tif management guidance report - greater franklin

Franklin County Unorganized Territory Enterprise and

Tax Increment Financing District

TIF Management Guidance Report

Presented to the Greater Franklin Development Corporation and Franklin County TIF Management Committee

May 18, 2010

Revised November 2012

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Section 1. Contents

Section 2. Introduction .............................................................................................................................. 2

Section 3. Background ‐ Kibby Ridge TIF & This Report............................................................................. 2

Section 4. Administration Procedures ....................................................................................................... 3

Section 5. County UT Development Program............................................................................................ 4

Section 6. County UT TIF Program Activity – Priority 1 Annual Activities ................................................. 7

Annual Activity 1 – Annual Dues to Economic Development (ED) Organizations .................................... 7

Annual Activity 2 – Public Safety/Fire Protection Equipment .................................................................. 8

Section 7. County UT TIF Program Activity –Priority 2 Project Activities .................................................. 9

Scenic Byway Improvements (Routes 17 & 27) ......................................................................................13

Tourism Planning & Marketing ...............................................................................................................14

Scenic Byway Planning and Updates.......................................................................................................14

Commercial Revolving Loan Fund for UT................................................................................................15

County Match for ED Grants ...................................................................................................................15

Section 8. Timeline and Cash Flow ..........................................................................................................16

Section 9. TIF Amendment Recommendations .......................................................................................18

New Activities .........................................................................................................................................18

Changes to Existing Activities..................................................................................................................21

New TIF Activity Program (proposed for amendment) ..........................................................................22

TIF District Changes (geography) ............................................................................................................24

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Section 2. Introduction

This Report provides guidance, policies and procedures for the administration and management of the

Franklin County Enterprise and Tax Increment Financing (TIF) District. Established in May of 2008, the

TIF District was created to provide public assistance to the financing of the Kibby Wind Power Project

and to establish an economic development program for the Unorganized Territory of Franklin County.

Eaton Peabody Consulting Group (EPCG) has prepared this Guidance Report in coordination with the

Franklin County Commissioners, the Greater Franklin Development Corporation (GFDC), and a Franklin

County TIF Management Committee formed for the purposes of creating this report and the

recommendations herein.

Section 3. Background Kibby Ridge TIF & This Report

TransCanada Maine Wind Development Inc., (Company) has developed and is operating a wind project

on Kibby Mountain and Kibby Ridge in Franklin County. The County Commissioners worked with the

Company to establish a Tax Increment Financing (TIF) District and an associated Credit Enhancement

Agreement (CEA) to allow for the taxes generated by the project

to remain with the County’s unorganized territories for the

purposes of economic development, and to share a portion of

the taxes with the Company to assist in financing the project.

The TIF and CEA allow for 75 percent of the new taxes generated

by the project to be retained by the County over 20 years. The

County agreed to reimburse to the Company 60 percent of

those new taxes annually for 20 years. The remainder of TIF

funds (40%) would be dedicated to the County for economic

development purposes, as outlined in the County UT Economic

Development Program (Development Program) for the TIF.

Serving on the Committee are:

Bob Carlton

Alison Hagerstrom

Fred Hardy

Bruce Hazard

Gary Perlson

Nancy Thomas

The TIF Management Committee

was created by the County

Commissioners and Greater

Franklin Development Corporation

to recommend guidelines and

procedures for the distribution of

County TIF funds as proposed and

allowed under the TIF and state

statute

Franklin County TIF Management

Committee

This Guidance Report outlines the administration and

distribution (i.e. “management”) of the TIF funds dedicated to

the County, for the purposes of economic development in the

Unorganized Territories (UT), as outlined in the Development

Program.

Eaton Peabody Consulting Group was retained by Greater

Franklin Development Corporation to provide guidance on the

management and procedures for the use of the County’s TIF

funds. A County TIF Management Committee was established


(see box). EPCG worked with the Committee to prepare this Guidance Report for review and approval by

the County Commissioners.

We present this Report based on our meetings and review by the Committee. The Committee and

Commissioners asked for guidance on managing and “selecting” projects for funding from the TIF.

Additionally, the Commissioners seek guidance on possible amendments to the Development Program

currently in place under the existing TIF. Since enacting its Development Program changes to State

statute allow for different activities using TIF funds. The Committee and Commissioners want to review

new allowable activities and others not established under the initial Development Program.

Our Report is organized as follows. After we review administration procedures, the current Development

Program, and prioritization and handling of funds under the existing TIF, we propose the procedures,

eligibility, and criteria to evaluate proposals requesting the use TIF funds. We conclude the report with

recommendations on amendments to the existing TIF and Development Program. As future

amendments will not affect recommendations on the management and handling of funds for existing

programs under the TIF but will impact the likely amount of funding allocated to each program, we offer

a revised set of criteria assuming recommended amendments are enacted.

Section 4. Administration Procedures

The May 29, 2008 Credit Enhancement Agreement (CEA) between Franklin County and TransCanada

Maine Wind Development Inc. provides a detailed description of the financial administration procedures

required by that agreement. To quote Article II, Section 2.1 of the CEA:

“The County shall create and establish a segregated fund in the name of the County

designated as the “Franklin County Enterprise Tax Increment Financing District

Program Fund” (hereinafter the “Development Program Fund”) pursuant to, and in

accordance with the terms and conditions of, the Development Program 30‐A M.R.S.A §

5227(3) (Supp. 2006).

“The Development Program Fund shall consist of a Project Cost Account that is pledged

to and charged with the repayment of project costs as outlined in the Financial Plan of

the Development Program and as provided in the 30‐A M.R.S.A § 5227(3)(A).

“The Project Cost Account shall include a subaccount designated as the “Kibby Wind

Power Project Cost Subaccount” and another subaccount designated as the County

Project Cost Subaccount.”

