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HomeMy WebLinkAbout2010-10-13-CPC-min Minutes of the Community Preservation Committee Wednesday October 13, 2010 3:00 pm Room 207 Town Offices Present: Board Members: Wendy Manz,Chair; Marilyn Fenollosa, Vice-Chair; Joel Adler, Norman Cohen, Jeanne Krieger, Leo McSweeney, Betsey Weiss and Dick Wolk. Absent: Sandy Shaw Administrative Assistant : Nathalie Rice Also in attendance was David Kanter, member of the Capital Expenditures Committee (CEC) and Glen Parker, Chair of the Appropriations Committee (AC). The meeting was called to order at 3:03 pm by Ms. Manz. 1.Approval of Minutes – Minutes from the 2010 meetings of 4/26, 6/17 and 9/29 were approved as amended. 2.Discussion of Land Acquisition Budget Overruns – Mr. Carl Valente, Town Manager, met with the Committee to discuss overruns in the legal budgets of the Busa Farm Acquisition account and the Cotton Farm Acquisition account. He presented a spreadsheet, in which all three land acquisition accounts and the administrative budget were detailed. The Leary acquisition account Mr. Valente noted, was under budget in legal spending, but exceeded the budget for the actual acquisition due to recording costs and associated fees. Members were concerned with the progress of the affordable housing aspect of the acquisition, and Ms. Manz provided a brief update. She stated that there may be a cost-effective way to rehab the Leary house and still have it meet the affordability standards. She noted that the Leary Committee (there is no formal name as yet) is planning to apply to the CPC for $50,000 in planning funds for FY2012 in order to develop site plans for potential housing. Mr. McSweeney questioned whether there were alternate sources of funding for the work, to which Ms. Weiss and Ms. Fenollosa replied that HOME funds, and DHCD grants might be available. Mr. Valente next discussed the Busa Farm account, which showed legal costs at $53,761 to date. These costs had been estimated at $35,000, resulting in a FY2010 overrun of $18,761. Ms. Fenollosa asked why the legal costs were nearly $20,000 higher to which Mr. Valente responded that the negotiations for the two different parcels of land made the negotiations and transactions 1 more complicated. He said that the overrun had not been attributable to the negotiations for the Goldinger parcel. Mr. Valente explained that there would be further legal work needed for the Busa parcel to draw up the conservation and/or housing restrictions that might be needed. He estimated these costs at $5,000 to $10,000. There was a lengthy discussion of the restrictions that would be placed on the property, and Mr. Adler suggested that permanent conservation restrictions not be placed on the agricultural land in the event that farming was abandoned at some point in the future. Mr. Valente added that there would be no further need for survey work, but that there would be further expenses associated with the Master Plan. Ms. Fenollosa questioned Mr. Valente about the difference between the Leary Land Management Plan and the Busa Master Plan. Mr. Valente explained that the Leary Land Management Plan involved conservation work on site, signage and the completion of a site inventory. The Busa Master Plan, however, was not a conservation plan, but involved analyzing the site for its suitability for a variety of uses including housing, recreation, open space and farm use. He explained that monies from the Leary Land Management Plan could not be used for future site planning since this use was “beyond” what the CPC had approved. In regard to the Busa property, he explained that he would be preparing a request for supplemental funding for the Master Plan process for FY 2012. Ms. Krieger questioned whether a FY 2012 request for Annual Town Meeting would be timely enough to allow the Busa Land Use Committee to make progress in FY 2011. In regard to the Cotton Farm acquisition, Mr. Valente explained that the Purchase and Sale has not yet been signed, but that the due diligence phase th would close on October 15. He noted that the site work to identify contaminants on the parcels had cost more than anticipated due to the complexity of the parcels and the discovery of an underground oil tank on the abutting Cataldo parcel. In response to a question from Mr. Adler, Mr. Valente explained that the Town had to hire their own consultant to oversee the Cataldo’s engineer, and to review his findings. Mr. Adler suggested that in future acquisitions this cost be borne by the seller. (The Town required the Cataldo’s to pay for 21E work, but did not include the cost of Town review.) Mr. Valente explained that legal fees associated with the negotiations have been significant and said he anticipated further expenses including the past month’s legal bills, closing costs and the drafting of the conservation restriction. The Committee was concerned at the overspending in the Cotton Farm budget, and questioned why such an overrun occurred. Mr. Valente explained that the negotiation of the Purchase and Sale had been very time- consuming and costly, and that the negotiations of use restrictions on the property had also been complex. 2 Mr. Valente explained that he had two options for paying the legal overruns on the Busa and Cotton Farm accounts; one, to pay the overages from the Selectmen’s budget; or two, to request payment of the fees from the CPC Administrative budget. It was the consensus of the CPC that it would be acceptable to pay the legal fees out of the Administrative budget and there was support for leaving the Land Management and Land Planning monies intact by doing so. The amount of $50,000 was discussed as an amount to put toward the legal overruns. Mr. Valente thanked the Committee for their support, and said he would check the CPA statute and seek Town Counsel’s opinion on whether paying the legal fees from the Administrative budget would be allowable. In response to a question from the CPC about State Self- Help monies for Cotton Farm, Mr. Valente said the Town would be notified about their application in the coming weeks. Mr. Adler made a motion to allow the payment of up to $50,000 out of the CPC Administrative budget for the Leary, Busa and Cotton Farm legal fees, subject to the approval of Town Counsel. The motion was seconded and voted, (8-0) (Mr. McSweeney had left the meeting at 3:30). In the event Town Counsel ruled unfavorably, Mr. Cohen asked whether the additional monies might be requested at Special Town Meeting, should such a meeting be held this fall. 