington State Parks contract with JL T to monitor and steward over 7000 acres of land under their control. In addition JL T stewards land owned by Jefferson County, the City of Port Townsend and Washington Department of Natural Resources. JL T stewardship and monitoring protocols were developed with the guidance of the Land Trust Alliance (the national umbrella organization for land trusts) and adherence to those protocols is one of the requirements for our national accreditation. 15. Has the sponsor and/or applicant of this project been involved in other projects previously approved for Conservation Futures funding? a._No, neither the sponsor nor applicant has been involved in a project previously approved for Conservation Futures funds. B .x Yes, the sponsor and/or applicant for this project has been involved in a project previously approved for Conservation Futures funds. Please provide details: JL T has sponsored numerous applications that have received Conservation Futures funds. These projects include: Sunfield Farm, 2003; Quimper Wildlife Corridor, 2004; East Tarboo Creek Conservation Project, 2005; Tamanowas Rock Phase 1, 2006; the Winona Buffer Project, 2006; Glendale Farm, 2007; Finnriver Farm, 2008; Quimper Wildlife Corridor, 2009; Brown Dairy, 2009; Salmon Creek Ruck 2010, Quimper Wildlife Corridor 2010; Tamanowas Rock 2010; Chimacum Creek Carleson 2011; Winona Basin - Bloedel 2011. 16a. Property ~ can _cannot feasibly be acquired in a timely fashion with available resources. b. Necessary commitments and agreements ~ are _are not in place. c. All parties ~ are _are not in agreement on the cost of acquisition. If "not" to any of the above, please explain below. 17. The proposed acquisition ~ is specifically identified in an adopted open space, conservation, or resource preservation program or plan, or community conservation effort. Please describe below, including the site '5 importance to the plan. Please reference the website of the plan if available or include the plan with this application. 5 _complements an adopted open space or conservation plan, but is not specifically identified. Please describe below, and describe how the proposed acquisition is consistent with the plan. _is a stand-alone project. The Boulton Farm is indicated on the Parks, Recreation Areas, Conservation Easements and Areas for Future Cooperative Conservation Efforts map from the Jefferson County Comprehensive Plan. http://www.co.jefferson.wa.us/idms/pdfs/parks99.pdf. It has also been identified as having local and regional agricultural and habitat significance in the Jefferson Land Trust Conservation Plan. The plan is located on the JL T website www.saveland.org. The Puget Sound Action Agenda states that protection of intact ecosystem processes, structures and functions, including the protection and conservation of freshwater resources to increase and sustain water availability for in stream flow and human uses as important. It also supports specifically long term protection and stewardship of working farms, particularly in East Jefferson County in the Hood Canal Action Area (A3). http://www.psp.wa.gov/downloads/AA2011/120911/AA-draft-120911-a8. pdf http://www.psp.wa.gov/downloads/AA2011/120911/AA-draft-120911-a 1-a4,pdf 18. List the important milestones for this project. Securing conservation easement funding Completion of a draft conservation easement document Completion of a survey designating the easement area and building envelopes. Baseline documentation Easement purchase Permanent stewardship, landowner relations and record keeping 19. Conservation Opportunity or Threat: a. The proposed acquisition site X does _does not provide a conservation or preservation opportunity which would otherwise be lost or threatened. b. If applicable, please carefully describe the nature and immediacy of the opportunity or threat, and any unique qualities about the site. Mr. Boulton approached JL T over 6 years ago expressing his interest in protecting the Boulton Farm with a conservation easement. Mr. Boulton is over 80 and is very keen on seeing the Boulton Farm remain as one of the larger operating farms in Jefferson County. JL T has been seeking federal and state grant funding for the value of the conservation easement though was not successful due to reductions in grant program funding. In the latest phase (A the project Mr. Boulton has expressed his interest in selling the easement at a bargain rate to ensure the easement is in place in his lifetime, and to help make the farm affordable for the next generations of farmers. Conservation easement funding will reduce future development potential and allow the farm to remain as one parcel. With existing parcels and agricultural zoning it is estimated that the farm has as many as 6 additional development rights beyond the three that have been exercised. Funding would also help cover the costs of the conservation easement preparation, survey work and other acquisition costs that Mr. Boulton can't afford, plus provide some additional cash for the easement value. 6 The Boulton Farm property is the current top priority for protection on the part of local agencies and organizations. The prime soils, size, access to the farmland, sub irrigation and warmer summer micro-climate, presence of infrastructure AND the long-history of agricultural significance, scenic qualities, and Andrews Creek habitat values contribute to its importance in the local agricultural economy_ Letters of support for this project were submitted from WSU, Craft 3, JCCD, the Farmers Market and The Food CoOp. 20. Describe the physical characteristics of the site that is proposed for acquisition with Conservation Futures Program funds including: vegetation, topography, surrounding land use, and relationship to parks, trails, and open space. The Boulton property is located at the high divide between the Andrews Creek, Crocker Lake, Snow Creek watershed draining to the north towards Discovery Bay, and the Lake Leland watershed which drains towards Quilcene Bay. Most of the area proposed for the conservation easement is level pastureland that runs north and south to the west of Highway 101, There is some forestland included in the easement area on the west side of the project on the edge of the foothills that contains fir, cedar and other native conifers. Further to the west the Boultor Farm-is surrounded by commercial timberland. Andrews Creek enters the middle of the property from the foothills to the west and bisects the pastureland before heading north along Highway 101. The riparian buffer contains mature willow, cottonwood and other deciduous trees and shrubs. In 1995 the family sold the 5 acres containing the downstream portion of Andrews Creek (approximately 2000 ft.) to Washington State Department of Transportation for habitat enhancement and flood control, a habitat restoration project created meanders with large woody debris. The creek was relocated from the Highway 101 ditch to its current location set back from the highway. Washington Department of Transportation, Wild Olympic Salmon and the Quilcene/Snow Restoration Team partnered on the project. 21. The proposed acquisition: 2S: provides habitat for State of Washington Priority Habitat and/or State or Federal Threatened, Endangered or Sensitive species. 2S: provides habitat for a variety of native flora or fauna species. X contributes to an existing or future wildlife corridor or migration route. {f affirmative in any of the above. please describe below, and cite or provide documentation of species' use. f Over 2000 ft. of Andrews Creek runs through the Boulton Farm and the headwaters of Leland Creek are located on the south end of the farm. Andrews Creek and Leland Creek are identified .in the Salmon and Steelhead Habitat Limiting Factors, Water Resource Inventory Area 17, by the WA State Conservation Commission and in the Watershed Management Plan for Quilcene-Snow Watershed (WRIA 17) by WRIA 17 Planning Unit as important spawning and rearing habitat for coho salmon, steel head and cutthroat trout and historically fall chum salmon species. Trumpeter swans forage on the property during the annual winter migration, Other species seen on the farm I See, for example, hup:llwww,dnr. wa.govlresearchscience/topics/naturalheriJage/pages/amp nh.aspx hup:! Iwww,wdfw.wa.gov/conservation/phs/list/ http://wwvvl.dnr.wa.gov/nhp/refdesk/plants.htm I http://www I.dnr.wa.gov!nhp!refdesk/pubs/wa ecological svstems.pdf 7 include many other bird species, coyotes, bear, beaver, deer and cougar. The Boulton Farm property importance will increase further as fauna and flora move in response to climate change. 22a. Describe the extent and nature of current and planned agricultural use of the proposed acquisition, including any anticipated changes to that use once the property, or property right, is acquired with Conservation Futures funds. Currently a portion of the farm is leased to Dharma Ridge Farm for row crops and the remaining pastureland is hayed for cattle. Dharma Ridge farmers are relocating their primary residence to the Boulton Farm, plan to expand their vegetable production and may eventually bring animals onto the farm as well. Mr. Boulton is in negotiation with Dharma Ridge farmers for possible purchase of the farm. They are interested in the farm for the reasons described in question 10 and because it provides a larger land base for a diversified agricultural operation compared to their current property. Mr. Boulton is hopeful that protecting the land with the easement will help insure that it will continue as a farm into the future, and he is encouraged by the interest of the Dharma Ridge Farmers. b. Describe any participation by the current property owner in any other agricultural land conservation programs, including the program and nature of the involvement. Aside from the sale of five acres to WSDOT for protection of Andrews Creek habitat near Highway 101, the Boulton family planted approximately 10 -25 ft. of riparian habitat in the 1940's on either side of Andrews Creek as it bisects the current Boulton Farm property. This buffer provides shade and temperature control. There are no other conservation programs involved on the property. Describe the use planned for the site, any development plans after a.:quisition, characteristics of the site which demonstrate that it is well-suited to the proposed use, and plans for any structures currently on the site. The goal is to continue this as productive working farmland, as it has been for decades. The prime soils, micro climate, location, and hydrology are all characteristics that make it eminently suitable for agricultural production. The existing residences, and possibly a few additional ones, could be used by farmers and farm workers, or to provide supplemental income without compromising the land available for agriculture. The proposed conservation easement would prohibit subdivision, 24a. Proposed acquisition site and any subsequent planned passive development (as described above) _is X is not part of a larger project. b. If applicable, describe how the site relates to the larger project, and whether the project has a plan, schedule and funding dedicated to its completion. The Boulton Farm project is part of a larger long-term effort spearheaded by local agencies and organizations to protect important agricultural lands and help landowners operate successful and viable businesses that will contribute to the local economy and food system. Jefferson LandWorks Collaborative (JLWC) is a model of land conservation and rural economic df'welopment, with the threefold goal: (1) to ensure that there is affordable prime agricultural land in large enough tracts that the farmer can be profitable, (2) to ensure that the farmers have access to the business training, capital and know-how to be profitable, and (3) to ensure that there are both the consumer demand and robust markets to accommodate the farmer's needs. JLWC partners include Jefferson Land Trust, Craft 3, Washington State University, Jefferson County Conservation District, Port 8 Townsend Food CoOp, Port Townsend Farmers Market, and Northwest Natural Resources Group. JLWC partners have participated in the Boulton Farm project by linking the landowner with the next generation of farmers that are interested in maintaining and expanding agricultural production on the land. Funding for preservation of working farms in east Jefferson County comes from landowner donations or bargain sales such as this; County, State, and Federal grants, local investors, local philanthropists, and private foundations. 25. Describe how the proposed acquisition benefits primarily a _local area X broad county area including the area served, the nature of the benefit, the jurisdictions involved, and the populations served. The Boulton Farm is well known locally and provides scenic vistas of pastoral agricultural lands to local residents as well as people who travel from the greater Puget Sound area to enjoy the rural experience and the designated scenic byway Highway 101. Benefits assoc:3ted with protecting prime agricultural lands include water quality and aquifer recharge protection to the Hood Canal and Discovery Bay watersheds, protection of wildlife habitat for multiple species and protection of prime soils for food production for the region. The conservation benefits to salmon stocks from healthy riparian vegetation for shading and woody debris extend beyond the local area, since the coho salmon and steel head that depend on this habitat travel to the Puget Sound and beyond. The vision of the Jefferson LandWorks Collaborative is to brand Jefferson County as a region that is known for its thriving agriculture and forest production, and supports healthy local food production. Dharma Ridge Farmers are already marketing their produce in the Seattle area and anticipate their production and distribution to increase, 26. Describe the educational or interpretive opportunities that exist for providing public access, educational or interpretive displays (signage, kiosks, etc.) on the proposed site, including any plans to provide those improvements and any plans for public accessibility. The Boulton Farm has the potential to be included on the Jefferson County annual Farm Tour. If the easement is secured, the farm will also likely be one of many properties included in property tours coordinated by Jefferson Land Trust. Its location on a major Olympic Peninsula tourist route provides opportunities for both retail sales at a farm stand, and demonstration of sustainable farming practices to both tourists and residents. 27. The proposed acquisition _ includes historic or culturally significant resources2 and _ is registered with the National Register of Historic Places, or an equivalent program. _ is recognized locally has having historic or cultural resources. _ is adjacent to and provides a buffer for a historic or cultural site. lfaffirmative in any of the above, please describe below, and cite or provide documentation of the historical or cultural resources. NA 2 Cultural resources means archeological and historic sites and artifacts, and traditional religious ceremonial and social uses and activities of affected Indian Tribes and mandatoI)' protections of resources under chapters 27.44 and 27.53 RCW. 9 28a. Describe the extent and nature of current and planned silvicultural use of the proposed acquisition.' Please cite or provide documentation of existing or planned sihicultural activities includingforest management plan (!J). The Boulton Family has a long history of forest management on the Boulton Farm property and as commercial loggers. Almost all of the harvestable timber on the property was harvested in the last twenty years, Pre-commercial thinning will be needed in next several years, though commercial thinning is not anticipated for another twenty years. b. Describe any participation by current property owner in silviculture conservation programs, including the program and nature of the involvement. None 29. Sponsors of applications that are approved for funding by the Board of County Commissioners are required to submit a brief progress report by October 30 every year for three years after the award is approved, or three years after the acquisition funds are disbursed to the applicant, whichever is later. The progress report must address any changes in the project focus or purpose, progress in obtaining matching funding, and stewardship and maintenance. Sponsors receiving O&M funds will also submit an annual report for each year that O&M funds are expended. The Committee will use the information to develop a project "report card" that will be submitted annually to the Board of County Commissioners. If this application is approved for funding, I understand the sponsor is required to submit progress reports for three years and for any year in which O&M funds are expended. ~ Initials 3/'2-/1'l.- Date 30. If, three years after the date funding is approved by the Board of County Commissioners, the applicants have not obtained the required matching funds, the Committee may request the Board of County Commissioners to nullify their approval of funds, and may require the project to re-apply. If this application is approved for funding, I understand that we may be required to re-submit the application if the project sponsor does not obtain the necessary matching funding within three years. ~ S Initials 3/2-/\ 2- Date . 31. Are there any critical dates, c.g, grant deadlines, for your project that the Committee should know about? Please list the dates and explain their importance. Mr. Boulton and JL T are prepared to finalize the conservation easement once funding has been secured. 10 1O)iIE C IE I V IE Irt\ IIru FEB 1 ~ 2012 Ill)) Landowner Information Name of Landowner: John Boulton Landowner Contact Information: same Mr. Ms. Title: First Name: John Last Name: Boulton Contact Mailing Address: 3590 E Quilcene Road, Quilcene. WA 98376 Contact E-Mail Address: none Phone: 360- 765-3394 Property Address or Location: Boulton Farm$780 Boulton Road, Quilcene, 98376 1. (Landowner or Organization) is the legal owner of property described above. 2. I am aware that the project is being proposed on my property. 3. If the grant is successfully awarded, I will be contacted and asked to engage in negotiati ons. 4. My signature does not represent authorization of project iniplementation. - -1l-~df~ ~owner Signa e ~h Project Sponsor Information Project Name: Boulton Farms Project Applicant Contact Information: Jefferson land Trust Mr. Ms. Title Executive Director First Name: Sarah Last Name: Spaeth Mailing Address: 1033 Lawrence Street, Port Townsend, WA 98368 Phone: 360-379.9501 E-Mail Address: sspaeth@saveland.org From: Sent: To: Subject: FW Boulton ,txt Sarah Spaeth <sspaeth@saveland.org> Thursday, March 01,20124:52 PM Nancy Newman FW: Boulton From: John Halberg [mailto:halberg@olypen.com] Sent: Thursday, March 01,2012 9:24AM To: Sarah Spaeth Cc: Greg Halberg Subject: Boulton Good morning Sarah Here is the key information, copied from our appraisal report. Please let us know if you have any questions or comments. John Summary of Salient Facts and Conclusions. .. The subject property consists of 202.51 acres of land in eight separate parcels within Sections 8, 23, and 24, Township 28 North, Range 2 West, W.M" Jefferson County, Washington. .. Before the easement is in place, the "larger parcel" determination is that there are eight . contiguous parcels that could be sold separately. .. Before the conservation easement, the highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future is for three to five recreational or residential parcels. .. The improvements consist of three residences, a large barn, and several smaller agricultural related buildings. .. The contributory value of the improvements is the same before and after the conservation easement. .. The market value of the 202.51 acres of land being appraised before the con..;ervation easement is $1,850,000. .. The after value is based on the extraordinary assumption that a boundary line adjustment, as proposed in the conservation easement, will be approved by Jefferson County. .. The proposed conservation easement has the effect of combining the seven agriculturally zoned parcels, including the improvements, into one 146 acre parcel. .. The 58.51 acre timberland zoned parcel will be able to support a residential homesite, and be sold separately. .. The contributory value of the timber, if any, is the same before and after the easement. .. The market value of the 202.51 acres of land being appraised after the conservation easement is $960,000. .. The effective date of this appraisal is March 1, 2012. .. The income approach is not applicable to this appraisal report. .. The cost approach is not applicable to this appraisal report. .. The value of the easement is $890,000. 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(~'(\\IJ\t~.. ~\\) i1ung@ll -;l-t,~ ,"1. ~. .~Ll.:..:.O fir ': ',/1 u~:t,:~"I:l,... rl' ..'.~" ,j..~ ,.z...6,;" )-~--.:~ff;,- I1J_1 ~'~'i:- . ~;ti 't1_ It''' " ;,...,~ C BOOl'.onF::crn ~~m;! c:: ~ eJ: ~ ~ -.C!rI"'1I1 strat, '~ i;O)Ully~fJ.; ':'1ry ...~ ~~I'tES ~~ :;;('. ,I ~ (} ocaplnleOCirf a'":'.:l'~n I. :1r15~' t8tl, !"! c:.. ~~t-e 01 S ~fl;ll"o;t$, ~ '""lt1(1J;'RD,;,. ~ H' dr,.,~. Sl1h',' .A~;pf)'r Q ~.'el 0f'S!' l!'l N .r~rl Land> '. 11 i~,I. " . .....} ."..,. 1('''f1$: 1:W'l;',~'S P~Jre '.;:ll"J.I'J1F!'I! :~:(:'20 x' ..... . . 'llFo.-e,!( ;?!J ",' .1fL~ A 'Jl~' ~, gI'Il"~" ~....: 5C;'I(IfY~l1-. lQJI)~ .q'lcutur:::1 (".unt &.-...111j.') ~~~d.ll. "_f{('. :'- 1~,>Ji~~. ~"l)~!1 r-'?'lhtr ~ '.c"lhlflE' it ~t"'lPlli '0,.", 4.-~~J':I.~ Fo:r'-" ......, h&f 6" U~ '.'ihll}l P..:t:l~ r I I ~,;.. " l ~ l) II II " 'r .. ~'" ~ '~IP"'\} """'- '.0,' i,., '(II I ~~~ I..lllm"t 1" ':= "l\ ..~~ \ ir. \ ' .... . -, f f~/~';: Agiclltural ConservEtion Easement Bourdaries ~ Awroximate Building EnvelClJe 1 , ~ AwrOlQmate Building EnvelClJ8 2 ~ Awroximate Building Envelqle 3 Streams ,I D BOJIt01 Farm Bourdaries Roads Boulton Farm Agricultural Conservation Easement" 2011 Aerial Image (NAIP) For informational purposes only. All data represented are from varying sources and approximate. Map created in February, 2012 -.... .4 Boulton Farm Property CONSERVATION FUTURES FUNDS ILLUSTRATIONS - 2012 'I' ~-l !'.' ~." ,"' ~.. ., ..X ;0. -~':' i: x, ~. Aerial View of Boulton Farm , 1 ,. ~.t a" . ~~) ~ '. . ~ .,. , ., ~;..~ If. . (1-11 ..' I . ,II! ji..1 ~~.. ": ' ". ~...i',. :Af-,~," ~ J, '" :~I, ~ /~ .~". .~ >;~(,/.:,~.; .". !";:~~{:~lf~1~ti:-~;..:, ~ Riparian Corridor looking east " . , Looking across Boulton Road to NE toward designated Scenic Byway 101 INTERNAL REVENUE SERVICE DISTRICT DIRECTOR 2 CUPANIA CIRCLE'- MONTEREY PARK, CA 91755-7406 DEPARTMENT OF THE TREASURY Date: MAY 03 1994 Employer Identification Number: 9~-1465078 Case Number: 954109002 Contact Person: TYRONE THOMAS Contact Telephone Number: (213) 894-2289 Our Letter Dated: May 08, 1990 Addendum Applies: No JEFFERSON LAND TRUST c/o DOUG MASON PRES PO BOX 1610 PORT TOWNSEND, WA 98368-0109 Dear Applicant: This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section 501 (a) of the Internal Revenue Code as an organization described in section 501 (c) (3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section.509(a) of the Code because you are an organization of the type described in section S09(a) (1) and 170(b) (1) (A) (vi). Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section S09(a) (1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a) (1) organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent records. If you have any questions, please contact the person whose name and telephone'nUmber are shown above. Sincerely yours, ~;,p~ Richard R. Orosco District Director Letter 1050 (DO/CG) Jefferson Land Trust P.O. Box 1610 Port Townsend, Washington 98368 Internal Revenue Service . Service Center ATTN:Entity 1 Odgen, UT 84201 RE: Name change BIN 91-1465078 Dear Sir or Madam: By resolution of the Board of Directors on November 13, 1991, the Jefferson County Land Trust changed its name to Jefferson Land Trust. This is a name change only. Please change our name in your records regarding our EIN and our 501(c)(3) status. Thank you. Jefferson Land Trust by: J ulianneMcCulloch Secretary . Internal Revenue Service District Director POBOX 2350 ROOM 5127 ATTN~ E.O. LOS ANGELES, CA 900532350 Department of the Treasury Date: MAya, 1990 Emp I oyer Ident if i cat j on Numben 91-' i465078 Case Number: 950114110 Contact: Person~ J OSEPH CUNH/~ Contact Telephone Nuqber: (213) 894.-4UO JEFFERSDN.CDUNTV LAMD TRUST 1322 WASHINGTON PO BOX 1610 PORT,TOWNSENT, WA 98368 Accounting Pariod Ending: December 31 foundation Status Classification: see attached Advance Rul ing Period Begins: April 7, 1990 . Advance Rul ing Period Ends: Dec. 31, 1993. Addendum Appl ies: none Dear Applicant: Based on information suppl ied, and assuming your operations Hi II be as stated in your appl ication for recognition of exc~ption, wc have determined you are exellpt: froll Federal income tal< under section 50] (a) of the Intemal Revenue Code as an organization described in section SOICc) (3). Because you are a neHI'l created organization, we are not nOH l'Iaking a final determination of your foundation status under soction509(a) of tho Codo. However, He have determined that you can reasonably bc expected to be a public- ly supported organization described in sections 509Ca)(]) and 1/0Cb) (]) (A)(vj). Accordingly, you I..i II be treated as a publ icly supported organization, and not as a private foundation, during an advance rul ing period. This advance ruling period begins and ends on the dates shoHn above. J.iljthin 90 clays after the endaf your advance twl ing period'J you must subm it to us i nforlJa t i on needed to determ ins whether ~fOU have ll1et the requ ire" l1ents of the applicable support test during the advance rul ing period. If YOll establish that you hava been a publ icly supported organiz3tion~ you wi II be classified as a section 509(a)<1) or 509Cu) (2) organi%ation as long as you con- tinue to meet the requirements of the appl icable sUPPclrt test. If you do not !leet the pub' ic support: requil'ements during tho advance rul jng period, you wi II be classified as a priyate foundation for future periods. Also, if you are classified asa private foundation, you wi I I be treated as a private foundation from the date of your inception for purposes of sections 507Cd) and 4940. Grantors and contributors may rely on the determination ~lat you are not.a private foundation unti I 90 days after the end of your ad~'ance nil iog period. If you sublllit the r-equired information Nithin the: 90 days. grantors and contri- butors lIay c~ntjnue to rely on the advance deterlli~ation unti I the Service !.etter lO.,!;)CCG) -2- JEFFERSONCOUNTV LAND TRUST lIakes a final deterllination of your foundation status. If notice that you wil I no longer be treated as a publ icly supported or- ganization is published fn the Internal Revenue Bulletin, grantors and con- tributors hay not rely on this determination after tho dato of such publica- tion. In addition, if you lose your status as a publ icly supported organiza- tion and a grantor or contributor Nas responsible fDr~ or Has aNare of~ the act or failure to act, that resulted in your loss of such status, that pen.on may not rely on this determination froll the date of the act or failure to act. Also, if a grantor or contributor learned that the Sorvice had giyen notice that you Nould be rehoved froll classification as a publ icly supported organiza- tion, then that person may not rely on this determination ~s of the date such knoHledge:Has8cquired. [f your sources of support, or your purposes~ charactor> or method of operation change, please let us knOH so HO can con5idor the effect of the change on your exempt status and foundation status. Cn the case of an alllend"' tlent to your ol-gan i 7.at i ona I document 0 r by I aHS, pi cnse sen<l us a copy of the a~ended,documerlt or bylaws. Also~ you should inform us of all changes in your .name or address. As of January J, 1984, you al-o I iabls For taxel~ unde.' the FedeniJ Insur" ance Contributions Act (social security taxes) 011 remuneration of $100 or ~ore you pay to each or your employees during a calendar year. Vou are not liable for the taK imposed under the Federa I Unemp I oyment Ta>: Act (FUTM. Organizations that are not private foundations are not subject to ~le pri- vate foundation excise ta~es under Chapter 42 of the Code. HoweverJ you are not automat i ca J I y exempt frOIl other F e'dera I axe i sa to. xes. If you ha ve any questions about excise, e~ployment, or other FederaJ laxes~ please let us know. Donors may deduct contributions to ,you as provided ill section 1'10 of the Code. Bequests, legacies, devises, transfers, or gifls to you or for your use are deductible for Federal estate and gift tax.purposos if tlley ~eet the appl i- cable.provisions of sections 2055, 2106, and 2527. of the Code. Contribut~on deductions are al IOHable to donors only lo the extont that their contributions are gifts~ Hitll no consideration received. Ticket pur- chases and simi lar payments in conjunction with fundrnising events ~ay not neceSSar i I y qua I j fy as deduct i b I e contr i but ions, depend j ng on the c i reum.' stances. See Revenue Ruling 67-246, publ ished in Cuml.lative Bulletin 1967-2. on page 104, which sets forth guidel ines regarding the deductibi lity, as chari- table contributions, of payments made by taxpayers fOI' addission to or olher partic~pation tn fundraisin~ activities for charity. You are required to fi Ie Form 990, Return of Organization EKeMpt Fro~ Income Ta~~ only if your gross receipts each year are nor~al Iy more than $25,000.. Bowever, if you raCe j ve ~. F onn 990 pack age in the ma j I, P J ease f i Ie the return even jf you do not e~ceod the gr05s receipts test. If you are not I. ettar 1 O~ ~j( CG) -3- JEFFERSON~CaUNTY LAMa TRUST required to flle, simply attach the label pro~ided, Cl18ckthe b)x in the head.' ing to indicate that your annual gross receipts are normally $25,000 or less, .and sign the return. If a return is required, it ~ust be fi l&d by the 15th day of the fifth nonth after the end of your annual accounting period. A penalty of $10 a day is charged Hhen a return is filed late, unless there is reasonable cause for the delay. Ho~ever, the maxiAU~ penalty charged cannot exceed $5,000 or 5 per- cent of your gross receipts for the year, Hhichever is less. Ttlis penalty may also be charged if a return is not co~plete, so ploaso be sure your return is complete before you fi Ie It. Vou are not required to fj Ie Federal income tax returns ullless you are subject to the' tax on unrelated business income under scction 511 of the Code. If you are subject to this tax, you must fi Ie an inco~e tax r~turn on Form 990-T, Exempt Organization Business Income Tal< Return. In this latle,- HO are not determining whether any of your present or proposed activities are unre- lated trade or business as defined in section 513 of lhe Code. You need an employer identification number oven if YOll havo no employees. If an emp10yer identification number Has not entered on your ap~lic3tjont a number Hi I I be assigned to you and you Hi II be advised of it. Plaase use thal nUlllber on all returns you fi Ie and in al I correspondence with the Internal Revenue Sa ,.v j ce ~ ' If He have indicated ~n the heading of this letter that an addendum applies, the addendull\ enclosed is an integral part of this letter. Because this letter could help resolve any questions about your exelllpt status and foundation status, you should keep it in your pormanent records. If you have any questions, please contact the person whose name and telephone number arc shoNn in the headirig of this letter. \,ours~ . Michael J. Quinn District Director Enclosure(s): Form 872-C l.etter l04S(CG) JEFFERSON COUNTY LAND TRUST FOUNDATION SlATUS, 170 (b) (1) (II) (\I i) and 509 (a) (1) -4- Letter LO"S (CG) . Consent Fixing Period of Limitation. Upon Assessment of Tax Under Section 4940' of the Internal Revenue Code (See Form 1023 Instructions for Part IV,Une 3.) Department of the Treasuty-Inttlrnal Revenue Service Form 872-C (Rev. March 1986) . OMS No. 1545.0056 Expires 3031.89 To b. used with Form 1023. Submit In duplicate. Under section 6501(c)(4) of the Internal Revenue Code, and as part of a requesUiled with Form 1023 thanhe organization named below be treated as a publicly supported organization under section 170(b)(1){A)(vi) or section 509(a)(2) during an advance ruling period, JEFFERSON COUNTY LAND TRUST .......................iiKa~ti;g;/~~~;~;~;i;;~H~;i.....-................. } and the District Director of Internal Revenue P.o. BOX 1610. PORT TOWNSEND. WA 98368 . . . . . . . . . . . . . . . . . . iN~i1b;;' str~t:city'o;. t~~~.~;ta;;:a~d itp'~ej . . . ~ . .. . . . . . . . . . . . Consent and agree that the period for assessing tax (imposed under section 4940 of the Code) for any of the 5 tax years in the advance ruling period will extend 8 years, 4 months, and 15 days beyond the end of the first tax year. However, if a notice of deficiency. in tax for any of these years is sent to the organization before the period expires, then the time for making an assessment will be'further extended by the number of days the assessment is prohibited, plus 60 days. Ending date of firsttax year Ow... ~ ~t.~ ~/ ~?_... _.............. Name of organization JEFFERSON. COUNTY LAND TRUST Date 2/6/90 Signature )Ii> District Director MICHAEL J. QUINN Date By )Ii> ~ MAY 0 GROUP MANAGER, EQ..4 For Paperwork Reduction Act Notice, see paCII of the Form 1023 Instructions. .. ';;; .. lD ,II ::! ::: fi 11."2 ~!': u ...... '\,;I "'.,-< "" X d .... :> N .... o N 3: Q) .~ '" ,. o ... Q) l1D 'C ~ '" ---- (!) u (!) :.:: ~ ... 9- -"" o .g ::l o ... I:: .'!: I:: o U ---- "' ~ u: ... OJ I:: Q:; .... E ~ ro o c. E Q) ~ ~ o 'C I:: ~ ---- ~ o (3N 11..... ~~ l'~ Ii "J'T:I <II :J 2m ---- VI ~ ::J ---- U Ql Cl '1:1 ::l m .c .. .. 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'~ o ~ '" u C .. n; aI 'tl I: '" IL ~ ., c CI> CI - '0 1;: ., c ., 0 <;: ~ 0 0" 0 '" 0 0 ~=::~ "2'" aJ >~ . ~~1ii i 0' 0: a! fll L6l ! .j; ., .~ .g g.~ <l "' "'" '" 8.~ ~ co~~ "' Q) 0 "'",0 .; 5 g ...r. 0 (fJ.51"--- ~~ >-0 "''0 a..~ g! o! 0, "<t, ~! 000 000 a.8i1i8 ~ ~_ {'\J~,l;t)r .......,.......v I: ~ ~ ~ " () '" .!;;. .;i g-<t ,_' a:. i....J;o.. , :g!8:~ 0:0'0 ro'z z '" ~ o '" 1!!, ~ Steve Moore, President David Reid, Vice President Jefferson Land Trust 2012 Board of Directors Rodger Schmitt, Vice President Joanne Tyler, Treasurer Kathryn Lamka, Secretary Bethany Axtman Glenda Hultman Gary Keister Suzanne Learned Bill Meyer N ,..-.I o M ,... ~ ~ -= U = Q ... ,... ~ .~ = ~ el.l ~ o ~ ~ """ 4:11 PM 02115/12 Accrual Basis Jefferson Land Trust Profit & Loss January through December 2011 Jan - Dec 11 Ordinary Income/Expense Income 4000 ' Unrestricted l&S Income 4500 . Restricted l&S Income 4900 . Endowment 5000, Operations Income Total Income 249,004.39 251,070,08 10,769.60 457,510.58 968,354.65 Cost of Goods Sold 6100 ' Program Expenses 6200 . land and Stewardship Expenses 6300, Professional services 33,824.47 240,876.93 157,715.79 432,417.19 Total COGS Gross Profit 535,937.46 Expense 7000 ' Operations Expense Total Expense 411,736.98 411,736.98 Net Ordinary Income 124,200,48 Net Income 124,200.48 Preliminary Financials - Unaudited Page 1 of 1 JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Financial Statements For the Year Ended December 31,2010 Tahle of Contents Page Independent Auditors' Report 1 Consolidated Financial Statements: Consolidated Statement of Financial Position 2 Consolidated Statement of Activities 3 Consolidated Statement of Cash Flows 4 Notes to Consolidated Financial Statements 5 - 14 Su pplementary Information: Consolidated Statement of Functional Expenses 15 Independent Auditors' Report Board of Director... Jeffer...on Land Trust and Subsidiary Port Townsend, Washington Certified PubliC Accountants We have audited the accompanying consolidated statement of financial position of Jefferson Land Trust and Subsidiary (collectively, JL T, a nonprofit organization) as of December 31, 2010, and the related consolidated statements of activities and cash flows for the year then ended. These financial statements are the responsibility of JL T's management. Our responsibility is to express an opinion on these financial statements based on our audit. and Consultants We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of JL T as of December 31,2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The consolidated statement of functional expenses on page 15 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. f!tt1A/(.; ~ (J s Certified Public Accountants May 17,2011 JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Financial Position December 31,2010 Assets: Cash and equivalents Investments (Note 2) Accounts receivable Pledges receivable (Note 3) Note receivable (Note 4) Prepaid expenses Land, conservation easements, and purchase options- Habitat land Working land Open space land Conservation easements Land held for sale Land purchase option Total land, conservation easements, and purchase options (Note 5) $ 360,332 312,047 76,292 499,028 85,054 2,347 546,491 25,048 176,094 44 933,760 52,500 1,733,937 6,123 $ 3,075,160 Furniture and equipment, net of depreciation of $1 0,897 T ota I Assets Liabilities and Net Assets: Accounts payable Accrued expenses and deferred revenue Purchase option received Long-term debt (Note 6) $ 34,727 48.338 120,000 657,024 Total Liabilities 860,089 Net Assets: Unrestricted (Note 9)- Undesignated Board designated Total unrestricted net assets (130,320) 1,561,437 1,431,117 763,728 20,226 2,215,071 $ 3,075,160 Temporarily restricted (Note 10) Permanently restricted (Note 11) Total Net Assets Total Liabilities and Net Assets See accompanying notes. - 2- JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Activities For the Year Ended December 31,2010 Unrestricted Temporarily Restricted Permanently Restricted Total Revenue and Gains: Gifts and contributions $ 71,077 $ 273,004 $ 10,000 $ 354,081 Fair value of easement acquisitions 166,000 166,000 Grants and contracts 351,933 351,933 Special events income, net of expenses of $14,786 113,877 113,877 Net gain on investments 30,374 226 30,600 Rental income 23,580 23,580 Other 3,016 3,016 Release from restriction 242,390 (242,390) Total Revenue and Gains 1,002,247 30,614 10;226 1,043,087 Expenses: Program 723,947 723,947 General and administrative 79,286 79,286 Fundraising 77,737 77,737 Total Expenses 880,970 880,970 Change in Net Assets 121,277 30,614 10,226 162,117 Beginning of year net assets 1,309,840 733,114 10,000 2,052,954 End of Year Net Assets $ 1,431,117 $ 763,728 $ 20,226 $ '2,215,071 See accompanying notes. - 3 - .' JEFFERSON LAND TRUST AND SUBSIDIARY Como/Mated Statement of Cash Flows For the Year Ended December 31,2010 Cash Flows from Operating Activities: Change in net assets $ 162,1.17 Adjustments to reconcile change in net assets to net cash provided by operating activities- Depreciation and amortization 1,339 Imputed interest expense (36,000) Realized and unrealized gain on investments (16,930) Changes in assets and liabilities: Accounts receivable 22,746 Pledges receivable (37,211) Prepaid expenses 2,683 Accounts payable 20,475 Accrueo expenses and deferred revenue 2,574 Net Cash Provided by Operating Activities 121,793 Cash Flows from Investing Activities: Purchases of investments (181,925) Proceeds from sale of investments 221,887 Purchases of land and land purchase option (208,291 ) Purchases of furniture "lnd equipment (3,243) Net Cash Used by Investing Activities (171,572) Cash Flows from Financing Activities: Payments on long-term debt (5,229) Net Cash Used by Financing Activities (5,229) Net Change in Cash and Cash Equivalents (55,008) Cash balance, beginning of year 412,402 Cash Balance, End of Year $ 357,394 Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 23,151 See accompanying notes, - of- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Organization and Summary (~f Significant Accounting Policies Organization - Jefferson Land Trust (the Land Trust) is a Washington nonprofit corporation, formed on April 7, 19a9. The Land Trust's purpose is to acquire, preserve and manage open space lands and easements for land conservation purposes benefitting the public. The Land Trust also provides information and materials to the public on land conservation issues. The Land Trust serves Jefferson County on the Olympic Peninsula in Washington. The land Trust has been accredited by the national Land Trust Alliance as of August 5, 2009. On September 5, 2007, JL T Resources, LLC was formed with Jefferson Land Trust as its only member. JLT Resources, LLC was formed for the purpose of purchasing and holding land for conservation purposes. Summary of Significant Accounting Policies: Principles of Consolidation ~ These financial statements consolidate the statements of Jefferson Land Trust