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The holder of a conservation easement must monitor the eased property to confirm compliance with conservation restrictions and, when necessary, take action to uphold the conservation objectives of the easement. These and other stewardship activities result in costs, year in and year out, to the holder.
With conservation easements, a holder's main responsibilities begin with the signing of the easement document. Stewardship of conservation easements includes regular site monitoring visits, responding to landowners’ questions about the easement, maintaining positive relationships with landowners, building relationships with new landowners, ensuring easement violations are resolved, responding to landowners’ requests to exercise reserved rights, and amending the easement when necessary. (Although uncommon, some easements require a holder to perform management on the land, such as maintaining a specific habitat or removing invasive weeds; if so, that work would also be a stewardship activity.)
These activities and associated costs continue in perpetuity.
This guide provides readers with a basic understanding of what activities are involved in stewardship and the average or range of costs associated with each. The numbers provided are drawn from the Pennsylvania Land Trust Association’s 2011 survey of the literature of conservation easement stewardship. The survey relied heavily on averages found in sample stewardship cost calculators. Readers should be aware that the sample size for this data is small and no stewardship cost calculator was found that included all cost categories discussed in this guide, though some of these categories, such as legal costs associated with regular landowner communications, may not be commonly needed for larger land trusts that have staff with specialized skills and knowledge. It should also be noted that most of the average costs came from larger, well established land trusts; the experience of newer easement holders may differ. For example, newer organizations may be more reliant on outside consultants, and those costs may be higher than those of the staff of larger organizations. Therefore, readers will need to estimate costs based on the specificities of their easements.
The digital spreadsheet that accompanies the guide provides a sample calculator to help holders estimate the cost of stewardship for a proposed easement.
To fund stewardship, holders should establish a stewardship endowment or stewardship fund that is segregated from the holder’s other assets and used strictly for stewardship purposes. The sample calculator can also be used to estimate how much money will need to be invested in a stewardship fund to cover stewardship costs.
As holders proceed with their stewardship work, they should carefully record their expenses to develop a better understanding of their long-term stewardship liabilities and the fiscal impact of each new easement project. According to the Land Trust Alliance’s publication Conservation Easement Stewardship Costs and Funding, which summarizes stewardship cost experiences from several New England land trusts, stewardship “always costs more than you think” (Lind, 2004, p. 2), reinforcing the importance of tracking actual stewardship costs and factoring this into long-term planning. Organizations that remain solvent in the long run will have successfully balanced the liabilities inherent with holding easements with reliable resources to offset those liabilities.
Allowing the subdivision of an eased parcel into two may nearly double the costs of stewardship if and when the landowner exercises this right. Subdivision into three parcels may nearly triple the costs and so forth. As each new parcel moves into separate ownership, it essentially brings into existence an independent set of easement management issues – most notably landowner relations and easement enforcement – and associated liabilities. (Travel costs may be mitigated if monitoring visits can be coordinated between the different landowners and neighboring properties monitored at the same time, but such savings won't be found in most other stewardship activities.)
Although a holder may, at the time a conservation easement is acquired, be using volunteers to conduct some or all of its stewardship, for planning purposes, holders should estimate stewardship costs based on the use of paid staff, not volunteers. Conservation easements must be stewarded in perpetuity, and as the number of easements held by a holder increases, easement stewardship can become too much for volunteers to handle (or to handle without substantial staff support). Additionally, a holder should consider that it could lose its volunteer energy over the decades and even cease to operate. In this case, will another organization be willing to accept the holder’s conservation easements without a corresponding endowment contribution that reflects staff – not volunteer – costs of meeting easement responsibilities? This is not to discount the important role of volunteers in stewardship. They play a vital part in many organizations. It is simply a mistake to plan on volunteers being able to handle easement responsibilities in perpetuity.
Volunteers can greatly strengthen a holder’s stewardship capacity. For example, volunteer monitoring and reporting can enable a holder to build its stewardship endowment or fund to meet its long-term obligations. Instead of using income from the stewardship fund for staff monitoring and reporting expenses, the fund’s income may be reinvested to build the fund for as long as volunteers can be relied upon for stewardship.
Holders have found that stewardship demands increase after land ownership changes from the landowner that initially established the easement. Holders are likely to spend more time answering questions and dealing with potential and actual easement violations with subsequent landowners. Future landowners are more likely to be hostile towards provisions of the easement, (Bay Area Open Space Council, 1999). In “Conservation Easement Violations: Results from a Study of Land Trusts” (Exchange, 2000), Melissa Danskin reported on 15 easement violations that required litigation to resolve. None of these violations were committed by the original easement grantor.
