2015-12-00-CPC-rpt (Needs Assessment Report)

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Town of Lexington Community Preservation Plan Overview Introduction In March of 2006, the residents of Lexington voted to adopt the Community Preservation Act (CPA), which set a 3% surcharge on property tax bills to be supplemented by State matching funds from the Massachusetts Community Preservation Trust Fund. The Lexington Community Preservation Committee (CPC) was appointed at that time to make recommendations to Town Meeting for the use of the funds raised by the surcharge under the CPA. In its initial year, fiscal year 2007 (FY07), the surcharge brought in approximately $2.5 million dollars, which was fully matched with State funds. Since FY07, annual revenue from the local surcharge has steadily increased. Latest figures are available for FY15, for which the surcharge raised $3,981,295. However, State matching funds, which come from a surcharge on Registry of Deeds transaction fees, have fallen since FY08. This is a function of two factors: falling home sales in Massachusetts over the last several years and an increasing number of communities passing CPA by -laws therefore competing for limited funds. (To date there are 158 communities with CPA by- laws). Initial estimates from the Department of Revenue projected the FY16 State match distribution at just 18% of the local surcharge, an all -time low. While the recently released State match figures exceeded those estimates, the match is on -trend with decreasing amounts year over year. Lexington will receive $1,229,774 in FY16, 30.7% of its surcharge. Lexington's state match in FY15 was $1,230,116 (32.6% of the surcharge) and $1,932,347 in FY14 (54% of the surcharge). Despite the decrease in state matching funds, there are several encouraging measures being taken to ensure that the Trust Fund benefits from both short and long -term growth strategies. The FY16 state budget authorized the transfer of $10 million from the FY15 state budget surplus to the CPA Trust Fund, marking the third year in a row the state budget has included such a transfer to this fund. ($11.4 million was transferred to the fund from FY14 and $25 million was transferred from FY13). Prior to the transfer of surplus funds, Lexington's FY13 state match totaled only $929,507. While yearly surplus transfers to the Trust Fund would benefit communities by providing immediate increases in state matching funds, relying on state budget surpluses cannot sustain the CPA as a long -term solution. A piece of legislation introduced earlier this year entitled An Act to Sustain Community Preservation Revenue calls for a review of the fees collected at the Registries of Deeds (the trust fund's primary source of funding). The current transaction fees have not been adjusted since the CPA was signed into law in 2000. The Department of Revenue's Monthly Report of Collections and Refunds released in October 2015 shows an 8.5% increase in collections at the Registries of Deeds compared to last year's figures but the bill seeks a more permanent solution. If passed, it would call upon the Department of Revenue to calculate the 1