The Community Preservation Act (CPA); Law of diminishing returns

CPA matching funds are generated from a finite, but decreasing, registries of deeds transaction revenue pool, divided by an exponential increase in number of divisors…

As most of you know the Massachusetts Community Preservation Act aped the Cape Cod Land Bank Act.

The Land Bank Act began with a $15 million gift from the legislature that was disbursed to Cape communities proportionate to each's 3% property tax surcharge.

The legislature intended the money to be used to acquire undeveloped lands (in their natural condition), but the Barnstable Town Council acquired properties using their own definition of "open space."

Barnstable even defied the act's proviso that each Land Bank acquisition have a Conservation Restriction recorded on the deed.

Barnstable officials never recorded a single Conservation Restriction on any of the $50 million it spent to buy land.

The biggest offense against Barnstable voters lies in the fact that the Town Council,

spent all twenty years worth of property tax surcharges,

leaving future councils up to year 2020

without a dime of Land Bank funds for the acquisition of open space for 16 years.

On August 19, 2004 the Barnstable Council voted to join the CPA, which was ratified by voters in November.

While all other CPA communities are taxing properties from 1% - 3% of assessed values, and using the money for community preservation, and open space acquisitions,

the Barnstable Council uses IOU's to obtain matching funds.

The CPA bubble is about to burst due to

the decline in real estate transactions statewide,

and a quadrupled increase in the number of communities joining and sharing CPA revenue.

The chart below depicts the increase in member communities from the first year’s disbursement of matching funds in 2003 up until June, 2008.

CLICK ON IMAGES TO ENLARGE...

Next year the towns of;

• Chelmsford,
• Essex,
• Goshen,
• Hudson,
• Littleton,
• Phillipston,
• Templeton, and
• West Boylston

will join the 113 communities already members of the CPA.

This spring voters in the communities of

• Andover,
• Becket,
• Brimfield,
• Chesterfield,
• Hanson,
• South Hadley,
• West Bridgewater, and
• Worthington

will decide whether to join the CPA.

Within five months 16 additional communities will make up the CPA family, bringing the total to 129.

With declining real estate sales (and fees to create matching funds), the addition of more communities will deplete annual CPA balances enough that the fund won't have the resources to match all property tax surcharges.

Listed below is a chart depicting CPA balances since its inception;

F/Y 07 ended June 30, 2007, and registries of deeds revenue during the past six months declined 30%,

and is predicted to continue to slide over the next six months.

The next chart depicts registries of deeds collections since the inception of the CPA;





The next chart depicts annual disbursements to communities since the inception of the CPA;





In October 2007 the CPA distributed more than $68 million,

$2.2 million of which went to the town of Barnstable.

In October, 2008, during the next dissemination of CPA matching funds, the eight new communities, will cause the matching fund pool to increase to $75 million from a pool of $65 million.

By law when the CPA cannot match local contributions, a formula is to be used to allocate the level of funds to each community.

The second round of the CPA disbursement formula is driven by EQV per Capita, or the total value of all taxable property in the community divided by population.

The state EQV per Capita is

$156,115, compared to

Barnstable’s EQV Per Capita of $313,142,

or double the state average.

With a 380% increase in the number of communities dividing the proceeds from a 30% reduced pool of funds, in October of 2008, matching funds will be disbursed through the following formula

Round one is the so-called “match distribution” which allocates 80 percent of the state pool to participating communities.

Each city or town will receive an identical percentage share of the amount raised locally.

The distribution will be no less than 5 percent and no more than 100 percent of the amount raised by each respective city or town.

Round two, the equity round, distributes most or all of the remaining 20 percent of the pool by a formula that incorporates EQV per capita, population, and assigned deciles.

Any trust fund balance is allocated as part of an optional round three surplus distribution, also based on an equity formula.

In light of the spendaholic practices of the Barnstable Town Council,

and in light of the strong probability of the adoption of a new charter and a new form of government,

it would be morally and ethically proper for the current council to curb its CPA spending

to leave some Land Bank/CPA revenue for future city councils/Mayor.

Depriving future councils of their right of passage to spend their share of earmarked property tax surcharges and matching state funds over the next twelve years is

unconscionable.

