LIVERMORE FALLS — More than 20 residents attended a public hearing on a tax-increment financing application Tuesday connected to a $14 million upgrade at Central Maine Power’s substation on Moose Hill Road.
A TIF opens a lot of doors for small and larger businesses and could encourage those business owners to invest more money into them and create growth in the town, businessman Bruce Adams said.
It could also attract new businesses to the area, which would result in more tax dollars to grow the tax base and create jobs and possibly lower the tax rate, several people said.
Resident Ron Chadwick said the concept of the TIF is excellent.
“I think the proof is going to be in the pudding and how well the TIF is managed,” he said. He said the town has opportunities in the past, but there are still vacant storefronts.
“This may be our last opportunity in 30 years. We damn well better get it right,” Chadwick said.
Selectman Kenny Jacques said the town has had a lot of investment in it, including the new medical arts building and the Lamb Block renovation.
“We are taking the right steps. It’s not all doom and gloom. We’re in better shape than other towns,” Jacques said.
CMP revised the projected valuation amount for the upgrade from $17 million to $14 million recently, town consultant John Cleveland said.
The application for a municipal tax-increment financing district reflects the revision. The numbers used in the application and projections are very conservative, he said.
A town vote on the application will be held at 6:30 p.m. Feb. 10 at the Town Office.
Under the proposed TIF, the town would shelter 90 percent of the new value and capture an estimated $8.59 million in new taxes over 30 years, Cleveland said. The remaining 10 percent of value is estimated to generate a total of $954,720 in new revenue with a net amount of $374,558 going into the general fund. The figures are based on what is known now and the current tax rate of $20.80 per $1,000 of real property value.
At the end of the 30 years, all of the value of the substation goes to the general fund, Cleveland said.
The town would have the flexibility to capture less than the 90 percent of value but not more once the agreement is accepted, Cleveland said.
The agreement does not pertain to any personal property value or taxes, he said.
The town projects generating about $291,200 in new tax revenue once the full value of the completed substation is on the tax rolls, he said.
Using the current tax rate, the town will collect $262,080 in TIF revenues and $29,120 in general fund revenues by year two of the TIF, Cleveland said.
CMP substation’s value before the project was $3.85 million that transpires into $80,092.48 in taxes, Town Manager Kristal Flagg said Wednesday. The town will continue to collect taxes from the current value if a TIF is created.
When asked if the tax rate would go down, Cleveland said, the hope is it would go down but they couldn’t project with any certainty it would go down.
“If you can achieve a stable mill rate, that is a great accomplishment,” he said.
The proposed TIF district includes the portion of the Otis Mill property in Livermore Falls, the downtown corridor from the Jay town line to the Depot Street/Park Street area, the town’s Wastewater Treatment Plant property, PalletOne/Isaacson Lumber Co. properties and some properties near the ReEnergy Holdings biomass plant.
Among the categories that the TIF money could be used for are costs associated with the development of a business park on Diamond Road, wastewater treatment plant upgrades and renovations related to commercial or economic development, improving the trail system, costs associated with cultural arts/programming, training/scholarship funding, downtown improvements and establishing an economic development loan/grant fund.
If the town does not create a TIF for the new value, it would lose 52 percent of the funds that would be generated through taxes and gain 48 percent, Cleveland said. With a TIF, the town would be able to retain about 94 percent of the TIF revenue.
“If we don’t have a TIF, we get 100 percent of the new revenue but we lose subsidy to the school so our share of school costs would rise an estimated $75,000 per year, our county tax would go up an estimated $10,000 more per year and our revenue sharing would also be cut,” Flagg said Wednesday. “We figured that we would lose about $100,000 per year at least and more in the next 30 years. If we have a TIF, we keep a small portion in the general fund but get to keep all the funds for a certain purpose without affecting subsidies, revenue sharing” and other associated funds.
By capturing 90 percent of the new value, it gives the town the flexibility to lower the capture rate if it becomes a tight budget year and more funds are needed to run the town, Cleveland said. The percentage rate cannot be increased once the TIF is in place, he said.
The TIF can be amended to add new properties as long as the total acreage and valuation doesn’t exceed the state’s allowed amounts.
dperry@sunjournal.com
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