and JL T Resources, LLC (collectively, "JL T"). Inter-organization balances and transactions have been eliminated in consolidation. Basis of Accounting. The consolidated financial statements of JL T have been prepared on the accrual basis of accounting. Basis of Presentation ~ Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor~imposed restrictions, Accordingly, the net assets of JL T and changes therein are classified and reported as follows: Unrestricted Net Assets - Include all net assets on which there are no donor-imposed restrictions for use, or on which donor-imposed restrictions were temporary and have expired. Temporarilv Restricted Net Assets ~ Include all net assets subject to donor-imposed restrictions that will be met either by actions of JL T or the passage of time. Permanentlv Restricted Net Assets ~ Include all net assets received by donations wherein the donors impose a permanent restriction on the use of the gift. The donors require the gift to be invested and only the income from such investments may be used to support the intended cause, All donor-restricted support is reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restriction. When restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restriction. Gifts of equipment are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long-lived assets are placed in service. - 5 - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Continued Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the finanCial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivalents - For reporting purposes, JL T considers all unrestricted highly liquid investments with a purchased maturity of three months or less to be cash equivalents. Concentrations - JL T maintains its cash in bank deposit accounts with two financial institutions, JL T's cash balances may, at times, exceed federally insured limits, One donor's pledge represented approximately 25% of pledges receivable at December 31, 2010. Investments - Investments in marketable securities with readily determinable fair values and all investments in debt securities are valued at their fair values in the consolidated statement of financial position. The carrying amount of the investment held in trust is determined by the trustee holding the securities, Unrealized gains and losses are included in the change in net assets. JL T has established a designated fund at Jefferson County Community Foundation. As JL T has designated itself as the beneficiary of the fund, the fund balance and activity are reported in the consolidated financial statements of JL T as required by GAAP. Accounts Receivable - Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation have not been material to the consolidated financial statements. Grants and Contracts - JL T receives grants and contracts from federal, state, and local agencies, as well as from private organizations, to be used for spedfic programs or land purchases, The excess of grants receivable over reimbursable expenditures to-date is recorded as deferred revenue. Furniture and Equipment - Furniture and equipment are capitalized at cost if purchased, or, if donated, at the approximate fair value at the date of donation. When retired or otherwise disposed of, the related carrying value and accumulated depredation are removed from the respective accounts and the net difference, less any amount realized from disposition, is reflected in earnings. Maintenance and repairs are charged to expenses as incurred Costs of significant improvements are capitalized. JL T provides for depreciation using the straight-line method over the estimated useful lives of the assets of five to ten years, - 6- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Continued land and Easements - JL T records acquisitions of land at cost if purchased. Land acquired through donation is recorded at fair value, with fair values generally based on independent professional appraisals. These assets fall into four primary categories: Conservation Lands - Real property with significant ecological value for habitat, open space, or working lands. Stewardship programs of JL T manage these properties to protect the natural biological diversity of the property, JL T manages its working timberland as a Forest Stewardship Council - Certified, managed forest. Conservation Easements - Voluntary legal agreements between a landowner and a land trust or government agency to permanently protect the identified natural features and conservation values of the property, These easements may be sold or transferred to others so long as the assignee agrees to carry out, in perpetuity, the conservation purposes intended by the original grantor. Conservation easements owned by JL T protect habitat, open space and working lands, such as family farms, through its stewardship programs. Easements acquired represent numerous restrictions over the use and developl""ent of land not owned by JL 1. Since the benefits of such easements accrue to the public upon acquisition, the fair market value of easements acquired is shown in the year of acquisition as an addition to net assets to record the donation of the easement, and unless conveyed to a public agency for consideration, shown as a reduction in net assets to record the value of the public's benefit and to recognize that these easements have no marketable value once severed from the land and held byJL 1. Easements held by JL T are carried on the consolidated statement of financial position at $1 each for tracking and accounting purposes. Two easements valued at $166,000 total were donated to JL T during the year ended December 31, 2010. Accordingly, $166,000 of contribution revenue and $165,998 of related write down expense have been reported on the consolidated statement of activities for the year ended December 31,2010. . Land Held for Sale - Two properties owned by JL T, Red Dog Farm and Tamanowas Rock Sanctuary, will be sold in the near future under prearranged agreements with each potential owner.. Red Dog Farm will be purchased by the current lessee after JLT finalizes and records a conservation easement with the new owner. This conservation easement ensures Red Dog Farm will continue to operate as a working farm and will protect critical habitat for salmon and other wildlife in perpetuity, Tamanowas Rock Sanctuary was purChased by JL T with the help of the Jamestown S'Klallam Tribe and a low interest loan from the Bullitt Foundation (Note 6). The Jamestown S'Klallam Tribe purchased an option on the property which will be exercised in late 2011. The intention of the tribe is to protect the property in perpetuity for both habitat and cultural purposes. Tamanowas Rock Sanctuary has a long history of cultural ties to the Jamestown S'Klallam Tribe. Land Purchase Option - JL T has $52,500 invested in purchase options for Chimacum Dairy, a historic dairy farm in the Chimacum Valley. These options will be exercised in mid-2011 when a group of conservation investors plan to buy the farm, reimburse JL T for the purchase option amount, and enter into a long term lease with a local creamery in Jefferson County. JLT alredy holds a conservation easement on the property for working farm and habitat purposes, - 7 - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Continued Purchase Option Received - In 2009, Jl T purchased the Tamanowas Rock Sanctuary with the help of the Jamestown S'KlaUam Tribe and a low interest loan from the Bullitt Foundation (Note 6). The Jamestown S'Klallam Tribe paid $120,000 to Jl T for an option to purchase the property which will be exercised in late 2011. At that time, Jl T will pay in full the outstanding balance on the Bullitt Foundation loan with proceeds from the sale of the property to the Jamestown S'Klallam Tribe and other potential conservation partners, The intention of the tribe and Jl T is to protect the property in perpetuity for both habitat and cultural purposes. Federal Income Taxes - The Internal Revenue Service has determined Jefferson land Trust and Jl T Resources, llC (a disregarded entity) to be exempt from federal income taxes under Internal Revenue Code Section 501 (c)(3). Contributions to Jl T are deductible as allowed under Section 170(b)(I)(A)(vi) of the Code, Functional Allocation of Expenses - The costs of providing the various programs and other activities have been summarized on a functional basis in the consolidated statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Subsequent Events - Jl T has evaluated subsequent events through May 17, 2011, the date on which the consolidated financial statements were available to be issued. Note 2 - Fair Value Measurements GAAP defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, GAAP uses a fair value hierarchy that prioritizes the inputs to valuation approaches into three broad levels. The hierarchy gives the highest priority to quoted prices in active markets (level 1) and the lowest priority to unobservable inputs (Level 3), Valuation Techniques - Financial assets and liabilities valued using level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using level 2 inputs are based primarily on quoted prices for similar assets or liabilities in active or inactive markets, Financial assets and liabilities using Level 3 inputs were primarily valued using management's assumptions about the assumptions market participants would utilize in pricing the asset or liability. Valuation techniques utilized to determine fair value are consistently applied. Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31,2010. Certificates of Deposit - Valued at cost plus accrued interest, which approximates fair value. Mutual Funds - Valued at quoted market prices in active markets, which represent the net asset value (NAV) of shares held by JL T at year-end. Funds Held at Jefferson County Community Foundation - Valued using the NAV provided by the fund's manager. The NAV is based on the fair value of the underlying assets owned by the fund. These underlying assets are traded in active public markets with observable market data, - 8" JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 2 - Continued Fair Values Measured on a Recurring Basis - Fair values of investments measured on a recurring basis at December 31, were as follows: Fair Value Measurements at December 31,2010 Quoted Prices Significant In Active Other Significant Mark~tsfor Observable Unobservable Identical Assets Inputs Inputs (Levell) (Level 2) (Level 3) Total Certificates of deposit Mutual funds- Fixed income Funds held at Jefferson County Community Foundation $ - $ 150,879 $ - $ 150,879 35,791 35,791 125,377 125,377 $ 35,791 $ 150.879 $ 125.377 $ 312 047 A reconciliation of the beginning and ending balances for fair value measurements made using significant unobservable inputs (Level 3) follows: Beginning balance at January 1, 2010 Interest income Total gains (realized/unrealized) Fees paid Withdrawals $ 175,078 2,464 16,820 (3,518) (65.467) Ending Balance at December 31, 2010 s 125.377 Investment return for the year ended December 31 consisted of the following: 2010 Interest income Realized/unrealized gain Investment fees $ 17, 188 16,930 (3.518) $ 30.600 -9- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statement~' Note 3 - Pledges Receivable Pledges receivable at December 31,2010 are to be received as follows: Less tr';ln one year Two to five years Thereafter $ 154,930 287,210 56,888 $ 499,028 A present value discount on pledges receivable has been determined to not be material to the consolidated financial statements. No allowance for doubtful accounts was deemed necessary by management for the promises to give based on historic experience. Note 4 - Note Receivable On February 15, 2008, JL T granted a loan to an individual in relation to one of the pieces of conservation land owned by JL T, JL T received a promissory note in exchange. The promissory note is for the amount of $93,750 and is to be paid in monthly installments of $618.71. The note matures on January 15, 2028 with an annual interest rate of 5%. The balance of $85,054 at December 31, 2010 is included in accounts receivable in the consolidated statement of financial position. The note receivable at December 31, 2010 is to be received as follows: Less than one year Two to five years Thereafter Note 5 - Land, Conservation Easements, and Purchase Options $ 3,239 14,702 67,113 $ 85 054 Land, conservation easements, and purChase options at December 31,2010 are summarized as follows: Conservation lands- Quimper Wildlife Corridor Duckabush Oxbow Chimacum Creek I Brown Dairy Bulis Forest Preserve Kilham Corner Snow Creek Estuary Conservation easements Land purChase option Land held for sale- Red Dog Farm Tamanowas Rock Sanctuary - 10- $ 261,803 180,000 140,160 125,240 38,930 1,500 44 52,500 333,760 600.000 $ 1.733.937 JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 6 - Long-term Debt On December 18, 2007, JL T entered into a loan agreement with a commercial lender in the amount of $226,110. The loan bears interest at 8,5%, and is due in 60 monthly payments of principal and interest totaling $1,965, and a final principal payment of $200,809 on January 10, 2013. The loan is secured by the Red Dog Farm property and an Assignment of Rents from the lease described in Note 8. The outstanding amount due at December 31, 2010 was $213,024. On December 23, 2009, JL T entered into a promissory note in the face amount of $480,000 with a Washington nonprofit corporation to purchase the Tamanowas Rock Sanctuary property. The note is secured by the property, The note has a stated interest rate of 1% and has a maturity date of December 31,2011. When the loan proceeds were advanced, JL T recorded contribution revenue and a loan discount using an impt...,ed interest rate of 8.5%, The discount on the loan is being amortized to interest expense over the life of the Joan. Imputed interest expense of $36,000 was reported in the accompanying consolidated statement of activities for the year ended December 31,2010. The outstanding amount due at December 31, 2010 was $444,000. Principal payments on the loans are as follows: Years Ending December 31, 2011 2012 2013 $ 449,997 6,218 200,809 Note 7 - Retirement Plan $ 657 024 In 2010, JL T began a Simplified Employee Pension - Individual Retirement Accounts Contribution Benefit Plan ("the Plan"). Eligible employees may join the Plan after one year of service. The total employer contribution for 2010 was $4,934, and is included in employee benefits on the consolidated statement of functional expenses, Note 8 - Lease Agreements On July 2, 2008, JL T entered into an operating lease as lessee for its administrative office in Port Townsend, Washington. The lease expired in June 2010 and continues on a month to month basis. Rent expense totaled $17,358 for the year ended December 31,2010. On December 20, 2007, JL T Resources, LLC entered into a lease agreement as lessor for the Red Dog Farm property. The lease term is five years, and monthly lease payments are $1,965. The lease requires the lessee to pay all taxes and assessments relating to the property. The lease also requires the lessee to comply with a land use plan, and provides a purchase option to the lessee during the lease term. - 11 - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 8 - Continued Sublease rentals to be received are as follows: Years Ending December 31, 2011 2012 Note 9 - Unrestricted Net Assets Unrestricted net assets consisted of the following at December 31, 2010: Designated - Tamanowas Rock Sanctuary Designated - Red Dog Farm Designated - Quimper Wildlife Corridor Designated - Duckabush Oxbow Designated - Chimacum Creek I Brown Dairy Designated" Bulis Forest Preserve, Designated - Kilham Corner Designated" Snow Creek Estuary Conservation easements Total designated Undesignated Note 10 - Temporarily Restricted Net Assets Temporarily restricted net assets consisted of the following at December 31,2010: Purpose restriction- To purchase Gateway land For stewardship of Sulis Forest Preserve For stewardship of Chimacum Creek I Brown Dairy For stewardship and management services for Tamanowas Rock Strategic plan Time restriction- Outstanding pledges $ 23,472 23,472 $ 46,944 $ 480,000 333,760 261,803 180,000 140,160 125,240 38,930 1,500 44 1,561,437 (130,320) $ 1.431.117 $ 99,525 83,984 41,850 36,341 3,000 264,700 499,028 $ 763.728 Net assets of $80,421 were released from donor restrictions by incurring expenses satisfying the purpose restriction specified by the donor, and net assets of $161,969 were released due to the expiration of time restrictions for the year ended December 31,2010. " 12- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note II - Permanently Restricted Net Assets At December 31, 2010 JL Thad $20,226 of permanently restricted net assets. This is comprised of endowment investments (Note 12), the income of which is available to support general operations. Note 12 - Endowments The JL T endowment consists of one fund established to support general operations. /.s required by GMP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor- imposed restrictions. Interpretation of Relevant Law - JL T's Board of Directors has interpreted the Washington State Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, JL T classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund, The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated tor expenditure by JL T in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, JL T considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: The duration and preservation of the fund The purposes of JL T and the donor-restricted endowment fund General economic conditions The possible effect of inflation and deflation The expected total return from income and the appreciation of investments Other resources of JL T The investment policies of JL T. As of December 31, 2010, endowment net assets consisted of the following: Unrestricted Temporarily Restricted' Permanently Restricted Total Donor-restricted endowment funds $ - $ - $ 20,226 $ 20,226 - /3 - JEFFERSON LAND TRUST AND SUBSIDIARY Note!)' to Consolidated Financial Statements Note 12 - Continued Changes to endowment net assets for the year ended December 31, 2010, are as follows: Contributions Permanently Restricted $ 10,000 1.94 32 226 10,000 $ 20.226 Endowment net assets, January 1, 2010 Interest and dividends Realized and unrealized gains/losses Total endowment investment return Endowment Net Assets, December 31, 2010 Funds with Deficiencies - From time to time, the fair value of assets associated with individual donor restricted endowment funds may faU below the level that the donor or UPMIFA requires JL T to retain as a fund of perpetual duration. In accordance with GAAP, deficiencies of this natwre are reported in unrestricted net assets. There were no such deficiencies as of December 31,2010. Return Objectives and Risk Parameters" JL T has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that JL T must hold in perpetuity or for donor-specified periods as well as board-designated funds. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results ot a custom Policy Index made up of various indices. The composition of the custom Policy Index is based upon the strategic asset allocation of the investment portfolio and assumes a moderate level ot investment risk, The investment objectives of the Operations Endowment Fund include maintenance of principal, timely liquidity, and preservation of purchasing power over time, Strategies Employed for Achieving Objectives. To satisfy its long-term rate-ot-return objectives, JLT notes that for funds earmarked for capital appreciation, appropriate investments include intermediate term bond funds/ETF's, equity mutual funds, equity ETF's, and unconstrained Bond Funds, Spending Policy and How the Investment Objectives Relate to the Spending Policy - JL 1's spending policy intends that no distributions may be made from the Operations Endowment Fund for the first five years of its existence or until it reaches a threshold balance of $400,000, whichever shall first occur, After a five-year period or after achieving the $400,000 threshold, distributions shall be made on an annual basis as determined by the Board. Regular disbursements should be limited to a maximum of 5% of the value of the portfolio at the beginning of each fiscal year, or one-half of the income generated by the fund for the most recent fiscal year, whichever is less, At no time will the distribution of the spendable amount result in the invasion ot the original amounts donated. - /4 - JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Functional Expense,~' For the Year Ended December 31,2010 General and Total Program Administrative Fundraising Expenses Salaries $ 165,528 $ 39,912 $ 33,752 $ 239,192 Payroll taxes 17,075 4,207 3,465 24,747 Employee benefits 26,932 6,636 5,465 39,033 Total salaries, taxes and benefits expense 209,535 50,755 42,682 302,972 Professional fees 144,717 2,907 22,276 169,900 Value of conservation easements written down 165,998 165,998 Land and stewardship expenses 95,449 95,449 Interest 59,151 59,151 Other expenses 2,412 19,866 148 22,426 Rent 12,868 2,951 3,030 18,849 Postage and printing 9,021 405 3,189 12,615 Travel and seminars 7,495 27 274 7,796 Public awareness 4,309 62 2,849 7,220 Office supplies 2,436 449 1,102 3,987 Insurance 2,600 445 367 3,412 Dues and subscriptions 3,129 165 3,294 Telephone 2,022 498 410 2,930 Web design and maintel')ance 848 848 1,696 Utilities 1,033 254 210 1,497 Depreciation 924 228 187 1,339 Bank fees 439 439 Total Expenses $ 723,947 $ 79,286 $ 77,737 $ 880,970 See independent auditors' report. - /5 - Jefferson Land Trust RESOLUTION February 21,2012 WHEREAS, Jefferson Land Trust is an applicant or sponsor for more than one Conservation Futures Funding application, and Conservation Futures Funding Application process requires that Jefferson Land Trust prioritize its projects, and WHEREAS, Jefferson Land Trust has been working since 2006 in partnership with Jefferson LandWorks ColJaborative whose mission is to keep the farms and forests of Jefferson County, Washington, working, productive and profitable, and WHEREAS, the historic Boulton Farm is indicated as priority agricultural and habitat land in several local and regional plans, and the landowner is eager to complete the project, AND WHEREAS, 144 acres of prime agricultural land on the Boulton Farm, will be protected for prime agricultural soils, riparian habitat of Andrews Creek and some associated forestland on the agriculturally zoned acreage by an agricultural conservation easement, and WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, AND WHEREAS, Jefferson Land Trust has been working since 2001 in partnership with Jefferson County Conservation District, Jefferson County, Washington Department ofFish and Wildlife, North Olympic Salmon Coalition, the Hood Canal Coordinating Council, the Jamestown S'Klallam Tribe and WSU Cooperative Extension to acquire and restore crifcal salmon spawning, rearing and migratory habitat in the Salmon/Snow Creek riparian area and estuary, and WHEREAS, these professional naturalists and scientists have recommended that Snow Creek habitat protection be expanded to provide further benefits for migrating salmonids and other species, and WHEREAS, acquisition of high-priority identified parcels in the Snow Creek Estuary area from willing sellers would provide such habitat protection, the L. Brown Trust parcel has been identified as such, AND WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, according to the Salmon and Snow Creek Fish and Wildlife Management Plan, AND WHEREAS, Jefferson Land Trust has been working since 2004 in partnership with Northwest Watershed Institute to acquire and restore critical forested watershed, riparial, estuarine and nearshore habitat in the Tarboo CreeklDabob Bay watershed area, and WHEREAS, a conservation easement on the 80-acre Tarboo Forest property would protect in perpetuity critical forested watershed habitat from subdivision and development, and will leverage conservation of an additional 160 acres of adjacent forestland, AND WHEREAS, Northwest Watershed Institute has requested that Jefferson Land Trust sponsor their Conservation Futures Funding application for an acquisition of a conservation easement to be held by Jefferson Land Trust, BE IT HEREBY RESOLVED that Jefferson Land Trust agreed at its February 21, 2012 Board of Directors meeting to sponsor an application for Conservation Futures Funding for acquisition of a conservation easement on the Boulton Fann, and agreed that The Boulton Farm protection is the highest priority for 2012 Conservation Futures Funding due to the landowner age, project duration and agricultural conservation and economic values. The next highest priority is funding for the Snow Creek project because it would provide a vital connectivity to the Snow Creek project area, is currently listed for sale, and it represents a collaborative effort with community members and our Chumsortium partner organizations as they work to preserve this significant salmon habitat. The third highest priority is funding the Tarboo Forest property to support our project partner Northwest Watershed Institute in preserving critical watershed and riparian habitat in the Tarb')o Creek area. Signed this 21th day of February, 2012. Steve Moore, re oent, Board of Directors Jefferson Land Trust e JEFFERSON COUNTY CONSERVATION DISTRICT 205 W. Patison St., Port Hadlock, WA 98339 - Phone (360) 385-4105 FAX (360) 385-4823 February 21,2012 Jefferson County Conservation Futures Program Dear Conservation Futures Citizen's Oversight Committee: We are writing to whole heartedly endorse efforts by John Boulton to work with the Jefferson Land Trust to protect his farm for long ternl agricultural production and to put a conservation easement in place that would protect this farms' long term economic viability. In the last few years, Jefferson County Conservation District has been working with Jefferson Land Trust to preserve some of our most important farmland for future generations through the State Famlland Preservation Program. With six agricultural easements protecting nearly 400 acres of local, prime farmland, Jefferson Land Trust has a history of successful efforts to protect our agricultural heritage. We hope your approval of this project expands that effort. John Boulton has been on the board ofthe Jefferson County Conservation District for more than fifty-five years. He has a traditional stewardship ethic and is kno\\'Il as a wise and committed leader throughout the region, His family is very visible and appreciated and his action to preserve farmland will be known throughout the region. Selling a conservation easement will help John with retirement income and protect the legacy of his family fann. The size, soils, water, and location of the fann are a rare, valuable asset. As we seek to ensure long-term economic viability of local agriculture it is clear that these last large parcels are important The Boulton farm has unique assets including high early spring temperatures, natural sub-irrigation and good soils. One of our local fanners is currently leasing part of the Boulton Farm to expand their vegetable production operation. Preserving this fann in perpetuity through a conservation easement will ensure that the Boulton Farm will be affordable for the next generation offanners. The Boulton Farm conservation easement provides an amazing opportunity to preserve and enhance one of our county's last best farms. We strongly urge you to consider and approve Jefferson Land Trust's conservation easement grant request. Sincerely, :J .< / l/: I. .i r--~ ! _ >': ".,tJ if! ~<tc.~~~ CL)/ "---__ Rosie Taylor District Manager W.. i.\. S"I""I'I.N' 'c-'r~V)Nir SrT';~Fr'I; UTNi iI' r[.~R. sr;-1"'\7 i.. L... .. .1 J 1 L ,& l... 11"\11;. .. V . ..1 . ,L ...1 1 Jr.lIJEFFERSON COUNTY SION ~ February 21, 2012 Jefferson County Conservation Futures Program Dear Conservation Futures Citizen's Oversight Committee: We are writing to whole heartedly endorse efforts by John Boulton to work with the Jefferson Land Trust to protect his farm for long term agricultural production and to put a conservation easement in place that would protect this farms' long term economic viability. In the last few years, Jefferson County has been working with Jefferson Land Trust to preserve some of our most important farmland for future generations through the State Farmland Preservation Program. With six agricultural easements protecting nearly 400 acres of local, prime farmland, ]effersonLand Trust has a history of successful efforts to protect our agricultural heritage. We hope your approval of this project expands that effort. John Boulton has been a director ofthe local and State Conservation Commission for more than fifty years. He has a traditional stewardship ethic and is known as a wise and committed leader throughout the region. His family is very visible and appreciated and his action to preserve farmland will be known throughout the region, Selling a conservation easement will help John with retirement income and protectthe legacy of his family farm. The size, soils, water, and location of the farm are a rare, valuable asset. As we seek to ensure long- term economic viability oflocal agriculture it is clear thatthese last large parcels are important. The Boulton farm has unique assets including high early spring temperatures, natural sub-irrigation and good soils. One of our local farmers is currently leasing part of the Boulton Farm to expand his innovative and pioneering western Washington organic grain production. Preserving this farm in perpetuity through a conservation easement ensure that the Boulton Farm will be affordable for the next generation of farmers. The Boulton Farm conservation easement provides an amazing opportunity to preserve and enhance one of our county's last best farms. We strongly urge you to consider and approve Jefferson Land Trust's conservation easement grant request. Sincerely, f;R. iJ{ ~' ~;. ..,... ,~C{ALL~ . \ /" Dr. Laura R. Lewis, Director Washington State University Jefferson County Extension 201 W. Patison Road Port Hadlock, WA 98339 360-379-5610 ext 202 laura.lewis@wsu.edu 4 CRAFT Lending to people. {nvesting far !'osiliencE.' February 26, 2012 Jefferson Cou nty Conservation Futu res Program Dear Conservation Futu res Citizen's Oversight Committee: Craft3 is writing to support efforts by John Boulton to protect his farm for long term agricultural production and economic viability. In order for this to happen, John is working with Jefferson Land Trust to put a conservation easem ent in place that would protect this fal.ns' long term opportunities. We hope your approval of this project expands that effort. The size, soils, water, and location of the farm are a rare, valuable asset. As Jefferson County citizens seek to ensure long-term economic viability of local agriculture it is clear that these last large parcels are im portant. The Boulton farm has unique assets includi ng high early spring temperatures, natural sub-irrigation and good soils. One of our local farmers is currently leasing part of the Boulton Farm to expand his innovative and pioneer ing western Washington organic grain production. Preserving this farm in perpetuity through a conservation easement ensure that the Boulton Farm will be affordable for the next generation of farmers. In the last few years, Jefferson County has been working with Jefferson Land Trust to preserve some of our most important farmland for future generations through the State Farmland Preservation Program. With six agricultural easements protecting nearly 400 acres of local, prime farmland, Jefferson Land Trust has a history of successful efforts to protect our agricultural heritage. The Boulton Farm conservation easement provides an amazing opportunity to preserve and enhance on e of our county's last best farms. Craft3 strongly urge you to consider and approve Jefferson Land Trust's conservation easement grant request. Sincerely, ~o.~ Mark D. Bowman Senior Vice President and Senior Loan Of ficer Craft3 P.O. Box 826 i 203 Howerton Way. S.E Illwaco, WA 98624~0826 I Tel 360.642-4265 1 Fax 360-455,4879 I 'Nww.craft3.org Offices located In Astoria. Oregon I Portland Oregon jliwaco, Washington I Port Angeles, Washington I Seattle. Washington Servicios en Ing!es y Espana! Jefferson County Farmers Market Saturday! Sunday! Wednesday! P.O. Box 1384 Port Townsend. WA98368 (360) 379"9Q98 info@ptfarrnersmarket.org www.ptfarmersmarket.org February 21, 2012 Jefferson County Conservation Futures Program Dear Conservation Futures Citizen's Oversight Committee: We are writing to whole heartedly endorse efforts by John Boulton to work with the Jefferson Land Trust to protect his fann for long term agricultural production and to put a conservation easement in place that would protect this farms' long term economic viability. in the last few years, Jefferson County has been working with Jefferson Land Trust to preserve some of our most important farmland for future generations through the State Fannland Preservation Program. With six agricultural easements protecting nearly 400 acres of local, prime farmland, Jefferson Land Trust has a history of successful efforts to protect our agricultural heritage. We hope your approval of this project expands that effort. John Boulton has been a director of the local and State Conservation Commission for more than fifty years. He has a traditional stewardship ethic and is known as a wise and committed leader throughout the region. His family is very visible and appreciated and his action to preserve farmland will be known throughout the region. Selling a conservation easement will help John with retirement income and protect the legacy of his family farm. The size, soils, water, and location of the rann are a rare, valuable asset. As we seek to ensure long-tenn economic viability of local agriculture it is clear that these last larg\.. parcels are important. The Boulton farm has unique assets including high early spring temperatures, natural sub-irrigation and good soils. One of our local fanners is currently leasing part of the Boulton Fann to expand his innovative and pioneering western Washington organic grain production. .Preserving this farm in perpetuity through a conservation easement ensure that the Boulton Farm will be affordable for the next generation of farmers. The Boulton Farm conservation easement provides an amazing opportunity to preserve and enhance one of our county1s last best fanns. We strongly urge you to consider and approve Jefferson Land Trust's conservation easement grant request. Sincerely, n tlr,j!A/~~ 414 Kearney Port Townsend, WA 98368 (360) 385-2883 Fax: (360) 385-0654 February 21,2012 Jefferson County Conservation Futures Program Dear Conservation Futures Citizen's Oversight Committee: The Food Co-op would like to wholeheartedly support Jefferson Land Trust's grant application for conservation easement funding for the long term protection of the Boulton Farm, near Quilcene, WA. The Boulton Farm is one of the larger agricultural parcels remaining in east Jefferson County. This farm has unique qualities such as natural sub- irrigation and good soils. The Boulton Farm owner is considering sellin~ portions of the farm to provide for retirement income, but would prefer that the farm remain as one parcel and able to continue with its history of agricultural production. Jefferson Land Works Collaborative, of which we are a member, is working with local farmers to gain access to farm acreage for local grain production and large scale vegetable production. One of our local farmers currently has a lease arrangement with John Boulton for the farm. Conservation easement funding would help make the Boulton Farm affordable for this next generation of east Jefferson County farmers. It is collaboration such as this that enables us to provide an increasing amount of local products to our members and shoppers. We represent over 5000 member households whose feedback to us continues to be, "More local products". Having a secure supply of local food requires a new generation of farmer and affordable farmland. A conservation easement on the Boulton Farm is a big step in supporting and growing our local agricultural economy. Thank you for considering Jefferson Land Trust's conservation easement grant request. We ask that you approve this grant request. Sincerely, C~d--J1~ Deborah L. Shortess SIPS Manager 2012 Jefferson Cou nty Conservation Futures P~ogram Property Acquisition and/or Operations and Maintenance Project Application Please complete the fallowing application in its entirety. Be sure to answer "N/A "for questions that don't apply to the project. Incomplete applications will not be acceptedfor consideration. Unless directed otherwise, use as much space as needed to answer each question. Contact program staff at 385-4498 or tpokornv(ii)co.;e{rerson. wa. us with questions. 1. Project Title: L. Brown Trust II Property 2a. Conservation Futures Acquisition Request: $24,900 b. Conservation Futures O&M Request: $2,000 3. Total Conservation Futures Request: $26,900 4. Please indicate the type of interest contemplated in the acquisition process. X Warranty Deed Easement _ Other (Please describe below.) In whose name will the property title be held after acquisition? Jefferson Land Trust with a Deed of Right to the State of Washington Recreation and Conservation Office through the Salmon Recovery Funding Board. 5. Applicant Information Name of Applicant or Organization: Jefferson Land Trust Contact: Sarah Spaeth Title: Executive Director Address: 1033 Lawrence Street, Port Townsend, Washington .{ Phone: (360) 379-9501, ext 101 Email: sspaeth@saveland.org Fax: (360) 379-9897, ext._ 6. Sponsor Information: (if different than applicant) " Organization Name: Contact: Title: Address: Phone: ( Email: This application was approved by the sponsor's legally responsible body (e.g., board, council, etc.) on February 21,2012. )- , ext. Fax: ( )-- , ext. _ 1 7. Site Location Street Address or Description of Location: The L Brown Trust parcel is located at the intersection of West Uncas Road and Highway 101 south of Discovery Bay. Driving Directions from Port Townsend: Take Highway 20 south from Port Townsend toward Discovery Bay. Turn left (south) on Highway 101 and travel approximately 1 1/4 miles south to the intersection of 101 and West Uncas Road. The property is located directly to the west of Highway 101 and to the south of West Uncas Road, Section: NW1/4 Section 36 Township 29N Range 2W Assessor's Parcel Number(s): 902 362 003 8. EXISTING CONDITIONS New Site: Yes No X Number of Parcels: One Addition to Existing Site: Yes X No Total Project Acreage (if different): Existing Structures/Facilities: None Any current covenants, easements or restrictions on land use: None Acres to Be Acquired: 15,5 Current Zoning: Rural Residential 1:5 Current Use: Vacant Land Waterfront (name of body of water): Shoreline (linearfeel): Snow Creek -14001 Owner Tidelands/Shorelands: 9. Current Property Owner X is _is not a willing seller. 10. In one-half page or less, provide a summary description of the project, the match, overarching goal, and three top objectives. Jefferson Land Trust (JL T) and Chumsortium partner organizations Washington Department of Fish and Wildlife 0/VFDW), North Olympic Salmon Coalition, Jefferson County Conservation District, Hood Canal Salmon Enhancement Group, WSU Cooperative Extension, Jamestown S'Klallam Tribe have been working together since 2001 to protect, restore and enhance the important estuarine and riparian habitats of Salmon and Snow Creeks at the head of Discovery Bay. The Salmon and Snow Creek Estuary is the most intact of its type on the Strait of Juan de Fuca and is the unquestioned stronghold of the ESA listed Strait of Juan de Fuca summer chum salmon. At the October 2011 and February 2012 meetings of the Chumsortium partners, the L Brown property was identified as important for permanent protection and restoration efforts. Numerous salmon species utilize the well forested riparian habitat of Snow Creek that flows through the property, including the endangered Summer Chum. The project fits well with the Hood Canal 2 Coordinating Council Strategy for Salmon Recovery. Critical habitat acquisition is number one on their sequenced project lists for both Salmon and Snow Creek watersheds, The 15.5 acre L. Brown Trust property contains approximately 12 acres of forested riparian habitat with 1400' of SnoW Creek bisecting the property from south to north. Site assessments indicate good habitat and some opportunity for conifer under planting. The property is zoned for Rural Residential development at one residence per 5 acres, technically supporting three homesites. It is located directly adjacent to Highway 101, a Washington State Scenic Byway. With the support of Chumsortium partners JL T will be applying for a Salmon Recovery Funding Board (SRFB) grant in spring 2012 for the L. Brown Trust property. We will be applying for 82% of the project budget fn:>m the SRFB grant and are requesting 18% of the project costs from the Conservation Futures Program. Overarching Goal The overarching goal for this project is to acquire and permanently protect additional critical salmon habitat in the project area and prevent inappropriate development and incompatible land uses. The three top objectives for this project are: 1. Secure the majority of funding through the SRFB grant process in 2012. 