China TIF committee looks to re-allocate funds among projects

by Mary Grow

China’s Tax Increment Finance (TIF) Committee members met virtually Dec. 1 and Dec. 8 to begin discussion of a proposed Amendment 2 to China’s TIF document. Progress was so slow that they scheduled another meeting for Dec. 15.

The Dec. 1 meeting was a budget workshop to consider reallocating funds among TIF projects. Committee members said the causeway project at the head of China Lake’s east basin is over budget, but no money has been spent from other accounts, like one to promote the town “as a business location” and one for job training.

On Dec. 8 committee members started discussing revising the list of projects, including adding new items eligible for TIF funding. Two proposed additions are expanded broadband service, made legal under revised state TIF regulations, and water quality.

Committee members can also recommend deleting project accounts.

The first item discussed Dec. 8 deals with improvements at the causeway at the north end of China Lake and the South China boat landing at the south end. The TIF plan estimates a $650,000 total cost for both. Pitney and Town Manager Becky Hapgood, who is treasurer for the town and for TIF, expect the causeway project alone to cost close to $1 million.

Committee Chairman Tom Michaud reported the project should be done within a week, weather permitting, except for paving that will be postponed to spring because paving plants have closed for the winter. The first phase involved building a new bridge across the head of the lake. The current phase includes installing sidewalks, more appropriate guardrails and shoreline riprap and improving the boat landing east of the bridge.

No money has been spent on the South China boat landing. Part of the Dec. 8 discussion was whether any should be, with non-committee-members Ronald Breton, chairman of the Board of Selectmen, and Scott Pierz, president of the China Lake Association (CLA) and China Region Lakes Alliance (CRLA), joining.

Breton and Pitney recommend deleting funding for the landing. The town owns only a 50-foot-wide roadway to the water and cannot acquire adjoining property; access is steep, with little or no room for maneuvering or parking vehicles; and the water is shallow for a good distance from the shore, they said.

Pierz said whether or not the landing is maintained, erosion control measures are urgently needed.

New TIF Committee member Michael “Mickey” Wing proposed a compromise, maintaining the area as a carry-in launch for canoes and kayaks.

The second, very specific, item on the current project list calls for using town property, and buying adjoining property if needed, on Fire Road 44 to develop a commercial site for either a “research/laboratory and/or facility developing products or services related to improving water quality and fisheries to inland waters.”

Fire Road 44 goes to the east shore of China Lake opposite Alder Park Road, just south of the town office complex. The TIF plan says the town owns the road; Pierz said the town discontinued the road, maintaining a public right of way. The plan further says town-owned land there is already used “for summer conservation programs performing water quality projects.”

This project is funded for $550,000 in the TIF document. Committee members agreed it should be either deleted or reworded more broadly, but postponed a decision on which alternative to recommend.

There was general agreement, too, on recommending that projects that promote water quality be made eligible for TIF funding. The Dec. 8 discussion focused on whether TIF money could and should be used to assist the CRLA with its Youth Conservation Corps run-off control work and its Courtesy Boat Inspection program, and to support the Alewife Restoration Project (ARI). ARI’s goal is to allow alewives access to China Lake by removing or modifying dams on Outlet Stream in Vassalboro.

One issue was whether TIF money should fund ongoing operations, like supporting a salary for the China Region Lakes Alliance director. If it did, Pitney asked, what would happen when the TIF ends in 2044?

Another issue was whether the Alewife Restoration Project (ARI) is a legitimate beneficiary. Not only is the work outside China’s boundaries, but, Pitney said, although the work has environmental benefits, its supporters do not guarantee China Lake water quality improvements.

The list of TIF-eligible projects under the current plan is on the town website, china.govoffice.com, under Tax Increment Finance Committee, sub-heading 2017 TIF First Amendment, pages 4 and 5.

Committee members still have to discuss projects under the heading of Community-Wide Municipal Investments. The larger ones are money for “The Town of China Community and Development Economic Development Department” ($55,000 a year); for events like China Days ($20,000 a year); for the revolving loan program for new and expanding businesses ($30,000 a year); for recreational trails “with significant potential to promote economic development” ($38,000 a year); and to provide matching funds for grants that help achieve TIF goals ($100,000 a year).

Committee members are also considering trying to add wording that would let China’s Board of Selectmen reassign funds from one project to another without voter approval. They do not know whether state officials would accept such a provision.

The TIF Committee will mee at 6 p.m.,Thurs., Dec. 17, to continue discussion of changes to China’s TIF document. The meeting will be virtual.

The China Planning Board will meet at 6:30 p.m., Tues., Dec. 22. The meeting, rescheduled from Dec. 8 to technology limitations, will be virtual.

Background on China’s Tax Increment Financing Program

China’s original TIF document was approved at the March 21, 2015, town business meeting, with funding to come from taxes on Central Maine Power Company’s north-south transmission line through China. Amendment 1 was approved two years later. It extended the TIF from 30 to 40 years and added taxes on the CMP substation in South China as a second revenue source.

Revenues come in as CMP pays taxes over the years, so the total amount appropriated for a category is not available immediately. New committee member Jamie Pitney pointed out that funding varies slightly from year to year as the tax rate changes, and would decline drastically if, for example, CMP discontinued the power line.

Any TIF Committee recommendations to change the TIF program are made to selectmen, who decide whether to present them to voters and hold a public hearing if they do so decide. To take effect, changes need voter approval, perhaps at the planned May 18 town business meeting, and acceptance by the state Department of Economic and Community Development.