Paperwork snags $2.4 million in state land preservation funding

A state program that has preserved more than 30,000 acres of private land in Hawaii for public benefit over a decade might not preserve much this year because of a paperwork mishap that the Legislature declined to correct in April.

The Legacy Land Conservation Program typically delivers about $4.5 million in annual grants to state agencies, counties and nonprofits. But $2.4 million in awards to four conservation projects were jammed up due to a lack of funds, and the program might have only $500,000 to distribute this year to new applicants that compete for grants and must obtain matching funds to leverage the state’s contribution.

Legacy Land, in reality, has a surplus of dedicated funding. But paperwork for an annual allocation wasn’t completed, and $2.4 million returned automatically to a locked account. Then what seemed like a simple fix — to return the fumbled grant money through legislative approval — was denied.

“The frustrating thing is that the money is there, but no authority to spend it,” lamented Lea Hong, Hawaii director for The Trust for Public Land, a nonprofit that has been involved in several preservation projects through Legacy Land.

Added John Sinton, a University of Hawaii emeritus professor of geology and geophysics who until July was on a commission that recommends funding awards for Legacy Land, “It’s a shame. (Legacy Land) is one of the best, most open programs in the state. Some of the most cultural and historical and just beautiful resource lands have been put into conservation for perpetuity.”

Legacy Land, established by the Legislature in 2006, has awarded grants to about 50 projects conserving 30,000 acres to date.

Recommendations for grants are made by a nine-member commission that reviews applications and visits project sites. The commission’s recommendations get forwarded to the Senate president and House speaker for consultation, and from there the recommendations go to the state Land Board and then the governor for approval.

The funding trouble stems from the program, which is administered by the state Department of Land and Natural Resources and its Division of Forestry and Wildlife, lacking a coordinator for 13 months.

Former Legacy Land coordinator Molly Schmidt left in September 2015, and DLNR couldn’t find a replacement until October 2016.

David Penn, the program’s new coordinator, said critical paperwork fell through the cracks in Schmidt’s absence and initially resulted in three land conservation projects not receiving the funding they were awarded in the state’s fiscal year that ended in June 2016.

The snafu entailed not writing contracts in time to convey award money to nonprofits or counties. Awards to state agencies don’t need contracts, so state projects through Legacy Land weren’t affected.

Legacy Land grant money comes from $5.1 million withdrawn annually from a state land conservation fund that is dedicated to the program and paid for by a 10 percent cut of real estate conveyance tax revenue. After expenses, which include state service fees, close to $4.5 million is typically left for project awards.

But because of the missed contract deadline, $2.2 million for three awards automatically went back into the fund, which has a $17.2 million balance and grows by about $1.7 million a year after withdrawals.

The Legislature, through annual appropriation decisions, has allowed DLNR to take only $5.1 million from the fund per year, so recovering the $2.2 million isn’t possible without lawmaker approval.

“We no longer have access to it,” Penn said of the lapsed grant money.

The biggest of the three initially affected projects was a Hawaii County purchase of 322 acres in Puna to preserve land bordering coastal tide pools from potential subdivision development. Legacy Land awarded $1.3 million for the acquisition, which also includes $1.3 million from the county.

Another casualty was a purchase of taro farmland on Kauai that also serves as habitat for six native wetland bird species. Two nonprofits, The Trust for Public Land and Waipa Foundation, were awarded $398,250 and had to raise another $132,750 for the project, which would expand farming on the 2-acre site, preserve the bird habitat and teach students about agriculture and native wetland species.

The third project involved a $500,000 grant to obtain an easement over 969 acres of Kaluaaha Ranch on Molokai that would limit the land’s use to conservation. The nonprofit Molokai Land Trust expects to obtain a $1.1 million matching grant from the U.S. Fish and Wildlife Service for the easement and plans to fence the area to control destructive hoofed animals while also eradicating invasive plant species.

To make good on these three obligations, Legacy Land tapped grant money mostly from the fiscal year that ended June 30. But that meant withholding $2.2 million from two new projects that won awards in May.

“Basically, we’re borrowing from Peter to pay Paul,” Penn said.

One other fouled-up grant contract totaling $175,000 from a preceding year for an Oahu project also received money from the just-finished fiscal year, pushing the funding gap to $2.4 million.

Legacy Land recently began seeking applications for the fiscal year that began in July, but actually has only about $500,000 available after funding previously postponed awards along with $1.5 million needed each year to repay $35 million in bonds the state issued to acquire a conservation easement at Turtle Bay Resort in 2015.

To correct the problem earlier this year, DLNR asked lawmakers, through Gov. David Ige’s budget draft, to allow recovery of the lapsed $2.2 million. However, the House Finance Committee disagreed when it amended the budget bill in early March.

The Senate Ways and Means Committee, led by Sen. Jill Tokuda, restored the $2.2 million to the bill in late March. But in the final budget bill negotiated by House and Senate leaders, the $2.2 million was out.

House Finance Chairwoman Sylvia Luke said she doesn’t oppose restoring Legacy Land funds that lapsed. She said the failure to restore the funds in the last session was due to a misunderstanding or a lack of communication.

Penn, the Legacy Land coordinator, hopes lawmakers next year will restore the lapsed money and maybe even raise the ceiling on what can be removed from the growing fund so that more projects can be financed. In the meantime, Legacy Land applications for the new fiscal year are due Sept. 25.