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Mar 11, 2008 9:14 AMPublication: The East Hampton Press & The Southampton Press

CPF diversions assailed

Mar 11, 2008 9:14 AM

A group of more than a dozen people protested outside Westhampton Beach Village Hall on Friday, February 29, targeting what they called unfair changes in the state's Peconic Bay Region Community Preservation Fund law, which allow school districts to receive money from the fund to make up for lost revenue when land has been taken off the tax rolls and saved from development.

The issue resonates in East Hampton Town, where there has been debate about the proposed use of CPF money to buy buildings—the Methodist Church in Sag Harbor and the East Hampton Bowl—and to pay budget expenses related to land management.

Elected officials representing the five East End towns were meeting inside at the time of the protest, discussing the future of their individual CPF funds, though they did not directly address the controversy surrounding the recent changes that allow three Southampton Town school districts to now receive payments in lieu of taxes, or PILOTs.

The original changes in the law, made several years ago and approved by public referendum, required a school district to have at least 25 percent of its property off the tax rolls, or located in the central pine barrens, to qualify for a PILOT. Until late last year, only the Riverhead School District, scheduled to receive a $3.1 million payment this year from Southampton Town, had qualified for the funding.

But this year, the Hampton Bays and Eastport South Manor school districts also will receive PILOTs—Hampton Bays will get $1.3 million, while ESM will receive approximately $187,000. And that change has angered some residents of the Riverside, Flanders and Northampton communities.

"The original legislation for the PILOT program was that it was for districts that had 25 percent or more property off tax rolls due to the pine barrens. The legislation went to referendum and was passed," said Chrissy Prete, a member of the Riverhead School District Board of Education, who was among those outside Village Hall protesting the new, broader rules. "The legislation was changed so that the PILOT could be for any preserved property, not just pine barrens. And it was changed without public referendum."

The changes, Ms. Prete argued, were made by politicians looking to increase their popularity and garner more votes in heavily populated areas of the East End, such as Hampton Bays. The idea of expanding the PILOT program to include Hampton Bays was proposed by former Southampton Town Supervisor Patrick Heaney, who was facing a reelection campaign at the time that he went on to lose.

"The CPF has become a political cash cow," Ms. Prete said.

In each of the five East End towns, the CPF raises money through a 2-percent transfer tax on most real estate sales, paid by the buyer. The money is used to preserve open space and farmland on the East End.

The February 29 meeting, attended by local government officials and representatives from environmental groups, was meant to commemorate the CPF's 10th anniversary this fall, but it focused on other issues pertaining to the fund, such as stewardship of preserved lands and the program's original purpose.

The meeting concluded with the formation of a committee that will attempt to address some of these issues and will report its findings at another meeting that will be held before April 15.

The meeting began with a report on the preservation funds in the five East End towns: East Hampton, Riverhead, Shelter Island, Southampton and Southold. Southampton Town's fund has raised approximately $289 million since 1999 while, in comparison, Shelter Island, the smallest East End town, has raised about $12 million.

"We would never have been able to do this amount of land preservation without this tool," said Southampton Town Supervisor Linda Kabot at the meeting.

One of the issues that was addressed by meeting attendees was how Riverhead Town, which has raised about $30 million in CPF money since 1999, can increase the amount of revenue generated through the land transfer tax. In comparison, East Hampton Town raised $30 million for its CPF just last year. The disparity between the municipalities was noted by Riverhead Town Board member Barbara Blass.

State Assemblyman Fred Thiele Jr. explained that members of the new CPF task force will be charged with investigating ways that Riverhead and Southold towns can increase the amount of money raised for land preservation. Since 1999, Southold's CPF has raised approximately $38 million, according to officials.

In addition, task force members will be charged with coming up with definitions for "parks and recreation" and "historic preservation," establishing a first-time homebuyers exemption for the tax, and ensuring that future changes made to the CPF are subject to mandatory referendum. Southampton Town's decision to alter its CPF, made last year, was completed without a public referendum, an action that Mr. Thiele said could have violated state law.

On March 3, Mr. Thiele and State Senator Kenneth LaValle announced that they are requesting State Comptroller Thomas P. DiNapoli to conduct a full audit of each town's CPF. The possibility of a state audit of the program, intended to examine the way funding was collected and ensuring that money is being properly spent, was discussed in passing at the February 29 meeting.

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