AUGUSTA — The city staff and a committee of city councilors recommend extending seven existing tax increment financing agreements for additional years, a topic that will be discussed at Thursday’s city council meeting.

Under the proposal, all of the new money collected would go toward city projects, including construction of a new fire station in north Augusta and the possible expansion and renovation of Hartford Fire Station.

Some of the agreements were created originally and approved by city councilors in part to give tax breaks to help spur private business development by returning a share of the property taxes paid on new development to the business owners involved. However, the city, not businesses, would be the sole beneficiary of funds sheltered within the agreements during the additional years recommended by city staff and the Tax Increment Financing Committee.

“None of these changes would provide any additional money to the developers,” said Ralph St. Pierre, finance director and assistant city manager. “100 percent (of TIF proceeds during the extended time period) goes to the city, and you get to do a project for 50 cents on the dollar.”

New property value sheltered in a tax increment financing agreement doesn’t count toward a municipality’s total property tax value used by the state. That benefits the municipality, because when a municipality’s property value increases, its amount of state aid for schools and other state revenue drops, and its share of county taxes increases.

By sheltering that money, the municipality can use them for specific projects allowed by state rules without its valuation increasing and without its share of state aid decreasing correspondingly.


In Augusta’s case, most of the money generated within the districts would go toward paying debt incurred or debt that could be incurred in the future for fire station construction or renovation and the purchase of firefighting equipment.

That would include $3.6 million in bonds to build a new fire station in north Augusta and $1 million in bonds to buy a new multi-purpose firetruck, both approved by voters last November.

Construction of the new fire station is expected to start in the spring, pending completion of an environmental review of the city-owned site, roughly across from the intersection of Leighton Road and Anthony Avenue. The new truck has been ordered and is expected to arrive next year.

St. Pierre said proceeds from multiple city agreements that may be extended, including those originally created to help J.S. McCarthy expand its printing business, would help pay off the debt incurred for the north Augusta fire station and fire apparatus.

The money also could help pay for the likely future expansion and renovation of historic Hartford Fire Station. St. Pierre said the old station was built for horses pulling carts, not modern, heavy firetrucks, and will need to be expanded and modified to continue serving the city into the future.

In addition to the extension of the time periods, the agreements also would be modified to include the fire station projects as allowed uses of the money generated within the designated districts.


Other agreements that could be extended would provide funding for improvements to infrastructure or other allowed projects in the downtown area.

State law allows municipalities to establish tax financing agreements for up to 30 years. Some of the city’s agreements were not originally 30 years long, so the city staff and a council committee made up of Jeffrey Bilodeau, Cecil Munson and Linda Conti recommend extending them to the maximum allowed.

If approved by councilors, the changes also would be subject to approval by the state Department of Economic and Community Development, which reviews and approves all tax financing agreements in Maine.

Councilors are scheduled to meet at 6:30 p.m. Thursday in council chambers in Augusta City Center.

Councilors are also scheduled to hear an update about the Kennebec Valley Garden Club.

Keith Edwards — 621-5647

[email protected]

Twitter: @kedwardskj

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