It may be the presidential election, but in Watertown much of the debate has been about a local ballot measure – Question #5 – which asks voters whether they want the town to adopt the Community Preservation Act.
Conversations have become heated, and discussions have raised questions about what the CPA would mean for Watertown, and what impact it will have, and of course, how much it will cost.
Election day is Tuesday, Nov. 8, 2016, but residents can participate in early voting through Friday, Nov. 4 (click here for more information).
And remember that the CPA is on the back of the ballot!
What will the CPA do?
The Community Preservation Act creates a fund that can be used on projects in Watertown in three different areas: affordable housing, open space and recreation and historic preservation. The money is collected through a tax surcharge (explained later) and the state provides some matching dollars.
How much will it cost me?
Proponents say the CPA would cost about $10 a month, on average, for Watertown home owners. Opponents note that the additional tax is on the property taxes owed, so if they go up, the surcharge grows, too.
The CPA will add a 2 percent surcharge. It would not raise taxes by 2 percentage points (from 13 percent to 15 percent), but instead it is 2 percent surcharge to your current annual tax bill.
According to the Town Assessor, this year the average owner-occupied home – one with an assessed value of $517,701 – would have a tax of $5,666. Two percent of that is $113.32.
Invest in Watertown posted these figures for different taxes
$350,000 = $67 / year or $5.50 / month
$450,000 = $94 / year or $8 / month
$550,000 = $122 / year or $10 / month
$650,000 = $150 / year or $12.50 / month
These figures are for owner-occupied homes and condos, which receive the $1,416 residential exemption.
Homes that are not owner-occupied (those that are rented or are second homes) would pay $7,082 on the same average property. The surcharge on that home would be $141.64.
To find out how much you owe (for owner occupied homes): take the assessed value, subtract the residential exemption of $1,416, multiply it by 2 percent (0.02) and that equals the extra amount you would pay this year if the CPA passed.
How to find your assessed value:
1) Click here: http://watertown.patriotproperties.com/default.asp
2) Put in your street at the top (don’t include your street number)
3) Find your property and click on it.
4) The assessed value is near the bottom on the right side.
5) The Tax Rate is $13.68/$1000, so multiply the value by .01368
6) Subtract the $1,416 for the residential exemption
7) Multiply the answer by 2 percent (.02) and that will be the amount the CPA would cost you this year
Will it impact renters?
That’s a bit complicated, but the short answer is: no, but quite possibly.
Confused? Well, since renters do not pay property tax, renters will not owe anything for the CPA. However, opponents say landlords will just pass on the tax increase directly to their tenants.
If you have a lease, check if there is an escalation clause. That would allow landlords to increase the rent if taxes are increased. If you are month-to-month, landlords can always raise rent, but they must give you 30 days notice before making an increase.
Based on the 2 percent surcharge, renters of apartments or part of a two-family will most likely pay less than the $10 a month average.
How much will the state contribute?
The state will provide some matching funds from the for Watertown projects if the CPA passes. The amount differs. Some project have received $1 for $1, but the matching has been as low as 27 cents per local dollar, according to a slide presentation on the Invest in Watertown website. According to the CPA law, the minimum matching amount is 5 percent.
The money comes from the state’s Community Preservation Trust Fund which receives money from surcharges from the Registry of Deeds. A $20 surcharge is charged each time a document or instrument is recorded at the Registry of Deeds. Also, $10 is charged when a municipal lien certificate is registered. Watertown already pays into this fund.
The money from this fund is distributed each year on Nov. 15 to towns and cities that have adopted the CPA. The first 80 percent of the money is divided among the communities that have adopted the CPA based on a percentage the money collected locally from the CPA surcharge, i.e., all communities would get 30 percent matching funds. The remaining 20 percent is distributed to communities based on their population and the value of their property, combined to come up with the equalized property valuation per capita. Communities are then ranked and that determines what portion of the remaining 20 percent a city or town will get, according to the CPA law.
The town will also be eligible for grants from the state and other organizations for projects funded in part by CPA money. Some grants require communities to have adopted the CPA as a condition for receiving the funds.
Once approved, can the CPA be revoked or changed?
Yes on both. The CPA can be revoked after five years. First the Town Council must approve it, and then it will go to the voters on a ballot question. If the vote to revoke it is successful, the surcharge will remain in effect until all unpaid taxes, and contractual obligations are paid off, according to the CPA law. This includes bonds on projects using CPA money.
The town may also make changes to the amount of the surcharge by a vote of the Town Council. It can be raised up to as much as 3 percent, reduced to the minimum of 1 percent, or somewhere in between.
Are all CPAs the same in every community?
No, there are some options that communities have when proposing a CPA. One is the surcharge. Communities can have a property tax surcharge of up to 3 percent. In the proposal in Watertown the surcharge is 2 percent, but others have gone for 1.5 percent or 1 percent.
Does everyone have to pay?
No, there are some exemptions allowed in the CPA legislation.
Exemptions can be included in the CPA proposal, including low and moderate income. This exemption is in the Watertown proposal.
They could also exempt the first $100,000 for residential and/or commercial/industrial property. Neither of these are in the Watertown proposal, but many communities have included those ones.
Another option is exempting all commercial or industrial properties in towns with a split tax rate. Watertown has a split rate but did not choose this exemption. The Community Preservation Coalition website shows few communities do so.
A few communities have no exemptions.
How do you qualify for the low- and moderate-income exemption?
Anyone who qualifies to live in low-income housing or low- and moderate-income senior housing qualifies. In this circumstance, seniors are people 60 years of age or older.
