South Routt The fragmentation of ranches into 35-acre parcels and the right to claim those lots as agricultural land for tax purposes drove a discussion on local agricultural issues Wednesday night.
About 15 members from the agriculture community and Routt County government agencies participated in the discussion as a follow-up to issues raised at the Economic Summit in June.
"To me, 35-acre parcels in the county are a problem," County Commissioner Ben Beall said to start the discussion.
Large ranches that are subdivided and sold in 35-acre parcels the minimum lot size allowed in most open spaces will take the land out of "real" agricultural production, he said.
That goes against the county's goal of preserving agriculture in the Yampa Valley, Beall said.
He asked people at the meeting if it would be wise for the county to pursue changing zoning regulations, raising the minimum lot size from 35 to 160 acres.
Local rancher Doug Monger said the option to sell off 35-acres parcels is a way for agricultural producers to bring in extra income, if it is needed.
"If you go to 160 acres, then you'd have to sell off that much," he said.
As an alternative, Beall pointed at land preservation subdivisions, which were first allowed in Routt County in 1995, to help solve that problem.
LPS regulations provide density incentives to developers who cluster smaller building lots to conserve 100 acres or more as agricultural land or open space. For each 100 acres preserved, the developer can build one extra home over the 1-per-35 ratio.
For example, if a rancher wanted to develop 350 acres of her land, she could either subdivide it into 10, 35-acre lots or develop an LPS in which the lots were clustered on 150 of the acres. Because 200 acres would be preserved in that scenario, the rancher would earn two "density bonus" lots, allowing her to sell 12 lots rather than the 10 allowed under the 35-acre rule.
While an LPS can potentially generate more income, of the approximately 20 LPS projects that have sprung up in the county, only one or two were done by ranchers, Routt County Planning Director Caryn Fox said.
"We we're aiming this at you guys, but that's not what has walked through the door," she said.
Instead, most LPS projects have been proposed by outside developers. Some have kept the open space in active agriculture use or designated it as a wildlife preserve; others have built golf courses.
For some reason, ranchers have shied away from using the LPS option instead of 35-acre subdivision. Beall concluded that was because the county hasn't explained the process well enough to landowners.
"You need to show the landowner that he's not going to lose land value," local rancher Dean Rossi said.
He then added that people maintaining an agricultural tax status on land, even though it is not really in agricultural use, is another piece of the problem.
"It's extremely frustrating with the grayness of the state statutes," Routt County agricultural appraiser Deb Canfield said.
The problem is that state statutes make it easy for people to legally maintain an agricultural use, resulting in break on property tax, even with 35-acre parcels that have only a few acres dedicated to agriculture.
The tax break is dramatic, Canfield said.
For example, a parcel of land that's worth $415,000 on the open market would be taxed roughly $7,000. If that same piece of land is assessed by the county to be in agricultural use, the taxes would be $85, Canfield said in an interview last month.
Because of this break, many people have agricultural status on properties that aren't really ranches, she said.
The impact is that one-sixth of the property owners in Routt County pay about 94 percent of the all property taxes collected, assuming one-third of the county is National Forest Land, Canfield estimated.
Sooner or later, taxpayers fed up with abuse the loophole will do away with the ag tax classification altogether, Beall feared, ultimately hurting the legitimate agricultural producers that the tax breaks are supposed to help.
"We're going to lose our ag classification because we don't have the votes to pass it," he said.
Everyone agreed that the state needs to adopt a better definition for agricultural land.
The informal group also decided to meet again, and asked extension agent C.J. Mucklow to try to get someone on the state level of government to participate. No date was set for the next discussion.
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