The Land Trust Alliance (Doscher, Lind, Sturgis and West, 2007) estimates that a full time staff person or volunteer can complete the stewardship of 50-100 properties a year. This is of course dependent on the nature of the properties and the complexities of the easements.
Based on the reports of eight land trusts, as found in the literature survey, average annual stewardship costs are $786/easement, with a range of $431 to $1,500 (excluding the costs to resolve major easement violations). The following describes the costs involved with the components of stewardship.
There are several activities that some organizations classify as initial stewardship expenses and others as the costs of establishing the easement: baseline documentation, installing signs indicating the property has been preserved and landowner education.
A crucial part of easement monitoring is proper baseline documentation, a record that establishes the condition of the property at the time an easement is signed (or as soon thereafter as possible). It is used to measure property changes and future development against the terms of the easement. It is a critical document in case of an easement violation. At ConservationTools.org, the costs of baseline documentation are discussed in the guide “Costs of Due Diligence in Conservation Acquisitions.”
When the conservation easement document is drafted, the grant to holder should be written to include a right of holder to install one or more signs to notify the public of the property’s conserved status, call attention to the benefits of conservation and provide supplemental notice to prospective purchasers, lessees and other users of the property of the property’s conservation restrictions. (The model conservation easements published by the Pennsylvania Land Trust Association include this provision in Article V.) Signs typically would be installed along a public right-of-way and/or along the easement boundary. Signs can vary greatly in size, material and cost.
To identify the average costs of installing signs, grant applications to the Conservation Easement Assistance Program were analyzed. In these applications, land trusts reported to the Pennsylvania Land Trust Association the costs actually incurred for installing signs on eased properties. Eighteen applications for sign installation between 2007 and 2011, submitted by five land trusts, were analyzed. Additionally, the literature search found two examples of estimated costs of sign installation.
The analysis found that sign materials cost an average of $372 per eased property with a range of $10 to $1,595. The cost of personnel and mileage for installing the signs on each property averaged $259 with a range of $44 to $438. (Reports of zero costs were not included in this average.) Thus, in total, the costs of installing signs on a conserved property averaged $540 with a range of $10 to $2,033.
Holders should ensure that the owners of the eased property understand the holder’s stewardship policies and procedures and what resources the holder can offer to the landowner. A simple way to accomplish this is a packet of information that can be reviewed prior to the easement being signed. Information on average costs for initial landowner education was not found.
"Land Trust Standards and Practices" (Land Trust Alliance, 2004), Practice 11C states the following:
Easement Monitoring. The land trust monitors its easement properties regularly, at least annually, in a manner appropriate to the size and restrictions of each property, and keeps documentation (such as reports, updated photographs and maps) of each monitoring activity.
Conservation easement monitoring is the regular inspection of the eased property to ensure the terms of the easement grant are being upheld. Monitoring allows holders to observe and document changes in a property’s condition, prevent violations from occurring, find existing violations, maintain a relationship with the landowner(s) through regular contact, remind landowner(s) of the easement’s provisions, find areas where land management technical assistance can be provided, and establish records in case legal action is necessary.
Monitoring costs include staff time for preparing for the inspection, including file review and contacting the landowner, inspecting the property and preparing an inspection report; travel (gas and mileage, meals while traveling, tolls, etc.); consultants, (i.e. GIS services if staff/volunteers don’t have the proper training and specialists to review and monitor particular easement provisions, such as forestry management); and equipment (camera, GPS equipment and software, photo printing). If volunteers are involved in monitoring, the costs of a volunteer program (staff time to oversee, trainings [whether holder sponsored or from outside organizations] and recognition events) should also be factored in.
The Land Trust Alliance (Doscher, et al., 2007) identified easement attributes that could necessitate more frequent monitoring, and these additional costs should be factored in when estimating an easement’s annual stewardship costs. These factors are:
Additional monitoring may not need to be as extensive as the regular annual monitoring. Some holders make frequent drive-bys an integral part of an increased monitoring regiment.
Several factors will affect how long it takes to complete a monitoring site visit. These include the size and shape of the property, the complexity of the easement, the permitted uses of the eased lands, the types of land uses on adjacent lands, the number of home sites at the time of the easement, the number of reserved home sites, and the accessibility of the eased land. Holders should also factor in the average travel time between easements and the trust’s office.
