Public hearing on Lincoln gas line tax deal scheduled for Monday

Lincoln Pulp and Paper, in Lincoln
Lincoln Pulp and Paper, in Lincoln Buy Photo
Posted Oct. 21, 2013, at 3:33 p.m.

LINCOLN, Maine — Town leaders will hold a public hearing at 5:30 p.m. Monday on a proposal to return 90 percent of the property taxes Bangor Natural Gas would pay on a proposed gas line to the company for reinvestment into the line’s construction.

Set to be completed next year, the pipeline connection to Lincoln Paper and Tissue Co. LLC is the first of three steps that could lead to residents, the town and businesses saving 35 to 50 percent on heating costs and new businesses flocking to the Lincoln Lakes region, town officials have said.

Town Council Chairman Steve Clay said he hopes residents will come to the meeting, which will be at the town office. A regular Town Council meeting will follow the hearing at 7 p.m., he said.

“It will have a big impact on the mill, and there’s the possibility of expansion that could impact a lot of people in the community,” Clay said Monday. “I think people should show up either way” — whether they support or oppose the plan.

A tax incentive program for economic development available to all Maine municipal governments, a TIF, or tax increment financing, agreement permits a business and a municipality to use some or all of the new property taxes that result from an investment project within a designated district to help that project’s expenses and to generate economic development funds for the municipality. TIF agreements typically run 10 to 30 years.

Lincoln has had several TIF agreements with local businesses. Most have granted the businesses a 60 or 70 percent share of the property taxes withheld. This would be the first set at 90 percent, Clay has said.

Under the 90/10 share, the town would be required to keep 10 percent of the project’s property taxes and put it toward community economic development projects. Previous Lincoln TIFs have helped pay for improved street lights, expansions of the town airport and portions of salaries paid to town officials tasked with economic development.

Officials eventually could hook town buildings and schools into the gas line, producing more savings for taxpayers, Clay said. Exactly how much in property taxes Bangor Natural Gas would pay for the line will be announced at the hearing, the town’s economic development coordinator Ruth Birtz has said.

Bangor Gas is installing a line from the Verso paper mill in Bucksport through Lincoln to the town’s five schools, a plan that is expected to save schools about $100,000 annually, Town Manager Michael Brennan said Monday.

Bangor Gas sought a TIF for the project but town leaders refused, saying that there was no economic justification for it given that Bangor Gas’ deal with Verso guaranteed the gas company its profit, Brennan said.

Officials at the Public Utilities Commission did not immediately return a telephone call on Monday regarding Bangor Gas’ contracts with Verso and LPT.

Brennan said he would give Bangor Gas an “incomplete” as a grade for its performance installing the Bucksport line, as construction is ongoing. The company is at least two months behind in the installation and has run into some problems that caused delays, such as the discovery of ledge rock, he said.

“I think there could have been better planning,” Brennan said Monday. “They tested the ground for ledge and found a lot more than they believed was here.”

The deal between Bangor Gas and Bucksport was delayed several times when negotiations collapsed over the town’s contribution to construction. Bangor Gas halted construction of its lines in Bangor in 2011 after falling behind in construction, leaving customers scrambling for alternative heat sources in winter.

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