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WVN #446: The past and future of Preservation Act

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  • waylandvoters1
    Dear Wayland Voter, When April 9 Town Meeting voters decide Article 6, they will be making a judgment on the complicated history of the Community Preservation
    Message 1 of 1 , Apr 2, 2012
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      Dear Wayland Voter,

      When April 9 Town Meeting voters decide Article 6, they will be making a judgment on the complicated history of the Community Preservation Act. The petitioners' article wouldn't make irreparable changes but for now would all but end taxpayers' contributions to a fund that supports historic preservation, land acquisition, recreation and affordable housing.

      The petitioners say the fund balance of $7.4 million is too large. Opponents argue that the town needs a large fund to be able to take advantage of chances to acquire open land, which they say is good for property values and Wayland's semi-rural ambience.

      In 11 years the fund has supported such things as affordable housing at the former Nike site, artificial turf at the High School, weed management on ponds and rehabilitation of historic buildings and assets.

      Once-generous state support of the fund has declined in recent years from 100% to about 26%.The number of communities adopting the CPA has risen while the economy has declined, reducing the amount the State trust fund can contribute. A bill now in the House Ways and Means Committee would stabilize the state match at 75%.

      Though it has no support from selectmen and selectmen candidates, or from various civic groups, Article 6 could be vigorously debated. Since the 2001 town meeting voted to adopt the CPA, there has not been a follow-up public dialogue, analysis or pulse-taking regarding this surcharge on property taxes.

      Here is a look at the history of the Community Preservation Act and a summary of arguments for and against the article.

      BACKGROUND/HISTORY

      The original inspiration for the state Community Preservation Act (CPA) was a conservation program on Nantucket. A Land Bank was established there in the 1980s to preserve open space through a special act of the state legislature. Fees collected through a real estate transfer tax on the sale price of a property were used to acquire, hold, and manage properties as public conservation land.

      In the 1990s land conservationists joined forces with supporters of affordable housing to promote early versions of the CPA. Historic preservation was later added to the equation to appeal to urban area revitalization efforts. When the funding mechanism changed from a real estate transfer tax to a local property tax surcharge, and was sweetened with state matching funds as financial incentives, the legislature finally passed the CPA, Massachusetts General Law Chapter 44B.

      The CPA was signed into law in September 2000. It allows communities, if they vote to do so, to raise taxes to create a dedicated fund for open space protection, outdoor passive and active recreation, historic preservation, and affordable housing development.

      Communities that vote to adopt the CPA may levy a property tax surcharge up to 3% and become eligible to receive state matching funds from the Community Preservation Trust Fund. The underpinning for the fund is a surcharge on Registry of Deeds filings, primarily deeds and mortgages. Communities can choose several exemptions to the property tax surcharge. The city or town sets up a Community Preservation Committee to manage the accounts and recommend projects for approval by the municipality's legislative body.

      The Department of Revenue (DOR) annually distributes monies from the trust fund in mid-October to participating CPA cities and towns. The DOR follows a formula in the CPA law that calls for up to three rounds of trust fund distributions depending on the authorized tax surcharge. Since 2000 the statewide trust fund has distributed $387.1 million to 148 CPA communities.

      During the first six years of the CPA (2002 through 2007), the trust fund provided a 100% dollar for dollar match on the first round. But the combination of an increased number of towns adopting the CPA and a decrease in real estate activity depleted the trust fund. First round recipients received a 67.6% match in 2008. This fell to 34.8% in 2009, 27.2% in 2010, and 26.6% in 2011. Communities with the maximum 3% tax surcharge were entitled to additional revenue in 2011 during the second and third distribution rounds.

      Since the beginning of the trust fund year in September 2011, the fund has received, on average, 11% less each month. An uptick in the housing market could help to mitigate this trend.

      WAYLAND'S EXPERIENCE

      Municipalities have different approaches toward the preservation issues embodied in the CPA. Weston, Lincoln and Sudbury approved the maximum 3% rate. Residents in Essex and Marion have the lowest surcharge, 0.5%. Dover and Sherborn don't tax residents separately for these purposes.

      Wayland voted in April 2001 to adopt the CPA and set a 1.5% surcharge on property taxes for the purposes of open space (including land for recreational use), preservation of historic resources, and affordable housing. Exemptions from the CPA tax were granted for the first $100,000 of residential property value and to residents with qualifying income limitations. Information on the exclusion, which is based solely on income, is at
      http://www.wayland.ma.us/Pages/WaylandMA_Assessor/CPAExempt.pdf.

      Through FY11, Wayland has accumulated over $9.5 million in CPA revenue, including the amount raised by the CPA surcharge, state matching funds and interest. Total expenditures through June 30, 2011, were around $2.1 million, leaving a balance of about $7.4 million in the town fund. Of that $7.4 million, about $2 million is reserved for acquiring open space and $4.3 million is available for any CPA purpose. Much smaller amounts have been set aside for historic resources and community housing.

