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Home My WebLink About51 21 STATE OF WASHINGTON County of Jefferson Dedication of Conservation Futures Funds to the } Big Quilcene River—Moon Valley Acquisitions } Project as Authorized by and in Accordance with } RESOLUTION NO. 51 21 Jefferson County Code Section 3.08.030(7) to } Provide a System of Public Open Spaces } 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 2021 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, Jefferson County, as project sponsor, requests funding towards the acquisition of portions of two parcels of land in S23 T27N R2W with Assessor's Parcel Numbers 702233001 and 702233006; and WHEREAS, the County retains enough developable land to accommodate the Big Quilcene River—Moon Valley Acquisitions 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 $89,500 in conservation futures funds in the 2021 funding cycle for acquisition expenses contingent on a matching contribution of at least eighty-nine percent (89%) of the total project cost. Resolution No. 51 21 re: Dedication of Conservation Futures Funds to the Big Quilcene River— Moon Valley Acquisitions 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 Sj'f'T'1 gbee- , 2021 in Port Townsend, Washington. SEAL: JEFFERSON COUNTY • ;P BOARD OF COMMISSIONERS , _ r i , , '''" i / 11)\,_ A ,-4 '= Kate6e.�, Chair ATTE ;. , : , ;0010/ )-- it : : erton, Member az - 6a, ...,,, Carol, Gallaway Clerk of the Board •'e ,,i Eisen V ur, Member ,c((' `�� 2021 Jefferson County Conservation Futures Program ti Property Acquisition and/or Operations and Maintenance Project Application '5,7IN6C° 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 staff at 379-4498 or tpokorny@co.iefferson.wa.us with questions. Background and Eligibility Information 1. Project Title: Big Quilcene River—Moon Valley Acquisitions 2. Conservation Futures Acquisition Request: $89,500.00 Conservation Futures O&M Request: $0 3. Total Conservation Futures Request: $89,500.00 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? Property Title will initially be held by Hood Canal Salmon Enhancement Group after acquisition. Property Title will be transferred post-restoration. 5. Applicant Information Name of Applicant or Organization: Hood Canal Salmon Enhancement Group(HCSEG) Contact: Gus Johnson Title: Project Manager Address: PO BOX 2169 Belfair, WA 98528 Phone: (360)275-3575, ext. 115 Fax:( ) - ,ext. Email: gus@pnwsalmoncenter.org 6. Sponsor Information: (if different than applicant) Organization Name:Jefferson County Environmental Public Health Contact: Tami Pokorny Title:Natural Resources Program Coordinator Address: 615 Sheridan St. Port Townsend,WA 98368 Phone: (360)316-9870, ext. Fax: ( ) - ,ext. Email:tpokorny@co.jefferson.wa.us This application was approved by the sponsor's legally responsible body(e.g., board, council, etc.) on: March 17th,2021. 1 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program 7. Site Location Street Address or Description of Location:330 Glen Logie RD,Quilcene WA 98376 Driving Directions from Port Townsend:Drive south to Quilcene WA.From Hwy 101,turn onto Glen Logie Rd. Property is located at end of road. Section:23 Township:27N Range:2W Assessor's Parcel Number(s): 702233001,702233006 Please differentiate current and proposed ownership of each APN and indicate if the parcel is to be acquired with CF funds or used as match. #702233001 —Currently owned by Cynthia and Michael Pollard.Proposed ownership HCSEG.Parcel to be acquired with CF funds. #702233006-Currently owned by Mark Baclawski.Proposed ownership HCSEG. Parcel to be acquired with CF funds. Please list the assessed values for each property or APN,as applicable. Assessed values according to title report: #702233001 -$171,408.00 #702233004-$53,396.00 #702233005-$78,065.00 #702233006-$41,477.00 Appraisals and review appraisals were completed on both properties in August 2020. #702233001 -$340,000(floodplain section of parcel only) #702233006-$290,000(including parts of 702233005 and 702233004.Boundary line adjustment in process). 8. Existing Conditions New Site: Yes 0 Number of Parcels:2 Addition to Existing Site: fia) No Acres to Be Acquired: 75.1 acres Total Project Acreage(if different): 97.1 acres Current Zoning:AL-20-Local Agriculture Existing Structures/Facilities:None Any current covenants,easements or restrictions on land use:Parcel 702233005:Easement 2081764 State of Washington(25' strip adjacent to river left bank for public access); Conservation Easement 549560-Jefferson Land Trust Current Use:Designated Forest Land/Vacant Waterfront(name of body of water):Big Quilcene River Shoreline(linear feet):4,367 feet 2 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program Owner Tidelands/Shorelands: 9. Current Property Owner is is not a willing seller. Project Description 10.In 1,000 words or less,provide a summary description of the project,the match,overarching goal,and three top objectives.Include information about 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.Describe the use planned for the site,any development plans after acquisition(including passive development),characteristics of the site which demonstrate that it is well-suited to the proposed use and plans for any structures currently on the site. 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.Please also list any important milestones for the project or critical dates,e.g. grant deadlines.List the dates and explain their importance.Please attach a spreadsheet of the budget. Jefferson County Public Health,in close partnership with the Hood Canal Salmon Enhancement Group(HCSEG with headquarters in Belfair,WA)is seeking funding from the Jefferson County Conservation Futures Fund to purchase areas of historic floodplain along the Big Quilcene River in the Moon Valley reach and protect this land as open space. These acquisitions include a 31 acre portion of the existing 84 acre Baclawski parcels,and a 45 acre portion of the existing 49 acre Pollard parcel.These portions of the existing parcels encompass the areas closest to the river and offer the greatest potential benefits for conservation and restoration.A boundary line adjustment will be needed to officially create the boundaries of these acquisitions,and a boundary line adjustment application has recently been submitted for the Baclawski portion. The purchase of these two newly created parcels of vacant land will conserve over 75 acres of historic floodplain, almost a mile of riverfront and are adjacent to a similar 22-acre parcel that HCSEG acquired in 2019. These acquisitions are not only important because of the inherent attributes and value of the land.HCSEG plans to use this land as the footprint for a large-scale salmon habitat restoration project in the Moon Valley reach in the next few years. The overarching goal of the Moon Valley Reach Project is to reconnect the Big Quilcene River to its historic floodplain in Moon Valley.By reconnecting the river to its historic floodplain,these three project goals will be met: 1. Restore salmon habitat within the reach with a focus on ESA listen Hood Canal Summer Chum. 2. Normalize sediment dynamics in the lower Big Quilcene River and reduce flood related impacts in the Quilcene community. 3. Provide increased recreational opportunities for the public. The topography in this area is essentially level,extensive floodplain with steep banks to the south side of the river and at the northern extent of the properties. The surrounding land use is forestry and rural residential. The Hwy 101 bridge over the Quilcene River and the Quilcene National Fish Hatchery are located upstream of the project area.A 25' DFW access easement and trail,used largely during the fishing season,runs through both of the subject parcels along the north bank of the river and ultimately to the community of Quilcene in the vicinity of the county's Riverside Park.A parking area to serve this access route is located just upstream of the Hwy 101 bridge. 3 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program Lawn and pasture grasses occupy a large portion of the project area.The riparian zone is native conifer forest along the south bank,where steep slopes have prevented development of the land.Along the north bank,where the historical land use is agriculture,the riparian buffer is a mix of native trees of different stages of maturity and areas dominated by noxious weeds. The Pollard property(702233001)was formally pastureland. The large meadow is now used as a hayfield and harvested at least once each year. Surrounding the field are mature stands of trees and riparian areas of the Big Quilcene River.The Baclawski property(702233006)was formally pasture and forestland.It now includes protected open space,a young fruit and nut orchard,and mature stands of forest.A conservation easement held by the Jefferson Land Trust on approximately 18 acres of land spanning the river includes 1,750' of frontage on the north bank and 575' on the south bank. In the Moon Valley Reach,the Big Quilcene River was moved,straightened,and diked to support agricultural use of the floodplain.As a result of the altered stream hydraulics and extensive diking along the north bank,the channel is now incised to a depth of up to ten feet.The artificially steep stream gradient along with the scouring force of higher flood velocities has resulted in a coarse cobble/boulder streambed lacking spawning gravels suitable for ESA-listed summer chum salmon.This has also contributed to sediment aggradation problems downstream in Quilcene and beyond the river mouth where an extensive delta cone of sediment has formed. The Moon Valley section of the Big Quilcene River has been identified as a target for restoration in the Summer Chum Recovery Plan and in the Hood Canal Coordinating Council's 3-Year Work Program. Specifically, restoration and protection of freshwater reaches in the lower watershed are identified as the highest priority action for summer chum recovery in the Big Quilcene River,with habitat diversity,channel stability,flow moderation, and sediment load identified as key features for restoration. The project will allow for improved salmon habitat in the lower watershed and estuary and contribute to restoration efforts already underway there by attenuating floods,reducing downstream sediment transport,and contributing to temperature and flow regulation. Restoration and protection of the Moon Valley floodplain will contribute to improved water quality,better rearing conditions for juvenile salmon,expanded habitat for other wildlife(including birds and beavers),and an enhanced trail system and outdoor experiences for students, recreationists,and visitors in Quilcene. The Moon Valley Restoration project has already acquired one of the three parcels needed for the project footprint. This 22-acre property was acquired in 2019 and is directly upstream of the two parcels whose acquisition is discussed in this project description.All structures and most utilities on site have been removed,and the property has generally been converted back to a natural state.A 30%restoration design has also been completed.HCSEG has submitted a$5 million dollar grant request to the Floodplains by Design(FbD)program to fund final design and construction of the project. The request was ranked#9 and at this time has a high likelihood of being funded.The acquisition of these two parcels of land is the final piece needed to proceed with this important restoration project.Matching funds for this acquisition will come from other grant sources, specifically the Salmon Recovery Funding Board(SRFB)and Floodplains by Design(FbD). Throughout the duration of the project,HCSEG has partnered with Jefferson County Public Health,the Jamestown S'Klallam Tribe,and the United States Forest Service. These agencies have provided numerous types of support including technical review,land acquisition assistance,and general project planning.The Jefferson County Board of County Commissioners wrote a long and detailed letter of support for the Moon Valley project in November of 2020. 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. 4 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program Estimated or Appraised Value of Propert(ies)to be Acquired: 702233001 appraised cost of acquisition area: $340,000.00 702233006 appraised cost of acquisition area: $289,000.00 Total Estimated Acquisition-related Cost(see Conservation Futures Manual for eligible costs): 702233001 estimated acquisition-related cost: $53,205.00 702233006 estimated acquisition-related cost: $53,205.00 Total Operation and Maintenance Cost: 702233001 estimated operation and maintenance cost: $21,690.00 702233006 estimated operation and maintenance cost: $21,690.00 Total Project Cost: 702233001 estimated total project cost: $434,735.00 702233006 estimated total project cost: $383,735.00 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): Property values are based off of recently completed appraisals(September 2020).Anticipated acquisition related costs are based off of project specific quotes,and costs from similar projects recently completed in the Quilcene area.Operation and maintenance work consists of creating and implementing a stewardship plan,controlling noxious weeds,and installing fencing and signs along the property boundary.Please note that no O&M funding is requested from the Conservation Futures grant.Anticipated schedule for completion of work hinges directly on property sale closing date occurs.All work is anticipated to be completed within 1 year of property closing date. Please see attached budget spreadsheet for detailed budget explanation. 0 & M only go to question#15: Scored Questions 1 a. Sponsor or other organizations Zwill _will not contribute to acquisition of proposed site and/or operation and maintenance activities. 1 b.If applicable,please describe below how contributions from groups or agencies will reduce the need to use Conservation Futures program funds. Around 89%of this acquisition project will be funded by Salmon Recovery Fund Board(SRFB)or Floodplains by Design(FbD). This largely encompassing amount of other funding will reduce the need for CF program funds,and result in only 11%of the project being funded by the CF program. 1 c.Matching Fund Estimate Acquisition O&M 5 2021 CF Program Application DRAFT http:llwww.cojefferson.wa.us/560/Conservation-Futures-Program , r Conservation Futures Funds Requested $89,500.00 $0.00 10.9% Matching Funds/Resources* $645,910.00 $83,059.00 89.1% Total Project Acquisition Cost $735,410.00 $83,059.00 100% *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. 1 d. Source of matching Amount of Contribution If not, Contribution If not, funds/resources contribution approved? when? available now? when? SRFB $289,184.00 • No No FbD $41,335.00 CO No • No SRFB $404,891.00 Yes No 9/22/21 Yes o 12/31/21 $ Yes No Yes No 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 of resources for on-going maintenance or stewardship ("in-kind" contributions) are not eligible as a match. 2 a. Sponsoring agency_is Wis not prepared to provide long-term stewardship(easement monitoring, maintenance,up-keep, etc.)for the proposed project site. 2 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 stewardship plan. Hood Canal Salmon Enhancement Group will hold the properties and steward them utilizing grant funds until all phases of restoration are completed. Both the Skokomish and Jamestown S'Klallam Tribes as well as Jefferson Land Trust have expressed interest in taking title post-restoration and in providing long-term stewardship consistent with existing conservation and public access easements and state grant requirements(Deed of Right). Jefferson Land Trust stewards the existing conservation easement on the Baclawski parcel and would be closely involved if the conservation easement on the Baclawski property is expanded or,otherwise, requires amendment. 3 a.Describe the sponsoring agency's previous or on-going stewardship experience. Jefferson County has acquired,restored and/or stewards floodplain properties on the Dosewallips, Duckabush and Big Quilcene River(for the purpose of salmon recovery)in coordination with partner agencies and organizations. Hood Canal Salmon Enhancement Group has acquired, restored, and stewards many properties across the Hood Canal watershed including a property neighboring the proposed acquisitions. 3 b. Has the sponsor and/or applicant of this project been involved in other projects previously approved for Conservation Futures funding? 6 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program • No,neither the sponsor nor applicant has been involved in a project previously approved for Conservation Futures funds. Yes,the sponsor and/or applicant for this project has been involved in a project previously approved for Conservation Futures funds.Please provide details: HCSEG has been awarded funds from the Jefferson County Conservation Futures grant for the Moon Valley project twice before. $2,500 was awarded in 2016 and used for the purchase of the Whittaker parcel in 2018. Another$2,500 was awarded in 2018 for the upcoming purchase of the Baclawski parcel. 4 a.Property can_cannot feasibly be acquired in a timely fashion with available resources. 4 b.Necessary commitments and agreements_are X are not in place. 4 c.All parties X are_are not in agreement on the cost of acquisition. If"not"to any of the above,please explain below. HCSEG is currently working with Mark Baclawski to negotiate a purchase and sale agreement. The finalization of this PSA is imminent,as we are just waiting for the boundary line adjustment to be completed in order to proceed. HCSEG has had ongoing positive discussions with the Pollards about the acquisition of their land within the floodplain. The Pollards have recently signed a notice of just compensation for the appraised price of the proposed acquisition area,and have expressed interest in making a sale once funding is in place. 5.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'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. Xis a stand-alone project. •The lower river is identified in local salmon recovery chapter"Guidance for Prioritization"(see https://hcccwagov.app.box.com/s/ru01 xmw6g5yga4b2c5mo9f1 9km5bvxkt). •The lower river is identified in Total Maximum Daily Load(TMDL)implementation plan(or through consultation with TMDL lead for Ecology)as a high priority for protection and/or restoration of riparian cover. •The lower river is identified in Pollution Identification and Correction(PIC)planning process(or through consultation with PIC leads)as a high priority for protection and/or restoration and protection and/or restoration of riparian cover can contribute to stated goals for shellfish beds. 6.Conservation Opportunity or Threat: 6 a. The proposed acquisition site X does _does not provide a conservation or preservation opportunity which would otherwise be lost or threatened. 6 b.If applicable,please carefully describe the nature and immediacy of the opportunity or threat, and any unique qualities about the site. 7 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program . r This is a unique opportunity to acquire a highly significant stretch of the Big Quilcene River for comprehensive conservation and restoration.The acquisition phase is the first phase of a project that will result in multiple positive benefits and contribute significantly to the overall productivity of the Big Quilcene River.Opportunities to work with adjacent willing sellers of such high-potential properties to help reverse mistakes of the past on a large scale are exceedingly rare. 7. Summarize the project's conservation values and how the CF funds requested support these values. The historic floodplain in Moon Valley has enormous conservation and restoration potential.Purchasing this significant area and placing it into conservation will help to ensure that it cannot be developed,and will be preserved in perpetuity for the benefit of fish,wildlife,and public recreation.Conservation values include increasing both natural habitat and the abundance of fish and wildlife populations,including the ESA listed Hood Canal Summer Chum and Puget Sound Steelhead.Conservation Futures funds will aid in making this vision a reality by contributing to the purchase price of the Moon Valley floodplain area. 8. Th roposed acquisition: 8 a. 2 provides habitat for State of Washington Priority Habitat and/or State or Federal Threatened, Endangered or Sensitive species. 8 b. provides habitat for a variety of native flora or fauna species. 8 c. n contributes to an existing or future wildlife corridor or migration route. If affirmative in any of the above,please describe and list the Priority Habitat(s)and Threatened, Endangered, or Sensitive species below, and cite or provide documentation of species'use.' ESA-listed species utilizing the Big Quilcene River include: -Hood Canal Summer Chum -Puget Sound Summer and Winter Steelhead Species use documented at:http://www.ecy.wa.gov/services/gis/maps/wria/sasi/sasi.htm ESA-listed spotted owls as well as bald eagles,harlequin ducks and cutthroat trout occur in the area.These acquisitions will enhance the riparian wildlife corridor linking Olympic National Forest and Olympic National Park with Quilcene Bay and Hood Canal. 