11/12/14 5:30pm
11/12/2014 5:30 PM
A view of Mattituck Inlet (Credit: Carrie Miller, file)

A view of Mattituck Inlet (Credit: Carrie Miller, file)

While lawmakers have proposed legislation to deal with deteriorating water quality such as mandating the use of costly wastewater treatment systems, one East End legislator has an idea for how to go about paying for such initiatives.

Assemblyman Fred Thiele Jr. (I-Sag Harbor) has proposed using a portion of monies raised in the Community Preservation Fund, a law passed 16 years ago which taxes real estate transfers on the first East End towns.

Revenue from the CPF has been devoted strictly to open space purchases, protecting land from development in the towns.

But Mr. Thiele — the same lawmaker who sponsored the original CPF legislation — said it is time to use some of that money for water treatment systems and other clean water projects.


02/07/14 8:00am
02/07/2014 8:00 AM
BARBARAELLEN KOCH PHOTO | The Weeping Willow Park on W. Main Street was purchased by the town under its Community Preservation Fund program.

BARBARAELLEN KOCH PHOTO | The Weeping Willow Park on W. Main Street was purchased by the town under its Community Preservation Fund program.

Last year was a pretty good year for the Peconic Bay Community Preservation Fund.

The fund, which uses money raised through a voter-approved 2 percent real estate transfer tax to buy open space and farmland development rights in the five East End towns, brought in a total for 2013 that was up by 43 percent over the previous year. (more…)

02/06/14 12:00pm
02/06/2014 12:00 PM
Annual CPF totals of the five East End towns, year-by-year.

Annual CPF totals of the five East End towns, year-by-year.

One of the last words any taxpayer wants to hear an elected official say is “bankrupt.”

But that’s how Riverhead Town Supervisor Sean Walter describes the town’s Community Preservation Fund. Luckily, the term is not being used literally in this case, though the difference seems to be semantic: The town will be doing nothing besides paying down debt on a loan for another 16 years until it’s paid off.


10/30/13 5:00pm
10/30/2013 5:00 PM
CYNDI MURRAY FILE PHOTO | Erosion has claimed much of the beach at Norman Klipp Park in Greenport.

CYNDI MURRAY FILE PHOTO | Erosion has claimed much of the beach at Norman Klipp Park in Greenport.

Gov. Andrew Cuomo enacted a law last week aimed at protecting and preserving East End coastlines that are at significant risk to climate change and sea level rise.

Proposed by Assemblyman Fred Thiele (I-Sag Harbor), the new law notes rising sea levels as one reason towns can purchase shorefront property using Community Preservation Fund dollars.

While towns could previously purchase undeveloped land on the shore, climate change could not specifically be one reason why towns were paying for them.

“What we wanted to do was to put in the statute that one of the factors towns can consider is the issue of climae change, and sea level rise,” said Thiele. “While there may be disagreement as to their cause, nobody can deny that [climate change] is happening.”

The law, signed last Wednesday, came just days before the one-year anniversary of Hurricane Sandy, which damaged shorelines along the North Fork.

Each of the five towns uses a Community Preservation Fund to preserve environmentally sensitive land for open space, farmland preservation, historic preservation and parks for recreational use, but existing law did not specifically include at-risk coastlines, he said.

The fund, approved by referendum of East End voters in 1998, applies a 2 percent tax on all real estate transfers to set aside funds for land preservation purchases.

According to Mr. Thiele, real estate transfer tax revenues for the first nine months of 2013 have raised $1.77 million for Riverhead Town, while Southold Town has taken in $2.98 million. Since the fund’s start, more than 10,000 acres of land have been preserved.

“In the wake of Superstorm Sandy, it was recognized that there was also a need to further ensure that we also protect lands that are at risk of coastal flooding and sea level rise,” Mr. Thiele said. “These sensitive lands are critical to the future of our local coastal communities.”

According to the U.S. Environmental Protection Agency, increases in heavier rainfall and projected sea level rise could lead to more frequent damaging floods – along with storm surges of greater intensity in the Northeast.

“It is fitting that we take this step to conserve our beautiful and pristine beaches that not only act as a buffer to protect our coastal communities but also represent an emblematic symbol of Long Island’s East End,” said Senator Ken LaValle (R-Port Jefferson), who sponsored the state Senate bill.

Southold Supervisor Scott Russell said the town has been examining areas that may meet the new law’s criteria.

“If it’s undeveloped shoreline – our interests are already there,” Mr. Russell said. The town had been looking into acquiring funding thorough the USDA Natural Resource Conservation Service to purchase coastal farmland at a high risk of flooding. The new law gives the town another option to work with, he said.

“The land preservation committee will look at the new law and see how we can make it work for Southold,” he said.

Riverhead Supervisor Sean Walter said the town has “attempted to buy wetlands in coastal areas since the inception of the fund, but now this gives us the absolute authority where as before it was more of a general authority as open space.