2. Acquire high priority threatened property from willing seller. 3. Permanently protect and restore the property as wild riparian salmon habitat, and to benefit water quality in Snow Creek and Discovery Bay. 11. Estimate costs below, including the estimated or appraised value ofthe propert(ies) or property right(s) to be acquired, even if Conservation Futures funds will only cover a portion of the total project cost. In the case of projects involving multiple acquisitions, please break out appraisals and estimated acquisition costs by parcel. a. Estimated or Appraised Value ofPropert(ies) to be Acquired: $125,000 b. Total Estimated Acquisition-related Cost (see Conservation Futures Manualfor eligible costs): $26,000 c. Total Operation and Maintenance Cost: $2,000 d. Total Project Cost: $153,000 Basis for Estimates (include information about how the property value(~) was determined, anticipated acquisition-related costs, general description of operation and maintenance work to be performed, task list with itemized budget, and anticipated schedule for completion of work): The L. Brown Trust property is currently listed for $125,000 through John L Scott Realty, Bill Perka listing agent. An appraisal and appraisal review will be conducted prior to purchase. Anticipated project related costs include; appraisal and appraisal review, title insurance and closing costs, taxes and recording fees, legal costs, project management and administration. A stewardship plan will be created that will include replanting and management considerations. 3 Operations and Maintenance costs include hard costs associated with JL T's annual monitoring of otected property. The estimated time involved is 3 hours of on-site visit and data update in on an annual basis in perpetuity. This is in accordance with the recommendation by Land Alliance for annual monitoring of properties, since the property would be owned outright and opment completely prohibited. For the purposes of O&M budget for this grant, we are only dering 10 years of monitoring. Stewardship plan and restoration costs will be covered by B grant. the pr office Trust devel consi SRF O&M Project r Land Appraisal Title insu Project M Stewa rds O&M 0& 12a. Spo andl b. If the n We for th there throu c. Match Conse", Matchin Total P * If a pri local ion, being co d.8ourc fundslre SRFB Gr Budget: 4 hours@ $50 per hour annually for 10 years = $2,000 elated costs and O&M and review rance and closing costs, taxes, etc anagement, Admin and legal fees hip Plan, Restoration imeline Est. Cost Early 2013 $125,000 Fall 2012 $5,000 Early 2013 $10,000 March 2013 $6,000 2013 $5,000 013 - 2018 $2,000 M fees would be invoiced on an annual basis up to the allowable amount. nsor or other organizations X will _will not contribute to acquisition of proposed site or operation and maintenance activities. applicable, please describe below how contributions from groups or agencies will reduce eed to use Conservation Futures program funds. will be requesting $126,100 of SRFB grant funds providing more than the necessary match e CFF grant. We are applying for CFF funds for 18% of the total project costs presuming will be fee simple acquisition by JL T with a Deed of Right held by the State of Washington gh the Recreation and Conservation Office. or acquisition is being proposed as match, please describe and provide documentation of value, date of acquisition and other information that would directly link the match to the property nsideredfor acquisition. e of matching Amount of sources contribution ant 2012 $126,100 $ ing Fund Estimate ation Futures Funds Requested g Funds/Resources* roject Acquisition Cost Acquisition O&M 0/0 $24,900 $2,000 18% $126,100 82% $151,000 $2,000 100% Contribution approved? Yes No If not, when? Dec. 2012 Contribution av~j}able now? Yes No If not, when? Dec.2Q12 Yes Yes No No 4 NOTE: Matching funds are strongly recommended and a higher rating will be assigned to those projects that guarantee additional resources for acquisition. Donation of property or a property right will be considered as a matching resource. Donation ofresourcesfor on-going maintenance or stewardship ("in-kind" contributiom,~ are not eligible as a match. 13a.Sponsoring agency X is _is not prepared to provide long-term stewardship (maintenance, up-keep, etc.) for the proposed project site. JL T anticipates a stewardship program of at least annual monitoring to insure that the conservation values of the preserve are in good shape; that there are no adverse impacts to the property such as trash accumulation or inappropriate uses, and that no noxious weeds have invaded the property. JL T Staff and trained community volunteers will conduct monitoring, and maintenance efforts. JL T relies on trained professionals, including habitat biologists, foresters and others as appropriate. b. Describe any existing programs or future plans for stewardship ofthe property, including the nature and extent of the commitment of resources to carry out the stewardship plan. JL T will conduct stewardship, monitoring and maintenance of the property along with the other parcels in the Salmon and Snow Creek watersheds that we own or are protected with conservation easements. JL 1's stewardship program includes annual monitoring (at least) of protected properties and easements, upkeep and maintenance (trash removal, signage, invasive plant control) and restoration efforts (tree planting, trail building, etc.) We anticipate needing to conduct some restoration planting and restoration forestry on the property and will be seeking funding for these elements in our SRFB grant application. Replanting and restoration forestry will be conducted in consultation and partnership with other Chumsortium agencies and organizations. 14. Describe the sponsoring agency's previous or on-going stewardship experience. JL T currently holds and monitors 48 conservation easements in Jefferson County, in addition to conducting monitoring and stewardship activities on the nearly 200 acres it owns, The Hoh River Trust and Washington State Parks contract with JL T to monitor and steward over 7000 acres of land under their control. In addition, the Land Trust stewards land owned by Jefferson County, the City of Port Townsend and Washington Department of Natural Resources, JL T stewardship and monitoring protocols were developed with the guidance of Land Trust Alliance (the national umbrella organization for land trusts) and adherence to those protocols is o"e of the requirements for our national accreditation. This includes at least annual monitoring of easements and preserves by professional staff and trained volunteers, extensive data collection and management, help with stewardship, enhancement and restoration goals and legal defense of the conservation easements should it become necessary. JL T has a legal defense fund of nearly $350,000, and continues to build this fund with each new easement acquisition, recognizing the legal obligation and responsibility of protecting conservation values in perpetuity. 15. Has the sponsor and/or applicant of this project been involved in other projects previously approved for Conservation Futures funding? a._No, neither the sponsor nor"applicant has been involved in a project previously approved for Conservation Futures funds. b. X Yes, the sponsor and/or applicant for this project has been involved in a project previously approved for Conservation Futures funds. Please provide details: 5 JL T has sponsored numerous applications that have received Conservation Futures funds. These projects include: Sunfield Farm, 2003; Quimper Wildlife Corridor, 2004; East Tarboo Creek Conservation Project, 2005; Tamanowas Rock Phase 1, 2006; the Winona Buffer Project, 2006; Glendale Farm, 2007; Finnriver Farm, 2008; Quimper Wildlife Corridor, 2009; Brown Dairy, 2009; Salmon Creek Ruck 201 0, Quimper Wildlife Corridor 2010; Tamanowas Rock 2010; Chimacum Creek Carleson 2011; Winona Basin - Bloedel 2011. 16a. Property 2Lcan _cannot feasibly be acquired in a timely fashion with available resources. b. Necessary commitments and agreements _are ~ are not in place. c. All parties _are JLare not in agreement on the cost of acquisition. If "not ,. to any of the above, please explain below. Funding is not secured yet and the purchase price will need to be determined through the appraisal process. If the project ranks well in the grant applications we will either purchase an option on the property or enter into a purchase and sale agreement. 17. The proposed acquisition X is specifically identified in an adopted open space, conservation, or resource preservation program or plan, or community conservation effort. Please describe below, including the site '.'I importance to the plan. Please reference the website afthe plan if available or include the plan with this application. _complements an adopted open space or conservation plan, but is not specifically identified. Please describe below, and describe how the proposed acquisition is consistent with the plan. _is a stand-alone project. The L. Brown property is located in the Discovery Bay project area that has been the focus of protection and restoration efforts on the past of Chumsortium partners since 2000 and is identified in the Summer Salmon Chum Recovery Plan which can be located at the following website. - http://www.nwr.noaa.qov/Salmon-Recovery-Pla nn ino/Recovery-Domains/Puqet -Sou nd/HC- RecoverY-Pia n, cfm The Hood Canal Coordinating Council 3-year work plan has identified Snow/Salmon floodplain and nearshore protection (row 77) as a priority. This category covers the acquisition of the L. Brown Trust property and row 76 Snow/Salmon Riparian restoration would cover the conifer restoration planting JL T and Chumsortium partners would undertake. The direct link to the spread sheet: http://hccc.wa.gov /CEDocuments/Downloads GetFile.aspx?id=416957 &fd=O In addition, the Snow Creek watershed is identified on the Jefferson County's Comprehensive Plan map as Parks, Recreation Areas, Conservation Easements and Areas for Future Cooperative Preservation Efforts: http://www.co.jefferson.wa.us/idms/pdfs/parks99.pdf. In JL 1's County Conservation Plan, this area has four priority habitat indicator layers (the maximum). The plan is located on the JL T web site www.saveland.org, The Nature Conservancy's Ecoregional Assessment categorizes this as both aquatic and terrestrial Ecoregional Portfolio site (defined as areas of exceptional biological value and most likely for conservation to succeed). A copy of the plan can be downloaded from http://east.tnc.orq/assessmentl2/. 6 Chumsortium partners formed a Snow/Salmon Technical Advisory Group that prepared a Snow Salmon Watershed Management Plan. Project partners received recognition and an award from WDFW for this plan. The first goal identified in the Snow/Salmon Watershed Management Plan, is to "Protect the Snow/Salmon Management Area and its lands and waters in a manner that prevents the degradation or loss of habitat for indigenous fish and wildlife and recreationally important shellfish." This plan is not listed online and is quite lengthy,.but is available at the JLT office. 18. List the important milestones for this project. Milestones are to secure Conservation Futures grant and SRFB funds for the project area, determine a purchase price, secure the property and conduct replanting and stewardship activities. 19. Conservation Opportunity or Threat: a. The proposed acquisition site X does _does not provide a conservation or preservation opportunity which would otherwise be lost or threatened. b. If applicable, please carefully describe the nature and immediacy of the opportunity or threat, and any unique qualities about the site. The property is currently for sale by the L. Brown Trust and the landowner is very eager to sell. Current zoning would permit division into three rural residential parcels. 20. Describe the physical characteristics of the site that is proposed for acquisition with Conservation Futures Program funds including: vegetation, topography, surrounding land use, and relationship to parks, trails, and open space. Snow Creek watershed is in the rainshadow of the Olympic Mountains and enters into Discovery Bay from the south. The L. Brown parcel is located at approxh.lately river mile 1.5 and consists of 15.5 acres with about 1400' of Snow Creek running through it toward Discovery Bay. The topography is level bottomland and a mature mixed forest covers much of the property. Approximately 12 acres have been determined to be riparian buffer with the remaining upland forest buffer. All of the property is classified by Jefferson County as one or more Critical Area: wetland, susceptible aquifer recharge area, flood hazard (FEMA) and seismic hazard area. The County also identifies is as Type 2 Core Habitat. Over 360 acres of critical riparian, estuarine and wetland habitat and agricultural lands located downstream to the L. Brown property are permanently protected through WDFW fee ownership and conservation easements with JL 1. Residential lots immediately to the west and south separate the L. Brown Trust parcel from large commercial forestland owned by Pope Resources. Across Highway 101 to the east is another L. Brown Trust parcel designated as open space agricultural land. The Pacific Northwest National Scenic Trail passes through the head of Discovery Bay into the foothills of the Olympics about % mile north of the site. 21. The proposed acquisition: X provides habitat for State of Washington Priority Habitat and/or State or Federal Threatened, Endangered or Sensitive species. 7 X provides habitat for a variety of native flora or fauna species. X contributes to an existing or future wildlife corridor or migration route. If affirmative in any of the above, please describe below, and cite or provide documentation of .! J specles use, Anticipated results of the project include perpetual protection of this habitat which will benefit fresh water life stages of summer chum salmon (threatened and one of only 8 extant subpopulations remaining today), Coho salmon, cutthroat and steelhead trout utilizing Snow Creek. (Summer Salmon Chum Recovery Plan) In addition to documenting occurrence of these priority species, the Washington Department of Fish and Wildlife Priority Species and Habitat Report indicates that Northern Spotted Owl have been identified in this township. Other species benefiting from protected water quality from this high quality habitat as it enters the estuary include a native Olympia oyster population, white sturgeon, Pacific and brook lamprey, spawning herring, surf smelt and sand lance. Puget Sound chinook salmon from other systems likely use the estuary. The forested habitat also provides habit for multiple wildlife species. Preserving a riparian corridor from the marine waters of Discovery Bay into the foothills of the Olympic Mountains is important now as species move seasonally. Its importance will increase further as fauna and ~Iora move in response to climate change. 22a. Describe the extent and nature of current and planned agricultural use of the proposed acquisition, including any anticipated changes to that use once the property, or property right, is acquired with Conservation Futures funds. None planned b. Describe any participation by the current property owner in any other agricultural land conservation programs, including the program and nature of the involvement. None ' 23. Describe the use planned for the site, any development plans after acquisition, characteristics of the site which demonstrate that it is well-suited to the proposed use, and plans for any structures currently on the site. No development is planned for the site after acquisition. Restoration will include some planting and restoration forestry management to enhance forest conditions. 24a. Proposed acquisition site and any subsequent planned passive development (as described above) X is _is notpart ofa larger project. b. If applicable, describe how the site relates to the larger project, and whether the project has a plan, schedule and funding dedicated to its completion. Chumsortium partners have been working together since 2001 in the Salmon and Snow Creek Estuary and Creeks and have coordinated efforts to identify the parcels for acquisition, In 2005 the I See, for example, http;ll..lVw\v.dpr.wa.gov!researchscience!topics!naturalheritage/pages/amp nh.aspx http://www . wdrw, wa. gov / conservation!phs!1 i st! http://wwwl.dnr.wa.gov/nhp/refdesklplants.html http://wwwl ,dnr.wa.gov/nhp/refdesk/pubs/wa ecological systems.pdf 8 Chumsortium partners adopted the Summer Chum Salmon Recovery Plan which is to recover and obtain delisting of the summer chum salmon populations in Hood Canal and the eastern Strait of Juan de Fuca watershed, including restoration of populations in watersheds where summer chum have been extirpated. This recovery plan adopts the overall goal presented in the Summer Chum Salmon Conservation Initiative (SCSCI). The SCSCI 0NDFW and Point No Point Treaty Tribes 2000) states the goal as: 'To protect, restore and enhance the productivity, production and diversity of Hood Canal summer chum salmon and their ecosystems to provide surplus production sufficient to allow future directed and incidental harvests of summer chum salmon." The Summer Chum Salmon Recovery Plan seeks to maintain current population structure and distribution of summer chum and restore distribution in previously occupied areas within the species native range. In addition, the project partners worked together to create a management plan for the project area that includes restoration recommendations, public access considerations and other management considerations. Additional acquisitions are also planned for the project area in keeping with the goal of protecting and restoring important riparian and estuarine habitat Project partners continue to pursue acquisition and restoration projects within the larger project area as opportunities arise, and local, state (SRFB) and federal funding grants are then sought 25. Describe how the proposed acquisition benefits primarily a _local area ~ broad county area including the area served, the nature of the benefit, the jurisdictions involved, and the populations served. The proposed acquisition benefits a broad county area and Washington State priorities by protecting critical habitat for endangered salmon species of this area. 26. Describe the educational or interpretive opportunities that exist fOf providing public access, educational or interpretive displays (signage, kiosks, etc.) on the proposed site, including any plans to provide those improvements and any plans for public accessibility. The L. Brown property has the potential to provide controlled passive recreational opportunities for the public, such as walking, salmon viewing and bird watching. Jefferson Land Trust conducts property tours in areas where conservation values and native habitat provide educational experience for the public. The Salmon Snow Estuary project area has been a place to inform, educate, involve, mobilize, and build strong support among citizens and communities to assist in habitat protection, restoration, and stewardship. Acquisition of this property would provide additional educational and scientific opportunities and limited recreational uses as described above. 27. The proposed acquisition _ includes historic or culturally significant resources2 and _ is registered with the National Register of Historic Places, or an equivalent program. _ is recognized locally has having historic or cultural resources. _ is adjacent to and provides a buffer for a historic or cultural site. If affirmative in any of the above, please describe below, and cite or provide doc..umentation of the historical or cultural resources. N/A 28a. Describe the extent and nature of current and planned silvicultural use of the proposed acquisition. Please cite or provide documentation of existing or planned silvicultural activities includingfores, management plan(s). 2 Cultural resources means archeological and historic sites and artifacts, and traditional religious ceremonial and social uses and activities of affected Indian Tribes and mandatory protections of resources under chapters 27.44 and 27.53 RCW. 9 JL T will be working with Chumsortium partners to identify any forest management activities that may benefit and improve the habitat values for priority species that utilize th,J property. b. Describe any participation by current property owner in silviculture conservation programs, including the program and nature of the involvement. The property is currently in the Designated Forest current use taxation with Jefferson County, though no forestry activities appear to have taken place in the recent past. 29. Sponsors of applications that are approved for funding by the Board of County Commissioners are required to submit a brief progress report by October 30 every year for three years after the award is approved, or three years after the acquisition funds are disbursed to the applicant, whichever is later. The progress report must address any changes in the project focus or purpose, progress in obtaining matching funding, and stewardship and maintenance. Sponsors receiving O&M funds will also submit an annual report for each year that O&M funds are expended. The Committee will use the information to develop a project "report card" that will be submitted annually to the Board of County Commissioners. If this application is approved for funding, I understand the sponsor is required to submit progress reports for three years and for any year in which O&M funds are expended. Sf:> Initials~Date . 30. If, three years after the date funding is approved by the Board of County Commissioners, the applicants have not obtained the required matching funds, the Committee may request the Board of County Commissioners to nullify their approval of funds, and may require the project to re-apply. If this application is approved for funding, I understand that we may be required to re-submit the application if the project sponsor does not obtain the necessary matching funding within three years. oS 5 Initials 3! z..J 12- Date 31. Are there any critical dates, e.g, grant deadlines, for your project that the Committee should know about? Please list the dates and explain their importance. The SRFB grant cycle begins in March 2012, with local project raking taking place in fall 2012 and final approval and funding awarded to successful grant applicants in December 2012. If JL T is successful we would be able to close on the acquisition in spring 2013. 10 62/24/2B12 14:55 3683854196 JOHH L SCOTT PH landowner Information Name of Landowner: L. 'rown Truet . Landowner Contact Informitlon: Bill PiIM'ka, RMII!atIfe Agent, on behalf of Mr. Me. Title: Tru.tee FIrat Name: DorOthy !..Iat Nlme; Hopldl'l* Contact Mailing Addrel8: Contact E.M.II Addre..: "..rkllIlbolvaen.cqJD Phone: 380.531 ~231 0 ~rop.rty Addreu or L.o~t1on: WNt Unc.. RoaCland HlghWty 101 1. (landowner or OrgBnl:zQtion.) is the legal owner 01' prcperty de.erIt.d In thla gr8l'1t IppllQatlon. 2. I .m e~re tl1at the project Is baing propOHd on my pr~eny. 3. rf the grant I, sucoeSlfuBy aWllrded, [will be contacted Il'ld Isked to engage In negotiations. 4, My signature does not represent .uthorimtlcn of projllQt Implementation, ~.L tiu.t" Lanaowner 81Qn ture r i PAGE 32 crl-:I 7...Ua. Dabl ProJect Sponsor Information ProJect Name: L. arown Snow C....k. Weat Uncaa PrcJ.ct Applicant Contact Inform~C)n: Jefferton LInd Truet Mr. MI. Title Ix.ecutMt DlreCt4)r Flret Name: S.rah Lilt Name: SpUIh MaUlr\; Addrell: t033 Lawr.nee StrHt, Part Townund. WA 81381 Phone; 3800478.9t01 E.Matt AddNII: "PllthQaaveland.olV 1 id WdSc:V0 cl0c Lc 'qa~ 'ON 3NOHd 0fl : WOd.::J BUI Perka Vacant land Agent Detail Report Page 1 of 1 Listing # 324446 1977 S West Uncas Rd, Port Townsend 98368 County: Jefferson L T: STAT: Active . BLK: CMTY: Uncas LP: $125,000 PRJ: West Uncas Type: Vacant Land AR 486 TAX: 902 362 003 MAP: 12 GRO: 0.2 Internet: Yes DO: Hwy 20 to Hwy 101 at Discovery Bay. South on 101,about 1 mile, south of BPA power lines .to interseCtion with West Uncas Rd,on rlghtnthis is north property Ilne--HWY 101 is East IIne[1248'] CDOM: 2 alP: $1.25,000 FIN: lD: 02/25/2012 XD: 12/31/2012 OMO: ZJO: ZNR: GZC: County RR 1:5 Forestry, Residential SKS: No aTR/SEC: 36292 LAG: FAX: 1.:0: sac: CLA: CLO: OTVP: OPH: POS: TX$: . TRM: TER: WRJ: Right of First Refusal: Bill Perka (26129) (360) 3854196 John l. Scott/Pt. Townsend (9720) 512.5 Cmnts: PH: (360) 385-4115 x561 PH Type: Office PH: (360) 385-4115 x561 (360) 379-1663 Closing $27 TXY: 2011 Cash Out, Owner Finance Possible owner contract PH: PTO: No F17:. Provided OWN: Brown Trust OAD: Port Townsend,Wa. SNR: No ATF: STY: 41 . Res-Over 1 Acre ACR: 15.500 LSF: 675,180 lSZ: 1300x432x1241 WFG: snow creek DOC: WFT: LOE: Corner Lot VEW: See Remarks RO: East RDI: County Right of Way. Paved IMP: FTR: Comm. Grade Timber, Corners Flagged, Partially Cleared, Recreational, Riding Trails TPO: Gullies, Level, Rolling SLP: Community Features: LVL: 1000 ft "'/. Snow Creek fr WTR: GAS: ElE: SWR: Unknown Not Available In Street Not Available 501: SFA: No SrD: SDA: SOD: ESM: Access,timber co LOCKI SUR: AFN 5584321p3 SST: SOX: SO: Chimacum #49 EL: 3rd Party Aprvl Req: None JH: Bank/REO Owned Y/N: SH: No Agent Only Remarks: some wetlands--plenty of space for dwelling and barn/shop Marketing Remarks: "A River Runs Thru It.....15.5 ac. parcel located on West side of HWY 1D1 at intersection of West Uncas Rd.. Lots of large trees.. Power on West Uncas and Hwy 101- needs well and septic.100Oft +/- of SNOW CREEK frontage.Beautiful nature lovers paradise. Realist Tax No Tax Information Available Information Deemed Reliable But Cannot Be Guaranteed. Lot Sizes and Square Footage Are Estimates. 02/27/2012 -12:36PM D SnowCreek_LBrownTrust I I Jefferson_Parcels_20120201 Snow Creek Roads Snow Creek Acquisition L. Brown Trust Parcel 15.53 acres 2011 Aerial Image (NAIP) For informational purposes only. All data represented are from varying sources and approximate. Map created in March, 2011 L. Brown Trust Snow Creek Property CONSERVATION FUTURES FUNDS IllUSTRATIONS - 2012 .1 I ... Salmon rearing Snow Creek Native vegetation; healthy watershed t j; .., t < .~ 'r t , Northwest property corner - looking SE INTERNAL REVENUE SERVICE DISTRICT DIRECTOR 2 CUPANIA CIRCLE.' MONTEREY PARK, CA 91755-7406 DEPARTMENT OF THE TREASURY Date: MAY 03 1894 Employer Identification Number: 91-1465078 Case Number~ 954109002 Contact Person: TYRONE THOMAS Contact Telephone Number: (213) 894-2289 Our Letter Dated: May 08, 1990 Addendum Applies: No JEFFERSON LAND TRUST C/O DOuG MASON PRES PO BOX 1610 PORT TOWNSEND, WA 98368-0109 Dear Applicant: This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section SOl(a} of the rnternal Revenue Code as an organization described in section 501 (c) (3) is still in effect. Based on the information you submitted, we have determined that you are not a private foundation within the meaning of section ..509 (a) of the Code because you are an organization of the type described in section 509(a} (1) and 170(b) (1) (A) (vi). Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section S09(a) (1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice. that you would no longer be classified as a section S09(a) (1) organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any qUestions about your private foundation status, please keep it in your permanent records. . If you have any questions, please contact the person whose name and telephone number are shown above. Sincerely yours, ~;,p~ Richard R. Orosco District Director Letter 1050 (DO!CG) Jefferson Land Trust P.O. Box 1610 Port Townsend, Washington 98368 Internal Revenue Service . Service Center ATIN: Entity 1 Odgen, UT 84201 RE: Name change EIN 91-1465078 Dear Sir or Madam: By resolution of the Board of Directors on November 13, 1991, the Jefferson County Land Trust changed its name to Jefferson Land .Tru st. This is a name change only. Please change our name ill your records regarding our EIN and our 501(c)(3) status. Thank you. Jefferson Land Trust by: J ulianneMcCulloch Secretary . Internal Revenue Service . District Director POBOX 2350~ROOM 5]27 ATTN: E.O. LOS ANGELES, CA 900532350 Department of the Treasury JEFFERSONCOUN1V LAMD TRUST 1322WP.SHINGTON PO BOX 1610 PORT.TOWNSENT, WA 98368 Employer Identificalion Numbel'; 91.-l465078 Case Numben 950114110 Contact Pel.son: JOSEPH CUNHt\ Contact Telephone Number: (213) 894,.-4 UO Date: MAY 8, 1990 Accounting Period Ending: December 3] foundation Status Classifica~ion: see attached Advance Rul inq Per iod Begins: Apl-j I 7, 1990 Advance Rul ing Period Ends: Dec. 3J, 1993. Addendum Applies: none Dear App I i cant: Based on information suppl ied~ and assuming your oper~tions ~i II be as stated in your appl ication for recognition of exemption, NO have determlned you are exempt fro~ Foderal income taK under section 501(8) of the Intel~al Revenue Code as an organization described in section 501Cc)(3). Because you are a newly created or-galli:r.ation, He are not nOH lIlaking a f ina I determ i nat i on of your foundalion status under section 509 (a) of the Codo. HOHever, we have deter~ined that you can reasonably be expected to be a public- ly supported organization described in sections 509(0)(1) and- 110(b) (l)(A)(vi). Accordingly, you will be treated as a publicly supported organization, and not as a private foundation, during an advance ruling period. This advance ru1ing period begins and ends on the dates shoHn above. Within 90 days after the end of your advance ruling period., you must submit to us information needed to determin~ ~Ilether you have Met the require-. llents of the appl lcabls support test during the ad'lance rLd ing period. If you Bstabl ish that you have been a publ icly supported org8nization~ you Hi I I be classified as a section 509Ca)(1) or 509Cu)(Z) organi~atiQn as long as you con- tinue to ~eet the requirements of the appl icable support tost. If you do not ~eet the public support requirements during the advance ruling period, you wi II be classjfied as a private foundation for future periods. Also, if you are classified as a private foundationJ you wi I 1 be treated as a private foundation from the date of your inception for purposes .of sections SOl Cd) and 4940. Grantors and contr.ibutors may rely on the dctcrnlination th<lt youan~ not.a private foundation until 90 days after the end of YOUI- advance rul ~n9 pej"iod. If you submit the required information Nithin the 90 days~ grantors and contri- butors may continue to rely on tho advance determination unti I the Service letter lO"~CCG) -2- JEFFERSON.COUNTY LAMD TRUST ~akes a final determination of your foundation status. If notice that you wil I no longer be treated 3S a pub! icly supported or- ganization is published in tho Internal Revenue Bulletin, grantors and con- tributors may not rely on this determination after th~ dato of such publ ica- tion. In addition, if you lose your status as a pub! icly supported organiza- tion and a grantor or contributor Nas responsible for, or Nas aHare of, the act or fa i lure to act, that resul ted irlyourloss of such status, that person may not rely pn this determination fron the date of the act or failure to act. A Iso, if a grantor or contr i butor I earned that the Snrv i co had given nab ce that you Nould be removed fro~ classification as a publ icly supported organiz~- tion, then that person may not rely on this determinalion ~s of the date such ~noHledge;Has acquired. [f your sources of suppor.t t or your purposes, character, or method of operation change, please let us knoH so He .can consider the effect of the change on your exempt status and foundati on status. [n the case of an anend-' ~ent to your organizational document or bylaHs, please se~d us a copy of the amended documeflt or byla~s. Also, you should inform us of al I changes in your name or address. ~ls of January 1, 1984, you are I iable for taxes undel' the Fedenll lnsurn ance Contributions Act (social security taxes) on remuneration of $lOO or more you pay to each of your employees during a calendar year. Vou are not I iabla for the tax imposed under the Federal Unemployment TaK Act <rUTh). Organizations that are not private foundations; are not subject to the pri- vate foundation excise taxes under Chapter 42 of the Code. HOHoverJ you are not automatically eK~mpt from other F~deral excise taxes. If you have any questions about excise, employment, or other Federal taxes, ploase let us ~noH. Donors may deduct contr i but ions to you as proY i dad insect. ion L iO of the Code. Bequests, legacies, de...ises, transfers, 0." f.Jifls to you or ft)l- your USt} are deductible for Federal estate and gift tax.purposas jf tlley meet the appl i- cableproyisions of sections 20551 2106~ and 2522 of the Code. Contribut~on deductions are allOHable to donors only lo the exlonl that their contributions are gifts, Wit!l no consideration received. Ticket pur- chases and similar payments in conjunction Hith fundrnising events may not necessar- i f y qua I i fy as deduct j b ! e contr i but ions, depend i n9 on the circum.. stances. See Revenue Ruling 67-246, publ ished in Cumlllative Bulletin 1967-2J on page 104, Hhich sets forth guidelines regarding the deductibi I ity, as chari- table contributions, of payments made by ta~payers fOI" adnission to or olher participation in fundr~ising activities for charity. You are requj~ed to fi Ie For-m 990, Return of Organization Exempt From lncome Tax, only if your gross recoipts each yeal" are noroally Dore than $25,000. HOHevert if you roceive ~ For~ 990 package in th~ mai I, please fi Ie the roturn even jf you do not exceod the gross receipts tost. If you aro not I.etter l04!:)(CG) -3- JEFFERSON~COUNTV LAMD TRUST required to file, simply attach the label provided, check the box in the head-- ing to indicate th~t your annual gross receipts are normally $25,000 or Jess, and s~gn the return. If a return is required, it must be fil~d by the 15th day of the fifth ~onth after the end of your annual accounting period. A ponalty of $10 a day is charged Hhen a return is fi led late, unless there is reasonable cause for the delay. HO~Aver, the maxi~Um ponalty charged cannot exceed $5,000 or 5 POI"- cent of your gross receipts for the year, Hhichever is less. This penalty may also be charged if a return is not complete; so plcu!w be sure your retuI"n IS complete before you file it. Vou are not required to file Federal income tax ret~rn5 utlless you are subject to the tax on unrelated business income.under section 511 of.the Code. If you are subject to this tax, you must fj Ie an inco~e tax return on Form 990-T, Exempt DI-ganizalion Business lncome Tax Return. In th~s letter He are not deter~in~ng Hheth~r any of your present or proposed activities are unre- lated trade or business as defined in section 513 ~f lhe Code. You need an employer identification number ovon if YOll hayo no employees. If an employer identification number Has not entered on your appl ication~ a number Hil I be assigned to you and you Hi! I be advised of it. Please use that nUlllber on all returns you fi Ie and in all correspondence Nith the Internal Revenue Service. If He have indicated in the heading of this letter thnt an addendum applies~ the addendum enclosed is an integral part of this letter. Becausw this letter could help resolve any questions about your exe~pt status and foundation status, you should keep it in your pcrrflanent records. ]f you have any questions, please contact the person whose name and telephone number are shown in the heading of this letter. {CerelY . Michael J. Quinn District Director Enclosure{s): Form 872-C l.etter 10"0 (em JEFFERSON COUNTY LAND TRUST FOUNDATION STATUS: 170(b) (1) (A) (vi) and S09(a)(l) -4- LettE?r lO"5(CG) Form 872-C Department o,f the Treasury-Internal Revenue ~rvice. OMB No,. 1545'()()56 ~es 3.3I-a9 (Rev. March 1986) . . Consent Fixing Period of Limitation Upon Assessment of Tax Under Section 4940.of the Internal Revenue Code (See Form 1023 Instructions for Part IV, line 3.) To be used with Form 1023. Submit In . duplicate. Under.section. 6501(c)(4) of the Internal Revenue Code, and as part of a requestfiled with Form 1023 thafthe organization named below be treated as a publicly supported organization under section 170(b)(1)(A){vi) or section 509(a)(2) during an advance ruling period, JEFFERSON COUNTY LAND TRUST .......................if;a~ti;i;in~~;o;o;g;n~no~j....................... } and the District Director of Internal Revenue P.O. BOX 1610, PORT TOWNSEND. WA 98368 ..._..............iN;~~;,;~~t~ay.~t~~;:;t~t~~~d.ilp.;od~j...~.-.........-.. Consent and agree that the period for assessing tax (imposed under section 4940 of the Code) for any of the5 tax years in the advance ruling period will extend 8 years, 4 months, and 15 days beyond the end of the first tax year. However, if a notice of deiiciency.in tax for any of these years is sent to the organization before the period expires, then the time for making an assessment will be further extended by the number of days the assessment is prohibited, plus 60 days. . . 12/31/89 Ending date of fl rst tax year. . . . . . . _ . . . . . . . . _ . . . . . . n. . .. .. ~. . . Name of organization JEFFERSON. COUNTY LAND TRUST Signature ... Distlict Director Date 2/6/90 MICHAfL J. QUINN Date By ... ~ MAY 0 GROUP MANAGER, EQ..4 For Paperwork Reduction Act Notice, $Ie page 1 of the Form l023lnstructlons. x o .-I > N .-I o N S' OJ .~ OJ :> o ... OJ "" -0 ::> '" --- lD u lD '" ~ (L 9- -'" o o ;:; ::> o ~ c 11 c o u --- '" .!! u:: - OJ E OJ ... c:. ~ '" o 0- E OJ ~ ~ o ~ .~ ~ .t:' o oN '1i;j.... i~ l'~ I~ ,:g, ""31'0 OJ ;::l ~m --- \'1 Q) '" ::l --- (j on ' ::> III J:: <II .. o !It c:. 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Steve Moore, President David Reid, Vice President Jefferson Land Trust 2012 Board of Directors Rodger Schmitt, Vice President Joanne Tyler, Treasurer Kathryn Lamka, Secretary Bethany Axtman Glenda Hultman Gary Keister Suzanne Learned B ill Meyer M ~ = M -w """ ~ ..= U = o ... -w ~ N ... = ~ '=J) """ o ~ ~ ~ V1;ii' ...... ~"'t. &..alIU .. ....g.. 02115/12 Accrual Basis Profit & Loss January through December 2011 Jiln - Dec 11 Ordinary Income/Expense Income 4000. Unrestricted L&S Income 4500. Restricted L&S Income 4900 . Endowment 5000 . Operations Income Total Income 249,Q04.39 251,070.08 10,769.60 457,510.58 968,354.65 Cost of Goods Sold 6100, Program Expenses 6200 . land and Stewardship Expenses 6300 . Professional services 33,824.47 240,876.93 157,715.79 432,417.19 Total COGS Gross Profit 535,937.46 Expense 7000 . Operations Expense 411,736.98 411,73698 Total Expense Net Ordinary Income 124,200.48 Net Income 124,200.48 . r....~...~._IUI 't.1 1~IVI.''''''~'\.oI'-' _.'''''