8 d.Does the current owner participate in conservation programs that enhance wildlife habitat?If so,please provide details. The Baclawskis have placed 18 acres of their land in a conservation easement with Jefferson Land Trust.The terms of this conservation easement serve to enhance wildlife habitat by preventing any future development in the easement area. 9. Describe to what degree the project protects habitat for anadromous fish species(for example:marine shorelines,stream/river corridors including meander zones,and riparian buffers).Please provide documentation and maps that demonstrate the location,quality and extent of the existing buffer and adjoining habitat. The main focus of the Moon Valley restoration project is to improve,create,and protect habitat for all anadromous fish in the Big Quilcene River, including the ESA listed Hood Canal Summer Chum and Puget I See,for example,http://www.dnr.wa.gov/researchscience/topics/naturalheritage/pages/amp nh.aspx http://www.wdfw.wa.gov/conservation/phs/list/ http://www 1.dnr.wa.gov/nhp/refdesk/plants.html http://wwwl.dnr.wa.gov/nhp/refdesk/pubs/wa ecological systems.pdf 8 2021 CF Program Application DRAFT http://wwvv.cojefferson.wa.us/560/Conservation-Futures-Program • Sound Steelhead.Before anthropogenic stresses occurred,Moon Valley was one of the most productive areas for salmon on the entire river.In the early 1900s,the river was artificially constrained against the far side of the valley in order to create pastureland.When this happened,the river's access to its floodplain was severed,and much of the existing salmon habitat was destroyed. The purchase of these proposed acquisitions will allow for restoration work to take place in Moon Valley. The implementation of this restoration project will restore habitat forming processes and features in the valley,bringing it back to most of its pre-disturbance potential for productivity. The area of the acquisitions proposed for funding will allow for a large meander belt and extensive riparian buffers to be placed in the valley. Reconnecting the river to its historic floodplain will create a number of desirable habitat features to the main river channel,and develop side channel and off channel habitat.Decreased flow velocities resulting from restoration will allow for spawning gravels to remain in the reach and reduce the scour potential of incubating salmon eggs. 10 a.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. No agricultural uses are planned for either property as part of this project. Topsoil was removed from portions of the Baclawski parcels by a previous owner,and efforts to establish a fruit and nut orchard on that property have met challenges due to the drought-prone,rocky character of the remaining soil.Hay is currently cut from the field on the Pollard property at least once a year.Agriculture is largely incompatible with a naturally functioning Big Quilcene River floodplain as evidenced by efforts of the past to move,straighten,and dike the river channel. This project is the first step in recreating the historic floodway and channel migration zone of the Big Quilcene River. It will benefit habitat for ESA-listed salmon while lessening flood impacts in Quilcene,improving forest health and water quality,restoring native soils,improving hydrologic and geomorphic function,promoting carbon sequestration,and enhancing aquifer recharge and summertime flows. 10 b.Describe the current owner's record of implementing management practices that preserves and/or enhances soil,water quality,watershed function and wildlife habitat on the farm. N/A 10 c.Describe how the acquisition or proposed easement will likely preserve and/or enhance soil,water quality, watershed function and wildlife habitat. Acquisition of the proposed properties will allow for comprehensive restoration activities in Moon Valley.By restoring the Big Quilcene River's access to its historic floodplain in Moon Valley,the reach will once again become a sediment deposition/storage reach. The ability for floodwaters to deposit sediments in the reach will steadily enhance soil quality and also improve water quality downstream. The restored floodplain will serve its intended function in the watershed which include decreased flow velocities and improved/increased fish,wildlife, and riparian habitat. 11 a.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 including forest management plan(s) or forest ecosystem restoration. No commercial silviculture is planned or anticipated.The Baclawski conservation easement precludes the pruning, cutting down,or other destruction or removal of live and dead trees and other vegetation within the conservation zones. Commercial harvest of any kind is unlikely to be consistent with the terms of the RCO Deed of Right for Salmon Recovery or other grant-related rules and requirements,and would go against the objectives of our habitat restoration project. 9 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program 11 b.Describe the current owner's record of implementing management practices that preserves and/or enhances soil,water quality,watershed function and wildlife habitat. N/A 11 c.Describe how the property acquisition or proposed easement will likely preserve and/or enhance soil,water quality,watershed function and wildlife habitat. Acquisition of the proposed properties will allow for comprehensive restoration activities in Moon Valley.Much of the acquisition area is pastureland,and by planting it with the appropriate native trees and shrubs,a vibrant riparian forest will once again exist in Moon Valley.The proposed restoration plan will lengthen the river channel though the valley,which will decrease flow velocities and encourage sediment deposition in the reach.A newly lengthened river channel and riparian forest will enhance soil and water quality,improve watershed function,and restore fish and wildlife habitat. 12 a.Describe how the proposed acquisition benefits primarily a_local area ybroad county area including the area served,the nature of the benefit,the jurisdictions involved,and the populations served. As a high priority restoration goal for the Big Quilcene River,this project will support the productivity of the lower river with benefits cascading into the estuary and Hood Canal.Restoring healthy sediment dynamics in Moon Valley will significantly reduce the ongoing issues with increased sediment deposition lower in the river where it flows though the community of Quilcene and enters Quilcene Bay. It is hoped that this project,in conjunction with a separate on-going floodplain restoration program in the lower mile of the river will lead to additional intervening acquisitions and/or conservation easements to ultimately lead to the best possible restoration outcomes ecologically for salmon,and also to meet the needs of the community for recreation, educational opportunities and economic vitality. 12 b. Is the project located in an area that is under-represented by CF funded Projects?Areas that Conservation Futures has not been able to support to date include Marrowstone Island, Toandos Peninsula, Dosewallips Valley, Bolton Peninsula, and the West End. No 13.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 established WDFW pedestrian corridor provides public access along the Big Quilcene River in Moon Valley. on the WDFW be FW After restoration is complete,a trail complete with educational signage is planned to placed corridor to improve access and educational opportunities. 14.The proposed acquisition_includes historic or culturally significant resources3 and _is registered with the National Register of Historic Places,or an equivalent program. _is recognized locally has having historic or cultural resources. 2 The words"education"and"interpretation"are interpreted broadly by the CF Committee. 3 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 10 2021 CF Program Application DRAFT http://www.cojefferson.wa.us/560/Conservation-Futures-Program • _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. No known cultural resources are located in the acquisition areas.A cultural resource survey to further investigate this will be completed before any ground disturbing activities are started. O& M Stand Alone Projects 15.Applications for Operation and Maintenance funding only: Please describe in detail,the reason O&M funds are needed,proposed O&M activities,and how they protect resources cited in the original acquisition project.Attach additional information such as up-to-date stewardship plan,maps,field reports,work plan,budget,timeline,etc.,to support the application,if appropriate.0&M projects must address a compelling,immediate need. N/A Verification 16. 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 pro ress ports for three years and for any year in which O&M funds are expended. Initials ` � te 17.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 year Initiale34G/9 , 11 2021 CF Program Application DRAFT 114);ttww► vjcI:ler urn yo.0 60/carseruntion-Futures-frogram Appendix A Project Attachments 1 . 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o ai ai o 0 cri _c Lc) Ln o o Ln Li-) rn o .-1 in o ui o0 00 +V+ N N O O .-1 O N O Ln m O1 Ol ‘al I,f) c m to totO � Lei cr- lfl N .--I 00 'A- 00 I� LA. lD N.' 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I� . • 'I_ —1 a \ \- a 12I \ \ Vi \ ash =� ` \ l Ni�I— H.UIIIN,,,I,..4uNd.0.1,fS,=I.,SSA55 S1S3MDL„ .UI,, "SUMS re..3-Sd w oz r ammo...Ku Appendix H:Landowner Acknowledgement Form Appendix H: Landowner �.,l. ic Acknowledgement Form 00),,1 t '`'',r Landowner Information Name of Landowner: Landowner Contact Information: x Mr. Title: First Name: MARK Last Name: BACLAWSKI Contact Mailing Address: 222 314 Avenue Seattle,WA 98122-6315 .�^ I, ' ` a. U/5k1.- & ahoa • cO//( Contact E-Mail Address: Wi A h k 6 a-t-, Contact Phone Number: A p 6 - 7 g 6 q 5'8'1 Property Address or Location: APN 702 233 005 (00di7 0120 Meefl- ey-Uriv'e Cam' /en t og'l e A Quilcene, WA 98376 1. (Landowner or Organization) is the legal owner of property described in this grant application. 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 negotiations. 4. My signature does not represent authorization of project implementation. 5. If I am affiliated with the roject sponsor, I will recuse myself from decisions made y the oje, pops work or purchase my property 77,,b i ////9//5— Landowner Signature Date Project Sponsor Information Project Name: Big Quilcene Key Pieces Project Applicant Contact Information: ❑ Mr. ►ZI Ms. Title Project Manager First Name: Tami Last Name: Pokorny Mailing Address: E-Mail Address: Public Health tpokorny©co.jefferson.wa.us 615 Sheridan St 360/379-4498 Port Townsend WA 98368 Page 109 Appendix F:Landowner Acknowledgement Form Appendix F: Landowner Acknowledgement Form Landowner Information Name of Landowner: Mike and Cindy Pollard Landowner Contact Information: ❑ Mr. ❑ Ms. Title: First Name: Mike Last Name: Pollard Contact Mailing Address: 330 Glen Logie Rd,Quilcene,WA 98376 PC) � 685 Contact E-Mail Address: c 1 ei.I o & C9 hot rota,,(, e0 rry 3,20 Property Address or Location:330 Glen Logie Rd,Quilcene,WA 98376 1. Mike and Cindy Pollard are the legal owners of property described in this grant application. 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 negotiations. 4. My signature does not repr ent au orization of project implementation. 71't 'T-aS 1i? Landowner Signature Date Project Sponsor Information Project Name: Big Quilcene Moon Valley Reach Acquisition and Planning Project Applicant Contact Information: Hood Canal Salmon Enhancement Group ❑ Mr. ❑ Ms. Title First Name: Sarah Last Name: Heerhartz Mailing Address: PO Box 2169, Belfair,WA 98528 E-Mail Address:sarah@pnwsalmoncenter.org Manual 18, Salmon Recovery Grants• March 2017 REVIEW APPRAISER'S CERTIFICATE NO. 1 Agency: Hood Canal Salmon Enhancement Group Parcel No. 702233001 and 702233007 Owner: Cynthia and Michael Pollard Federal Aid No. N/A Project: N/A Map Sheet: N/A Map Approval Date: N/A Date of Last Revision: N/A From: Richard F. Duncan, MAI, RF Duncan and Associates, Inc. To: Hood Canal Salmon Enhancement Group Date of Review: October 9, 2020 The following appraisal has been made on the subject larger parcel: Appraiser Valuation Market Market Value Value of Damages Date Value— Value— Difference Property Before After Rights Project Project Acquired Chad C.Johnson, 7-17-20 $510,000 -0- $510,000 $510,000 -0- MAI WA Cert No. (Scenario 1) 1101662 and Leslee A. Gilmore, WA Cert. $510,000 $240,000 $270,000 $238,500 $31,500 No. 1101840 (Scenario 2) $510,000 $285,000 $225,000 $187,200 $37,800 (Scenario 3) Chad C. Johnson, 7-17-20 $510,000 $170,000 $340,000 $340,000 -0- MAI WA Cert No. (Scenario 4) 1101662 and Leslee A. Gilmore, WA Cert. No. 1101840 Appraisal Review Comments and Conclusions The Hood Canal Salmon Recovery Group proposes either a total acquisition (Scenario 1) or three partial acquisitions (Scenarios 2,3 and 4)which are described in the body of this review. Appraisal # 1 analyzes the impacts under Scenarios 1 thru 3, and Appraisal # 2 analyzes the impact under Scenario 4. I have analyzed all four scenarios in this review. Appraisals 1 and 2 are prepared consistent with the Uniform Standards for Professional Appraisal Practice (USPAP). Description of Subject Ownership The subject of the appraisal consists of a rural property located along at the terminus of Glen Logie Road, southerly of U.S. Highway 101 in the community of Quilcene in an unincorporated area of Richard F.Duncan,MAI Page 1 RF Duncan and Associates,Inc. Jefferson County, Washington. In the before situation, the subject site consists of a total area of 48.53 acres. The subject has approximately 2,400 lineal feet of frontage along the Big Quilcene River, which bisects the property in the southeasterly portion of the site. Of the 48.53 acres that comprise the subject property, approximately 8.53 acres is located southeasterly of the Big Quilcene River and does not have either legal or physical vehicular access. The portion of the subject property located along Glen Logie Road where the improvements are located is relatively level. The site then slopes downward drastically towards the center of the property where the pasture and area of the site that is associated with the Big Quilcene River is located. On the southeasterly side of the river the site then slopes upward dramatically in a southeasterly direction. According to the Jefferson County GIS maps, the subject site ranges in elevation from approximately 100 feet above sea level in the northwesterly corner of the site in the vicinity of Glen Logie Road down to a low of approximately 60 feet above sea level in the vicinity of the Big Quilcene River, then upward again in the southeasterly corner of the site to an elevation of approximately 240 feet above sea level. The subject has power and telephone and it has access to a shared well located on the parcel directly to the north of the property. In addition, the manufactured home is served by its own septic system. The subject is encumbered with a pedestrian travel and sport fishing easement that runs along the shoreline of the Big Quilcene River. This easement allows the general public to traverse along the bank of the Big Quilcene River for recreational purposes. The easement is limited to pedestrian access only. The Big Quilcene River is identified as a Shoreline of the State, and thus, development within 200 feet of this waterway is subject to the regulations of Jefferson County's Shoreline Master Program. Specifically, the Big Quilcene River in the vicinity of the subject property is classified as a"Conservancy" shoreline environment. The improved portion of the subject property located along Glen Logie Road is identified as being located in an area outside the 100-year and 500-year flood plain, as per Flood Insurance Rate Map, Number 530310884C, effective date June 7, 2019. The central and southerly portion of the subject property located along the valley floor is identified as being located in a Zone AE. Zone AE is defined "an area inundated by 1% annual chance flooding (usually an area of ponding), for which based flood elevations have been determined."Typical flood depths can range from one to three feet. Additionally, the area of the subject property associated with the Big Quilcene River along the southerly and easterly boundary of the site is classified as a floodway. Based on information within the Jefferson County GIS mapping system, the Big Quilcene River in the vicinity of the subject property is classified as a Conservancy Shoreline environment, which requires a building setback from the river of 150 feet. According to the Jefferson County GIS mapping system, portions of the site associated with the Big Quilcene River could be impacted by wetland/buffer areas. In addition, there are two potential wetland areas along the toe of the slope in the northerly portion of the site. In addition to the shared well located on the adjacent property, the subject has a water right for irrigation that draws from a spring associated with the Big Quilcene River. The Certificate of Water Right was recorded on January 10, 1973 under certification number 52-021227CL. According to the owner of the subject property, this allows for irrigation of the pasture and lawn areas located on the subject site. The subject is zoned Local Agricultural (AL-20), which allows agricultural development and residential uses at a minimum density of one home per 20 acres. Richard F. Duncan,MAI Page 2 RF Duncan and Associates,Inc. The subject site is currently improved with a Fleetwood, one-story, wood frame manufactured single- family residence that was constructed in 1999. The owner of the subject property has not gone through the title elimination process for the manufactured home. Thus, this structure is assessed under its own personal property Assessor's Number (702233007). The manufactured home has 3 bedrooms, 1.75 baths and approximately 1,200 SF. The site is also improved with a five-bay equipment shed with a total area of 1,014 square feet. Four of bays are open with the fifth bay being enclosed. The building is of wood frame construction.The building is improved with a wood truss roof with a mixture of a composition shingle and metal cover. The four open bays have a dirt floor and the enclosed portion has a concrete floor. The enclosed area of the structure contains an area of 384 square feet. According to county records this structure was constructed in 1947. The site is also improved with a woodshed with an area of 160 square feet. In addition to the home, the property is also improved with an equipment shed and a woodshed. The appraisers concluded a highest and best use for the subject for residential development, coupled with ancillary agricultural/recreational use, and with the potential to develop the site with one additional home site in the future when demand dictates. The appraisers concluded a highest and best use as improved is for continued use as a single-family residence. In my opinion, the appraisers' highest and best use conclusions are reasonable and well supported in the appraisal. Valuation-Before Situation The appraisers applied the sales comparison approach to value the subject land. Neither the cost nor the income approaches were appropriate for this assignment, and they were not utilized. Since the building improvements are not impacted by the proposed partial acquisition, they were not valued in the appraisal, which is reasonable and appropriate. The appraisers analyzed four comparable sales in supporting the value of the subject land in the before situation. Due to the lack of sales of large parcels with river frontage in Jefferson County, the appraisers included sales from neighboring Thurston, Mason and Clallam counties along with one sale from Jefferson County. The sales range from approximately $8,168 to $9,653 per acre, prior to adjustments, and from $8,393 to $10,304 per acre, after applying adjustments for market appreciation since each sale. After comparing and contrasting the comparables to the subject for major value influencing characteristics including size, river frontage, location, water rights, and site utility, the appraisers concluded a value for the subject land of approximately $9,000 per acre or approximately $435,000® overall (48.53 acres x $9,000/acre) which is considered to be reasonable and well supported. The appraisers applied the cost approach to support the contributory value of the subject's manufactured home and other improvements of approximately $75,000 which is considered to be reasonable. The value of the subject as improved is approximately $510,000 ($435,000 (land) + $75,000 (improvements). Richard F.Duncan,MAI Page 3 RF Duncan and Associates,Inc. Proposed Acquisition and Remainder Description As indicted the Hood Canal Salmon Enhancement Group proposes three partial acquisition scenarios which are referred to as Scenarios Two, Three and Four, and each are discussed below. Scenario One is a total acquisition of the subject which has a total value of approximately $510,000. Scenario Two: Under Scenario Two, 26.50 acres located in the southerly portion of the property along the Big Quilcene River will be acquired. Under this scenario the northerly 22.03 acres 40 fi (inclusive of all improvements) will be retained by the property owner. According to the agency all of the subject's river frontage will be pi. acquired and the remainder will have no river frontage or river access. (I note that the exhibit in the appraisal shows a small amount of river ' _ # frontage in the remainder's northeasterly corner, however the appraisers indicate that they were instructed to assume that all of the subject's river frontage will be acquired.) The highest and best use of ',.,, . , the remainder will be for continued use as a single-family residence. fr • PC t TIAL ACQUISITION aREA-SCENARIO rwq Under Scenario Three 20.80 acres located in the southerly portion of the property along the Big Quilcene River will be acquired. Under this scenario 27.73 acres (inclusive of all improvements) will be retained by the property owner. According to the agency all of the . *"y M ` '" subject's river frontage will be acquired and the remainder will '"' have no river frontage or river access. (I note that the exhibit in the appraisal shows a small amount of river frontage in the 1 g remainder's northeasterly corner, however the appraisers indicate that they were instructed to assume that all of .3 subject's river frontage will be acquired.)The highest and best use of the remainder will be for continued use as a single- family residence. m 2011 acres POTENTIAL ACGJ►$ITION AREA-SCENARIO Th REE Richard F.Duncan,MAI Page 4 RFDuncan and Associates,Inc Scenario Four This scenario includes the acquisition of all but 3.94 acres which is where the building improvements are located. The subject will no longer have frontage along the Big Quilcene River and the owners of the k , subject will no longer have legal/private access to the river .h. from their property. Under this scenario, the residential building site area located along Glen Logie Road will remain �- ..