Which leads to the next question;

Do Janet Joakim, and her ilk on the council, have consciences?

Comments

[sevenvillageidiots]

Easy answer: NO!

[Prissy]

On the real estate transactions of the Barnstable Patriot, the Barnstable Housing Authority purchased two units at 185 Stevens St.,Village Market Place for $126,000. Were these units the ones that the Community Preservation Funds were used to "buy down" for $50,000. each? Also, what was the asking price of these units? I bet it was alot more than $126,000.

185 Stevens Street is the Village Market Place, owned by Stu Bornstein, and the site of his new condominium project that was completed earlier this year, but never sold a single unit.

Months ago COG warned that the upscale condo projects in Hyannis wouldn't sell, and that they would become either "affordable" or Housing Authority units.

These condos were originally on the market for $400K which makes one onder if the units are being subdivided into smaller ones.

It seems to me that once these condo projects become Housing Authority units, future sales as market rate units will be curtailed.

[J J]

Gary, I noticed you mentioned that Janet Joakim put some moronic comments on your post and you deleted them on the last post. GOOD. She has no business being in here commenting on anything! Sorry Janet, but you are far too UNqualified to comment on ANYTHING and you have NO CLue ON ANYTHING! Therefore, as Gary said, go away. Go talk to yourself on your garbage blog. THAT is something you ARE good at...

Janet Joakim has NEVER, EVER, answered any questions or concerns that have been published here for over two years now... she has also NEVER explained any of the council and administration's WASTE, MISMANAGEMENT and corruption that has been going on here now for years... so it is time to RECALL Janet Joakim.

In the meantime, as this post points out, this CPA is a joke. I was there the night the great Senator O'Leary waltzed into town hall and told us all how GREAT this CPA savior would be... sure, real great. Like the LAND BANK, which turned out out to be a BANK for a bunch of MORONS, including the HACK Lindsay Counsel who ran it.They FORGOT to tell everyone here that they had PLANNED to BORROW all the land bank money thru the year 2020 and went out and BOUGHT up about ALL the potentially developable land.

Sure, they DID turn it into open space but these idiots forgot to tell us of the ramifications, as in SOMEONE having to PAY for the LOST TAX REVENUE on the approx 1,000 or so acres. THIS MORONIC MISMANAGEMENT also added to the artificial inflation of home prices as well, and now, thanks in part to these morons, the TOWN of Barnstable now has one of the HIGHEST foreclosure rates in the state!

So what these assenine morons also FORGOT to tell us all is that this CPA pipedream is MAINLY for historic preservation and affordable housing... As for affordable housing, this is perhaps the biggest LIE there has ever been. Want proof?

Back in May a 2 bedroom 1 bath DEED RESTRICTED so called affordable housing unit sold for $ 179,400. And THIS unit is a DEED RESTRICTED affordable unit, available ONLY for those who 'qualify' under the guidelines.

Now, consider this: Just last week I sold a MARKET RATE 3 bedroom 2 bath unit for LESS than 105K!! And in fact, there have been SEVERAL MARKET RATE UNITS sold recently for far LESS than the $ 179,400 that some poor sap bought back in May!

See, it is THESE kinds of LIES that make us all angry. The real truth is that we don't NEED any land bank and we don't need any CPA. All these two arrrangements did was give some HACKS an opportunity for high paying jobs, to LEACH off the taxpayers!

I WONDER now, IF the TAXPAYERS had known the truth about these two things (Land Bank and CPA), if the voters would have approved either. I don't think so. It turns out to be nothing but a huge WASTE of our hard earned TAX DOLLARS, all for a bunch of HACKS who led us to believe that this was all for a good cause...

Sure, great cause. Rip us off of our tax money, pay a few major league HACKS big salaries, watch out taxes go way up and then WASTE more on affordable housing when the truth is that the MARKET ALWAYS takes care of itself, as the aforementioned example clearly PROVES!

Someone should have Mr. Wonder man Governor Patrick and his bank of housing hacks read this as well too. If you think this example is just for Barnstable, think again. The MARKET takes care of itself everywhere and I bet the MARKET rate units are cheaper than the affordable's in other areas also! So it is all just one pack of lies after another...

she is a pathetic she-man