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The Sudbury Finance Committee voted 7-2 Monday, April 14, to oppose Town Meeting warrant article 54, submitted by citizen petition, to cut Sudbury’s Community Preservation Act (CPA) surcharge from 3% to 1.5%. Under the CPA, the state provides some matching funds in three rounds based on the amount raised by the local surcharge and other factors. The surcharge is separate from Proposition 2 ½, allowing communities to generate additional revenue for projects that qualify for CPA funding. Qualified projects must meet criteria in the CPA statute, but, broadly speaking, must fit the primary categories of open space, recreation, historic preservation, and community housing.
The warrant article petitioner, Jean Nam, presented her case to the Finance Committee. Nam is currently serving as a Goodnow Library Trustee, and was formerly a member of the Finance Committee.
Nam argued that the Town is not following its financial policies on the capital planning process, and she launched the citizen petition as a remedy.
When asked which policies she meant by co-chair Mike Ferrari, Nam referenced the capital assets policy. “But the idea was, you have this 5-year or 15-Year Plan, so that there are no surprises come budget time. There’s no like ‘Oh, my gosh! What is that all about? Why are we suddenly asking for, for example, this year one million dollars to fix Hosmer House?’ That’s nowhere in the long-term plan. All of a sudden we’re spending a million dollars. We’re proposing to spend a million dollars in CPC funds to fix Hosmer House. It’s not even on the long-term plan.” She was referring to CPC expenditure articles on the Town Meeting warrant.
Member Andrew Bettinelli questioned if cutting the CPA surcharge is the best way to address policy adherence. “I think you’ve identified a good problem. But I’m not sure that the prescription is necessarily correct, and I just would hope that you could expand on that a little bit.”
“The Finance Committee, you guys, unfortunately, also [are] allowing these projects to go through and not adhering to those financial policies.”
At that point, Nam accused several committees, including the Finance Committee, of not adhering to the policies. “So it’s definitely been at least three, if not four years since we approved these financial policies. And it’s been very frustrating to see that year after year they are not adhered to at many levels. The CPC committee should be adhering to them. They’re not. Select Board should be adhering to them. They’re not. The Finance Committee, you guys, unfortunately, also [are] allowing these projects to go through and not adhering to those financial policies.
“It’s been like three or four years. That’s a lot of time to be like, okay, let’s get our act together. And it’s not happening. So that’s why I’m proposing, okay, you know what? Let’s shut it off at the other end. Let’s shut off the source. Okay? And if, you know, people want the money back, then prove that you can do a good job with the money.”
Policy Brass Tacks
Nam’s comments about the Select Board’s financial policies were partially accurate, and partially inaccurate.
The capital assets policy does call for the Town to apply for CPA funding for eligible capital projects. But the policy itself does not apply to the Community Preservation Committee.
“This policy applies to the Town Manager as the Town’s chief budget decision maker. It also applies to the job responsibilities of the Finance Director, School Superintendent, School Business Manager, Select Board, Sudbury Public School Committee, Finance Committee and Capital Improvement Advisory Committee (CIAC).” (Page 17)
The policy states that any projects in the Town’s annual Capital Improvement Budget that qualify for CPA funds must apply for CPA funds via the Community Preservation Committee’s (CPC) annual process. The policy does not limit applications for CPA funding only to the Town’s planned capital projects, as Nam suggested. The CPC, not the town, determines the eligibility of projects. In short: while CPA funds are a possible, even desirable, funding source for eligible Town capital projects, the CPA funds are not governed by the capital assets policy.
Applications for CPA funding are in no way limited to projects on the Town of Sudbury’s capital improvement plan. Such a policy would defy the intent of the Community Preservation Act.
The text of the CPA legislation says: “The community preservation funds shall not replace existing operating funds, only augment them.”
Further, the Community Preservation Act coalition explains on its site: “Property taxes traditionally fund the day-to-day operating needs of safety, health, schools, roads, maintenance, and more. But until CPA was enacted, there was no steady funding source for preserving and improving a community’s character and quality of life. The Community Preservation Act gives a community the funds needed to control its future.”
For further information about the program, review the CPA legislation, and Sudbury’s associated bylaws.
Reserves
The Finance Committee considered the warrant article from multiple perspectives, but one matter generated a good amount of back-and-forth: the CPA fund balance, which was also described as a reserve. Nam claimed that over $6 million was currently in the fund, suggesting that amount was proof the town doesn’t need the full 3% surcharge and that a 50% cut would not negatively impact projects. She later claimed there was no plan to use the fund balance.
Sudbury’s Finance Director, Victor Garofalo, clarified that the fund balance isn’t comprised solely of revenue that was never appropriated for a project. “The account has grown by six million through various reasons,” including funds that were appropriated and then returned when a project did not need them. “At this Town Meeting there’s a particular project in which they’re reverting about 400 and some odd thousand back to the fund for a project that was committed many years ago as those funds are not needed.”
Garofalo cited other ways the account has grown, including conservative budgeting and investment income. The Town has an investment policy for CPA funds.
Member Andrew Bettinelli argued that a reserve was a good thing. “It just takes one big project, one big ask, and it’ll wipe that all away. I also think at the same time we shouldn’t be spending money just because we have it. I think it’s healthy to have a little bit of a CPA balance. I mean is six million too much? Good question, but I don’t think it shows that we haven’t been managing it correctly.”