_.............. Page 1 of 1 JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Financial Statements Forthe Year Ended December 31,2010 Table of Contents Page Independent Auditors' Report Consolidated Financial Statements: Consolidated Statement of Financial Position 2 Consolidated Statement of Activities 3 Consolidated Statement of Cash Flows 4 Notes to Consolidated Financial Statements 5 -14 Supplementary Information: Consolidated Statement of Functional Expenses 15 Independent Auditors" Report Board of Directors Jefferson Land Trust and Subsidiary Port Townsend, Washington Certified Public Accountants We have audited the accompanying consolidated statement of financial position of Jefferson Land Trust and Subsidiary (collectively, JL T, a nonprofit organization) as of December 31, 2010, and the related consolidated statements of activities and cash flows for the year then ended. These financial statements are the responsibility of JL T's management. Our responsibility is to express an opinion on these financial statements based on our audit. and Consultants We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonabl~ assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of JL T as of December 31,2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an OplTIlOn on the financial statements as a whole. The consolidated statement of functional expenses on page 15 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibil ity of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The infonnation has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. &~~Ps Certified Public Accountants May 17,201 I JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Financial Position December 31,2010 Assets: Cash and equivalents Investments (Note 2) Accounts receivable Pledges receivable (Note 3) Note receivable (Note 4) Prepaid expenses Land, conservation easements, and purchase options- Habitat land Working land Open space land Conservatio n ea sements Land herd for sale Land purchase option $ 360,332 312,047 76,292 499,028 85,054 2,347 546,491 25,048 176,094 44 933,760 52,500 1,733,937 6,123 $ 3,075,160 Total land, conservation easements, and purchase options (Note 5) Furniture and equipment, net of depreciation of $1 0,897 Total Assets Liabilities and Net A 'isets: Accounts payable Accrued expenses and deferred revenue Purchase option received Long-term debt (Note 6) $ 34,727 48,338 120,000 657,024 Total Liabilities 860,089 Net Assets: Unrestricted (Note 9)- Undesignated Board designated Total unrestricted net assets (130,320) 1,561,437 1 ,431 ,117 763,728 20,226 2,215,071 $ 3,075,160 Temporarily restricted (Note 10) Permanently restricted (Note 11) Total Net Assets Total Liabilities and Net Assets See accompanying notes. - 2 - JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Activities For the Year Ended December 31,2010 Unrestricted Temporarily Restricted Permanently Restricted Total Revenue and Gains: Gifts and contributions $ 71,077 $ 273,004 $ 10,000 $ 354,081 Fair value of easement acquisitions 166,000 166,000 Grants and contracts 351,933 351,933 Special events income, net of expenses of $14,786 113,877 113,877 Net gain on investments 30,374 226 30,600 Rental income 23,580 23,580 Other 3,016 3,016 Release from restriction 242,390 (242,390) Total Revenue and Gains 1,002,247 30,614 10,226 1,043,087 Expenses: Program 723,947 723,947 General and administrative 79,286 79,286 Fundraising 77,737 77,737 Total Expenses 880,970 880,970 Change in Net Assets 121,277 30,614 10,226 162,117 Beginning of year net assets 1,309,840 733,114 10,000 2,052,954 End of Year Net Assets $ 1 ,431 ,117 $ 763,728 $ 20,226 $ 2,215,071 See accompanying noles, - 3 - JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Cash Flows For the Year Ended December 31,2010 Cash Flows from Operating Activities: Change in net assets $ 162,117 Adjustments to reconcile change in net assets to net cash provided by <..perating activities- Depreciation and amortization 1,339 Imputed interest expense (36,000) Realized and unrealized gain on investments (16,930) Changes in assets and liabilities: Accounts receivable 22,746 Pledges receivable (37,211) Prepaid expenses 2,683 Accounts payable 20,475 Accrued expenses and deferred revenue 2,574 Net Cash Provided by Operating Activities 121,793 Cash Flows from Investing Activities: Purchases of investments (181,925) Proceeds from sale of investments 221,887 Purchases of land and land purchase option (208,291 ) Purchases offurniture and equipment (3.243) Net Cash Used by Investing Activities (171,572) Cash Flows from Financing Activities: Payments on long-term debt (5,229) Net Cash Used by Financing Activities (5,229) Net Change in Cash and Cash Equivalents (55,OOS) Cash balance, beginning of year 412,402 Cash Balance, End of Year $ 357,394 Supplemental Disclosure of Cash Flow Information: Cash paid for interest $ 23,151 See accompan,ving nales. -+- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Organization and Summary of Significant Accounting Policies Organization. Jefferson Land Trust (the Land Trust) is a Washington nonprofit corporation, formed on April 7, 1989. The Land Trust's purpose is to acquire, preserve and manage open space lands and easements for land cohservation purposes benefitting the public. The Land Trust also provides information and materials to the public on land conservation issues. The Land Trust serves Jefferson County on the Olympic Peninsula in Washington. The Land Trust has been accredited by the national Land Trust Alliance as of August 5,2009. On September 5, 2007, JLT Resources, LLC was formed with Jefferson Land Trust as its only member. JLT Resources, LLC was formed for the purpose of purchasing and holding land for conservation purposes. Summary of Significant Accounting Policies: Principles of Consolidation " These financial statements consolidate the statements of Jefferson Land Trust and JL T Resources, LLC (collectively, "JL T). Inter-organization balances and transactions have been eliminated in consolidation. Basis of Accounting - The consolidated financial statements of JL T have been prepared on the accrual basis of accounting. Basis of Presentation - Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of JL T and changes therein are classified and reported as follows: Unrestricted Net Assets" Include all net assets on which there are no donor-imposed restrictions for use, or on which donor-imposed restrictions were temporary and have expired. Temporarily Restricted Net Assets - Include all net assets subject to donor-imposed restrictions that will be met either by actions of JL T or the passage of time. Permanently Restricted Net Assets - Include all net assets received by donations wherein the donors impose a permanent restriction on the use of the gift The donors require the gift to be invested and only the income from such investments may be used to support the intended cause. All donor-restricted support is reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restriction. VVhen restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restiction. Gifts of equipment are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts Of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long-lived assets are placed in service. - 5- -- ----------~--I JEFfERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statement!)' Note 1 - Continued Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivalents - For reporting purposes, JL T considers all unrestricted highly liquid investments with a purchased maturity of three months or less to be cash equivalents. Concentrations - JL T maintains its cash in bank deposit accounts with two financial institutions. JL T's cash balances may, at times, exceed federally insured limits. One donor's pledge represented approximately 25% of pledges receivable at December 31,2010. Investments - Investments in marketable securities with readily determinable fa.ir valUeS and all investments in debt securities are valued at their fair values in the consolidated statement of financial position. The carrying amount of the investment held in trust is determined by the trustee holding the securities. Unrealized gains and losses are included in the change in net assets. JL T has established a designated fund at Jefferson County Community Foundation. As JL T has designated itself as the beneficiary of the fund, the fund balance and activity are reported in the consolidated financial statements of JL T as required by GAAP. Accounts Receivable - Accounts receivable are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation have not been material to the consolidated financial statements. Grants and Contrac~ - JL T receives grants and contracts from federal, state, and local agencies, as well as from private organizations, to be used for specific programs or land purchases. The excess of grants receivable over reimbursable expenditures to-date is recorded as deferred revenue. Furniture and Equipment ~ Furniture and equipment are capitalized at cost if purchased, or, if donated, at the approximate fair value at the date of donation. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference, less any amount realized from disposition, is reflected in earnings. Maintenance and repairs are charged to expenses as incurred. Costs of significant improvements are capitalized. JL T provides for depreciation using the straight-line method over the estimated useful lives of the assets of five to ten years. - 6- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Continued Land and Easements - JL T records acquisitions of land at cost if purchased. Land acquired through donation is recorded at fair value, with fair values generally based on independent professional appraisals. These assets fall into four primary categories: Conservation Lands - Real property with significant ecological value for habitat, open space, or working lands.. Stewardship programs of JL T manage these properties to protect the natural biological diversity of the property. JL T manages its working timberland as a Forest Stewardship COllncil - Certified, managed forest Conservation Easements - Voluntary legal agreements between a landowner and a land trust or government agency to permanently protect the identified natural features and conservation values of the property. These easements may be sold or transferred to others so long as the assignee agrees to carry out, in perpetuity, the conservation purposes intended by the original grantor. Conservation easements owned by JL T protect habitat, open space and working lands, such as family farms, through its stewardship programs. Easements acquired represent numerous restrictions over the use and development of land not owned by JL T. Since the benefits of such easements accrue to the public upon acquisition, the fair market value of easements acquired is shown in the year of acquisition as an addition to net assets to record the donation of the easement, and unless conveyed to a public agency for consideration, shown as a reduction in net assets to record the value of the public's benefit and to recognize that these easements have no marketable value once severed from the land and held by JL T. Easements held by JL T are carried on the consolidated statement of financial position at $1 each for tracking and accounting purposes.. Two easements valued at $166,000 total were donated to JL T during the year ended December 31. 2010. Accordingly, $166,000 of contribution revenue and $165,998 of related write down expense have been reported on the consolidated statement of activities for the year ended December 31,2010. Land Held for Sale - Two properties owned by JL T, Red Dog Farm and Tamanowas Rock Sanctuary, will be sold in the near future under prearranged agreements with each potential owner. Red Dog Farm will be purchased by the current lessee after JL T finalizes and records a conservation easement with the new owner. This conservation easement ensures Red Dog Farm will continue to operate as a working farm and will protect critical habitat for salmon and other wildlife in perpetuity. Tarranowas Rock Sanctuary was purchased by JL T with the help of the Jamestown S'Klallam Tribe and a low interest loan from the Bullitt Foundation (Note 6). The Jamestown S'Klallam Tribe purchased an option on the property which will be exercised in late 2011. The intention of the tribe is to protect the property in perpetuity for both habitat and cultural purposes. Tamanowas Rock Sanctuary has a long history of cultural ties to the Jamestown S'Klallam Tribe. Land Purchase Option - JL T has $52,500 invested in purchase options for Chimacum Dairy, a historic dairy farm in the Chimacum Valley. These options will be exercised in mid-2011 when a group of conservation investors plan to buy the farm, reimburse JL T for the purchase option amount, and enter into a long term lease with a local creamery in Jefferson County. JL T already holds a conservation easement on the property for working farm and habitat purposes. - 7- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1- Continued Purchase Option Received - In 2009, JL T purchased the Tarnanowas Rock Sanctuary with the help of the Jamestown S'Klallam Tribe and a low interest loan from the Bullitt Foundation (Note 6). The Jamestown S'Klallam Tribe paid $120,000 to JL T for an option to purchase the property which will be exercised in late 2011. At that time, JL T will pay in full the outstanding balance on the Bullitt Foundation loan with proceeds from the sale of the property to the Jamestown S'Klallam Tribe and other potential conservation partners. The intention of the tribe and JL T is to protect the property in perpetuity for both habitat and cultural purposes. Federal Income Taxes - The Internal Revenue Service has determined Jefferson Land Trust and JL T Resources, LLC (a disregarded entity) to be exempt from federal income taxes under Internal Revenue Code Section 501 (c)(3). Conl.ibutions to JL T are deductible as allowed under Section 170(b}(f)(A)(vi) of the Code. Functional Allocation of Expenses - The costs of providing the various programs and other activities have been summarized on a functional basis in the consolidated statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Subsequent Events - JL T has evaluated subsequent events through May 17, 2011, the date on which the consolidated financial statements were available to be issued. Note 2 - Fair Value Measurements GAAP defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, GMP uses a fair value hierarchy that prioritizes the inputs to valuation approaches into three broad levels. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). Valuation Techniques - Financial assets and liabilities valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using Level 2 inputs are based primarily on quoted prices for similar assets or liabilities in active or inactive markets. Financial assets and liabilities using Level 3 inputs were primarily valued using managemerrt's assumptions about the assumptions market participarrts would utilize in pricing the asset or liability. Valuation techniques utilized to determine fair value are consistently applied. Following is a descripti,n of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2010. Certificates of Deposit - Valued at cost plus accrued interest, which approximates fair value. Mutual Funds - Valued at quoted market prices in active markets, which represent the net asset value (NAV) of shares held by JL T at year-end. Funds Held at Jefferson County Community Foundation - Valued using the NAV provided by the fund's manager The NAV is based on the fair value of the underlying assets owned by the fund. These underlying assets are traded in active public markets with obseNable market data. - 8. JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 2 - Continued Fair Values Measured on a Recurring Basis - Fair values of investments measured on a recurring basis at December 31, were as follows: Fair Value Measurements at December 31. 2010 Quoted Prices Sign~llcant In Active Other Significant Markets for Observable Unobservable Identical Assets Inputs Inputs (Levell) (Level 2) (LeveI3) Total Certificates of deposit Mutual funds- Fixed income Funds held at Jefferson County Community Foundation $ - $ 150,879 $ - $ 150,879 35,791 35,791 125,377 125,377 $ 35.791 $ . 150.879 $ 125.377 $ 312.047 A reconciliation of the beginning and ending balances for fair value measurements made using significant unobservable inputs (Level 3) follows: Ending Balance at December 31, 2010 175,078 2,464 16,820 (3,518) (65.467) 1-- 125.377 Beginning balance at January 1, 2010 Interest income Total gains (realized/unrealized) Fees paid Withdrawals $ Investment return for the year ended December 31 consisted of the following: 2010 Interest income Realized/unrealized gain Investment fees $ 17,188 16,930 (3.518) $ 30 600 - 9- JEFFERSON UND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 3 - Pledges Receivable Pledges receivable at December 31,2010 are to be received as follows: Less than one year $ 154,930 Two to five years 287,210 Thereafter 56,888 $ 499,028 A present value discount on pledges receivable has been determined to not be material to the consolidated financial statements. No allowance for doubtful accounts was deemed necessary by management for the promises to give based on historic experience. Note 4 - Note Receiv"ble On February 15, 2008, JL T granted a loan to an individual in relation to one of the pieces of conservation land owned by JL T JL T received a promissory note in exchange. The promissory note is for the amount of $93,750 and is to be paid in monthly installments of $618.71. The note matures on January 15, 2028 with an annual interest rate of 5%. The balance of $85,054 at December 31, 2010 is included in accounts receivable in the consolidated statement of financial position. The note receivable at December 31, 2010 is to be received as follows: Less than one year $ 3,239 Two to five years 14,702 Thereafter 67,113 $ 85.054 Note 5 - Land, Conservation Easements, and Purchase Options Land, conservation easements, and purchase options at December 31, 2010 are summarized as follows: Conservation lands- Quimper Wildlife Corridor Duckabush Oxbow Chimacurn Creek I Brown Dairy Bulis Forest Preserve Kilham Cornu Snow Creek Estuary Conservation easements Land purchase option Land held for sate- Red Dog Farm Tamanowas Rock Sanctuary $ 261,803 180,000 140,160 125,240 38,930 1,500 44 52,500 333,760 600,000 $ 1 733,937 -]()- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 6 - Long-term Debt On December 18,2007, JL T entered into a loan agreement with a commercialleoder ir, the amount of $226,110. The loan bears interest at 8.5%, and is due in 60 monthly payments of principal and interest totaling $1,965, and a final principal payment of $200,809 on January 10, 2013. The loan is secured by the Red Dog Farm property and an Assignment of Rents from the lease described in Note 8. The outstanding amount due at December 31, 2010 was $213,024. On December 23, 2009, JL T entered into a promissory note in the face amount of $480,000 with a Washington nonprofit corporation to purchase the Tamanowas Rock Sanctuary property. The note is secured by the property. The note has a stated interest rate of 1 % and has a maturity date of December 31, 2011. When the loan proceeds were advanced, JL T recorded contribution revenue and a loan discount using an imputed interest rate of 8.5%. The discount on the loan is being amortized to interest expense over the life of the loan. Imputed interest expense of $36,000 was reported in the accompanying consolidated statement of activities for the year ended December 31,2010. The outstanding amount due at December 31,2010 was $444,000. Principal payments on the loans are as follows: Years Ending December 31, 2011 2012 2013 $ 449,997 6,218 200,809 S 657 024 Note 7 - Retirement Plan In 2010, JL T began a Simplified Employee Pension - Individual Retirement Accounts Contribution Benefit Plan ("the Plan"). Eligible employees may join the Plan after one year of service. The total employer contribution for 2010 was $4,934, and is included in employee benefits on the consolidated statement of functional expenses. Note 8 - Lease Agreements On July 2, 2008, JL T entered into an operating lease as lessee for its administrative office in Port Townsend, Washington. The lease expired in June 2010 and continues on a month to month basis. Rent expense totaled $17,358 for the year ended December 31,2010. On December 20, 2007, JL T Resources, LLC entered into a lease agreement as lessor for the Red Dog Farm property. The lease term is five years, and monthly lease payments are $1,965. The lease requires the lessee to pay all taxes and assessments relating to the property. The lease also requires the lessee to comply with a land use plan, and provides a purchase option to the lessee during the lease term. - 1/ - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to ConsoJidateJ Financial Statements Note 8 - Continued Sublease rentals to be received are as follows: Years Ending December 31, 2011 2012 Note 9 - Unrestricted Net Assets Unrestricted net assets consisted of the following at December 31,2010: Designated - Tamanowas Rock Sanctuary Designated - Red Dog Farm Designated - Quimper \Nildlife Corridor Designated - D' Ickabush Oxbow Designated - Chimacum Creek I Brown Dairy Designated - Bulis Forest Preserve Designated - Kilham Corner Designated - Snow Creek Estuary Conservation easements Total designated Undesignated Note 10 - Temporarily Restricted Net Assets Temporarily restricted net assets consisted of the following at December 31,2010: Purpose restriction- To purchase Gateway land For stewardship of Bulis Forest Preserve For stewardship of Chimacum Creek I Brown Dairy For stewardship and management services for Tamanowas Rock Strategic plan Time restriclion- Outstanding pledges $ 23,472 23,472 $ 46 944 $ 480,000 333,760 261,803 180,000 140,160 125,240 38,930 1,500 44 1,561,437 (130,320) $ 1431117 $ 99,525 83,984 41,850 36,341 3,000 264,700 499.028 $ 763.728 Net assets of $80,421 were released from donor restrictions. by incurring expenses satisfying the purpose restriction specified by the donor, and net assets of $161,969 were released due to the expiration of time restrictions for the year ended December 31,2010. - J 2- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 11 - Permanently Restricted Net Assets At December 31, 2010 JL Thad $20,226 of permanently restricted net assets. This is comprised of endowment investments (Note 12), the income of which is available to support general operations. Note 12 - Endowments The JL T endowment consists of one fund established to support general operations. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor- imposed restrictions. Interpretation of Relevant Law. JL T's Board of Directors has interpreted the Washington State Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, JL T classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by JL T in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, JL T considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: The duration and preservation of the fund The purposes of JL T and the donor-restricted endowment fund General economic conditions The possible effect of inflation and deflation The expected total return from income and the appreciation of investments Other resources of JL T The investment policies of JL T. As of December 31, 2010, endowment net assets consisted of the following: Unrestricted Temporarily Restricted Permanently Restricted Total Donor-restricted endowment funds $ - $ - $ 20,226 $ 20,226 - /3- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 12 - Continued Changes to endowment net assets for the year ended December 31,2010, are as follows: Interest and dividends Realized and unrealized gains/losses Total endowment investment return Permanently Restricted $ 10,000 194 32 226 10,000 $ 20 22~ Endowment net assets, January 1, 2010 Contributions Endowment Net Assets, December 31,2010 Funds with Deficiencies - From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor or UPMIFA requires JL T to retain as a fund of perpetual duration. In accordance with GAAP, deficiencies of this nature are reported in unrestricted net assets. There were no such deficiencies as of December 31, 2010. Return Objectives and Risk Parameters - JL T has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that JL T must hold in perpetuity or for donor-specified periods as well as board-designated funds. Under this policy, as approved by the Board of Directors, the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of a custom Policy Index made up of various indices. The composition of the custom Policy Index is based upon the strategic asset allocation of the investment portfolio and assumes a moderate level of investment risk. The investment objectives of the Operations Endowment Fund include maintenance of principal, timely liquidity, and preservation of purchasing power over time. Strategies Employed for Achieving Objectives - To satisfy its long-term rate-of-return objectives, JL T notes that for funds earmarked for capital appreciation, appropriate investments include intermediate term bond funds/ETF's, equity mutual funds, equity ETF's, and unconstrained Bond Funds. Spending Policy and How the Investment Objectives Relate to the Spending Policy - JL T's spending policy intends that no distributions may be made from the Operations Endowment Fund for the first five years of its existence or until it reaches a threshold balance of $400,000, whichever shall first occur. After a five-year period or after achieving the $400,000 threshold, distributions shall be made on an annual basis as determined by the Board. Regular disbursements should be limited to a maximum of 5% of the value of the portfolio at the beginning of each fiscal year, or one-half of the income generated by the fund for the most recent fiscal year, whichever is less. At no time will the distribution of the spendable amount result in the invasion of the original amounts donated. - f-+ - JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Functional Expenses For the Year Ended December 31,2010 General and Total Program Administrative Fundraising Expenses Salaries $ 165,528 $ 39,912 $ 33,752 $ 239,192 Payroll taxes 17,075 4,207 3,465 24,747 Employee benefits 26,932 6,636 5,465 39,033 Total salaries, taxes and benefits expense 209,535 50,755 42,682 302,972 Professional fees 144,717 2,907 22,276 169,900 Value of conservation easements written down 165,998 165,998 Land and stewardship expenses 95,449 95,449 Interest 59,151 59,151 Other expenses 2,412 19,866 148 22,426 Rent 12,868 2,951 3,030 18,849 Postage and printing 9,021 405 3,189 12,615 Travel and seminars 7.495 27 274 7,796 Public awareness 4,309 62 2,849 7,220 Office supplies 2,436 449 1,102 3,987 Insurance 2,600 445 367 3,412 Dues and subscriptions 3,129 165 3,294 Telephone 2,022 498 410 2,930 Web design and maintenance 848 848 1,696 Utilities 1,033 254 210 1 .497 Depreciation 924 228 187 1,339 Bank fees 439 439 Total Expenses $ 723,947 $ 79,286 $ 77,737 $ 880,970 See independent auditors' report. - 15 - Jefferson Land Trust RESOLUTION February 21, 2012 WHEREAS, Jefferson Land Trust is an applicant or sponsor for more than one Conservation Futures Funding application, and Conservation Futures Funding Application process requires that Jefferson Land Trust prioritize its projects, and WHEREAS, Jefferson Land Trust has been working since 2006 in partnership with Jefferson LandWorks Collaborative whose mission is to keep the farms and forests of Jefferson County, Washington, working, productive and profitable, and WHEREAS, the historic Boulton Fann is indicated as priority agricultural and habitat land in several local and regional plans, and the landowner is eager to.complete the project, AND WHEREAS, 144 acres of prime agricultural land on the Boulton Fann, will be protected for prime agricultural soils, riparian habitat of Andrews Creek and some associated forestland on the agriculturally zoned acreage by an agricultural conservation easement, and WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, AND WHEREAS, Jefferson Land Trust has been working since 2001 in partnership with Jefferson County Conservation District, Jefferson County, Washington Department ofFish and Wildlife, North Olympic Salmon Coalition, the Hood Canal Coordinating Council, the Jamestown S'Klallam Tribe and WSU Cooperative Extension to acquire and restore crifcal salmon spawning, rearing and migratory habitat in the Salmon/Snow Creek riparian area and estuary, and WHEREAS, these professional naturalists and scientists have recommended that Snow Creek habitat protection be expanded to provide further benefits for migrating salmonids and other species, and WHEREAS, acquisition of high-priority identified parcels in the Snow Creek Estuary area from willing sellers would provide such habitat protection, the L. Brown Trust parcel has been identified as such, AND WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, according to the Salmon and Snow Creek Fish and Wildlife Management Plan. AND WHEREAS, Jefferson Land Trust has been working since 2004 in partnership with Northwest Watershed Institute to acquire and restore critical forested watershed, riparial, estuarine and nearshore habitat in the Tarboo CreeklDabob Bay watershed area, and WHEREAS, a conservation easement on the 80-acre Tarboo Forest property would protect in perpetuity critical forested watershed habitat from subdivision and development, and will leverage conservajon of an additional] 60 acres of adjacent forestland, AND WHEREAS, Northwest Watershed [nstitute has requested that Jefferson Land Trust sponsor their Conservation Futures Funding application for an acquisition of a conservation easement to be held by Jefferson Land Trust. BE IT HEREBY RESOLVED that Jefferson Land Trust agreed at its February 21,2012 Board of Directors meeting to sponsor an application for Conservation Futures Funding for acquisition of a conservation easement on the Boulton Fann, and agreed that The Boulton Farm protection is the highest priority for 2012 Conservation Futures Funding due to the landowner age, project duration a,nd agricultural conservation and economic values. The next highest priority is funding for the Snow Creek project because it would provide a vital connectivity to the Snow Creek project area, is currently listed for sale, and it represents a collaborative effort with community members and our Chumsortium partner organizations as they work to preserve this significant salmon habitat. The third highest priority is funding the Tarboo Forest property to support our project partner Northwest Watershed Institute in preserving critical watershed and riparian habitat in the Tarboo Creek area. Signed this 2Ith day of February. 2012. Steve Moore, re Qent, Board of Directors Jefferson Land Trust Hood Canal Coordinating Council JEFFERSON, KITSAP Be MASON COUNTIES; PORT GAMBLE S'KLALLAM Be SKOKOMISH TRIBES; STATE Be FEDERAL AGENCIES February 28th, 2012 Conservation Futures Committee Via email To whom it may concern, I am writing in support of the Jefferson land Trust proposal to purchase the L. Brown trust parcel located on Snow Creek. This parcel contains 1400' of Snow Creek that is home to two federally-listed salmonid species, Hood Canal Summer Chum Salmon and puget Sound Steel head Trout, as we as coho salmon. The Hood Canal Summer Chum Salmon Recovery plan states "Protection, restoration and maintenance of the Jimmycomelately and Salmon/Snow Creek watersheds are of paramount importance. In both watersheds, the lower river sections (lower 1-2 miles) and the estuaries are targeted for restoration. These areas must be restored and protected to effect and ensure recovery of the Strait population." This project is located at river mile 1.6 and clearly is a tremendous opportunity to not only purchase for permanent protection but also to restore 11 acres of riparian area. In addition to the recovery plan, the three year work plan identifies conservation purchases/easements and riparian restoration as very high priorities. The HCCC conducted a riparian habitat assessment in the summer of 2010 and found this parcel to contain highly functional riparian conditions that are currently limited in this watershed. With minimal effort, conifer underplantings on this parcel would establish one of the best examples of this lowland habitat in Jefferson County. Beyond salmon recovery, this proposed purchase would further the draft goals of the Integrated Watershed Management Plan by improving the integrity of our forests, riparian areas, and water for human health and prosperity. Further, by moving towards improved habitat conditions and salmonid viability, we hope to decrease future pressure on other important social and economic goals such as livable communities, sustainable employment and cultural heritage. We fully support the application of the Jefferson land Trust to the Conservation Futures program to purchase and replant this parcel. The Jl T is a critical partner in the Chumsortium that has the capacity and expertise to implement and sustain conservation purchases that will fulfill a cornerstone of our shared conservation mission. Sincerely, ,LLJ- &.(h,1~~;fL Richard Brocksmith Director for Habitat Programs 17791 FJORD DRIVE NE, SUITE 122. FOULSBO, WA 9837G-8481 - WWW.HCCC.WA.GOV Board of Directors Mike Longley p,c:;':g ~ro?~Jdenr Ron Deisher ;'(f{,;!~;!2.f jeon frreca ';f-~reIG"/ Harry 8~1I Co thy Lear Kurt Lawler Hanna/1 MerrHl Saran M<:Mahan Andy McGregor Coleman Byrnes Michael Bfanron NORTH OL YMPlC SALMON COAUTION Restaring wild solmon habitat on the. North Olympic Penlnsuro www.noscorg February 29. 2012 To: Conservation Futures Advisory Committee Subject; L Brown Property Acquisition on Snow Creek The North Olympic Salmon Coalition offers its enthusiastic supportfoT the Jefferson Land Trust's project application for the acquisition of the L Brown Trust propert)r on Snow Creek. The North Olympic Salmon Coalltion, the Jefferson Land Trust and a multitude of partners collectively known as the Chumsortium, have been working in the Discovery Bay watershed for a decade to restore habitat for salmon, including ESA listed summer chum. Property acquisition of targeted parcels has been a key component to Jur successes in the watersheds and has allowed over a half mile of Salmon Creek to be restored. 11 acres of salt marsh have been reclaimed and restored,tens of acres have been replanted with riparian forest, and 356 acres have been permanently protected with conservation easements and preserves. The acquisition of the 15.5 acre l. Brown Trust property will protect approximately 12 acres of critical forested riparian habitat along 1500' of Snow Creek. The property has been identified by the Hood Canal Coordinating Council's Salmon Recovery Strategy as critical for protection and restoration efforts due to the presence of ESA-listed Hood Canal Summer Chum spawning habitat at the site. Perhaps more importantly, the section of Snow Creek on this property ;s in excellent condition and should be protected in this state. It is far simpler and cheaper to protect high quality habitat than to restore it down the line. The Chumsortium partners agree that this is a key property for acquisition. Fundingfrom the conservation Futures program aids this effort significantly and greatly increases the odds of funding the balance of the acquisition with Salmon Recovery Funding Board dollars by guaranteeing project match. This leverages Jefferson County dollars to purchase a key property in the preservation and restoration of Jefferson County salmon. Sinc.ereW. ///- It ~(dv~25---;~~/ '----. Rebecca Benjamin Executive Director, North Olympic Salmon Coalition 2056 We,t Patison Street. Port Hadlock. Washington 98339 I phone: 360.319.8051 fax: .3.60.379.3558 em~il; info@no$c.org ON .... Oc; 2012 Jefferson County Conservation Futures Program ~, . Property Acquisition and/or INO~~ Operations and Maintenance Project Application Please complete the following application in its entirety. Be sure to answer "N/A "for questions that don't apply to the project. Incomplete applications will not be accepted for consideration. Unless directed otherwise, use as much space as needed to answer each question. Contact program staffat 385-4498 or tRokQJ1JY...@co.iefferson.wa.uswithquestions, 1. Project Title: Tarboo Forest Conservation Project 2a. Conservation Futures Acquisition Request: $260,000 b, Conservation Futures O&M Request: 0 3, Total Conservation Futures Request: $260~000 4. Please indicate the type of interest contemplated in the acquisition process. _ Warranty Deed X Easement _ Other (Please describe below.) In whose name will the property title be held after acquisition? Jefferson Land Trust will hold title to the conservation easements. NWI and Leopold-Freeman LLC will continue to hold title to the properties. 5, Applicant Information Name of Applicant or Organization: Northwest Watershed Institute Contact: Peter Bahls Title: Director and Conservation Biologist Address: 3407 Eddy Street, Port Townsend, W A 98368 Phone: (360) 385-6786 Fax: (360) 385-2839 Email: peter@nwwatershed.org 6. Sponsor Infonnation: (if different than applicant) Organization Name: Jefferson Land Trust Contact: Sarah Spaeth Title: Executive Director Address: 1033 Lawrence S1., Port Townsend, WA 98368 Phone: (360}379,.9501, ext. 101 Fax: 360-379-9897 Email: peter@nwwatershed.org This application was approved by the sponsor's legally responsible body (e.g.. board, council, etc.) on February 21~ 2012. 1 7. Site Locati on Street Address. or Description of Location: Between Dabob and Center Road, due west of Tarboo Wildlife Preserve (2151 Dabob Road, Quilcene, WA) in the Tarboo valley. Driving Directions from Port Townsend: Take a left at the Chimacum 4-way stop onto Center Road, proceed south under Hwy 104, left onto Dabob Road and proceed 2 miles, right at the driveway at 2151 Dabob Road to park near the white barn. Section: 28,29, and 31 Township:28 N Range: lW Assessor's Parcel Number(s): 801294002,801321016,801291002,801204006 8. EXISTING CONDITIONS New Site: X Yes No Addition to Existing Site: X Yes No Total Project Acreage (if different): Existing StructuresIFaciIities: None Any current covenants, easements or restrictions on land use: No Number of Parcels: 4 Acres to Be Acquired: 236 Current Zoning: Current Use: Forestry Waterfront (name of body of water): NA Shoreline (linear feet): NA Owner TidelandslShorelands: NA 9. Current Property Owner X is _is not a willing seller. 10. In one-half page or less, provide a summary description of the project, the match, overarching goal, and three top objectives. In 2010 and 2011, Leopold-Freeman Forests LLC and NWI purchased 236 acres of mature forestland adjacent to the Tarboo Wildlife Preserve and including numerous tributary streams to Tarboo Creek from a foreign investor who planned to clearcut the property and sell it for large lot development. The goal of this project is now to raise funding necessary to permanently protect the forestlands for sustainable forestry and habitat conservation. Two conservation easements will placed on the two ownerships. NWI 78 acres - the CE will prohibit residential development and protect the parcel for long-term forestry and restoration of old growth forest habitats. The CE will protect the standing timber volume as determined by 2010 cruise. As the trees grow and timber volume increases, selective cutting above the base timber volume is allowed under an FSC management plan. 2 Leopold-Freeman LLC 158 acres - as match to JCCC funding, the owners will donate a CE that prohibits residential development and protects the entire acreage for long-term forestry and habitat conservation. Although the appraised value of the CE does not include the additional value of timber harvest restrictions above standard forest practice regulations, the owners do intent to manage for older forest and old growth characteristics that will be defined in the CE and will consider applying for FSC certification. 11. Estimate costs below, including the estimated or appraised value of the propert(ies) or property right(s) to be acquired, even if Conservation Futures funds will only cover a portion of the total project cost. In the case of projects involving multiple acquisitions, please break out appraisals and estimated acquisition costs by parcel. a. Estimated or Appraised Value ofPropert(ies) to be Acquired: $700,000 b. Total Estimated Acquisition-related Cost (see Conservation Futures Manual jar eligible costs): $53,535 c. Total Operation and Maintenance Cost: $500 d. Total Project Cost: $754,035 Basis for Estimates (include information about how the property value(s) was detennined, anticipated acquisition-related costs, general description of operation and maintenance work to be peIformed, task list with itemized budget, and anticipated schedule for completion of work): Itemized Budget JCCF Item Request Match Total Cost Total Appraised Value of Conservation Easements NWI 80 acres - $.450,000 4 1..- ~~ c<> (; 260,000 165,000 425,000 Leopold-Freeman Forests LLC 160 acres - $tOcJ,Ooo 275,000 Ir 275,000 Acquisition Related Costs: 11), t"110 Two appraisals 1 0,000 ,. 10,000 Staff Time (Limited to 5% of Total Proj. Cost) 20,000 ", 20,000 Legal Fees - prepare CE 7,000 7,000 Excise Tax 4,450 4,450 Recording Fees 150 150 Settlement Fees 981 981 Title Insurance 954 ,. 