Although larger easements will be more costly to monitor than smaller ones, many costs are not proportional to the size of the easement. While it will take longer to view the land of a larger easement, other costs, such as communications with the landowner and travel to the property, are not related to size.
Several other factors that can increase monitoring costs were identified in the literature (Parker, 2002), (Doscher, et al., 2007), and (Saffeir, 2009):
As an example of how permitted use of eased land can affect monitoring costs, in “A Report on Working Forest Conservation Easements” (Nova Scotia Nature Trust, 2000), it is reported that the Society for the Protection of New Hampshire Forests requires 1.25-1.5 days for the monitoring of each of its easements, which is higher than the average reported monitoring time of 5.25 hours. Most of the Society’s easements allow forest harvesting and require the use of a forest management plan.
Some holders use low altitude aerial monitoring as an additional tool to track changes in eased properties. It can be a cost effective means of reviewing a large easement or several small ones in the same area because land can be viewed at a significantly faster rate than on-ground monitoring. Additionally, it can allow holders to monitor areas that might be inaccessible or hard to access on the ground. When potential violations are observed, on-ground monitoring should be used as follow up.
Some holders use satellite imagery. Satellite images can provide a cost effective tool to detect landscape changes for large properties or for nearby properties that can be captured in one image.
Average estimated time and cost for monitoring, as reported in the literature by 5 individual land trusts and one study (102 holders in San Francisco), are 1.5 hours to prepare for a monitoring site visit (file review, landowner contact), 4.1 hours for the monitoring visit (including travel time), and 1.9 hours post-monitoring trip (reporting, landowner contact). Average total cost for monitoring is $335. Information about average costs for aerial and satellite monitoring was not found.
"Land Trust Standards and Practices"; (Land Trust Alliance, 2004), Practice 11D states the following:
Landowner Relationships. The land trust maintains regular contact with owners of easement properties. When possible, it provides landowners with information on property management and/or referrals to resource managers. The land trust strives to promptly build a positive working relationship with new owners of easement property and informs them about the easement's existence and restrictions and the land trust’s stewardship policies and procedures. The land trust establishes and implements systems to track changes in land ownership.
Landowner communications include, but should not be limited to, meeting with the landowner during annual monitoring and responding to landowner requests and questions. Additional forms of landowner communications include educational events, maintaining a webpage, creating educational publications, sending out newsletters, hosting annual landowner events, landowner recognition for resource management, provision of technical assistance to plan and implement best land management practices, and referring landowners to land management funding sources. It is also essential for holders to track changes in land ownership and holders must ensure new landowners understand the existence and terms of the easement as well as the holder’s stewardship policies and procedures.
The Vermont Land Trust (Shaffer, 2009) credits their efforts to move from viewing stewardship as enforcement to channeling their efforts into building partnerships with landowners with dropping their easement violation rate to 2%, well below the 5% average reported by land trusts nationally. They also rarely have a major easement violation. “As partners, we assume that landowners know what is best for their land, will do what is best by it, and unless proven otherwise, are acting with integrity and in good faith with us.” The Vermont Land Trust provides landowners and communities with assistance and education on land management and land-based enterprise development and to engages landowners in the trust’s work. They do this while they “remain true to our core stewardship responsibilities: monitoring easements, responding to landowner inquiries, investigating violations, documenting properties at the time of conservation, and upholding the terms of our more than 1,600 conservation easements.”
Average estimated time and cost for landowner relationships, as reported in the literature by 3 land trusts, are 1.7 hours of staff time and $25.50 in material costs (printing, stamps, etc.).
Some easements include reserved rights, such as the right to construct a building or to extract timber or other resources. Often these reserved rights require the holder to review and approve the activity. Holders must be prepared for review of the request to exercise the right, which can include at least one site visit, review of the easement language, review of the landowners’ plans (e.g., construction or timbering plans), hiring of outside consultants such as foresters or architects, and meeting with the landowner to discuss, negotiate, and/or modify plans.
While the rights are being exercised, the holder must carefully monitor to prevent violations, either intentional or from a misunderstanding. Holders may want to meet with the person or people carrying out the action, such as the construction manager or forester. Remember, it is easier to address potential violations during, rather than after a building is constructed or trees harvested. For construction, the holder should also prepare for conducting a post-construction site visit with documentation of the construction work that occurred. Holders must maintain careful records of the review, approval and inspection of exercised rights.
Holders should decide how to cover the costs of approval and monitoring of reserved rights before accepting an easement. The grant of conservation easement may be drafted to require landowners to cover the costs at a set rate before the review and approval process begins, afterwards, once all activities have been completed and the cost of the work accounted for, or a combination of the two. Holders can also include the costs as something the holder will cover out of its stewardship endowment fund.
