Category Archives: Community Preservation Act (CPA)

CPA – town missing out

The letter below that I received this week from the Norfolk Register of Deeds highlights for Medfield how, as a town, we all pay in to the Massachusetts Community Preservation Act (CPA) fund ($44,250 last year), but we get none of the monies or benefits back because we have not adopted the CPA.

The CPA is a self-imposed additional tax of from 1-3%, in exchange for which the town get state matching monies.   CPA monies have to be spent on one of three areas:

  • historic preservation
  • affordable housing
  • open space and recreation

My analysis has always been that where we already spend on those three things anyway, that by not adopting the CPA that we are merely forgoing the state matching monies.

The one time the CPA went to the annual town meeting (ATM), about ten years ago, it was defeated.

WILLIAM P. ODONNELL REGISTER OF DEEDS ASSISTANT RECORDER OF THE LAND COURT Selectman Osler L. Peterson Medfield Board of Selectmen  0 Copperwood Road Medfield, MA 02052 Dear Selectman Peterson, COUNTY OF NORFOLK COUNTY OF PRESIDENTS REGISTRY OF DEEDS NORFOLK REGISTRY DISTRICT OF THE L AND C O URT January 18, 2019 The fees for the Community Preservation Act are set by the State Legislature on land documents recorded here at the Norfolk County Registry of Deeds. l thought the chart on the reverse side would be of interest to you. It provides an illustration of the funds generated by the Community Preservation Act (CPA) in your community based on recorded real estate filings during the 2018 calendar year. The Community Preservation Act was signed into law on September 14, 2000. Today there are 175 Massachusetts communities that have adopted the Community Preservation Act, including this year the town of Plainville in Norfolk County. Just over 2.1 billion dollars has been raised to date statewide. The Registry of Deeds, at no additional cost to the Commonwealth or local communities, collects these revenues for the state once a document is recorded. The monies are then forwarded to the Massachusetts Department of Revenue on a monthly basi s. The funds collected by the Commonwealth are then redistributed back to the communities that have adopted the CPA through a variety of formulas. The Norfolk County Registry of Deeds which is located at 649 High Street, Dedham, is the principal office for real property in Norfolk County. The Registry is a resource for homeowners, title examiners, mortgage lenders, genealogists, municipalities and others with a need for secure, accurate, accessible land record information. For assistance please contact our Customer Service Center at (781) 461-6101 , or visit our website at www.norfolkdeeds.org. J hope you find this data to be timely, informative and useful. In the meantime, if I can be of assistance to you, please do not hesitate to contact me at 781-461-6116 or by email at registerodonnell@norfolkdeeds.org. I wish you a healthy New Year. WPO/aag Sincerely yours, "P~(}p~ William P. O'Donnell Norfolk County Register of Deeds 649 HIGH STREET. DEDHAM. MASSACHUSETTS 02026 TELEPH ONE : 781 ·46 I · 61 16 FAX 78 1 ·326·4246 EM A I L : registerodonnell@norlolkdeeds.org www .norfolkdeeds.org •~7SC ~ facebook.com/NorfolkDeeds ~ twitter.com/NorfolkDeeds YouiD youtube.com/NorfolkDeeds Linked rm linkedin.com/company/Norfolk·County·Registry·Of·Deeds (.@) @NorfolkDeeds NORFOLK COUNTY REGISTRY OF DEEDS •I COMMUNITY PRESERVATION ACT (CPA) SURCHARGES BY TOWN FOR CALENDAR YEAR 2018 TOWN TOTAL AVON $1~,450 BF.I ,IJNGHAM $66,660 BRAINTREE $112,570 BROOKLINE $150,350 CANTON $86,090 COHASSET $39,420 DEDHAM $83,650 DOVER $23,650 , FOXBOROUGH $58,270 FRANKLIN $110,350 •( HOLBROOK . $40,100 MEDFIET,n $44,150 MEDWAY $47,000 MILLIS $31,420 MILTON $86,060 NEEDHAM $103,370 NORFOLK $40,980 NORWOOD $80,170 PLAINVILLE $29,560 QUINCY $244,110 RANDOLPH $100,420 SHARON $56,740 STOUGHTON $96,000 WALPOLE $88,710 WELLESLEY $87,090 WESTWOOD $51,890 WEYMOUTH $200,460 WRENTHAM $47,530 II :''20190118-norfolk register of deeds-ltr from-cpa figures for 2018_page_2

Community Preservation Act primer

This comes from the newsletter that I get from the Division of Local Services (DLS) at the DOR –

DLS

Discussing Community Preservation
Jared Curtis – Bureau of Accounts Field Representative
Tony Rassias – Bureau of Accounts Deputy Director

Each year, the Bureau of Accounts distributes a Budget Bulletin in the spring addressing issues that cities, towns, regional school and other districts should consider for the upcoming fiscal year’s revenue and expenditure budgeting and other related matters.