954 Survey - property boundaries 10,000 10,000 Total of Acquisition Related Costs 53,535 O&M cars - signage 500 lo- 500 Total Project Costs 260,000 494,035 754,035 Percent of total 34% 66% 100.0% 3 Conservation easement (CE) values were determined by preliminary appraisals to USP AP .standards by GPA Truman, February 28, 2012 (attached). The CE on the Leopold-Freeman LLC 158 acres will be donated as match toward the project. The value of the CE reflects the loss of residential development rights. The owners also plan to have some restrictions on timber harvest to foster older stand structure and habitats (letter from Leopold Freeman LLC dated March 1, 2012, attached), but these restrictions were not appraised and are not included in the CE value proposed as match. For the NWI 78 acres, the CE value is based on restrictions that will prohibit residential development and restrict timber harvesting to future growth only. The total board feet of standing tim ber will not be reduced below the total board feet of standing timber that existed as of April 3, 2010, as established by a timber cruise and appraisal conducted by Cronin Forestry (Cronin 2010 timber cruise attached). The Conservation Futures request is to pay $260,000 of the $425,000 CE value, with the remaining $165,000 provided as match. Donated match also includes all staff time and real estate transaction costs to be incurred by NWI and Leopold Freeman LLC. Schedule and funding scenarios Upon Jefferson County's commitment to fully fund their proposed share of the project, Leopold- Freeman LLC will place a CE on their 157 acres in 2012. NWI will leverage Jefferson County's co~mitment by raising additional funds in 2012-2013 from private donors to cover the remaining cost to place the CE on the property by early 2014. Alternative 2 (funding phased over 2 years) - If Jefferson County commits to fully funding the requested share, but over two years (2012 and 2013), NWI and JLT are confident that the entire project can be successfully completed as described above. The two-year commitment is NWI and JLT's preferred approach to funding" to allow other proposed projects to receive funding and ensure an adequate funding commitment to complete the entire project. Alternative 3 (2012 partial funding) - A third approach is for Jefferson County .to commit to fund part of the request in 2012, with no commitment for 2013, but a new application required at that time. If Jefferson County commits to partial funding of at least $167,000 in 2012, the project can be split into two equivalent phases, with the first funded phase involving a 2012 purchase of a CE on one-half of the NWI property (the north 40 acre parcel) and yz ofthe Leopold Freeman LLC property (two 40 acre parcels). In this case, the match for Phase I would be reduced from 65% to 55% of the total project cost. For Phase II, the applicants would re-apply in 2013. A proposed budget for this scenario is shown below. 4 Budget for Alternative 3 - 2012 partial funding with no commitment for 2013. JCCF Item Request Match Total Cost Phase I 2012 - one year committed funds NWI-40 N 167,000 38,000 205,000 Leopold Freeman - 40 N 70,000 70,000 Leopold Freeman - 40 5 75,000 75,000 Acquisition related costs 26,000 26,000 Phase I Project Costs 167.000 209,000 376,000 Percent of Total 44.4% 55.6% 100.0% Phase II 2013 - a new request NWI - 40 S 167,000 53,000 220,000 Leopold Freeman - 80 130,000 130,000 Acquisition related costs 27,535 27,535 Phase II Project Costs 167,000 210,535 377,535 Percent of Total 44.2% 55.8% 100.0% 12a. Sponsor or other organizations X will _will not contribute to acquisition of proposed site and/or operation and maintenance activities. b. Ifapplicable, please describe below how contributions from groups or agencies will reduce the need to use Conservation Futures program funds. c. Matching Fund Estimate Acquisition O&M % Conservation Futures Funds Requested $260,000 0 34% Matching FundslResources* $494,035 0 66% Total Project Acquisition Cost $754,035 0 100% * If a prior acquisition is being proposed as match, please describe and provide documentation of value, location, date of acquisition and other information that would directly link the match to the property being considered for acquisition. d. Source of matching Amount of funds/resources contribution Leo-Free. CE value $275,000 Contribution approved? Yes No If not, when? Contribution available now? Yes No If not, when? 2012 NWI CE Value donation $165,000 NWI & Leo-Free costs $53,535 Yes No Yes No Yes No Yes No 2013 2013 5 NOTE: Matchingfunds are strongly recommended and a higher rating will be assigned to those projects that guarantee additional resources for acquisition. Donation of property or a property right will be considered as a matching resource. Donation of resources for on-going maintenance or stewardship ("in-kind" contributions) are not eligible as a match. 13a.Sponsoring agency X is _is not prepared to provide long-term stewardship (maintenance, up- keep, etc.) for the proposed project site, JL T anticipates a stewardship program of annual monitoring to insure that the terms of the easement are honored, that no trash has accumulated, and that no noxious weeds have invaded the property. JLT staff and trained community volunteers will conduct monitoring, and maintenance efforts. JL Trelies on trained professionals, including habitat biologists, foresters and others as appropriate. In addition, the landowners, NWI and Leopold-Freeman, will be actively involved in stewardship and management of the property under the terms of existing Forest Management Plans (attached on file with Jefferson County) and the conservation easements. b. Describe any existing programs or future plans for stewardship of the property, including the nature and extent of the commitment of resources to cany out the stewardship plan. JL T will conduct stewardship, monitoring and maintenance of the property along with the other parcels in Tarboo watershed that are protected with conservation easements. The Land Trust's stewardship program includes annual monitoring (at least) of protected properties and easements, upkeep and maintenance (trash removal, signage, invasive plant control) and restoration efforts (tree planting, trail building, etc.) 14.Describe the sponsoring agency's previous or on-going stewardship experience. JLT currently holds and monitors 48 conservation easements in Jefferson County, in addition to conducting monitoring and stewardship activities on the nearly 200 acres it owns. The Hoh River Trust and Washington State Parks contract with JLT to monitor and steward over 7000 acres of land under their control. In addition,JL T stewards certain lands owned by Jefferson County, the City of Port Townsend and Washington Department of Natural Resources. JLT stewardship and monitoring protocols were developed with the guidance of the National Land Trust Alliance and adherence to tbose protocols is one of the requirements for our national accreditation. This includes at least annual monitoring of easements and preserves by professional staff and trained volunteers, extensive data collection and management, help with stewardship, enhancement and restoration goals and legal defense of tbe conservation easements should it become necessary. The Land Trust has a legal defense fund of nearly $350,000, and continues to build this fund with each new easement acquisition, recognizing the legal obligation and responsibility of protecting conservation values in perpetuity. In addition, NWI and Leopold-Freeman Forests LLC, and their consulting forester Mike Cronin, have extensive experience in forestry and land restoration. 6 15. Has the sponsor and/or applicant of this project been involved in other projects previously approved for Conservation Futures funding? a._No, neither the sponsor nor applicant has been involved in a project previously approved for Conservation Futures funds. b. X Yes, the sponsor and/or applicant for this project has been involved in a project previously approved for Conservation Futures funds. Please provide details: Yes. Four projects proposed by NWI or a partnership ofNWI and JLT, were previously approved for Conservation Futures funding as part of the landscape scale conservation project in the Tarboo watershed. All four projects were successfully completed. 16a. Property X can _cannot feasibly be acquired in a timely fashion with available resources. b. Necessary commitments and agreements X are _are not in place. c. All parties X are _are not in agreement on the cost of acquisition. If "not" to any of the above, please explain below. 17. The proposed acquisition X is specifically identified in an adopted open space, conservation, or resource preservation program or plan, or community conservation effort. Please describe below, including the site's importance to the plan. Please reference the website of the plan if available or include the plan with this application. _complements an adopted open space or conservation plan, but is not specifically identified. Please describe below, and describe how the proposed acquisition is consistent with the plan. _is a stand-alone project. In January 2010, the Jefferson Land Trust Board of Directors adopted the Jefferson County Conservation Plan, which was developed with extensive public input In June 2010 the Implementation Strategy for the TarboolDabob Bay Sub-Area was distributed electronically to the Board for review, and they agreed to adopt this addition to the Conservation Plan on June 15, 2010. The Implementation Strategy specifically identifies the proposed properties for conservation and sustainable forestry. Prior to the Board review, the TarboolDabob Bay Implementation Strategy was reviewed and discussed by 17 members of Jefferson Land Trust's Conservation Projects Committee. This Committee includes local business owners and community members involved in forestry and agriculture and other diverse backgrou.nds, who unanimously recommended adoption by the Board (attached letter from Owen Fairbank, JLT Board president, June 15,2010). JLT's Jefferson County Conservation Plan can be found at ~1tP:/~av~land!..o.J:gfJjgkf.Ue~/w_eb fo!m!l2ql0~L ConservlltionPlaJLkoR~~_!pdf. Under the Habitat section of the plan, note that the properties are mostly within all four priority habitat layers. For the Forestry section, the properties are also identified within the "Tarboo Creek Area" . The TarboolDabob Implementation Strategy and map showing the proposed properties included in the forestry and stream corridor priority areas of the watershed. 7 18. List the important milestones for this project. . Upon Jefferson County commitment of the requested funding share toward the overall project, 158 acre conservation easement donated by Leopold-Freeman LLC. . Upon Jefferson County commitment and donor campaign to raise additional match funding, 78 acre conservation easement partial donation by NWL 19. Conservation Opportunity or Threat: a. The proposed acquisition site X does _does not provide a conservation or preservation opportunity which would otherwise be lost 9r threatened. b. If applicable, please carefully describe the nature and immediacy of the opportunity or threat, and any unique qualities about the site. For conservation projects, the highest level of threat is represented by those projects where a non- profit organization needs to take the extraordinary risk of stepping in to purchase the land prior to any assurance of grant funding so that a conservation opportunity is not lost forever. ANE Forests of Puget Sound, a Denmark investor, had already logged and sold over 5,000 acres that the corporation owned in Eastern Jefferson County. The corporation retained 200 acres that he planned to clear-cut and then sell for large lot development. Over six years, NWI and Leopold- Freeman LLC negotiated an alternate plan that required a joint purchase in 2010-2011. The remaining 40-acre Freeman property in this proposal was purchased when it came up for sale for residential development several years ago. Although the opportunity and threat may seem low now that it has been purchased, NWI must repay loans for $550,000 purchase price by 2014. Collateral for the loans is the property itself, which would go to the lenders. Funding for forestland conservation is ,extremely limited. Without a commitment of the proposed funding in 2012, there is a high risk that the property will not be conserved, nor that a conservation easement will be placed on the adjoining Leopold-Freeman LLC property. 20. Describe the physical characteristics of the site that is proposed for acquisition with Conservation Futures Program funds including: vegetation; topography, surrounding land use, and relationship to parks, trails, and open space. The 236 acres lies along the western slopes of the Tarboo valley and represents some of the last unprotected "older forest" in private ownership remaining in the watershed. Approximately 200 acres is mature second growth timber, mostly approximately 40 years old, with some stands of older timber of 70-90 years. The properties include a diversity of timber stands, including Douglas fir, western red cedar, alder and big leave maple. Three major tributaries to Tarboo Creek flow through ravines on the properties, as well as several smaller and seasonal streams. The remaining north 40-acres of the Leopold Freeman ownership was logged about 15 years ago and contains young stands of alder and Douglas fir and a large forested ravine containing Cabler Creek. The properties are adjacent to the 316 acre Tarboo Wildlife Preserve, owned and managed by NWI and permanently protected by conservation easement by the Jefferson Land Trust. The 8 proposed properties form important wildlife corridors and water quality protection for Tarboo Creek and the Preserve. 78-acres owned byNWI would be added to the Preserve, with an amended and restated conservation easement. 21. The proposed acquisition: X provides habitat for State of Washington Priority Habitat and/or State or Federal Threatened, Endangered or Sensitive species, X provides habitat for a variety of native flora or fauna species. X contributes to an existing or future wildlife corridor or migration route. If affirmative in any Df the above, please describe below, and cite or provide documentation of species' use. 1 . Priority and Listed Species on-site 3 major tributaries to Tarboo Creek Western toad Pileated woodpecker Priority Riparian Habitat State Candidate and Federal Species of Concern State Candidate Listed Species benefited immediately downstream in Tarboo Creek (spawn/rearing) Puget Sound steel head State Candidate and Federal Threatened Hood Canal coho salmon Federal Species of Concern Listed Species benefited in Tarboo-Dabob Bay (documented rearing habitat) Hood Canal summer chum salmon State Candidate and Federal Threatened Puget Sound Chinook salmon State Candidate and Federal Threatened Potential Priority and Listed Species over time with late seral stage forest management Marbled murrelet State and Federal Threatened Spotted owl State Endangered and Federal Threatened Northern Goshhawk State Candidate and Federal Species of Concern Vaux's Swift State Candidate Provides habitat for a variety of native flora and fauna The large scale of this conservation project, location along Tarboo Creek tributaries and proximity to the Tarboo Wildlife Preserve, and the protection of older forest provides for very high biodiversity and the potential to restore species that are increasingly rare due to the loss of older forest and old growth forest habitats. Currently, the proposed project includes a variety of forest plant associations dominated by bigleafmaple, alder, Douglas fir, and western red cedar. Three very steep forested ravines bisect the property, containing major tributaries to Tarboo Creek, as well as several smaller tributaries to Yarr Creek, an important salmon and steelhead spawning stream. Wildlife corridor I See, for example, htt.p.;l!l~w .dur. ,va.~ov /researchscience/topics/naturalherita~e/pagcw.:amIL>>h. aspx http://wwW.,}ydfw.wa.gov/conservationJphsllist/ . . l.illP:I/~wF-1gnr.wa.goyfJW..P!~f4~sk!p.hillts.lJ1ml h1JQ:ljw\Y..~1.dn,r. WA,KQV /1!hI0'efdesk/pubs/w~1Qgjcal..E~stem~df 9 The proposed project provides a critical, landscape-scale wildlife corridor between the upland forests and the adjacent Tarboo Wildlife Preserve and the wetlands and streams of the Tarboo valley. Cougar, bobcat, deer, black bear, and other large mammals use these areas, as well as . diversity of amphibianst reptiles, and birds. The overall block of land protected, including the Preserve, totals 552 acres and is a significant contribution to the overall stream and wetlands corridor from the headwaters of Tarboo Creek to the Dabob Bay Natural area on Tarboo-Dabob Bay. 22a. Describe the extent and nature of current and planned agricultural use of the proposed acquisition, including any anticipated changes to that use once the property, or property right, is acquired with Conservation Futures funds. NA b. Describe any participation by the current property owner in any other agricultural land conservation programs, including the program and nature of the involvement. Wetland and riparian habitat on the adjoining Tarboo Wildlife Preserve were restored with cost- share funding from the USDA Natural Resources Conservation Service's Conservation Reserve Enhancement Program and Wetland Reserve Program. 23, Describe the use planned for the site, any development plans after acquisition, characteristics of the site which demonstrate that it is well-suited to the proposed use, and plans for any structures currently on the site. NWI and Leopold-Freeman LLC properties will be managed as experimental/demonstration forests to demonstrate innovative forestry methods to restore old growth forest habitat characteristics and provide high quality forest products, including secondary forest products and cultural resources for Tribes. The forests will be availablet at ownerts discretion, for public workshops, field tours and other events to foster a greater.understanding and use of alternative forestry methods and restoration of forest habitats. 24a. Proposed acquisition site and any subsequent planned passive development (as described above) X is _is not part of a larger project. b. If applicable, describe how the site relates to the larger project, and whether the project has a plan, schedule and funding dedicated to its completion. The proposed project is part of the larger Tarboo Watershed Programt described in the Implementation Strategy for the Tarboo/Dabob Bay sub-area of the Jefferson County Conservation Ph.n (attached). 25, Describe how the proposed acquisition benefits primarily a _local area X broad county area including the area served, the nature of the benefit, the jurisdictions involved, and the populations served The proposed project represents the largest permanently protected tract of private forestland and the second largest conservation easement in eastern Jefferson County to date. Over time, the project will serve an important role in the region and state in demonstrating innovative, sustainable forestry methods and restoration of late seral forest habitats. In addition~ this project 10 is intended to leverage additional forestland conservation easements for surrounding Pope Resources and DNR properties in the watershed and Jefferson County to protect the forest land base. Specifically, if funded by Conservation Futures, the project will be used to providing matching funds to a Washington State Forest Legacy proposal in 2012 to protect at least 2,000 acres of additional industrial forest land in the Tarboo watershed. 26. Describe the educatiDnal Dr interpretive Dpportunities that exist fDr prDviding public access, educatiDnal Dr interpretive displays (signage, kiDSks, etc.) Dn the propDsed site, including any plans to' provide thDse improvements and any plans fDr public accessibility. Please see above for a discussion of the use of the property as a demonstration forest Several interpretive signs will probably be placed along Dabob Road on the NWI property as part of this effort. In addition, a trail system for use by the public, at owner's discretion, is planned that will connect the NWI and Leopold-Freeman properties. 27. The propDsed acquisition X includes historic or culturally significant resources2 and _ is registered with the National Register of Historic Places, Dr an equivalent program. _ is recognized IDeally has having histDriC Dr cultural reSDurces. X is adjacent to and provides a buffer for a historic or cultural site. If affirmative in any of the above, please describe below, and cite or provide documentation of the historical or cultural resources. Four Native American tribes reserved fishing, hunting and gathering rights in Hood Canal, including Tarboo watershed, with the signing of the Point No Point Treaty of 1855. Many of the indigenous plants and animals are considered by the Tribes to be important cultural resources, critical to the survival of Tribal cultural traditions. However, with logging, agriculture and development of much of lowland Puget Sound, many of these cultural resources have become increasing difficult to find. For example, old growth cedar logs for use in canoes, totem poles and other are impossible to find in the lowland Puget Sound region. The proposed project currently contains a diversity of traditional food, medicinal, and material resources that could be sustainably harvested. With time, the properties have the potential to provide large diameter cedar trees for bark harvesting and logs. In addition, the proposed properties are adjacent to and provides a scenic backdrop for the historic site ofthe Yarr farm that is now part of the Tarboo Wildlife Preserve. The Yarr barn is registered on the State's historic preservation list. 28a. Describe the extent and nature Df current and planned silvicultural use Dfthe proposed acquisition. Please cite or provide documentation of existing or planned silvicultural activities including forest management plants). Both Leopold-Freeman LLC and NWI have forest management plans for the proposed properties that are on file with the Jefferson County Assessors office and both properties will be maintained in state timber tax designation. Both ownerships will be managed for long.term timber production of high quality forest products and restoration of late seral forest habitats and species. NWI will 2 Cultural resources means archeological and historic sites and artifacts, and traditional religious ceremonial and social uses and activities of affected Indian Tribes and mandatory protections of resources under chapters 27.44 and 27.53 RCW. 11 seek FSC certification in conjunction with placing the conservation easement on the property. Leopold-Freeman LLC will consider FSC certification as well at that time. b. Describe any participation by current property owner in silviculture conservation programs, including the program and nature of the involvement. NWI owns and manages forestland as part of the 316 acre Tarboo Wildlife Preserve. Peter Bahls, Director and Conservation Biologist with NWI worked for 6 years as a timber-fish-and-wildlife biologist reviewing hundreds of tim ber sales in the Hood Canal area. He wrote portions of the initial Smartwood Certification standards for Washington, which became FSC certification standards. More recently, he was a scientific reviewer of FSC certification standards as a consultant for Pacific Rivers Council. With NW Natural Resources Group, he organized one of the first alternative forestry workshops in Hood Canal in 1997. More recently, he worked with retired DNR District forester Mike Cronin and the Jefferson County Public Lands Group to develop an alternative forest asset management plan for DNR lands in East Jefferson County to keep these lands in forestry. Leopold-Freeman LLC is owned by the Freeman family, who have partnered with NWI and JLT on several successful land acquisition and restoration projects in the Tarboo watershed. Susan Freeman is the granddaughter of Aldo Leopold, renowned 20th century American conservationist, forester, and author of Sand County Almanac (1949), who restored in Sand County, Wisconsin. The Freemans continue a family tradition of restoring land and have an abiding passion for forestry and forests. 29. Sponsors of applications that are approved for funding by the Board of County Commissioners are required to submit a brief progress report by October 30 every year for three years after the award is approved, or three years after the acquisition funds are disbursed to the applicant, whichever is later. The progress report must address any changes in the project focus or purpose, progress in obtaining matching funding, and stewardship and maintenance. Sponsors receiving O&M funds will also submit an annual report for each year that O&M funds are expended. The Committee will use the information to develop a project "report card" that will be submitted annually to the Board of County Commissioners. If this application is approved for funding, I understand the sponsor is required to submit progress reports for three years and for any year in which O&M funds are expended. t.S ~ Initials March 1,2012 Date 30. If, three years after the date funding is approved by the Board of County Commissioners, the applicants have not obtained the required matching funds, the Committee may request the Board of County Commissioners to nullify their approval of funds, and may require the project to re-apply. If this application is approved for funding, I understand that we may be required to re-submit the application if the project sponsor does not obtain the necessary matching funding within three years. (. S Initials March 1, 2012 Date 31. Are there any critical dates, e.g, grant deadlines, for your proj ect that the Committee should know about? Please list the dates and explain their importance. 12 NWI must repay its loans by September of 2014, or give up the property as collateral and lose the potential for a donated easement from Leopold Freeman LLC. NWI is requesting a commitment by Conservation Futures in 2012 (and 2013 if phased over two years) to help leverage the additional funds that will be needed by private donors in 2012 and 2013 to transfer the NWI conservation easement in early 2014. With a funding commitment from Jefferson County as proposed, Leopold-Freeman LLC will be willing to donate the easement on the 158 acres in 2012. Attached Maps and photos of the proposed project (also emailed in PDF format) Willing landowner letters from Leopold-Freeman LLC and NWI, March 1, 2012 JLT Conservation Plan - 2010 Tarboo-Dabob Bay Implementation Strategy and cover letter GPA Trueman appraisals for Leopold-Freeman Forests LLC and NWI parcels (Feb 28, 2012) 13 ~ No rthwest Watershed Institute Tarboo Watershed Assessment Olympic ;:> Watershed Locator A 5 Miles Mountains Northwest Washin gto n State Figure 1. Site location map showing location of proposed Tarboo Forest proj ect. ~ Tarboo Watersh~ , walo'::~~~~~:i1ut. Parcel Ownership Parcels _ ANE Forests of PlJQet Sound :=J Green Diamond n Pope Resources _ DNR Trust lands _ DNR NaluralArea _ ONR NaluralArea - Pending _ 'The Natur@ ConS4!lf\l81"lC)' D Northwest Waters.hed Inslltute ,... , WDWF Critical Habit.at Pres.et'\re EJ County Park CJ Other. Private DNR Aquatic lands _ Unknown D Public _ Private Easements I Restoration Projects ~ Conservation Easements ~ Restoration ?rojecls ~ Conservation & Restoration I D Oabob Bay Natural Resource Conservation AIel' D Oabob Ba:,' Natural Area Preserve Roads Private ~ County ""'" Sta,e C> Lakes ...f ___ StrearTlS '+'1 , I ~ay. 2010 I o 0.5 1 Miles I I Rroject-Areas D Tarboo Creek Corridor D Dabob Bay Natural Area o Forests and Forestry Figure 2. Map from Tarboo-Dabob Bay Implementation Strategy of Jefferson Land Trust Conservation Plan showing project site. Figure 3. Project boundary map. Conservation easements proposed for NWI and Leopold-Freeman Forests LLC properties adjacent to Tarboo Wildlife Preserve. Figure 4. View south of lower Tarboo valley showing proposed project in relation to Tarboo Wildlife Preserve and Dabob Bay Natural Area. D: Figure 5. Freeman family discuss forestry methods with forester Mike Cronin. Figure 6. Older Douglas fir grove on Leopold-Freeman Forests LLC parcel. Figure 7. Western red cedar grove on NWI parcel. I ~t ~~. Figure 8. Forest road and Douglas fir stand on NWI parcel. Figure 10. Tributary to Tarboo Creek on Leopold-Freeman Forests LLC. Figure 11. Tributary to Tarboo Creek on Leopold-Freeman Forests LLC. Figure 12. Root rot pocket providing snags for pileated woodpeckers - ~ ~ r ..t, ~i " I . ~- 11: " ... ,- ~ .. ..\ .... ", ...... \. ~: ~ . ~ .., Figure 13. Bobcat tracks seen on March 1, 2012. Leopold-Freeman Forests LLC 8412 36th Avenue NE Seattle W A 98115 USA tel. 206.300.4448 sfreeman?91@gmail.com 1 March 2012 Peter Bahls, Director Northwest Watershed Institute 3407 Eddy Street Port Townsend, W A 98368 Dear Peter: I am writing to express Leopold-Freeman Forests LLC's endorsement of the proposal, by Northwest Watershed Institute and Jefferson Land Trust to the Jefferson County Conservation Futures program, to protect 236 acres of forestland in the Tarboo Creek watershed with conservation easements. As a partner on this project, Leopold-Freeman Forests LLC is committed to donating a conservation easement on the 158 acres of timberland that we call Carl's Forest. The easement will prohibit development and permanently protect the land for forestry and wildlife habitat. We will also put restrictions on the extent of clearcutting, but will work out the nature of the restrictions (areal extent) at the time we write the conservation easement. Our willingness to make this donation is contingent upon Jefferson County Conservation Futures' commitment of funding for the overall proposed project We are, however, prepared to write and execute the easement on our property as soon as a commitment from Jefferson County Conservation Futures is formalized. To help educate the public on alternative forestry methods and the importance of forest habitats, Leopold-Freeman Forests LLC will allow public access for tour groups and workshops and scientific research at our discretion. In addition, we plan on developing a coordinated pedestrian trail system that connects the NW[ and Leopold-Freeman forests. Finally, we are committed to covering the cost of drawing up the easement and supporting stewardship by JL T. Sincerely',. ... ....:;1t.::;..:;:.;..ii,{~..:,.:H.:...:.::u:::.....::.....~;::.:...:::.: '.-. .. '.,-. ..... ' ',"' '. ";::.' " .;:. ./;''':';: ,','.,c;", ':;. :. ....... . .. - -- . . . ' :~, :', . . ,.:. .: .. :- " " :': . . .. . . '.'. ~ Scott Freeman, Manager Northwest Watershed Institute 3407 Eddy Street I Port Townsend, Washington 98368 voice 360.385.6786 fax 360.385.2839 email peter@nwwatershed.org I www.nwwatershed.org March 1,2012 Tami Pokorny Jefferson County Conservation Futures Program Department of Community Development 621 Sheridan Street Port Townsend, W A 98368 Dear Tami, Northwest Watershed Institute (NWI) is excited to contribute to the 236 acre Tarboo Forest Conservation Project; the largest private forest land conservation project, and second largest conservation easement project, in Eastern Jefferson County to date. As proposed in the 2012 Conservation Futures grant proposal by NWI and Jefferson Land Trust (JLT), NWI is willing to sell a conservation easement to Jefferson Land Trust for the 78 acre forest adjoining the existing Tarboo Wildlife Preserve. NWI purchased the property in ajoint project with . the Leopold-Freeman LLC purchase of an adjoining forest parcel from the same owner, who was othetWise going to clear-cut the properties and sell parcels for large lot development. NWI's purchase for $550,000 was made possible by conservation loans that must be repaid in 2014. The proposed conservation easement on the NWI forest will prohibit development, but allow selective forestry, harvest of secondary forest products, and cultural use by Tribes. The forest management goal will be to help restore old growth forest habitat structure and function and wildlife habitat while providing high quality, FSC certified forest products. The easement will prohibit timber removal below the "base" standing timber volume documented in the April 2010 timber cruise by Cronin Forestry. The value of the conservation easement was appraised at $425,000 in February 2012. NWI is willing to sell the CE to JCCF for $260,000, with the remaining $165,000 of easement value donated as match. NWI plans to raise the match funds, as well as the additional $125,000 needed to pay NWI's loans on the $550,000 purchase before 2014. NWI is also proposing to donate all of the staff costs, real estate transaction costs, and JLT stewardship fees necessary for successful transfer of this conservation easement in a timely fashion. JEFFERSON LAND TRUST Helping the community preserve open space, working lands and habitat forever 1033 LawrenceStrcct, Port Townsend, WA 98368 360-379-9501 - office 360-379-9897 - fax www.savcland.org jlt@savcland,org June 11 r 2010 To: Lorinda Anderson, RCO Conservation Grants Manager Re: Riparian Protection Grant Application In January 2010, the Jefferson Land Trust Board of Directors adopted the Jefferson County Conservation Plan, which was developed with extensive public input. In June 2010 the Implementation Strategy for the TarboolDabob Bay supplement was distributed electronically to the Board for review, and they have agreed to adopt this addition to the Conservation Plan. This decision has been documented through e-mails and will be noted in the minutes of Board's monthly meeting on June 15,2010. A copy of those minutes will be forwarded to the RCO. Prior to the Board review, the Tarboo/Dabob Bay Implementation Strategy was reviewed and discussed by 17 members of Jefferson Land Trust's Conservation Projects Committee. This Committee includes local business owners and community members involved in forestry and agriculture and other diverse backgrounds, who unanimously recommended adoption by the Board. sincerely yours, OW~lA.. ?~~b"';""'L~ Owen Fairbank JL T board president (,<.9.1b1t-. 'f' ~ .~: ~ """". 0 ~'O:"'ND T"-U~~~ ,....l'/o,.(~ Jefferson Land Trost is a 501 (c) (3) non-profit. tax-exempt, private corporation. Printed on recyded paper JEFFERSON LAND TRUST CONSERVATION PLAN IMPLEMENTA TION 5TRA TEGY Region: Southeast Jefferson County Watershed: TARBOO-OABOB BAY INTRODUCTION The Jefferson Land Trust Conservation Plan identifies priorities for conservation, threats (or driving forces) and recommended conservation actions for the county as a whole, developed through an intensive public process. This implementation strategy applies those priorities and recommendations to the Tarboo Watershed, an area of longstanding involvement and conservation action by JLT, Northwest Watershed Institute, and more than 20 additional partnering organizations. This strategy has been developed by the Jefferson Land Trust and Northwest Watershed Institute and represents a joint plan for the Tarboo watershed that has been approved by both organizations. PRIORITY PROJECTS The JLT Conservation Plan involved an analysis of conservation "demand and need" through an intensive public involvement process of ten public meetings in Jefferson County. Citizens identified their priority areas on wall maps and provided a broad range of written feedback to JLT in various conservation topic areas. GIS maps were also developed based on public input and available scientific data and surveys that identify priority areas with the county, such as biologically important stream corridors. The result of this analysis was a list of priority conservation actions under the themes of habitat, forestry, agriculture, and recreation and tourism, as well as maps of the county identifying the distribution of several conservation values related to these themes. The following Conservation Actions apply to the Tarboo-Dabob Bay Watershed: HABITAT Priority Places: Rivers, Streams and Lakes; Natural Ecosystems; Wildlife Corridors; Bays, Shorelines and Estuaries Conservation Action: Develop and implement critical wildlife corridor conservation campaigns throughout the county 1 FORESTRY Priority Places: land with high site productivity; buffers to habitat preserves; buffers to public timberlands; recreation and scenic view lands; large management units Conservation Action: Develop and implement landscape scale forest land conservation program. AGRICULTURE Priority Places: Productive shorelines and associated nearshore environments; prime farmland soils and/or proven productivity Conservation Action: Conserve agricultural lands within and near population centers, and main transportation corridors RE{REATION AND TOURISM Priority Places: Trails, greenbelts and accessible natural areas; shoreline and river access; scenic vistas; culturally significant places Recreation and Tourism Action: Identify an-d protect scenic and cultural landscape features that help maintain the wild and naturally scenic character of our county. For the Tarboo Watershed, these priorities can be organized into three major proje~ts - 1) protecting the Tarboo Creek Wildlife Corridor, 2) protecting lands within the recently expanded boundaries of the Dabob Bay Natural Area, and 3) protecting large tracts of forest lands suitable for sustainable forestry within the watershed as a whole. This combination of conservation actions will implement J L T conservation priorities at the watershed level; restore abundant salmon runs of Tarboo Creek, protect the water quality and habitat for wildlife and shellfish farms of Dabob Bay, protect and restore biological diversity across a range of Jefferson County environments (forest, freshwater, estuary, and marine), and help maintain a sustainable, natural resource based economy. Each of the three projects is discussed below. 1. Tarboo Headwaters to Bay Wildlife Corridor- work with project partners and willing landowners to protect and restore riparian areas and associated wetlands of Tarboo Creek, from headwater tributaries to Tarboo-Dabob Bay. The 7,000 acre Tarboo Creek Watershed contains a low gradient valley, rolling forested hills, and the spectacular estuary ofTarboo-Dabob Bay. Tarboo Creek's mainstem is about 6 miles in length. The mainstem and its major tributaries provides habitat for wild coho salmon, fall chum salmon, resident and searun cutthroat trout, and historically, steelhead salmon (a federally threatened species). Like most of the stream valleys of western Washington, the Tarboo valley's forested wetlands were 2 cleared for agriculture beginning in the late 1800s. Tarboo Creek was straightened and its associated bottomlands were drained. Tarboo Creek offers an outstanding opportunity to restore extremely productive and diverse wetland and stream habitat for salmon, wildlife, and other at-risk species, such as western toads. In 2002, Northwest Watershed Institute initiated the Tarboo Watershed Project, in partnership with Jefferson Land Trust, four Tribes, state and federal agencies, and willing landowners. JL T now holds eight conservation easements on 461 acres along approximately three miles of the mainstem and East Fork of Tarboo Creek. Much of this acreage is being restored to productive wetlands and salmon habitat by NWI. One of the properties protected by JL T easement is the 316 acre Tarboo Wildlife Preserve, NWl's center for field research, environmental education and restoration. An additional 160 acres of very high quality riparian habitat and floodplain wetlands on lower Tarboo Creek is owned and protected by WDFW as a critical habitat preserve, for a total of 621 acres protected within the corridor. However, approximately one-half of the riparian area along the mainstem of Tarboo Creek and riparian areas along many tributaries remain unprotected. The goal of this project is to continue to work in partnership with NWI to secure conservation easements or fee simple acquisitions from willing landowners to protect the entirety of the riparian and wetland corridor along the mainstem of Tar boo Creek and major tributaries. 2. Dabob Bay Natural Area. Conservation - work with project partners and willing landowners to protect and restore lands within the proposed boundaries of the Oabob Bay Natural Area. Dabob Bay is recognized as one of the highest quality, least developed large bays remaining in Puget Sound. The bay supports rare saltmarsh plant communities on coastal spits, eelgrass beds, salmon, shellfish, and a diversity of marine and estuarine species, as well as large expanses of intact forests along the steep shorelines. Dabob Bay is also one of the most important shellfish growing bays in Washington and home to the Taylor Shellfish hatchery, one of the largest shellfish hatcheries in the world. As discussed earlier in the main body of the JLT conservation plan, shellfish farming represents the major type of agricultural activity in Jefferson County. Oyster farming became established in the early 1900's around the Hood Canal communities, and today this industry represents nearly 75% of the Jefferson County's market value of agricultural products soldl. For many years, JLT has been one of the leaders in the effort to better protect Oabob Bay's extraordinary habitats and natural resources. In the spring of 2009, after an intensive one year scientific assessment and extensive public hearings, Peter Goldmark, Commissioner of Public Lands, approved a greatly expanded proposed bou'ndary for the Oabob Bay Natural Area, including both Natural Area Preserve (NAP) and Natural Resource Conservation Area (NRCA) designations. The new boundary was supported by a broad coalition of local and state conservation organizations, shellfish growers, local landowners, and 1 United States Department of Agriculture, National Agricultural Statistics Service. http://www.agcensus.usda.gov/Publications/200?