      The Wayland Community Preservation Committee consists of nine members, one each from the Planning Board, Historical Commission, Recreation Commission, Conservation Commission, Housing Authority, Board of Public Works, and three members appointed by the Board of Selectmen. Each fiscal year the CPC proposes setting funds aside for future spending as required by law. Once those allocations are met, the CPC recommends the division of the remaining revenues among the designated CPA purposes. Town Meeting makes the final decisions on all spending.

      Town Meeting has approved all of the projects thus far recommended by the CPC, with the largest appropriations going toward affordable housing at the former Nike site. A table in Appendix J on page 143 of the 2012 Annual Town Meeting warrant lists 23 projects, the amounts appropriated and the funds left unspent for completed projects.
      http://www.wayland.ma.us/Pages/WaylandMA_Selectmen/Warrant2012.pdf.


      WARRANT ARTICLE

      Resident Jay Sherry's Article 6 on page 40 of the warrant would roll back the CPA tax surcharge from 1.5% to 0.1%. He calculates his proposal would reduce the CPA taxes from $143 to less than $10 on a $600,000 property assessment.

      Sherry argues that the town could restore the higher rate when the need for funding arises and if state matching funds increase. A majority vote at town meeting followed by a majority vote at the polls at the next election would be required. But since there is a large surplus on hand, the town has sufficient funding for worthy projects for many years to come, he says.

      Wayland's Community Preservation Committee says that if article 6 passes, ongoing negotiations for a conservation restriction for Mainstone Farms, one of the main motivations for Wayland's entry into the Act, would be in jeopardy.

      An oft-stated rationale for keeping a large CPA reserve fund is to be prepared for a future large expenditure such as securing a conservation restriction on Mainstone Farm. Its estimated value of not less than $10 million would deplete the open space and uncommitted reserves. According to CPC Chairman Jerry Heller, the town also needs funds in reserve for debt service to support underwriting such a large expenditure. The CPC cautions that a landowner may not wait around for the town to reinstate the surcharge to a sustainable level.

      Numerous other projects are also being considered by the CPC, such as acquiring part of the Route 20 Lee Farm property for community agriculture and installing three softball fields at the Route 30 Loker Conservation and Recreation Area (formerly owned by Dow Chemical). Appropriating funds for affordable housing developments on Stonebridge Road and Route 20 will be voted at the upcoming town meeting.

      FUTURE OF CPA

      A bill now in the House Ways and Means Committee would stabilize the state match at 75%. HB 765, An Act to Sustain Community Preservation, would also make it easier to use CPA funds for certain projects and make it more attractive to established cities. If the bill becomes law, CPA funds could be used to rehabilitate existing parks and athletic fields. The Act now strictly limits those types of projects.

      This was a controversial issue at the November 2006 special town meeting when Wayland voted to appropriate $300,000 toward the artificial turf field at the high school. Town counsel advised that this funding was permitted since the artificial turf would both "create" a new athletic field on top of the old and "preserve" open space by providing a protective barrier against damage to the topsoil. Artificial turf fields are specifically prohibited in the proposed HB 765.

      A subsequent court case in another town proved Wayland town counsel's opinion to be incorrect, but the law provided no remedy to reimburse the CPA fund for the misappropriation.

      -- WVN Staff

      ELECTION REMINDER

      Town election, Tuesday April 3. Polls open 7 a.m-8 p.m.

      Information: Town Clerk:
      http://www.wayland.ma.us/Pages/WaylandMA_Clerk/election

      Seniors who need a ride to the polls should call the Council on Aging to make a reservation. 508-358-2990. Seniors can also reserve round trip transportation to the Annual Town Meeting beginning on Monday evening, April 9, by calling the same number.

      WVN's election roundup is at
      http://groups.yahoo.com/group/waylandvotersnetwork/message/588


      ANNIVERSARY CELEBRATION PLANNERS SEEK HELP, DONATIONS

      Residents have been at work for nearly a year to plan celebrations of Wayland's 375th anniversary in 2013 and 2014.

      You can help with ideas, time and money.

      A 12-member Wayland 375th Anniversary Celebration Finance Subcommittee is raising funds from residents and businesses. Some event costs will be covered by attendees, but such things as fireworks and a parade will be free and open to all.

      The Wayland budget to be voted at Town Meeting beginning April 9 includes $30,000 in seed money. One fund-raising goal is to reimburse the town.

      The 375th Committee meets monthly. For more information see
      http://www.wayland.ma.us/Pages/WaylandMA_BComm/375/index

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      Wayland Voters Network
      Michael Short, Editor
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