Section 2.3 of the CEA further instructs the manner in which TIF revenues will be administered, to quote:

“Each year during term of this Agreement, commencing with the tax valuation date of

April 1, 2009 and continuing thereafter for the next twenty (20) years to and including

March 31, 2029, the County shall retain in the District:


In years 1‐10, seventy‐five percent(75%), and;

In years 11‐20, fifty percent (50%)

of the Increased Assessed Value as Captured Assessed Value.”

“Each year during the 20‐year term of this Agreement, the County shall deposit into the

Development Program Fund the Retained Tax Increment Revenues contemporaneously with

the County’s receipt of the Retained Tax Increment Revenues from the State. The County shall:

allocate sixty percent (60%) of the Retained Tax Increment Revenues so deposited in the

Development Program Fund to the Kibby Wind Power Project Cost Subaccount, to an upset limit

of $8.9 million over the twenty year term, and the remaining forty percent (40%) to the County

Project Cost Subaccount, to an upset limit of $4.0 million over the twenty year term.”

The tax bills for the UT are issued by the State of Maine on or about April or May of each year. The

Company will pay the State the assessed tax bill. The State will then provide the captured TIF funds to

the County on or about November. The Franklin County budget is a July 1—June 30 budget. Therefore,

TIF funds paid to the County in or around November of each year will be reimbursed to the Company in

accordance with the CEA: Article III, Section 3.2 of the CEA states:

“The County agrees to pay Developer, within fifteen (15) days following the date the

County receives the Kibby Wind Power Tax Increment Revenues from the State, all

amounts then on deposit in the Kibby Wind Power Project Cost Subaccount.”

The balance of funds (the 40%) shall be allocated to the Development Program on or around November

or December of each year. We recommend that the County follow the above detailed procedures in the

administration and distribution of Kibby Wind Power project TIF revenues. Section 8, page 16, provides

an annual timeline to follow the “cash flow” of the TIF funds.

The remainder of this Guidance Report outlines recommended priorities of the activities approved in the

County Development Program.

Section 5. County UT Development Program

The County shall make payments from the County Project Cost Subaccount based on the policies and

procedures in this Section. Please note that additional cost accounts may be set up within the County

Project Cost Subaccount so that individual County project expenses can be segregated by activity. For

ease of accounting, reporting, and documenting the expenditure of funds, we recommend that the

County consider separate cost accounts for individual Programs in the Development Program.


For clarity, we cite the Development Program as approved in the Franklin County Enterprise and Tax

Increment Financing Development Program dated May 28, 2008:

The specific elements of the Franklin County UT Economic Development Program include:

Scenic Byway Improvements

Available funds will be used to support capital costs relative to transportation improvements,

scenic outlooks, signage, etc. on the portions of Route 17 & 27 that pass through Franklin County

unorganized territories.

Public Safety/Fire Protection Equipment

Available funds will be used to support capital costs relative to emergency communication

equipment and a tanker truck to transport water supply to support fire protection related to the

Project.

Economic Development Planning

Available funds will be used to support costs relative to economic development planning,

including Franklin County tourism planning and marketing initiatives such as professional and

technical services relative to tourism packaging, marketing and planning assistance, and Scenic

Byway master planning and updates. Costs will be prorated for unorganized territories if

planning initiatives are County‐wide.

Economic Development Organizations

Available funds will be used, annually, to support economic development initiatives of the

Greater Franklin Development Corporation and the Androscoggin Valley Council of Governments.

Use of TIF revenue will be prorated for unorganized territories.

Commercial Revolving Loan Fund

Available funds will be utilized to establish a new commercial revolving loan fund for the

unorganized territory to assist with business start up and expansion.

County Match for Economic Development Grant Programs

Available funds will be utilized as match for federal, State and other agency economic

development grant programs focused on the unorganized territory. The amount of the local

match will be prorated for grants covering the entire County.

TIF Administration

Available funds will be utilized to cover the costs of professional services such as legal,

accounting and consulting expenses associated with the management and administration of the

TIF program.


The following table provides the projected budget for the County UT Development Program at the time

of its adoption:

TIF Activity Cost

(over 20 years) Annual Average

In‐District Infrastructure (located in UT or prorated cost if serving entire Franklin County)

Scenic Byway Improvements (Routes 17 & 27) $1,000,000 $50,000 (i.e. signage, scenic outlooks, etc.)

Out‐of‐District, but Related to Wind Farm Project

Public Safety/Fire Protection and Emergency Communication Equipment

$323,000 $26,912

UT Wide ‐ Tourism Planning & Marketing (prorated for UT if covering entire County)

Tourism Packaging and Marketing Assistance $400,000 $20,000 Nature Based Tourism Planning $300,000 $15,000

UT Wide ‐ Economic Development (ED) Organizations

Greater Franklin Development Corp. (prorated for UT) Annual Dues ($60,000 total; $30,000 half) $600,000 $30,000 Business Recruitment Marketing ($10,000 total; $5,000 half) $100,000 $5,000

AVCOG (prorated for UT) Annual Dues ($2,700 total; $1,350 half) $27,000 $1,350

UT Wide ‐ General

Scenic Byway (Routes 17 & 27) planning and updates (prorated for UT)

$50,000 $2,500

Commercial revolving loan fund for UT $500,000 $25,000 County match for ED grants (prorated for UT) $500,000 $25,000 TIF Administration Costs $200,000 $10,000

TOTAL $4,000,000 $200,000

The existing TIF and CEA places a cap on TIF revenues available to the County to fund the Development

Program. The County cap is set at $4.0M. Those documents also place a cap is on the TIF revenues

dedicated to reimbursement to the Company. The Company cap is set at $8.9MM. As the TIF now

stands, once either cap is met the funding for that portion returns to the general County UT budget.

As noted above, the figures above are estimates and budgets at the time of the creation of the TIF. Our

Report recommends that the Committee have authority to recommend annual budgets on each of the

activities, using the above table and this Report as guidance.

The purpose of this Report is to provide an outline and guide for the prioritization of the above activities

as well as procedures for the submission, review, and approval of expenditures for each activity. The

remainder of this Guidance Report outlines the County UT Development Program activities.