/Onlinc _Highlights/County _ ProfilesiW ashington/cp53 031 . pdf 3 county, state and federal representatives. The boundary was expanded from 350 acres to 6,287 acres (3,975 acres of upland and 2,312 acres of aquatic lands). The boundary is for administrative, not regulatory purposes; it gives Washington Department of Natural Resources (DNR) approval to pursue grant funding and acquire lands from willing landowners within the boundary. The boundary also allows DNR to use the Trust Land Transfer (TLT) process to transfer state timber land into Natural Area management. The State legislature approved more than $10 million for TL T funding in the 2007-09 and 2009-11 biennium for Dabob Bay. DNR expects to transfer all 1,299 acres of remaining state timber lands within the boundary into natural area protection by June of 2011. Within new boundaries of the Dabob Bay Natural Area, JLT holds three conservation easements totaling 163 acres on the steep slopes surrounding the bay. However, approximately 1,000 acres of private land remains unprotected, including more than 50 privately owned parcels. About one-half these parcels remain undeveloped. In this project, Northwest Watershed Institute, Jefferson Land Trust, and The Nature Conservancy will continue to work in partnership with DNR to seek grant funding for acquisitions from willing sellers. In general, undeveloped properties would be acquired by fee simple acquisition for long-term ownership and management by DNR as part of the Natural Area. JL T's focus will be on acquiring conservation easements on parcels that already have a house or other development, but retain significant habitat values that could be permanently protected by conservation easement. 3. Sustainable Forestry in the Tarboo Watershed - Protection of forest land from development by fee simple acquisition or conservation easement with willing landowners. Thousands of acres of industrial forestland drain to Tarboo Creek and Tarboo-Oabob Bay, with Pope Resources and DNR being the largest landowners. Because the Tarboo watershed is midway on the continuum between the lands at higher risk of development near the Hood Canal bridge and the more remote forest lands to the east, there is a narrow window of opportunity to protect large tracts of forestland at relatively low cost. Protecting the forest land base of the watershed is essential to prevent stormwater impacts related to residential development that could undermine the conservation gains made to protect riparian areas, wetlands, and Dabob Bay. Jefferson Land Trust currently holds a number of easements allowing for continued forestry use in the Tarboo watershed, including "Upper Tarboo"; a 50 acre tract at the intersection of Dabob and Center roads that is adjacent to a large block of DNR forestland. This project involves working with Northwest Watershed Institute and other project partners to obtain fee simple and/or conservation easement acquisition of large tracts of forestland suitable for sustainable timber production from willing sellers and permanently protecting it from more intensive development. 4 CAPITAL IMPROVEMENT PROGRAM Table 1 provides an estimate of the cost, timelines, and potential funding sources to implement these three major projects. These are estimated costs to be raised by all project partners to complete all aspects ofthe project (protection and restoration) with willing landowners. Figure 1 shows the general project areas within the Tarboo Watershed. Table 1. Capital Improvement Plan for the Tarboo-Oabob Bay Watershed Project Year Cost (M) Funding Sources Tarboo Headwaters to Bay - Phase I 2011 1.5 Tarboo Headwaters to Bay - Phase II 2012 1.5 Tarboo Headwaters to Bay - Phase 1111 2013 1 WWRP, JCCF, USFWS Tarboo Headwaters to Bay - Phase IV 2014 1 Partnership, NRCS Cost-Share, ALEA Tarboo Headwaters to Bay - Phase V 2015 1 Tarboo Headwaters to Bay - Phase V 2016 1 Oabob Bay Natural Area -Phase I 2011 3 Oabob Bay Natural Area -Phase II 2012 6 WWRP, NOAA CELCP, Oabob Bay Natural Area -Phase III 2013 3 USFWS NeWC, USFWS Oabob Bay Natural Area -Phase IV 2014 2 Section 6, SRFB, Private Oabob Bay Natural Area -Phase V 2015 2 donors Oabob Bay Natural Area -Phase V 2016 2 Tarboo Watershed Forestry - Phase I 2011 1 Tarboo Watershed Forestry - Phase II 2012 2 ON R Forest Legacy, Tarboo Watershed Forestry - Phase III 2013 3 Carbon Sale, WWRP, Tarboo Watershed Forestry - Phase IV 2014 3 Private Donors and Tarboo Watershed Forestry - Phase V 2015 3 Investors Tarboo Watershed Forestry - Phase V 2016 3 5 ~ Tarboo Watersh: w.,.=~~tut. Parcel OwnershIp Pa<<;el$ !l.:I ANE fOfeslS of Puget SOUnd o Green Diamond L Pope ReS<lUn:e5 r.......] DNR TMI Lendo _ DNR NlllurellVe. _ DNR NattnlAr.e. Perdir>g _ Tha Net... Cooservancy D Northwest_Institute _ WOWf C...tical Hebilel Prose",e CJ County Pori< C' 0lMr . Prlvota llNft Aqu.otie undo n Un~nown Pubk _ Prtvata ,Easements I Restonlbon Proj4rct.. ~ Conse<vetion E......-.. ~ RasIoratioo P"'lecls ~ C008EtfV9fioo & Restoration D Dabob Boy Natural Resource Cooserve_ Area o Oabcb Bey NaluralArea PresefY9 Road!. Private "---' Coonly "'"' Stslo ?!;; Lak8s SWOlno .+ 1 Miles I May. 2010 P-roject-Ar-eas D Tarboo Creek Corridor o Dabob Bay Natural Area o Forests and Forestry o I 0.5 Figure 1. Project Areas within the Tarboo-Dabob Bay Watershed. Richard Pinkley, President Gary K. Wossels, MAl Jennifur A. Trueman Matthew D. Haner GP A TRUEMAN Real Estate Appraisers and Consultants 7522 281h Street West University Place, Washington 98466 info@gpatrneman.com (253) 564-1342 Fax (253) 566-9:560 John It Trueman, MAl, 8RA Edward o. Gretrr, MAl Bruce E. Pynili Robert E. Stemquist Michael D. Wearne .. February 28,2012 Mr. Peter Bahls Northwest Watershed Institute 3407 Eddy Street Port Townsend, WA 98368 Re: Appraisers' Opinion of the Market Value of Northwest Watershed Institute Site Located at Dabob Road Quilcene, Washington File Number 12-026 Dear Mr. Bahls, In accordance with your request, we have inspected the above mentioned property, which is legally described in this report, for the purpose of estimating the market value thereof. This is a Restricted Use Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(c) of the Uniform Standards of Professional Appraisal Practice for a Restricted Appraisal Report. As such, it presents no discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning. and analyses is retained in the appraisers' file. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraisers are not responsible for unauthorized use of this report. PurDose of the AoDraisal Northwest Watershed Institute purposes to encumber the sites with conservation easements which will prohibit development and restrict timber harvesting to future growth only. The total board feet of standing timber could not be reduced below the total board feet of standing timber which existed as of April 3, 2010, as established by a timber cruise and appraisal conducted by Cronin Forestry. This appraisal estimates the market value of the property rights which would be conveyed via the easement. GPA TRUEMAN File #12-026 Page 2 Leaal DescriDtion No title report was ordered by or furnished to the appraisers' office; therefore, public information has been relied upon for the information contained herein. The following identification numbers were furnished by the Jefferson County Assessor's Office: Tax Parcels 801294002 and 801321016 Should current title report information other than that presented herein be revealed, the appraisers reserve the right to change, alter, and/or modify any portion of this report, including the expressed value conclusions, as the appraisers deem necessary and/or appropriate. SeODe of Work The Unifonn Standards of Professional Appraisal Practice (USPAP) of the Appraisal foundation defines scope of work as "the type and Axtent of research and analysis in an assignment". It further states that "the acceptability of an appraiser's work is judged based on two tests: The expectation of parties who are regularly intAnded users for similar assignments and what an appraiser's peers' actions would be in performing the same or a similar assignmene In regard to the subject property, this involved the following steps: 1) The property was inspected on February 23,2012. The extent oftheinspection included a visual inspection of the subject site. 2) We have performed a previous appraisal of the subject property for the same client in August of 2010. 3) Regional, city, county and neighborhood data was based on information available in the Jefferson County Library and on the internet. The neighborhood section was based upon a physical inspection of the area as well as data from Jefferson County. 4) The subject property data was based upon information obtained from Jefferson County and Mr. Mike Cronin of Cronin Forestry. Other subject property data was compiled from the public records and from a physical inspection of the site. 5) In estimating the highest and best use for the property, an analysis was made of data compiled in the three steps noted above. In addition, the appraiser(s) identified and analyzed the effect on use and value of existing land use regulations, investigated reasonably probable modifications of such land use regulations, performed a study of GPA TRUEMAN File #12-026 Page 3 the market activity in the subject area along with a study of economic supply and demand, the physical adaptability of the real estate and market area trends to help determine the economic feasibility of the potential uses of the subject property. 6) In developing approaches to value, the market data used was collected from the GPA Trueman office files, other appraisers, realtors or persons knowledgeable of the subject property marketplace, and the municipal offiCes in the greater Olympic Peninsula area. 7) To develop the opinion of value, the appraisers performed an appraisal and reported their findings and conclusions in a restricted use appraisal report, containing information which limits use of the report to the client and wams that the appraisers' opinion and conclusions set forth in the report may not be understood properly without additional information in the appraisers' work file. This report states the appraisal methods and techniques employed, the value opinion(s) and conclusion(s) reached, and references the work file. Due to the type of property under appraisal, the Sales Comparison Approach is utilized. The IncOme and Cost Approaches are not applicable, although timber value information obtained from a qualified timber valuation specialist - is incorporated in to our analysis. 8) After assembling and analyzing the data defined in this scope of the appraisal, a final opinion of market value was made. Market Value Definition According to the Uniform Standards of Professional Appraisal Practice, and regulations published by federal regulatory agencies pursuant to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 between July 5, 1990 and August 24, 1990, by the Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA). Market value is defined as: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) buyer and seller are typically motivated; GPA TRUEMAN File #12~026 Page 4 2) both parties are well informed or well advised, and acting in what they consider their own best interests; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. This definition of market value is commonly used in connection with mortgage lending by a number of government agencies and others. It is designed to provide an accurate and reliable measure of the economic potential of property involved in federally related transactions. In applying this definition of market value, adjustments to the comparables must be made for special or creative financing or sales concessions, No adjustments are necessary for those costs that are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party financial institution that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar-for-dollar cost of the financing or concession, but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraisers' judgment. Market Value "As Is" Definition According to The Dictionary of Real Estate Appraisal, Fifth Edition, published by the Appraisal Institute, 2010, market value "as-is" is defined as follows: "The estimate of the market value of real property in its current physical condition. use, and zoning as of the appraisal date." Fair Valuation Definition According to Law 12-USC 29; 7.3025 (d) of the Comptroller's Manual for National Banks, "fair value" is the cash price that might reasonably be anticipated in a current sale under all conditions requisite to a fair sale. A fair sale means that buyer and seller are each acting prudently, knowledgeably, and under no necessity to buy or sell-I.e.. other than in a forced or liquidation sale. GPA TRUEMAN File #12-026 Page 5 The appraisal estimates the cash price that might be received upon exposure to the open market for a reasonable time, considering the property type and local market conditions. When a current sale is unlikely-Le., when it is unlikely that the sale can be completed within twelve months-the appraisers must discount all cash flows generated by the property to obtain the estimate of fair value. These cash flows include, but are not limited to, those arising from ownership, development, operation, and sale of the property. The discount applied shall reflect the appraisers' judgment of what a prudent, knowledgeable purchaser under no necessity to buy would be willing to pay to purchase the property in a current sale. ProsDective Value Estimate Definition According to The Dictionary of Reaf Estate Appraisal, Fifth Edition, published by the Appraisal Institute, 2010, prospective value estimate is defined as follows: "A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being eftectiveat some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have n6t yet achieved sellout or a stabilized level of long- . term occupancy." Marketina Period Regulatory appraisal standards require all appraisal reports to analyze and report a normal or reasonable marketing period for the subject property. Normal marketing period generally is defined as the amount of time necessary to expose a property to the open market in order to achieve a sale. Implicit in this definition is the following characteristics: The property will be actively exposed and aggressively marketed to potential purchasers through marketing channels commonly used by sellers of similar type properties. The property will be offered at a price reflecting the most probable markup over market value used by sellers of similar type properties. A sale will be consummated under the terms and conditions of the definition of market value required by the regulation. GPA TRUEMAN File #12-026 Page 6 USPAP defines marketing time in Advisory Opinion 7 (AO-7) as "the reasonable marketing time is an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal". Marketing time is based on the sales utilized in this analysis and sales of other similar properties, with consideration given to the current market. This marketing time is estimated to be twelve months or less for the greater subject properties. Exposure Time USPAP defines Exposure Time in Statem~nt NO.6 as follows: "estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open market". Exposure time is different for various types of property and under various market conditions. It .is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time, but also adequate, sufficient and reasonable effort. In the development of estimating the exposure time, the appraisers have reviewed historical data relative to the sales of comparable properties, gathered information through sale verification, conducted interviews with agents and considered changes in the market. Based on the foregoing, it is the appraisers' opinion that exposure time would have been twelve months or less for the greater subject properties. Property Riahts ADD raised The property rights are that portion of the rights proposed to be conveyed via a conservation easement. "Easemenf and "Conservation Easemenr are defined in The Appraisal of Real Estate, Thirteenth Edition, by the Appraisal Institute, 2008, as follows: GPA TRUEMAN File #12-026 Page 7 Easement ~An interes.t in real property that transfers use, but not ownership, of a portion of an owner's property. Access or right-of-way easements may be acquired by private parties or public utilities. Governments accept conservation, open space, and preservation easements on private property," Conservation Easement ~A restriction that limits the future use of a property to preservation, conservation, or wildlife habitat." The conservation easement proposed to encumber the subject property would prohibit development on the property. Timber harvesting would be restricted to only future growth. The total board feet of standing timber could not be reduced below the. total board feet of standing timber which existed as of April 3, 2010, as established by a timber cruise and appraisal conducted by Cronin Forestry. Identification of Client The term "Client" is defined in USPAP as: "The party or parties who engage, by employment or contract, an appraiser in a specific assignment. The client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent." GPA TRUEMAN has been retained by Mr. Peter Bahls, acting on behalf of Northwest Watershed Institute, who is herein identified as the client. Intended Use of ReDort The term "Intended Use" is defined in USPAP as: ~The use or uses of an appraiser's reported appraisal, appraisal review or appraisal consulting assignment opinions and conclusions,. as identified by the appraiser based on communication with the client at the time of the assignment." The intended use of this appraisal report is to aid and assist the client in the establishment of a conservation easement which would encumber the subject sites. Any party receiving a copy of this report does not, as a consequence, become a party to the appraiser-client relationship. GPA TRUEMAN File #12-026 Page 8 Intended User of Report The term "Intended User" is defined in USPAP as: ~The client and any other party as identified, by name or type, as users of the appraisal, appraisal review or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment." The intended user of the subject report is the aforementioned client. Statement of OwnershiD and Recent Historv As previously stated, no title report was ordered by or furnished to the appraisers' office; therefore, public information has been relied upon for the information contained herein. If the information is other than as indicated, the appraisers reserve the right to revise this analysis as needed. The title to the subject properties is vested in Northwest Watershed Institute, a Washington Corporation. The current owner acquired the sites in September of 2011 for a price of $550,000. The property was purchased for conservation purposes and was reportedly financed with low and no interest loans from conservation investors. The prior sale price is 4.5% higher than the aggregate of our value conclusions in the ~before" condition. This could be due to a declining market and/or high motivation for the buyer to acquire conservation land. Consideration and weight were given to the prior sale in formulating our value conclusions. Effective Date of Value The date on which this value estimate is valid is February 23,2012. Date of Inspection The date the property was last inspected was February 23, 2012. Map Reference For map reference purposes, the subject property can be located in the 2012 Edition of A Good Map Company, Jefferson County Map, Page 17; Section 8-4. Census Tract The subject property is located in U.S. Government Census Tract Number 9503. GPA TRUEMAN File #12-026 Page 9 Real Estate Aooraised The real estate appraised consists of two tax parcels which are valued separately herein. Parcel 801294002 contains 38.12:t acres and Parcel 801321016 contains40.18:t acres. The sites are located on Dabob Road in the Quilcene area of Jefferson County, Washington. Northwest Watershed Institute purposes to encumber the sites with conservation easements which will prohibit development and restrict timber harvesting to future growth only. The total board feet of standing timber could not be reduced below the total board feet of standing timber which existed as of April 3, 2010, as established by a timber cruise and appraisal conducted by Cronin Forestry. This appraisal estimates the market value of the property rights which would be conveyed via the easement. Hiahest and Best Use Highest and best use of the site in the "before" condition is concluded to be timber harvesting, with potential future low density residential development. The highest and best use in the "after" condition is concluded to be for limited future timber harvesting. Concluded Value Tax Parcel 801294002 "Before" Condition "After" Condition Difference Between "Before" and "After" Tax Parcel 801321016 "Before" Condition "After" Condition Difference Between "Before" and "After" $255,000 $50.000 $205,000 $270,000 $50.000 $220,000 The appraisers' conclusions of market value for the proposed conservation easement as of February 23, 2012, is $205,000 for Tax Parcel 801294002 and $220,000 for Tax Parcel 801321016. Very truly yours, Gj..A. T...UEMAN ./ .~:: i .. . .J Edward O. Greer, MAl State.certified General Real Estate Appraiser Num ber 1100597 EOG/MDH: tdb ~J2~ Matthew D. Haner, Associate State-certified General Real Estate Appraiser Number 1101768 GPA TRUEMAN File #12-026 Page 10 ASSUMPTIONS AND LIMITING CONDITIONS: 1. As agreed upon with the client prior to the preparation of this appraisal, this is a limited appraisal because it invokes the Departure Rule of the Uniform Standards of Professional Appraisal Practice. As such, information pertinent to the valuation has not been considered and/or the full valuation process has not been applied. Depending on the type and degree of limitations, the reliability of the value conclusion provided herein may be reduced. 2. This is a Restricted Use Appraisal Report, which is intended to comply with the reporting requirements set forth under Standard Rule 2-2{c) of the Uniform Standards of Professional Appraisal Practice for a Restricted Appraisal Report. As such, it does not include discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report, The appraisers are not responsible for unauthorized use of this report. 3. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 4. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 5. Responsible ownership and competent property management are assumed unless otherwise stated in this report. 6. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 7. All engineering, if any, is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 8. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility. is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 9. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report. 10. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in this appraisal report. 11. It is assumed that all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national governmental, or private entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. GPA TRUEMAN File #12-026 Page 11 12, Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property, Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. 13, It is assumed that the utilization of the land and improvements, if any, is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report. 14. The appraisers are not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraisers that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The appraisers' value opinion is predicated on the assumption that there is no such material on or in the property that would cause a loss in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraisers' descriptions and resulting comments are the result of the routine observations made during the appraisal process. 15. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the properly is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communications barriers that are structural in nature' that would 'restrict access by disabled individuals may adversely affect the property's value, marketability, or utility. 16. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 17. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. 18. Po~session of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than. the party to whom it is addressed without the written consent of the appraisers, and in any event, only with proper written qualification and only in its entirety. 19. Neither all nor any pari of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or the firm with which the appraisers are connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraisers. GPA TRUEMAN File #12-026 Page 12 CERTIFICATION We certify that to the best of our knowledge and belief, . The statements of fact contained in this report are true and correct. . The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions and conclusions. . We have no present or prosp~ctive interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. . We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. . Our engagement in this assignment was not contingent upon developing or reporting predetermined results. . Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of th is appraisal. . The reported analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. · The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. . Edward O. Greer and Matthew D. Haner are currently certified under the voluntary continuing education program of the Appraisal Institute. As of thedate of this report, they have completed the continuing education program of the Appraisal Institute. . Edward O. Greer and Matthew D. Haner have made a personal inspection of the property that is the subject of this report. The research and collection of comparable data and valuation analysis was a collective effort by Edward O. Greer and Matthew D. Haner. The composition of the narrative portion of this report was prepared largely by Matthew D. Haner and reviewed in its entirety by Edward O. Greer. . We have performed a previous appraisal of the subject property for the same client in August of 2010. · No one provided significant real property appraisal assistance to the persons signing this certification. JA........>.. !i.D k#r/ /llJ,A }).f;.-, . Edwa rd O. Greer State-certified General Real Estate Appraiser Number 1100597 Matthew D. Haner, Associate State-certified General Real Estate Appraiser Number 1101768 GPA TRUEMAN File #12-026 Page 14 QUALIFICATIONS AND EXPERIENCE OF EDWARD O. GREER, MAl EDUCATIONAL BACKGROUND AND TRAINING (including recent seminars & courses) Business Practices and Ethics. Appraisal Institute, February 2011 Uniform Appraisal Standards for Federal Land Acquisitions, June 2011 Business Practices and Ethics, February 2011 Uniform Standards of Professional Appraisal Practice, Update, January 2011 Loss Prevention Program for Real Estate Appraisers, November 201 0 Appraisal Review for Federal Aid Highway Programs, May 2008 Legal Aspects of Easements, March 2007 Evaluation Commercial Construction, March 2007 NSBC Mortgage & Appraisal Fraud Seminar, January 2007 Certified by State of Washington to instruct Appraisal Courses 1 and 2 Instructor, Tacoma Community College and Clover Park Educational Center Expert Review Appraiser Roster (ERAR), State of Washington, Department of Licensing ASSOCIATION MEMBERSHIPS Appraisal Institute International Right of Way Association PROFESSIONAL AFFILIATIONS AND LICENSES MAl designation 1985, Certificate Number 7195, American Institute of Real Estate Appraisers SRA designation, Society of Real Estate Appraisers 1970, resigned 1990 Licensed by the State of Washington as a Certified Real Estate Appraiser, General Classification, License Number 1100597 EXPERIENCE 1977 to Present - Real Estate Appraiser and Consultant GPA Trueman GPA Valuation (formerly Greer, Patterson & Associates, Inc.) Greer, Patterson & Associates, Inc. (President), 1977 to 2002 Greer Appraisals (Owner) 4 years - Chief Appraiser, Great Northwest Federal Savings & Loan Association 2 years -Independent Appraiser, Westgate Realty and Appraisal Company 8 years .. Chief Appraiser, Pierce County Assessor's Office TYPES OF PROPERTY Land - commercial, industrIal, apartments, residential. rural Improved - industrial properties, offices, medical buildings, warehouses, farm buildings, service stations, churches, apartments. condominiums; miscellaneous PARTIAL CLIENT LIST State of Washington; Cities of Tacoma, lakewood, University Place, Fife and Aubum; Port of Tacoma; Metropolitan Park District of Tacoma; Pierce County Parks Department; Tacoma School District; Pierce County Public Works; Tacoma Public Utilities; Thurston County; Kitsap County; Columbia Bank; Viking Bank; Sterling Savings; private individuals; attorneys COURT OF EXPERT WITNESS TESTIMONY Pierce County Superior Court Snohomish County Superior Court U.S, District Court PRESENT RESPONSIBILITIES Real Estate Appraiser, Litigation Specialist, and Consultant 09/11 GPA TRUEMAN File #12-026 Page 15 ",.,."""".;;!~"~~f~~~2~:, C1lii,'I'Il'DlI'i~AtllML~i'll~ ~.. _AlUl D/}lU!IIII. .~mw#nt$'r .'\'ilCOIo.f..."" 9~ GPA TRUEMAN . File #12-026 Page 16 QUALIFICATIONS AND EXPERIENCE OF . MATTHEW D. HANER PROFESSIONAL LICENSE AND CERTIFICATION State of Washington Department of Licensing, Certified General Real Estate Appraiser #1101768, expiration date August 24, 2012 EDUCATIONAL BACKGROUND AND TRAINING Pacific Lutheran University, Bachelor of Business Administration, Marketing Concentration, 1990 MacPherson's Inc. Real Estate/Better Homes and Gardens - Real Estate School, State of Washington, Licensed Real Estate Agent, 1995 - \ SEMINARS AND CLASSES ATTENDED Marshal and Swift Commercial Cost Training, Appraisal Institute, 2010 Eminent Qomain and Condemnation, Appraisal Institute, 2010 Standards of Professional Practice: 1400 - 7-Hour National Update, Appraisal Institute, 2010 Subdivision Seminar, Appraisal Institute. 2010 Condominium Seminar, Appraisal Institute, 2010 Evaluating Commercial Construction, Appraisal Institute, 2008 Real Estate Finance Statistics and Valuation Modeling, Appraisal Institute, 2007 Standards of Professional Practice: 7-Hour National Update, Appraisal Institute, 2007 Business Practices and Ethics. Appraisal Institute, 2007 Advanced Income Capitalization, Appraisal Institute, 2005 Apartment Appraisal: Concepts and Applications, Course 330, Appraisal Institute, 2004 Basic Income Capitalization, Appraisal Institute, 2004 Standards of Professional Practice, Appraisal Institute, 2003 Principles of Real Estate Appraising, Tacoma Community College, 2001 ASSOCIATION MEMBERSHIPS Tacoma Executive Association Tacoma Athletic Commission President . Vice President SecretarylT reas urer Board of Trustees President Vice President 01/09 - 06/09 07/08 -12/08 01/08 - 06/08 2009-2010 2008-2009 EXPERIENCE 2011 to Present 2001 to 2011 : 2000 - 2001: 2000: 1993 -1999: GPA Trueman, Independent Fee Appraiser, University Place. Washington Trueman Appraisal Company, Associate, Tacoma, Washington Auto-Chlor System Commercial Dishwashing Service, Operations Manager, Fife, Washington Total Renal Care, Staff Accountant, Tacoma, Washington Katie Downs Tavern and Eatery, Manager, Tacoma, Washington TYPES OF PROPERTY Land - commercial, industrial, residential, rural, acreage. Improved - office, retail, industrial, multi-family dwellings, single-family residential. PRESENT RESPONSIBILITIES Independent Fee Appraiser 08/2011 GPA TRUEMAN File #12-026 Page 17 GPA TRUEMAN File #12-026 Page 19 Subject Property, Parcel 801294002 - View from Dabob Road GPA TRUEMAN Subject Property, Parcel 801294002 - Interior File #12-026 Subiect PhotoaraDhs Page 20 Subject Property. Parcel 801321016 Street Scene, Dabob Road - View to the North GPA TRUEMAN File #12-026 Subiect PhotoaraDhs Page 21 Street Scene, Dabob Road - View to the South GPA TRUEMAN File #12-026 Page 22 AERIAL PLAT MAP - Parcel 801294002 GPA TRUEMAN File #12-026 Page 23 AERIAL PLAT MAP - Parcel 801321016 GPA TRUEMAN RicbardPinkley. President Gary K. w.ssels, MAl Jetlllmr A Truom!lll Matth<.w D. Haner GPA.TRUEMAN Real Estate Appraisers and Consultants 7522 28th Street West University Place, Washington 98466 info@gpatmeman.com (253) 564-1342 Fax (253) 566-9560 JobnR. Trueman, MAl, SRA Edward o. Gteer, MAl BnLce E. Pyrab Robert E. Stemqui~ Michael D. W........ February 28, 2012 Mr. Peter Bahls Northwest Watershed Institute 3407 Eddy Street Port Townsend, WA 98368 Re: Appraisers' Opinion of the Market Value of Leopold-Freeman Site Located at Center Road and Old Tarboo Road Quilcene. Washington File Number 12-027R Dear Mr. Bahls, In accordance with your request, we have inspected the above mentioned property, which is described in this report, for the purpose of estimating the market value thereof. This is a Restricted Use Appraisal Report, which is intended to comply with the reporting requirements set forth under Standards Rule 2-2(c) of the Unifonn Standards of Professional Appraisal Practice for a Restricted Appraisal Report. As such, it presents no discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file.. The depth of discussion contained in this report is specific to the needs of the client and for the intended use stated below. The appraisers are not responsible for unauthorized use of this report. PurDose of the AoDraisal Northwest Watershed Institute proposes to encumber the sites with a conservation easement which will prohibit development, but allow timber production and harvest. This appraisal estimates the market value of the property rights which would be conveyed via the easement. GPA TRUEMAN File #12-027R Page 2 Leaal DescriDtion No title report was ordered by or furnished to the appraisers' office; therefore, public information has been relied upon for the information contained herein. The following identification numbers were furnished by the Jefferson County Assessor's Office: Tax Parcel 801291002 and 801204006 Should current title report information other than that presented herein be revealed, the appraisers reserve the right to change, alter, and/or modify any portion of this report. including the expressed value conclusions, as the appraisers deem necessary and/or appropriate. SCODe of Work The Uniform Standards of Professional Appraisal Practice (USPAP) of the Appraisal Foundation defines scope of work as nthe type and extent of research and analysis in an assignment". It further states that "the acceptability of an appraiser's work is judged based on two tests: The expectation of parties who are regularly intended users for similar assignments and what an appraiser's peers' actions would be in performing the same or a similar assignment." In regard to the subject property, this involved the following steps: 1) The property was inspected on February 23, 2012. The extent of the inspection included a visual inspection of the subject site. 2) We have performed a previous appraisal of the subject property for the same client in August of 2010. 3) Regional, city, county and neighborhood data was based on information available in the Jefferson County Library and on the internet. The neighborhood section was based upon a physical inspection of the area as well as data from the Jefferson County. 4) The subject property data was based upon information obt.ained from Jefferson County and Mr. Mike Cronin, of Cronin Forestry. Other subject property data was compiled from. the public records and from a physical inspection of the site. 5) In estimating the highest and best use for the property, an analysis was made of data compiled in the three steps noted above. tn addition, the appraisers identified and analyzed the effect on use and value of existing land use regulations, investigated reasonably probable modifications of such land use regulations, performed a study of GPA TRUEMAN File #12-027R Page 3 the market activity in the subject area along with a study of economic supply and demand, the physical adaptability of the real estate and market area trends to help determine the economic feasibility of the potential uses of the subject property. 6) In developing approaches to value, the market data used was collected from the GPA Trueman office files, other appraisers, realtors or persons knowledgeable of the subject property marketplace, and the municipal offices in the greater Olympic Peninsula area. 7) To develop the opinion of value, the appraisers performed an appraisal and reported their findings and conclusions in a restricted use appraisal report, containing information which limits use of the report to the client and warns that the appraisers' opinion and conclusions set forth in the report may not be understood properly without additional information in the appraisers' work file. This report states the appraisal methods and techniques employed, the value opinion(s) and conclusion(s) reached, and references the work file. Due to the type of property under appraisal, the Sales Comparison Approach is utilized. The Income and Cost Approaches are not applicable, although timber value information obtained from a qualified timber valuation specialist is incorporated in to .our analysis. 