ORONO, Maine — The proposed transit-oriented tax increment financing, or TIF, district for the downtown won’t result in any new taxes, Town Planner Evan Richert said earlier this week, but it could result in a rise in taxes over the years if the Town Council doesn’t manage it the right way.
The council held public hearings on the TIF district and zoning changes Monday during its regular meeting and will vote Jan. 11 on both issues.
TIFs allow municipalities to capture taxes from increased property values in certain districts, then reinvest the captured taxes in economic development, capital projects or transit.
Richert said one model showed captured TIF revenue of more than $1 million by the 21st year of the TIF. Typical TIFs last 30 years.
However, he added, it’s up to the Town Council to figure out how to use the money that comes in and scrutinize the programs the TIF will fund.
“If a community sees [TIF] revenue as found money and starts creating multiple new programs that are expensive instead of using the money to pay for things that would have to come out of the general fund anyway, you could end up seeing the expense of local government rise,” Richert said.
Proposed projects include reconstruction of roads and curbs, replacement of clay pipes and deteriorated sewers, the funding of a pedestrian bridge and purchasing equipment. Funding for the new Black Bear Orono Express shuttle, which costs the city about $60,000 per year, is also part of the proposal.
The projects will be earmarked for the TIF district and not available for the town’s general fund.
Richert and town councilors said the TIF is entirely separate from a tax paid by businesses and residents in the downtown that helps support the Orono Village Association. Two residents told the council they were worried their taxes would rise with the TIF.
Village Association co-chairwoman Michelle Goldman told councilors the association supports the TIF.
Some residents also spoke out against proposed amendments to the town’s land use ordinance, particularly changes to the Forestry and Agriculture District which Richert said makes up 60 percent of town’s land base.
The changes would increase the minimum lot size outside subdivisions to 160,000 square feet from the current 80,000, a maximum density of one family per 160,000 square feet, a 55 percent open space requirement within in subdivisions, and mandatory clustering in subdivisions.
“I don’t think it’s a wise use of resources. I’m for cluster development … but I think 160,000 square feet is very, very demanding, especially because 55 percent has to be open space,” said Orono resident Milos Blagojevic, whose family owns a piece of land which will be affected.
The council also approved a liquor license for Margaritas restaurant and approved a zoning change that will allow Campus Crest Development LLC to extend its plan to build a housing complex off Park Street for University of Maine students.
The council also authorized Conlow to enter into an agreement with the town of Milford to provide animal control services.
In other business, Conlow announced that Moody’s Investors Service has elevated Orono’s bond rating from A3 to A2 and took away a negative outlook. Strong bond ratings can translate into better interest rates when the town seeks to borrow money.