Section 6. County UT TIF Program Activity – Priority 1 Annual Activities

After a review of the County UT Development Program and in consultation with the Committee, we

identified two priority activities. These activities were assumed as annual priorities based upon

recollection of the Committee.

The Committee shall recommend the funding for these priorities annually. Their recommendation may

be more or less than the amounts in the Development Program, but their recommendation shall be

explained if it varies from the annual funding recommendation in the Development Program. The

balance of TIF funds in each year will then be prioritized for Priority 2 Project Activities (Section 7).

The Committee shall review the anticipated annual budget in January and February of each year (see

Section 8). The Committee will recommend funding for these Priority 1 Annual Activities and then

review and recommend funding for the Priority 2 Project Activities (described in Section 7) to the County

Commissioners in March or April.

The County, at any time during the term of the district, by vote of the County Commissioners, may

return to the state UT fund any tax increment revenues remaining in the project cost account in excess

of those estimated to be required to satisfy the obligations of the Development Program. The

corresponding amount of increased assessed value may not be included as part of the captured assessed

value as specified by the County. Therefore, we recommend that, each year, the County shall provide

the Committee an accounting of the funds in the County Project Cost Subaccount and any additional

subaccounts for each activity.

The Committee will be better prepared to make its recommendations on funding TIF projects with the

accounting of funds in the County Project Cost Subaccount(s).

For clarity, we repeat the priority 1 annual activities here and provide additional guidance on setting

their annual funding.

Annual Activity 1 – Annual Dues to Economic Development (ED) Organizations

This activity is to provide funding for economic development programs in the UT as allowable under 30‐

A §5225 1.C. (1). The Committee reemphasized the recommendation to fund these organizations. The

Development Program directed that TIF funds would cover 50% of the County’s annual dues to the

Greater Franklin Development Corporation (GFDC) and Androscoggin Valley Council of Governments

(AVCOG). Additionally, the Committee recommends that annual business marketing funds be paid to

GFDC in an amount of $5,000 per year, or 50% of the County’s annual costs for this activity (these are to

be used for marketing the UT as a place for business).

This is a Priority 1 Annual Activity and the Committee will review this funding first before consideration

of the allocation for Annual Activity 1. Without reason to the contrary, it is expected that the Committee

will recommend these annual payments. The Committee recommends that the County continues to

review and monitor AVCOG and GFDC annual reports to assure the County UT is receiving appropriate

level of development assistance. Furthermore, the Committee recommends that GFDC provide an


additional supplemental memo summarizing its use of TIF funds for business recruitment marketing of

the UT.

Annual Activity 2 – Public Safety/Fire Protection Equipment

This activity is to fund capital costs relative to emergency communication equipment and a tanker truck

to support fire protection related to the wind project. Under the Development Program, this activity

was budgeted for $323,000 over 20 years, or $26,912 per year. We emphasize that Development

Program amounts is an estimated budget and that the Committee (and ultimately the Commissioners)

will allocate TIF funds annually.

It is critical to note here that capital costs relative to emergency communication equipment and a tanker

truck were authorized under 30‐A §5225 1.B. (2), which states that authorized projects are the “costs of

improvements that are made outside the tax increment financing district but are directly related to or

are made necessary by the establishment of the district, including, but not limited to: the costs of funding

public safety improvements made necessary by the establishment of the district” (italics added for

emphasis).

The district, of course, was created as a result of the construction of the Kibby wind project. Therefore,

as the Development Program is presently constituted, any expenditure of TIF funds on emergency

communication equipment or fire protection equipment must be in direct response to a demand

created by the wind project. It will be important to keep this in mind as the Committee, and the

Commissioners, proceeds forward with their implementation of this activity. Arguably, emergency

equipment and communications are required across the UT to respond to potential medical or property

emergencies in the District.

Preliminary research on this activity indicates the cost for emergency communication equipment varies

widely. Towers can cost up to $200,000 to $300,000 for complete installation per tower (excluding any

permitting or siting costs). Communication equipment costs vary widely as well (a full costing was

beyond the scope of this report).1

EPCG and members of the Committee spoke with the Franklin County EMA Director. Current plans call

for a narrow band radio system to be implemented in 2012. The County is currently getting licenses for

existing frequencies on existing towers. The EMA Director recommends an additional study to assess the

most efficient investment in new communication towers and equipment. Such a study may also include

an analysis as to whether additional cell coverage could meet the county’s emergency communication

needs, which may reduce the overall investment necessary to upgrade the system. The Committee

agree that prior to any expenditure, an assessment of the need, costs, and value of emergency

communication equipment is needed.

We propose, based on our review of state statute and the current Development Program that the full

cost of a County‐wide emergency communications plan can not be paid by TIF funds. However, we

1 These cost estimates are preliminary only based on phone calls to emergency response managers.


would argue that a portion, perhaps 50% of the cost of a countywide emergency communication plan

may be paid for by TIF funds. Statue allows for TIF funds to be used in this manner only for projects

within the District (30‐A §5225 1.A.(4)). As noted above, as the installation of equipment across the UT is

allowable as a direct result of activities in the District, this study will clearly need to include the need for

towers across the UT. Communication equipment does not act in isolation and the entire “system” must

be studied. Therefore, we recommend that TIF funds provide up to 50% of the costs for a countywide

emergency communication study that will include the installation of communication equipment to serve

the existing District and equipment required as a result of the activities in the District.

The Development Program also calls for the funding of a “tanker truck to transport water supply to

support fire protection related to the Project.”

The Committee is unsure of the need or demand for this specific piece of equipment, but is of the

opinion that additional public safety/fire protection equipment is indeed needed as a direct result of the

establishment of the district. Therefore, it is our recommendation that the Committee be tasked with

researching the specifics of those needs, consider what (if any) of these needs can be met with TIF

funds, and to make any appropriate recommendations to the Commissioners.

Furthermore, we recommend that if equipment other than a tanker truck is identified for purchase, the

Development Program be amended to include that equipment and gain local and state authorization for

its purchase.

