MADISON — The town’s proposal to construct a natural gas pipeline from Richmond to Madison failed by 27 votes on Tuesday.

Residents were split, with 51 percent opposed to borrowing $72 million for the pipeline and 49 percent in favor. The final vote was 724-697.

“I think we missed a great opportunity,” said Joy Hikel, Madison’s economic development director. “I don’t know what other project I could come up with that had that much taxpayer relief.”

Madison officials had proposed to use pipeline revenue to lower property taxes. They encountered opposition from Portland-based Kennebec Valley Gas Co., which also has plans to build a line.

The private company helped fund a local opposition group called Madison Taxpayers Against Bad Debt, which sent at least five mailings and organized a push poll over the last couple weeks.

Town Manager Dana Berry said the town is not sure what to do next or whether the issue will be brought before voters again.

“I don’t know at this point. I think it depends upon a number of things, including what kind of movement or activity we see from the private sector,” he said.

The town will not do a recount, he said.

Though Kennebec Valley Gas is proposing the same pipeline, its representatives have said it would be risky for Madison to bond for $72 million. They said local homes could be used as collateral in the case of a default on the loan.

“Will a failed ‘dream’ become a nightmare, leaving all our property on the hook?” reads one mailing sent to residents.

On Wednesday, the company issued a release, saying, “It is clear the citizens of Madison strongly desire a natural gas pipeline, but have chosen the alternative that places far less risk on the Town of Madison and its citizens.”

Berry said, “I think the scare tactics used were a misrepresentation of the worst that could happen.”

“I’m hoping the voters didn’t vote on the misinformation that was put out by Kennebec Valley Gas,” Hikel said, adding that she doesn’t know what the town could have done to combat the mailings without spending taxpayer money.

Tony Buxton, a principal of Kennebec Valley Gas, responded, “We really don’t want to get into an examination of ‘he said, she said’ in regards to the campaign at this point. We just want to move forward and be positive if we can and get this project going.”

Buxton said Kennebec Valley Gas still plans to bring natural gas to Madison, and the company will continue working to negotiate contracts with large users along the proposed route and secure financing. The financing includes arranging tax increment financing (TIF) districts with each of the 12 communities along the pipeline route.

TIFs require municipalities to give back a percentage of local property taxes to the developer to help finance the pipeline. TIF districts also act as a tax shelter for towns, so increased property values in the designated areas don’t result in increased tax commitments.

Berry said there likely wouldn’t be enough pipeline in Madison to make a TIF economically feasible.

“I doubt if the town would support a TIF with Kennebec Valley Gas,” he said.

Buxton said discussion of a Madison TIF and any impact on the company’s plans will wait for now. “I think it would be good for the town manager and all of us to talk about that after the dust has settled a little bit. The day after an election is not necessarily a good day for anybody.”

The release from the company states that Madison can still have a hand in bringing natural gas to its residents. The town “could operate a local natural gas utility, lay distribution pipeline in the streets and neighborhoods of the town and provide natural gas service to local businesses and residents.”

Madison Town Clerk Kathy Estes said 180 signatures would be needed to petition selectmen to bring the issue back to a referendum.

Erin Rhoda — 612-2368

erhoda@centralmaine.com

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