° unchanged. In the after situation, the potential wetland areas ` " and the areas that are impacted by flood plain issues are all ...- M. ; located in the portion of the subject that will be acquired by the Hood Canal Salmon Enhancement Group and thus, do not impact the subject property in the"after"scenario. There are views of the Big Quilcene River valley from the home located on the property, but direct views of the river are impacted by intervening vegetation over which the owner no longer has control. The highest and best use of the remainder will be for continued use as a single-family residence. Valuation of Remainder(s) Scenario Two (22.03-acre remainder) The appraisers analyzed four comparable land sales in analyzing the value of the subject remainder under this scenario. The sales range from approximately$4,017 to$9,091 per acre prior to adjustments, and from $4,248 per acre to $10,273 per acre after adjusting for market appreciation since each sale. After comparing and contrasting the comparables to the subject for major value influencing characteristics including size, location and site utility, the appraisers concluded a value for the subject land of approximately $7,500 per acre or approximately $165,000® overall (22.03 acres x $7,500/acre) which is considered to be reasonable and well supported. The subject's improvements will have the same value as in the before situation or approximately $75,000. The value of the remainder under Scenario Two is approximately $240,000 ($165,000 + $75,000). The value impacts under this scenario are allocated as follows: Value of Subject in Before Situation: $510,000 Value of Remainder: $240,000 Value Difference: $270,000 Value of Land Acquired (26.50 acres x $9,000/acre): $238,500® Damages ($270,000-$238,500): $31,500 Scenario Three (27.73-acre remainder) The appraisers analyzed four comparable land sales in analyzing the value of the subject remainder under this scenario. The sales range from approximately$4,017 to$9,091 per acre prior to adjustments, and from $4,248 per acre to $10,273 per acre after adjusting for market appreciation since each sale. After comparing and contrasting the comparables to the subject for major value influencing characteristics including size, location and site utility, the appraisers concluded a value for the subject land of approximately $7,500 per acre or approximately $210,000® overall (27.73 acres x $7,500/acre) which is considered to be reasonable and well supported. Richard F.Duncan,MAI Page 5 RF Duncan and Associates,Inc. The subject's improvements will have the same value as in the before situation or approximately $75,000. The value of the remainder under Scenario Three is approximately $285,000 ($210,000 + $75,000). The value impacts due to the proposed acquisition are allocated as follows: Value of Subject in Before Situation: $510,000 Value of Remainder: $285,000 Value Difference: $225,000 Value of Land Acquired (20.80 acres x $9,000/acre): $187,200® Damages ($225,000-$187,200): $37,800 Scenario Four (3.94-acre remainder) The appraisers analyzed four comparable sales of sites improved with manufactured homes in analyzing the value of the subject remainder under this scenario. The sales range from approximately $150,000 to $195,500, prior to adjustments, and from $155,775 to $210,971 after adjusting for market appreciation since each sale. After comparing and contrasting the comparables to the subject for major value influencing characteristics including size, quality and condition of home, location and site utility, the appraisers concluded a value for the subject under this scenario of approximately $170,000, which is considered to be reasonable and well supported. Deducting the $75,000 worth of improvements, the residual value to the land is approximately $95,000 or approximately $24,111 per acre for the 3.94- acre remainder site ($95,000/3.94 acre) which is significantly higher than $9,000 per acre as supported for the 48.53-acre subject in the before situation. The higher unit value in the after situation is due to the fact that very small sites tend to sell for much higher per acre land values than do larger 40+ acre parcels and not due to the proposed project. In my opinion, the much higher unit value for the remainder site is market reflective and it off-sets any damages to the loss of the subject's river frontage. The value impacts due to the proposed acquisition under this scenario are allocated as follows: Value of Subject in Before Situation: $510,000 Value of Remainder: $170,000 Value Difference: $340,000 Value of Land Acquired (40.59 acres x $8,376/acre): $340,000 Damages- none: -0- The appraisal of the remainder under each scenario is made subject to the hypothetical condition that the proposed acquisition has occurred when analyzing the value of each remainder. The appraisal has numerous other general assumptions and limiting conditions which are typical for similar appraisals in Washington State. There are some minor typographical errors in the appraisal but correction of these would not change its value conclusions. The title report identifies several easements and restrictions which are typical for competing properties. Richard F.Duncan,MAI Page 6 RF Duncan and Associates,Inc. There are no tenant-owned realty items taken or affected. The appraisal and this review use the correct methods and techniques. The market data in the appraisal are adequate and appropriate to solve the appraisal problem. The conclusions of value reached in the appraisal and in this review are reasonable and fit the market evidence. In my opinion, the appraisal report which is under review complies with the Uniform Standards of Professional Appraisal Practice (USPAP). Richard F.Duncan,MAI Page 7 RF Duncan and Associates,Inc. REVIEWER'S DETERMINATIONS OF VALUE NO. 1 Scenario One DETERMINED VALUE BEFORE PROJECT $510,000 DETERMINED VALUE AFTER PROJECT: -0- VALUE DIFFERENCE DETERMINED: $510,000 ESTIMATED JUST COMPENSATION: $510,000 Reviewer's Allocation of Just Compensation Acquisition: Land Acquired in Fee 48.53 acres x $9,000/acre: $435,000 Improvements Acquired: $75,000 Damages: -0- Special Benefits: -0- Total Just Compensation This Larger Parcel: $510,000 Scenario Two DETERMINED VALUE BEFORE PROJECT $510,000 DETERMINED VALUE AFTER PROJECT: $240,000 VALUE DIFFERENCE DETERMINED: $270,000 ESTIMATED JUST COMPENSATION: $270,000 Reviewer's Allocation of Just Compensation Acquisition: Land Acquired in Fee 26.50 acres x $9,000/acre $238,500 Improvements Acquired: -0- Damages: $31,500 Special Benefits: -0- Total Just Compensation This Larger Parcel: $270,000 Richard F.Duncan,MAI Page 8 RF Duncan and Associates,Inc. Scenario Three DETERMINED VALUE BEFORE PROJECT $510,000 DETERMINED VALUE AFTER PROJECT: $285,000 VALUE DIFFERENCE DETERMINED: $225,000 ESTIMATED JUST COMPENSATION: $225,000 Reviewer's Allocation of Just Compensation Acquisition: Landa d Acquired in Fee 20.80 acres x 9 000 acre: q $ , / $187,200 Improvements Acquired: -0- Damages: $37,800 Special Benefits: -0- Total Just Compensation This Larger Parcel: $225,000 Scenario Four DETERMINED VALUE BEFORE PROJECT $510,000 DETERMINED VALUE AFTER PROJECT: $170,000 VALUE DIFFERENCE DETERMINED: $340,000 ESTIMATED JUST COMPENSATION: $340,000 Reviewer's Allocation of Just Compensation Acquisition: Land Acquired in Fee 40.59 acres x $8,376/acre $340,000 Improvements Acquired: -0- Damages: -0- Special Benefits: -0- Total Just Compensation This Larger Parcel: $340,000 Richard F.Duncan,MAI Page 9 RF Duncan and Associates,Inc. APPRAISAL REVIEW SALIENT INFORMATION Property Rights Appraised Unless specified otherwise in this review, the property rights appraised constitute the fee simple interest. Date of Value The effective date of the value opinion for the property in this review is 7-17-20 per Appraisal #1. Competency of Reviewer The undersigned reviewer has the knowledge and experience required to competently perform this review; detailed resumes are available upon written request. The undersigned reviewer is approved by the Federal Highway Administration (FHWA) and the Washington State Department of Transportation (WSDOT), lead agency for all eminent domain appraisal matters, to perform fee appraisal reviews for all public agencies and quasi-public agencies in Washington State. The undersigned reviewer is a state certified appraiser holding the General classification #1100496 and is on the WSDOT List of Approved Fee Reviewers. Purpose of this Review Overall, the purpose is to estimate the total Just Compensation due the owner for the taking of privately- owned real property for the public project identified. For a partial taking, this is done by: estimating the Fair Market Value of the subject Larger Parcel in the Before Situation; estimating the Fair Market Value of the subject Larger Parcel in the After Situation; then subtracting the latter from the former. When a larger parcel's major improvements are unaffected by the taking/project other than simple cost to cure, the jurisdictional exception allows a Strip Appraisal Procedure wherein said improvements need not be valued. Use of this Review This review estimates Just Compensation due the owner and will be used to establish the first offer amount to be made to the owner by the agency. Scope of this Review The commonly recognized valuation methods and techniques most appropriate for valuing the subject Larger Parcel were performed in this review. This review involved a reasonably detailed inspection of the subject property, the subject neighborhood, and surrounding/competing neighborhoods. Sales and listings of competing properties were investigated before any conclusions of value were made. Unless otherwise stated above, the Income and Cost Approaches to value were not employed in this review because the Sales Comparison Approach is sufficient to solve the subject appraisal problem. Definition of the Larger Parcel The "Larger Parcel" is the parent parcel; it is the real property that is the subject of this review. It is that real property that has Unity of Use, Unity of Ownership, and Contiguity. Definition of Market Value Market Value,as defined by the Uniform Appraisal Standards for Federal Land Acquisitions, 2016 Edition, is: "...the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the Richard F.Duncan,MAI Page 10 RF Duncan and Associates,Inc. property would have sold on the effective date of the appraisal, after a reasonable exposure time on the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal." Definition of Cash Equivalent A price expressed in terms of cash (money) as distinguished from a price which is expressed all or partly in terms of the face amount of notes or other securities which cannot be sold at their face amount. Market data in this review are compared to the subject on an all cash basis to satisfy the definition of Fair Market Value. Richard F.Duncan,MAI Page 11 RF Duncan and Associates,Inc. APPRAISAL REVIEW ASSUMPTIONS and LIMITING CONDITIONS 1.The property description supplied to the reviewer is assumed to be correct; 2.No surveys of the properties have been made by the reviewer and no responsibility is assumed in connection with such matters.Title is assumed merchantable and vested as noted herein; 3.No responsibility is assumed for matters of a legal nature affecting title to the properties,nor is any opinion of title rendered; 4.Information furnished by others is assumed to be true,correct,and reliable.A reasonable effort has been made to verify such information;however,no responsibility for its accuracy is assumed by the reviewer; 5.All mortgages,liens,encumbrances,leases,and servitudes have been disregarded unless so specified in review.The property is assumed to be under responsible ownership and competent management; 6.It is assumed that there are no hidden or unapparent conditions of the property,its subsoil,or its structures which would render it more or less valuable.No responsibility is assumed for such conditions or for engineering or testing which may be required to discover them; 7.Unless otherwise stated,the existence of hazardous material,which may or may not be present in or on the property,was not observed by the reviewer.The reviewer has no knowledge of the existence of such materials on or in the property.The reviewer,however,is not qualified to detect such substances.The presence of substances such as asbestos,urea- formaldehyde foam insulation,or other potentially hazardous/toxic materials may affect the value of the property.The value estimate in this review is predicated on the assumption that there is no such material on or in the property that would cause a loss in value.No responsibility is assumed for any such conditions,or for the expertise or engineering knowledge required to discover them.The client is urged to retain an expert in this field if desired; 8.Unless otherwise stated,no environmental impact studies were either requested or made in conjunction with this review,and the reviewer hereby reserves the right to alter,amend,revise,or rescind any of the value opinions based upon any subsequent environmental impact studies,research,or investigation; 9.It is assumed that there is full compliance with all applicable federal,state,and local environmental regulations and laws unless noncompliance is specified,defined,and considered in this review; 10.It is assumed that all applicable zoning and use regulations and restrictions have been complied with,unless nonconformity has been specified,defined,and considered in this review; 11.It is assumed that all required licenses,consents,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 review are based; 12.The reviewer will not be required to give testimony or appear in court because of having made this review unless arrangements have been previously made therefore, 13.Possession of this review 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 client without the written consent of the reviewer and in any event,only with properly written qualification and only in its entirety; 14.Neither all nor any part of the contents of this review,or copy thereof,shall be conveyed to the public through advertising,public relations,news,sales,or any other media without written consent and approval of the reviewer.Nor shall the reviewer,client,firm,or professional organization of which the reviewer is a member be identified without the written consent of the reviewer; 15.The liability of the reviewer,employees,and subcontractors is limited to the client only.There is no accountability, obligation,or liability to any other party.If this review is placed in the hands of anyone other than the client,the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions.The reviewer is in no way responsible for any costs incurred to discover or correct any deficiencies in the properties; 16.It is assumed that the public project which is the object of this review will be constructed in the manner proposed and in the reasonably foreseeable future.It is also assumed herein that the taken landscaping will not be required to be replaced on the remainder; 17.Acceptance and/or use of this review constitutes acceptance of the foregoing assumptions and limiting conditions. Richard F.Duncan,MAI Page 12 RFDuncan and Associates,Inc CERTIFICATE OF REVIEW APPRAISER I, the review appraiser, certify to the best of my knowledge and belief: 1. The f acts and data reported by the review appraiser and used in the review process are true and correct. 2. The analyses, opinions, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report, and are my personal, unbiased professional analyses opinion, and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved; 4. I have no bias with respect to the property that is the subject of this report or to the parties involved in this assignment. 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this review report. 7. My analyses, opinions, and conclusions were developed and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), with the Uniform Appraisal Standards for Federal Land Acquisitions(USFLA, the"Yellow Book") and with 49CFR Part 24. 8. I personally inspected the subject property of the appraisal under review and the comparable sales analyzed in the report. No one provided significant appraisal, appraisal review, or appraisal consulting assistance to the persons signing this certificate. I further certify that if this review is to be used in conjunction with a Federal Aid Highway Project or other federally funded project, none of the approved just compensation herein is ineligible for Federal reimbursement. Signature: Date Signed: 10-9-20 Richard F. Duncan, MAI, Review Appraiser, Washington State Certified Real Estate Appraiser: General, # 1100496 Richard F.Duncan,MAI Page 13 RF Duncan and Associates,Inc. CONCURRENCE and AUTHORIZATION for PAYMENT of JUST COMPENSATION The Hood Canal Salmon Enhancement Group does hereby indicate concurrence with the above certification and does authorize further action to proceed according to established procedures with the acquisition of the property. 1. I have no present or prospective personal interest in the property that is the subject of this report. 2. I have no personal interest or bias with respect to the parties involved. 