“It’s a good thing, unfortunately for the Town of Riverhead; we don’t have much CPF money left – but it’s a good tool to have for the future,” he said.

In the early 2000s, Riverhead Town leaders started borrowing against future CPF revenues to buy open land before an anticipated rise in real estate values. But when real estate market stalled, revenues to pay off the debt did not come in as expected, leaving an annual shortfall of nearly $4 million, according to a News-Review report.

Should the town find the appropriate funds, Mr. Walter said the coastal area off Creek Road in Wading River is an example of a space the town might be interested in.

“The houses along Creek Road are always at risk because it is a bit of barrier road that protects the wetlands,” Mr. Walter said.

Long Island Pine Barrens Society executive director Richard Amper said “the key word in this legislation is ‘undeveloped’ lands.”

“This is what the original act intended, so this particular bill makes clear that vulnerable coastal areas will be a priority for CPF finding in the years ahead,” Mr. Amper said. “Sea level rise will affect Long Island Sound and it will affect the Peconic bays.”

Suffolk County Legislator Al Krupski (D-Cutchogue) said towns could gain waterfront access while protecting sensitive marshland that needs to be preserved – actions that many towns are already invested in.

“It’s not really a departure from what we’re doing now,” said Mr. Krupski. “The areas you’re talking about, they are areas already important to the program.”

Adding coastline into the mix with already sought-after farmland and open space means “each town really has to do their due diligence and prioritize,” Mr. Krupski said. “How do they want to spend their money?”

10/11/13 7:00am
10/11/2013 7:00 AM
PAUL SQUIRE PHOTO | Riverhead Town Board members (on right) get briefed on the town’s 2012 financial audits last Thursday.

PAUL SQUIRE PHOTO | Riverhead Town Board members (on right) get briefed on the town’s 2012 financial audits last Thursday.

While Riverhead Town officials are primarily concerned with overcoming a deficit in the town’s general fund next year – which will be closed with $3.5 million in reserves – they say a deficit in the Community Preservation Fund looms even larger.

Auditors contracted by the town, along with members of the town’s independent audit committee, found that about $19 million remains in the CPF, according to findings presented at last Thursday’s Town Board work session.

The CPF, approved by referendum among East End voters in 1999, taxes real estate transfers to set aside funds for land preservation purchases.

In the early 2000s, town leaders started borrowing against future CPF revenues to buy open land before an anticipated rise in real estate values. But the real estate market then stalled, and revenues to pay off the debt have not come in as expected, leaving an annual shortfall of nearly $4 million. The town owes about $6 million each year to pay down the principal and interest on money borrowed for the land purchases.

Supervisor Sean Walter said the real estate market has to improve, or else.

“In 2018, if things don’t turn around … we’d run out of money [in the CPF],” he said in an interview. “The picture’s not very bright.”

While a deficit remains in the CPF fund, the real estate market does seem to be rebounding, suggested by this year’s rising CPF revenues, according to numbers provided by Assemblyman Fred Thiele (I-Sag Harbor).

Riverhead has brought in $1.62 million through August, an increase of 45 percent over last year’s $1.11 million. Across the entire East End, CPF funds are up to $58.5 million, up from $39.2 million in 2012.

Despite the improvement, Mr. Walter described the CPF debt as a “structural deficit problem.”

“They ran the town like it was a giant credit card,” Mr. Walter said, referring to the previous administration under Democrat Phil Cardinale. “Here’s the key: they never went to anybody … to determine if the revenue would ever support the amount financed.”

Since the town’s CPF debt far exceeds the amount of CPF money taken in, Mr. Walter predicted the town will have to start using general fund money to refill the CPF funding in 2019. The town will then have to use reserves from its general fund for eight years, until the CPF is expected to bring back in enough to pay its debt, he said.

Though Mr. Walter blamed the Cardinale administration for the bleak outlook, Long Island Pine Barrens Society executive director Richard Amper said the town “did the CPF right.”

Mr. Amper said the town hasn’t received the funding they expected from taxes due to the recession, adding the town accomplished what it set out to do by preserving land and preventing over-development.

“The likelihood that the town will have to underwrite the cost of payment from the general fund is slim to none,” Mr. Amper said, noting he last calculated his figures in 2010.


02/28/11 6:32pm
02/28/2011 6:32 PM

Riverhead Town saw a 158 percent increase in Peconic Bay Community Preservation Fund (CPF) revenues in January 2011 compared to January 2010.

That’s the largest percentage increase in CPF revenues among any of the five East End towns for January. Even so, Riverhead still took in less money than any town other than tiny Shelter Island.

Riverhead’s January 2011 CPF number was $310,000, up from $120,000 the previous January.

Supervisor Sean Walter said the town needs that money to pay off debt on past land purchases, made with money borrowed against future CPF revenues.

But to meet the debt burden, Mr. Walter said, “We need to very quickly get up to earning $3.5 million a year in revenue. If we don’t, we’re in trouble.”

