THE COMMUNITY PRESERVATION ACT IN CONCORD

WHAT IS THE COMMUNITY PRESERVATION ACT?

Established under M.G.L. c. 44B, the Community Preservation Act (CPA) allows Massachusetts cities and towns to raise monies through a surcharge of up to 3% of the tax levy on real property. These funds can be used to acquire, create and preserve open space; acquire, preserve, rehabilitate or restore historic resources; acquire, create, preserve and support community housing; and acquire and preserve land for recreational use. The Act also includes a significant State matching fund, which provided $36.29 million in matching funds to CPA communities last year and over $542 million to those communities to date. In addition to Concord, 156 cities and towns across the State have adopted the CPA to date.

HOW IS THE CPA USED IN CONCORD?

At the 2004 Annual Town Meeting and subsequently at the polls, Concord residents voted to adopt the CPA with a 1.5% surcharge on all real estate property tax bills. There are two exemptions, however, to this surcharge:

• The first $100,000 of taxable value of residential real property

• Residential property owned and occupied by any person who qualifies for moderate- or low-income housing (earning less than 80% of Area Median Income), or low or moderate-income senior housing (earning less than 100% of Area Median Income and are 60 years of age or older).

The CPA mandates that each fiscal year Concord must spend, or set aside for later spending, at least 10% of the annual revenues in the Town of Concord Community Preservation Fund for each of the three CPA interests: community housing, historic resources, and open space. Beyond these required allocations, Concord Town Meeting decides, based on the CPC’s recommendations, how much of the remaining 70% of the funds should be spent on the three purposes identified above or for recreation. The spending mix for the remaining 70% of the Fund can be modified each year, and any monies not appropriated remain in the Fund for future distribution.

WHERE DO THE CPA FUNDS COME FROM?

The funds available for spending each fiscal year are a combination of three sources:

1) Projected Fund Revenues for the Upcoming Fiscal Year – Projected fund revenues are made up of the funds collected from the 1.5% surcharge on all real estate property tax bills and the State matching funds collected from existing surcharges on all real estate transactions at the Registry of Deeds and Land Court. These funds are termed as “projected” because the final numbers are not available until October or November of each year. 

2) Undesignated Fund Balance – These are funds which were collected in previous years but never allocated. Where did this money come from? Usually an undesignated fund balance represents either unanticipated additional interest received on CPA fund accounts or the receipt of more State matching funds or surcharge tax revenues than were originally anticipated.

3) Reserve Funds - These are funds which were approved at previous Town Meetings to be set aside for future projects in Community Housing, Historic Preservation, and/or Open Space. 

WHAT DOES THE SURCHARGE MEAN TO CONCORD TAXPAYERS?

To calculate the median CPA surcharge, first subtract the CPA exemption for the first $100,000 of the taxable value of a residential property, then multiply the remaining number by the recommended fiscal year tax rate per $1,000 of value. Then multiply that number by .015 (1.5% surcharge) and you get the CPA surcharge amount. 

Example:

Assessed Home Value is $800,000. 

Subtract the first $100,000 (residential only) for the CPA exemption. Net value is now $700,000. 

Multiply the net value by the fiscal year tax rate/$1,000: $700,000 X .01476 = $10,332.

Multiply the net tax by the surcharge rate: $10,332 X .015 = $154.98

The CPA Surcharge would be $154.98.