Municipal Page

Present: Erin Cooperrider, Lisa McSwain, Amanda Russell, Stuart Smith, Rodd Hopper, Jo Cameron, Frank Perkins, Tom Toye (Sheepscot River Holdings), Jim Nimon (ME Dept. of Economic and Community Development), Andy Nelson, Paul Harrison, Joan Forten, Bob Faunce, Alan Mast,

Jim Nimon explained that Tax Increment Financing is a state-authorized program which uses local property taxes for investment projects and economic development activities in a specific district. The district has limits -- it cannot be more than 2% of area for a single project and not more than 5% in area or value for multiple TIF districts.

Under the TIF program, the original taxes from the property go to the general fund as always, but taxes from the incremental value above the original value can go to the general fund, to credit enhancement where the community returns some portion of the taxes back to the company, bond repayment if the community issued bonds or for economic development in the community such as a revolving loan fund, investment trust funds, etc.

Reasons for using the program are that economic development is a priority for the community; as a shelter from the tax storm (as values rise, state subsidies decrease and county taxes increase, but under the TIF program values in the district do not increase during the lifetime of the TIF); or to be a financing partner with the developer by returning some of the taxes to the project.

In order to develop a TIF, the community with a consultant must prepare a proposal which will be presented to the community at a public hearing and voted on at a Special or Annual Town Meeting. The proposal is then forwarded to the Department of Economic Development for State approval.

There are 80 communities participating in the TIF program in Maine at the present time; there are 175-180 TIF districts; and 140 of the districts are using credit enhancement agreements whereby the community participates in the project by returning some of the taxes to the company.

Summarizing, Mr. Nimon said that TIF is a local economic development project financing program. It is community-driven, using community funds to lower property taxes. It is a shelter against adverse adjustments to state subsidies and county taxes based on local valuation, and it is a flexible economic development tool.

In the discussion period which followed, Mr. Nimon said that the limit for a TIF district was 30 years, most were between 15 to 17 years. Boothbay has a TIF district and Whitefield and Waldoboro are in the process of preparing or considering a proposal. A TIF can be amended in order to change the terms. Under Tom Toye’s scenario the TIF district would encompass the Sheepscot Inn and be made possible by the water and sewer being brought over from Wiscasset. Ownership or control of the water and sewer lines has yet to be determined. The developer would bear the expense of bringing the water and sewer to the property. Investment and development would take place in the TIF district and generate revenue from the increased value, part of which would reimburse the developer for the initial investment.

The advantages to Edgecomb are increased taxes with no liability. Bob Faunce said the benefit to Edgecomb was a permanent resolution to the overboard discharge situation and it would give the Planning Board power over what gets developed on Davis Island. The ordinances may have to be amended depending upon the agreements with the Water District and Wiscasset. An agreement may contain language to allow the contract to be assigned if the development is sold or the TIF could start over with the new buyer. If the developer goes bankrupt, the TIF can be terminated or kept and renegotiated with a new owner.

Tom Toye is working with Attorney Dennis Jumper on a draft of an agreement and will be meeting with the Planning Board on June 17th. He offered to pay Attorney Paul Gibbons’ fee if the Planning Board wished to consult him on the TIF. He would like to lay the pipes in September or October.