In this regard, another key point should be kept in mind. Clearly, the need for public safety equipment is

not limited to the geography contained within the TIF district. This need probably exists across the UT,

and in fact, the County itself. It is unlikely that equipment purchased with TIF funds would be used

exclusively within the district. Therefore, if TIF funds are used as part of a broader, county‐wide effort,

these costs must be prorated in an equitable manner that limits the expenditure of TIF funds to

activities within, or related to, the District.

Other activities within the adopted and approved Development Program apply a proration formula of

50% to initiatives are carried out on a County‐wide basis, meaning that TIF funds can pay half of the total

cost. Because this formula has already been subject to review by the public, the Commissioners and

Maine DECD, we recommend the same proration in the event of public safety/fire protection equipment

purchase.

Section 7. County UT TIF Program Activity –Priority 2 Project Activities

With funding for Priority 1 Annual Activities set (as summarized in previous Section), the Committee will

recommend to the Commissioners the funding priorities for the other approved activities in the

Development Program. These activities support economic development in the Unorganized Territories.

In this Section, we provide recommendations on how to prioritize and direct funds for those programs,

based on submissions or requests for use of those funds.


It is our understanding that the TIF Management Committee shall be empowered to make annual

recommendations to the County Commissioners on these priorities and to act as the reviewer of

proposed projects.

Annual Activities (currently in the

County TIF)

We should note here that annual TIF funds need not be spent each year. Over the 20‐years, however,

the funds allocated to the TIF must be spent in accordance with the Development Program or any future

amendments to that Program.2 Funds may be directed to any activity in any year and not spent (e.g.,

held in its project account for a following year). In that case, we would recommend that the subsequent

prioritization include review of the “carry over funds” for dedication into any TIF program activity.

Likewise the Committee may recommend that funds be put aside into an activity account but not spent

in the upcoming year.

The current annual activities are repeated in the box at the

right. Proposed amendments to the existing Development

Program are offered in the last Section of this Report. The

addition of new activities impacts the funding amounts that

may be allocated annually, but not the procedures and

evaluation of project requests for each activity.

Scenic Byway Improvements

Tourism Planning & Marketing

Scenic Byway Planning & Updates

Commercial Revolving Loan Fund for UT

County Match for ED Grants

The Committee will issue a notice of request for proposals, or

advertise the availability of the UT TIF funds, on or about January of each year. The Committee may

accept requests for funds for any on these activities throughout the year but shall complete its

evaluations on or about March of each year so that it can forward its recommendations to the

Commissioners. The Committee will accept “letters of intent” for proposed projects in March or April.

Letters of intent will allow the Committee to advise potential applicants on their project eligibility and

ways to improve scoring for the proposal. The Committee will make its recommendations on funding

projects and expenditure of the TIF funds in March or April.

A graphic representation of the

annual TIF program is presented in

Section 8

Projects recommended to the Commissioners will not be

funded until after the State issues its tax bill to the

Company, the Company pays the State, the State pays the

County, the County pays the Company its annual

reimbursement, and the County allocates the balance of funds into its ‘County Project Cost’ sub‐account

or appropriate activity sub‐accounts. As a result of this cash flow stream, annual projects recommended

in March by the Committee shall not be funded until approximately November of that year.

We recommend that the County administer and manage all contracts and payments for these projects

using its standard operating procedures. TIF funds may be used by the County in administration of the

TIF projects. The projects may begin after the County approves its budget and the annual TIF funding

recommendations, but actual payment of TIF funds may not likely be made until at least November of

2 Unused TIF funds not used by the end of the term of the TIF must be returned to the State Assessor for deposit into the state UT fund, and the

corresponding increased assessed value corresponding amount of increased assessed value may not be included as part of the captured

assessed value as specified by the County.


the same year, based on documentation of the project and the contracting procedures used by the

County. Recall too, that all TIF funds are contingent upon the Company paying its tax payment that year.

In this Section we summarize each activity in the current Development Program. We make

recommendations on eligible applicants, what types of projects will be reviewed, and the evaluation

criteria that the Committee will use to recommend projects for funding. The Committee will review all

proposals equally regardless of the Activity it falls under. Scoring criteria are designed to balance the

evaluation of projects whether they are Scenic Byway improvements or Matching funds for grants or

any other type of activity.

In any one year, there may be multiple projects proposed for one activity. At the same time, there may

be no projects recommended for another activity. Before evaluating projects in any one activity, the

Committee will review all requests and identify the number of projects per activity and the amount of

funding recommended across all activities.

The annual funding amounts in the Development Program and repeated in this report (page 6‐7) are

only estimates. The Committee shall have the authority to recommend funding amounts per activity.

The Committee reserves the right to reject all proposals or to recommend partial funding of any one

proposed project based on availability of funds that year. Recommendations may vary from no funding

up to the amount available for all the annual activities (the amount remaining after the Company

reimbursement and the funding of the annual priorities, Section 6).3

All project requests will be sent to Greater Franklin Development Corporation. Requests shall be in letter

format and address the criteria outlined for each activity. Supporting documentation is acceptable and

encouraged.

All proposed projects will be scored on the following criteria. An additional activity‐specific scoring

criterion is used to score each project. The activity‐specific scoring criteria use the same point range

across activities assuring balanced scoring of projects across activities.

3 Keep in mind as well that an amendment to the Development Program is intended (as reported in Section 8) that

will alter the TIF program budget. The existing and amended Development Program budget is just that, a budget

that may be reviewed and must be approved each year.


Scoring Criteria Description (points)

Evidence of Collaboration

The proposal shall demonstrate collaboration from

other groups or organizations across Franklin County

and the State. Applicant should provide evidence of

collaboration in writing. Evidence may include letters of

intent or support or indications of financial support

from other collaborators. (Points score between 1‐20)

Evidence of engagement with a Franklin County

“Network”.

* The established and evolving Networks are noted

below the table. Additional Networks may be

organized at some time in the future.

