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Date: 2/21/2023
HOLYOKE – The Finance Committee was able to move forward with the approval of additional Community Preservation Act (CPA) funding after receiving a legal opinion from an assistant city solicitor during their Feb. 15 meeting.
The item discussed, tabled from the committee’s Jan. 11 meeting, was an order that the City Council approve an increased funding request in the amount of $3,000 to the Wistariahurst museum for their painting restoration project. Originally, Wistariahurst applied for and was granted $125,000 via CPA funds to complete the project, but due to rising costs in building and materials across the nation they now needed another $3,000.
While there is no dispute of Wistariahurst’s historical significance to Holyoke — especially from city officials — the question of if CPA dollars can be used to pay for painting of the museum building needed to be answered. Now after a month since their last meeting, Assistant City Solicitor Kathleen Degnan shared with the committee that in her legal opinion, the use of CPA funding was allowed.
Degnan was looking to answer the question of whether the painting job is classified as maintenance, which is prohibited by Massachusetts General Law Chapter 44B, or as preservation, rehabilitation or restoration of a historic building. The state law referred to defines maintenance as being “incidental repairs which neither materially add value of the property nor appreciably prolong the property’s life, but keep the property in a condition of fitness, efficiency or readiness.”
According to Degnan’s opinion, painting projects are usually classified as maintenance regardless of the amount being expended.
“While there are no Massachusetts cases which address this issue, the state’s Department of Revenue (DOR) ... has addressed the issue of whether painting should be classified as “maintenance” and therefor not eligible for CPA funding,” Degnan wrote. “In an advisory dated April 3, 2014, and numbered 2013-1280, the DOR stated that ‘because the legislature used the same language to define ‘maintenance’ under the CPA as the IRS used to define ‘repair,’ they decided that the use of court decisions using the IRS regulations to determine whether painting is ‘repair’ would also be helpful in determining whether painting is ‘maintenance’ and therefor ineligible for CPA funding.’”
According to Degnan’s research, the DOR opined that “repairs” under the IRS regulations are the same as “maintenance” under the CPA and that if the courts rule that painting is a “repair” then such painting is classified as “maintenance” under the CPA. The DOR has also cited a few cases where painting projects were ruled to be repair work.
“Basically, if a painting project is being done to get rid of peeling or unsightly paint, then it is a repair. However, the painting of a building which has not been painted or required for more than 20 years ... is not considered to be repair/maintenance,” Degnan wrote. “In addition, the DOR explained that if painting is being done to resotre a building to its historic color, then such painting work is not repair/maintenance.”
Degnan concluded by saying in her opinion this painting work is being done in order to return the building to its previous historic color and is therefore eligible for CPA funding. She also noted to the committee and in her opinion that the paint analysis report indicated that painting the building would be done in order to reverse the change in color of the building due to prior paint jobs within the last 15 years.
Wistariahurst Director Megan Seiler joined the committee and said with this final piece of funding they could meet their bid number and finalize the agreement to start work on the painting restoration.
Finance Committee Chair and At-Large Councilor Joseph McGiverin asked Seiler if there was a deadline for the project to which Seiler said it was originally May 31 before having to go back for the additional funding, but they are looking to get started as soon as possible as they can now sign the contract.
Councilor Kevin Jourdain, who was vocal in making sure the city looked at this carefully and that this funding met the proper requirements, thanked Degnan for her effort in coming up with the opinion and talked about why this process was important for the committee. He called this order an “educational moment,” and added that as they continue to use CPA funding in the future, they need to build a collection of information like this in order to know what money can be used on which projects.
“I just want us to take a step back and thank you [Degnan] for your thoughtful approach so nobody can question if we did something inappropriately. Now we’re building a little book,” Jourdain said. “I’m glad it all worked out.”
Jourdain noted the city would have found the $3,000 somewhere for completion of the project if the CPA funding was not permissible but that it was important to get this answer and opinion from legal.
The committee voted to adopt the order unanimously and Wistariahurst should soon be able to secure their bid officially and begin the project.