By Ezra Silk

esilk@keepmecurrent.com

The Windham Town Council has reversed course, approving a 15-year extension of a development program funded by taxation of a natural gas pipeline property that runs through town.

With the development program set to expire at the end of March, the council voted 3-2 on March 10 to reject the extension. Councilor Dennis Welch did not attend the March 10 meeting. On Tuesday, March 24, the council voted 4-2 to approve the extension, with Chairman David Nadeau switching from a no to a yes vote.

Nadeau said he brought up the issue for reconsideration because he wanted to hold the vote with the full council in attendance.

“I voted against it intentionally to wait until we had a full council,” Nadeau said.

A pipeline tax increment financing (TIF) district is a legal designation meant to provide funds for public infrastructure projects through increased municipal revenues. Windham adopted the pipeline district on March 30, 2000, and it was set to expire at the end of this month.

The 13-mile, 3-foot-wide stretch of pipeline property, owned by Portland Natural Gas Pipeline Transmission System, runs north to south through Windham. Every year, using the TIF district, the town has directed $50,000 in tax revenue from the company toward public infrastructure projects and programs such as wastewater planning and Geographic Information Systems mapping. The remaining tax revenue, or about $120,000 this fiscal year, goes to the general fund.

Under the existing development program this fiscal year, $50,000, or 29 percent, of the annual property tax revenue from the pipeline property is channeled into specific public infrastructure uses authorized by the TIF. In turn, the state deducts 29 percent of the $11.7 million valuation of the pipeline from the town’s total assessed valuation. The reduction in the town’s total valuation affects state and county funding formulas – decreasing county taxes and increasing the amount of state education aid and revenue sharing.

But as the pipeline has aged, its property has steadily depreciated in value – declining nearly $2 million in the past 15 years – a change that has affected state and county funding formulas.

In order to shelter more of the town’s assessed value from state and county funding formulas, the proposed 15-year extension of the district will send 100 percent of annual tax revenues from the pipeline to five public infrastructure uses authorized under the TIF district, and nothing to the general fund. The extension will shelter 100 percent of the pipeline’s assessed value from the funding formulas.

According to Town Manager Tony Plante, during the next 15 years, the extension will channel $2,039,746 of property tax revenue specifically toward the five public infrastructure uses and avoid losses of $1,139,131 in state education aid, revenue sharing, and county tax increases.