8) After assembling and analyzing the data defined in this scope of the appraisal, a final opinion of market value was made. Market Value Definition According to the Uniform Standards of Professional Appraisal Practice, and regulations published by federal regulatory agencies pursuant to Title XI of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 between July 5, 1990 and August 24, 1990, by the Office of the Comptroller of the Currency (OCC), Federal Reserve Board (FRB), Federal Deposit Insurance Corporation (FDIC), Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA). Market value is defined as: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: 1) buyer and seUer are typically motivated; GPA TRUEMAN File #12-027R Page 4 2) both parties are well informed or well advised, and acting in what they consider their own best interests; 3) a reasonable time is allowed for exposure in the open market; 4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and 5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. This definition of market value is commonly used in connection with mortgage lending by a number of government agencies and others. It is designed to provide an accurate and reliable measure of the economic potential of property involved in federally related transactions. In applying this definition of market value, adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs that are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party financial institution that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar-far-dollar cost of the financing or concession, but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraisers' judgment. Market Value liAs Is" Definition According to The Dictionary of Real Estate Appraisal, Fifth Edition, published by the Appraisal Institute, 2010, market value "as-is. is defined as follows: 'The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal date." Fair Valuation Definition According to Law 12-USC 29; 7.3025 (d) of the Comptroller's Manual for National Banks, "fair value" is the cash price that might reasonably be anticipated in a current sale under all conditions requisite to a fair sale. A fair sale means that buyer and seller are each acting prUdently, knowledgeably, and under no necessity to buy or sell-I.e., other than in a forced or liquidation sale. GPA TRUEMAN File #12-027R Page 5 The appraisal estimates the cash price that might be received upon exposure to the open market for a reasonable time, considering the property type and local market conditions. When a current sale is unlikely-Le., when it is unlikely that the sale can be completed within twelve months-the appraisers must discount all cash flows generated by the property to obtain the estimate of fair value. These cash flows include, but are not limited to, those arising from ownership, development, operation, and sale of the property. The discount applied shall reflect the appraiser('s') judgment of what a prudent, knowledgeable purchaser under no necessity to buy would be willing to pay to purchase the property in a current sale. Prosoective Value Estimate Definition According to The Dictionary of Real Estate Appraisal, Fifth Edition, published by the Appraisal Institute, 2010, prospective value estimate is defined as follows: "A value opinion effective as of a specified future date. The term does not define a type of value. Instead, it identifies a value opinion as being effective at some specific future date. An opinion of value as of a prospective date is frequently sought in connection with projects that are proposed, under construction, or under conversion to a new use, or those that have not yet achieved sellout or a stabilized level of long- tenn occupancy.H Extraordinary Assumotion The term "Extraordinary Assumption" is defined in USPAP as: "An assumption, directly related to a specific assignment, as of the effective date of the assignment results, which, if found to be false, could -alter the appraiser('s') opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis.H Standards Rule 1-2(f) of the Uniform Standards for Appraisal Practice states that "an extraordinary assumption may be used in an assignment only jf: it is required to properly develop credible opinions and conclusions; the appraiser has a reasonable basis for the extraordinary assumption; use of the extraordinary assumption results in a credible analysis, and; the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions: GPA TRUEMAN File #12-027R Page 6 Standards Rule 2-2(a)(x) of the Uniform Standards for Appraisal Practice requires that the appraiser must "clearly and conspicuously state all extraordinary assumptions; and state that their use might have affected the assignment results". The subject zoning allows a development density of one dwelling unit per 80 acres. As subject parcet 801291002 is a single tax parcel which contains 118.54:t acres, it follows that only a single dwelling unit would be legally permissibleon that parcel. However, the probability exists that the site was originally two tax parcels which were separated along the quarter section line, and were subsequently merged into a single parcel for simplicity of property taxes. The Jefferson County Community Development Department indicated that such a circumstance would allow for a return to the original parcel configuration, thereby creating the potential for two development sites. Application for a lot certification would be required, along with a fee of $296, a legal description, and a site plan. The County would then review the application and research the history of the site. If it was confirmed that the site was originally two parcels, it is likely that reversion to that status would be approved. No lot certification information has been provided to the appraisers. Therefore, this appraisal contains the Extraordinary Assumption that the southerly 118.54% acres (Tax Parcel 801291002) of the subject site could be legally divided into two separate tax parcels containing 79.45::1: acres and 39.09:t acres which could each be developed with a single family residence. No timber valuation information was provided for subject parcel 801204006 which comprises the northerly 39:1: acres of the subject site. Based on information provided by the client regarding the age of the standing timber on that parcel, a timber value o~ $1,500 per acre is assumed. Thus, this appraisal includes a second Extraordinary Assumption that the northerly 39:t acres of the subject site (Tax Parcel 801204006) has standing timber with a net value of $1,500 per acre. Should either of these extraordinary assumptions be found to be false, the appraisers reserve to the right to alter their value conclusions. Marketina Period Regulatory appraisal standards require all appraisal reports to analyze and report a normal or reasonable marketing period for the subject property. Normal marketing period generally is defined as the amount of time necessary to expose a property to the open market in order to achieve a sale. Implicit in this definition is the following characteristics: GPA TRUEMAN File #12-027R Page 7 The property will be actively exposed and aggressively marketed to potential purchasers through marketing channels commonly used by sellers of similar type properties. The property will be offered at a price reflecting the most probable markup over market value used by sellers of similar type properties. A sale will be consummated under the terms and conditions of the definition of market value required by the regulation. USPAP defines marketing time in Advisory Opinion 7 (AO-7) as Uthe reasonable marketing time is an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal". Marketing time is based on the sales .utilized in this analysis and sales of other similar properties, with consideration given to the current market. This marketing time is estimated to be twelve months or less for the greater subject property. EXDosure Time USPAP defines Exposure Time in Statement No.6 as follows: "estimated length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal; a retrospective opinion based on an analysis of past events assuming a competitive and open marker. Exposure time is different for various types of property and under various market conditions. It is noted that the overall concept of reasonable exposure encompasses not only adequate, sufficient and reasonable time, but also adequate, sufficient and reasonable effort. In the development of estimating the exposure time, the appraisers have reviewed historical data relative to the sales of comparable properties, gathered information through sale verification, conducted interviews with agents and considered changes in the market. Based on the foregoing, it is the appraisers' opinion that exposure time would have been twelve months or less for the greater subject property. GPA TRUEMAN File #12-027R Page 8 Prooertv Rights AoDraised The property rights are that portion of the rights proposed to be conveyed via a conservation easement. "Easement" and "Conservation Easemenr are defined in The Appraisal of Real Estate, Thirteenth Edition, by the Appraisal Institute, 2008, as follows: Easement UAn interest in real property that transfers use, but not ownership, of a portion of an owner's property. Access or right-of-way easements may be acquired by private parties or public utilities. Governments accept conservation, open space, and preservation easements on private property.". Conservation Easement UA restriction that limits the future use of a property to preservation, conservation, or wildlife habitat." The conservation easement proposed to encumber the subject property would prohibit development on the property, but would allow timber production and harvesting. Identification of Client The term "Client" is defined in USPAP as: "The party or parties who engage, by employment or contract, an appraiser in a specific assignment. The client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent." GPA TRUEMAN has been retained by Mr. Peter Bahls, acting on behalf of Northwest Watershed Institute, who is herein identified as the client. Intended Use of Reoort The term "Intended Use" is defined in USPAP as: ''The use or uses of an appraiser's reported appraisal, appraisal review or appraisal consulting assignment .opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment." GPA TRUEMAN File #12-027R Page 9 The intended use of this appraisal report is to aid and assist the client in the establishment of a conservation easement which would encumber the subject site. Any party receiving a copy of this report does not, as a consequence, become a party to the appraiser-client relationship. Intended User of Reoort The term Ulntended User" is defined in USPAP as: "The client and any other party as identified, by name or type, as users of the appraisal, appraisal review or appraisal consulting report by the appraiser on the basis of communication with the client at the time of the assignment." The intended user of the subject report is the aforementioned client. Statement of Ownershic and Recent Historv As previously stated, no title reportwas ordered by or furnished to the appraisers' office; therefore, public information has been relied upon for the infonnation contained herein. If the information is other than as indicated, the appraisers reserve the right to revise this analysis as needed. The title to the subject property is vested in Leopold-Freeman Forests~ LLC. The current owner acquired Tax Parcel 801291002 in October of 2010 for a price of $1,050,000, and acquired Tax Parcel 801204006 for a price of $179,000 in August of 2009. The aggregate of the purchase prices is approximately 11 % higher than our concluded value for the greater subject property in the "beforeN condition. A lower value would be expected due to a declining market and the potential for high motivation on the part of the buyers to acquire the land for conservation purposes. These factors may be partially offset by timber growth over the time period since the purchases. Our value conclusions have considered and given weight to the prior sales. Effective Date of Value The date on which this value estimate is valid is February 23,2012. Date of Insoection The date the property was last inspected was February 23,2012. Mac Reference For map reference purposes, the subject property can be located in the 2012 Edition of A Good Map Company, Jefferson County Map, Page 17; Section A-3. GPA TRUEMAN File #12-027R Page 10 Census Tract The subject property is located in U.S. Government Census Tract Number 9503. Real Estate ADoraised The real estate appraised is a 157.54t acre site located at Center Road and Old Tarboo Road in the Quilcene area of Jefferson County, Washington. For the purpose of the appraisal and at the request of the client, the subject is appraised as three separate sites containing 39.0t acres (North Parcel), 79.45t acres (Center Parcel) and 3H.09:t acres (South Parcel). Northwest Watershed Institute proposes to encumber the sites with a conservation easement which will prohibit development, but allow timber production and harvest. This appraisal estimates the market value of the property rights which would be conveyed via the easement. Hiahest and Best Use Highest and best use of the site in the "before" condition is concluded to be for low density residential development with possible partial timber harvesting as to the northerly 39.09:t acre site (Tax Parcel 801204006), and timber harvesting with potential future low density residential development as to the 79.45t acre center site and 39.09:t acre southerly site (Tax Parcel 801291002). The highest and best use in the "after" condition is concluded to be for timber harvesting for all three parcels. Concluded Values North Parcel (39.0:t Acres) UBefore" Condition uAfter" Condition Difference Between "Before" and uAfler" $160,000 $90,000 $70,000 Center Parcel (79.45:t Acres) "Before" Condition "After" Condition Difference Between "Before" and "After" $625,000 $495.000 $130,000 South Parcel (39.09:t Acres) "Before" Condition "After" Condition Difference Between uBefore" and "After" $305,000 $230.000 $75,000 GPA TRUEMAN File #12-027R Page 11 The appraisers' conclusion of market values for the rights conveyed via the proposed conservation easement as of February 23, 2012, are $70,000 for the North Parcel, $130,000 for the Center Parcel, and $75,000 for the South Parcel. Very truly yours, GPA TRUEMAN . ta....~.....X~. " ~ Edward O. Greer, MAl State-certified General Real Estate Appraiser Number 1100597 4$il(It1f'-- - Matthew D. Haner, Associate State-certified General Real Estate Appraiser Num ber 1101768 EOG/MDH: tdb Attachments GPA TRUEMAN File #12-Q27R Page 12 ASSUMPTIONS AND LIMITING CONDITIONS: 1. As agreed upon with the client prior to the preparation of this appraisal, this is a limited appraisal because it invokes the Departure Rule of the Uniform Standards of Professional Appraisal Practice. As such, information pertinent to the valuation has not been considered and/or the full valuation process has not been applied. Depending on the type and degree of limitations, the reliability of the value conclusion provided herein may be reduced. 2. This is a Restricted Use AppraisaJ Report, which is intended to comply with the reporting requirements set forth under Standard Rule 2-2(c) of the Uniform Standards of Professional Appraisal Practice for a Restricted Appraisal Report. As such, it does not include discussions of the data, reasoning, and analyses that were used in the appraisal process to develop the appraisers' opinion of value. Supporting documentation concerning the data, reasoning, and analyses is retained in the appraisers' file. The information contained in this report is specific to the needs of the client and for the intended use stated in this report. The appraisers are not responsible for unauthorized use of this report. 3. No responsibility is assumed for legal or title considerations. Title to the property is assumed to be good and marketable unless otherwise stated in this report. 4. The property is appraised free and clear of any or all liens and encumbrances unless otherwise stated in this report. 5. Responsible ownership and competent property" management are assumed unless otherwise stated in this report. 6. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. 7. All engineering, if any, is assumed to be correct. Any plot plans and illustrative material in this report are included only to assist the reader in visualizing the property. 8. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or structures that render it more or less valuable. No responsibility is assumed for such conditions or for arranging for engineering studies that may be required to discover them. 9. It is assumed that there is full compliance with all applicable federal, state and local environmental regulations and laws unless otherwise stated in this report. 10. It is assumed that all applicable zoning and use regulations and restrictions have been complied with, unless nonconformity has been stated, defined, and considered in this appraisal report. 11. Jt is assumed that' all required licenses, certificates of occupancy, or other legislative or administrative authority from any local, state, or national governmental, or private "entity or organization have been or can be obtained or renewed for any use on which the value estimates contained in this report are based. GPA TRUEMAN File #12-027R Page 13 12. Any sketch in this report may show approximate dimensions and is included to assist the reader in visualizing the property. Maps and exhibits found in this report are provided for reader reference purposes only. No guarantee as to accuracy is expressed or implied unless otherwise stated in this report. No survey has been made for the purpose of this report. 13. It is assumed that the utilization of the land and improvements, if any, is within the boundaries or property lines of the property described and that there is no encroachment or trespass unless otherwise stated in this report. 14. The appraisers are not qualified to detect hazardous waste and/or toxic materials. Any comment by the appraisers that might suggest the possibility of the presence of such substances should not be taken as confirmation of the presence of hazardous waste and/or toxic materials. Such determination would require investigation by a qualified expert in the field of environmental assessment. The presence of substances such as asbestos, urea- formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The appraisers' value opinion is predicated on the assumption that there is no such material on or in the property that would cause a loss. in value unless otherwise stated in this report. No responsibility is assumed for any environmental conditions, or for any expertise or engineering knowledge required to discover them. The appraisers' descriptions and resulting comments are the result of the routine observations made during the. appraisal process. 15. Unless otherwise stated in this report, the subject property is appraised without a specific compliance survey having been conducted to determine if the property is or is not in conformance with the requirements of the Americans with Disabilities Act. The presence of architectural and communications barriers that are structural in nature that would restrict access by disabled individuals may adversely affect the property's value, marketability, or utility.. 16. Any proposed improvements are assumed to be completed in a good workmanlike manner in accordance with the submitted plans and specifications. 17. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not ~e used in conjunction with any other appraisal and are invalid if so used. 18. Possession of this report, or a copy thereof, does not carry with it the right of publication. It may not be used for any purpose by any person other than the party to whom it is addressed without the written consent of the appraisers, and in any event, only with proper written qualification and only in its entirety. 19. Neither all nor any part of the contents of this report (especially any conclusions as to value, the identity of the appraisers, or the firm with which the appraisers are connected) shall be disseminated to the public through advertising, public relations, news sales, or other media without prior written consent and approval of the appraisers. GPA TRUEMAN File #12-027R Page 14 CERTIFICATION We certify that to the best of our knowledge and belief, . The statements of fact contained in this report are true and correct. . The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are our personal, impartial, and unbiased professional analyses, opinions and conclusions. . We have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. . We have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. . Our engagement in this assignment was not contingent upon developing or reporting predetermined results. . Our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. . The reported analysis, opinions and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Appraisal. Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. . The use of this report is subject to the requirements of the Appraisalln'stitute relating to review by its duly authorized representatives. . Edward O. Greer and Matthew D. Haner are currently certified under the voluntary continuing education program of the Appraisal Institute. As of the date of this report, they have completed the continuing education program of the Appraisal Institute. . Edward O. Greer and Matthew D. Haner have made a personal inspection of the property that is the subject of this report. The research and collection of comparable data and valuation analysis was a collective effort by Edward O. Greer and Matthew D. Haner. The composition of the narrative portion of this report was prepared largely by Matthew D. Haner and reviewed in its entirety by Edward O. Greer. . We have performed a previous appraisal of the subject prpperty for the same client in August of 2010. . No one provided significant real property appraisal assistance to the persons signing this certificatio n. t Edward O. Greer State-certified General Real Estate Appraiser Number 1100597 bJ'J_.D .,,~ -',,~ Q-.. ..... ....,..--' Matthew D. Haner, Associate State-certified General Real Estate Appraiser Number 1101768 GPA TRUEMAN File #12-027R Page 16 QUALIFICATIONS AND EXPERIENCE OF EDWARD O. GREER, MAl EDUCATIONAL BACKGROUND AND TRAINING (including recent seminars & courses) Business Practices and Ethics, Appraisal Institute, February 2011 Uniform Appraisal Standards for Federal Land Acquisitions, June 2011 Business Practices and Ethics, February 2011 Uniform Standards of Professional Appraisal Practice, Update, January 2011 Loss Prevention Program for Real Estate Appraisers. November 201 0 Appraisal Review for Federal Aid Highway Programs. May 2008 Legal Aspects of Easements, March 2007 Evaluation Commercial Construction, March 2007 NSBC Mortgage & Appraisal Fraud Seminar, January 2007 Certified by State of Washington to instruct Appraisal Courses 1 and 2 Instructor, Tacoma Community College and Clover Park Educational Center Expert Review Appraiser Roster (ERAR), State of Washington, Department of Licensing ASSOCIATION MEMBERSHIPS Appraisal! nstitute International Right of Way Association PROFESSIONAL AFFILIATIONS AND LICENSES MAl designation 1985, Certificate Number 7195, American Institute of Real Estate Appraisers 8RA designation, Society of Real Estate Appraisers 1970, resigned 1990 Licensed by the State of Washington as a Certified Real Estate Appraiser, General Classification, License Number 1100597 EXPERIENCE 1977 to Present - Real Estate Appraiser a nd Consultant GPA Trueman . GPA Valuation (formerly Greer, Patterson & Associates, Inc.) Greer, Patterson & Associates, Inc. (President), 1977 to 2002 Greer Appraisals (Owner) 4 years - Chief Appraiser, Great Northwest Federal Savings & Loan Association 2 years - Independent Appraiser, Westgate Realty and Appraisal Company 8 years - Chief Appraiser, Pierce County Assessor's Office . TYPES OF PROPERTY land - commercial, industrial, apartments, residential, rural Improved - industrial properties, offices, medical buildings, warehouses, farm buildings, service stations, churches, apartments, condominiums; miscellaneous PARTIAL CLIENT LIST State of Washington; Cities of Tacoma, Lakewood, University Place, Fife and Auburn: Port of Tacoma; Metropolitan Park District of Tacoma; Pierce County Parks Department; Tacoma School District; Pierce County Public Works; Tacoma Public Utilities; Thurston County; Kitsap County; Columbia Bank; Viking Bank; Sterting Savings; private individuals; attorneys COURT OF EXPERT WITNESS TESTIMONY Pierce County Superior Court Snohomish County Superior Court U.S. District Court PRESENT RESPONSIBILITIES Real Estate Appraiser, Litigation Specialist, and Consultant 09/11 GPA TRUEMAN File #12-027R Page 17 .; <~:' '.., -,~ '~. :;; ..... ~- ~ . -- '" .-. - - o.o~::,,:<.i..o':-:~"'~.'~,;-J::St(ATE:Oo~ 'WJ\SHloNG10No" '" 0 0" '.: .o:':~ "'~~==~~~~~~1I=~~~~1w.:A5'+ ", d1iminlP~ilAALQALlIS1')..'I'1lAl>l'U~.." GPA TRUEMAN File #12-027R Page 18 QUALIFICATIONS AND EXPERIENCE OF - MATTHEW D. HANER PROFESSIONAL LICENSE AND CERTIFICATION State of Washington Department of Licensing, Certified General Real Estate Appraiser #1101768, expiration date August 24, 2012 EDUCATIONAL BACKGROUND AND TRAINING Pacific Lutheran University, Bachelor of Business Administration, Marketing Concentration, 1990 MacPherson's Inc. Real Estate/Better Homes and Gardens - Real Estate School, State of Washington, Licensed Real Estate Agent, 1995 SEMINARS AND CLASSES ATTENDED Marshal and Swift Commercial Cost Training, Appraisal Institute, 2010 Eminent Domain and Condemnation, Apprais_allnstitute, 2010 Standards of Professional Practice: 1400 - 7-Hour National Update, Appraisal Institute, 2010 SubdiviSion Seminar, Appraisal Institute, 2010 Condominium Seminar, Appraisal Institute, 2010 Evaluating Commercial Construction, Appraisal Institute, 2008 Real Estate Finance Statistics and Valuation Modeling, Appraisal Institute, 2007 Standards of Professional Practice: 7-Hour National Update, Appraisal Institute, 2007 Business Practices and Ethics, Appraisal Institute, 2007 Advanced Income Capitalization, Appraisal Institute, 2005 Apartment Appraisal: Concepts and Applications, Course 330, Appraisal Institute, 2004 Basic Income Capitalization, Appraisal Institute, 2004 Standards of Professional Practice, Appraisal Institute, 2003 Principles of Real Estate Appraising, Tacoma Community College, 2001 ASSOCIATION MEMBERSHIPS Tacoma Executive Association Tacoma Athletic Commission President Vice President SecretarylTreasurer Board of Trustees President Vice President 01/09 - 06/09 07/08 -12/08 01/08 - 06/08 EXPERIENCE 2011 to Present 2001 to 2011: 2000 - 2001 : 2000: 1993 -1999: 2009-2010 2008-2009 GPA Trueman, Independent Fee Appraiser, University Place, Washington Trueman Appraisal Company, Associate, Tacoma, Washington Auto-Chlor System Commercial Oishwashing Service, Operations Manager, Fife, Washington Total Renal Care, Staff Accountant, Tacoma, Washington Katie Downs Tavem and Eatery, Manager, Tacoma, Washington TYPES OF PROPERTY Land - commercial, industrial, residential, rural, acreage. Improved ~ office, retail, industrial, multi.family dwellings, single-family residential. PRESENT RESPONSIBILITIES Independent Fee Appraiser 08/2011 GPA TRUEMAN File #12-027R Page 19 GPA TRUEMAN File #12-027R Page 21 Subiect Photoaraohs Subject Property, Interior Subject Property, Interior GPA TRUEMAN File #12-027R Page 22 Street Scene, Old Tarboo Road - View to the East Street Scene, Old Tarboo Road - View to the West GPA TRUEMAN File #12-027R Page 23 AERIAL PLAT MAP - Parcel 801291002 GPA TRUEMAN File #12-027R Page 24 AERIAL PLAT MAP - Parcel 801204006 GPA TRUEMAN INTERNAL REVENUE SERVICE DISTRICT DIRECTOR 2 CUPANIA CIRCL~- MONTEREY PARK, CA 91755-7406 DEPARTMENT .OF THE TREASURY Date: MAY 0 g 1994 Employer Identification NUmber: 91-1465078 Case Number: 954209002 Contact Person: TYRONE THOMAS Contact Telephone Number: (213) 894-2289 Our Letter Dated: May 08, 1990 Addendum Applies: No JEFFERSON LAND TRUST C/O DOUG MASON PRES PO BOX 1.610 PORT TOWNSEND, WA 98368-0109 Dear Applicant: This modifies our letter of the above date in which we stated that you would be treated as an organization that is not a private foundation until the expiration of your advance ruling period. Your exempt status under section 501(a) of the Internal Revenue Code as an organization described in section 501(c) (3) is still in effect. Based On the information you submitted, we have determined that you are not a private foundation within the meaning of section.50gea) of the Code because you are an organization of the. type described in section 509(a) (1) and 170(b) (1) (A) (vi). Grantors and contributors may rely on this determination unless the Internal Revenue Service publishes notice to the contrary. However, if you lose your section 509(a) (1) status, a grantor or contributor may not rely on this determination if he or she was in part responsible for, or was aware of, the act or failure to act, or the substantial or material change on the part of the organization that resulted in your loss of such status, or if he or she acquired knowledge that the Internal Revenue Service had given notice that you would no longer be classified as a section 509(a) (1) organization. If we have indicated in the heading of this letter that an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about your private foundation status, please keep it in your permanent records. If Y9u have any questions, please contact the person whose name and telephone number are shown above. Sincerely yours, ~;,p~ Richard R. Orosco District Director Letter 1050 (DO/CO) Jefferson Land. Trust P.O. Box 1610 Port Townsend, Washington 98368 Internal Revenue Service . Service. Center A TI'N:Entity 1 Odgen, lIT 84201 R.E: Name change EIN 91-1465078 Dear Sir or Madam: By resolution of the Board of Directors on November 13, 1991, the Jefferson County Land Trust changed its name to Jefferson Land Trust. This is a name change only. Please change our name m your records regarding. our EIN and our 501(c)(3) status. Thank you. , Jefferson Land Trust by: I ulianneMcCulloch Secretary - Internal Revenue Service . District Director POBOX 2350, ROOM 5]27 ATTN: E.D. lOS ANGELES, CA 900532350 Department of the Treasury Date: MAY 8, ]330 Enplayer Identffication Numbe..: 91" l4 65078 Case Numbe '": 950L14110 Contact Pel'son~ JOSEPU CUI~Ht\ Contact fa lephone NUllber: (213) 894-41"10 JEFFERSON COUNTY LAND TRUST 1322 ~ASH[NGTON PO ~OX 1610 PORT,TOWNSENT, WA 98368 Accounting Period Ending: December 31 -F oundat i on Status CI ass j fi cati on: See attached Advance Rul f.ng Period Begins: Ap r j I 7, 1990 Advance Ru ling F)er i od Ends: Dec. 31, 1993. Addnndum Appl ins: none Dear (\pplicant: Based on infomation suppl ied, and assuming yoUr' openltions Hi II be as stated in your application for recognition of exemption, Ne have determined you are exempt from Federal incolle ta~ under section 50J(a) of the Internal Revenue Code as an organization described in section 501(c)(3). Because you are a neHly created organiza.tion, we are not nOH 11'13king a final determination of your foundation status under section509'a) of the Codo. HOHever, He have determined that you can reasonably b~ expacted to be a public-. ly supported organization described in sections 509(a)(1) and 170(b) (])'A)(vii. ACCOI"dingly, you Hi II be treated as a publ icly supported organization, and not as a private foundation, during an advance rul ing period. This advance ruling period begins and ends on the dates ShoHn above. Within 90 days after the end of your advance ml ing period'l you musl; submit to us jnfor~atjon needed to determine whether you have ~et the require- 3ents of the appl icable support test during the ad'lilocerul ing period. If YOll establish that you have been a publicly supported organjz3tion~ you will be classified as a section 509(a)(I) or 509(u) (2) organi~ation as long as you con- t i nue to lIloet the reQu i rellents of the app I j cab Ie support test. If you do not ~eet the public support requJrements during the advance ruling period, you will be classified as a private foundation for future periods. Also, if you are classified as a private foundation, you wil I be treatod as a private foundation fro~ the date of your inception for purposes of sections 507(d) and 4940. Grantors and contributors may rely on the determination ~mt you arc not.a pr i vate founda t ion unt i I 90 days a fter the end 0 r your advance '"LI1 i ng per i od. If you subrlit the required information within the 90 days, grantors and contri- butors may continue .to rely on the advanco deter~i~ation unti I the Service l.etter 10"l5(CG) -2- JEFFERSON COUNTY lAND TRUST .,akes a final deterllination of your foundation status. rf notice that you Hil I no longer be treated as a publ icly supported or- ganization is published in th~ Internal Rcyenuo Bulletin, grantors and con- tributors Ilay not rely on this deterllination after thn date of such publica- tion. In addition, if you lose your status as a publicly supported organi2a- tion and a grantor or contributor was responsible for~ or Has aHare oft the act or fa i lure to actt that resw I ted in your loss of such status, l:hat person may not rely on this determination from the date of the act or failure to act. Also, if a grantor or contributor learned that the Service had given notice that you would be rerloved frol'l classification as a publ icly supported organiza- tion, then that person .ay not rely on this detel'mination ~s of the date such knowl edge; was acquired. If your Sources of support, or your purposes, charactnrt or lIIethod of operation change, please fet us know 50 He can c~nsjder the effect of the change on your exempt status and foundation status. [n ~le case of an alllend- Rent to your organizational document or bylaws, ploase send us a copy of the a.endeddoculllent or bylaws. Also~ you should inform us of all changes in your name or address. As of January I, 1984, you are I iabla for taxes under the Federal Insur- ance Contributions Act (social. security taxes) ~1 remuneration of $lOO or more you pay to each of your eRployees during a calendar year. You are not liable for the ta~ imposed under the Federal Unemployment Tax Act CFUrA). Organiz:ations that are not private foundations are not subject to the pri- vate foundati on exe ise ta)(es unde." Chaptet" 4-2 of the Code. Ho~..ever, you are not automatically exempt from other Federal excise tcl)!E~s. If you have any questions about excise, egployment, or other Fedora.1 laxes, please let us know. . Donors may deduct contri but i OriS to you as prov i ded ill sect i on 1'(0 of the Code. Bequests, legaCies, devises, transfen;, 0'" f:lifts to you or for your USt~ are dcductfble for. Federa I estate and gift tax purposos if tlley 'eet the appl j_ cable provisions of sections 20SS, 2106, and 2527. of the Code. Contr i bu't i on deduct ions a re a II owab I e to donot.s on I y lo the ex lent lha t their contributions are gjfts~ ~itll no consideration received. Ticket pur- chases and Similar payments in conjunction with fundr<<ising events qay not necessar j I y qua r j fy as deduct i b I e contr i but ions, depend i n9 on the circum'. stances. See Revenue Ruling 67-246, published in CUmlllati~e Bulletin 1967-2, on page 104, which sets forth gUidel ines regarding the deductibi lity, as chari- table conhibutions, of paymonts made by taxpayers for adllission to or other participation in fundraising activities for charity. Vou are required to fi Ie Form 990t Return of Organization Exempt Fro~ Inco.e Ta)(j on Iy if your gross rece ipts each yeal' are norrln II y 11I0re than $25,000.. lIowe....er, if you receive a. Form 990 package in tho: lIlail, plea.se file the return even if you do not exceed the gross receipts test. If you are not l. ettar 1045 (CG) -3- JEFFERSON~COUNTV LAMO TRUST required to file, simply attach the label provided, check the 1;;:;.)( in the head" ing to indicate that your annual gross receipts are nQrmally $25,000 or less, .and sign the return. If a return is required, it ~ust be filed by the 15th day of the fifth month after the end of your annual accounting period. A penalty of $10 a day is charged Hhen a return is fi led late, unless there is reasonable cause for the delay. Ho~evar, the maximum penalty charged cannot exceod $5,000 or 5 per- cent of your gross. receipts for the year, Hhichever ts less. This penalty May also be charged if a return is not complete, so please. be sure your return is complete before you file it. You are not required to file Federal income tax returns unless ~tOU are subject to the tax on unrelated business income under section 511 of the Code. [f you are subject to this tax, you must fi Ie an tnco~e tax returri on Form 990-T, EXEJllpt Organization Business Income Tax Return. In this laHer I'I~ are not deter~injng Hhether any of your present or proposed activities are unre- lated trade or business as defined in section 513 of lhe COdA. You need an employer identification number cvan if YOll have no employees. [f an e~ployer identification number Has not entered on your applicationt a number Hill be assigned to you and you Hill be advised of it. Please. use thal number on al I returns you file and in all correspondence Nith the Internal Revenue Service. If He have indicated in the heading of this letter th~t an addendum applies, the addendum enclosed is an integral part of this letter. Because this letter could help resolve any questions about your exe~pt status and foundation status, you should keep it in your pordanent records. If you have any questions, please contact the person whose name and telephone number arc shown in the headi~g of this letter. ~four S t . Michael J. Quinn District Director Enclosure(s): F om 872-C tetter 10~5(CG) JEFFERSON COUNTY LANO TRUST FOUNDATION STATUS~ 170 (b) (1) (A) (v j) and 509 (a) (1) -4- I.ettor lO"5<CG) r~ 872-C . Consent Fixing Period of limitation' Upon Assessment of Tax Under Section 4940'of the Internal Revenue Code (See Form 1023 fnstructJons for Part IV, line 3.) Depa~"l ofth8 TreasUl')'-lntern:i1 Revenue SeMce (Rev. March 1986) , OMB No. 1545-0056 Expires 3.31.89 To be used with Form 1023. Submit In duplicate, Under section 6501(c)(4) .f the Internal Revenue Code, and as part of a requesL~led with Form 1023 thanhe organizahon named below be treated as a publicly suPported ollian;z"hon under section 170(b)(I)(A)(vi) or section 509(a)(2) during an advance ruling period, JEFFERSON COUNTY LAND TRUST .......................i~~~tj;i.i/~~;;;~;~;,r.;d~il;~j....................... } and the District Director of Internal Revenue P.o. BOX 1610~ PORT TOWNSEND, WA 98368 ..................iNd~b~;,;~e;t~Uy~t~~~:;t~t~~~.i,P~Od~j................._ Consent and agrea thalth. period for asseSsing Ia. (impos.d under s.chon 4940 olthe Cod.) for any of the 5 tax years in the advanc. ruling p.riod will ext.nd 8 y.ars, 4 months, and 15 days b.yond th. end olthe first tax year, Howev.r, if a notice of d.hci.ncy.in tax for any of these y.ars is sentto the organ;z"hon before the period .xpiras. lh.n the time for making an ......ment wIll be'furth.r ext.nded by the number of days the ......m.ntls prohibited, plu, 60 days. Ending date of first tax year. . ... ~ .~ (~ !.( ~ ? . . . . h. . . . . .. ... . . Name of organization JEFFERSON' COUNTY LAND TRUST Dato 2/6/90 Signature II> District Director MICHAEL J. QUINN Date By.... ,~ MAY 0 GROUP MANAGEAt E~ For Paperwork Reduction Act Notlce.,e, pace 1 orthe Form 1023 Instruction$. -I o ['f>, -. -. t~~~m 01\,)-0= o 0. mfi:lfi:l~~ a"'7'~~ ~~:~~ 3 .. 3 m CD~a ;a ~ ii:: ~ ;. ~,~ QO :::::J' 5-[fn ~~ ~ ~ 2l A a o o o l;, 'gl ~ a I .: ~, ~ ." .. '" CD Q, .. -I o [ t; <> <> -i ~. 0' .VI [./>.!~ ,1:10' OI! . ~! 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U ~.i ~~ o!i, ...l.a N", a ;:l:' ~ S' 0.. a :E' '" -:::; '" 3 1:1 Q ~ '<: o t: ::r III c: <:L (Q l2. ~ ~ " '" ... :;!;1 if -- Ii a ~ '" ;::. b S- o a ~ " o :2': ;0:: COl Ii COl --- OJ c: 0.. "" '" ... o <: '" < ;0:' :E' t-J o .... t-J < .... a x in Steve Moore, President David Reid, Vice President Jefferson Land Trust 2012 Board of Directors Rodger Schmitt, Vice President Joanne Tyler, Treasurer Kathryn Lamka, Secretary Bethany Axtman Glenda Hultman Gary Keister Suzanne Learned Bill Meyer N ~ <= N ...... - = ..= U = Q .- ...... = .~ = = Cl} - o ~ ~ ~ 4:11 PM . 02115/12 Accrual Basis Jefferson land Trust Profit & Loss January through December 2011 Jan - Dec 11 Ordinary Income/Expense Income 4000 . Unrestricted L&S Income 4500 . Restricted L&S Income 4900 . Endowment 5000 . Operations Income 249,004.39 251,070.08 10,769.60 457,510.58 968,354.65 Total Income Cost of Goods Sold 6100. Program Expenses 6200 . Land and Stewardship Expenses 6300 . Professional services 33,824.47 240,876.93 157,715.79 432,417.19 Total COGS Gross Profit 535,937.46 Expense 7000 . Operations Expense Total Expense 411,736.98 411.736.98 Net Ordinary Income 124,200.48 Net Income 124,200.48 Preliminary Financials - Unaudited Page 1 of 1 JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Financial Statements For the Year Ended December 31, 2010 Table of Contents Page Independent Auditors' Report Consolidated Financial Statements: Consolidated Statement of Financial Position 2 Consolidated Statement of Activities 3 Consolidated Statement of Cash Flows 4 Notes to Consolidated Financial Statements 5 - 14 Supplementary Information: Consolidated Statement of Functional Expenses 15 Independent Auditors' Report Board of Director!)' Jefferson Land Trust and Subsidiary Port Townsend, Washington Certified Public Accounta nts We have audited the accompanying consolidated statement of financial position of Jefferson Land Trust and Subsidiary (collectively, JL T, a nonprofit organization) as of December 31, 2010, and the related consolidated statements of activities and cash flows for the year then ended. These financial statements are the responsibility of JL T's management Our responsibility is to express an opinion on these financial statements based on our audit. and Consu Itants We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of JL T as of December 31,2010, and the changes in its net assets and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. Our audit was conducted for the purpose of forming an opinion on the financial statements as a wh()le. The consolidated statement of functional expenses on page 15 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The infomiation has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. f!t~~ jJS Certified Public Accountants May 17,2011 JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Financial Position December 31,2010 Assets: Cash and equivalents Investments (Note 2) Accounts receivable Pledges receivable (Note 3) Note receivable (Note 4) Prepaid expenses Land, conservation easements, and purchase options- Habitat land Working land Open space land Conservation easements land held for sale Land purchase option Furniture and equipment, net of depreciation of $1 0,897 $ 360,332 312,047 76,292 499,028 85,054 2,347 546,491 25,048 176,094 44 933,760 52,500 1,733,937 6,123 $ 3,075,160 Total land, conservation easements, and purchase options (Note 5) Total Assets Liabilities and Net Assets: Accounts payable Accrued expenses and deferred revenue Purchase option received long-term debt (Note 6) $ 34,727 48,338 120,000 657,024 Total Liabilities 860,089 Net Assets: Unrestricted (Note 9)- Undesignated Board designated Total unrestricted net assets (130,320) 1,561,437 1,431,117 763,728 20,226 2,215,071 $ 3,075,160 Temporarily restricted (Note 10) Permanently restricted (Note 11) Total Net Assets Total Liabilities and Net Assets See accompanying notes. -2- JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Activities For the Year Ended December 31,2010 Unrestricted Temporarily Restricted Permanently Restricted Total Revenue and Gains: Gifts and contributions $ 71,077 $ 273,004 $ 10,000 $ 354,081 Fair value of easement acquisitions 166,000 166,000 Grants and contracts 351,933 351,933 Special events income, net of expenses of $14,786 113,877 113,877 Net gain on investments 30,374 226 30,600 Rental income 23,580 23,580 Other 3,016 3,016 Release from restriction 242,390 (242,390) Total Revenue and Gains 1,002,247 30,614 10,226 1,043,087 Expenses: Program 723,947 723,947 General and administrative 79,286 79,286 Fundraising 77,737 77,737 Total Expenses 880,970 880,970 Change in Net Assets 121,277 30,614 10,226 162,117 Beginning of year net assets 1,309,840 733,114 10,000 2,052,954 End of Year Net Assets $ 1,431,117 $ 763,728 $ 20,226 $ 2,215,071 See accompanying notes. - 3 - JEFFERSON LAND TRUST AND SUBSIDIARY Consolidated Statement of Cash Flows For the Year Ended December 31,2010 Cash Flows from Operating Activities: Change in net assets $ 162,117 Adjustments to reconcile change in net assets to net cash provided by operating activities- Depreciation and amortization 1,339 Imputed interest expense (36,000) Realized and unrealized gain on investments (16,930) Changes in assets and liabilities: Accounts receivable 22,746 Pledges receivable (37,211) Prepaid expenses 2,683 Accounts payable 20,475 Accrued expenses and deferred revenue 2,574 Net Cash Provided by Operating Activities 121,793 Cash Flows from Investing Activities: Purchases of investments (181,925) Proceeds from sale of investments 221,887 Purchases of land and land purchase option (208,291 ) Purchases of furniture and equipment (3,243) Net Cash Used by Investing Activities (171,572) Cash Flows from Financing Activities: Payments on long-term debt (5,229) Net Cash Used by Financing Activities (5,229) Net Change in Cash and Cash Equivalents (55,008) Cash balance, beginning of year 412,402 Cash Balance, End of Year $ 357,394 Supplemental Disclosure of Cash Flow Infonnation: Cash paid for interest $ 23,151 See accompanying notes~ - 4 - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statement.'f Note 1 - Organization and Summary of Significant Accounting Policies Organization - Jefferson Land Trust (the Land Trust) is a Washington nonprofit corporation, formed on April 7, 1989. The Land Trust's purpose is to acquire, preserve and manage open space lands and easements for land conservation purposes benefitting the public. The land Trust also provides information and materials to the public on land conservation issues. The Land Trust serves Jefferson County on the Olympic Peninsula in Washington. The land Trust has been accredited by the national land Trust Alliance as of August 5, 2009. On September 5. 