Land Acquisition
The conversation eventually shifted to land acquisitions when Member John Baranowsky asked if the reserve was built up in anticipation of a major land acquisition. Nam said, “We’ve made at least three land purchases where we could have used more CPC money or any CPC Money, and we didn’t. We used some for Johnson Farm, but we could have used more. We used some for Broadacre, but we could have used more, and we used nothing for Sewataro. So while it’s an interesting idea that ‘oh, let’s save it for land purchases’, the last three land purchases didn’t utilize CPC that much.”
Nam also compared the size of the CPA balance to the size of the Town’s stabilization fund.
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“To compare the Community Preservation Fund to the stabilization fund is a gross mischaracterization.”
Town Manager Andy Sheehan corrected some of her claims:
“I know the Finance Committee realizes this, but for folks watching at home: to compare the Community Preservation Fund to the stabilization fund is a gross mischaracterization. You can’t just flip-flop money from one to the other. The money in CPC is limited in what it can be used for. So we can’t just refer to it like it’s a pot of money that we can use for any purpose. It is strictly limited in what we can use it for.”
Sheehan defended the Town’s efforts to build a long-term capital plan based on the results of a comprehensive facilities study that will be released later this month. “I think it is a little disingenuous to say that nobody’s been working on this. It’s been worked on. But you don’t just do this in a weekend.”
Sheehan told the committee, “Open space is always difficult, because if you use CPA funds for the purchase of open space, then you’re tying your hands permanently for the use of that property” He pointed out that the decision that went into the Broadacre purchase included the desire not to tie up the property only for conservation. Select Board Member Janie Dretler, attending the meeting, followed, with a warning for the Finance Committee:
“I encourage the Finance Committee to fact-check everything that you’ve been told tonight. I think it’s interesting. Some of the information that you’ve been provided is not accurate.”
Dretler objected to Nam’s earlier statement that the town could have used more CPA funding for the acquisition of Camp Sewataro, noting Sewataro is developed property with infrastructure on-site, not open space. “Sewataro is a developed property. You use CPA funds for open-space properties.” Dretler reiterated Sheehan’s points about Broadacres Farm.
Mixed Messages, Varied Perspectives
The warrant article was framed in different ways by Nam. At first it was described as means of reprimanding Town officials for alleged non-adherence to financial policies. When the conversation focused on financial data, the article was framed as a method of reducing the burden on taxpayers while there is an alleged “backlog” of incomplete CPA-funded projects and CPA reserves that can be tapped.
The Finance Committee did not deliberate or vote at the conclusion of their conversation with Nam. Instead, they opted to hold deliberation until later in the meeting. Several members said they would like to see the Town improve on capital planning, but did not see how cutting the CPA surcharge would help with that goal.
Co-Chair Mike Joachim voiced optimism about the work going into the capital plan. “But the sense I have is that there’s a real understanding within the administration of where we need to be going, and they’re taking us in the right direction.”
Member Bettinelli argued, “I agree that we should be doing a much better job adhering to our capital planning function. That said, if we cut CPA, we’re going to pay for needed projects one way or the other. We can either soften some of the blow with these CPA funds that we voted to approve 20 years ago and have benefited from, or we’ll end up paying for it with an override. This feels like cutting off our nose to spite our face. I don’t think it’s a good decision and I will be voting against recommending approval of this article.”
Member Hank Sorett wanted to eliminate the CPA program altogether. He lamented that CPA funds weren’t used to purchase Camp Sewataro, indicating a possible misunderstanding of the earlier statement that Camp Sewataro didn’t qualify for CPA funds because it is not open space.
Member Eric Poch echoed Nam’s policy adherence points when he signaled his support for the article, criticizing the Select Board and Sudbury’s Town Managers in recent years. “We have supported and helped craft and hone the would-be financial policies of this Town, which the Select Board members, including the one that spoke out earlier tonight, and our town managers are responsible for supporting, advocating for, and responsible to ensure that they’re followed. And they haven’t been.”
(Now) It’s Complicated
The vote came in with only two Finance Committee members in favor of warrant article 54 and seven opposed. While the vote was decisive, the reasoning was more complicated. The fundamental purpose of the Community Preservation Act, and the authority of the Community Preservation Committee, were at times missing from the conversation. Instead, the Town’s capital planning process was the focus.
The Division of Local Services conducted a review of Sudbury’s Capital Improvement Program in 2020. In that review, it stated of the CPC: “The CPA budget decision making is entirely the purview of the local Community Preservation Committee, with ultimate authorization by town meeting.”
Other state guidance does encourage coordination between the CPC and a town’s capital improvement program, but it’s consistently clear that the CPA Trust Fund is the purview of the CPC, not the Town.
For all the talk on Monday about Town policies and planning, the Community Preservation Act is a separate matter from the Town’s capital planning and budget building processes. CPA funds are, as described in the Town financial policies, merely a funding source for eligible projects, assuming the CPC approves them. The CPC has its own policies for applications for funding and reporting on progress.
As Town Meeting approaches, it remains unclear if warrant article 54 will become a discussion about CPA financial management, the CPA’s impact in Sudbury, or Town capital planning. What is clear is that the article has opened up a multi-front battle.
