Southold Town is largely standing by its proposed framework for determining how Community Preservation Fund spending will benefit Greenport, while agreeing to provide greater transparency and consultation as the town moves toward adopting an updated CPF plan by the end of the year.

During a Town Board work session Tuesday, Southold Land Preservation Coordinator Lilly McCullough walked board members through comments submitted by the Village of Greenport on the town’s proposed update to its CPF open-space project plan.

The village is Southold’s only state-designated disadvantaged community, a designation that requires the town to direct at least 10% of annual CPF proceeds toward projects that benefit disadvantaged communities.

In a four-page Sept. 18 letter to McCullough, attorneys for Greenport called Southold’s proposed framework for determining whether a project benefits the village too restrictive and asked the town to replace it with a more flexible, project-specific standard.

The village also requested greater accounting and disclosure of the money, annual consultation with Greenport officials, and a firm timetable for expanding the town’s CPF plan beyond open-space preservation to include water-quality and historic-preservation projects.

The central question now confronting the town is what constitutes a benefit to Greenport.

McCullough said the state law provides virtually no guidance for answering that question, leaving Southold to develop its own defensible standard.

Under the framework she has recommended, an open-space acquisition would be presumed to benefit Greenport if the property is within the village, within a half-mile of it, or directly adjacent to existing open space that is within a half-mile of the village.

McCullough said the half-mile standard is based on state Department of Environmental Conservation methodology used to measure the benefits of recreational open space, with a half-mile considered a reasonable walking distance.

‘One sentence’

In its letter, Greenport argued that Southold is reading the state requirement too narrowly.

The village contends that state law does not require the 10% allocation to be spent specifically addressing the socioeconomic, environmental, public-health or climate-related factors that led the state to designate Greenport as a disadvantaged community.

Instead, the village argued, the relevant question is whether an otherwise CPF-eligible project provides a “real and demonstrable benefit to Greenport and its residents.”

Greenport also objected to Southold’s reliance on DEC methodologies, arguing that they were developed for other state programs and are not binding on the town.

“The Town should not convert nonbinding, program-specific guidance into a gating requirement that narrows the Legislature’s broader direction to benefit Greenport,” attorneys Jared Kasschau and Brian Stolar wrote on behalf of the village.

The village took particular issue with Southold’s proposed geographic test.

Greenport acknowledged that proximity could be one factor in determining whether a project benefits the village but argued that it should neither automatically qualify a nearby project nor disqualify a more distant one.

A project outside the half-mile radius could still provide water-quality, shoreline-access, flood-resilience, recreational, habitat, fisheries, maritime-heritage, historic-preservation or quality-of-life benefits to Greenport, the village argued.

Instead, Greenport wants Southold to evaluate each expenditure individually and identify the project, the amount charged against the village’s allocation, its authorized CPF purpose and the “specific and measurable benefit” expected to flow to Greenport and its residents.

McCullough recommended that Southold retain its proposed framework.

“We are applying a benefit-based standard, but we have to define what that benefit is,” she told the board. “It can’t be so flexible as to just say make this a case-by-case determination.”

For accountability purposes, she said, the Town Board needs an established framework for determining whether an expenditure qualifies.

The state legislation requiring the disadvantaged-community spending provides little assistance, McCullough said.

“It is one sentence,” she said. “It just says it ‘has to benefit.’ It does not give any guidance at all about how that benefit is measured.”

McCullough said DEC methodology is not binding on Southold but remains relevant because it provides one of the few existing models for determining whether environmental spending benefits a disadvantaged community.

“I wouldn’t get rid of basically the only guidance available on this issue,” she said.

She also rejected the idea that Southold could simply define the larger Greenport hamlet outside the incorporated village as part of the disadvantaged community.

The state designation applies specifically to the census tract encompassing Greenport Village, she said. Property outside the village could still qualify if the town determines that preserving it benefits village residents, but it cannot be treated as though it is physically within the designated community.

Transparency

McCullough was more receptive to Greenport’s calls for greater transparency over the money.

The village asked Southold to publicly report the annual 10% allocation, including money accumulated since 2024, and maintain a separate ledger detailing annual allocations, commitments, expenditures and balances carried forward. It also wants Southold to identify each project against which money is charged.

“That’s fine,” McCullough said. “That’s not text that needs to go into the project plan, but that is something that I’m happy to do.”

McCullough also said Southold could identify on its CPF parcel list properties presumed to benefit Greenport and add language explaining the anticipated benefits, including improvements to air quality, water quality and quality of life.

