2015.01.26 Council Agenda Item 08

Town Staff prepared draft documents outlining a proposed Ocean View / Natural Gas Tax Increment Financing (TIF) District. This meeting is to get feedback from the Council regarding the proposed TIF District and Development Program. The TIF District consists of approximately 355 acres and proposes to capture increases in assessed real estate values associated with new Ocean View development and Natural Gas Line installation by Summit Natural Gas from 2015 to 2044 (30 year term).

The State of Maine permits the sheltering of the incremental valuation of property within a TIF district for up to 30 years. Sheltering is fiscally advantageous for the Town of Falmouth as it avoids losses in state aid to education and state municipal revenue sharing and increases in the Cumberland County Tax Assessment. Revenues are kept in a separate TIF fund and can only be used by the Town for designated economic development related purposes and not the General Fund (see attachment 14). But, as can be seen in the both scenario 1 and 2 (attachments 3 and 7), the first 13 projects are all projects that could be funded in either a TIF or general fund budget. The Town commissioned Camoin Associates to conduct a fiscal analysis of having the proposed TIF district versus not having this district (see attachment 16). This attachment identifies more tax revenue that the other supporting documentation because some of the projected new values have decreased since the submission of this report. These changes do not materially change the impact of creating a TIF district.

The process that remains is:

• March 9: Required Public Hearing and Order approving the proposed TIF District and Development Program.
• March 10: Submission of a complete application to the Commissioner of the Maine Department of Economic and Community Development (DECD).

Updated materials:
Following the Council’s request on February 17 staff developed two TIF scenarios. Staff also updated the mill rate impact information and the “reach back” illustration.

SCENARIO 1
Scenario 1 includes the following tiered captured assessed value percentage:

Year 1: 0%
Year 2-15: 100%
Year 16-25: 75%
Year 26-30: 50%

This tier is estimated to generate revenues of approximately $16.2M in TIF taxes over 30 years.

Scenario 1 lays out estimated expenditures for thirteen “Base Package” projects that are either part of the Town’s current Capital Improvement Plan (CIP) or operational budget. Total estimated cost of these projects is approximately $16M.

SCENARIO 2
Scenario 2 has the following the following captured assessed value percentages:

Year 1: 0%
Year 2-30: 100%

This scenario is estimated to generate revenues of approximately $19.8M in TIF taxes over 30 years.

Expenditures for Scenario 2 include the $16M for the “Base Package,” but would leave approximately $3.8M available for other eligible projects.

Staff created several sets of possible projects with costs estimates for the Council’s consideration:

• List A: Economic Development Initiatives
• List B: Infrastructure Improvements in Other Commercial Areas
• List C: Bicycle and Pedestrian and Multi-Modal Improvements

A PowerPoint presentation has been posted -see #17 below.

Attached are:

1. District Acreage and Valuation
2. Scenario 1 – Captured values
3. Scenario 1 – Project List
4. Scenario 1 - Projects by Year
5. Scenario 1 - Financial Worksheet
6. Scenario 2 – Captured values
7. Scenario 2 – Project List
8. Scenario 2 - Financial Worksheet
9. Scenario 2 – Selected Project Descriptions
10. Public Street List
11. TIF Thresholds
12. Mill Rate Impact
13. Reach Back Illustration
14. DECD TIF Rules and State Statutes
15. DECD  Extension Request
16. Fiscal Analysis
17. PowerPoint Presentation, February 23, 2015