- As the East End real estate market continues to bend towards breaking, the revenues generated by the two percent tax on all property transfers over $250,000 in the Peconic region are waning severely as well. East Hampton's Community Preservation Fund (CPF) Committee is bracing for the changing winds while at the same time trying to strike a balance between transparency and responsibility.
A Graph Is Worth A Thousand Words: The CPF fund dropped dramatically in 2008 and shows little signs of recouping in 2009.
As of April, East Hampton's CPF has taken in $1,668,534, compared to the $5,631,267 accumulated by the same time last year and $9,538,793 in receipts recorded by April 2007, the highest grossing year since the two percent tax was instated in 1999. Most were expecting a bad year for the fund, though the first four months of 2009 have been particularly discouraging, declining 67.6 percent throughout the South Fork over the same period in 2008 (2008 revenues were 41.1 percent below 2007). April's $274,064 marked the second lowest month to date, with July 2001 ranking the lowest in a year that brought in $7,869,745. February 2009 ranks third to last.
While real estate sales contributed $326,196 less to East Hampton's CPF in April than in March, there were two more actual transactions in April (78 and 76, respectively), a sign of the decline in real estate prices. There were 141 property transfers in East Hampton in April 2008 and 155 in April 2007.
Lazy Days Of Summer
The Duke property, also known as Boys Harbor, was a joint acquisition between the Town of East Hampton and Suffolk County, which closed just last month. The sign above sits in one of the unused Boys Harbor buildings.
Facing these dismal figures, East Hampton's Department of Land Acquisition, which manages the CPF properties and finances, and the CPF Committee, which rates properties before they are added to the target list and prioritizes the steward and management of purchased land, are both scaling back the level of their activity.
With the recent closing of the Boys' Harbor property, a $7.34 million joint acquisition with Suffolk County, the $160,000 budgeted to complete the renovation work on the Selah Lester Home and Barn and the regular debt service payments the fund is committed to "for the next 18 months," according to Director of Land Acquisition Scott Wilson.
East Hampton's CPF coffers will be receiving some help this year, as Supervisor William McGintee's office discovered $500,000 that has been sitting in a dedicated fund since the joint purchase of the Shadmoor property in 2000. The 99-acre property in Montauk was one of the town's first CPF acquisitions, splitting the $17.7 million price with the state, county and The Nature Conservancy
(TNC), who currently manages the property with the town.
East Hampton ultimately contributed $5.43 million to the acquisition, the funding for which was originally slated to come from long-term bonds. As the CPF program began to accumulate large revenues, a 1999 Town Board resolution divided the town's funding source between a $4.5 million bond with the remainder coming from CPF. When the sale closed two months later, the entirety of the purchase seems to have been taken out of the CPF, despite the fact that the supervisor's office was unable to find a resolution, stating that the property would not be purchased using any bonded funds. "It's too late to bond for that money now, we have to take the hit in CPF," Supervisor McGintee explained, as those funds could have helped the CPF in its current meager state. Shadmoor was "certainly a worthy CPF purchase," McGintee clarified, asserting that the acquisition was not wrong, merely muddled.
A monthly comparison of CPF real estate transactions in East Hampton since 2005.
Along with providing the largest individual portion of the purchase price ($5.63 million), the State of New York also provided East Hampton with $500,000 for debt service on the bonded funds. Since the town never bonded for the purchase, that money has been sitting untouched in a dedicated account since 2000. "The money's got to go to CPF," McGintee contended, requesting some direction from the board during their May 19 work session. The other board members agreed, providing the fund with a timely boost.
Despite that assistance, "very little stewardship and management money will be used this year," Wilson explained to the CPF Committee during their May meeting, stating that they "can get it down to almost zero" if revenues continue to fall. As part of their new role, the CPF Committee has been charged with giving the Department of Land Acquisition direction on where to spend the 10 percent allocated from the CPF budget for property maintenance, however, with no funds to expend the point is moot.
The committee's other task is to assign letter grade recommendations to any property brought before them by the Town Board or Planning Department before they are assessed and added to the acquisition list. "We're not buying any land," committee member Rav Freidel pointed out, suggesting that the committee begin meeting bi-monthly for the time being. "It's a question of what the town's needs are," committee Chair Tim Brenneman contended, though he and other committee members agreed that there would be little for them to accomplish at a meeting in June. The committee customarily breaks for the month of August, and so by scheduling the next two meetings on July 13 and Sept. 14, decided to meet bi-monthly for the summer.
When they do reconvene, the board will be implementing a public comment section to their agendas, limiting speakers to five minutes. The new policy was established after lengthy discussions with East Hampton resident John Talmage, who has been asking to review the committee's recommendations to the Town Board, as their decisions are currently made in executive session and are "not discoverable," according to Town Attorney John Jilnicki, who was in attendance at the committee's May meeting.
Whether or not the committee should be forced to abide by the Open Meetings Law will depend on whether they are considered a public body under the law. Unfortunately, that's "not crystal," Jilnicki explained, and per the committee's request, he will get an official opinion from the State Committee on Open Government. Until that time, "the way we're currently operating is as an open committee," Brenneman maintained. "We can feel confident to continue operating as we have been."
Town Attorney John Jilnicki (wearing the blue vest) attended the committee's May meeting to explain how the advisory body fits into the state's Open Meetings Laws. Jilnicki's determination is not final, however, and he will be asking the Committee on Open Government for input as well.