HADLEY — A proposed reduction in the surcharge for the Community Preservation Act, which town officials viewed as a way to offset an increase in property taxes to support sewer operations and sewer improvement projects, is being abandoned by the Select Board.
The board this week voted 4-0, with member Joyce Chunglo absent, to scrap a fall Town Meeting warrant article that would have asked residents to reduce the CPA surcharge from 3 percent to 2 percent after being advised by members of the CPA Committee that doing so wouldn’t be fiscally prudent.
Under the plan, the Select Board had sought to reduce the CPA surcharge and take $92,000 off the property tax bills annually, and then transfer an equal amount of sewer debt service, estimated at about $135,000 per year for the next seven to 10 years, to those residential and commercial property tax bills.
But members of the CPA Committee told the board Wednesday that a CPA reduction would mean giving up in excess of $160,000 projected to be provided by the state this year in the form of its match.
Andy Morris-Friedman, chairman of the CPA Committee, compared what the Select Board proposed to an employee dipping into a retirement savings plan to make a one-time purchase.
“CPA is kind of like a 401K,” Morris-Friedman said.
Hadley in fiscal year 2019 took in $381,914 from the CPA surcharge, with a state match at 43 percent. If the CPA surcharge had been lower, that would have gone down to just $211,164 collected from both taxpayers and the state.
Morris-Friedman said the state match is supposed to go up to 80 percent next year and that Gov. Charlie Baker is pledging to get the match to 100 percent at some point.
Town Treasurer Linda Sanderson said the town has $1.6 million available for spending in the CPA account and $2.1 million total in the account, when various projects that have been approved but have not yet spent the money are factored in.
Based on these totals, Sanderson said the town earned $60,000 in investment income, noting that the money held in CPA can be invested more aggressively than money from the town’s general fund
“It’s a great investment for the town and I would like to see it stay,” Sanderson said.
Finance Committee Chairwoman Amy Fyden also expressed support for keeping the CPA surcharge at 3 percent. Fyden said it wouldn’t be smart to lose state money and potential investment income, and that the discussion of a reduced surcharge comes at a time when Hadley is looking at major projects, such as preserving the historic Russell School Building and renovating the Golden Court housing property, that could use CPA money.
Select Board Chairman Christian Stanley said the idea of reducing the surcharge would have been complicated. Even if approved by residents at fall Town Meeting, a ballot vote would have been needed on March 2, 2020, coinciding with the presidential primary.
Scott Merzbach can be reached at smerzbach@gazettenet.com
