A new audit into the South Carolina agency that sets aside grants for the conservation of land criticizes that agency for committing future funds it is not guaranteed to receive and for not ensuring the land it preserves with state funds can be visited by the public.
The South Carolina Conservation Bank says it has helped secure $276 million towards land protection efforts since its creation 15 years ago, through the use of grants and matching funds. The bank will sometimes help fund efforts to purchase land for conservation efforts or will finance conservation easements on property owners with the condition that the property not be developed.
However, the bank’s operating laws will require it to shut down in June 2018 if the legislature does not reauthorize it before then. Lawmakers are working to reauthorize this spring, but expect a fight from opponents who believe the bank has expanded beyond its original purpose.
The audit results released Thursday by the Legislative Audit Council identified several issues the auditors deemed concerning. One area is how the grants and easements are funded. The Conservation Bank’s operations are funded mostly through a “deed stamp recording fee” that any South Carolina land buyer must pay while purchasing new property.
Audit manager Brad Hanley said the Bank is setting up grants with projected future revenue from those recording fees, even though it does not yet know how much funding it will receive. “They won’t be able to pay for them until next year, but they go ahead and approve them,” he told South Carolina Radio Network. “So that presents some problems. And there’s a question about how much that will obligate the state (if the funding is not there).”
The audit notes the agency had roughly $15 million in revenue last budget year, but awarded $20 million in grants, committing itself to future projects worth a third of its entire budget. For the current budget year the bank has committed $9.5 million it does not currently have for future projects. Hanley said that creates a potential financial risk if the real estate market were to suddenly collapse, as occurred in 2007-2008.
In the bank’s response to the audit, bank executive director Marvin Davant disputed the idea that the advance planning was unusual, noting the agency relies on analysts’ budget predictions when estimating its fee revenue. “The Bank has NEVER exceeded its authorized budget,” the response said. It later continued, “All applicants are notified in person and in writing… that all grants are subject to budget authorization and the Bank actually receiving the requested funding.” It noted there were no legal issues when the legislature slashed all the agency’s funding during 2008 budget cuts.
Another concern raised by auditors was the amount of land being conserved that the general public would never be allowed to step foot inside. The state law which created the Conservation Bank required at least ten percent of its revenue go towards land acquisitions which the public would be able to access. While the audit notes the bank is exceeding that minimum, Hanley questioned if the agency could still do more.
“We think there’s an opportunity maybe for more public access,” he said. “And the bank is not exploring that or encouraging that by not asking the questions or getting with the landowners or conservation groups bringing the applications.”
He noted that no more than 7 percent of easements the past three years allowed public access. In other cases, the “public access” was limited to private hunting clubs. “They’re classified as public access, yet when you look deeper into it they have maybe a youth hunt after duck season,” he continued. “And it’s not all youth, just some youth who can come on (to the property).”
In Davant’s response, he noted state law does not require public access as a condition for preserving the land. In fact, the agency argued, requiring public access to private land would likely scare away landowners interested in getting conservation easements. “If public access was the overriding issue of conserving significant lands statewide then the General Assembly would have made more than 10% statutorily required,” the response said. “The Legislature in SC realized… that it would stop landowners from using incentivized land conservation.”