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11/18/2019

Hearing Dec. 9 on amendments to town-center Tax Increment Financing district

The town is looking to amend the Tax Increment Financing district approved for the town center in 2015.

The Town Council will hold a public hearing on three technical amendments to the TIF on Dec. 9, 2019, 7 p.m. at Town Hall.

The Tax Increment Financing district, or TIF, allows the town to set aside tax revenue from increases in the town center's valuation for improvements to sidewalks and stormwater improvements.

Two of the amendments correct the amount of acreage in the district, primarily by excluding tax-exempt property owned by the Cape Elizabeth Land Trust. A third amendment changes the date of the base valuation, from which the increases are determined, from April 1, 2014 to April 1, 2013. "The (Original Assessed Value) was over-stated, this has to be corrected," according to the draft amendment documentation.

Fixing the acreage and the valuation date reduces the original assessed value of the TIF from $11,729,600 to $11,225,200, a difference of $504,400.

The errors, brought to the town's attention by Maine Revenue Services last year, prompted the state to recoup approximately $1,800 because of the overstated valuation. However, correcting the overall assessed value does benefit the town. "For example, in this last tax commitment, $73,822 went in to the TIF account. Had we not corrected the OAV, it only would have been $63,895 so the town makes about $10,000 on this correction," Town Assessor Clinton Swett told members of the council at their meeting Nov. 13.

Captured value five years into the TIF is $175,296.

Swett said a number of things may have caused the errors. It was the first TIF for the town, and there was new staff at the Maine Department of Economic and Community Development, the agency that approved the 2015 application. "We are not here to lay the blame, we are here to fix the problem," Swett said.