3. My compensation is not contingent on an action or event resulting from this report. Authorized Representative of Hood Canal Salmon Enhancement Group Date Richard F.Duncan,MAI Page 14 RF Duncan and Associates,Inc. Review Appraiser's Qualifications Richard F. Duncan, MAI Experience: • Partner,The Granger Company • President, R.F. Duncan and Associates, Inc. • Fee Appraiser, Anderson Appraisal, Inc., Olympia, Washington • Real Estate Appraiser, Clark County, Department of Public Works • Real Estate Appraiser/Right-of-Way Agent, Washington State Department of Transportation • Real Property Manager, Phoenix Properties, Inc. Education: The Evergreen State College, Olympia, Washington Bachelor of Arts, Major—Business Management, 1987 Appraisal Education: Real Estate Courses: "Real Estate Law" "Real Estate Finance" "Real Estate Practices" "Principles of Real Estate Appraisal I" "Principles of Real Estate Appraisal II" "Uniform Standards of Professional Appraisal Practice" Appraisal Institute Courses: Successfully challenged "Real Estate Appraisal Principles" Successfully challenged "Basic Valuation Principles" "Capitalization Theory and Techniques Part A" "Capitalization Theory and Techniques Part B" "Report Writing and Valuation Analysis" "Advanced Applications" "Standards of Professional Practice Part A" "Standards of Professional Practice Part B" International Right-of-Way Association Courses: "Appraisal of Partial Acquisitions" "Principles of Real Estate Acquisition" "Engineering Plan Development and Application" "Ethics and the Right-of-Way Profession" "Communication in Real Estate Acquisition" "Bargaining Negotiations" Richard F.Duncan,MAI Page 15 RFDuncan and Associates,Inc. "Relocation Assistance" "Land Titles" National Highway Institute Courses: "Appraisal and Appraisal Review for Federal Aid Highway Programs" "Moving Cost Estimating" Business and Professional Organizations: • Member, Appraisal Institute • Certified Real Estate Appraiser(General)—State of Washington #1100496 Types of Appraisal Assignments: Apartments Eminent Domain Takings—Strip and Before/After Reports Funding Feasibility Studies for Governmental Projects (roads, parks, bike trails, etc.) Office Buildings Retail Special Benefit Studies Subdivisions Undeveloped Land Warehouses Wetlands/Open Space Appraisal Review Richard F.Duncan,MAI Page 16 RF Duncan and Associates,Inc. REVIEW APPRAISER'S CERTIFICATE NO. 1 Agency: Hood Canal Salmon Enhancement Group Parcel No. 702233004, 702233005, 702233006 Owner: Mark Baclawski Federal Aid No. N/A Project: N/A Map Sheet: N/A Map Approval Date: N/A Date of Last Revision: N/A From: Richard F. Duncan, MAI, RF Duncan and Associates, Inc. To: Hood Canal Salmon Enhancement Group Date of Review: September 17, 2020 The following appraisal has been made on the subject larger parcel: Appraiser Valuation Market Market Value Value of Damages Date Value— Value— Difference Property Before After Rights Project Project Acquired Chad C.Johnson, 7-17-20 $510,000 $220,000 $290,000 $183,200 $106,800 MAI WA Cert No. 1101662 and Leslee A. Gilmore, WA Cert. No. 1101840 Appraisal Review Comments and Conclusions Appraisal #1 is referred to as"the appraisal" herein. The appraisal is an Appraisal Report as defined by USPAP. The Hood Canal Salmon Recovery Group proposes a partial acquisition of the subject parcel. Description of Subject Ownership The subject of the appraisal consists of a rural property located along Glen Logie Road, southerly of U.S. Highway 101 in the community of Quilcene in an unincorporated area of Jefferson County, Washington. The subject site consists of three Jefferson County Assessor's parcels and contains a total area of 84.31 acres. The subject has approximately 1,750 lineal feet of frontage along the Big Quilcene River, which bisects the southeasterly corner of the site as well as traveling along its southerly boundary. The site is for the most part unimproved. There is an equipment shed located on the property with an area of 576 square feet. In addition, there is a cargo container and a small one-room cabin located on the site with an area of 196 square feet. The cabin is not affixed to a permanent foundation and the owner stated he can move its location easily. Thus, the cargo container and the cabin are considered personal property. The equipment shed is part of the real estate. Site coverage includes the buildings, an agricultural area that is currently planted with fruit and nut trees, and forested areas. Richard F. Duncan,MA! Page 1 RF Duncan and Associates,Inc. • Vehicular access to the subject property is from Glen Logie Road. Due to its location and steep topography, access to the portion of the subject property located southerly of the Big Quilcene River is not feasible. The northerly portion of the subject is relatively level.The site then slopes downward drastically towards the center of the property where the agricultural portion and the area of the site that is associated with the Big Quilcene River is located. On the southerly side of the river the site then slopes upward dramatically in a southeasterly direction. According to the Jefferson County GIS maps, the subject site ranges in elevation from approximately 180 feet above sea level in the northwesterly corner of the site down to a low of approximately 75 feet above sea level in the vicinity of the Big Quilcene River, then upward again in the southeasterly corner of the site to an elevation of approximately 430 feet above sea level. Electrical and telephone service are extended to the subject property. The subject site is not served by public water or sanitary sewer service. The subject is improved with a well. Any residential development of the property will require that a septic system be installed. The subject is encumbered with a pedestrian travel and sport fishing easement that runs along the shoreline of the Big Quilcene River. This easement allows the general public to traverse along the bank of the Big Quilcene River for recreational purposes. The easement is limited to pedestrian access only. On February 2, 2010, the owner of the subject property entered into "Grant Deed of Conservation Easement" (Auditor's Number 549560) which created a conservation zone impacting approximately 18 acres of land on the northerly and southerly side of the Big Quilcene River. The Big Quilcene River is identified as a Shoreline of the State, and thus, development within 200 feet of this waterway is subject to the regulations of Jefferson County's Shoreline Master Program. Specifically, the Big Quilcene River in the vicinity of the subject property is classified as a"Conservancy" shoreline environment. The majority of the subject property is identified as being located in an area outside the 100-year and 500-year flood plain, as per Flood Insurance Rate Map, Number 530310884C, effective date June 7, 2019. The most southerly and easterly portions of the site located along the valley floor are identified as being located in a Zone AE. Zone AE is defined as"an area inundated by 1% annual chance flooding (usually an area of ponding), for which based flood elevations have been determined." Typical flood depths can range from one to three feet. Additionally, the area of the subject property associated with the Big Quilcene River along the southerly boundary of the site is classified as a floodway. According to the Jefferson County GIS mapping system, portions of the site associated with the Big Quilcene River could be impacted by wetland/buffer areas. In addition,there is a small potential wetland located in the central portion of the property. In addition to the well located on the property, the property owner indicated that he is allowed to draw water from a spring/pond located on the property for agricultural irrigation, though the appraisers were unable to find supporting documentation for the irrigation rights. The subject is zoned Local Agricultural (AL-20), which allows agricultural development and residential uses at a minimum density of one home per 20 acres. The appraisers concluded a highest and best use for the subject for development with one home site, coupled with ancillary agricultural/recreational use, and with the potential to develop the site with up to three additional home sites in the future when demand dictates. The appraisers concluded a highest Richard E Duncan,MAI Page 2 RF Duncan and Associates,Inc. and best use as improved is to retain the equipment shed and develop the subject for residential use. In my opinion, the appraisers' highest and best use conclusions are reasonable and well supported in the appraisal. Valuation-Before Situation The appraisers applied the sales comparison approach to value the subject land. Neither the cost nor the income approaches were appropriate for this assignment, and they were not utilized. Since the building improvements are not impacted by the proposed partial acquisition, they were not valued in the appraisal, which is reasonable and appropriate. The appraisers analyzed four comparable sales in supporting the value of the subject land in the before situation. Due to the lack of sales of large parcels with river frontage in Jefferson County, the appraisers were forced to includes sales from neighboring Thurston, Mason and Clallam counties along with one sale from Jefferson County. The sales range from approximately $3,504 to $8,776 per acre, and from $3,846 to $9,829 per acre, after applying adjustments for market appreciation since each sale. After comparing and contrasting the comparables to the subject for major value influencing characteristics including size, river frontage, location and site utility, the appraisers concluded a value for the subject land of approximately $6,000 per acre or approximately $505,000® overall (84.31 acres x $6,000/acre) which is considered to be reasonable and well supported. The appraisers applied the cost approach to support the contributory value of the subject's 576 SF equipment shed of approximately $5,000 which is considered to be reasonable. The value of the subject as improved is approximately$510,000($505,000(land) + $5,000(equipment shed). Proposed Acquisition and Remainder Description The Hood Canal Salmon Enhancement Group proposes to acquire, in fee, approximately 30.53 acres located in the southerly portion of the site in the vicinity of the Big Quilcene River. The northerly 53.78 acres (inclusive of all improvements) will be retained by the property owner. After the proposed acquisition has been completed, the subject property will have an area of 53.78 acres, with no frontage along the Big Quilcene River, and the owners of the subject will no longer have legal/private access to the river from their property. The area of the site where the equipment shed is located is not within the acquisition area. The southerly approximately 18 acres that are part of the conservation easement that impacts the subject property are located in the acquisition area. Thus, in the"After"scenario the conservation easement is no longer impacting the subject property. The appraisers conclude that the highest and best use of the remainder site as vacant is for the use of the site to support development of one home, with ancillary agricultural/recreational use, with the potential to develop the site with a second home site in the future when demand dictates.The appraisers conclude that the highest and best use of the remainder as improved is to retain the equipment building and incorporate this structure into the development of the remainder site with a residential use. In my opinion, the appraisers' highest and best use conclusions for the remainder are reasonable and well supported. Valuation of Remainder The appraisers analyzed four comparable sales in analyzing the value of the subject remainder. The sales range from approximately $3,026 to $5,885 per acre prior to adjustments, and from $3,337 per acre to $6,430 per acre after adjusting for market appreciation since each sale. After comparing and Richard F.Duncan,MAI Page 3 RF Duncan and Associates,Inc. contrasting the comparables to the subject for major value influencing characteristics including size, location and site utility, the appraisers concluded a value for the subject land of approximately $4,000 per acre or approximately $215,000® overall (53.78 acres x $4,000/acre) which is considered to be reasonable and well supported. The subject's equipment shed has the same value as in the before situation or $5,000. The total value of the remainder is approximately $220,000 ($215,000(land) +$5,000(shed). The value impacts due to the proposed acquisition are allocated as follows: Value of Subject in Before Situation: $510,000 Value of Remainder: $220,000 Value Difference: $290,000 Value of Land Acquired (30.53 acres x $6,000/acre): $183,200® Damages ($290,000-$183,200): $106,800 The appraisal is made subject to the hypothetical condition that the proposed acquisition has occurred when analyzing the value of the remainder. The appraisal has numerous other general assumptions and limiting conditions which are typical for similar appraisals in Washington State. There are some minor typographical errors in the appraisal but correction of these would not change its value conclusions. The title report identifies several easements and restrictions which are typical for competing properties. There are no tenant-owned realty items taken or affected. The appraisal and this review use the correct methods and techniques. The market data in the appraisal are adequate and appropriate to solve the appraisal problem. The conclusions of value reached in the appraisal and in this review are reasonable and fit the market evidence. In my opinion, the appraisal report which is under review complies with the Uniform Standards of Professional Appraisal Practice (USPAP). Richard F.Duncan,MAI Page 4 RF Duncan and Associates,Inc REVIEWER'S DETERMINATION OF VALUE NO. 1 DETERMINED VALUE BEFORE PROJECT $510,000 DETERMINED VALUE AFTER PROJECT: $220,000 VALUE DIFFERENCE DETERMINED: $290,000 ESTIMATED JUST COMPENSATION: $290,000 Reviewer's Allocation of Just Compensation Acquisition: Land Acquired in Fee 30.53 acres x $6,000/acre: $183,200 Improvements Acquired: -0- Damages: $106,800 Special Benefits: -0- Total Just Compensation This Larger Parcel: $290,000 Richard F. Duncan,MAI Page 5 RF Duncan and Associates,Inc. APPRAISAL REVIEW SALIENT INFORMATION Property Rights Appraised Unless specified otherwise in this review, the property rights appraised constitute the fee simple interest. Date of Value The effective date of the value opinion for the property in this review is 7-17-20 per Appraisal #1. Competency of Reviewer The undersigned reviewer has the knowledge and experience required to competently perform this review; detailed resumes are available upon written request. The undersigned reviewer is approved by the Federal Highway Administration (FHWA) and the Washington State Department of Transportation (WSDOT), lead agency for all eminent domain appraisal matters, to perform fee appraisal reviews for all public agencies and quasi-public agencies in Washington State. The undersigned reviewer is a state certified appraiser holding the General classification #1100496 and is on the WSDOT List of Approved Fee Reviewers. Purpose of this Review Overall, the purpose is to estimate the total Just Compensation due the owner for the taking of privately- owned real property for the public project identified. For a partial taking, this is done by: estimating the Fair Market Value of the subject Larger Parcel in the Before Situation; estimating the Fair Market Value of the subject Larger Parcel in the After Situation; then subtracting the latter from the former. When a larger parcel's major improvements are unaffected by the taking/project other than simple cost to cure, the jurisdictional exception allows a Strip Appraisal Procedure wherein said improvements need not be valued. Use of this Review This review estimates Just Compensation due the owner and will be used to establish the first offer amount to be made to the owner by the agency. Scope of this Review The commonly recognized valuation methods and techniques most appropriate for valuing the subject Larger Parcel were performed in this review. This review involved a reasonably detailed inspection of the subject property, the subject neighborhood, and surrounding/competing neighborhoods. Sales and listings of competing properties were investigated before any conclusions of value were made. Unless otherwise stated above, the Income and Cost Approaches to value were not employed in this review because the Sales Comparison Approach is sufficient to solve the subject appraisal problem. Definition of the Larger Parcel The "Larger Parcel" is the parent parcel; it is the real property that is the subject of this review. It is that real property that has Unity of Use, Unity of Ownership, and Contiguity. Definition of Market Value Market Value,as defined by the Uniform Appraisal Standards for Federal Land Acquisitions, 2016 Edition, is: "...the amount in cash, or on terms reasonably equivalent to cash, for which in all probability the property would have sold on the effective date of the appraisal, after a reasonable exposure time on Richard F.Duncan,MAI Page 6 RF Duncan and Associates,Inc. the open competitive market, from a willing and reasonably knowledgeable seller to a willing and reasonably knowledgeable buyer, with neither acting under any compulsion to buy or sell, giving due consideration to all available economic uses of the property at the time of the appraisal." Definition of Cash Equivalent A price expressed in terms of cash (money) as distinguished from a price which is expressed all or partly in terms of the face amount of notes or other securities which cannot be sold at their face amount. Market data in this review are compared to the subject on an all cash basis to satisfy the definition of Fair Market Value. Richard E Duncan,MAI Page 7 RF Duncan and Associates,Inc. APPRAISAL REVIEW ASSUMPTIONS and LIMITING CONDITIONS 1.The property description supplied to the reviewer is assumed to be correct; 2.No surveys of the properties have been made by the reviewer and no responsibility is assumed in connection with such matters.Title is assumed merchantable and vested as noted herein; 3.No responsibility is assumed for matters of a legal nature affecting title to the properties,nor is any opinion of title rendered; 4.Information furnished by others is assumed to be true,correct,and reliable.A reasonable effort has been made to verify such information;however,no responsibility for its accuracy is assumed by the reviewer; 5.All mortgages,liens,encumbrances,leases,and servitudes have been disregarded unless so specified in review.The property is assumed to be under responsible ownership and competent management; 6.It is assumed that there are no hidden or unapparent conditions of the property,its subsoil,or its structures which would render it more or less valuable.No responsibility is assumed for such conditions or for engineering or testing which may be required to discover them; 7.Unless otherwise stated,the existence of hazardous material,which may or may not be present in or on the property,was not observed by the reviewer.The reviewer has no knowledge of the existence of such materials on or in the property.The reviewer,however,is not qualified to detect such substances.The presence of substances such as asbestos,urea- formaldehyde foam insulation,or other potentially hazardous/toxic materials may affect the value of the property.The value estimate in this review is predicated on the assumption that there is no such material on or in the property that would cause a loss in value.No responsibility is assumed for any such conditions,or for the expertise or engineering knowledge required to discover them.The client is urged to retain an expert in this field if desired; 8.Unless otherwise stated,no environmental impact studies were either requested or made in conjunction with this review,and the reviewer hereby reserves the right to alter,amend,revise,or rescind any of the value opinions based upon any subsequent environmental impact studies,research,or investigation; 9.It is assumed that there is full compliance with all applicable federal,state,and local environmental regulations and laws unless noncompliance is specified,defined,and considered in this review; 10.It is assumed that all applicable zoning and use regulations and restrictions have been complied with,unless nonconformity has been specified,defined,and considered in this review; 11.It is assumed that all required licenses,consents,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 review are based; 12.The reviewer will not be required to give testimony or appear in court because of having made this review unless arrangements have been previously made therefore, 13.Possession of this review 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 client without the written consent of the reviewer and in any event,only with properly written qualification and only in its entirety; 14.Neither all nor any part of the contents of this review,or copy thereof,shall be conveyed to the public through advertising,public relations,news,sales,or any other media without written consent and approval of the reviewer.Nor shall the reviewer,client,firm,or professional organization of which the reviewer is a member be identified without the written consent of the reviewer; 15.The liability of the reviewer,employees,and subcontractors is limited to the client only.There is no accountability, obligation,or liability to any other party.If this review is placed in the hands of anyone other than the client,the client shall make such party aware of all limiting conditions and assumptions of the assignment and related discussions.The reviewer is in no way responsible for any costs incurred to discover or correct any deficiencies in the properties; 16.It is assumed that the public project which is the object of this review will be constructed in the manner proposed and in the reasonably foreseeable future.It is also assumed herein that the taken landscaping will not be required to be replaced on the remainder; 17.Acceptance and/or use of this review constitutes acceptance of the foregoing assumptions and limiting conditions. Richard F.Duncan,MAI Page 8 RFDuncan and Associates,Inc. CERTIFICATE OF REVIEW APPRAISER I, the review appraiser, certify to the best of my knowledge and belief: 1. The facts and data reported by the review appraiser and used in the review process are true and correct. 2. The analyses, opinions, and conclusions in this review report are limited only by the assumptions and limiting conditions stated in this review report, and are my personal, unbiased professional analyses opinion, and conclusions. 3. I have no present or prospective interest in the property that is the subject of this report and I have no personal interest or bias with respect to the parties involved; 4. I have no bias with respect to the property that is the subject of this report or to the parties involved in this assignment. 5. My engagement in this assignment was not contingent upon developing or reporting predetermined results. 6. My compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this review report. 7. My analyses, opinions, and conclusions were developed and this review report was prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP), with the Uniform Appraisal Standards for Federal Land Acquisitions(USFLA, the"Yellow Book") and with 49CFR Part 24. 8. I personally inspected the subject property of the appraisal under review and the comparable sales analyzed in the report. No one provided significant appraisal, appraisal review, or appraisal consulting assistance to the persons signing this certificate. I further certify that if this review is to be used in conjunction with a Federal Aid Highway Project or other federally funded project, none of the approved just compensation herein is ineligible for Federal reimbursement. Signature: Date Signed: 9-17-20 Richard F. Duncan, MAI, Review Appraiser, Washington State Certified Real Estate Appraiser: General, # 1100496 Richard F.Duncan,MAI Page 9 RF Duncan and Associates,Inc. CONCURRENCE and AUTHORIZATION for PAYMENT of JUST COMPENSATION The Hood Canal Salmon Enhancement Group does hereby indicate concurrence with the above certification and does authorize further action to proceed according to established procedures with the acquisition of the property. 1. I have no present or prospective personal interest in the property that is the subject of this report. 