The Benton Board of Selectmen is looking into setting up a development district around the Central Maine Power Co. substation on Albion Road that recently has been the target of noise complaints by nearby residents.
Estsblishing a tax increment financing distrct there would allow a portion of the yearly property tax revenue from the site to go back to the town for economic development.
A public hearing is scheduled for 6 p.m. March 10 at the Benton Town Office, where development proposals will be shown and residents can comment or ask questions.
The Albion Road substation has been at the center of conflict since it was turned on last May. Some residents who live near the substation have complained about a persistent buzzing sound, and believe that the power company has dragged its feet in finding a solution to the sound.
CMP has conducted two tests, one at the substation in the summer and another at four residents in November, and has stated that the noise level from the substation is in line with the town’s ordinance.
The assessed value of the CMP substation is about $24 million, according to Selectman Antoine Morin. Because the assessed value of Benton will increase by about 15 percent with the substation, the amount the town will have to pay to the school district and Kennebec County will increase, while state revenue sharing would decrease, Morin said.
The tax increment financing district would allow the town to take part of the substation’s property taxes generated by new development within the designated district and shelter it, as long as the sheltered money is used for certain purposes, such as economic development or infrastructure improvements.
Though the town loses tax revenue, it also benefits. Money sheltered during a TIF doesn’t count toward a municipality’s overall tax value during the TIF’s life. That lower taxable value means state revenue sharing is not affected.
State law puts a cap on the TIF value at 5 percent of the town’s total assessed value, so the proposed Benton TIF has the potential to capture roughly $8 million of the $24 million of assessed value for the substation. The $8 million represents about $100,000 in property tax revenue, while the other roughly $200,000 in tax revenue would go to the general fund to mitigate property tax increases. The town is working with the Kennebec Valley Council of Governments to determine how much of the $100,000 would meet the needs of the developmental plan.
Removing that $100,000 in property tax from the town tax revenue would decrease the amount the town needs to pay to the county and the school district, offsetting the loss in tax revenue, according to Morin.
What the town proposes to do with the district is still in discussion, Morin said.
“Some short-term projects we’ve discussed are improving access to our snowmobiling, hiking and canoeing trails; while more long-term, we’re looking at extending sewer lines down Neck Road,” Morin said, adding that the developmental ideas are taken from the town’s most recent comprehensive plan in 2008.
Other things the TIF money could pay for are the town’s annual payment of First Park in Oakland, the town’s yearly payment to KVCOG and the expense of establishing the TIF district.
The public hearing on March 10 will take place days before the annual Town Meeting, scheduled for 10 a.m. March 15, at which residents can vote on the TIF as well as other town budget articles.