Average estimated time and costs for the review, approval and monitoring of landowner’s exercise of reserved rights, as reported in literature by four land trusts, are 10.75 staff hours, 1.5 site visits, and a total cost of $564.
Over time, stewardship will inevitably result in questions about easement interpretation, proper procedures, and other points of law. Handling requests to exercise reserved rights will likely require legal services; easement interpretation and enforcement after a violation will always require legal services. For the easement holder, having ready access to an attorney to answer questions and provide legal counsel is essential.
Many holders seek board members who are attorneys to help address the day-to-day legal matters and some lawyers will provide their services to holders pro bono or at a discounted rate. Pro bono or discounted legal advice however is not guaranteed and holders should include legal advice at full cost in their estimates of stewardship costs. No literature was found regarding average costs or attorney hours needed for this type of legal work.
This guide separates enforcement of easement violations into two categories, minor (those that don’t require litigation) and major (those that require litigation). Violations can generally be resolved without legal action. However, even without litigation, the holder may expend significant resources to reach resolution. Staff will need to travel to the property to inspect and document the violation, meet with the landowner, (and possibly the violator if not the same person, such as a neighbor), develop and negotiate a resolution, and inspect the site once the violation has been resolved. Staff may need to work with original owners, new owners, and neighbors. Legal counsel should be obtained to review the easement and offer advice on appropriate responses. Outside consultants may need to be hired to provide additional technical expertise, such as water quality testing. The holder may find it necessary to remediate damage to the property’s natural resources itself, and could incur significant costs to do so. It is sometimes impossible to recover the costs of resolving violations and holders should be accordingly prepared.
Average estimated time and costs for resolving minor violations, as reported in literature by four land trusts, are 22.5 staff hours, 2.3 site visits, and a total cost of $1,241. The average likelihood of this happening in a year is 12%.
Although taking a violation to court is generally viewed as a last resort, it may be necessary to prevent further resource damage or force a landowner to repair damages. Taking a case to court can be very costly, both in legal fees and staff time. As it can hurt a holder’s public image, additional work might be needed to rebuild relationships with other landowners and the community at large. If litigation is necessary, the holder must be able to hire legal counsel with litigation expertise, actively participate in the formulation of the case; and provide careful baseline, monitoring, and violation documentation. The holder must be able to ensure it has sufficient funds to cover the costs, or the ability to obtain them. Every holder should plan on eventually facing some form of major legal challenge.
A 1999 Land Trust Alliance survey (Danskin, 2000) of 147 land trusts that had, on a previous survey, indicated they had experienced one or more easement violations or had amended an easement, revealed that land trusts’ legal fees for major easement violations averaged $35,000 (which includes those that did not go to trial), and ranged from $5,000 to $100,000. Legal costs were recovered in half of the litigated cases. In its materials for its Conservation Defense Insurance program, the Land Trust Alliance (2011) estimates a range of $70,000 to $100,000 in costs for a typical trial in a typical jurisdiction, $35,000 for summary judgment motions and $150,000 for an appeal. They also cite cases where costs far surpassed these averages: One land trust accrued over $1.5 million in outside attorney fees and in another four cases, those costs exceeded $250,000. A case in California, which settled before trial, cost the land trust over $200,000.
In a 2008 survey, Rissman and Butsic (2011) asked land trusts whether or not they had dealt with an easement violation or legal challenge that required more than $5,000 in non-staff costs. For both eased and fee-owned lands, 47% had at least one violation in this category. There was an average of 7 years between conserving the land and the land trust learning of the first violation. Fifty-three percent were resolved within 2 years; 15% lasted at least 5 years. The authors found that “one-quarter (27%, 26 of 97) of the land trusts that ever experienced a legal challenge or violation would have considered pursuing legal action if greater funding had been available, in at least one instance.”
It is not known how often holders should expect a major violation. Past experience can’t be relied on to predict the future because:
If the landowner seeks an easement amendment, the holder would normally expect the owner to pay for the costs of doing so. However, if a holder initiates an amendment, which likely would be to correct a deficiency in the easement language, (which is probable in older easements) the holder most likely would bear its costs. The Land Trust Alliance estimates the cost of an amendment to range between $500 and $5,000, and possibly higher (Doscher et al., 2007). Projects to amend/restate easements supported by the Pennsylvania Land Trust Association ranged in cost from $676 to $9,425 with an average cost of $4,826. Legal costs were the largest component of this, ranging from $90 to $9,144 and averaging $3,535 (based on five Conservation Easement Assistance Program applications from three different land trusts between 2007 and 2010).