One particular topic that appears annually in the Bulletin and always generates inquiries is the Community Preservation Act (CPA) as it relates to state matching funds estimate for cities and towns. The following represents a discussion between Tony Rassias, Deputy Director of the Bureau of Accounts, and Jared Curtis, the Bureau’s subject matter expert, covers a variety of topics related to the CPA. We hope you find it helpful.

Tony Rassias: Jared, for cities and towns that haven’t accepted the CPA, could you first explain what the Act is all about?

Jared Curtis: Sure. Cities and towns that accept the CPA impose a surcharge on each parcel of taxable real estate up to an additional 3% of the bill, less any exemption to the surcharge adopted by the city or town as allowed by the CPA law. Total surcharges received are then reserved into a local CPA fund for community preservation purposes to preserve open space and historic resources, create affordable housing and develop outdoor recreational facilities. A state trust fund, created from recording fees at the Registry of Deeds and Land Court, provides an additional source of revenue to the local CPA fund through state matching funds.

TR: How do cities and towns accept the Act?

JC: Cities and towns have two acceptance options. Under the first option, the CPA is accepted under M.G.L. c. 44B, §3(b) and a surcharge up to 3% of the tax assessed on each parcel of taxable real estate is approved. This is called the “traditional” CPA. Under the second option, the CPA is accepted under G.L. c. 44B, § 3(b1/2) and (1) a surcharge of at least 1% is approved and (2) an appropriation of other municipal revenue is made into the Community Preservation Fund (CPF) which when added together with the surcharge will not exceed 3% of the taxes assessed on real property. This is called the “blended” CPA.

If a city or town has adopted a “traditional” CPA, it must follow the amendment procedure under M.G.L. c. 44B, § 16(a) to adopt the “blended” CPA. Adoption of the CPA under both options requires either (1) legislative body approval and voter approval of a ballot question or (2) a petition process and voter approval of a ballot question.

TR: What happens to the CPA surcharge receipts?

JC: Surcharges, and the other revenue appropriated to the Community Preservation Fund by a “blended” CPA community, are credited to the local CPF and may be appropriated on the recommendation of the Community Preservation Committee for community preservation purposes under the CPA law.

TR: What are state matching funds?

JC:  A Community Preservation Trust Fund is established at the state level which is funded by surcharges on recording fees at the Registry of Deeds and Land Court. All municipalities imposing a surcharge the previous year receive a first round state match.

TR: Our Budget Bulletin begins with a total number of cities and towns that have accepted the CPA that are eligible for state matching funds in the upcoming fiscal year.  How does BOA know the correct number of acceptances and are they all eligible for state matching funds?

JC: Once the CPA has been accepted by either (1) a majority vote of the municipal legislative body followed by a majority vote of the electorate or by (2) a majority vote of the electorate after filing a local ballot question petition signed by at least 5% of the municipality’s registered voters, municipal clerks are required to submit a CPA Notification of Acceptance form to the Municipal Databank in the Division of Local Services (DLS). This notification is important, not only for tracking acceptances, but for distributing the state matching funds because the Municipal Databank is responsible for the distribution.

Because a municipality must commit one fiscal year of surcharges prior to receiving a state match, cities and towns where the CPA takes effect on July 1, 2018 will receive their first state match distribution in November of 2019, in FY2020. In FY2018, 172 municipalities committed the CPA local surcharge and will be eligible for the State match in FY2019. In FY2018, 162 cities and towns received just over $24 million for the FY2018 state match.

TR: The Bulletin then indicates a percentage first round state match as determined by the Municipal Databank. Why is this estimate so important?

JC: The CPA calls for up to three distribution rounds. All cities and towns that imposed a surcharge the previous fiscal year will receive first round match distributions. The estimate is important for local Community Preservation Committees to properly budget revenue to be received from the State’s Trust Fund in the upcoming fiscal year. For FY2019, the Databank has estimated a first round match of 11.5% of the municipality’s surcharge imposed in FY2018.

TR: How is the first round match estimate determined?

JC: The process of estimating the first round match is a bit complicated, but here is a very basic overview. The Databank estimates the match by:

  • reviewing the balance in the state trust fund as of March 15th
  • estimating deposits into the fund through October of the next fiscal year
  • splitting 80% of the projected fund balance, after administrative expenses, among the eligible cities and towns
  • estimating growth in the local surcharge commitments

TR: Why did our first round percentage estimate drop from FY2018 to FY2019?

