Santa Rosa board approves Kelly Farm mitigation bank, says credits could save ratepayers millions

The Santa Rosa Board of Public Utilities voted unanimously to adopt a Mitigated Negative Declaration and approve the Kelly Farm Mitigation Bank project, a roughly 99‑acre effort to restore wetlands and establish California tiger salamander breeding and upland habitat credits.

“By enhancing this property we will be successful in helping to aid in the recovery of the species,” said Shawn McNeel, deputy director of environmental services, summarizing the biological rationale for the bank and staff’s outreach with resource agencies.

Staff described the project as a mixture of wetland restoration and targeted construction of three deeper breeding pools for California tiger salamanders, upland habitat enhancements, invasive species removal and managed cattle grazing. The bank area would cease routine irrigation on the bank acreage while a recycled water line would continue to traverse the parcel to serve a separate vineyard. Staff said they will drill an agricultural well to support managed grazing and that cattle grazing is part of a stewardship approach to maintain native habitat structure.

McNeel presented an accounting of credit types and an estimated market value for replacement credits, saying that tiger salamander and vernal pool credits can command substantial prices. Staff provided a working estimate that the credits produced by the bank could be worth about $35.8 million on the current market, while estimated establishment costs for the bank — studies, permitting, construction, five years of interim monitoring and an in‑perpetuity endowment to fund long‑term stewardship — would total in the low‑to‑mid single‑digit millions plus an endowment the staff estimated at about $8.3 million.

“We evaluated the project under CEQA and prepared an initial study and a Mitigated Negative Declaration; all potential impacts that were identified will be reduced to less than significant with the incorporation of mitigation,” said consultant Christine Gaspar as she reviewed the mitigation and monitoring program staff proposed.

Public comments included a written agency comment from the California Department of Conservation urging consideration of agricultural land impacts; staff said the bank acreage will cease manure application and irrigation while other Kelly Farm parcels remain in agricultural lease and use. Neighbor Kim Gartman, who lives adjacent to the property, said she supports the project in principle but asked staff to tighten operational controls on manure spreading, citing past incidents where large piles of material ended up near drainage that feeds a vernal pool on her property. “I am very much in favor of what the plans are here,” Gartman said, but added she wanted assurances about runoff and well impacts.

Staff responded to neighbor concerns with technical clarifications: the proposed well for livestock would support modest grazing (staff estimated roughly 0.5 acre‑feet/year for up to 100 head in their model) and staff said they will continue monitoring and coordinate with reclamation staff to limit manure dumping adjacent to the bank parcel. Staff also described tribal outreach, cultural resource surveys and the interagency banking team’s role in approving bank design and release schedules for credits.

Board member Wright moved the resolution to adopt the MND, adopt the mitigation monitoring and reporting program, approve the bank and direct staff to file the Notice of Determination; Board member Bartholo seconded the motion. Roll call was unanimous in favor with Board member Batten absent.

Next steps: staff will finalize and record a subordinate conservation easement, bring construction documents to bid (anticipated construction season in 2027), fund the required endowment and seek the interagency banking team approvals that will allow phased credit releases for the city’s planned trunk‑lining and flood‑related projects.