WATERVILLE — City councilors voted 7-0 Tuesday to postpone until March 6 taking a final vote on a proposed tax break and related development program for a natural gas pipeline.

Councilors said they needed more time to consider the terms for a tax increment financing plan for Kennebec Valley Gas Co., which wants to build the pipeline through 12 municipalities, from Richmond to Madison.

Initially, the council considered a plan that called for directing 80 percent of property tax revenue for the first 10 years of the pipeline’s use to the developer and 20 percent to the city. For the next five years, 60 percent would go to the developer and 40 percent to the city under that plan.

Councilor Erik Thomas, D-Ward 4, proposed the city’s TIF revenue go to a dedicated TIF account rather than into the general fund, and recommended the term of the TIF be for 30 years instead of 15, but for the city only — not for the developer.

In other words, the TIF agreement with the company would be for 15 years, but the city would keep the TIF in place for its purposes an additional 15 years, under Thomas’ proposal.

The city’s designated TIF fund would be for economic development. Thomas said the city must outline for the state Department of Economic & Community Development what the city would spend the TIF money for when the city submits its application. The TIF request is subject to DECD approval.

City Manager Michael Roy said Tuesday he supports Thomas’ proposal to dedicate the funds for economic development.

“I think it’s a good idea,” Roy said.

However, councilors were not ready to take a final vote Tuesday, saying they wanted more time to review the pros and cons of a 15-year term and a 30-year term.

Thomas supported the idea of tabling the issue to March 6 to give councilors more time to finalize details.

“I think the point is that if the city structures this the right way and does everything it’s supposed to do, we only stand to gain from the TIF,” he said. “There’s really nothing for the city to lose.”

Richard Silkman, a partner in Kennebec Valley Gas Co., said before the meeting that the company has not set a deadline for communities to decide whether to approve a TIF, but officials have asked them to let the company know by the end of the first quarter of 2012.

Waterville, Norridgewock, Richmond and Madison have not decided; Sidney has rejected it, as has Farmingdale, but the Farmingdale issue will go to referendum in June at the request of selectmen. Other towns may decide to enter the project.

“Belgrade looks like a good option for us to consider,” Silkman said.

He said that construction of the $85 million project will start in 2013.

The pipeline proposal process started in mid-2010 with a feasibility study done late that year, and the Public Utilities Commission approved the plan in 2011, he said.

Amy Calder — 861-9247

[email protected]


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