BREWER, Maine - Tax increment financing is nothing new, but city officials are taking the idea a step further by setting up a municipal economic development TIF that will pay for part of the new public safety building and improvements downtown and along the river.
The tax dollars that will be sheltered from state and county coffers will come directly from the new Lowe’ s on outer Wilson Street and Maritimes & Northeast Pipeline, which includes a new compressor station near the junction of Day and Lambert roads.
“Rather than put the new tax revenues from those two projects into the general fund, those revenues will go into a TIF revenue fund, which only can be used for approved projects,” said D’ arcy Main-Boyington, Brewer economic development director, on Monday. “We would lose 66.5 percent” of the new tax money if the funds were not sheltered.
She explained that when property values increase, “we have a decrease in the amount for education [funding] from the state, and an increase in county taxes and state revenue sharing.
“The net result for one new tax dollar is the city actually gets to keep about 34 cents and the rest goes to the county and the state,” Main-Boyington said.
Over the next 30 years, which is the length of the new TIF, Lowe’ s and the pipeline will pay nearly $17 million in taxes and the city will use those funds — on average $564,563 — for projects that have been approved by the state Department of Economic and Community Development, which oversees the TIF program.
There are 11 projects that have been placed in the municipal economic development TIF.
The new home for the Fire and Police Departments, at $6.79 million, is the largest of the projects on the list, which totals just more than $21.5 million.
Rules prevent the city from using the TIF to pay for police buildings, so only a portion of the new structure will be paid for using the funds.
“We’ re funding 100 percent of the fire costs,” Main-Boyington said. And since the Fire Department makes up approximately 55 percent of the new public safety building, which is located on Parkway South, “we can [use the TIF] for up to 55 percent of the total.”
The TIF rules allow for a portion of the money to be used toward the cost of new public safety equipment because it is needed for the new Lowe’ s and pipeline developments.
Prorated costs for a new minipumper for the Fire Department, at a cost of $48,300 or 33 percent of the total cost, and a police cruiser, at $1,325 or 0.05 percent of the total, round out the public safety investments.
Relocating a riverside sewer dumping station at the old Public Works locale, used by trucks and RVs, at $610,000, is the second largest project. Other projects along the river include purchasing property to make improvements downtown and shorefront stabilization, Main-Boyington said.
Organizational costs for creating the TIF, operating costs and expenses for the economic development office, funds related to South Brewer Redevelopment, and a $1 million revolving loan fund for future investments make up the remainder of the investment plan.
The projects are all planned, but that does not mean that they will be undertaken this year, or even next year, Main-Boyington stressed.
As an example, the revolving loan fund “is a future project that we’ re hoping to do,” she said.
The new economic development TIF is an incredible opportunity for the city to invest in its future, Main-Boyington said.
“We’ re not the first [community] to do this,” she said. “We’ re sheltering new revenues for our own benefit, not for a company. This is economic development for the city.”