JC: The FY2018 first round estimate was 15%, but the actual match was 17.2%. The actual percentage exceeded our estimate. But for FY2019, the estimate is 11.5%. I see two reasons for the estimate’s decline. The first and main reason is that recent legislative changes to the CPA have attracted 10 additional cities and towns, including several larger cities, to accept the law and these entities are now eligible to receive a state match in FY2019. The second reason is that fees taken in by the Registry of Deeds and Land Court that provide revenue for the match have remained stable. As a result, the percentage of the state match has decreased.

TR: As for the other distribution rounds, which cities and towns are eligible?

JC: We already know that municipalities that imposed a surcharge in the prior fiscal year are eligible for the first round distribution. If monies remain, there is a second or equity round and a third or surplus round distribution to cities and towns that have adopted the maximum 3% surcharge. The most a city or town may receive in state matching funds in any year is 100% of the total surcharge it assessed in the previous fiscal year.

TR: How is the state match determined for a “blended” CPA municipality?

JC: For these cities and towns, the state match is based on surcharge collections in the previous fiscal year plus the amount of the additional revenue appropriated by the municipality to the CPF by June 30 of that fiscal year. To be eligible for additional rounds of state matching funds, the “blended” CPA municipality must have appropriated additional municipal revenue to the CPF so that the total funds, additional appropriated municipal revenues plus surcharge, equal 3% of the real estate tax levy. The most a “blended” CPA city or town may receive in state matching funds in any year is 100% of the total surcharge assessed in the previous fiscal year plus additional funds appropriated in that fiscal year to the CPF.

TR: How many cities and towns have accepted the 3% maximum surcharge?

JC: Currently, for the 172 municipalities that have accepted the CPA, the breakdown of percentages accepted is:

  • 75 at 3%
  • 15 at 2%
  • 39 at 1.5%
  • 1 at 1.25%
  • 1 at 1.10%
  • 40 at 1%
  • 1 at .5%

Included within the 1% and 1.5% categories are five municipalities that have adopted or amended their CPA adoption to a “blended” CPA.

TR: The Bulletin says that the equity and surplus distributions will increase a city or town’s reimbursement depending upon their decile and total surcharge amount. What is a decile, and why will reimbursements increase because of it?

JC: It would probably help if I explain how the second and third rounds work. The 20% reserved in the state trust fund before the first round is calculated is used to determine the second or equity distribution round by dividing the remaining fund balance by the number of cities and towns receiving distributions. This result is called the “base.”

Every municipality’s equalized valuation or EQV per capita and population is then ranked from highest to lowest and the ranks are averaged to get a “raw score.” The “raw scores” are then ranked from lowest to highest and the cities and towns are placed into what are called deciles. Each decile has 35 municipalities, except decile 1 has 36. Each one of the 10 deciles has a percentage of the base assigned to it in descending order from 140% to 50%. Decile #1 is assigned 140%, decile 2, 130% and so on.

By formula, municipalities in the lower deciles (for example 1, 2, or 3) are determined to be those most in need and will receive a greater percentage share of the “base.”

If money is still available in the state trust fund after the second round, there is a third or surplus round. A new “base” is determined just as in the second round that is then multiplied by the same decile percentage used in the second round.

TR: How about a quick example?

JC: Let’s say that Community A accepted a surcharge percentage of 3% and is therefore eligible for three rounds of distribution and let’s say that money will be available in the fund after rounds one and two.

Now, let’s say that Community A collected a previous fiscal year surcharge of $1 million and the next fiscal year’s actual first round match is 17.2%. In the next fiscal year, Community A will receive a match of at least $172,000.

In the second round, Community A’s EQV and population was averaged to give it a raw score which was then ranked against all cities and towns. A base was calculated at $45,000. Community A’s ranking placed it into the fourth decile which allows an equity distribution of 110% of the base, another $49,500 or $45,000 times 110%. In the third round, after a new base of $25,000 is determined, Community A’s 110% decile percentage from the second round allows a surplus distribution of $27,500, or $25,000 times 110%. In total for the three rounds, Community A will receive a distribution of $249,000 from the state trust fund.

TR: Finally, the Budget Bulletin indicates that the estimates are subject to change depending upon Registry of Deeds collections between the time of the Bulletin and October of that year. Why does that time frame make a difference?

JC: The time frame when we issue our Budget Bulletin through October is important because actual Registry of Deeds and Land Court fees will be deposited into the State Trust Fund. The Databank does a great job estimating the amounts that will be collected, however; the actual receipts are what the final distribution in November is based on.

