LIVERMORE FALLS — The commissioner of the Maine Department of Economic and Community Development has approved the town’s application to create a municipal tax-increment financing district, Town Manager Kristal Flagg said.

The application was approved because it met the statutory requirements needed of an application after local legislative body approval, Laura “Smitty” Santini-Smith, director of Tax Incentives Programs for the DECD, said.

Livermore Falls voters approved the development municipal tax-increment financing district and authorized selectmen to submit a TIF application to the state at a special town meeting in February.

The TIF allows the town to capture 90 percent of the new value of Central Maine Power Co.’s $14 million upgrade and capture an estimated $8.59 million in new taxes over 30 years. The money would be used for economic development purposes.

The remaining 10 percent is estimated to generate $954,720 in new revenue, with a net amount of $374,558 going into the general fund. The figures are based on what is known now and the current tax rate of $20.80 per $1,000 of property value. If the formulas change, the projection would change, according to the town’s consultant, John Cleveland, president of Community Dynamics Corp. in Auburn.

The town would have the flexibility to capture less than the 90 percent of value but not more once the agreement is accepted, he said.

CMP will not benefit from the municipal TIF district.

The agreement does not pertain to any personal property value or taxes.

The town projects generating approximately $291,200 in new tax revenue once the full value of the completed substation is on the tax rolls, Cleveland told residents during a hearing in January.

Using the current tax rate, the town will collect $262,080 in TIF revenues and $29,120 in general fund revenues by the second year of the TIF, he said.

CMP substation’s value before the project was $3.85 million, which brings in $80,092.48 in taxes, Flagg had said. The town will continue to collect taxes on the existing value.

With a TIF, the town would retain approximately 94 percent of the TIF revenue. Town officials would reduce the percentage captured on a year-to-year basis, if needed.

Among the possible projects the TIF funds could be used for are creating a business park, wastewater treatment plant upgrades, natural gas distribution systems, trail system improvements, training/scholarship funding, cultural/arts programing, downtown improvements and economic development dues.

Voters also approved authorizing the Board of Selectmen to enter into credit-enhancement agreements of up to 100 percent to provide an incentive to developers interested in investments within the TIF district to help develop jobs and attract and retain businesses.

The proposed TIF district includes the area of the Otis Falls Mill property in Livermore Falls, the downtown corridor from the Jay town line to the Depot Street/Park Street area, the town’s Wastewater Treatment Plant property, PalletOne/Isaacson Lumber Co. properties and some properties near the ReEnergy Holdings biomass plant.

dperry@sunjournal.com

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