2. I have no personal interest or bias with respect to the parties involved. 3. My compensation is not contingent on an action or event resulting from this report. Authorized Representative of Hood Canal Salmon Enhancement Group Date Richard F.Duncan,MAI Page 10 RF Duncan and Associates,Inc. Review Appraiser's Qualifications Richard F. Duncan, MAI Experience: • Partner, The Granger Company • President, R.F. Duncan and Associates, Inc. • Fee Appraiser, Anderson Appraisal, Inc. Olympia,pp , pp Washington • Real Estate Appraiser, Clark County, Department of Public Works • Real Estate Appraiser/Right-of-Way Agent, Washington State Department of Transportation • Real Property Manager, Phoenix Properties, Inc. Education: The Evergreen State College, Olympia, Washington Bachelor of Arts, Major—Business Management, 1987 Appraisal Education: Real Estate Courses: "Real Estate Law" "Real Estate Finance" "Real Estate Practices" "Principles of Real Estate Appraisal I" "Principles of Real Estate Appraisal II" "Uniform Standards of Professional Appraisal Practice" Appraisal Institute Courses: Successfully challenged "Real Estate Appraisal Principles" Successfully challenged "Basic Valuation Principles" "Capitalization Theory and Techniques Part A" "Capitalization Theory and Techniques Part B" "Report Writing and Valuation Analysis" "Advanced Applications" "Standards of Professional Practice Part A" "Standards of Professional Practice Part B" International Right-of-Way Association Courses: "Appraisal of Partial Acquisitions" "Principles of Real Estate Acquisition" "Engineering Plan Development and Application" "Ethics and the Right-of-Way Profession" "Communication in Real Estate Acquisition" "Bargaining Negotiations" Richard F.Duncan,MAI Page 11 RF Duncan and Associates,Inc. "Relocation Assistance" "Land Titles" National Highway Institute Courses: "Appraisal and Appraisal Review for Federal Aid Highway Programs" "Moving Cost Estimating" Business and Professional Organizations: • Member,Appraisal Institute • Certified Real Estate Appraiser(General)—State of Washington #1100496 Types of Appraisal Assignments: Apartments Eminent Domain Takings—Strip and Before/After Reports Funding Feasibility Studies for Governmental Projects(roads,parks,bike trails, etc.) Office Buildings Retail Special Benefit Studies Subdivisions Undeveloped Land Warehouses Wetlands/Open Space Appraisal Review Richard F.Duncan,MAI Page 12 RF Duncan and Associates,Inc. Appendix B Application Sponsor Private Non - Profit Organization Attachments Applicant Resolution/Authorization Organization Name:Hood Canal Salmon Enhancement Project Name:Moon Valley Acquisitions This resolution/authorization authorizes the person(s)identified below(in Section 2)to act as the authorized representative/agent on behalf of our organization and to legally bind our organization with respect to the above Project(s)for which we seek grant funding assistance managed through Jefferson County. WHEREAS,grant assistance is requested by our organization to aid in financing the cost of the Project(s) referenced above; NOW,THEREFORE, BE IT RESOLVED that 1. Our organization has applied for or intends to apply for funding assistance managed by Jefferson County for the above"Project" 2. Our organization authorizes the following persons or persons holding specified titles/positions(and subsequent holders of those titles/positions)to execute the following documents binding our organization on the above projects: ,ate d Person Authorizedto Sign .,. Grant application (submission thereof) Mendy Harlow—Executive Director Project contact(day-to-day t,us Johnson—Project Manager administering of the grant and communicatin,;with Jefferson County) Jefferson County Grant Agreement Mendy Harlow—Executive Director Agreement amendments Mendy Harlow—Executive Director Authorizing property and real estate Mendy Harlow—Executive Director documents(Notice of Grant,Deed of Right or Assignment of Rights if applicable).These are items that are typical recorded on the property with the county. The above persons are considered an"authorized representative(s)/agent(s)"for purposes of the documents indicated.Our organization shall comply with a request from Jefferson County to provide documentation of persons who may be authorized to execute documents related to the grant 3. Our organization acknowledges and warrants,after conferring with its legal counsel,that its authorized representatives)/agent(s)have full legal authority to act and sign on behalf of the organization for their assigned role/document 4. Grant assistance is contingent on a signed Agreement Entering into any Agreement with Jefferson County is purely voluntary on our part 5. Any grant assistance received will be used for only direct eligible and allowable costs that are reasonable and necessary to implement the project(s)referenced above. 6. Our organization acknowledges that if it receives grant funds managed by Jefferson County,the County will pay us on only a reimbursement basis.We understand reimbursement basis means that we will only request payment from the County after we incur grant eligible and allowable costs and pay them. 7 Our organization acknowledges that any property acquired with grant assistance must be dedicated for the purposes of the grant in perpetuity unless otherwise agreed to in writing by our organization and the County.We agree to dedicate the property in a signed"Deed of Right"for fee acquisitions,or an"Assignment of Rights"for other than fee acquisitions to be recorded on the title of the property with the county auditor.Our organization acknowledges that any property acquired in fee title must be immediately made available to the public unless otherwise provided for in policy,the Agreement,or authorized in writing by the County. 8. This resolution/authorization is deemed to be part of the formal grant application to Jefferson County. 9. Our organization warrants and certifies that this resolution/authorization was properly and lawfully adopted following the requirements of our organization and applicable laws and policies and that our organization has full legal authority to commit our organization to the warranties,certifications, promises and obligations set forth herein. This resolution vauthorization is signed and approved on behalf of the resolving body of our organization by the following auti*rized member(s):7 Signed JIJIJ& G1mitk Title 146 11.Ul'/Kk1 hfl n/1417X02_ Date 5. 17----2__ On Fileat fO ) (J,k14 L GLN akidifiZe148arCAAUuf This Applicant Resolution/Authorization was adopted by our organization during the meeting held: (Local Governments and Nonprofit Organizations Only): Location: 3/i /2-1Date: INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY DISTRICT DIRECTOR 2 CUPANIA CIRCLE MONTEREY PARK, CA 91755 -7406 Employer Identification Number: 91-1518294 Date: r ,( Case Number: 955332004 HOOD CANAL, SALMON ENHANCEMENT GROUP Contact Person: ATTN KATHERINE 0 MARSH TYRONE THOMAS PO BOX 7 Contact Telephone Number: BRINNON, WA 98320-0007 (213) 894-2289 Our Letter Dated: January 1992 Addendum Applies: No 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 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 you have any questions, please contact the person whose name and telephone number are shown above. Sincerely yours, r Richard R. Orosco District Director Letter 1050 (DO/CG) , . HCSEG 2020 Budget i 11 L.,L.i.r. . L ' $0 $1,000 $2,000 $3,000 $4,000 $5,000 57,000 In Thousands FY 2019 FY 2020 PRIOR YEAR Fundraisers and events $ 109,806.73 $ 100,000.00 USFWS operating funds $ 165,952.00 $ 150,030.00 WDFW operating funds $ 212,402.00 $ 200,000.00 RCO-Lovaer Big Quilcene Master plan $ 107,517.00 $ 190,000.00 USFWS-Lower Big Quilcene Master Plan $ 2,725.84 $ 500.00 Floodplains by Design-Lower Big Quilcene Master Plan and Moon Valley $ 217,901.00 $ 1,000,000.60 RCO-Big Quilcene Moon Valley acquisition and planning $ 28,170.70 $ 300,000.00 USFWS-Big Quilcene Moon Valley $ 24,851.66 $ 50,000.00 RCO-INIW-Lower Big Beef Creek Restoration-Phase 3 $ 236,054.69 $ 20,000.00 WDFW ALEA-Forage Fish Assessment $ 3,95855 $ 1,000.00 Union River Griswold Culvert replacement $ - $ 106,601.00 WSDA-Knotweed Control $ 22,845.00 $ 8,000.00 RCO-Riparian Enhancement Project $ 130,431.09 $ 100,000.00 NFWF-Cooperative Weed Management Area $ 5,821.00 $ 14,000.00 WDFW ALEA-Summer Chum Outmigration $ 25,769.00 $ 26,030.00 RCO-Seabed(Creek Bridge $ 112,234.25 $ 1,500,000.00 WDFW ALEA-Steelhead Project $ 7,000.00 $ 7,000.00 WDFW ALEA-Summer Chum Project 5 3,907.07 $ 3,000.00 NOAA Steelhead Project $ 21,186.54 $ 21,000.00 Scholarship Fundraiser $ 8,093.00 $ 9,000.00 Camp Registrations $ 2,017.48 $ 1,000.00 Farm Income $ 4,809.00 $ 5,000.00 Farm Sponsorships $ 2,162.00 $ 4,000.00 Rental income $ 21,275.00 $ 14,000.00 Membership $ 3,141.50 $ 4,000.00 Crew Income $ 32,003.00 $ 50,000.00 Other Income $ 3,953.76 $ 4,000.00 DNR Hahobas Camp $ 160,000.00 5 - USFWS NON,WWRP,ESRP and SRFB-Big Beef Creek Acquisition l$ 2,828,264.00 1$ 535,000.00 ESRP-Duckabush Estuary Design support $ 60,355.00 $ 108,000.00 Tahuya River Estuary Preliminary Design $ 4,688.09 $ 12,000.00 Union River Reath Restoration Planning $ 106,601.00 $ 10,000.00 i Tahuya River Watershed Assessment '$ 110,984.45 $ 109,000.00 1 RCO-Riparian Stewardship(Applied for,not yet received) $ - $ 10,000.00 RCO-Duckabush Estuary Restoration Design and Acquisition(new grant) $ - $ 1,000,000.00 RCO-Moon Valley Reach Preliminary Design(new grant) $ 289,000.00 Int,"AL, $4,786,878.40 $5,961,101.00 r EXPENSES ■FY 2020 PROPOSED FY 2019 PRIOR YEAR r!^ry Sarrc -i v,+ ,,.T ., .del' > _- $4,200 $4,400 $4,600 $4,800 $5,000 $5,200 $5,400 $5,600 $5,800 In Thousands • FY 2019 FY 2020 EXPENSES PRIOR YEAR PROPOSED Salaries 448,076.50 475,000.00 Benefits 67,018.00 70,000.00 Payroll[saes 51,003.00 52,000.00 Utilities 11,473.00 12,000.00 Travel and meetings - 3,923.82 10,000.00 A-133 Audit 11,665.00 13,000.00 Office Supplies and Equipment 4,171.15 4,200.00 Printer lease and maintenance 13,887.76 14,000.00 Farm supplies and maintenance 6,136.90 7,000.00 Facilities Maintenance 25,446.00 15,030.00 Vehicle maintenance 3,901.25 5,030.00 Membership Dues,licenses and subscriptions 8,866.29 10,000.00 Staff Development and training 5,211.00 3,000.00 legal fees 0.00 2,000.00 Insurance 15,304.17 16,000.00 Volunteer/Donor gifts and Prkes 1,521.21 2,000.00 Postage 1,132.10 700.00 IT Services 0.00 1,000.00 Web fees(webske,meeting space,etc.) 250.00 250.00 Trail maintenance 485.92 500.00 Outreach Supplies and Events 19,247.96 20,000.00 Education supplies 322.65 1,500.00 Research Supplies 22,995.00 15,000.00 Data Analysis 16,612.62 15,000.00 AmeriCorps 27,200.00 30,000.03 Internship Stipends and Salaries 24,009.76 20,000.03 Scholarships 4,500.00 3,000.00 Restoration Design and Construction Services 724,183.77 3,500,000.00 Advertising 2,706.40 6,000.00 Grounds Maintenance and Equipment iv 2,000.00 6,000.00 WCC Crew 120,669.55 160,000.00 Interest Expense 95,136.26 100,000.00 land acquisitions 2,930,000.03 1,000,000.00 l TOTALS $4,669,057.04... 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CC 0 C ..�_, 5 Y Hood Canal Salmon Enhancement Group Staff Roster 2021 Mendy Harlow—Executive Director Clayton David—Salmon Biologist Alex Papiez—Stewardship Coordinator Lucas Marin—Education and Outreach Coordinator Alexandra Ehrich—Communications Manager Anna Robinson—Project Manager Gus Johnson—Project Manager Andy Hokit—Project Manager Joanne Tejeda—Design & Marketing Associate Kim Gower—Project Administrator Dana Delhaute—Finance Manager Heather Hamilton—Farm Caretaker Kassie Crissman—Environmental Educator/AmeriCorps Megan Bertucci—Environmental Educator/AmeriCorps Sophie Savoie—Sustainability Coordinator/AmeriCorps Lotte Off—Sustainability Coordinator/AmeriCorps HOOD CANAL SALMON ENHANCEMENT GROUP FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2019 INDEPENDENT AUDITOR'S REPORT 1-2 FINANCIAL STATEMENTS STATEMENTS OF FINANCIAL POSITION 3 STATEMENTS OF ACTIVITIES 4-5 STATEMENTS OF FUNCTIONAL EXPENSES 6-7 STATEMENTS OF CASH FLOWS 8 NOTES TO THE FINANCIAL STATEMENTS 9-17 ADDITIONAL INFORMATION SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 18 NOTES TO SCHEDULE OF FEDERAL AWARDS 21 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND 22-23 ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; 24-25 REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY OMB CIRCULAR A-133 SCHEDULE OF FINDINGS AND QUESTIONED COSTS 26-27 • CLARKE WHITNEY, CPA, INC. 610 Warren Avenue Bremerton,WA 98337 CERTIFIED PUBLIC ACCOUNTANTS Phone: 360-377-4496 www.clarkewhitney.com Fax:360-377-4497 INDEPENDENT AUDITOR'S REPORT To the Board of Directors Hood Canal Salmon Enhancement Group Belfair, Washington Report on the Financial Statements We have audited the accompanying financial statements of Hood Canal Salmon Enhancement Group, which comprise the statement of financial position as of December 31, 2019, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 1 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of as of December 31, 2019, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Report on Summarized Comparative Information We have previously audited the Hood Canal Salmon Enhancement Group's 2018 financial statements, and we expressed an unmodified audit opinion on those audited financial statements in our report dated November 18, 2019. In our opinion, the summarized comparative information presented herein as of and for the year ended December 31, 2018, is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Matters Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, 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. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 15, 2020, on our consideration of Hood Canal Salmon Enhancement Group's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on Hood Canal Salmon Enhancement Group's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering Hood Canal Salmon Enhancement Group's internal control over financial reporting and compliance. e a r te/else, Mg, 41e Clarke Whitney, CPA, Inc. Bremerton, Washington November 15,2020 2 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENTS OF FINANCIAL POSITION DECEMBER 31,2019 AND 2018 2019 2018 Assets Current assets Cash and cash equivalents $ 19,180 $ 29,588 Restricted and reserved cash 125,377 101,645 Contracts and grants receivable, net of allowance for doubtful contracts of$0 (2019) and $0 (2018) 164,685 182,801 Costs in excess of billings 154,468 12,084 Prepaid expenses 21,600 12,800 Total current assets 485,310 338,918 Endowment investments 75,623 64,198 Property and equipment, net 7,917,734 4,992,950 Total assets $ 8,478,667 $ 5,396,066 Liabilities and net assets Current liabilities Accounts payable $ 336,697 $ 236,330 Accrued liabilities 50,879 44,315 Lease deposit 100 100 Credit cards 12,737 2,748 Current portion of long-term debt 46,277 41,400 Total current liabilities 446,690 324,893 Long-term debt 1,062,393 1,001,444 Total liabilities 1,509,083 1,326,337 Net assets Without donor restrictions 1,323,329 1,382,323 With donor restrictions 5,646,255 2,687,406 Total net assets 6,969,584 4,069,729 Total liabilities and net assets $ 8,478,667 $ 5,396,066 See the accompanying notes to the financial statements and independent auditor's report. 3 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31,2019 Without With Donor Donor 2019 Restrictions Restrictions Total Revenues Revenues, gains and support Grants and contracts $ - $ 4,787,795 $ 4,787,795 Contributions 16,501 88,707 105,208 Dues-membership 3,142 - 3,142 Program income 9,564 - 9,564 Investment income (loss) 5 11,425 11,430 Rental income 21,700 - 21,700 Other income 1,419 - 1,419 Total revenues, gains and support 52,331 4,887,927 4,940,258 Sales Sales revenue 8,913 - 8,913 Cost of goods sold (9,215) - (9,215) Gross profit (302) - (302) Net assets released from restrictions Satisfaction for use restrictions 1,929,078 (1,929,078) - Total revenues 1,981,107 2,958,849 4,939,956 Expenses Program services 1,922,002 - 1,922,002 Management and general 116,083 - 116,083 Fundraising 2,016 - 2,016 Total expenses 2,040,101 - 2,040,101 Change in net assets (58,994) 2,958,849 2,899,855 Net assets, beginning of year 1,382,323 2,687,406 4,069,729 Net assets, end of year $ 1,323,329 $ 5,646,255 $ 6,969,584 See the accompanying notes to the financial statements and independent auditor's report. 4 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31,2018 Without With Donor Donor 2018 Restrictions Restrictions Total Revenues 1 Revenues, gains and support Grants and contracts $ - $ 2,245,673 $ 2,245,673 Contributions 41,551 10,189 51,740 Dues-membership 1,738 - 1,738 Program income 57,354 - 57,354 Investment income (loss) - (4,304) (4,304) Rental income 10,800 - 10,800 Other income and gains 105 - 105 Total revenues, gains and support 111,548 2,251,558 2,363,106 Sales Sales revenue 8,984 - 8,984 Cost of goods sold (6,813) - (6,813) Gross profit 2,171 - 2,171 Net assets released from restrictions Satisfaction for use restrictions 1,312,041 (1,312,041) - Total revenues 1,425,760 939,517 2,365,277 Expenses Program services 1,352,516 - 1,352,516 Management and general 95,947 - 95,947 Fundraising - - - Total expenses 1,448,463 - 1,448,463 Change in net assets ( 22,703) 939,517 916,814 Net assets, beginning of year 1,405,026 1,747,889 3,152,915 Net assets, end of year $ 1,382,323 $ 2,687,406 $ 4,069,729 See the accompanying notes to the financial statements and independent auditor's report. 5 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31,2019 2019 Program Management Fundraising Total Staff salaries $ 413,663 $ 50,202 $ - $ 463,865 Staff payroll taxes 44,456 5,383 - 49,839 Staff payroll benefits 58,703 7,124 - 65,827 Total salaries and related expenses 516,822 62,709 - 579,531 Advertising 2,706 - - 2,706 Bad debt 313 - - 313 Bank charges - 3,027 - 3,027 Contract labor 157,951 - - 157,951 Dues, licenses and subscriptions 9,416 1,005 - 10,421 Education and outreach 21,964 - 2,016 23,980 Equipment rental 13,952 - - 13,952 Insurance 12,243 3,061 - 15,304 Interest expense 75,649 18,912 - 94,561 Meetings and conferences 5,211 - - 5,211 Miscellaneous 6 - - 6 Postage 1,132 - - 1,132 Prizes and gifts - - - - Professional services 22,406 2,307 - 24,713 Rental expenses 698 2,696 - 3,394 Repairs and maintenance 25,154 6,288 - 31,442 Research projects 39,608 - - 39,608 Restoration projects 937,900 - - 937,900 Scholarships 2,979 - - 2,979 Supplies 3,978 - - 3,978 Taxes - 4,074 - 4,074 Telephone 3,142 - - 3,142 Travel and transportation 3,808 - - 3,808 Utilities 7,348 1,837 - 9,185 Total expenses before depreciation and 1,864,386 105,916 2,016 1,972,318 amortization Depreciation and amortization 57,616 10,167 - 67,783 Total functional expenses $ 1,922,002 $ 116,083 $ 2,016 $ 2,040,101 See the accompanying notes to the financial statements and independent auditor's report. 6 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED DECEMBER 31,2018 2018 Program Management Fundraising Total Staff salaries $ 413,518 $ 38,855 $ - $ 452,373 Staff payroll taxes 48,211 5,596 - 53,807 Staff payroll benefits 50,551 12,638 - 63,189 Total salaries and related expenses 512,280 57,089 - 569,369 Advertising 1,619 - - 1,619 Bad Debt 200 - - 200 Bank charges 798 57 - 855 I Contract labor 111,056 - - 111,056 Dues, licenses and publications 10,557 - - 10,557 Education and outreach 19,973 - - 19,973 Equipment rental 12,840 - - 12,840 Insurance 16,784 4,196 - 20,980 Interest expense 70,812 17,703 - 88,515 Meetings and conferences 1,239 - - 1,239 Miscellaneous 2,569 - - 2,569 Postage 453 - - 453 Printing and publications 205 - - 205 Prizes and gifts 8,924 226 - 9,150 Professional services - - - - Rental expenses 25 3,515 - 3,540 Repairs and maintenance 13,276 - - 13,276 Research projects 17,960 - - 17,960 Restoration projects 464,284 - - 464,284 Scholarships 11,921 3,750 - 15,671 Supplies 3,883 - - 3,883 Taxes - 344 - 344 Telephone 6,989 - - 6,989 Travel and transportation 2,861 - - 2,861 Utilities 9,630 - - 9,630 Total expenses before depreciation and 1,301,138 86,880 - 1,388,018 amortization Depreciation and amortization 51,378 9,067 - 60,445 Total functional expenses $ 1,352.516 $ 95,947 $ - $ 1.448,463 See the accompanying notes to the financial statements and independent auditor's report. 7 HOOD CANAL SALMON ENHANCEMENT GROUP STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31,2019 AND 2018 2019 2018 Cash flows from operating activities Change in net assets $ 2,899,855 $ 916,814 Adjustments to reconcile the change in net assets to net cash provided by operating activities: Depreciation and amortization 67,783 60,445 Capitalized in-kind contributions (1,761) - Unrealized loss(gain)on investments (9,045) 5,726 Loss (gain)on sale of fixed assets 527 - (Increase)decrease in operating assets: Restricted and reserved cash (23,732) (28,566) Contracts and grants receivable 18,116 (130,475) Costs in excess of billings (142,384) 22,672 Prepaid expenses (8,800) (1,760) Increase(decrease) in operating liabilities: Accounts payable 100,367 136,313 Accrued liabilities 6,564 15,540 Lease deposit - 100 Net cash provided by operating activities 2,907,490 996,809 Cash flows from investing activities Endowment fund investments (2,380) (2,154) Payments for the purchase of property and equipment (2,991,583) (1,021,482) Proceeds from the sale of fixed assets 250 - Appropriations from endowment fund investments - 732 Net cash used by investing activities (2,993,713) (1,022,904) Cash flows from financing activities Proceeds from borrowings 192,157 125,382 Payments on borrowings (116.342) (163,776) Net cash provided(used)by financing activities 75.815 (38,394) Net decrease in cash and cash equivalents (10,408) (64,489) Cash and cash equivalents,beginning of year 29,588 94,077 Cash and cash equivalents, end of year __ 19,180 $ 29,588 Cash paid for interest $ 98,027 $ 82,174 See the accompanying notes to the financial statements and independent auditor's report. 