3.Financial Model – Mr. Addelson – Mr. Addelson presented the FY2012 CPA budget model to the Committee, explaining that there was a deficit in revenue due to an $83,000 shortfall in expected revenue from the state match and lower than expected returns on investment income. In addition, he noted that the projections for the 3% property surcharge might not meet expected amounts. He estimated the total shortfall at approximately $125,000. In order to account for the shortfall, there were two avenues for reconciling the deficit: (1) to reconcile it at the end of the year, or (2) to go to Special Town Meeting and make modifications to Article 11 and re-appropriate funds to the appropriate buckets or projects. Mr. Addelson said he would be meeting with a DOR official the following day and would get a better idea of how to handle the accounting for this matter. Mr. Cohen suggested it might be better to wait until Annual Town Meeting especially since the warrant for Special Town Meeting would have to be written in the next few days. Mr. Addelson presented the remainder of his budget model, noting that there was approximately $1.84 million available in the Undesignated Fund Balance for FY2012. With expected revenue from the surcharge, the state match and investment income, he estimated the total available for FY2012 at approximately $6 million. The figure of $6M figure, however, did not include: (1) the $2 million reserve, (2) debt service for Busa and Cotton Farm, or (3) the approximate $125,000 revenue deficit. Mr. Kanter questioned whether the $217,000 return on the premium from the Busa bond sale had been accounted 3 for to which Mr. Addelson replied that it had not. He noted that the $217,000 and the returned funds from closed projects were not part of the $6 million total. A motion was made regarding the anticipated $125,000 deficit; “that in the event that it becomes necessary to reallocate funds at the Special Town Meeting, the CPC authorizes such reallocation, and if the reallocation is not necessary at that time, the CPC will defer the decision until the end of the year”. This motion was seconded, voted and approved, (8-0). 4.Discussion of a Lexington Housing Trust – LexHAB Co-Chairs, Mr. Bill Hays and Mr. Bill Kennedy met with the CPC to discuss the possibility of creating a Lexington Housing Trust. Mr. Aaron Henry, senior planner was also present for the discussion. Mr. Hayes presented a lengthy argument for establishing a Housing Trust in Lexington. He noted that the timing of the CPC process is awkward and wasteful for four reasons. One, once LexHAB seeks approval at Town Meeting, the units have already been purchased. He stated that there is some disagreement with this process, and that he would like to arrive upon a solution to rectify this situation. Secondly, Mr. Hays stated that the process now necessitates two closings, one when LexHAB purchases a unit, and a second when the Town closes on the transfer of funds. He said this is duplicative and costly and that the units cannot be put on the Subsidized Housing Inventory (SHI) list until the Town has closed, often months after money is available on July 1. Thirdly, there are economic costs borne by both LexHAB and the Town due to the time delays associated with closing. Mr. Hays explained the LexHAB has to hold the property through the Town Meeting process until funds are available July 1, and that due to delays in the Town’s closing, interest costs incurred by LexHAB over the last three years have approached $100,000. He also noted that Town staff time is wasted in preparing documents for the second closing. Finally, Mr. Hays pointed out that the units remain vacant for up to a year and a half while the restrictions are prepared and the Town closing takes place. He suggested that tenants could be placed on the SHI list earlier if there were just one closing. In summary, Mr. Hays proposed that the Town initiate the formation of a Lexington Housing Trust. He noted that legally, LexHAB already functions as a housing trust, and that few changes would have to be made to formalize its role. He added that in place of LexHAB functioning as the Trust, a separate trust could also be formed. He explained the process by which monies could be approved by the CPC, deposited with the Trust and used at a later date. Upon developing a proposal for the purchase of a property, Mr. Hays stated that the Trust would return to the Board of Selectmen and CPC for approval prior to the purchase of any units. The CPC and Board of Selectmen would 4 have thirty days to approve such a request from the Housing Trust. He noted that a Trust could also hold monies for the Housing Authority if needed. In response to questions from the CPC, Mr. Hays stated that he would not be applying for funding for the purchase of affordable units this fiscal year. He added that he would be “very agreeable” to a $100,000 to $200,000 grant toward a trust, however. Mr. Adler questioned whether the arrangement described by Mr. Hays would give Town Meeting members enough control, and questioned if other groups such as Conservation or Recreation might want to develop their own trusts. Mr. Wolk echoed this sentiment, stating that Town Meeting would have much less control with a Housing Trust, and said that the CPC would need to see quantitative data on how much money would be saved. Ms. Manz asked Mr. Henry if he could put together some idea of these costs for the next meeting. In support of Mr. Hays’ proposal, Ms. Weiss noted that LexHAB was the only housing group in Town that was purchasing new units for inclusion on the SHI list. The Housing Authority, she said, was concerned only with the maintenance and upgrading of units. 5.Needs Assessment Report – Ms. Manz addressed this agenda item, reminding members to edit their sections and return them to Ms. Rice. Ms. Rice will send the LexHAB section to Mr. Hays for updating. th 6.Future Meeting – A future meeting was scheduled for Monday October 25 at 4:00 pm. Mr. Hays will be invited to come at 4:00 pm for the continuation of the discussion of a Lexington Housing Trust. The meeting was adjourned at 5:16 pm. Two documents were reviewed or presented at the CPC meeting; (1)A spreadsheet entitled, “Land Acquisition Accounts and Admin. Budget, October 15, 2010”. This document is on file with the CPC. (2)A spreadsheet entitled, “Community Preservation Budget Projections” dated October 13, 2010. This document is on file with the CPC. Respectfully submitted, Nathalie Rice Administrative Assistant Community Preservation Committee 5