There are a variety of “networks” active or being

organized across Franklin County. A “network” is a

group of individuals (persons, organizations, and

business) connected or “tied” together by a common

characteristic. In the case of Franklin County, for

example, there is a Franklin County Community College

Network and an evolving Franklin County Tourism

Network. Greater Franklin Development Corporation is

participating in these networks and can direct

applicants to information about these Networks. (Points

score between 1‐10)

Potential to provide direct benefit to business(es) in the

UT

The proposal shall demonstrate how it provides benefit

to existing business in the UT. The applicant may

include referrals or letters of support from business in

the UT or provide other evidence of how the project

will assist business. (Points score between 1‐10)

Project applicant home or work address in the UT

Bonus points are awarded to an applicant who has a

home or work address in the UT. (Points score either 0

or 5)

Leveraging other funds

Leverage will be scored based on the amount total costs

provided or secured by the applicant or collaborators.

The “matching funds” may include in‐kind (commitment

of applicants or a collaborator’s time or other non‐case

resources) or cash. All matching funds must be

committed at the time of project scoring. (Points score

based on % of leverage towards total project costs)

* Franklin County is proud of the use of evolution of Networks in its economic

development efforts. The following is list of existing or evolving Networks in place in

Franklin County:


o Franklin County Community College Network (FCCCN)

Contact: Betty Gensel, Liaison, 207‐491‐2752

o Franklin County Tourism Network (FCTN) in the planning stages

Contact: Alison Hagerstrom, Greater Franklin Development Corporation, 207‐

778‐5887

o Ag Commission (In the planning stages)

Contact: Tanya Swain, Western Mountains Alliance, 207‐778‐3885

o Land Use Design Team (Just now being formed and the name may change)

Contact: Chris Beach, High Peaks Alliance Email, [email protected]

o Franklin County Economic Development Network (this is the current name, but

the name may change)

Contact: Mary Sylvester, University of Maine Farmington, 207‐778‐7509

A maximum score for the above standard criteria is at least 45 plus the amount of points awarded based

on project leverage. An additional 10 points, maximum, are available based activity‐specific points as

summarized under each activity in the following sections.

Scenic Byway Improvements (Routes 17 & 27)

The Development Program envisions these improvements (specifically “transportation improvements,

scenic outlooks, signage, etc.”, as articulated on page 3 of the adopted Program) to be made within the

following TIF district tracts (underline added for emphasis):

The Kibby‐Route 27 Tract – the roadway and right of way associated with the section of State

Route 27 from Jim Pond Township to Coburn Gore Township;

The Wyman Township‐Route 27 Tract – the roadway and right of way associated with the

section of State Route 27 that passes through Wyman Township;

The Township D/E‐Route 17 Tract – the roadway and right of way associated with the sections of

the Rangeley Lakes Scenic Byway (Route 17) that pass through Township D and Township E.

These activities were qualified as eligible project costs under 30‐A §5225 1.A. (1‐8) (“Costs of

improvements made within the tax increment financing district”). The pro‐forma estimates and

Development Program recommend approximately $50,000 per year for this activity. Therefore, without

an amendment to the TIF District, as currently stands, TIF funds may only be used for projects within the

roadway and right of way of the above mentioned roadways.


Considering this, the Committee can only accept proposals from organizations that have the

demonstrated capacity to complete such projects in these limited areas. However, the Committee and

recommends that projects that seek to develop Scenic Byway Improvements do so and that the

necessary amendment to the Development Program and district boundaries as it relates to this project

activity be made. See Section 9, TIF District Changes (geography), page 24for more detail.

In addition to the standard scoring criteria for all Priority 2 projects, Scenic Byway proposals shall be

evaluated on the following criteria (it is the responsibility of the proposal applicant to clearly summarize

how the project meets each scoring criteria):

Specific Scoring Criteria—Scenic Byway Improvements Points

Project must provide consistent signage with other tourism efforts. A score will be awarded based on

evidence of applicants capability to provide on‐going maintenance costs, and evaluate of scenic value

(as compared to other projects competing under this activity in any one year).

1‐10

Tourism Planning & Marketing

The Development Program allows for tourism planning and marketing projects for the UT. TIF funds may

not be used for planning or marketing for areas outside the UT. County wide planning and marketing is

allowed, but TIF funds must be pro‐rated in a reasonable fashion to pay for that portion of the work that

focuses on the UT. The pro‐forma estimates and Development Program recommend approximately

$35,000 per year for this activity.

The Committee will accept proposals from private, non‐profit, or government organizations for this

activity. Project funded under this activity include planning activities or marketing activities. If the

project is a marketing activity, the project must demonstrate that it markets the UT as “business or arts

location” [30‐A §5225 1.C. (1)].

In addition to the standard scoring criteria for all Priority 2 projects, tourism planning and marketing

proposals shall be evaluated on the following criteria (It is the responsibility of the proposal applicant to

clearly summarize how the project meets each scoring criteria)

Specific Scoring Criteria—Tourism Planning and Marketing Points

A score of 1‐10 will be awarded based on Committee’s overall review of project scope and evidence

that the plan will document implementation tasks and the organizations and costs to carry‐out

implementation.

1‐10

Scenic Byway Planning and Updates

The Development Program allows for planning activity across the UT related to the Scenic Byway. Clearly

such planning may be necessary as part of funding Scenic Byway improvements as an annual activity


(see page 13). But this activity will fund plans of the Byway in the UT or for routes in the UT that may

connect to the Byway. TIF funds may not be used for planning or marketing for areas outside the UT.

County wide planning and marketing is allowed, but TIF funds must be pro‐rated in a reasonable fashion

to pay for that portion of the work that focuses on the UT. The pro‐forma estimates and Development

Program recommend approximately $2,500 per year for this activity.

The Committee will accept proposals from private, non‐profit, or government organizations with the

appropriate transportation planning capacity.

In addition to the standard scoring criteria for all Priority 2 projects, scenic byway planning and update



Specific Scoring Criteria—Scenic Byway Planning and Updates Points

Project must be consistent with the current Scenic Byway Plan. A score of 1‐10 will be awarded based

on Committee’s overall review of project scope and evidence that the plan will document

implementation tasks and the organizations and costs to carry‐out implementation.