8 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Activities Hood Canal Salmon Enhancement Group (the Organization) is a not-for-profit organization that was formed as a corporation in the State of Washington to protect and enhance the genetic diversity and populations of Wild Salmon (naturally spawning salmon) in Hood Canal by the protection and restoration of habitats, water quality, education, wild salmon incubators and other means to achieve an abundance of Wild Salmon. The Organization also does business under the names: Pacific Northwest Salmon Center and Farm at the Water's Edge. Basis of Accounting The financial statements have been prepared on the accrual basis of accounting in accordance with generally accepted accounting principles. Financial Statement Presentation The Organization follows the recommendations of the Financial Accounting Standards Board in its Accounting Standards Codification (ASC) 958 Not-for-Profit Entities. Under ASC 958, the Organization is required to report information regarding its financial position and activities according to two classes of net assets: with donor restrictions, and without donor restrictions. With Donor Restrictions: Net assets that result from contributions whose use by the Organization is restricted by donor imposed stipulations that may expire with the passage of time or can be fulfilled or otherwise removed by actions of the Organization. Without Donor Restrictions: Net assets that are not restricted by donor stipulation. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses in the financial statements. Actual results could differ from management's estimates. Credit Risk The Organization maintains cash balances in one local bank, which is insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of December 31, 2019 the Organization's cash balance did not exceed the FDIC limit at its financial institution. 9 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash and Cash Equivalents The Organization considers all highly liquid investments with a maturity of ninety days or less to be cash equivalents. Restricted and reserved cash are limited in use, as designated by donors or the reserved intent. These financial instruments are valued at fair market value due to their short-term maturity and low risk nature. Investments Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values based on quoted prices in active markets in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are reported as increases in unrestricted net assets if the restrictions are met (either by passage of time or by use) in the reporting period in which the income and gains are recognized. Contracts and Grants Receivable Grants and contracts receivable are valued at their net realizable value. The calculation of allowance for doubtful contracts is based on an assessment made by management, which determined which of the outstanding contracts receivable are not expected to be collectible. Fixed and Intangible Assets Fixed and intangible assets are stated at cost for purchased assets and fair market value for donated assets. It is the Organization's policy to capitalize expenditures for these items in excess of $1,000. Lesser amounts are expensed. Donated equipment is recorded at its fair market value at the date of receipt. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets as follows: Buildings and capital improvements 40 years Office furniture and equipment 5 to 7 years Vehicles 5 years Intangible assets 5 to 15 years Revenue Recognition Grant and contract revenues and fees for service are recognized when the service is provided. 10 • HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Contributions Contributions are recognized when the donor makes a promise to give to the Organization that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in net assets without donor restrictions if the restrictions expire in the fiscal year in which the contributions are recognized. All other donor-restricted contributions are reported as increases in net assets with donor restrictions. When a restriction expires, net assets with donor restrictions are reclassified to net assets without donor restrictions. Restrictions on gifts of fixed assets or cash for the purchase of fixed assets expire when the asset is placed in service. Functional Allocation of Expenses The costs of providing various programs and other activities have been summarized on a functional basis in the statement of activities. Accordingly, certain costs have been allocated among the programs and supporting services benefited based on the programs and supporting services actual and estimated incurrence of such expenses. Advertising The Organization expenses advertising costs when they are incurred. The total advertising cost incurred during the year ended December 31,2019 was $2,706. Income Taxes The Organization has been determined to be exempt from federal income taxes under Internal Revenue Code Section 501(c)(3) by the Internal Revenue Service. However, income from certain activities not directly related to the Organization's tax-exempt purpose is subject to taxation as unrelated business income. Interest and penalties from such unrelated business income taxes are recognized as separate expenses when incurred, for which there were none incurred for the year ended December 31, 2019. The Organization believes that it has appropriate support for any tax positions taken, and as such, does not have any uncertain tax positions that are material to the financial statements. The Organization's federal Exempt Organization Business Income Tax Returns for 2017, 2018, and 2019 are subject to examination by the IRS,generally for three years after they were filed. Land Held for Conservation Land held for conservation is recorded at cost when purchased and at fair market value at the date of acquisition, if donated. Management reviews each parcel periodically to determine if there has been an impairment to the value that is recorded in the statement of financial position. 11 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Costs in Excess of Billings The Organization receives most of its revenues through contracts and agreements that require billings to be on a reimbursement basis. The costs in excess of billings account allows the Organization to recognize revenues as soon as reimbursable costs are incurred. Subsequent Events The COVID-19 outbreak in the United States has caused business disruption through mandated and voluntary closings of multiple business and nonprofit entities. While the disruption is currently expected to be temporary,there is considerable uncertainty around the duration of the closings. The related financial impact and duration cannot be reasonably estimated at this time. There were no other subsequent events discovered up to November 15, 2020, which is the date the financial statements were available to be issued. NOTE B-RESTRICTED AND RESERVED CASH The Organization receives restricted donations from donors, which are limited for use in programs designated by the donor. The Organization also holds reserved funds related to the repayment of debt and for payments related to the maintenance and repair of its facilities, as required under loan covenants. The balances of restricted and reserved funds as of December 31, 2019 are as follows: 2019 Donor restricted funds Education fund $ 2,500 Restoration fund 2,530 Whittaker cabin rent fund 2,015 Scholarship fund 622 Farm animal fee and care fund 502 Dog park restricted fund 750 Trail project restricted fund 6,193 Founder's restricted fund 30,279 Cutthroat assessment restricted fund 46,134 4-H club fund 502 Amphitheater fund 15,865 Dan O'Neil memorial fund 1,595 Total donor restricted funds 109,487 Board designated reserve funds Facility repairs and maintenance reserve fund 15,890 Total board designated reserve funds 15,890 Total restricted and reserved cash 125,377 12 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE C - ENDOWMENT FUND -DONOR DESIGNATED The Board of Directors of the Organization established an endowment fund for the purpose of supporting the scholarship and internship programs. This endowment has been funded with restricted donor contributions. This endowment fund has a spending policy that only appropriates interest and dividends generated by the endowment as well as any capital gains in excess of 7.00%. The endowment fund has an investment policy that restricts the ability to manage the funds to three elected trustees who are members of the Board of Directors of the Organization. Composition of and changes in endowment net assets for the year ended December 31, 2019 were as follows: 2019 Without donor restrictions $ - With donor restrictions 75,623 Total net endowment assets $ 75,623 Changes in endowment net assets as of December 31, 2019 are as follows: Without Total Net Donor With Donor Endowment Restrictions Restrictions Assets Endowment net assets, as of January 1, 2019 $ - $ 64,198 $ 64,198 Contributions - - - Investment income (loss) - 11,425 11,425 Endowment net assets, as of December 31, 2019 $ - $ 75,623 $ 75,623 Investment income (loss) includes the following: 2019 Dividends and interest earned $ 2,955 Unrealized gain/(loss) 9,045 Realized gain/(loss) 177 Amounts appropriated for expenditures (752) Total $ 11,425 13 • HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE D -FIXED AND INTANGIBLE ASSETS Total depreciation and amortization expense incurred by the Organization for the year ended December 31, 2019 was $65,719 and $2,064, respectively. The Organization's land, works of art, construction in process and certain educational equipment are non-depreciable. The Organization had fixed and intangible assets as of December 31, 2019 that consisted of: 2019 Land $ 6,294,448 Capital improvements 121,127 Buildings 1,766,170 Furniture and equipment 397,384 Vehicles 8,127 Construction in process 36,591 Works of Art 15,400 Intangible assets 14,475 Total fixed and intangible assets 8,653,722 Accumulated depreciation and amortization (735.988) Total fixed and intangible assets,net $ 7,917,734 NOTE E -OPERATING LEASES Non-cancelable lease The Organization entered into a non-cancelable sixty month operating lease for a copy machine in December of 2018. Total rental expense incurred under this lease for the year ended December 31, 2019 was$13,952. The future minimum payments under this lease are listed in the table below. Year Ended December 31, 2020 12,313 2021 12,313 2022 12,313 2023 9,155 Total $ 46.094 NOTE F-REVENUE CONCENTRATIONS The Organization receives substantial support from the State and Federal government to operate various programs. A material reduction in funding or a change in the eligibility to receive such funding could have an adverse impact on the Organization's ability to continue its operations. 14 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE G-LONG-TERM DEBT The Organization incurred the following debt as of December 31, 2019: 2019 Secured mortgage with Craft 3 Capital Corporation has a monthly payment of principal and interest of$11,968 and one irregular last payment estimated at $1,049,851, incurs interest at a fixed rate of 8.5%, was entered into on April 1, 2016 and terms were renegotiated on January 3, 2019 by the Organization, and is secured by the first deed of trust on the buildings and property located at 600 NE Roessel Road, Belfair, Washington. 1,108,670 Less current portion of long-term debt (46,277) Total notes payable, net current portion of long term debt $ 1,062,393 Future maturities of debt over the next five years are as follows: Year ended December 31, 2020 46,277 2021 1,062,393 Total $ 1,108,_670 NOTE H - OPERATING LEASE COMMITMENTS The Organization also owns residential property, which it leases to tenants on a month-to-month basis. The tenants, that have occupied the property since it was purchased and have provided rental income during the year ended December 31, 2019, in the amount of$21,700. There was no schedule of future minimum rental receipts prepared, since the tenants are on a month-to-month basis. Leases from two such properties were terminated during the year ended December 31, 2019, but were considered short-term leases to tenants that were vacating a newly acquired conservation property. NOTE I-LIQUIDITY AND AVAILABILITY OF FINANCIAL ASSETS 2019 Financial assets, at year end $ 8,478,667 Less those available for general expenditures within one year due to: Contractual or donor-imposed restrictions: Restricted by donor with time or purpose restrictions (5,646,255) Financial assets available to meet cash needs for general expenditures within one year $ 2,832,412 15 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE J-RESTRICTIONS ON NET ASSETS Restrictions on net assets at December 31,2019 consist of the following: 2019 Without donor restrictions $ 1,323,329 With donor restrictions: Land held for habitat restoration/conservation 5,461,145 Endowment fund 17 ,6 23 5, 45 Donor restricted donations 5, 09,487 87 Total with donor restrictions Total net assets $ 6,969,584 The Organization has obtained properties that were either purchased by or donated to the Organization for habitat restoration and/or conservation, but only the use of the property is restricted and not the sale or transfer thereof. The value of these temporarily restricted properties held by the Organization was $5,461,145 as of December 31,2019. The Organization received restricted donations, which were restricted by the donors for various limited uses and purposes. As of December 31, 2019, the balance of these restricted donations was $109,487 of these restricted donations. The Organization has an endowment fund that is restricted, as noted in Note B - Endowment Fund - Donor Designated. The amount of funds available to fund scholarships as of December 31, 2019 was $30,144. The Organization received $0 in donations deposited into the restricted endowment fund for college scholarships during the year ended December 31, 2019 and the principal balance in this account, which is permanently restricted,was$45,479 as of December 31,2019. NOTE K-DONATED SERVICES AND MATERIALS The Organization records various types of in-kind contributions. Contributed services are recognized at fair value if the services received (a) create or enhance long-lived assets or (b) require specialized skills, are provided by individuals processing those skills, and would typically need to be purchased if not provided by donation. Contributions of tangible assets are recognized at fair value when received. The amounts reflected in the accompanying financial statements as in-kind contributions are offset by like amounts included in expenses or additions to property and equipment. The Organization received contributed materials during the year ended December 31, 2019, with a fair value on the dates of donation of$2,461. 16 HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2019 NOTE K-DONATED SERVICES AND MATERIALS (CONTINUED) In addition, a number of volunteers donated a total of 12,636 hours to the Organization's program and support services during the year ended December 31, 2019. These contributions in-kind are not reflected in the financial statements since these services do not meet the criteria for recognition. NOTE L-FAIR VALUE MEASUREMENTS The Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 820-201, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This hierarchy consists of three broad levels: Level 1 inputs consist of unadjusted quoted prices in active markets for identical assets and have the highest priority, Level 2 inputs consist of observable inputs other than quoted prices for identical assets, and Level 3 inputs have the lowest priority. The Organization uses appropriate valuation techniques based on the available inputs to measure fair value of its investment. When available, the Organization measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value. Level 2 and 3 inputs are used only when Level 1 inputs are not available. The following table presents the fair value measurements of assets recognized in the accompanying statements of financial position measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2019. Level 1 Level 2 Level 3 Total Investment at Edward Jones $ 75,623 $ - $ - $ 75,623 Following is a description of the valuation methodologies used for assets measured at fair value on a recurring basis and recognized in the accompanying statements of financial position,as well as the general classification of such assets pursuant to the valuation hierarchy. Level 1: Quoted market prices in active markets for identical assets and liabilities Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable or can be corroborated by observable market date for substantially the full term of the assets or liabilities. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Organization's investments are classified as Level 1. Carrying Value and the Fair Value amounts are the same for the year ended December 31, 2019. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term. 17 OD 6A N n - 0 A w w b0 00 0 VD L V N a1i O'0 Qi Gi Vi b9 Y L rn _O .0 Ocoa O O N N O O L 6 .." 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L g p A 0 w +_+ L c O id O iC V ' S7 U V)) d U c s, 0 w p'^ , O N O w 4)) 0 w O 0U O aU O ir b 0 O ai va E6d Ea) aC+d wTO L) Civ °E ) a HOOD CANAL SALMON ENHANCEMENT GROUP NOTES TO SCHEDULE OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31,2019 NOTE A-BASIS FOR PRESENTATION The accompanying schedule of federal expenditures of federal awards includes the federal grant activity of Hood Canal Salmon Enhancement Group and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of,the basic financial statements. II 21 CLARKE WHITNEY, CPA, INC. 610 Warren Avenue Bremerton,WA 98337 CERTIFIED PUBLIC ACCOUNTANTS Phone: 360-377-4496 www.clarkewhitney.com Fax: 360-377-4497 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Directors Hood Canal Salmon Enhancement Group Belfair, Washington We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of Hood Canal Salmon Enhancement Group (a nonprofit organization), which comprise the statement of financial position as of December 31, 2019, and the related statements of activities, functional expenses, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated November 15,2020. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered Hood Canal Salmon Enhancement Group's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Hood Canal Salmon Enhancement Group's internal control. Accordingly, we do not express an opinion on the effectiveness of Hood Canal Salmon Enhancement Group's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency,or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 22 COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether Hood Canal Salmon Enhancement Group's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Organization's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. &u rit 6 W it*, C s4,Xi . Clarke Whitney, CPA, Inc. Bremerton, WA November 15, 2020 23 CLARKE WHITNEY, CPA, INC. 610 Warren Avenue Bremerton,WA 98337 CERTIFIED PUBLIC ACCOUNTANTS Phone: 360-377-4496 www.clarkewhitney.com Fax:360-377-4497 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE To the Board of Directors Hood Canal Salmon Enhancement Group Belfair, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited Hood Canal Salmon Enhancement Group's compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of Hood Canal Salmon Enhancement Group's major federal programs for the year ended December 31, 2019. Hood Canal Salmon Enhancement Group's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. MANAGEMENT'S RESPONSIBILITY Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. AUDITOR'S RESPONSIBILITY Our responsibility is to express an opinion on compliance for each of Hood Canal Salmon Enhancement Group's major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Unifrom Guidance). Those standards and the Unirform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about Hood Canal Salmon Enhancement Group's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of Hood Canal Salmon Enhancement Group's compliance. 24 OPINION ON EACH MAJOR FEDERAL PROGRAM In our opinion, Hood Canal Salmon Enhancement Group complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31,2019. