Community Preservation Fund revenues plummet in 2008

0
22

The amount of money collected by the five East End towns in 2008 to buy and preserve open space plummeted from the previous year’s totals, according to the latest data provided by State Assemblyman Fred Thiele Jr.

In the first 11 months of 2008—revenue figures from December 2008 have not yet been released—the total Community Preservation Fund revenue in the five towns was down 41.1 percent compared to the total collected for all of 2007. Traditionally, the revenue totals in December are the lowest of the year for CPF revenue.

Southampton and East Hampton towns—the two municipalities that have traditionally boasted the biggest CPF revenues—experienced the largest drops in funding. Southampton Town’s revenues declined by 38.3 percent, from about $53.5 million in 2007 to nearly $33 million in the first 11 months of 2008, according to Mr. Thiele. In East Hampton Town, the fund saw a 52-percent drop in revenue over the same time; the fund collected $14.5 million through November 2008, down from $30 million collected in 2007.

Mary Wilson, the administrator of Southampton Town’s CPF, which has collected more than $322 million since its inception in 1999, said the sharp decline in revenues can be blamed on the struggling housing market and lagging economy. “The number of transfers are down,” said Ms. Wilson, referring to deed transfers in her municipality.

According to Ms. Wilson, the number of deed transfers in Southampton Town dropped by 23.5 percent last year, from 3,640 transfers in 2007 to 2,783 transfers in 2008. Because the CPF is funded by a 2-percent tax that applies to most real estate purchases, the amount of money generated for the fund is a direct reflection of the local real estate market. In other words, fewer house sales equate to fewer dollars for land preservation.

The total amount of CPF revenues collected by the five East End towns, which also includes Riverhead, Shelter Island and Southold, declined from about $96 million in 2007 to $56.5 million through the first 11 months of 2008, according to a press release issued by Mr. Thiele’s office.

In spite of the falling revenues, officials in both Southampton and East Hampton towns are confident that they will be able to continue paying off the money that they have already borrowed to preserve land in their respective municipalities.

East Hampton Town Supervisor Bill McGintee said Monday that his municipality’s debt service is so low that officials should have no problem paying off loans used to acquire open space. He added that he does not think the drop-off in revenues—a trend that is anticipated to continue in 2009—will prevent the town from making future land acquisitions. The East Hampton CPF has generated more than $152.5 million since 1999.

“Our debt service is about $4 million per year, and we anticipate bringing in $13 million to 14 million with our CPF, even in a bad year,” Mr. McGintee said. “Our goal is to keep an eye on debt service and make sure it’s manageable in relation to the income we’re bringing in right now.”

Scott Wilson, the director of land acquisition for East Hampton Town, did not return calls this week.

In comparison, Southampton Town’s debt service currently totals about $100 million, which can be attributed to previous land purchases, according Southampton Town Comptroller Steven Brautigam. Ms. Wilson said she is uncertain whether the decrease in CPF revenues, combined with the town’s debt service, will ultimately result in a drop-off in open space acquisitions this year.

“We are definitely prioritizing and continuing to re-prioritize,” Ms. Wilson said, referring to her office’s list of properties that are targeted for preservation. “There are no parcels that are off the list.”

Ms. Wilson noted that town officials will be looking to work with Suffolk County to complete more joint purchases of property in the town.

Additionally, Southampton Town officials are now considering creating a reserve fund in the near future that would ensure that they can continue to buy land even in bad economic times. Ryan Horn, a spokesman for Southampton Town Supervisor Linda Kabot, said the Town Board will discuss such a program during its next work session set for this Friday, starting at 11 a.m., at Town Hall.

If all goes as planned, Mr. Horn projected that a reserve fund could be in place within the next few weeks.

“We’ve been discussing a policy like this for some time,” said Richard Blowes, the management services administrator for Southampton Town, noting that he recommended such a fund to Ms. Kabot and Ms. Brautigam.

Noting the town’s significant debt service, Mr. Brautigam said that a reserve fund totaling around $10 million should be sufficient in Southampton. He noted that the town now spends about $10 million a year to pay off loans that went toward land preservation.

With a reserve fund in place, Mr. Brautigam said town officials should be able to continue buying land even when the real estate market is struggling. He also noted that the town should be able to take advantage of the slowing real estate market to buy additional land.

The five East End towns have collected nearly $565 million as a group since 1999, helping preserve more than 10,000 acres.

Facebook Comments