TR: Is there more than one distribution in a fiscal year?

JC: The only distribution for the fiscal year is in November provided the city or town submits to the Databank forms CP-1 and CP-3. Form CP-1 is available in Gateway and form CP-3 is available from Mass GIS after entering your community’s password issued by the DLS Databank. Contact the Databank to obtain a password. Any questions concerning the completion of the CP-3 should be directed to the Community Preservation Coalition at (617) 367-8998.

TR: Thank you for your explanations, Jared. I’m sure our readers will now more fully understand the Bureau’s guidance.

JC: Thanks, Tony!

The authors would like to thank Lisa Krzywicki, Director Municipal Databank/Local Aid Unit, and Patricia Hunt of the Bureau of Municipal Finance Law for their help in reviewing this article. 

CPA

Per the letter below, that I received this week, from Bill O’Donnell, our Norfolk County Register of Deeds, the residents of the Town of Medfield paid $46,790 in surcharge fees at the Norfolk Registry of Deeds for recordings in 2017 to support the Massachusetts Community Preservation Act (CPA).

However, because Medfield has not yet adopted the CPA, the fees we paid were in turn paid over to other towns that have adopted the CPA.

The CPA for me is all about getting the state matching monies, so that our town monies can go further in the three categories where the CPA requires the monies to be spent:

  • open spaces and recreation
  • historic preservation
  • affordable housing

Originally the state matching monies were 100%, but as more towns joined the CPA the match declined.  In recent years the legislature has even added monies to the match to make it more attractive.  Last year the state matching money was 17%.

WILLIAM P. O'DONNELL REGISTER OF DEEDS ASSISTANT RECORDER OF THE LAND COURT Selectman Osler L. Peterson Medfield Board of Selectmen l 0 Copperwood Road Medfield, MA 02052 Dear Selectman Peterson, COUNTY OF NORFOLK COUNTY OF PRESIDENTS REGISTRY OF DEEDS NORFOLK REGISTRY DISTRICT OF THE LAND COURT January 19, 2018 As Register of the Norfolk County Registry of Deeds, I thought the chart on the reverse side would be of interest to you. It provides an illustration of the funds generated by the Community Preservation Act (CPA) in your community based on recorded real estate filings during the 2017 calendar year. The Community Preservation Act was signed into law on September 14, 2000. Today there are 172 Massachusetts communities that have adopted the Community Preservation Act. Just over 1.75 billion dollars has been raised to date statewide. The Registry of Deeds, at no additional cost to the Commonwealth or local communities, collects these revenues for the state once a document is recorded. The monies are then forwarded to the Massachusetts Department of Revenue on a monthly basis. The funds collected by the Commonwealth are then redistributed back to the communities that have adopted the CPA through a variety of formulas. The Norfolk County Registry of Deeds which is located at 649 High Street, Dedham, is the principal office for real property in Norfolk County. The Registry is a resource for homeowners, title examiners, mortgage lenders, genealogists, municipalities and others with a need for secure, accurate, accessible land record information. For assistance please contact our Customer Service Center at (781) 461-610 I, or visit our website at www.norfolkdeeds.org. I hope you find this data to be timely, informative and useful. In the meantime, ifl can be of assistance to you, please do not hesitate to contact me at 781-461-6116 or by email at registerodonnell@norfolkdeeds.org. I wish you a healthy New Year. Sincerely yours, ~411?7~ William P. O' Donnell Norfolk County Register of Deeds WPO/aag 649 HIGH STREET. DEDHAM . MASSACHUSETTS 02026 T E L EPHONE 78 1·461 ·6 1 16 FAX 7 81 -326·4246 EM A IL registerodonnel l@norfolkdeeds.org www .norfolkdeeds.org ~ facebook.com/NorfolkDeeds ~ twitter.com/NorfolkDeeds You£m youtube.com/NorfolkDeeds Linked linkedin.com/company/Norfolk-County-Registry-of-Deeds (@ @NorfolkDeeds NORFOLK COUNTY REGISTRY OF DEEDS COMMUNITY PRESERVATION ACT (CPA) SURCHARGES BY TOWN FOR CALENDAR YEAR 2017 TOWN TOTAL AVON $18,030 BELLINGHAM $68,890 BRAINTREE $124,580 BROOKLINE $166,930 CANTON $94,080 COHASSET $42,810 DEDHAM $90,580 DOVER $29,780 FOXBOROUGH $62,360 FRANKLIN $117,830 HOLBROOK $47,080 MEDFIEI,n $46,790 MEDWAY $48,810 MILLIS $34,740 MILTON $95,820 NEEDHAM $108,540 NORFOLK $40,180 NORWOOD $83,730 PLAINVILLE $35,410 QUINCY $273,240 RANDOLPH $110,070 SHARON $60,270 STOUGHTON $105,140 WALPOLE $94,180 WELLESLEY $103,680 WESTWOOD $54,980 WEYMOUTH $215,200 WRENTHAM $53,87020180119-Wm O'Donnell-ltr from_Page_2

