Friday, March 12, 2004
Can the town afford Parcel A?
The proposed $1,950,000 purchase of 45 acres of the Benfield Parcel A on South Street offers Carlisle a place to site affordable housing and a recreation field while keeping 26 acres open space. It seems an attractive opportunity to accomplish several town goals using funds collected through the Community Preservation Act (CPA) surcharge on taxes that has been in effect in Carlisle since 2001.
But in evaluating the wisdom of the purchase, a number of questions arise. How long will the town need to continue the 2% surcharge? What will be the effect on the health of town finances? Does committing to this purchase reduce the town's flexibility to make other needed investments? Finally, is this purchase consistent with town goals given uncertainty regarding the outcome of the planning process to take place once the purchase is complete?
The Finance Committee has developed best- and worst-case scenarios for financing the purchase (see article on page 8) using only CPA funds, both those already collected and those to be collected in future. These scenarios assume the surcharge remains at 2% over the life of the loan.
Under the best case, financing the land purchase with a first-year $500K and a second-year $300K down payment, and entering into a ten-year bond the second year, the town would repay the $1.15 million loan by the end of 2007. If state matching shrinks during that time, that horizon could stretch to 2008 or 2009. This doesn't include any costs for land development, which are currently unknown.
No new taxes
Town Financial Manager Larry Barton is pleased that, under this plan, taxpayers will bear no additional burden. "This was designed so there'll be no incremental tax increase. We're already being taxed for the CPA." Last year the surcharge added $260K to the town's taxes, contributing $520K to the CPA fund with state matching.
The plan would limit the town's flexibility to repeal the CPA surcharge or to reduce the level, but Barton says the town appears committed to 2%. He notes that in 2002 the FinCom recommended rolling back the surcharge, "but Town Meeting voted to keep it" while rejecting a $152K override. Barton adds, however, that CPA support may hinge on the promise of matching funds which might not be there indefinitely.
No effect in debt capacity
The FinCom's financing scenario keeps 25% of available inflow to the CPA Fund for other projects that may arise. At no time does the balance in the fund go below $600K. This structure "strikes a reasonable balance between utilizing existing and growing CPA funds while leaving sufficient capital for other worthy projects," says FinCom member Deb Belanger. She notes that because the loan would be financed through a surcharge, it is not included in calculations of debt capacity, and would not affect the town's bond rating. Most of the loan will be repaid before other large projects, such as high school renovations, come on board. In addition, the town's debt service is falling by $300K, providing an opportunity for new debt to be assumed without increasing taxes.
Goal is affordable housing
A concern for members of the CPA Committee (CPAcom) is that the development plan, which won't begin until after the land is purchased, include an affordable housing component capable of gaining town approval. Under state law 40B, towns with less than 10% of housing in the "affordable" category may not be able to enforce zoning restrictions against a developer of affordable housing. A town-authorized development on the Benfield land would provide sufficient increase to prevent near-term approval of a 40B over which the town would have little control. Belanger notes the FinCom's support for the purchase is "in large part because of the 40B component of the proposal."
David Freedman of the planning board says his board supports the purchase, but "it would not be a good use of CPA funds" without an intent to develop housing. His committee is working on a community development plan that identifies affordable housing as a town priority.
He notes a town-controlled development would be "sited better, better for the environment, and better for the neighbors" than a 40B such as Laurel Hollow, which he calls "dense, too close to neighbors, and on land not suited" to the development. Affordable housing on the Benfield land would also be ecologically better than letting the land go to a private developer who could put "mega-mansions with driveways, basketball courts and lighting" with no town control.
Freedman adds, "I have tremendous faith in the planning process." Pointing to neighborhood involvement in the planning of the pool at the high school, he says, "The citizens of Carlisle will be equally involved. We will come up with a plan everyone can live with."
In summary, Benfield is a purchase the FinCom believes the town can afford. It will not add taxes or impact the town's bond rating. However, it does commit a high percentage of CPA funds to a single project, one without an existing plan for how the land will be developed. Is this the best use for CPA funds? That's the outstanding question each voter at Town Meeting must answer.
© 2004 The