Introduction to “PAR” – Property Analysis Record
CNLM’s core mission of protecting and managing properties with substantial conservation value, listed or vulnerable species, and rare habitat types, has also created a need to determine the costs for protecting and managing these resources. Ideally, such costs are determined in advance of acquisition, and a funding source (endowment) is established that can provide sufficient income, in perpetuity, to provide appropriate stewardship. With variables that include species, habitat type and condition, current and ongoing threats or influences, and property size and dimensions, among others, this cost determination does not lend itself to an easy formula or ‘cost-per-acre’ extrapolation. Every conservation property is unique.
In the early 1990s, shortly after being founded, the Center for Natural Lands Management (CNLM) developed software and a due diligence process that provide a structure for detailed and objective determination of perpetual stewardship costs of a specific property. Called the “PAR” (for Property Analysis Record), the software prompts provision of detailed information on the acquisition transaction, conservation values and stewardship tasks, and unit costs of items and services involved in providing stewardship. The stewardship services and costs are necessarily influenced by the intended land manager and their business model. The PAR software then calculates the average annual stewardship costs. Using financial parameters provided by the user, that average annual cost is also parlayed into a perpetual stewardship amount (endowment). The PAR report or product provides a detailed and transparent justification for the stewardship endowment, allowing discussion and revision or negotiation, as appropriate, among the interested parties. The report serves as a perpetual record of the factors affecting stewardship cost determination.
The PAR software, although not complicated in its computations, was novel in its approach to perpetual stewardship costs. Prior to CNLM’s development of this tool, the methodology used within the conservation community for such determination was subjective and superficial. The software was designed with the objective of providing a more objective and comprehensive approach to determining perpetual stewardship costs. Its structure reflects:
- Deconstructing ‘stewardship’ into many tasks and items, each individually assigned an appropriate cost.
- Provision of ‘initial costs’ as distinct from ‘perpetual costs’—the distinction not only being one of some differences in stewardship tasks and costs but the fact that an endowment, once established, could not immediately supply stewardship funding; some initial funding was required.
- Allowance for uncertainty, represented as ‘contingency’ expenses.
- Calculating an endowment from an average annual stewardship cost using an appropriate and inflation-adjusted average longterm return on investments.
- A detailed description of the conservation property in additional to the financial information—the financial information requiring this context for verification and discussion.
CNLM uses the PAR software and its due diligence process, which has improved steadily over time and with experience, for its preserve acquisitions. CNLM has also made this software available for purchase by others. Licenses have been purchased by city, county, state, and federal government entities; conservation banks and other for-profit entities; and land trusts, among others.
“PAR” has, over time, become the commonly accepted approach for professional estimation of perpetual stewardship costs. Although many who use the term may have long forgotten its origin, ‘PAR’ has become synonymous with a detailed, comprehensive, defensible approach to endowment calculation and a ‘PAR’ or ‘PAR-like analysis’ is often a requirement for such determinations within a mitigation context.
Although the PAR software provides a rigorous structure for stewardship endowment calculations, as with any software it is the knowledgeable selection of appropriate data that determines the value of the PAR output. Two interest groups – regulatory agencies and conservation land owners – have shown such interest in CNLM’s PAR software and methodology, that CNLM has also provided workshops and seminars when there is compelling conservation value in doing so. Provided under contract, these services have helped regulatory agencies to better understand the inputs to perpetual stewardship costs and the elements of endowment construction, thus enabling them to more effectively review ‘PARs’ or PAR-like plans when submitted to them in relation to permit requirements. Workshops or other services provided to land-holding nonprofits, city governments, utility companies, open-space districts, and others, have assisted them in longterm financial planning to appropriately manage their current and future conservation lands or conservation easements. If these services are of interest, please contact CNLM’s Director of Conservation Science and Stewardship, Deborah L. Rogers, PhD at firstname.lastname@example.org or 510.799.7701.