She was also receptive to Greenport’s request for reasonable advance notice and an opportunity to comment before Southold counts an expenditure toward its disadvantaged-community obligation.

For open-space purchases, however, public discussion would generally have to wait until a required public hearing because premature disclosure could interfere with property negotiations, she said.

Another point of disagreement involves what happens when the annual Greenport allocation isn’t spent.

Greenport supports carrying unused money forward, but only if Southold identifies during that year a specific larger multi-year or future capital project, the amount being reserved and when it expects the money to be spent.

McCullough said that approach does not work well for open-space preservation because Southold cannot predict when a landowner will become willing to sell property or development rights.

The money is already treated as earmarked in the CPF accounting she maintains, McCullough said, and can only be removed from that set-aside when it is spent on a project benefiting the disadvantaged community.

Forcing the town to tie accumulated money to a particular property before an acquisition opportunity exists could actually limit Greenport’s options, she said.

“We can’t do that because open space is not predictable,” McCullough said. Allowing the money to accumulate, she added, creates opportunities to pursue more expensive, high-priority properties when they become available.

Outside funding

The village also raised a separate objection to Southold’s proposed treatment of grants and outside funding.

Greenport objected to language saying the village “should pursue and obtain” grants, matching funds or partnerships to stretch Southold’s CPF contribution.

The village said it will continue seeking outside money but argued that doing so cannot become a prerequisite for Southold meeting its own statutory obligation.

Greenport also objected to giving a project the highest priority only when its cost falls within the accumulated Greenport set-aside or significant outside funding has been obtained.

“The ten-percent requirement is a statutory floor, not a ceiling,” the village’s attorneys wrote. A project substantially benefiting Greenport, they argued, should remain eligible for additional CPF money even without outside funding.

McCullough emphasized Tuesday that the 10% set-aside does not represent a cap on what Southold can spend on projects benefiting Greenport. But she said the town also has to manage a CPF revenue stream that fluctuates with the real estate market and balance projects benefiting Greenport against other preservation commitments.

McCullough stressed several times that Tuesday’s discussion concerned the town’s open-space CPF plan. Southold plans to turn next to a separate review of water-quality improvement projects, where the rules governing Greenport-related spending may work differently.

That could ultimately prove far more significant for the village.

Greenport specifically asked Southold to commit to a timetable for adding both water-quality improvement and historic-preservation projects to the CPF plan, saying both are particularly important to the village.

Board members raised the prospect of combining CPF money with outside funding for major Greenport infrastructure improvements. McCullough said recently secured state funding for village infrastructure could make future partnerships more feasible.

CPF revenues fluctuate with the real estate market, she said, making it difficult for Southold to commit to a major project stretching over five years when it cannot predict how much money the fund will receive during that period.

Outside grants can change that equation.

McCullough said that even if Southold devoted all of the water-quality improvement funding available through the CPF, it would cover only a fraction of the cost of some major long-term infrastructure projects.

State and other outside funding could allow Southold to commit CPF dollars knowing that other pieces of the financing are already in place.

“The more funding you gather, the more attractive it is to other funding partners who look at this as a sure thing,” she said.

Greenport properties

The village’s letter also raises an issue McCullough did not substantially address during Tuesday’s presentation.

Greenport wants Southold to remove all but two properties within the village from the CPF Eligible Parcel List and Project Plan Map.

The two properties Greenport wants to remain eligible are the Greenport Yacht & Shipbuilding property and the Sweet Indulgences property.

The village said the other listed properties are already developed, devoted or planned for municipal or community uses, or otherwise conflict with Greenport’s land-use and community-development goals.

“Their continued inclusion is neither necessary nor appropriate absent consultation with, and concurrence by, the Village,” the letter states.

The town and village have already been meeting to discuss Greenport priorities, and McCullough recommended continuing that process before the CPF update goes before the public.

She said she will prepare proposed revisions based on the stakeholder comments and Tuesday’s Town Board discussion and recommended another meeting with Greenport representatives.

Her goal is to return to the Town Board with a substantially final draft that can be scheduled for a public hearing.

“I would like to be able to have a public hearing and adopt this plan before year end,” McCullough said.

The open-space plan is only the first stage of what Southold has described as a rolling overhaul of its CPF planning documents. Once it is completed, McCullough said, the town will turn to water-quality improvement projects — potentially opening a much broader discussion over how Southold’s preservation-fund revenues can be used to address Greenport’s infrastructure needs.