LINCOLN, Maine — With the Town Council’s first try at negotiating a 20-year tax break for First Wind of Massachusetts essentially dead due to a deadlocked 3-3 council vote on March 9, councilors will meet Monday to resume talks with the wind- power proponent, officials said Thursday.
The executive session is the meeting’s sole purpose. No council votes are expected, Chairman Steve Clay said.
As part of the negotiations, town officials are examining municipal improvement options the town could pursue under state tax increment financing, or TIF, regulations, Town Manager Lisa Goodwin said.
“We can purchase items through the TIF revenue rather than going to the taxpayer and getting funding through tax dollars,” Goodwin said Thursday. “If we needed a street sweeper, say, a percentage of that street sweeper purchase could come from TIF revenues.”
Tax increment financing is among the state’s leading tools for aiding economic development. When a town sees an increase in valuation created by an investment such as First Wind’s, it also experiences a reduction in its share of state revenues and an increase in county taxes.
A TIF allows a town to “shelter” the new valuation from the calculations of state revenue sharing, education subsidy and county tax assessment — in effect creating more money for the town. With a TIF, however, the money that a town gains must be invested in community economic development projects, such as industrial parks or infrastructure improvements that aid businesses.
Under state laws, municipalities can keep the sheltered value for 30 years with a municipal tax phase-in over the last four years so that taxpayers only gradually take on that financial burden, Goodwin said. Businesses such as First Wind receive the sheltered-value benefits for 20 years.
Under the first, failed TIF agreement — a proposed 60-40 split between First Wind and the town of the taxable value of First Wind’s estimated $50 million investment in Lincoln — First Wind would have received $8.8 million in sheltered tax monies over 20 years, while the town would have received an estimated $9.8 million in TIF funds over 30 years, Goodwin said.
Without the TIF, the town would receive an estimated $19.76 million in taxes over 30 years, Goodwin said, but the tax shift caused by lost state tax subsidies — an estimated $14.58 million — would have resulted in town taxpayers netting only $5.1 million from the project over the 30 years.
“That’s the difference,” Goodwin said. “I would rather the town receive $9.8 million than $5.1 million.”
First Wind is seeking permits to build 40 1.5-megawatt turbines along the Rollins Mountain ridgelines that run through Burlington, Lee, Lincoln and Winn. A new 135-kilovolt transmission line would carry the wholesale electricity from the project through Mattawamkeag to the New England power grid as part of the $130 mil-lion project, company officials have said.
The proposed or accepted TIF agreements for Burlington, Lee and Winn have similar benefits for those towns, and TIF funding can be used for projects such as Lincoln is considering. Among the town improvements the TIF could pay for:
ä Road construction projects, such as the repair of badly worn town roads, the paving of dirt roads and traffic-light and traffic-flow installations.
ä The creation of a reserve account for sidewalks and streetlight repair and replacement. Although these were just replaced, they have a 15- to 20-year life, Goodwin said.
ä The payment of town department salaries and equipment. Equipment reserve accounts plan for the capital replacement of fire equipment and public works equipment.
ä Grant matches for federal and state grants. For example, if the town applied for a Community Development Block Grant for housing rehabilitation, the TIF proceeds would be used for the 10 percent required match.
ä Funding for a revolving micro-business loan program or investment funds to support commercial or industrial activities, including a small-business loan program for business start-ups and expanding businesses.