According to Town Treasurer-Collector, the thresholds for Watertown would be:
Single person $54,936
2 people $62,784
3 people $70,632
4 people $78,480
5 people $84,758
6 people $91,037
Single person $68,670
2 people $78,480
3 people $88,290
4 people $98,100
5 people $105,948
6 people $113,796
What about renters, can they get an exemption?
No, renters cannot apply for an exemption, because the charge is on property taxes, which they do not pay, directly.
How do you show you qualify for the exemption?
People seeking an exemption will have to apply to the Board of Assessors. They will look at the applicants gross income, according to a letter from Town Treasurer-Collector Joseph DiVito. The income requested in the application includes wages and salary, Social Security, pensions, profits from a business, capital gains, alimony, child support, public assistance, unemployment and disability.
DiVito added that “household out of pocket medical expenses” may be deducted from the gross income. These include money paid to health insurance premiums, doctors, hospitals, on diagnostic tests, prescription drugs, medical equipment and other miscellaneous items.
Applicants will be asked to show town officials their most recent Federal Tax Return and/or additional verification, according to DiVito.
The application also asks for the names of everyone living in the home.
Do Watertown residents get preference when applying for affordable housing built using CPA money?
Yes. Up to 70 percent of affordable units can be distributed using a local preference. This includes current residents, and others such as municipal employees. This is for any affordable housing, not just for projects built or acquired using CPA funds.
According to Watertown’s Housing Production Plan filed with the state, the following groups qualify for the local preference:
• Current residents: A household in which one or more members is living in the city or town at the time of application. Documentation of residency should be provided, such as rent receipts, utility bills, street listing or voter registration listing.
• Municipal Employees: Employees of the municipality, such as teachers, janitors, firefighters, police officers, librarians, or town hall
• Employees of Local Businesses: Employees of businesses located in the municipality.
• Households with children attending the locality’s schools, such as METCO students.
Have projects been presented?
No, the supporters of the CPA do not have a list of projects they have planned. They did, however, include some potential projects on the Invest in Watertown site.
These include open space and sports fields by Walker’s Pond (on the Westside near to Bell Watertown Apartments), a lot on Elm Street could become affordable housing, preserve the historic Schick House in the East End, and improving recreational facilities at Filippello Park and Cannalonga Memorial Park.
What have other communities done with their CPA money?
Neighboring communities that have passed the CPA have done dozens of projects, using the CPA funds to partially or fully pay for the projects.
Belmont spent $2 million in CPA money toward the construction of the pool at Underwood Park. The total cost of the project was $4.9 million. Belmont set up a first-time homebuyer assistance program using $375,000 of CPA funds. The historic 1853 William Flagg Homer House had all but $10,000 of the $110,000 cost of a preservation project paid for by CPA money.
In Waltham, $50,000 was spent on a City Hall roof project from the CPA fund because it is a historic building. Several projects have been done at Waltham’s historic homes, including $250,000 toward the $1.5 million cost of moving the carriage house at Gore Place. Also, $300,000 was spent on an energy savings project at the Waltham Housing Authority’s Whalen Apartments. Waltham covered half the $5,000 cost of acquiring land at the Hardy Pond Lands I project from the fund.
Newton spent nearly $75,000 of CPA money to create access to an unimproved part of Auburndale Park. The Newton archives were preserved using $74,770 in CPA money. The city spent $100,000 on a supplemental funding for Pelham House, which has 10 studio rental units affordable to individuals 55 years or older, with incomes up to 50 percent of the area median.
If property is purchased with CPA funds, the property will have a permanent use restriction limiting to the use to the purpose it was acquired for (such as affordable housing or open space), according to the CPA law
Who decides what to spend money on?
If the CPA passes, a committee will be formed, and they will recommend projects to the Town Council. The Council can then approve or reject spending money on the proposed projects. CPA money can also be put into an affordable housing trust fund by the town, the law reads.
The CPA legislation requires the CPA committee to do a study of the needs of the town in the areas of affordable housing, historic preservation and open space, and they will hold one or more public meetings to talk about the needs and possible projects and resources needed for the projects.
The CPA legislation requires the committee to include a member of the Conservation Commission, a member of the Historical Commission, a member of the Planning Board, a member of the Parks Commissioners (Watertown does not have this commission), and a member of the local Housing Authority.
The money does not have to be split evenly among open space, affordable housing and historic preservation, but at least 10 percent must be spent on each of the three area from the annual CPA revenues, according to the law.
Money can also be spent on the administrative costs and the operating expenses of the CPA board, but that amount cannot exceed 5 percent of the annual revenues. In the first year, up to 5 percent of the revenues can be spent on implementing or integrating tax billing software.
Can the CPA money be used on the school projects?
Only if the school is a historic building and is being restored. It could not be used for building a new school. Some communities have spent CPA money on projects to repair parts of schools, but not repair an entire school.
Examples of schools repaired using CPA include Fairhaven High School, where $40,000 was used to repoint and waterproof a parapet at the school, $50,000 was spent to design an arch, $50,000 was spent on window restoration, $86,000 was spend on gutter restoration, and $205,000 of the $305,000 cost to restore fire escapes.
In Hanover, a boiler was replaced at the historic Salmond School for $120,000.
Can the CPA money be used for projects like upgrading the track and courts at Victory Field of putting in more lights at field in town for youth sports?
Yes, recreation projects can be funded by CPA funds.
In Gloucester, athletic field lights, a red track surface and walking track lights at Newell Stadium were upgraded with help of CPA funds. The city covered $1.5 million of the $3.5 million project with money from the CPA.
Sandwich spent $13 million to install lights and bleachers at their high school athletic field.