2007, JlT Resources, llC was formed with Jefferson Land Trust as its only member. JLT Resources, LLC was formed for the purpose of purchasing and holding land for conservation purposes. Summary of Significant Accounting Policies: Principles of Consolidation - These financial statements consolidate the statements of Jefferson Land Trust and JL T Resources, LLC (collectively. "JL 1"). Inter-organization balances and transactions have been eliminated in consolidation. . Basis of Accounting - The consolidated financial statements of JL T have been prepared on the accrual basis of accounting. Basis of Presentation - Net assets and revenues, expenses, gains and losses are classified based on the existence or absence of donor-imposed restrictions. Accordingly, the net assets of JLT and changes therein are classified and reported as follows: Unrestricted Net Assets - Include all net assets on which there are no donor-imposed restrictions for use, or on which donor-imposed restrictions were temporary and have expired. Temporarily Restricted Net Assets - Include all net assets subject to donor-imposed restrictions that will be met either by actions of JL T or the passage of time. Permanently Restricted Net Assets - Include all net assets received by donations wherein the donors impose a permanent restriction on the use of the gift. The donors require the gift to be invested and only the income from such investments may be used to support the intended cause. All donor-restricted support is reported as increases in temporarily or permanently restricted net assets, depending on the nature of the restriction. When restrictions expire (that is, when a stipulated time restriction ends or purpose restriction is accomplished), temporarily restricted net assets are reclassified to unrestricted net assets and reported in the consolidated statement of activities as net assets released from restriction. Gifts of equipment are reported as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Gifts of long-lived assets with explicit restrictions that specify how the assets are to be used and gifts of cash or other assets that must be used to acquire long-lived assets are reported as restricted support. Absent explicit donor stipulations about how long those long-lived assets must be maintained, expirations of donor restrictions are reported when the donated or acquired long-lived assets are placed in service. - 5 - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1 - Continued Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Equivalents - For reporting purposes, JL T considers all unrestricted highly liquid investments with a purchased maturity of three months or less to be cash equivalents. Concentrations - JL T maintains its cash in bank deposit accounts with two financial institutions. JLT's cash balances may, at times, exceed federally insured limits. One donor's pledge represented approximately 25% of pledges receivable at December 31,2010. Investments - Investments in marketable securities with readily determinable fair values and all investments in debt securities are valued at their fair values in the consolidated statement of financial position. The carrying amount of the investment held in trust is determined by the trustee holding the securities. Unrealized gains and losses are included in the change in net assets. JL T has established a designated fund at Jefferson County Community Foundation. As JL T has designated itself as the beneficiary of the fund, the fund balance and activity are reported in the consolidated financial statements of JL T as required by GAAP. Accounts Receivable - Accounts receivable are stated at the amount management expects to collect from outstanding balances. lv1anagement provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on its assessment of the current status of individual accounts. Balances still outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation have not been material to the consolidated financial statements. Grants and Contracts - JL T receives grants and contracts from federal, state, and local agencies, as well as from private organizations. to be used for specific programs or land 'purchases. The excess of grants receivable over reimbursable expenditure~ to-date is recorded as deferred revenue. Furniture and Equipment - Furniture and equipment are capitalized at cost if purchased, or, if donated, at the approximate fair value at the date of donation. When retired or otherwise disposed of, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference, less any amount realized from disposition, is reflected in earnings. Maintenance and repairs are charged to expenses as incurred. Costs of significant improvements are capitalized. JL T provides for depreciation using the straight-line method over the estimated useful lives of the assets of five to ten years. - 6- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 1- Continued land and Easements - JL T records acquisitions of land at cost if purchased. land acquired through donation is recorded at fair value, with fair values generally based on independent professional appraisals. These assets fall into four primary categories: Conservation lands - Real property with significant ecological value for habitat, open space, or working lands. Stewardship programs of Jl T manage these properties to protect the natural biological diversity of the property. JL T manages its working timberland as a Forest Stewardship Council - Certified, managed forest. Conservation Easements - Voluntary legal agreements between a landowner and a land trust or government agency to permanently protect the identified natural features and conservation values of the property. These easements may be sold or transferred to others so long as the assignee agrees to carry out, in perpetuity, the conservation purposes intended by the original grantor. Conservation easements owned by Jl T protect habitat, open space and working lands, such as family farms, through its stewardship programs. Easements acquired represent numerous restrictions over the use and development of land not owned by Jl T.. Since the benefits of such easements accrue to the public upon acquisition, the fair market value of easements acquired is shown in the year of acquisition as an addi.tion to net assets to record the donation of the easement, and unless conveyed to a public agency for consideration, shown as a reduction in net assets to record the value of the public's benefit and to recognize that these easements have no marketable value once severed from the land and held by JL T. Easements held by Jl T are carried on the consolidated statement of financial position at $1 each for tracking and accounting purposes. Two easements valued at $166,000 total were donated to JLT during the year ended December 31,2010. Accordingly, $166,000 of contribution revenue and $165,998 of related write down expense have been reported on the consolidated statement of activities for the year ended December 31,2010. land Held for Sale - Two properties owned by JL T, Red Dog Farm and Tamanowas Rock Sanctuary, will be sold in the near future under prearranged agreements with each potential owner. Red Dog Farm will be purchased by the current lessee after JL T finalizes and records a conservation easement with the new owner. This conservation easement ensures Red Dog Farm will continue to operate as a working farm and will protect critical habitat for salmon and other wildlife in perpetuity. Tamanowas Rock Sanctuary was purchased by Jl T with the help of the Jamestown S'Klallam Tribe and a low interest loan from the Bullitt Foundation (Note 6). The Jamestown S'Klallam Tribe purchased an option on the property which will be exercised in late 2011. The intention of the tribe is to protect the property in perpetuity for both habitat and cultural purposes. Tamanowas Rock Sanctuary has a long history of cultural ties to the Jamestown S'Klallam Tribe. land Purchase Option - JLT has $52,500 invested in purchase options for Chimacum Dairy, a historic dairy farm in the Chimacum Valley. These options will be exercised in mio-2011 when a group of conservation investors plan to buy the farm, reimburse JL T for the purchase option amount, and enter into a long term lease with a local creamery in Jefferson County. JL T already holds a conservation easement on the property for working farm and habitat purposes. - 7- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Con.'wlidated Financial Statements Note 1- Continued Purchase Option Received - In 2009, JL T purchased the Tamanowas Rock Sanctuary with the help of the Jamestown S'Klallam Tribe and a low interest loan from the Bullitt Foundation (Note 6), The Jamestown S'Klallam Tribe paid $120,000 to JL T for an option to purchase the property which will be exercised in late 2011, At that time, JL T will pay in full the outstanding balance on the Bullitt Foundation loan with proceeds from the sale of the property to the Jamestown S'Klallam Tribe and other potential conservation partners. The intention of the tribe and JL T is to protect the property in perpetuity for both habitat and cultural purposes, Federal Income Taxes - The Internal Revenue Service has determined Jefferson Land Trust and JL T Resources, LLC (a disregarded entity) to be exempt from federal income taxes under Internal Revenue Code Section 501 (c)(3). Contributions to JL T are deductible as allowed under Section 170(b)(I)(A)(vi) of the Code. Functional Allocation of Expenses - The costs of providing the various programs and other activities have been summarized on a functional basis in the consolidated statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited. Subsequent Events . JL T has evaluated subsequent events through May 17, 2011, the date on which the consolidated financial statements were available to be issued. Note 2 - Fair Value Measurement.~ GAAP defines fair value. establishes a framework for measuring fair value, and requires disclosures about fair value measurements. To increase consistency and comparability in fair value measurements, GAAP uses a fair value hierarchy that prioritizes the inputs to valuation approaches into three broad levels. The hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable inputs (Level 3). Valuation Technique~ - Financial assets and liabilities valued using Level 1 inputs are based on unadjusted quoted market prices within active markets. Financial assets and liabilities valued using Level 2 inputs are based primarily on quoted prices for similar assets or liabilities in active or inactive markets, Financial assets and liabilities using Level 3 inputs were primarily valued using management's assumptions about the assumptions market participants would utilize in pricing the asset or liability. Valuation techniques utilized to determine fair value are consistently applied. Following is a description of the valuation methodologies used for assets measured at fair value, There have been no changes in the methodologies used at December 31,2010. Certificates of Deposit - Valued at cost plus accrued interest, which approximates fair value, Mutual Funds - Valued at quoted market prices in active markets, which represent the net asset value (NAV) of shares held by JL T at year-end. Funds Held at Jefferson County Community Foundation. Valued using the NAV provided by the fund's manager. The NAV is based on the fair value of the underlying assets owned by the fund, These underlying assets are traded in active public markets with observable market data, - 8- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Con:wlidated Financial Statements Note 2 - Continued Fair Values Measured on a Recurring Basis. Fair values of investments measured on a recurring basis at December 31, were as follows: Fair Value Measurements at December 31.2010 Quoted Prices In Active Markets for Identical Assets (Levell) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Certificates of deposit Mutual funds- Fixed income Funds held at Jefferson County Community Foundation $ - $ 150,879 $ - $ 150,879 35,791 35,791 125.377 125.377 $ 35,791 $ 150.879 $ 125377 S 312.047 A reconciliation of the beginning and ending balances for fair value measurements made using significant unobservable inputs (Level 3) follows: Beginning balance at January 1,2010 Interest income Total gains (realized/unrealized) Fees paid Withdrawals $ 175,078 2,464 16,820 (3.518) (65.467) Ending Balance at December 31, 2010 $ 125.377 Investment return for the year ended December 31 consisted of the following: 2010 Interest income Realized/unrealized gain Investment fees $ 17,188 16,930 (3,518) $ 30.600 - 9- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 3 - Pledges Receivable Pledges receivable at December 31,2010 are to be received as follows: Less than one year Two to five years Thereafter $ 154,930 287,210 56,888 $ 499,Q28 A presen~ value discount on pledges receivable has been determined to not be material to the consolidated financial statements. No allowance for doubtful accounts was deemed necessary by management for the promises to give based on historic experience. Note 4 - Note Receivable On February 15, 2008, JL T granted a loan to an individual in relation to one of the pieces of conservation land owned by JLT. JLT received a promissory note in exchange. The promissory note is for the amount of $93,750 and is to be paid in monthly installments of $618.71. The note matures on January 15, 2028 with an annual interest rate of 5%. The balance of $85,054 at December 31, 2010 is included in accounts receivable in the consolidated statement of financial position. The note receivable at December 31, 2010 is to be received as follows: Less than one year Two to five years Thereafter Note 5 - Land, Conservation Easements, and Purchase Options $ 3,239 14,702 67, 113 $: 85.054 Land, conservation easements, and purchase options at December 31, 2010 are summarized as follows: Conservation lands- Quimper Wildlife Corridor Duckabush Oxbow Chimacum Creek I Brown Dairy Bulis Forest Preserve Kilham Comer Snow Creek Estuary Conservation easements Land purchase option Land held for sale- Red Dog Farm Tamanowas Rock Sanctuary - 10- $ 261,803 180,000 140,160 125,240 38,930 1,500 44 52,500 333,760 600,000 $ 1,733.937 JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statement!)' Note 6 - Long-term Debt On December 18, 2007, JL T entered into a loan agreement with a commercial lender in the amount of $226,110. The loan bears interest at 8.5%, and is due in 60 monthly payments of principal and interest totaling $1,965, and a final principal payment of $200,809 on January 10, 2013. The loan is secured by the Red Dog Farm property and an Assignment of Rents from the lease described in Note 8. The outstanding amount due at December 31, 2010 was $213,024. On December 23, 2009, JL T entered into a promissory note in the face amount of $480,000 with a Washington nonprofit corporation to purchase the Tamanowas Rock Sanctuary property. The note is secured by the property. The note has a stated interest rate of 1% and has a maturity date of December 31,2011. When the loan proceeds were advanced, JL T recorded contribution revenue and a loan discount using an impl"ed interest rate of 8.5%. The discount on the loan is being amortized to interest expense over the life of the loan. Imputed interest expense of $36,000 was reported in the accompanying consolidated statement of activities for the year ended December 31,2010. The outstanding amount due at December 31,2010 was $444,000. Principal payments on the loans are as follows: Years Ending December 31, 2011 2012 2013 $ 449,997 6,218 200,809 $ 657024 Note 7 - Retirement Plan In 2010, JL T began a Simplified Employee Pension - Individual Retirement Accounts Contribution Benefit Plan ("the Plan"). Eligible employees may join the Plan after one year of service. The total employer contribution for 2010 was $4,934, and is included in employee benefits on the consolidated statement of functional expenses. Note 8 - Lease Agreements On July 2, 2008, JL T entered into an operating lease as lessee for its administrative office in Port Townsend, Washington. The lease expired in June 2010 and continues on a month to month basis. Rent expense totaled $17,358 for the year ended December 31, 2010. On December 20, 2007, JL T Resources, LLC entered into a lease agreement as lessor for the Red Dog Farm property. The lease term is five years, and monthly lease payments are $1,965. The lease requires the lessee to pay all taxes and assessments relating to the property. The lease also requires the lessee to comply with a land use plan, and provides a purchase option to the lessee during the lease term. -/I - JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 8 - Continued Sublease rentals to be received are as follows: Years Ending December 31, 2011 2012 Note 9 - Unrestricted Net As.fets Unrestricted net assets consisted of the following at December 31, 2010: Designated - Tamanowas Rock Sanctuary Designated - Red Dog Farm Designated - Quimper Wildlife Corridor Designated - Duckabush Oxbow Designated - Chimacum Creek! Brown Dairy Designated - Bulis Forest Preserve Designated - Kilham Corner Designated - Snow Creek Estuary Conservation easements Total designated Undesignated Note 10 - Temporarily Restricted Net As~'ets Temporarily restricted net assets consisted of the following at December 31, 2010: Purpose restricdon- To purchase Gateway land For stewardship of Bulis Forest Preserve For stewardship of Chimacum Creek !Brown Dairy For stewardship and management services for Tamanowas Rock Strategic plan Time restriction- Outstanding pledges $ 23,472 23.472 $ 46.944 $ 480,000 333,760 261,803 180,000 140,160 125,240 38,930 1,500 44 1,561,437 (130,320) $ 1.431.117 $ 99,525 83,984 41,850 36,341 3.000 264,700 499,028 $ 763.728 Net assets of $80.421 were released from donor restrictions by incurring expenses satisfying the purpose restriction specified by the donor, and net assets of $161,969 were released due to the expiration of time restrictions for the year ended December 31,2010. - 12- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 11 - Permanently Restricted Net Assets At December 31, 2010 JL Thad $20,226 of permanently restricted net assets. This is comprised of endowment investments (Note 12), the income of which is available to support general operations. Note 12 - Endowments The JL T endowment consists of one fund established to support general operations. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor- imposed restrictions. Interpretation of Relevant Law - JL T's Board of Directors has interpreted the Washington State Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor-restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, JL T classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, and (b) the original value of subsequent gifts to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor-restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by JLT in a manner consistent with the standard of prudence prescribed by UPMIFA. In accordance with UPMIFA, JL T considers the following factors in making a determination to appropriate or accumulate donor-restricted endowment funds: The duration and preservation of the fund The purposes of JL T and the donor-restricted endowment fund General economic conditions The possible effect of inflation and deflation -. The expected total return from income and the appreciation of investments Other resources of JL T The investment policies of JL T. As of December 31, 2010, endowment net assets consisted ofthe following: Unrestricted Temporarily Restricted Permanently Res trieted Total Donor-restricted endowment funds $ - $ - $ 20,226 $ 20,226 - /3- JEFFERSON LAND TRUST AND SUBSIDIARY Notes to Consolidated Financial Statements Note 12 - Continued Changes to endowment net assets for the year ended December 31, 2010, are as follows: Contributions Permanently Restricted $ 10,000 194 32 226 10.000 $ 20.226 Endowment net assets, January 1, 2010 Interest and dividends Realized and unrealized gains/losses Total endowment investment return Endowment Net Assets, December 31,2010 Funds with Deficiencies - From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor or UPMIFA requires JL T to retain as a fund of perpetual duration. In accordance with GAAP, deficiencies of this nature are reported in unrestricted net assets. There were no such deficiencies as of December 31, 2010. Return Objectives and Risk Parameters. JL T has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding to programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. Endowment assets include those assets of donor-restricted funds that JL T must hold in perpetuity or for donor-specified periods as well as board-designated funds. Under this policy, as approved by the Board of Directors. the endowment assets are invested in a manner that is intended to produce results that exceed the price and yield results of a custom Policy Index made up of various indices. The composition of the custom Policy Index is based upon the strategic asset allocation of the investment portfolio and assumes a moderate level of investment risk. The investment objectives of the Operations Endowment Fund include maintenance of principal, timely liquidity, and preservation of purchasing power over time. Strategies Employed for Achieving Objectives. To satisfy its long-term rate-of-return objectives, JL T notes that for funds earmarked for capital appreciation, appropriate investments include intermediate term bond funds/ETF's, equity mutual funds, equity ETF's, and unconstrained Bond Funds. Spending Policy and How the Investment Objectives Relate to the Spending Policy. JL 1's spending policy intends that no distributions may be made from the Operations Endowment Fund for the first five years of its existence or until it reaches a threshold balance of $400,000, whichever shall first occur. After a five-year period or after achieving the $400,000 threshold, distributions shall be made on an annual basis as determined by the Board. Regular disbursements should be limited to a maximum of 5% of the value of the portfolio at the beginning of each fiscal year, or one"half of the income generated by the fund for the most recent fiscal year, whichever is less. At no time will the distribution of the spendable amount result in the invasion of the original amounts donated. - /4- ~ . . JEFFERSON LANI> TRUST AND SUBSIDIARY Consolidated Statement of Functional Expenses For the Year Ended December 31,2010 General and Total Pro:>vam Administ rat ive Fundraising Expenses Salaries $ 165,528 $ 39,912 $ 33,752 $ 239,192 Payroll taxes 17,075 4.207 3,465 24,747 Employee benefits 26,932 6,636 5,465 39,033 Total salaries, taxes and benefits expense 209,535 50,755 42,682 302,972 Professional fees 144,717 2,907. 22,276 169,900 Value of conservation easements written down 165,998 165,998 Land and stewardship expenses 95,449 95,449 Interest 59,151 59,151 Other expenses 2,412 19,866 148 22,426 Rent 12,868 2,951 3,030 18,849 Postage and printing 9,021 405 3,189 12,615 Travel and seminars 7.495 27 274 7,796 Public awareness 4,309 62 2,849 7,220 Office supplies 2,436 449 1,102 3,987 Insurance 2,600 445 .367 3,412 Dues and subscriptions 3,129 165 3,294 Telephone 2,022 498 410 2,930 Web design and maintenance 848 848 1,696 Utilities 1,033 254 210 1,497 Depreciation 924 228 187 1,339 Bank fees 439 439 Total Expenses $ 723,947 $ 79,286 $ 77,737 $ 880,970 See independent auditors' report. - 15- Jefferson Land Trust RESOLUTION February 21, 2012 WHEREAS, Jefferson Land Trust is an applicant or sponsor for more than one Conservation Futures Funding application, and Conservation Futures Funding Application process requires that Jefferson Land Trust prioritize its projects, and . WHEREAS, Jefferson Land Trust has been working since 2006 in partnership with Jefferson LandWorks Collaborative whose mission is to keep the farms and forests of Jefferson County, Washington, working, productive and profitable, and WHEREAS, the historic Boulton Farm is indicated as priority agricultural and habitat land in several local and regional plans, and the landowner is eager to complete the project, AND WHEREAS, 144 acres of prime agricultural land on the Boulton Fann, will be protected for prime agricultural soils, riparian habitat of Andrews Creek and some associated forestland on the agriculturally zoned acreage by an agricultural conservation easement, and WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, AND WHEREAS, Jefferson Land Trust has been working since 2001 in. partnership with Jefferson County Conservation District, Jefferson County, Washington Department ofFish and Wildlife, North Olympic Salmon Coalition, the Hood Canal Coordinating Council, the Jamestown S'Klallam Tribe and WSU Cooperative Extension to acquire and restore crifcal salmon spawning, rearing and migratory habitat in the Salmon/Snow Creek riparian area and estuary, and WHEREAS, these professional naturalists and scientists have recommended that Snow Creek habitat protection be expanded to provide further benefits for migrating salmonids and other species, and WHEREAS, acquisition of high-priority identified parcels in the Snow Creek Estuary area from willing sellers would provide such habitat protection, the L. Brown Trust parcel has been identified as such, AND WHEREAS, this important community asset will require stewardship in perpetuity, to include annual monitoring, maintenance, and management, according to the Salmon and Snow Creek Fish and Wildlife Management Plan, AND WHEREAS, Jefferson Land Trust has been working since 2004 in partnership with Northwest Watershed Institute to acquire and restore critical forested watershed, riparia1, estuarine and nearshore habitat in the Tarboo Creek/Dabob Bay watershed area, and WHEREAS, a conservation easement on the SO-acre Tarboo Forest property would protect in perpetuity critical forested watershed habitat fTom subdivision and development; and will leverage conservation of an additional ] 60 acres of adjacent forestland, AND WHEREAS, Northwest Watershed Institute has requested that Jefferson Land Trust sponsor their Conservation Futures Funding application tor an acquisition of a conservation easement to be held by Jefferson Land Trust, BE IT HEREBY RESOL VED that Jefferson Land Trust agreed at its February 21, 2012 Board of Directors meeting to sponsor an application for Conservation Futures Funding for acquisition of a conservation easement on the Boulton Farm, and agreed that The Boulton Farm protection is the highest priority for 2012 Conservation Futures Funding due to the landowner age, project duration and agricultural conservation and economic values. The next highest priority is funding for the Snow Creek project because it would provide a vital connectivity to the Snow Creek project area, is cm;ently listed for sale, and it represents a collaborative effort with community members and our Chumsortium partner organizations as they work to preserve this significant . salmon habitat. The third highest priority is funding the Tarboo Forest property to support our project partner Northwest Watershed Institute in preserving critical watershed and riparian habitat in the Tarboo Creek area. Signed this 21th day of February. 2012. Steve Moore, re oent, Board of Directors Jefferson Land Trust ~ ~ 0 J ~ - - - ~ ~ ~ ~ ~ ~ ~ ~ ~ j ~ w ~ ~ ~ I t " ! ! i ~ ~~ ~ ~ ~ ~ ~ ~ ~ 0] ~ - - ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ o 0 ~ I I ~ E " Q ~ "3 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ i Q..U . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 0 0 ~ ~ g i I ~ ~ '" ~ 2 u g ~ . i " ~ ~ 0 0 ~ ~ ~ CO ~ m .t m ~ . i . , ~ ~ , 0 0 0 0 0 u. 0 0 1 3 b ~ ~ ~ ~ ~ ~ ~ - ~ ~ - U ~ ,., N N N N N N N N N N N N N N ~ U u I 0 ~ 0 ,[ ~ g g g g g g g g " g g - - g g - - 1 1Il & ~ ~ ;;: - - - - - - - - 0 g g g g g g - - ;;; " - g g - - - - - - - - - - - & - - - - - - - ;;: ~ u u Ii u ~ u u u u u '" 2 0 0 ~ ~~ 0 c: c: 0 0 c: 0 ~ ~ ~ - g ~ 0 ~ - - ~ ~ ~ ~ ~ Jj Jj ~ ~ ~ 0 ~ ~ m >- ~ m j ~ 1 1j ~ ~ " i 0 ~ ~ I I i ~ ~ E ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ Tami, Stacie has forwarded your request to me and in response to your inquiry of May 14,2012 regarding the 2012 Conservation Futures projects, I have the following comments: I understand the proposed projects involve the purchase of the following parcels: B It F A 0 It C f E t 0 on arm ,~ncu ure onserva IOn asemen Parcel Approximate Potential # of number Zoning Acreage* Developable parcels 802-141-002 Local Agriculture AL-20 30.33 1 802-141-006 Commercial Agriculture AP-20 23.34 1 802-141-005 Rural Forest RF 1:40 69.47 1 802-144-003 Commercial Agriculture AP-20 28.77 1 802-144-009 Commercial Agriculture AP-20 40.46 2 802-231-003 Commercial Agriculture AP-20 3.82 1 802-242-001 Rural Residential RR 1:5 6.38 1 802-133-003 Commercial Agriculture AP-20 1.13 1 TOTAL 203.70 9 LB T tIIF lA o of f S I R 0 rown rus ee Slmpl e cqmsl IOn or a mon ecovery Parcel Approximate Potential # of number Zoning Acreage* Developable parcels 902-362-003 Rural Residential RR 1:5 15.53 3 TOTAL 15.53 3 T b F tC f p 0 tbt C t dDbbR d ar 00 ores onserva IOn rOJec e ween en er an a 0 oa S Parcel Approximate Potential # of number Zoning Acreage* Developable parcels 801-294-002 Rural Forest RF 1:40 38.11 1 801-291-002 Commercial Forest CF 1-80 118.54 1 801-204-006 Commercial Forest CF 1-80 38.98 1 TOTAL 195.63 '") .) GRAND TOTAL 411. 66 15 * Acreages are based on mapping. Surveys may differ from these estimates. A formal survey may identify the parcels as larger or smaller. The potential number of developable parcels does not change in the three scenarios above. None of the proposals includes propeliy located within an urban growth area, and the potential loss of developable parcels is minimal. The Jefferson County Comprehensive Plan identifies goals and policies for the preservation and enhancement of open space. Open Space Goal (OSG) 1.0 guides Jefferson Count to preserve and enhance the existing open space lands, and the Open Space Policy (OSP) 1.5 encourages the pursuit of public acquisition of potential parks, critical wildlife areas, and other open space lands by utilizing a variety of funding mechanisms. RECOMMENDA TION: Based upon the preceding findings, the Department of Community Development believes the proposed acquisitions would not significantly reduce the Jefferson County's capacity to accommodate planned growth and Jefferson County would retain enough development land to accommodate the housing and employment growth that it is expected to receive. STATE OF WASHINGTON County of Jefferson Dedication of Conservation Futures Funds to the } Boulton Farm Project as Authorized by } and in Accordance with Jefferson County Code } Section 3.08.030(7) to Provide a System of Public } Open Spaces } RESOLUTION NO. WHEREAS, conservation futures tax levy collections, authorized under RCW 84.34.230 are an important means of retaining community character and accomplishing the open space policies and objectives of the Jefferson County Comprehensive Plan that encourage the coordinated acquisition of key open space lands for long-term protection; and WHEREAS, Jefferson County is authorized by RCW 84.34.210 and 84.34.220 to acquire open space land, agricultural and timber lands as defined in RCW 84.34.220; and WHEREAS, the Conservation Futures Citizen Oversight Committee has reviewed proj ect applications for 2012 and made its funding recommendations to the Board of County Commissioners in accordance with Jefferson County Code Chapter 3.08; and WHEREAS, under the provisions of the Jefferson County Conservation Futures Program, the Jefferson Land Tmst, as project sponsor, requests funding towards the protection of 146 acres offannland in Sec. 14, T. 28N, R. 2W with Assessor's Parcel Numbers 802141002,802141006, 802141005,802144003,802144009,802231003,802242001, and 802133003 through the acquisition of a conservation easement; and WHEREAS, the County retains enough developable land to accommodate the Boulton Farm Project as well as the housing and employment growth that it is expected to receive, thus satisfying the requirements of Chapter 449, Laws of 2005; and WHEREAS, Jefferson County considers it in the best public interest to contribute financially to this open space project. NOW, THEREFORE BE IT RESOLVED, that: 1. Jefferson County hereby dedicates up to $69,000 in conservation futures funds for acquisition expenses contingent on a matching contribution of no less than the amount of conservation futures funds requested. Resolution No. re: Dedication of Conservation Futures Funds to the Boulton Farm Project 2. This dedication of funding may be nullified if a submittal for reimbursement, accompanied by documentation of matching funds sufficient to complete the acquisition, is not received from the sponsor within three years of the signing of this resolution. APPROVED AND ADOPTED this _ day of Washington. , 2012 in Port Townsend, SEAL: JEFFERSON COUNTY BOARD OF COMMISSIONERS John Austin, Chair ATTEST: Phil Johnson, Member Clerk of the Board David Sullivan, Member STATE OF WASHINGTON County of Jefferson Dedication of Conservation Futures Funds to the } L. Brown Tmst II Project as Authorized by } and in Accordance with Jefferson County Code } Section 3.08.030(7) to Provide a System of Public } Open Spaces } RESOLUTION NO. WHEREAS, conservation futures tax levy collections, authorized under RCW 84.34.230 are an important means of retaining community character and accomplishing the open space policies and objectives of the Jefferson County Comprehensive Plan that encourage the coordinated acquisition of key open space lands for long-term protection; and WHEREAS, Jefferson County is authorized by RCW 84.34.210 and 84.34.220 to acquire open space land, agricultural and timber lands as defined in RCW 84.34.220; and WHEREAS, the Conservation Futures Citizen Oversight Committee has reviewed proj ect applications for 2012 and made its funding recommendations to the Board of County Commissioners in accordance with Jefferson County Code Chapter 3.08; and WHEREAS, under the provisions of the Jefferson County Conservation Futures Program, the Jefferson Land Tmst, as project applicant and sponsor, requests funding towards the protection of 15.5 acres of vacant land in NW~ Sec. 36, T. 29N, R. 2W with Assessor's Parcel Number 902362003 through fee-simple acquisition; and WHEREAS, the County retains enough developable land to accommodate the L. Brown Trust II Project as well as the housing and employment growth that it is expected to receive, thus satisfying the requirements of Chapter 449, Laws of 2005; and WHEREAS, Jefferson County considers it in the best public interest to contribute financially to this open space project. NOW, THEREFORE BE IT RESOLVED, that: 1. Jefferson County hereby dedicates up to $24,900 in conservation futures funds for acquisition expenses contingent on a matching contribution of no less than the amount of conservation futures funds requested. Resolution No. re: Dedication of Conservation Futures Funds to the L. Brown Tmst II Project 2. Jefferson County hereby dedicates up to $2,000 in conservation futures funds to reimburse for operations and maintenance expenses incurred within ten years of the signing of this resolution contingent on a matching contribution of no less than the amount of conservation futures funds requested. 3. This dedication of funding may be nullified if a submittal for reimbursement, accompanied by documentation of matching funds sufficient to complete the acquisition, is not received from the sponsor within three years of the signing of this resolution. APPROVED AND ADOPTED this _ day of Washington. , 2012 in Port Townsend, SEAL: JEFFERSON COUNTY BOARD OF COMMISSIONERS John Austin, Chair ATTEST: Phil Johnson, Member Clerk of the Board David Sullivan, Member STATE OF WASHINGTON County of Jefferson Dedication of Conservation Futures Funds to the } Tarboo Forest Conservation Project as Authorized } by and in Accordance with Jefferson County Code } Section 3.08.030(7) to Provide a System of Public } Open Spaces } RESOLUTION NO. WHEREAS, conservation futures tax levy collections, authorized under RCW 84.34.230 are an important means of retaining community character and accomplishing the open space policies and objectives of the Jefferson County Comprehensive Plan that encourage the coordinated acquisition of key open space lands for long-term protection; and WHEREAS, Jefferson County is authorized by RCW 84.34.210 and 84.34.220 to acquire open space land, agricultural and timber lands as defined in RCW 84.34.220; and WHEREAS, the Conservation Futures Citizen Oversight Committee has reviewed project applications for 2012 and made its funding recommendations to the Board of County Commissioners in accordance with Jefferson County Code Chapter 3.08; and WHEREAS, under the provisions of the Jefferson County Conservation Futures Program, the Jefferson Land Tmst, as project sponsor, requests funding towards the protection of up to 120 acres of forest land in Sec. 28, 29, and 31 T. 28N, R. lW with Assessor's Parcel Numbers 801294002, 801291002, and 801204006 through the acquisition of one or more conservation easements; and WHEREAS, the County retains enough developable land to accommodate the Tarboo Forest Conservation Project as well as the housing and employment growth that it is expected to receive, thus satisfying the requirements of Chapter 449, Laws of 2005; and WHEREAS, Jefferson County considers it in the best public interest to contribute financially to this open space project. NOW, THEREFORE BE IT RESOLVED, that: 1. Jefferson County hereby dedicates up to $167,000 in conservation futures funds for acquisition expenses contingent on a matching contribution of no less than the amount of conservation futures funds requested. Resolution No. re: Dedication of Conservation Futures Funds to the Tarboo Forest Conservation Project 2. This dedication of funding may be nullified if a submittal for reimbursement, accompanied by documentation of matching funds sufficient to complete the acquisition, is not received from the sponsor within three years of the signing of this resolution. APPROVED AND ADOPTED this _ day of Washington. , 2012 in Port Townsend, SEAL: JEFFERSON COUNTY BOARD OF COMMISSIONERS John Austin, Chair ATTEST: Phil Johnson, Member Clerk of the Board David Sullivan, Member Upper Tarboo Creek Conservation Easement 200] ~l~ OJ c- o \0 bk N w E 5 ~oil]i POcl~. l::~ ~ -i'Q'c i:f' J~ ' ",,'" v- Discovery Bay ~ct /eaChe(orJld _ i'o,9----&ardiner f!f "'-?Q' [- Ll \ ...c <'" ~ .... en <'" -.:. ....... .-' ? I ) ~ \ Y ) ~\(\ge -? "" rl -.~J \j ~ t \ ~ ---~ 'Ii\r ~. C\ <1>. "\ ~ ~ " ,..-f ) b ~\ c,~dq1>- 3~~~J ~ ()- 'i ~ , ~rcy _Loftus R ~~cw,L '.,~J 7' 4rcadia ~est' \ ~ i~ /}~ 0 -----, ~. /.::i; ~ ~ I!I 3J. St- " I S - r - crutdli?....O ,-0 <r:: ."1:, -Sa" Port Townsend Bay ",o.!1 ~Gate _ Rd ~M"%- ~ (d ~ "'3 ~CJ) ;::: 8 <::l ~ \ ~ Kala P--;,.- 'I I" ..0 \ ar"rn:Po '-i ~'o. ~ ::l ~~) ~'!t to <l>creStO't",-o;o l""'l,"" ........ ': -;::. ...... ?-o ? .... ~ ? ?-o~ x ~~- ~ """'"" ~ ,..... 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