When calculating staff costs, indirect (overhead) costs should be included since staff can’t operate without overhead support. Indirect costs are those not specifically identified with the stewardship work, but which are necessary for the general operation of the holder and its work (including stewardship). Indirect costs include support staff salaries, staff time needed to work with boards and committees, staff time needed for policy development, computers, file systems, (fireproof file cabinets, files, binders, offsite storage), phones, trainings, rent, utilities, insurance, and office maintenance. Holders that rely partially or completely on volunteer time for stewardship should estimate what their costs would be if they had staff. The same should be done for organizations without an office. No literature was found describing commonly used methods to make this estimation for holders currently without staff or office space.
To fund stewardship, holders should establish a stewardship endowment or stewardship fund, which is segregated from the holder’s other assets and used strictly for stewardship purposes. Annual stewardship costs should be paid for only from the fund’s income, not the fund’s principal.
To determine the amount a holder needs to invest in its stewardship fund in order to cover annual stewardship costs, the estimated annual stewardship costs are divided by the expected return on investment. For example, if estimated annualized stewardship costs are $375 and the holder expects a 3. 75% rate of return above inflation on investments, $10,000 should be invested in the stewardship fund. In previous years, 5%, after inflation was a common estimate of the average annual return on stewardship fund investments. In recent years, organizations have revised downward their expected rates of return to reflect the poor performance of investment portfolios over the first decade of the new century. An internet search found current estimated rates for four land trusts, which average out to a 3.75% expected rate of return after inflation.
Since a stewardship fund is intended to fund stewardship costs in perpetuity, it is appropriate to look at investment returns over a long period. Over the twenty years ending in 2010, the average annual return of the S & P stock index was 5.7% after inflation. Over the forty years ending in 2010, the average annual return of the S & P stock index was 5.5% after inflation.
Calculated roughly, if a holder estimates a major easement violation to cost $65,000 and to occur once in 20 years, the holder would need to save $3,250 a year ($65,000*(1/20)), to fund the cost of the defense. To fund this cost out of a stewardship fund, assuming a 3.75% rate of return after inflation, a holder would need an initial endowment investment of $86,667 ($3,250/3.75%). If the holder assumes a major violation is expected to occur once every 50 years, the holder would need to save $1,300 a year ($65,000*(1/50) with an initial investment of $34,667 (1,300/3.75%). If the holder assumes a major violation is expected to occur once every 100 years, the holder would need to save $650 a year (=$65,000*(1/100)) with an initial investment of $17,333 ($650/3.75%).
Obviously, asking most landowners for that large of a stewardship fund donation is not feasible and this points to the fundamental problem that most holders are likely unprepared to cover the costs of major easement defense. Easement documents should require owners to reimburse the holder for all costs associated with a violation, but there is no guarantee that a court will enforce this requirement. Some holders divide the cost of a single easement defense amongst multiple easements (50-100). This method has two major flaws. First, it assumes that only one easement will need to be defended in court against a violation. Second, small holders would not have 50-100 easements to spread the costs over.
Holders will likely soon have a new tool when planning for the legal costs of defending an easement. The Land Trust Alliance is in the process of establishing a conservation defense insurance program, which will be owned by its members to insure the costs of upholding conservation easements and fee lands held for conservation purposes when they have been violated or are under legal attack. The insurance program is a ‘risk retention group,’ a mutual insurance arrangement whose business is limited to insuring its members, all of whom will be members of the Land Trust Alliance. The conservation defense insurance has more steps to take before it is ready to stand on its own. For information on the program and premium costs, visit the Land Trust Alliance’s insurance program web page.
A sample costs calculator, based on this literature survey is found in the ConservationTools.org library. The sample calculator is based on a fictional conservation easement. As discussed in this guide, there are many factors that can increase or decrease potential stewardship costs. When using this calculator, holders should carefully consider the specificities of each easement and adjust time and cost calculations appropriately.
The calculator also factors in the probability of each stewardship activity happening in a year. For example, if an easement violation is estimated to occur once every 20 years, then the probability of an easement occurring in a single year is 1/20, or 5%. To find the yearly amount needed to cover an activity, simply multiply the cost by the percent chance of it occurring in a single year. For example, if the defense of an easement is $65,000 and it is estimated to happen once every 20 years, a holder would need to save $3,250 (65,000 x .05) each year.
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