BELGRADE — Selectboard members will soon know if the town will benefit if they decide to grant a natural gas company a tax break for a pipeline through the community.

The Kennebec Valley Council of Governments will present an analysis to the board on Tuesday, April 17. The meeting is scheduled for 6:30 p.m. at the Town Office.

The $86 million proposed natural gas pipeline would run through a dozen towns from Richmond to Madison.

Sidney voters rejected a tax break for the project, so Kennebec Valley Gas Co. officials recently turned to Belgrade as an alternate route. The pipe would run about 10 miles through Belgrade via routes 27 and 11.

Gas company officials asked the town for a tax break, but selectboard members said they won’t do anything until they see what the town would get out of the deal.

The tax break, called a tax increment financing district agreement, has been brokered by the Kennebec Valley Council of Governments and it calls for the TIFs to last 15 years, which must be approved in each community. Under the deals, municipalities rebate a portion of local property taxes back to the developer to help underwrite the project’s financing.

Ken Young, executive director of KVCOG, said his organization has hired an attorney experienced in tax increment financing, who will provide Belgrade officials with an analysis of the gas company’s investment.

“It describes the effect of the TIF arrangement, the terms of the TIF financing arrangement, and how much revenue the municipality would get in the first 10 years, and how much it will get in the remaining five years,” Young said.

He said the analysis also will show officials how the tax increment financing districts will act as shelters, so increased property values in those areas don’t result in increased tax commitments for the town.

“In simplest terms, if I make a $1 million investment in a town and pay $100,000 in taxes, at first blush the town gets $100,000 in new revenue,” he said. “But because the valuation went up, they get less municipal revenue sharing, less school aid and pay more county taxes.

“With the TIF agreement the town doesn’t get all the revenues, but it doesn’t lose any from those three formulas.”

Young said he has a “rough understanding” what the investment would mean to the town, but didn’t want to say more until he has the final numbers. He said the town can use the revenue to underwrite general fund spending or invest the it in an economic development program.

“If they agree they can put it into their general fund and spend it on day-to-day operations or put it in an economic development program that identifies the sort of investment they might like to use it for, a new road or new bridge or other things related to economic development,” he said.

He said KVCOG will go over all the spending options with town officials and put together the needed paperwork for a townwide vote.

KVCOG also will help file the TIF with the Maine Department of Economic and Community Development, he said. The department is responsible for reviewing all TIF proposals.

“The gas company is interested in having it done as soon as is convenient,” he said. “It’s critical to their financing. They want to know if Belgrade wants to go ahead with it.”

Eight communities in central Maine, including Hallowell and Gardiner, have already agreed to a TIF.

Richmond officials decided against bringing the matter to voters at the annual Town Meeting, while Sidney voters rejected the tax break at a special town meeting Feb. 15.

Farmingdale will vote again in a referendum June 22 after rejecting the tax break at a special town meeting Dec. 10. In response to the December vote, gas company officials announced they would not construct 2.5 miles of distribution pipeline planned for the town.

Mechele Cooper — 621-5663

[email protected]