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of Hood Canal Salmon Enhancement Group is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered Hood Canal Salmon Enhancement Group's internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of Hood Canal Salmon Enhancement Group's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly,this report is not suitable for any other purpose. etapite- Okirv,,W'4, Clarke Whitney, CPA, Inc. Bremerton, WA November 15, 2020 25 HOOD CANAL SALMON ENHANCEMENT GROUP SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31,2019 Section I—Summary of Auditor's Results Financial Statements Type of auditor's report issued : unmodified Internal control over financial reporting: • Material weakness(es) identified? yes X no • Reportable condition(s) identified that are not considered to be material weaknesses? yes X none reported Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: • Material weakness(es) identified? yes X no • Reportable condition(s) identified that are not considered to be material weakness(es)? yes X none reported Type of auditor's report issued on compliance for major programs : unmodified Any audit findings disclosed that are required to be reported in accordance with OMB Uniform Guidance? yes X no Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster 66.456 Big Beef Creek Estuary Acquisition 15.614 Big Beek Creek Acquisition Dollar threshold used to distinguish between type A and type B programs: $750,000 Auditee qualified as low-risk auditee? yes X no Section II—Financial Statement Findings There were no reportable findings. 26 HOOD CANAL SALMON ENHANCEMENT GROUP SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED DECEMBER 31,2019 Section III—Federal Award Findings and Questionable Costs There were no reportable findings Section IV—Prior Year Audit Findings There were no prior year audit findings 27 !V Regular Agenda 615 Sheridan Street drehson Port Townsend, WA 98368 www.JeffersonCountyPublicHealth.org Public Healt HEARING FORM JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Mark McCauley, Interim County Administrator FROM: Pinky Mingo, Environmental Public Health and Water Quality Director Tami Pokorny, Natural Resources Program Coordinator DATE: September 7,2021 SUBJECT: Agenda Request: Public Hearing and Possible Decision Regarding Applications for Conservation Futures Funding in 2021 STATEMENT OF ISSUE: On August 23rd,2021,the BoCC approved a Public Hearing Notice to hold a public hearing on the Conservation Futures Program project applications received in 2021 on September 7th,2021 at 10:30 a.m. The notice was published in the Port Townsend&Jefferson County Leader on August 25th and September 1st,2021. The Conservation Futures Program(JCC 3.08)requires a duly noticed public hearing to be held as part of the public process of allocating conservation futures funding to worthy projects that protect public open spaces.At the start of the hearing, Conservation Futures Citizen Oversight Committee(CF Committee)Chair Joanne Pontrello will provide an update of the Committee's recommendations.After the hearing,the BoCC may decide which project(s)to fund by passing resolution(s)to include a factual finding as to whether each project would reduce the county's capacity to accommodate growth. ANALYSIS/STRATEGIC GOALS: The five applications to the Conservation Futures Fund in 2021 are: 1.Big Quilcene River—Moon Valley Acquisitions, $89,500 towards the fee simple acquisition of 75.1 acres to protect portions of two separately owned parcels to protect the floodplain as part of a larger effort to restore the Big Quilcene River in the Moon Valley Reach.Proposed match is$818,469 in grants to the Hood Canal Salmon Enhancement Group(HCSEG)from the Salmon Recovery Funding Board and the Floodplains by Design program.The project sponsor is Jefferson County;The project applicant is the HCSEG. Project location: S23 T27N R2W. Community Health Environmental Health Developmental Disabilities Water Quality 360-385-9400 360 385 9401 360-385-9444 f () Always working for a safer and healthier community (f)360-379-4487 2.Camp Discovery Creek Acquisition,$140,000 towards the fee simple acquisition of 80.6 acres in one parcel to protect the second largest tributary to Tarboo-Dabob Bay located partly within the boundaries of the Dabob Bay Natural Area.Proposed match is$521,000 from the Navy Readiness and Environmental Protection Integration(REPI)program and cash from the Northwest Watershed Institute.The project applicant and sponsor are Northwest Watershed Institute.Project location: S 15 T27N R1W. 3.Hannan Farm, $25,000 towards the acquisition of a conservation easement on one parcel of residential and agricultural land totaling 115.8 acres along the east fork of Chimacum Creek approximately four miles south of Chimacum. Objectives include protecting scenic values,prime agricultural soils and supporting habitat improvements along the creek. Proposed match is a WWRP Farmland Preservation grant of$260,000 and$275,000 from the Navy REPI program. Jefferson Land Trust is the project sponsor and applicant.Project location: S3 T28N R1W. 4. Quimper Wildlife Corridor Additions, $95,000 towards the acquisition of Blocks 1-9 of David's Addition to the City of Port Townsend(4.95 acres)and$5,000 for operations and maintenance.The project will contribute to an existing protected 3.5-mile-long natural wetland,drainage,and wildlife habitat corridor.Proposed match is 2.3 acres of donated land contiguous with the Corridor with an estimated value of$50,000 and$116,790 in cash.Jefferson Land Trust is the project sponsor and applicant.Project location: S4 T3ON R1W. 5. Schmidt Farm—Phase II of Quilcene Headwaters to Bay, $95,000 towards the acquisition of a conservation easement on two parcels of residential and agricultural land totaling 67 acres along Jakeway Creek northeast of Quilcene.The project also requests$5,000 for operations and maintenance. Objectives include protecting pastureland, scenic values and a creek buffer as well as extending a corridor between Quilcene Bay and forested upland areas.Proposed match is$250,000 from the Navy REPI program and $60,000 in cash.Jefferson Land Trust is the project sponsor and applicant.Project location: S18 T27N R1W. At its April 27th meeting,the Conservation Futures Citizen Oversight Committee(CF Committee)voted all in favor that four of the projects are worthy of funding and voted 8 in favor and 3 against that the Quimper Wildlife Corridor Additions was worthy of funding.The CF Committee developed specific award recommendations that were subsequently presented to the BoCC.In response to news that additional funds from a closed project had become available,the Committee met on July 12th to update their recommended funding levels. Chair Pontrello describes them in the accompanying memo. Due to the limited CF funds available,only four of the projects are recommended for funding and one,the Quimper Wildlife Corridor Additions project, at a reduced amount.The total of recommended awards, 324,000,is equal to the final amount of funds available in this cycle. This briefing packet contains: • Five conservation futures project applications and the relevant sponsor information. • Updated Conservation Futures Citizen Oversight Committee recommendations memo • Draft meeting summaries from the April 27th and July 12th CF Committee meetings • Map of conservation futures projects 2003-2020 • Letter from Joel Peterson,Jefferson County Department of Community Development, regarding the four projects located in the County. • Letter from Judy Surber,City of Port Townsend,regarding the one project located in the City. • Draft resolutions consistent with the recommendations of the CF Citizen Oversight Committee as described in Chair Pontrello's memo. Community Health Environmental Public Health Developmental Disabilities Water Quality 360-385-9400 360-385-9444 f 360-379-4487 360-385-9401 (f) Always working for a safer and healthier community ( ) The purpose of the CF Program is to address the"general and increasing need to provide a system of public open spaces...for the health,welfare,benefit and safety of the residents of Jefferson County,"and to maintain"Jefferson County as a desirable place to live,visit and locate businesses."Conservation futures tax levy collections,authorized under RCW 84.34.230 are an important means of retaining community character and accomplishing open space policies and objectives of the Jefferson County Comprehensive Plan. The goal of the program is to preserve and protect the county's open space resources from development,and from being"negatively and permanently affected." On January 3,2006,the BOCC approved Ordinance No. 01-0103-06 in response to Chapter 449 of that year which allowed up to 15%of the conservation future levy monies raised in the preceding year to be used for operations and maintenance needs.Fifteen percent of the revenue collected in 2020($271,860)is $40,779.However,The CF Committee is not specifically recommending the award of operations and maintenance funding this year. Chapter 449 also states that local governments must consider and develop findings on whether or not new CF projects would reduce the County's capacity to accommodate planned growth. Grant agreements for approved projects between one or more of the project sponsors and the County will be developed by Environmental Public Health and submitted to the BoCC for approval. 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 following projects are anticipated to close during the remainder of 2021: Arlandia: $52,138 Big Quilcene River Moon Valley Reach(2nd of 2 properties): $2,500 Pending approval,Quimper Wildlife Corridor Additions: $69,500 The following previously approved projects are anticipated to close after 2019: Dosewallips River Lazy C: $7,649 Pending approval,Big Quilcene River—Moon Valley Acquisitions: $89,500 Pending approval, Camp Discovery Creek Acquisition: $140,000 Pending approval,Hannan Farm: $25,000 RECOMMENDATION: 1) Review the five project proposals brought forth by the CF Committee. 2) Hold a public hearing on September 7th,2021 at 10:30 a.m. Consider the written and oral testimony at the public hearing and adopt any of the enclosed funding resolutions(with or without revisions)for project proposals and funding amounts that the Commissioners may wish to approve. REVIEWED BY: .4441/Ate 3 z. Mark McCauley, unty Administrator Dat Community Health Environmental Public Health Developmental Disabilities 360-385-9400 Water Quality 360-385-9401 (f) Always working for a safer and healthier community (f)360-3779-4487 615 Sheridan Street Allason Port Townsend, WA 98368 www.JeffersonCountyPublicHealth.org Public Healt To: Jefferson County Board of Commissioners From: Joanne Pontrello, Chair Conservation Futures Citizen Oversight Committee Date: Originally June 15,2021; Updated and revised August 24, 2021 Subject: Conservation Futures Citizen Oversight Committee— 2021 Funding Round Recommendations Each year,as authorized in RCW 84.34 and by the direction of the Jefferson County Board of County Commissioners,the Conservation Futures Citizen Oversight Committee(CF Committee)receives applications from the community to fund projects that will conserve open space lands within the county for future use and enjoyment by county residents.This cycle,the CF Committee received five applications for consideration,and I'm pleased to present our updated recommendations for funding.Two of the applications focus on farmland protections and three are primarily concerned with conserving wildlife habitat.With the addition in late-June of turned back funds from the Serendipity Farm project,up to$324,000(originally$237,000)from the Conservation Futures Fund are available to award in 2021. The total request for funding is $454,500.We recommend that four of the projects be awarded, in sum, the new total amount available. After sponsors presented each project during our April 6th CF Committee meeting,members reviewed the written applications and site visit videos.Each person then separately scored the projects on a set of 15 questions in order to assess the merits of protecting each property for open space and its likelihood of project success.The project ranking,as determined by the scores alone,was reviewed,discussed,and confirmed at the April 27th meeting when all of the projects were declared worthy of funding.The top four projects scored in excess 70%. Only the Quimper Wildlife Corridor scored below that threshold but was still voted"worthy of funding". Recommended funding levels were also developed after discussion and presented to the BoCC on June 21 st.At about that same time, it was learned that the Serendipity Farm project would not move forward,making an additional$87,000 available to 2021 projects.Another meeting of the CF Committee was held on July 12te to update its funding recommendations. The task of allocating funds was extra difficult this year given the large difference between requested funds and available funds. I wish we had been able to fund in full all of these projects,given their importance,timeline sensitivity and my respect for the organizations and individuals compiling these projects. 1. Hannan Farm: Received 256.7 points out of a possible 321 points(80%).Requested$25,000; recommended funding: $25,000. 2. Camp Discovery Bay Acquisition: Received 254.8 points(79.4%). Requested$140,000; recommended funding: $140,000. 3. Big Quilcene—Moon Valley Acquisitions: Received 236.6 points(73.7%%).Requested$89,500; recommended funding: $89,500. 4. Schmidt Farm: Received 233.5 points(72.7%).Requested$100,000(including$5,000 for 0&M); recommended funding: $0. Community Health Environmental Public Health Developmental Disabilities Water Quality 360 385 9400 360-385-9444 360-385-9401 (f) Always working for a safer and healthier community (f) 360-379-4487 5. Quimper Wildlife Corridor Addition:Requested 209 points(65.1%).Requested$100,000(including $5,000 for 0&M);recommended funding: $69,100 or remainder of funding($69,500 is confirmed available). Thank you for your consideration of the CF Committee's recommendations for the 2021 funding cycle.If you have questions,please contact me at pontrello@gmail.com or Tami Pokorny at tpokorny@cojefferson.wa.us. Community Health Environmental Public Health Developmental Disabilities Water Quality 360-385-9400 360-385-9444 360-385-9401 (f) Always working for a safer and healthier community (f)360-379-4487 vs ON co Conservation Futures Citizen versi ht Committee w • '` Special Meeting by Remote Connection - Draft Summary �rNo� April 27, 2O21 * Decisions and action items are indicated in bold font. Members Present: Phil Andrus, District 2; Mary Biskup, District 1;JD Gallant, District 3; Rob Harbour, Interest—Working Lands; Richard Jahnke, Interest—Coastal Areas;Joanne Pontrello, Chair, District 2; Ron Rempel, Interest—Wildlife Conservation Biology; Craig Schrader, Interest—Climate Change; Dave Seabrook, Vice Chair, Interest—Food Security; Lorna Smith, Interest—Ecotourism; Dave Wilkinson, District 1 Members Absent: Scott Brinton, Interest—Agriculture County Staff Present: Tami Pokorny, Public Health Rebekah Brooks, Recorder (Rebekah Brooks Contracting) Guests Present: Peter Bahls (Northwest Watershed Institute), Heidi Eisenhour (Jefferson County Commissioner) I. Call to Order: Chair Joanne Pontrello called the meeting to order at 2:02 PM. II. Welcome and Introductions III. Approval of Minutes: Dave Seabrook moved to preliminarily approve the April 6, 2021 CFCOC Meeting minutes as written; Rob Harbour seconded.The motion passed unanimously. Dave Seabrook moved to accept the January 11, 2021 CFCOC Meeting minutes; Mary Biskup seconded.The motion passed unanimously. IV. Approval of Draft of Agenda: Joanne Pontrello suggested pushing the Old Business and Subcommittee Reports to the end of the agenda. Rob Harbour moved to push the Old Business and Subcommittee Reports to the end of the agenda; Richard Jahnke seconded.The motion passed by consensus. http://www.co.iefferson.wa.us April 27,2021 V. Guest Observer comments: Commissioner Heidi Eisenhour said she had been involved with projects for decades in the County and was interested in watching the recommendation and approval process for the Conservation Futures projects. VI. New Business A. Conflict of Interest Consideration Tami Pokorny reminded the group that the Jefferson County attorney no longer feels that it's necessary to use the Appearance of Fairness Forms, and that potential conflicts should interfere with members rating the projects as this body is advisory only. He suggested that members share any involvement they had in any projects for transparency. Rob Harbour and Mary Biskup mentioned their brief associations with the current projects and sponsors, which raised no concerns from the group. B. Review of Project Selection Process Joanne Pontrello went over the project award process. A motion would be needed for each project to determine whether it was worthy of funding. Following that, decisions would be made to decide funding allocations. C. Presentation of Composite Scores Tami Pokorny displayed the scores and ranking of each project, which were as follows: 1. Hannan Farm: 256.7 points 2. Camp Discovery Bay Acquisition: 254.8 points 3. Big Quilcene—Moon Valley Acquisitions: 236.6 points 4. Schmidt Farm: 233.5 points 5. Quimper Wildlife Corridor Addition: 209 points D. Develop Funding Recommendations JD Gallant discussed his concerns with the Big Quilcene—Moon Valley Acquisitions project. He supported the purchase of the land, but he felt that the way the project would be done could hurt Quilcene Bay and the River downriver from the hatchery. Rob Harbour clarified that the Committee would have the opportunity to participate throughout the permitting process. Phil Andrus moved that the Big Quilcene—Moon Valley Acquisitions project was worthy of funding as it scored above the 70% threshold; Ron Rempel seconded.The motion passed unanimously. Phil Andrus moved that the Camp Discovery Bay Acquisition project was worthy of funding as it scored above the 70%threshold; Mary Biskup seconded.The motion passed unanimously. Dave Seabrook asked about the guidelines for a project that the Committee might determine to be not worthy of funding if they were all above the 70% threshold. Discussion followed, and the Committee reviewed the Bylaws. The Committee reserved the right to deem a project worthy of funding regardless of where it scored on the threshold. The Committee could also decide in which order and what amount each project could be awarded funding, irrespective of ranking. Dave Seabrook moved that Hannan Farm and Schmidt Farm projects were worthy of funding because they both scored above the 70%threshold; Ron Rempel seconded. The motion passed unanimously. The Quimper Wildlife Corridor Addition scored below the 70%threshold. The Committee reviewed the scoresheet and corrected some scores that had discrepancies. Phil Andrus requested that the scoresheets be turned in earlier in the future so that the Committee could have the opportunity to review them prior to the Ranking Meeting. Mary Biskup moved that the Quimper Wildlife Corridor Addition still be considered worthy of funding; Richard Jahnke seconded.After discussion,the Committee voted with eight in favor and three opposed. The motion passed. Phil Andrus moved to fully fund Hannan Farm to the request of$25,000;JD Gallant seconds. Mary Biskup expressed concern that purely as a cattle farm, the project offered no climate change benefits. Discussion and agreement followed.The Committee recognized that the point was to preserve the land. The motion passed unanimously. David Wilkinson started the conversation about how to divide the remaining funds by stating that he would be in favor of partially funding rather than fully funding Camp Discovery Bay Acquisition. Discussion followed on the merits and problems of the next three highest ranked projects: Camp Discovery Bay Acquisition, Big Quilcene—Moon Valley Acquisitions, and Schmidt Farm, and various possible funding allocations. Phil Andrus moved to fund Camp Discovery Bay Acquisition at$122,500, and to fully fund Big Quilcene— Moon Valley Acquisition at$89,500; Lorna Smith seconded. The motion passed unanimously. VII. Old Business A. Bylaws Tami Pokorny will put the Bylaw revision on the next CFCOC meeting agenda. B. Sub-Committee Reports Rob Harbour reported that he and Tami had been working on a StoryMap of past projects to offer descriptions of the program and the projects to the public. They will continue after this funding cycle and bring an update back to the full Committee. Tami stressed the importance of photos, and asked the group to provide some high- resolution pictures of projects if they were able to do so. IX. Announcements/Administrative A. Staff Update Tami Pokorny mentioned that the sponsors were concerned that so many extensive questions were asked during the presentations. Phil Andrus requested a meeting to discuss the project questions, times of meetings, and the alignment of the score sheets with the application.The group agreed. B. Next Meeting The next meeting was scheduled for 6/1/21 from 4:00 PM to 6:00 PM. Dave Seabrook requested the attorney's comments in writing. Tami requested comments from the group for a press release about the projects that were approved for funding. X. Guest Observer Comments There were no comments. Xl. Adjournment Rob Harbour moved to adjourn the meeting at 3:34 PM; Lorna Smith seconded.The meeting was adjourned by consensus. Action Items: Tami Pokorny will put the Bylaw revision on the next CFCOC meeting agenda. r � ¢sON coG Conservation Futures Citizen Oversight Committee y (CFC • C) Special Meeting by Zoom Connection 4-S o� Draft Summary NIN�z July 12, 2021 * Decisions and action items are indicated in bold font. Members Present: Phil Andrus, District 2; Mary Biskup, District 1;JD Gallant, District 3; Rob Harbour, Interest—Working Lands; Richard Jahnke, Interest—Coastal Areas;Joanne Pontrello, Chair, District 2; Craig Schrader, Interest—Climate Change; Dave Wilkinson, District 1 Members Absent:Scott Brinton, Interest—Agriculture; Ron Rempel, Interest—Wildlife Conservation Biology; Dave Seabrook, Vice Chair, Interest—Food Security; Lorna Smith, Interest—Ecotourism County Staff Present: Tami