For the past three years, the town hasn’t met that goal, collecting $2.29 million in 2010, $1.62 million in 2009 and $2.77 million in 2008, according to statistics provided by Assemblyman Fred Thiele (I-Sag Harbor).

However, the town was able to keep up with interest payments by using a $19.3 million CPF reserve fund accumulated from prior years, when the economy was good and the town collected far more in annual CPF revenues than it does now, according to town finance administrator Bill Rothaar.

At the start of 2010, the town had $99 million in debt on purchases leveraged against future CPF earnings, and about $19 million in reserve funds from past CPF earnings, Mr. Rothaar said. The total debt is now down to $87 million, and CPF reserves now stand at $19.3 million.

Riverhead brought in far more CPF revenue from 2003 to 2007, when the economy and the real estate market were strong. It received $4.33 million in 2007, $6.1 million in 2006, $5.55 million in 2005 and $4.16 million in 2004.

“We need the CPF to start raining money or we’re going to have to find funds someplace else to pay the debt,” Mr. Walter said. “But, we’re okay for now.”

Assemblyman Thiele said this week that the five East End towns together took in $6.4 million in CPF revenues during January 2011 — the highly monthly total for the fund since May 2008. He said there were slightly fewer transactions this January than last, but that sales prices were higher.

“It would appear that the revenue increase continues to be driven by activity at the high end of the real estate market,” Mr. Thiele said in a press release.

The CPF money comes from a 2 percent real estate transfer tax, paid by the buyer, in each of the five East End towns. The revenues are administered independently in each town to fund the preservation of open space and farmland and cover some related administrative costs.

Since the fund was first implemented in 1999, after voters in each town approved it, Riverhead has earned almost $39 million from the CPF, less than any other East End town except Shelter Island, and far less than the towns of Southampton and East Hampton, which have collected more than $380 million and $180 million, respectively, during that same period.
Riverhead has used its CPF money to preserve more than 1,700 acres of open space and farmland.

The $3.5 million per year figure the supervisor referred to is the revenue Riverhead must average between 2009 and 2030, when the CPF tax expires, to pay off its debt, according to Mr. Rothaar. He said Tuesday that updated figures show the average needed per year is actually $3.4 million.


11/29/10 6:31pm
11/29/2010 6:31 PM

In May of 2009, an audit by the New York State Comptroller’s office found that Southampton Town in 2007 had sent $2 million too much in Community Preservation Fund money to help lower taxes in the Riverhead School District, which encompasses parts of Southampton Town.

Now, a new audit from the comptroller’s office finds that the town also allocated a total of $1.8 million too much from its preservation fund to the Riverhead School District between the years 2008 and 2009.

The Community Preservation Fund uses a voter-approved two percent land transfer tax to raise money for open space and farmland preservation, but in 2002, the law was amended to allow certain districts with a high percent of land off the tax rolls due to Pine Barrens preservation to have their tax levy offset with CPF PILOT payments, or payments in lieu of taxes. Initially, Riverhead was the only district that qualified.

The PILOT payments to the Riverhead school district had helped offset some big tax increases in the Southampton Town portion of the district that were due to fluctuations with the equalization rate, which is used to divvy up tax payments in districts like Riverhead that are located in more than one town. But the 2009 audit found Southampton Town used the entire Riverhead district’s tax levy, including parts not in Southampton Town, when computing how much of a PILOT to use to offset school taxes in the Southampton Town part of the district.

The audit also found that the CPF payments were improperly used to benefit residents of the Flanders Fire District.

The new audit, released last week, deals strictly with the PILOT issue in Southampton Town and found that the town did not correctly interpret a 2007 amendment made to the CPF PILOT program by the state Legislature, and based its PILOT payments on the amount of all tax exempt land in each district, rather than the amount of tax exempt land due solely to CPF purchases.

As a result, the audit says, $1.7 million more in PILOT payments were applied to lower taxes in the Riverhead School District in 2008 than should have been, and $35,252 more than should have been were applied in 2009. The 2010 audit also found that the town applied $664,647 more in CPF money than it should have for PILOT payments in all districts combined because it misinterpreted another 2007 amendment to the program.

The audit was requested by state Senator Ken LaValle (R-Port Jefferson) and state Assemblyman Fred Thiele (I-Sag Harbor). They had at one time promised to pass state legislation that would have forgiven the over-allocations, but that law never was approved.

Southampton Supervisor Anna Throne-Holst said in a letter to the comptroller’s office that the town revised its procedures for assessing PILOT payments in 2008 and revised its assessments on properties to make sure they qualified for the payments. She said the town will develop a corrective action plan and send it to the comptroller’s office before Jan. 15, 2011 to address any mistakes in allocations to various districts.

The town in 2009 already began a program of “phasing out” of PILOTs to various districts over a 10-year payment plan to make up for lost aid when Riverhead district taxpayers received that extra $2 million in tax relief. School districts themselves do not have to repay anything, since they didn’t technically receive money; the CPF amount was simply used to lower the amount taxpayers in each district had to pay.