WATERVILLE — A vote on a tax increment financing district for a proposed natural gas pipeline revealed lingering doubts among some city councilors.

The City Council approved the first reading of the proposal 4-2, but two members, Fred Stubbert and Erik Thomas, voted against it.

Stubbert said the issue boils down to tax revenues for the city.

“I hate to give up more tax money,” he said Wednesday. “We need as much tax money as we can get here in Waterville. I’m pretty sure they don’t need the TIF.”

The vote followed a public hearing Tuesday on the issue in Council Chambers. During public comment, a partner at Kennebec Valley Gas, Richard Silkman, said the formation of TIF districts in 12 Central Maine communities is a necessary step toward the financial viability of the project.

Under the proposed TIF agreement, 80 percent of the pipeline’s property taxes during the first 10 years would return to the developer and 20 percent to the towns. In years 11 through 15, 60 percent would return to the developer and 40 percent to the towns.

Silkman said his company has financial documents that attest to the necessity of TIF districts. Those documents were shared with Augusta City Council during discussions there, he said.

Augusta councilor Michael Byron, a former commercial lending officer, said he served as chair of a subcommittee to review the TIF proposal. Byron said Wednesday that the gas company’s financial records satisfied the Augusta requirements for a TIF district.

“The deal can’t work without this TIF,” Byron said.

In October, Augusta unanimously approved the plan.

Stubbert, a nine-year councilor, said Wednesday he wasn’t swayed by Silkman’s claim and said the pipeline could be built without tax relief.

“I’ve been around long enough to know you can make financial statements say anything you want,” he said. “They’ll build it anyway. Sure they will.”

Silkman said Wednesday he understands Stubbert’s concerns about city revenues, but insists the pipeline cannot be built without TIF districts.

City Manager Mike Roy has requested the financial documents from Kennebec Valley Gas Company. Silkman said the company will share the documents as long as the council keeps the documents confidential.

Councilor Erik Thomas voted against the TIF district because the deal isn’t ready, he said.

“I’m actually in favor of the pipeline, and I’m not opposed to the TIF, necessarily,” Thomas said Wednesday. “I just think it’s important that we negotiate the best deal for the city.”

Thomas wants to see a plan from Kennebec Valley Gas Company that ensures Waterville homes will be tied into the pipeline for residential use. He also wants the company to provide advocacy to low-income residents who seek grants or low-income loans for gas-fired heaters and appliances.

Silkman said the marketplace provides a natural incentive to address most of those concerns.

“We will build out wherever there is demand for natural gas service that can support the build out,” he said.

Silkman also said the company would work with state government and other agencies to try to get financial assistance to residents for conversion to gas.

Thomas also wants to know if the gas company could raise the price of its product to help finance construction of the pipeline.

Silkman said raising rates isn’t an option.

“(Thomas) is correct that we could raise rates,” Silkman said. “The problem is it will discourage customers, and, in the end, we won’t have enough customers to support the project.”

Councilor Eliza Mathias couldn’t attend the Tuesday hearing, but she is reasonably certain how she would have voted.

“I support bringing natural gas to central Maine. I am aware of why they need a TIF to complete the project, and I think I would have voted in favor of the project moving forward.”

The council will vote on the issue again at its next meeting, Dec. 20. The order requires three separate votes for approval.

Ben McCanna — 861-9239

[email protected]

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