1‐10

Commercial Revolving Loan Fund for UT

The Development Program calls for the establishment of a revolving loan fund (RLF) for commercial

enterprises in the UT. The pro‐forma estimates and Development Program recommend approximately

$25,000 per year for this activity. This is a relatively small amount of funds to capitalize a loan fund, and

it is unclear at this time whether there is sufficient demand to warrant a greater degree of capitalization

Therefore, the Committee does not recommend promoting loan funds as part of the UT TIF program.

The Committee essentially recommends “no action” on this activity as it currently is approved in the TIF.

If there is request or demand for a RLF in the UT, the Committee will review that demand. If the

Committee, based on its review of demand, deems it important to establish an RLF, we recommend that

the County contract with Androscoggin Valley Council of Governments (AVCOG) to establish a loan

review process.

Therefore, this Report does not offer specific scoring criteria for RLF or specific business requests.

County Match for ED Grants

The Development Program calls for TIF funds to provide matching funds for economic development

grants for projects in the UT. TIF funds may not be used for grant projects serving areas outside the UT.

County wide grants are allowed, but TIF funds must be pro‐rated in a reasonable fashion to pay for that

portion of the work that focuses on the UT. The pro‐forma estimates and Development Program

recommend approximately $25,000 per year for this activity.

The Committee will accept proposals from businesses, non‐profits, or government organizations. The

applicant need not be in the UT, but the purpose of the grant must serve the UT. If the County



anticipates applying for a grant for economic development in the UT, then the County’s use of funds

takes priority.

In addition to the standard scoring criteria for all Priority 2 projects, scenic byway planning and update



Specific Scoring Criteria—Match for Grants Points

Additional score (1‐10) will be made on the projects anticipated impact on the economic

development in the UT as well as the Committee’s overall review of project scope and evidence that

the plan will document implementation tasks and the organizations and costs to carry‐out

implementation

1‐10

All applicants will be required to document use of funds and provide a written report to the Committee

on the expenditure of the match and all grant funds, project outcomes, and impact as a result of the

funded project. The County will provide its committed portion of match funds upon request as a

reimbursement for costs incurred and documentation of costs will be required.

Section 8. Timeline and Cash Flow

The graphic on the following page presents an overview of the timeline and cash flow for managing the

TIF programs. This graphic represents the timeline for proposals and projects beginning in 2011. This

current calendar year (2010), the County has only received a small amount of TIF funds due to the

assessed value of the (at the time of assessment) not yet completed project. Therefore, the schedule for

reviewing and recommending any projects for this year is yet to be determined.

The following accounting of TIF revenues for tax year 2009‐2010 was provided by the Franklin County

Treasurer’s office. A new assessed value of the District (row 1) will be assessed in the spring of this year

for the tax year 2010‐2011. The 2010‐2011 TIF revenues for the Development Program (last line) can

then be estimated using the formulas in the table (replacing the property tax rate with the 2010‐2011

rate).

Calculation of 2009‐2010 TIF Revenue Revenues 2009‐2010

Assessed Value of District, per Maine Revenue Services $8,770,000

Percent of District Retention (Sec. 2.3) – “Capture” 75%

District ‘Captured Assessed Value’ $6,577,500

2009‐2010 Property Tax Rate per $1,000 $8.85

Captured Assessed Value = 2009‐2010 TIF Revenues $58,210.88

Credit Enhancement Agreement (Company) – 60% $34,926.52

County Project Cost Sub‐Account (County) – 40% $23,284.36

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Insert graphic in this section

Jan ‐ Mar

County provides

estimate of Jul ‐ Jun

revenues

Committee accepts

"full" project proposals

and sets priorities

Committee submits

annual

recommendations to

County Commissioners

Committee accepts

Letters of Intent,

advises applicants

Committee solicits

projects, issues RFP

Apr ‐ Jun

Company pays State tax

bill

State assesses UT

properties and issues

tax bill to Company

Jul ‐ Sep Oct ‐ Dec

Pending contract date

and County billing

procedures, County

reimburses project(s).

This may take place

throughout the year

pending the project

and contract with

County

State transfer tax

payment to County

County allocates tax

payment to

subaccounts

Committee/County

enters into contracts

with project

organizations

County issues tax

reimbursement to

Company

Section 9. TIF Amendment Recommendations

Since the adoption of the TIF district and Development Program, the State has amended its statute and

now allows TIF funds to be used for the planning, design, construction and maintenance of recreation

trails. The TIF Management Committee recommends the Development Program be amended to allow

TIF funds to support recreation trail development. The TIF Management Committee also recommends

the addition of a training program to support skill development and training for residents in the UT.

Finally, the Committee recommends the exploration of an activity to provide high‐speed fiber (for

Internet access) to residents in the UT. In this Section we outline our recommendations for an

amendment to the existing TIF and Development Program.

Following our presentation of recommended new activities, we summarize recommended changes to

existing activities based on this Report as discussed in Section 6 and Section 7. Finally, as noted

elsewhere in this Report, the County may, with recommendations from the Committee, consider

amendments to the TIF District geography in support of existing or new activities. We offer

recommendations on activities that require changes to the TIF District.

We wish to report here a discussion held by the Committee. During the deliberations of this project and

preparation of this Report, the Committee realized that the TIF fund, although valuable, may not be

adequate to fund the proposed activities. The Committee wishes the Commissioner’s to consider, but

does not take any position, on amending the term of the TIF. It recognizes the policy debate that took

place during the enactment of the TIF but wishes to note that the economic development demands in

the UT outweigh the funding available under the County’s portion of the TIF. The TIF may likely generate

significant taxable income over the imposed $4.0MM cap during its 20 year term. The cap, however,

clearly limits the funding for the Development Program. Raising the cap or extending the term of the TIF

does not require (nor does the Committee recommend) any additional tax refund to TransCanada.

