Should Somerville Adopt the Community Preservation Act?

This November, in addition to casting important votes in the presidential and senatorial races, Somerville voters will decide whether or not to adopt the Community Preservation Act, known as the CPA.

The CPA is a surcharge on property taxes that puts aside money for open space, recreational space, historic preservation and affordable housing projects in cities and towns. Communities that adopt the CPA receive partial matching funds from the state.

In Somerville, the CPA decision will be Question 4 on the ballot, and here's a look the matter.

What will you be voting about?

When you vote on Question 4, a "yes" vote means you want Somerville to adopt the Community Preservation Act. A "no" vote means you don't want Somerville to adopt the Community Preservation Act.

When you vote "yes," saying Somerville should accept the CPA, you're agreeing that Somerville should establish a 1.5 percent surcharge on property taxes to fund CPA projects in the city. In return, Somerville will receive partial matching funds from the state (more on that below).

What is the CPA? Why now?

The CPA was signed into law in 2000, and it allows communities to form Community Preservation Funds to pay for projects in three broad categories: open space, historic preservation and affordable housing. Somerville's local fund would get its revenue from the 1.5 percent property tax surcharge and from partial matching funds from the state.

Some 148 Massachusetts communities have already adopted the CPA, and 12 communities, including Somerville, will be voting on the matter in November.

As originally written, the CPA was not of interest to a dense city like Somerville because, when it came to open space projects, CPA funds could only be used to acquire open space, something Somerville doesn't really have, explained Katherine Roth of the Community Preservation Coalition, a statewide organization that advocates on behalf of the CPA.

This summer legislators made some changes to the CPA law. Now, communities can use funds to rehabilitate existing recreational facilities, Roth said. As a result, the CPA made more sense for Somerville, according to advocates, who include Somerville Mayor Joseph Curtatone and the Board of Aldermen.

How much would it cost Somerville taxpayers?

The CPA would add a 1.5 percent surcharge on property taxes.

It would also establish exemptions for lower-income residents, according to Erica Schwarz of The Committee for a Stronger Somerville, which supports the CPA.

"The point about the exemptions is really important to know," she said. The first $100,000 of residents' property value would also be exempt.

So, what does that mean?

According to a chart prepared by the city assessor's office, here are the average surcharges property owners would pay:

• Condo (average value $323,500): $16.89 surcharge
• Single-family home (average value $405,000): $32.89 surcharge
• Two-family home (average value $487,000): $48.99 surcharge
• Three-family home (average value $550,300): $61.42 surcharge
• Building with four to eight apartments (average value $727,100): $123.13 surcharge
• Building with nine or more apartments (average value $2.4 million): $453.91 surcharge
• Commercial and industrial (average value $1.4 million): $439.12 surcharge

How much money would the CPA raise in Somerville?

First, the short answer:

It would raise roughly $1.2 million from the property tax surcharge in Somerville in the first year. On top of that, according to Roth, the state would provide matching funds worth about 22 cents on the dollar, based on conservative estimates. So, with $1.2 million raised, Somerville could receive $264,000 in matching funds from the state.

Now, the slightly longer answer:

The estimate of $1.2 million is based on fiscal-year 2012 property tax rates and current assessed values. The fiscal-year 2014 tax rate hasn't been established yet, and assessed values are always changing, so the CPA would raise different amounts every year.

As for state matching funds, "To do an estimate is somewhat of a moving target," said Roth.  She thinks the 22 percent matching funds currently projected are a low estimate. A $25 million infusion of cash is coming into the state's CPA fund in 2013, she said. Also, revenue for the CPA comes from fees tied to registry of deeds transactions, she and Schwarz explained. During the recent housing downturn, those funds dried up, but with the housing market experiencing more activity so far in 2012, the state's CPA fund could grow. In other words, Roth and Schwarz—advocates of the CPA—think matching funds will rise in upcoming years.

What projects would it fund in Somerville?

Schwarz, a Union square resident, pointed to two possible projects that CPA funds could help with in Somerville.

She often runs up Prospect Hill, and "the tower could use some work," she said, referring to the Prospect Hill monument and park, which mark the spot where George Washignton first flew the American flag in 1776. CPA funds could help renovate the monument and park as historic preservation and open space projects, she said.

Another project could be the Somerville Museum, which is "facing some expenses" right now, she said.

CPA funds could also be used to "create really high quality affordable housing" or renovate and maintain existing affordable housing, she said.

The Community Preservation Coalition lists examples of projects conducted in other communities.

Cambridge, for instance, has used CPA funds to support the acquisition of buildings for affordable housing units. It's also funded capital improvements to existing affordable housing buildings and allowed owners of affordable housing complexes to refinance and maintain affordable designation.

Cambridge has also used CPA funds to conduct multiple projects at Fresh Pond and make repairs to Cambridge City Hall and other historic buildings in the city.

What about Somerville's Lincoln Park?

Some have asked if CPA funds could be used to renovate Lincoln Park near Union Square, where neighbors and city planners have been in sometimes heated discussions about rehabilitation plans. Plans called for installing an artificial turf field, among other rehabilitation features.

Based on new legislation passed over the summer, CPA funds cannot be used for the installation of artificial turf, Roth explained. However, other aspects of renovating an athletic field, such as improving drainage and leveling the field—both things that may need to happen at Lincoln Park—could potentially use CPA funds, she said.

Because the artificial turf rules are new, communities are still waiting for legal guidelines on this issue, Roth said.

How would CPA work in Somerville?

Somerville would establish a local Community Preservation Fund that would be managed by a local committee. 

The committee would have at least five members from the city's housing, planning, historic, conservation and recreation commissions, explained Schwarz.

But Somerville would likely have nine members on the committee, the maximum allowed by law.

Government or non-profit groups with worthy projects would apply to Somerville's community preservation committee for funds. The committee would make recommendations, and the Somerville Board of Aldermen would have the final say on approving those projects.

Every year, Somerville would need to spend at least 10 percent of the local Community Preservation Fund on each of the three project categories. In other words, it would spend 10 percent on historic preservation, 10 percent on affordable housing and 10 percent on open space. The remaining 70 percent could be used however the committee sees fit.

Funds not used in a given year could roll over into subsequent years.

Arguments against CPA

Those who oppose the CPA argue against more taxation. 

On Somerville Patch, one commenter wrote, "No way would I ever vote for something like this. We are already paying way too much now and I am sure we are going to be hit some more with all this so called progress going on in this city."

Another asked, "Can we get the open space and maybe the historic preservation without the affordable housing?"

A Kennedy School of Government paper written in 2007 suggested that CPA funds benefited wealthy communities at the expense of poorer, urban communities, and that wealthy communities used the funds mostly to protect open space. (It seems this summer's changes to the law addressed some of those issues).

Arguments for the CPA

Schwarz said that with an average surcharge of $32 for a single-family home in Somerville, the CPA represents a "modest investment" that would not only attract matching funds from the state but also leverage state, federal and private grants.

Even with state matching funds at 22 percent, a number she said would likely grow, "It's still hundreds of thousands of dollars" that Somerville would get in return for joining the CPA, Schwarz said. When matching funds increase, "We might as well be poised to take advantage," she said.

On Somerville Patch, one commenter wrote, "It's basically free money for the city, to improve our parks (or other uses, if we see fit). Personally, I think this might be one of the best sources of money available to actually finish the Community Path."

Roth said, "CPA is very flexible" and communities like Somerville can tailor projects to fit its needs. She said Somerville is a "dynamic, growing, thriving" community and "CPA would be a terrific choice for Somerville."