Lewiston council adopts amendment to NECEC TIF district to meet state cap

The Lewiston City Council on Thursday night adopted an amended order revising the New England Clean Energy Connect (NECEC) tax increment financing district to ensure the city stays below a state valuation cap while keeping roughly $1.4 million in annual TIF revenue, councilors and staff said.

Nate Libby, director of Economic and Community Development, said the amendment reduces the TIF district from about 40 acres to 11 acres while producing substantially the same financial outcome for the city. "This stuff is really being used to fund economic development staff salaries and related projects and office expenses," Libby said, explaining the city plans to use TIF revenue to relieve pressure on the general fund by moving portions of staff salaries and related costs into the TIF program.

The amendment was prompted after staff learned the original configuration would exceed a state cap on cumulative TIF valuation. Libby said the city’s original TIF configuration used a "single taxpayer high valuation exemption" but that the Department of Economic and Community Development in Augusta advised the city it did not meet all criteria, triggering the need for the amendment. The change reconfigures which parcels are sheltered under the TIF so the city remains under the statutory 5% citywide valuation cap while preserving the projected revenue.

Under the amended plan presented to the council, the converter-station components on Main Street that are part of the CMP corridor will be confined to an 11-acre district with an original assessed value placed into the TIF of about $83.8 million; the packet submitted in February had placed roughly $186 million into the district. Libby said the amendment increases the percentage of that smaller assessed value that is sheltered from 55% to 98% in order to generate the same amount of TIF revenue—about $1.4 million—and to keep valuation supporting the general fund at roughly $257.8 million. Libby said the resulting tax shift is "within a dollar." He also told the council staff will supply a polished revised map on Monday.

Libby described the NECEC project as a roughly $340 million converter-station component of the transmission corridor that transmits hydroelectric power from Quebec. He emphasized the TIF as structured does not provide a direct tax reimbursement to CMP or the NECEC project; instead, he said, the city’s TIF funds will support economic development activities, capital projects, a business development fund and housing programs including shelter and housing-first efforts.

During public comment Matt Roy, Ward 3, raised concerns about the size of the sheltered percentage and earlier warnings from the finance director. "Do we foresee any negative impact from increasing the TIF?" Roy asked. Libby and councilors replied that the amendment was structured to hold the city’s net fiscal position neutral compared with the measure approved in February and that staff had modeled the change with the finance director and the assessor.

Councillors asked follow-up questions about how the statutory 5% cap is calculated and whether future revaluations would change the available room under the cap. Libby said the cap is a moving target that adjusts annually as the city’s valuation changes and pointed to a spreadsheet in the council packet that lists 18 active and proposed TIF districts and shows roughly $6,690,000 in remaining valuation that could be placed into a TIF under current calculations; he noted that amount will change when the city revaluation is finalized on April 1.

Councillor Majin noted the council may want to preserve flexibility for future downtown redevelopment or housing-focused TIFs and asked for an updated list of TIF expirations; Libby said staff would provide that information. Councillor Chittum and several other councilors thanked Libby and the assessor for the work to correct the application after the state review.

The motion to adopt the amended order, using the revised order distributed by Libby that evening (including a corrected seventh whereas clause), passed unanimously by voice vote called by ward: Ward 1 yes; Ward 2 yes; Ward 3 yes; Ward 4 yes; Ward 5 yes; Ward 6 yes; Ward 7 yes. The clerk recorded the motion as passed 7 to 0.

The council concluded the public hearing and adopted the amended order; Libby and the assessor were thanked by the mayor before the meeting adjourned. Staff will provide an updated, polished TIF map and a list of TIF expirations and remaining capacity in coming days.