Scarborough council amends TIF, seeks School Board cooperation on budget
SCARBOROUGH — In unanimous votes Wednesday, town councilors extended the length of time Cabela's developers have to recover $8.25 million in taxes and endorsed a resolution that calls on the Board of Education to join them in limiting cost increases, including employee raises, in the fiscal 2010 budget.
Under the terms of the original Tax Increment Financing agreement with the town, Cabela's developers Barry Feldman and Gene Beaudoin of N.E. Expedition could receive real estate tax reimbursements of up to $825,000 per year for 10 years, up to a maximum of $8.25 million.
In a recent workshop, Feldman said the economy and what he believes is a low assessment of the property's value mean his company will realize only $400,000 this fiscal year and will be unable to earn back the maximum within the 10-year window. As a result, he said, it is unable to obtain financing to continue its Haigis Parkway developments.
The council on Wednesday spent little time discussing the request before agreeing to push the terms out to 2028. Only Councilor Karen D'Andrea tried to hold out for a letter from a financial institution before making a decision.
"I am interested in knowing if there is a ... document that said if this agreement were extended, we would have no problems with this loan," she said.
But after Feldman said it would not be possible, D'Andrea voted in favor of the extension.
"The development of Haigis Parkway is critical in finding the balance between commercial and residential property," Councilor Shawn Babine said. "We will still get the money as originally intended."
While saying it was "not ideal" for either the developers or the town, Council Chairman Mike Wood called the decision "the best formula for success," given the current economic climate.
By passing the budget resolution, several councilors said they hoped to get the message to the Board of Education that town employees shouldn't be asked to make the sacrifice of giving up a cost of living increase if school employees are not being asked to do the same.
"We need to speak loud and clear on our position," Councilor Judy Roy said.
"I wholeheartedly support this resolution," Wood said. "I see this as more of an opportunity for the town and school to join hands ... and make a decision that truly resonates with the town."
In response to the town's request to hold the line on salaries, the
Scarborough Police Benevolent Association announced this week that its
members voted unanimously to forgo pay raises scheduled to go into
effect July 1. The association is the labor union that
represents the town's patrol officers, sergeants and detectives.
The resolution was introduced by Babine, who said he received "a number of calls" asking him to address school spending. The 2010 school budget that was first proposed showed an increase of $1.5 million, or 3.5 percent, he said, although the council asked the board to provide a flat-funded budget.
Calling the resolution a "wonderful catalyst," Babine hinted Wednesday that at Thursday night's Board of Education meeting, the school Finance Committee would be bringing forth a budget with an increase of only $412,000, 1.1 percent higher than last year's budget and with only a 0.34 percent increase to the tax rate based on today's valuation estimates.
But board and Finance Committee member Brian Dell'Olio said in a phone interview Thursday morning that the resolution has not affected the school panel's decision.
"I don't think the School Board was oblivious to what was going on with the economy and in our community," he said. "We knew this was going to be a flat year. Our administration came to us months ago, offering to take a zero percent increase on their salary."
Dell'Olio confirmed Babine's school budget figures, but added the total net tax levy request from residents is $92,000 with the balance of the $412,000 coming from the state GPA.
And Finance Committee Chairman Chris Brownsey said Thursday that "this (budget) is exactly what the council asked us to do." And he added the tax rate could very well remain steady, depending on the town's side of the budget.