Riverhead CPF revenues up, but more funds needed to pay debt
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.