NEW GLOUCESTER – By a narrow margin, the town’s Budget Committee on Tuesday voted not to bond the proposed $2.3 million fire station, but use local funds.

The seven-member panel grappled with whether to fund the project using $532,000 from the Pineland Tax Increment Financing District combined with $905,451 in reserves plus roughly $1.3 million from an undesignated fund balance that totals $5 million.

Budget member Peter Bragdon’s amendment to use the TIF funds plus reserve and remainder from undesignated funds failed 4-3.

Marty Geesaman of the budget group said local funding should be used to pay for the design/construction of a five-bay fire/rescue station on Route 100.

A special town meeting is scheduled Jan. 30 asking voters to approve building the station and funding the project.

Selectmen will vote on the financing method when they approve the warrant at a special meeting Jan. 16.

“With that ratio of cash around, the town is not an investment account . . . It’s there to buy services for the town,” Geesaman said.

Town Manager Rosemary Kulow said bonding is a commitment of indebtedness.

“Why add this burden to our tax payment when we can pay for it with cash?” she asked.

Selectman Linda McCann said SAD 15 expects an additional $1.5 million increase to be paid by voters in Gray and New Gloucester in the upcoming budget cycle.

The town’s undesignated fund balance now totals $5 million. Accountants have recommended that $1.5 million is sufficient to stave off unforeseen needs.

In recent years, the undesignated balance has increased from revenues and valuations and have partially been used to offset taxes.

The Pineland TIF was created to pay for costly infrastructure and impacts from the development of Pineland by Libra Foundation and it’s real estate arm, October Corp. The taxes are segregated in a special account and over 30 years are expected to accrue to $12 million. This is the sixth year since the TIF was approved.