Furthermore, extending the terms of the TIF (perhaps to the maximum allowable term allowed by

statute, 30 years) would generate additional revenues for the economic development activities in the

Program.

New Activities

As noted in the introduction to this Report, since passing the TIF, there have been changes to State

statute and reconsideration of activities for the TIF. EPCG was engaged as part of this work, in part, to

incorporate potential amendments to the TIF based on the new rules and the Committee’s input on new

activities. The Committee recommends that addition of two new activities to the Development Program.

The Committee recommends consideration of a third activity as it (Internet access) may require

additional planning. The first will allow the use of TIF funds for the development of recreation trails in

the UT. The second will be used to establish a training and scholarship program for residents in the UT.

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The TIF amendments proposed to support recreation trail development and a training fund are based on

the following statues:

Recreational Trails – Statute Citation 30‐A §5225 1. C. (6)

”Costs relating to planning, design, construction, maintenance, grooming and improvements to new or existing recreational trails determined by the department to have significant potential to promote economic development, including bridges that are part of the trail corridor, used all or in part for all‐terrain vehicles, snowmobiles, hiking, bicycling, cross‐country skiing or other related multiple uses;”

Workforce Training ‐ Statute Citation 30‐A §5225 1. C. (4)

“Employment training to provide skills development for residents of the municipality. These costs may not exceed 20% of the total project costs and must be designated as training funds in the development program;

To amend the TIF, the County Commissioners must hold at least one public hearing before designating

an amended development district or adopting an amended Development Program (notice must be

published at least 10 days before the hearing in a newspaper of general circulation within the

municipality). Before final designation of an amended tax increment financing district, the DECD

commissioner shall review the proposed amendment to ensure that it complies with TIF statutory

requirements.

Neither of these activities requires the establishment of new TIF District boundaries.

We recommend that the following items be added to the Development Program:

Activity‐‐UT‐Wide General

Eligibility Under

Title 30‐A Estimated Cost

To capitalize on the significant economic development potential of recreational trails located all or in part in the UT, costs of planning, design construction, maintenance, grooming and improvements to new or existing trails used all or in part for ATV’s, snowmobiles, hiking, bicycling, cross‐country skiing or other uses.

§5225 1 .C. (8) $553,000

Costs of employment training programs to provide skills development to residents of the UT.

§5225 1 .C. (4) $200,000

The above activities would be added to the Development Program as part of an amendment. The

estimated costs are based on the Committee’s recommendations and, as noted below, impact the

estimated budget costs for all TIF activities (see page 22). We now present scoring criteria for these new

activities. The basic scoring criteria used for all Priority 2 activities apply.

At the end of its work on this Report, the Committee considered a third new activity. The Committee

would like to explore the use of an activity that will allow the TIF funds to help support and provide the


access of high‐speed Internet to the residents in the UT. As this activity will require additional planning,

consultation and confirmation with DECD, and the addition of new TIF District boundaries, we

recommend this activity is not included in the recommended amendment that follows. It is however,

worthy of review and may be added as part of the amendment as appropriate and approved by DECD.

MultiPurpose Recreation Trails

The Committee will accept proposals from private, non‐profit, or government organizations for this

activity. As noted above, projects funded under this activity include, “Costs relating to planning, design,

construction, maintenance, grooming and improvements to new or existing recreational trails

determined by the department to have significant potential to promote economic development,

including bridges that are part of the trail corridor, used all or in part for all‐terrain vehicles,

snowmobiles, hiking, bicycling, cross‐country skiing or other related multiple uses;” [30‐A §5225 1.C.(6)].

In addition to the standard scoring criteria for all Priority 2 projects, multi purpose recreation trail



Specific Scoring Criteria—Multi‐Purpose Recreation Trails Points

A score of 1‐10 will be awarded based on Committee’s overall review of project and its significant

potential to promote economic development within the UT. The Committee will awaard

more weight to those that are interconnected with other existing local and statewide trails.

1‐10

Employment Skills Training

Employment Skills Training – (Revised Nov 2012)

The Committee will accept proposals on a rolling basis from individuals based on an application form to

be prepared. The application form will be based upon the existing form in use for funding provided by

the Hugh & Elizabeth Montgomery & Franklin County Community College Network Scholarship program.

Applications will be accepted through a Training Fund established annually by the Commissioners.

This program will be limited to adult (18 & older) residents in the UT who wish to pursue additional

employment and skills training. The training must be offered through an accredited, certificate or state

recognized program. The type of programs to be funded will be limited to tuition, books and required

materials that are specifically needed for the program being completed. All participants will be required

to show evidence of completion, if not successful in completion, individuals will be required to

reimburse the County. Receipts will be required for books and any associated materials. In the event of

limited availability of funds in the program, as determined by the Commissioners, a cap per individual

may be imposed.

In addition to the standard scoring criteria for all Priority 2 projects, applicants for training funds will

complete an application. The application scoring will be based on the following specific scoring criteria.


Specific Scoring Criteria—Training Points

A score of 1‐10 will be awarded based on Committee’s review of the application. The application (to

be developed) will include a personal statement and letters of recommendation. Points will be

awarded based on the application.

1‐10

Changes to Existing Activities

Based on our review and work with the Committee, the following changes were made to existing

activities in the Development Program.

Existing Activity (as approved)

Eligibility Under Title

30‐A Estimated Cost

In‐District Infrastructure (located in UT or prorated cost if serving entire Franklin County)

Study of County emergency communications capacity and strategic plan for improvements (prorated for UT; see next item)

§5225 1 .A. (4) $30,000

Out‐of‐District, but Related to or made necessary by Wind Farm Project

Emergency communication equipment needs resulting from establishment of the District, as identified in above‐noted strategic plan

§5225 1 .B. (2) $500,000

Public‐Safety/Fire Protection equipment needed for emergency medical needs resulting from establishment of the District

§5225 1 .B. (2) $440,000


New TIF Activity Program (proposed for amendment)

We now present a new proposed TIF Activity Program (next page). This Program combines the

proposed new activities and changes to the existing activities as presented in the previous two sections.