Pokorny, Environmental Public Health Rebekah Brooks, Recorder (Rebekah Brooks Contracting) Guests Present: Peter Bahls (Northwest Watershed Institute), Sarah Spaeth (Jefferson Land Trust [JLT]), Blaise Sullivan (JLT) I. Call to Order: Chair Joanne Pontrello called the meeting to order at 4:00 PM. II. Welcome and Introductions III. Approval of Minutes: Richard Jahnke moved to preliminarily approve the April 27, 2021 CFCOC Meeting minutes as written; Rob Harbour seconded.The motion passed unanimously.The minutes from the April 6, 2021 CFCOC Meeting were accepted without comments. IV. Guest Observer comments: None V. Old Business None http://www.co.jefferson.wa.us July 12, 2021 / . ? VI. Sub Committee Reports None VII. New Business A. Serendipity Farm Project Closure and Residual Funds Tami Pokorny anticipated $86,600 additional funds would be available to reallocate due to the Serendipity Farm Project closure. She said that everyone did everything possible to try to salvage the project, but the outcome was disappointing. Sarah Spaeth reported that the landowner was not happy with the appraised or reappraised property values, and also decided they were not interested in the restrictions placed on the property, so they terminated the agreement. Expenses were accrued for the appraisal, survey work and other efforts, so JLT was seeking reimbursement from the County and State. The CFCOC reimbursed the JLT at the allowed rate. The returned funds could now be put towards one of the other projects from the 2021 cycle. B. Sponsor Supplemental Presentations Sarah Spaeth presented on the Quimper Wildlife Corridor, requesting that it be considered for the turned back funds.The Corridor is an ongoing project that has been funded for a number of years by the CFCOC, and was ranked internally by the JLT as the top priority project. Sarah said that Port Townsend residents contribute property tax to the project because it is within the City limits, and that she has heard citizens express concern that the CFCOC should fund projects inside the City limits. Phil Andrus suggested that those citizens who are concerned should give testimony directly to the Committee, where it might have more influence. Mary Biskup was in favor of funding the Quimper project because of its high value to the community. The project request was originally for$100,000. Sarah said that ideally, all of the remaining funds would be directed to this project,and the shortfall would be made up with additional money raised. Dave Wilkinson asked about the ability to raise the remaining funds, and what the viable time frame was for the project if it took more time to raise the difference. Sarah clarified that while some supplementary funds were being raised for this and other projects,the landowners are hoping to sell the Quimper property this fall, so securing additional funding was critical. Peter Bahls thanked the Committee for their participation in the process, but expressed dissatisfaction with the way the NWI projects have been funded in the past. While the NWI projects tend to rank very highly, $18,000 to$20,000 was regularly skimmed off the top of the requested amount to put toward a lower ranking project on the basis that NWI was good at securing additional funds. This year their project ranked second highest and $17,500 was skimmed off to fund projects down the list. The funds that were reduced were designated for the survey, appraisal, management and acquisition- related costs, in addition to administrative costs. He said he would really like to see this . project fully funded based on the ranking criteria. Peter suggested that if the Committee really felt like the project should be scaled back, a request limit should be written in to the application guidelines or addressed by an application question about the sponsor's ability to raise additional funds. Phil asked for some clarification on project costs; Peter explained that while the acquisition amount was granted, there was no money available to actually work on the project because there were no real estate or appraisal funds provided. Rob Harbour asked about the ultimate ownership of the parcel. Most likely, NWI would make the entire purchase, although there was a possibility that the Department of Natural Resources could buy the south half as match. The purchase price was still unconfirmed, but was expected to be between $600,000 and $700,000. Dave asked about the ability of the Committee to recommend funding at a lower level than the ask. Tami confirmed that there was no legal barrier to the Committee making those recommendations. The Committee discussed their process. Phil asked Peter to put his suggestions in writing to the CFCOC so the Committee could go over these issues in more depth during their material revision process. C. Possible Additional Funding Recommendations Rob Harbour pointed out the two options to the Committee:to fully fund the NWI project first with $17,500, and direct the remaining$69,100 to the Quimper project; or to designate all of the remaining$86,600 to the Quimper project. The group discussed the two options, the merits of the two projects, and the uncertain abilities of both organizations to raise remaining funds. Phil Andrus moved to fully fund the NWI project with$17,500, and the remaining$69,100 to the Quimper Wildlife Corridor project; Mary Biskup seconded. The motion passed unanimously. Rob expressed thanks to the sponsors for their input and looked forward to a constructive review. VIII. , Announcements/Administrative A. Staff Update Tami Pokorny said that Joanne Pontrello did a great job presenting the Committee's recommendations to the Board of County Commissioners. Some Committee members will need to attend the next presentation with the new recommendations. B. Next Meeting The next meeting was scheduled for 10/4/21 from 4:00 PM to 6:00 PM. It will include review of the bylaws, manual and application questions. Phil Andrus requested any ideas distributed in writing prior to the meeting. *Tami Pokorny said she did not know when the County attorney would have the bylaws reviewed, but she would keep the Committee posted. X. Guest Observer Comments None XI. Adjournment Richard Jahnke moved to adjourn the meeting at 5:18 PM; Rob Harbour seconded.The meeting was adjourned by consensus. Action Items: *Tami Pokorny said she did not know when the County attorney would have the bylaws reviewed, but she would keep the Committee posted. l lit:, 141 IPt 2$ its i ,ON yb ee..5k,,. . Conservation Futures .....,,o, r „,,) te.' A , .c. 1 -rwe J Jefferson County,Washington 'Ulf 11.:14° i , p---,Z4-f,,- .,... ..‘ . ' --is,---- •." ' i ; Selig,Sr* u,..e on.tt l'. i 1 MO... “, , . ^.e .....11v .....' V , 1 1 I 1 , /.. ---- rown..ed Roc , _., ,78,.., ........ 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Flooeplein r , ce......,8 we \1\ 77, , _ IIIII ce..........•no .775 e/r Seabed , . 5 17 , 777-7.77 1 r;d9 \ l I/ Produced by 7 i ' . 977,..d —\I *I Jetta".County GIS r 0,2s0N (,) JEFFERSON COUNTY DEPARTMENT OF COMMUNITY DEVELOPMENT 621 Sheridan Street,Port Townsend,WA 98368 I Web:wanw.cojefferson.wa.uslcommunitydevelopment /i ‘0 Tel:360.379.4450 I Fax:360.379.4451 I Email:dcd{a7,co.iefferson.wa.us SquareONE Resource Center I Building Permits & Inspections I Development Review I Long Range Planning TO: Tami Pokorny, Jefferson County Water Quality and Environmental Health FROM: Joel Peterson, Associate Planne`t`-\)t DATE: July 8, 2021 RE: 2021 Jefferson County Conservation Futures Program Property Acquisition and/or Operations and Maintenance Project Applications: Summary of DCD Findings for 2021 Conservation Futures Program: Project Name Project Type 1. Big Quilcene River—Moon Valley Acquisition Acquisitions 2. Camp Discovery Creek Acquisition 3. Hannah Farm Easement 4. Schmidt Farm—Phase II of Quilcene Easement Headwaters to Bay Project The Department of Community Development (DCD) reviewed the proposed 2021 Jefferson County Conservation Futures Program Property Acquisition and/or Operations and Maintenance Projects and provides the following findings. When a local government chooses to use Conservation Futures Fund money to purchase an interest in land, it must consider and analyze whether taking land out of the 'stock' of land that can be developed leaves enough land subject to development to accommodate allocated housing and employment growth (RCW 84.34.240). From our analysis, we provide two findings to support this requirement and additional findings from the Jefferson County Comprehensive Plan. Methods: Housing Analysis: DCD reviews the estimated number of potential dwelling units that may be forgone by the Conservation Futures actions and the effect this may have on the County's ability to accommodate our projected 20-year population growth (2018-2038); and how the actions may affect the County's ability to provide employment growth in the same 20-year planning period. Note that any determination made in this exercise is only an estimate based on zoning and a map review of possible site conditions. Employment Growth Analysis: Potential impacts, resulting from the Conservation Futures program actions on Jefferson County's ability to provide for anticipated employment growth, were reviewed by observing current employment conditions in the vicinity of the project parcels, the prevalent employment sector in the area, and consideration of any other potential effects resulting from conservation action that may limit or enhance the County's ability to provide for economic development or jobs. Findings: 1. Housing. The proposed acquisitions and easements of the 2021 Conservation Futures program would extinguish development rights, or purchase land for conservation purposes, which could preclude the opportunity for approximately 21 total theoretical single-family dwelling units and accessory dwelling units (ADUs). A large portion of the Conservation Futures program areas are those which would otherwise be challenging to develop. For example, the theoretical yield is based on acreage only, with the caveat that the area may be restricted by flood zones, wetlands, Channel Migration Zones, or geologically hazardous areas, and would require special permitting processes to develop. Jefferson County has a documented surplus of vacant and underdeveloped parcels which can accommodate the land needs of the County's projected population during the 20-year planning period (2018-2038 Comprehensive Plan Land Use Element). As found in past evaluations, the proposed 2021 conservation actions do not reduce the County's capacity to accommodate future planned growth. 2. Employment Growth. No commercial areas are included in the protected properties. None of the properties are within or near a rural commercial area or urban growth area. Employment or business development that could be forgone by loss of residential dwelling units may include potential home business or cottage industry opportunities. There has been no documentation to suggest there is a reduction in rural employment due to shortage of residential parcels that could support home business or cottage industry. Employment in the project areas would likely consist of agriculture, home businesses, cottage industries or in the natural resources sectors. Limited loss of timber harvest or pasture hay from resource and residential parcels would not make up a significant loss of commercial forestry in Jefferson County. Natural resource conservation has been identified as playing a role in economic development, contributing to a draw of economic development interests to the area due to the quality of life and healthy environment. Project proposals like the Camp Discovery Creek acquisition, continue to be managed for their resources and provide more opportunity for programs that could enhance future employment. Additional Findings from the Jefferson County Comprehensive Plan: 3. The action is consistent with the goals and policies of the Jefferson County Comprehensive Plan for the preservation and enhancement of open space. The Jefferson County Comprehensive Plan identifies goals and policies for the preservation and enhancement of open space as follows: • Policy LU-P-15.2 Protect open space consistent with the goals and policies of this plan and in cooperation with County Conservation Futures and other land conservation programs. • Open Space Goal OS-G-1 guides Jefferson County to"Preserve and improve the quality, value and extent of open space lands." Open Space Policy OS-P-1.4 "Identify and conserve critical wildlife habitat, including nesting sites, foraging areas, 2 and migration corridors within or adjacent to natural areas, open spaces, and developed urban areas. Preserve especially sensitive habitat sites that support threatened species and wildlife habitat in developed areas." • Natural Resources Goal NR-G-1 guides Jefferson County to "Encourage the conservation and long-term sustainable use of resource lands so their continued future use will not be precluded by other uses; and encourage the long-term sustainability of natural resource-based economic activities through Jefferson County. • Economic Development Goal ED-G-6 guides Jefferson County to "Encourage economic development that sustains natural resources and open spaces, protects environmental quality, encourages non-motorized recreation and transportation, and enhances Jefferson County's overall quality of life." 4. None of the proposals include property in an Urban Growth Area or Rural Commercial area. Attachment: 2021 Conservation Futures Housing and Employment Analysis Spreadsheet Scope of Review: This review is conducted solely to ascertain the current Conservation Futures project's potential effect on housing supply and Employment growth. While reviewing the proposals, DCD observed potential issues regarding statements about the potential for future development or land divisions. All applicants are encouraged to take advantage of Community Development's customer assistance programs so that technical provisions of Jefferson County Code can be explained and applied to particular site-specific situations. Specifically, the following statement made in the Hannan Farm project regarding ADU allowances does not appear to be accurate: "The Hannan Ranch property is zoned AP 1:20, with the two residences on site using 2 of the presumed 5 development rights (115 acres at 1:20). It is presumed that 2 ADUs could be added if the owners want to, without exercising any additional development rights." (Application, P. 12. Emphasis added.) In this instance, a single parcel of land is allowed one SFR & one ADU. The current ADU exceeds the maximum ADU size of 1,250 s.f. gross floor area & was placed in the spreadsheet's "Current SFR" category for theoretical D.U. yield only. No additional residential structures or Accessory Dwelling Units would be allowed without a subdivision action, unless additional housing was being created pursuant to JCC 18.20.030(3)(e)(ii)(A), farmworker housing criteria. In the Moon Valley project, the Pollard property proposal included subdivision of an AL-20 parcel, leaving approximately 4 acres for a residential parcel. This action would require an exemption from the State and County subdivision regulations. 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C .f q V1 1/13 .a N N7.1 7 0 7O p E °a 'a c a .To To 3 ` Z , m m o •u w o o .+ .4 00 v are $ € N cur`, — • e ar N N .+ 0 .+ m 00 00 m t\ vs N n m q O 01 00 .-, 0co .. mN LO M a a OD t00 t C 'C Ory C C N N Oqr N O a N a a Q N 0 8 o co O N WCO m 2 O 2 .-, .•, a. a p a O O a0 a) C al a • d Q SI 6 N ).- ff. a E c !IH j co aE ,X S W W ./, ot'o(port 250 Madison Street,Suite 3 Port Townsend,WA 98368(360.379.5095 i www.cityotpt.us Townsend [)EVELOPMFNT SERVICES August 5, 2021 Ms. Tami Pokorny Jefferson County Natural Resources and Environmental Health 615 Sheridan Street Port Townsend, WA 98368 Dear Ms.Pokorny, RE: 2021 QWC Addition —Conservation Futures Application Thank you for forwarding a copy of the Conservation Future Funds application for site acquisition of lots within the city limits. It is our understanding that the"Taimay Jones and Hertel Properties" involve conservation of forty(65)platted lots(approximately 7.25 acres)for the purpose of wildlife and trail access within the Quimper Wildlife Corridor(QWC). • Parcels available for acquisition include: All of Blocks 1 through 9 of David's Addition. • Parcels to be donated: Lots 1 to 20, Block 35 of Fowler's Park Addition. You had asked whether the fee simple purchase and donation of the project area for permanent conservation "would reduce the capacity of land suitable for development necessary to accommodate the allocated housing and employment growth,as adopted in the countywide planning policies". Based on our review of the projected population, Comprehensive goals and policies and existing zoning of the parcels,the answer is no,placing these parcels in permanent preservation would not reduce the capacity of land suitable for development necessary to accommodate the allocated housing and employment growth,as adopted in the countywide planning policies. In association with the City's 2016 GMA Periodic Update,population and employment projections were assessed. The updated forecast and allocation anticipated a significantly slower growth rate than was projected under the City's initial GMA Comprehensive Plan in 1996. In fact,the updated allocation anticipates Port Townsend's 2036 population will be 1,711 less than was projected for the year 2016 under the original GMA Plan. The analysis concluded that the City has adequate capacity to accommodate anticipated housing and employment growth. Of the 65 platted lots under consideration, 32 lots are wholly in and 2 partially in the City's "Potential Park and Open Space Overlay": All of Blocks 1, 6, 7 together with Lot 2 of Block 8 of David's Addition Block 35 Lots 4-16 together with portions of Lots 3 and 17 of Fowler's Park Addition This category includes areas that may have the potential to be included within a comprehensive and interconnected system of open space and trails. The P/OS (A) overlay appears in areas that could be valuable if maintained as open spaces, such as wooded areas, drainage corridors, and scenic vistas. Purchase of these properties was identified as a means of implementing the open space overlay. In addition,the Comprehensive Plan's Land Use Element encourages the City to consider preservation of habitat within Winona Wetlands and the Quimper Wildlife Corridor: • Policy 3.4: Designate and retain wetlands,drainage corridors and other areas that provide essential habitat for priority plant or wildlife species as passive open space.Sites that the City should consider acquiring include, but are not limited to: a. Winona Wetlands.... • Policy 3.5: Where possible,accommodate multiple functions within the open space and trails system, including stormwater management,viewpoints,protection of cultural resources,wildlife habitat,and passive recreation. • Policy 3.6: Coordinate with Jefferson County to identify and designate open space corridors and trails within and between urban growth areas,as required under the GMA. 3.6.2: Support the expansion of a Quimper Peninsula wildlife and open space corridor consistent with the Quimper Wildlife Corridor Management Plan. All the lots considered for acquisition are zoned R-I single-family up to 4 d.u.per acre for a gross yield of approximately 32 units; however, development yield would likely be less due to the presence of critical areas. The area is in Tier 3 of the city's infrastructure tiering strategy, reflecting the extended distance from roads and utilities. In addition, all of the subject lots are located within the QWC. Per the adopted QWC Management Plan" The QWC will ultimately consist of a patchwork of property owned by JLT, the City of Port Townsend, other public agencies such as Jefferson County, Washington DNR, and private individuals." In the preamble to Ordinance 2976, adopting the Quimper Wildlife Corridor Management Plan, City Council acknowledged: "Whereas,The Quimper Wildlife Corridor is a series of high quality wetlands, 100-year floodplains, drainage corridors, and forested connections that serves multiple functions and values including providing buffers, preserving view corridors, providing links between neighborhoods, providing wildlife corridors, and generally serving multi-purpose functions such as storm water treatment and conveyance, all of which contribute to the health, safety and welfare as well as quality of life that Port Townsend residents enjoy." "Whereas, the preservation of the QWC in open space substantially addresses the City's requirements under the Growth Management Act to retain open space while accommodating urban growth." T Given that the Comprehensive Plan anticipated purchase and preservation of properties within the Potential Park and Open Space overlay and Council found the QWC Management Plan consistent with the GMA goal of accommodating urban growth, it is concluded that acquisition of the project for permanent conservation would not reduce the capacity of land suitable for development necessary to accommodate the allocated housing and employment growth as adopted in the countywide planning policies. The proposed acquisition is consistent with the goals and policies of the City's Comprehensive Plan. We are pleased to see it recommended for preservation and are hopeful that the Commissioners approve the application. Please feel free to contact me at(360) 379-5084 with any questions Sincerely, LWYNt. Judy Surber Planning Manager