Presentation on theme: "Bonding 101 Issues to Consider when Bonding CPA Projects."— Presentation transcript:
Bonding 101 Issues to Consider when Bonding CPA Projects
Very popular! 74 municipalities -162 CPA projects Over $250 million in project costs paid for with bonds Most popular projects: Acquiring land & historic rehabilitation Borrowing Permitted Under CPA
General obligation bonds of the city/town, but issued against your future CPA revenue stream Can only bond against local surcharge, not state match Two-thirds vote needed to pass bonded projects at Town Meeting Borrowing Permitted Under CPA
Work with municipal officials to determine what you can afford to bond Consider a “CPA Bonding Capacity” spreadsheet to guide your future planning Update it every year Determining Your Bonding Capacity
CPC recommendation and warrant article should include term. If not, term can be changed when town issues bond Maximum length of bond term follows state guidelines on bonding (up to 30 years in some cases) Include issuance and other bonding costs in total budget for project CPC Recommendation
Warrant article should mention that bond is “under authority of CH.44b” Can fund project with multiple funding sources a. Existing CPA or other funds b. Bonding under CPA for the balance Remember – 2/3 vote required Town Meeting
No subsequent ballot election required CPA bond can be combined with other town bonds to reduce issuance costs and/or obtain a better interest rate After Town Meeting
CPC recommends annual debt service payment each year as part of your CPA budget The Legislative Body can decide to fund an annual payment from another source other than CPA It DOES NOT work in reverse! You cannot use CPA funds to pay a bond authorized under another funding source One Year Later…
If payment on a project bond is more than 10% of your annual CPA revenue, bond payment counts as your 10% requirement for that category Annual Debt Service
$100,000 total CPA revenue Open Space Reserve: $10,000 Housing Reserve: $10,000 Town Hall Debt Service: $15,000* Administrative Acct: $5,000 Budgeted Reserve: $60,000 $100,000 * Counts as your 10% Historic Requirement Sample Annual CPA Budget
1)Pay the bond from another funding source? 2) Keep CPA surcharge on tax bills at full 3%, put everything toward bond, pay off early? 3)Reduce CPA surcharge to whatever percentage will fund annual debt service? Note: Above is theoretical; never happened What Happens if CPA is Revoked?
What’s new with the Community Preservation Act?
Trust fund matching dollars Recreation category Many clarifications needed CPA Challenges (in 2005)
CPA Trust Fund Overview Why not raise deeds fee? $25M in Fall 2013 (in addition to the deeds recording fee funds) What about the future?
Recreation CPA funds can now be used to rehabilitate and restore land for recreational use
Open Space HistoricRecreationHousing Acquire Yes Create Yes- Preserve Yes Support ---Yes Rehabilitate and/or Restore Yes – if acquired or created w/CPA $$ Yes Yes – if acquired or created w/CPA $$ Recreation Revised Allowable Uses Chart
Recreation Artificial Turf Section 5(b)2: “With respect to recreational use, the acquisition of artificial turf for athletic fields shall be prohibited.”
Recreation 10% Open Space Reserve Account Open space reserve account may now be used for open space and recreation projects Doesn’t mean you have to…
Recreation Things that haven’t changed Outdoor recreational facilities only No horse or dog racing, stadiums, gymnasiums or similar structures Capital projects only No maintenance or operating costs
“Capital Improvement” New Definition Reconstruction or alteration of real property that: (1)materially adds to the value of the real property, or appreciably prolongs the useful life of the real property, (2)becomes part of the real property or is permanently affixed to the real property so that removal would cause material damage to the property or article itself and (3)is intended to become a permanent installation or is intended to remain there for an indefinite period of time.
“Maintenance” New Definition …incidental repairs which neither materially add to the value of the property or appreciably prolong the property’s life, but keep the property in a condition of fitness, efficiency or readiness.
Open Space HistoricRecreationHousing AcquireYes CreateYes- PreserveYes Support---Yes Rehabilitate and/or Restore Yes – if acquired or created w/CPA $$ Yes Yes – if acquired or created w/CPA $$ Community Housing Guidance on meaning of “support”
Community Housing Definition for “support” …shall include, but not be limited to, programs that provide grants, loans, rental assistance, security deposits, interest-rate write downs or other forms of assistance directly to individuals and families who are eligible for community housing, or to an entity that owns, operates or manages such housing, for the purpose of making housing affordable.
New guidance from Department of Housing and Community Development (DHCD) Contact CPA Circuit Rider Shelly Goehring for help Community Housing Rehabilitation vs. Preservation
“Historic Resources” Clarification “…a building, structure, vessel, real property, document or artifact that is listed or eligible for listing on the state register of historic places or has been determined by the local historic preservation commission to be significant in the history, archaeology, architecture or culture of a city or town.”
“Historic Resources” Clarification …with respect to historic resources, “rehabilitation” shall have the additional meaning of work to comply with the Standards for Rehabilitation…
“Historic Resources” Coalition Historic Flowchart Qualifying Historic Projects for CPA Funding
Open Space Clarifications Clarify procedure for issuing restrictions on land acquired with CPA funds OK to appropriate funds to non- profits to hold restrictions
Future Land Protection
Important Habitat Areas BioMap2 Core Habitat: Prime habitat areas for ‘Species of Conservation Concern’ (those listed under the Massachusetts Endangered Species Act as well as additional species identified in the State Wildlife Action Plan) Critical Natural Landscape: Support landscapes for supporting intact ecological processes, maintaining habitat connectivity, enhancing ecological resilience, and buffering habitats for long-term integrity (often overlap with Core Habitat) Protected Acres in North Andover: 710 Unprotected Acres in North Andover: 200 (22%) Total BioMap Acres in North Andover: 910
CPC Annual Plan New topic to include in plan CPC must study the needs, possibilities & resources of town including “regional projects for community preservation”
155 CPA Communities
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