Could CPF funds be used to save water, too?

While lawmakers have proposed legislation to deal with deteriorating water quality such as mandating the use of costly wastewater treatment systems, one East End legislator has an idea for how to go about paying for such initiatives.

Assemblyman Fred Thiele Jr. (I-Sag Harbor) has proposed using a portion of monies raised in the Community Preservation Fund, a law passed 16 years ago which taxes real estate transfers on the first East End towns.

Revenue from the CPF has been devoted strictly to open space purchases, protecting land from development in the towns.

But Mr. Thiele — the same lawmaker who sponsored the original CPF legislation — said it is time to use some of that money for water treatment systems and other clean water projects.

“The perception and hope was that if we preserved the land, that would also protect the water,” Mr. Thiele said. “That didn’t turn out to be true.”

His plan calls for both extending the CPF law’s time frame — originally planned to sunset in 2030 — for another 20 years, and dedicating about 10 percent of those monies to water quality efforts.

“Up to 10 percent is the number we are looking at now. This is a concept at the moment and we are still trying to reach a consensus,” he said. “Caps on how much gets spent is still going to be up to each local government. I think the program works well because there is a lot of local flexibility and we don’t want to get in the way of that.”

Also known as the “2-percent fund,” the CPF is financed by a 2-percent tax buyers pay on real estate deals, with a certain amount of the sale price exempted from the tax (either $150,000 or $250,000 depending on the town, and first-time homebuyers in all five towns beside Riverhead get exemptions) . Once collected, the tax then goes into each individual town’s CPF fund and is spent to buy and maintain open space parcels.

The law has brought in about $1 billion across the region since it was enacted, Mr. Thiele said.

“If we did nothing between now and 2030, we’ll have $1.2 billion more over the next 16 years for land acquisition,” Mr. Thiele said, noting his estimate is on the conservative side.

“Adding the 20 years, we’ll still have money for land acquisition,” Mr. Thiele said.

Mr. Thiele noted his plan is still in the drafting process, as he is reaching out to government, civic and business leaders, as well as environmental groups within the five towns for input.

Riverhead Town Supervisor Sean Walter called Mr. Thiele’s grand scheme “a great idea,” but noted that for Riverhead, using CPF funding is not really an option.

The town is currently paying debt service incurred after borrowing against anticipated CPF revenues to fund a number of open space purchases. The idea at the time was to purchase land before it was developed. However, home sales have not kept pace with what was expected at the time, leaving Riverhead in a place where it could be forced to pay CPF debt from its general fund in as soon as five years if sales don’t pick up.

Mr. Walter said he hopes Mr. Thiele’s legislation will include an option for the municipality to refinance its loans on CPF purchases through the state Environment Facilities Corporation, in hopes of getting that debt payments down over the course of the 20-year extension.

Southold Town Supervisor Scott Russell said he believes it would be “difficult to ask people to pay a tax when you have not identified specifically how that money is going to be spent.”

Bill Toedter, president of the North Fork Environmental Council said Mr. Thiele’s legislation could be beneficial so long as it is written appropriately.

“How can we take something that’s been successful and make it do more?” he said. “From our point of view, you hate to see funds drawn down from a successful program and used in other ways.”

He noted the “recent raids” by the county on the Drinking Water Protection Fund.

“That was a wonderful program that over the years has gotten watered down by the county taking salaries out of it and balancing the budget,” he said. “We have to be very protective and very cautious as to what those funds will be used for so we don’t run into those same problems.”

He said the idea “isn’t going to be an easy sell and it is not going to be an easy piece of legislation to craft. However it is needed.”

Any changes in the bill would require a voter referendum.

With Ambrose Clancy