Tax Increment Financing

Policy Guidelines and Provisions

Policy Guidelines
ALL Tax Increment Financing [TIF] applications shall be reviewed by the Community Economic Development Committee [CEDC], the Town Treasurer and the Gray Town Council. The CEDC shall have the responsibility to study, review and submit a recommendation to the Gray Town Council concerning the application. The application must meet a majority of the following guidelines:

Notwithstanding compliance with any or all of the guidelines, the creation of a TIF district is a policy choice to be made by the Gray Town Council and the citizens of Gray on a case-by-case basis. A TIF district is not a right under Maine law and meeting these guidelines, in whole or part, does not create a right or entitlement in any applicant.

Basic Provisions

  1. In order to minimize risk to the Gray, Tax Increment Financing [TIF] will be provided via Credit Enhancement Agreements only. The applicant must provide any and all other documentation that will protect the Town's economic and financial position, and that confirm both the letter and spirit of the underlying agreement between the applicant and the Town.
  2. The Town shall not Issue general obligation bonds to support development of any TIF project.
  3. The amount of funding available to the Town of Gray shall not decrease significantly due to the effect of any Tax Increment Financing [TIF] plan over the life of the TIF district [revenue neutral to the Town].
  4. The maximum value of the captured assessment in a single TIF district shall be limited to 2% of the equalized value in the base year of each TIF district.

Guidelines That Must Be Met
In all instances, applicants requesting Tax Increment Financing [TIF] demonstrate:

  1. The Town's participation is economically necessary and involvement by the Town is needed in order for the project to be undertaken. Justification for economic need and Town Involvement must be demonstrated by:
    1. A need to offset economic advantages available to the corporate entity if it should build or expand outside of the Town of Gray.
    2. A need to offset infrastructure costs unique to the site.
  2. The project must be primarily industrial or commercial in nature and no uses which are principally consumer retail.
  3. The project creates significant, new, assessed tax value equal to or greater than $250,000.
  4. The project produces additional permanent employment.
  5. Financial capability to undertake the project must be evidenced prior to review.
  6. Compliance with all statutory and regulatory guidelines of the State and Town.

Guidelines to Determine the Town's Level of Participation
Although an applicant need not meet each of the following criteria, these criteria will be used to determine the level of participation by the Town:

  1. The project assists an established business in the Town of Gray, thus retaining existing employment.
  2. The project creates significant, long-term employment.
  3. The project improves the general economy of the community.
  4. The project improves and broadens the tax base.
  5. The project improves a blighted building or area In need of [re]development.
  6. The project creates public infrastructure facilitates which have application beyond the particular development such as traffic upgrades, public parking facilities, etc.
  7. The project will support community projects or create public benefits such as providing job training or supporting local contractors and supplies, etc.

Standard Operating Procedures
The Town Treasurer in coordination with the Community Economic Development Committee [CEDC] act as liaisons and coordinate all activity regarding Tax Increment Financing [TIF] proposals. Working with potential applicants, the Town Treasurer and the Committee will:

  1. Provide information on Tax Increment Financing [TIF].
  2. Discuss project proposals and accept Application Information Sheets from applicants,
  3. All applicants will be required to sign a Legal Fee Consent form agreeing to reimburse the Town for all legal costs and any out-of-pocket expenses incurred as a result of the Tax Increment Financing [TIF] proposal, whether or not the TIF is approved.
  4. Review the Application Information Sheet based on policy guidelines, in consultation with the Town Assessor and the Town Attorney.
  5. Assist applications to complete a final application suitable for presentation to the Town Council for formal review and recommendation.
  6. Following a review and evaluation of the application, the Community Economic Development Committee [CEDC] will present a written recommendation to the Town Council and the Town Manager will advise the applicant that the application is ready for consideration by the Town Council and the citizens of Gray.
  7. Upon receipt of the final development plan and the Credit Enhancement Agreement, the applicant will present the plan to the Town Treasurer, accompanied by a nonrefundable $250 application fee.
  8. The Town Treasurer will notify the Chair of the Town Council that the review process is completed and the application is in accordance with policy and guidelines as stated herein.
  9. The Town Treasurer, in consultation with Town staff and officials, will:
    1. Verify Tax Shift Formulas.
    2. Verify calculations in various exhibits which at a minimum, will show development cost, tax shifts and revenue return percentages over the duration of the Tax Increment Financing [TIF].
    3. Verify the revenue amounts to be returned to the applicant over the life of the Tax Increment Financing [TIF].
    4. Act as the liaison between the applicant, the Town Council and the Town Attorney.
    5. Make financial recommendations to the Town Council as requested.
  10. Upon completion of the review by the Town Treasurer, the applicant will be required to:
    1. Submit to the Town Treasurer a development program, which in turn will be introduced at a regularly scheduled Town Council Meeting.
    2. Request the Town Council to schedule a Public Hearing with at least a ten [10] day Public Notice.
    3. Attend the Public Hearing to answer any questions that may arise at the Public Hearing.
    4. Attend any subsequent Town Council Meeting to answer any questions that may arise at the Council meeting.
  11. The Town Manager will submit the application to the State, based upon the direction of the Town Council.
  12. The CEDC will monitor the progress of the project.
  13. If the applicant transfers ownership of property in the district, the applicant must notify the Town Manager, in writing prior to finalizing the transfer. The new owner must agree, in writing, to accept the provisions of the agreement as presented to and approved by the Town Council, before the Town Treasurer will release any further TIF reimbursements.
  14. Application Information Sheets will be provided by:

The Gray Town Office
24 Main Street
P. O. Box 258
Gray, Maine 04039-0258

Application Form