CPA needs to come to town

cpa

Medfield voted down the Massachusetts Community Preservation Act (CPA) at our annual town meeting (ATM), maybe 7-8 years ago, and as a result we have missed out on huge amounts of state CPA matching monies that we could have been using to pay for our open spaces, our historic preservation, or our affordable housing.  I hope that we can agree to finally adopt the CPA soon, as every year we are leaving state matching monies on the table, despite that we pay in to the Norfolk Registry of Deeds recording surcharges that create the pool of monies used for the matching funds.  Our payments are instead going to other towns in their matching monies.

In recent years, the matching monies have been so low from the registry surcharges that the legislature has annually supplemented the matching monies via an appropriation – almost half the cities and towns have adopted the CPA, so a lot of legislators are interested in keeping the CPA match high.

When we do adopt the CPA, since the whole reason to do so is to get the most state matching monies, we should adopt the highest level surcharge, which is 3%, because only those who agree to the 3% CPA surcharge get the most and largest state matches.

I have been asking for several years in a row to have an ATM warrant article to adopt the CPA, and I have been requested to not proceed by CPA proponents due to their not having educated the residents sufficiently.  This year I think we just need to go ahead, and expect that residents will understand that the CPA will save us money in the long run.  The Community Preservation Coalition website (www.communitypreservation.org) is excellent at explaining the CPA.

This article below about the CPA matching monies just issued was in my Massachusetts Department of Revenue newsletter this week –

==================================================================

FY18 Community Preservation Act (CPA) State Match Info
Lisa Krzywicki – Municipal Databank Director

On November 14th, the Division of Local Services (DLS) released the FY2018 CPA state match to the 162 communities that have adopted the CPA surcharge. The CPA allows a community to adopt a local surcharge of up to three percent that is added to real estate property tax bills. The purpose of the CPA is to help communities preserve open space and historic sites, create affordable housing and develop outdoor recreational facilities. The CPA statute, M.G.L. 44B, provides a state match to eligible communities from revenues collected by the registry of deeds for surcharges on fees charged for recording various documents.

In FY2018, the available balance in the CPA state trust fund was $26M, and the local surcharges committed by cities and towns totaled $120.9M, which provided for a 17.2 percent base state match. Chapter 44B provides for an additional state match if a community adopted a three percent surcharge or the “blended” CPA by voting a surcharge of at least one percent and appropriating other funds to the community preservation fund so that the total equals three percent of the real estate tax levy. For FY2018, 76 communities are eligible for the second round or equity distribution and third round surplus distribution. The equity and surplus distributions use population and equalized valuation (EQV) to determine a ranking that would provide a greater portion of the balance of the state trust fund after the initial calculation to poorer and more densely populated communities. However, only those that committed a three percent surcharge whether by adopting a three percent surcharge or the blended CPA (as stated above) are eligible for these additional distributions. The decile ranking used to determine the equity and surplus rounds can be found by clicking here. The distribution summary can be found in this report.

The state community preservation trust fund was created in 2000 and revenues from the registry of deeds started funneling into the trust fund right away. In FY2003, communities started collecting the local CPA surcharge. The first state match occurred in FY2004 based on those local surcharges. In FY2003, 34 communities adopted the CPA and were eligible for the state match. In FY2018, 162 communities were eligible to receive the state match. Until FY2009, the state trust fund was sufficient to provide communities with a 100 percent state match. Due to increasing participation and declining registry collections, DLS has not been able to provide a 100 percent state match since then.

In FY2018, ten additional communities will begin assessing the local CPA surcharge and will be eligible for the state match in FY2019. In the spring of 2018, DLS will project the first round state match for the 172 communities eligible for the state match in FY2019. The ten new communities are Billerica, Boston, Holyoke, Hull, Norwood, Pittsfield, Rockland, Springfield, Watertown and Wrentham. For a complete list of all communities that have adopted the CPA, please click here. As of today, only one other community has scheduled a ballot question to adopt the CPA. Voters in the town of Northbridge will decide next spring whether to add the CPA surcharge at one percent. For the up-to-date listing of communities considering adoption of the CPA, please refer to the Community Preservation Coalition website at www.communitypreservation.org or by clicking here.