Cone Ranch panelist and attorney Pamela Jo Hatley had some harsh words for the county’s actions regarding Cone Ranch. She has already come out against the recommendation recently to get a costly appraisal on the land (which is already owned by the County) before transferring it to ELAPP (the county’s own preservation land buying program.) You can see her earlier email to Commissioners in this recent post by George Niemann. Hatley also spoke out in this very informative commentary in the Tribune. Recall county staff convinced six out of seven of our Commissioners that we needed a costly appraisal on the land. Hatley dispels the need for that in that Tribune piece in part by exposing this:

In 1991 the county transferred Cone Ranch from a general real estate asset to a water department asset and replaced the corresponding tax revenue bond debt with utility revenue bond debt. No expensive appraisals or market price were required to make the transfer at that time.

And later she states:

Instead of allowing the water department to exploit the public trust in this way, the county should follow its own 1991 precedent and simply transfer Cone Ranch to ELAPP at book value.

Now, she hits even harder in an email to Kent Bailey. Bailey is a citizen who has worked tirelessly to save Cone Ranch from the jaws of subdivision and development. Recall this idea to sell the publicly owned ranch of over 12,000 acres was proposed by some big time Republican donors and then brought forth to the County Commission by Chairman Ken Hagan. The rest of the board obliged Hagan’s request and created a panel to look at the idea of selling off the land. So far it has cost you over $50,000 just to study this idea and it appears that the highly paid staff Mike Merrill could have misled panelists, citizens and Commissioners. The panel ultimately decided to recommend that the land go to ELAPP (the county’s own land-buying conservation program) as did the Commissioners but not before throwing a huge wrench in it by voting to get an expensive appraisal at the urging of Merrill which could cost taxpayers hundreds of thousands of dollars. They also ignored Commissioner Kevin Beckner who thought it might be good to have an independent review of this at the last meeting. Beckner was the only Commissioner who did not vote for the expensive appraisal.

Merrill is now backpedaling and offering Commissioners other options but he seems to be pushing to wait five years for the transfer. His backpedaling since the last meeting doesn’t change the fact that he got Commissioners to vote for the appraisal and in the meantime public trust has eroded regarding any of Merrill’s actions or recommendations.

Why don’t concerned citizens want the costly appraisal? Besides the obvious misuse of tax dollars, if it came back high then it could make it out of reach for ELAPP to purchase. Considering taxpayers already bought it once it seems foolish to spend a fortune to appraise land to sell (or transfer) to ourselves. That coupled with the past schemes to develop this land like Commissioner Jim Norman’s failed Championship Park idea also make some people suspicious. It sure seems like somebody is throwing up road blocks which most board members are obediently stopping for.

Hatley bravely exposes the holes in those prior road blocks recommendations with this email yesterday:

I believe the Cone Ranch matter has revealed a practice by the County that is dishonest, scandalous, and probably illegal. Officials in the county who are focused on government finance have consistently claimed argued that Cone Ranch is an asset of the water department, and when the water department sells an asset it must receive compensation in an amount equal to fair market value. But in reality water department assets are all owned by Hillsborough County. In fact, Mr. Vanderploog’s presentation to the advisory committee on June 29 stated that “Enterprise assets” are the “sole property of the County.” Therefore, when the water department “sells” its assets to other county departments, it is actually NOT a sale because the county cannot sell property to itself. It is actually just an accounting transaction to transfer an asset from the books of one department to the books of another. So the first point is: transfer of property from the water department to other county departments is NOT a sale of property.

County finance officials have also consistently emphasized that the water department is a “closed system.” As such, the water department must fund its operations by generating its own revenue. It generates its revenue by selling services to its customers. In fact, the staff report to be presented to BOCC on January 21, 2010 as agenda item G-3 states (p. 2) “The Utility is an enterprise fund of the County…charged with providing water and wastewater services to customers in a manner similar to a private business enterprise. The enterprise fund is responsible for ensuring that its rates, fees, and charges are sufficient to: pay the cost of operations and maintenance; fund debt service requirements when due; fund required repairs and replacements of Utility assets; and make all required deposits to maintain reserves” (emphasis added). It is the water department’s customers who pay these “rates, fees, and charges;” NOT the taxpayers. And the utility bonds the county issues to fund water department projects are repaid by a pledge of utility revenue. So the second point is: the water department is not funded by ad valorem taxes (or at least, it is NOT SUPPOSED to be).

Although the water department is supposed to be responsible for generating its own revenue sufficient to fund its own operations, by “selling” property from the water department to other departments and programs the county taps funds generated by other sources (TAXES) and transfers those funds to the water department. And by requiring these other departments and programs to “pay” the water department an inflated amount, the county essentially borrows against the equity it has in those properties, using the taxpayers as its funding source. So the third point is: by “selling” property to itself at an inflated price, the county borrows against the equity in its own properties, and places that additional debt on the taxpayers. The proceeds of that “sale” go to the water department, so the taxpayers are essentially funding water department projects that should be funded by water department revenue.

I believe that practice is outrageous, dishonest, and scandalous. If that were not enough, it may also be illegal and unconstitutional.

This article appears in Jan 20-26, 2010.