OAKLAND — The town council plans to triple the lifespan of a tax increment financing district it approved in 2014 to shield new tax revenue created by a natural gas pipeline through town.

The pipeline TIF was approved for 10 years, but the council would like to extend it to 30 years, the maximum allowed by state rules.

A TIF district allows a town to shelter new tax revenue from industrial and commercial development from county and local school taxes. The revenue is instead used to invest in the development or directed to municipal costs related to economic development approved by the Maine Department of Economic and Community Development.

According to Oakland’s TIF development program, the gas pipeline was expected to create $5.1 million in increased tax value. The town estimated it would generate about $628,400 in revenue over the TIF’s 10-year lifespan. The TIF runs along more than 48 acres of gas transmission lines installed by Summit Natural Gas. The pipeline runs down Fairfield Street to Kennedy Memorial Drive, up Old Waterville Road, then crosses Kennedy Memorial Drive and goes down Country Club Road to Webb Road.

On Thursday, Town Manager Gary Bowman said that last year town councilors decided not to approve the TIF for 30 years, but were told by their attorney that they could extend it in the future.

Bowman expects to start the process of applying for an extension in January. The town will have to submit its request to the Department of Economic and Community Development, but it will likely be approved, Bowman said.

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“You have to have some pretty extenuating circumstances for them not to approve it,” he said. It should be easy for Oakland, since there is “nothing complicated” about the town’s development plan, Bowman said.

According to Finance Director Doug Mather, the town received roughly $89,000 from the TIF in the 2014-15 fiscal year and billed Summit Natural Gas for approximately $90,000 in taxes this year. That revenue is more than the town expected when it submitted its development plan to the state. Initial projections estimated slightly more than $70,000 in revenue in the first year, then gradually drawing down every year to $55,000 in 2024.

The town has used its revenue to finance broadly defined economic development goals. According to its development plan, high priority was given to using the money to pay for Oakland’s $47,000 annual dues to the Kennebec Regional Development Authority, the agency responsible for the FirstPark development, and $9,000 annual dues to Kennebec Valley Council of Governments.

TIF money was also pegged for administrative and professional services, an economic development program, an energy improvement business incentive program and road reconstruction costs directly related to the pipeline development, according to the development plan.

The TIF revenue came up as a key part of helping pay for a new police station approved by voters earlier this year. At the time, Bowman said the town has been able to use the TIF revenue to offset general fund spending on annual membership to regional associations and partial salaries for himself and the town’s code enforcement officer.

That frees up money in the budget to pay down a $900,000 general obligation bond without increasing property taxes, Bowman has said.

Peter McGuire — 861-9239

pmcguire@centralmaine.com

Twitter: @PeteL_McGuire


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