We also offer proposed budgets for each activity—recalling that the amended TIF requires such budgets

but each year the Committee will recommend and Commissioner approve annual expenditures for each

activity. Proposed new activities and amended text in italics and shaded boxes.

The revised or new activities are noted in grey shaded boxes and italics.


TIF ActivityMRSA Title 30‐A

Chapter 206

Cost

(over 20 years)Annual Average

Scenic Byway Improvements (Routes 17 & 27)

(i.e. signage, scenic outlooks, etc.)§5225 1 .A. (1‐8) $500,000 $25,000

Study of County emergency communications

capacity and strategic plan for

improvements (prorated for UT; see next

item) (one‐time cost)*

§5225 1 .A. (4) $30,000 $30,000

Emergency communication equipment needs

resulting from establishment of the District,

as identified in above‐noted strategic plan.§5225 1 .B. (2) $500,000 $25,000

Public Safety/Fire Protection Equipment

resulting from establishment of the District,

including (identify targeted equipment)

§5225 1 .B. (2) $440,000 $22,000

Tourism Packaging and Marketing Assistance §5225 1 .C. (1) $250,000 $12,500

Nature Based Tourism Planning §5225 1 .C. (1) $250,000 $12,500

Greater Franklin Development Corp.

Annual Dues($60,000 tota l ; $30,000 ha l f)

$600,000 $30,000

Business Recruitment Marketing ($10,000 tota l ; $5,000 ha l f)

$100,000 $5,000

AVCOG

Annual Dues($2,700 tota l ; $1,350 ha l f)

$27,000 $1,350

Scenic Byway (Routes 17 & 27) planning and

updates (prora ted for UT)§5225 1 .C. (1) $50,000 $2,500

Commercial revolving loan fund for UT §5225 1 .C. (3) $0 $0

County match for ED grants (prorated for UT) §5230 $300,000 $15,000

TIF Administration Costs §5225 1 .A. (5) $200,000 $10,000

Costs of employment training programs to

provide skills development to residents of the

UT.

§5225 1 .C. (4) $200,000 $10,000

To capitalize on the significant economic

development potential of recreational trails

located all or in part in the UT, costs of

planning, design construction, maintenance,

grooming and improvements to new or

existing trails used all or in part for ATV’s,

snowmobiles, hiking, bicycling, cross‐country

skiing or other uses.

§5225 1 .C. (8) $553,000 $27,650

TOTAL $4,000,000 $198,500

* Tota l average annua l excludes the one‐time emergency communications planning s tudy

UT Wide ‐ General

UT Wide – Trail Improvements

§5225 1 .C. (1)

§5225 1 .C. (1)

In‐District Infrastructure (located in UT or prorated cos t i f serving enti re Frankl in County)

Out‐of‐District, but Related to or made necessary by Wind Farm Project

UT Wide ‐ Tourism Planning & Marketing (prorated for UT if covering entire County)

UT Wide ‐ Economic Development (ED) Organizations (prorated for UT)


TIF District Changes (geography)

The boundaries of the TIF District may be amended as well or may need to be in order to expend TIF

funds on projects envisioned in this Report. In general, capital expenditures using TIF funds may only be

made within the TIF District. Therefore, future activities that require the expenditure of TIF funds for

“bricks and mortar” may require an amendment of the TIF District. The most likely case, based on the

TIF activities envisioned here, is the desire to develop a scenic byway site. As explained in Section 7,

Scenic Byway Improvements (Routes 17 & 27), page 13, new scenic byway sites not in the current public

right of way will require an amendment to include the site in the TIF District. There may be, in the

future, as well other projects that are proposed that may require an amendment that includes the

addition of new geography to the District. A corresponding change to the above recommended

Development Program (activities) would be made identifying the location of the new project.

We wish to make the Committee aware of the limits of changes to the TIF District and the use of TIF

funds. Statute 30‐A §5233 3.B and 3.C set forth the following limitations on District size and value:

Size (total area) – The total area of a single TIF district may not exceed 2% of the total acreage of a

municipality. In the case of the Franklin County UT TIF, the county’s unorganized territory is the

municipality). The total area of all TIF districts in the UT cannot exceed 5% of the total acreage of the UT.

The following table establishes the current limitations based on the current (and only) Franklin County

UT TIF and the UT valuation as the date of the TIF.

ACREAGE CALCULATIONS Acres

Total Acreage of Existing UT District 4,077.53

Total Acreage of Franklin County UT 446,000

% of all UT acreage made up of Existing UT District 0.91%

2% of Total Acreage of Franklin County UT (single district limitation) 8,920

5% of Total Acreage of Franklin County UT (all districts limitation) 22,300 * All acreage values based on the current (05/28/2008) approved Development Program.

In other words, the County could add another 4,842 acres to the existing district without exceeding the

2% single district limitation. Please note that this does not constitute a recommendation to do so;

instead, this is intended to point out that the County is unlikely to encounter any issues with district size

limitations should it decide to expand its existing UT TIF district.

Assessed Value – the original assessed value (OAV) of a proposed TIF district, plus the original assessed

value of all existing TIF districts within the UT, may not exceed 5% of the total taxable value of the UT as

of the April 1st preceding the date of the DECD commissioner’s designation of the proposed TIF district.

VALUE CALCULATIONS

Original Assessed Value of Existing UT District as of 04/01/2007 $455,952

Total Taxable Value of Franklin County UT as of 04/01/2007 $185,950,000

% of UT Total Taxable Value made up of Existing UT District 0.25%

5% of Total Taxable Value of Franklin County UT (all districts limitation)

$9,297,500

* All valuation figures based on the current (05/28/2008) approved Development Program.



In short, the County clearly has the same sort of flexibility with value limitations as it does with the

acreage thresholds explained above. Additional amendments will likely need additional review to assure

conformance with State statute.

Revisions

Nov 2012 – New Wording for Employment Training Skills Section. Approved by County Commissioners.

tif management guidance report - greater franklin

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