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APPROPRIATION COMMITTEE REPORT TO THE MARCH 2013 ATM
<br /> Pion), and affordable housing. The State provides matching funds (the amount depending on monies
<br /> available and demand from adopting communities) from fees imposed on real estate transactions, includ-
<br /> ing mortgage refinancing.
<br /> While the CPA provides broad guidance on the appropriate use of funds, it allows for a considerable
<br /> measure of local control by (1) establishing a local Community Preservation Committee (CPC) to review
<br /> and make recommendations on candidate CPA projects to Town Meeting and(2) authorizing Town Meet-
<br /> ing to approve CPC-recommended projects. Town Meeting may not increase a CPC-recommended ap-
<br /> propriation, nor may it alter the stated purpose of an appropriation, but it may amend to decrease an ap-
<br /> propriation.
<br /> Communities adopting the CPA have each implemented the statute in a way that reflects local opportuni-
<br /> ties, priorities and needs. One of Lexington's opportunities lies in the inventory of municipal and school
<br /> buildings that qualify as historic buildings and which are therefore eligible for CPA funding. These pro-
<br /> jects can be funded through a combination of Lexington taxpayers' CPA surcharges and State matching
<br /> funds. Of the total $32,149,602 of CPA funds appropriated by Lexington for projects and administrative
<br /> costs, Town Meeting has appropriated $7,340,079 for historic projects, many of which have led to the
<br /> renovation or rehabilitation of Town buildings; $3,355,392 for recreation projects; $9,592,017 for acqui-
<br /> sition and preservation of land for open space; $6,813,114 for community housing; and $730,000 in ad-
<br /> ministrative expenses. Categorization of an additional $4,319,000, representing appropriations for the ac-
<br /> quisition of the Busa Farm property, is pending.
<br /> The State Match
<br /> Under the CPA, the State provides matching funds to supplement the Town's 3% CPA property tax sur-
<br /> charge. The state match is the product of the state matching rate times the amount collected by the Town
<br /> for the previous fiscal year's CPA surcharge. This state match comes from the CPA Trust Fund, which is
<br /> largely funded by a state fee on real estate transactions. The matching rate is determined by the State each
<br /> year based on the balance in the CPA Trust Fund, and on the number of communities participating in the
<br /> CPA.
<br /> In FY2007, the first year following Lexington's adoption of the CPA, there were 113 participating CPA
<br /> communities and the state match rate was 100%. Beginning in FY2008, state revenue from the real estate
<br /> transaction fees began to decline, along with the economy. In addition, the number of participating com-
<br /> munities rose to 148 in FY2013. As a result of increasing participation and lower balances in the CPA
<br /> Trust Fund, the state match rate fell to around 28% in FY2011 and has since hovered slightly below that
<br /> level.
<br /> Since March 2012, the state revenue collected from real estate transactions has improved,but not enough
<br /> to significantly affect the Town's state match for FY2014. The state match for FY2014 will be bolstered
<br /> by the state legislature's decision to appropriate an additional $25 million into the CPA Trust Fund in July
<br /> 2012. In FY2014 (November 2013), it is estimated that the Town will receive a state match equal to 27%
<br /> of the FY2013 surcharge, or approximately $962,000. This will be in addition to the FY2014 CPA prop-
<br /> erty tax surcharge revenue estimated at $3,691,000.
<br /> Funds Available for Appropriation
<br /> A total of $6,628,088 in CPA funds is available for appropriation at this Town Meeting: $1,958,131 in
<br /> carry-forward reserves and $4,669,957 in FY2014 anticipated revenues. The latter includes anticipated
<br /> FY2014 surcharge collections of$3,691,000, an anticipated State match of$961,957 (estimated at 27% of
<br /> the collected the Town's FY2013 surcharges), and $17,000 in interest income.
<br /> The Motion
<br /> The motion under Article 8 will be in two parts; the first section will distribute the anticipated revenue
<br /> among reserve accounts and the second part will appropriate funds for the individual projects as outlined
<br /> in the Warrant. To be consistent with the requirements of the enabling state statute, 10% of the anticipated
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