LIVERMORE FALLS — Every municipal tax-increment financing district is different, Laura Santini-Smith told selectmen and residents at a presentation at the Town Office.

“It’s a program about local control. It is municipality-created. It is designed on your town’s need,” said Santini-Smith, director of the tax-incentive program for the Maine Department of Economic and Community Development. 

Tax-increment financing is a flexible finance tool that can be used by municipalities to leverage new property taxes generated by a specific project or projects within a defined geographic district, she said at the meeting Monday night.

A TIF can last up to 30 years, and development districts could not exceed 5 percent of the municipality’s total acreage, Santini-Smith said.

A town could take advantage of an already-planned and financed project and create a TIF district around it, capturing a portion of new property-tax revenue for specific uses.

A public hearing and vote by residents would be required on a proposed TIF district and development program.

Town officials asked Santini-Smith to give a presentation on TIFs so they could decide whether it would be something they wanted to use to capture some of the new tax dollars to benefit the town’s infrastructure.

Central Maine Power is in the process of a $17 million upgrade of its electrical substation on Moose Hill Road. CMP did not ask for a TIF and would not benefit from this type of program, Town Manager Kristal Flagg said previously.

In her job, Santini-Smith reviews applications for statutory compliance, she said. The number of applications for TIFs has increased over the years. She reviews 47 to 50 applications per year. The projects must be based on economic development.

The town’s plan would have to include a designated geographical district and a development program.

The town’s option on a tax-incentive financing program would be connected only to the new valuation and new taxes that valuation would bring in. Taxes would continue to be assessed on property that previously existed.

The town does not have a TIF at this time. It did have one when the Wausau Paper Corp. operated a mill in town. It closed in 2009. It was a 100 percent capture and 100 percent company-allocated with the town receiving no benefit from the TIF district, Flagg said.

What you do with new taxes can be different, Santini-Smith said. It can include 100 percent capture or a percentage of new taxes.

She recommended that the town hire a consultant or lawyer who specializes in TIFs to advise officials on creating a development program.

The town has until April 1, 2014, to create a TIF based on CMP’s project. That is when the new valuation is expected to go on the books, she said.

If one of the projects approved in the plan is canceled or more money is received, that money can go into the town’s general fund or be spent on another project approved in the development program, Santini-Smith said.

“Whatever you capture in a TIF is hidden from the state,” she said, and would not affect the state aid the town gets from revenue-sharing or for schools, and would not affect county taxes.

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