Brunswick Finance Committee reviews finances, TIF policy

[0:08] Chair Weems: Welcome, everybody, to the Finance Committee meeting of Monday, September 28th, the year of our Lord, 2026. First up on the agenda is to find out if this meeting was properly acknowledged. It was. INTRODUCTORS. FROM MY LEFT, NOW MANAGER, JULIA HENS. ECONOMIC DEVELOPMENT DIRECTOR, SALLY COSTELLO. FINANCE DIRECTOR, JERRIAN CLONT. DEPUTY FINANCE DIRECTOR, DIANE LATHERUP. MYSELF, I'M THE CHAIR OF THE COMMITTEE OF TOWN COUNCIL FOR DISTRICT 7, TOWN COUNCIL OF DISTRICT 5. COMMITTEE MEMBER, RICH ELLIS, TOWN COUNCIL OF DISTRICT 1, COMMITTEE MEMBER, JANIE ECKER, TOWN COUNCIL OF DISTRICT 2, AND VISITING environment, Matt Shedd, a member of the public, and I believe a council from Prairie Flaherty, Emily White, is on Zoom, and I think Kathy Wilson, another town councilor, is also on Zoom. A lot of people. Good job. Any adjustments to the agenda? because the review of the minutes of the meeting of august 31st 2026 any comments of the committee that was on that let me see what i have on this sheet red pen myself on page two there's a comment about the discussion we had on establishing potentially a covert reserve did we actually decide that there would be a reserve or that we would consider having my recollecting is that we didn't do anything to establish a reserve then it seemed to reflect that there is or is going to be a reserve okay so what are other people's recollections? What are they about that item? That's one, two, three, four, five, six, seven. The seventh item on page two. [3:30] Julia Hens (Town Manager): Two or three. [3:32] Sally Costello (Economic Development Director): The last page of the minutes. So my memory is that you did recommend it, but it didn't go forward. It isn't something we were going to follow up on. There was a discussion about how you would fund it, how you would announce it, but the council did not, the finance committee didn't take action. [3:55] Julia Hens (Town Manager): Yeah, that was just an ending comment, not an action item or recommendation. [4:00] Chair Weems: Given that, is my memory, too. I would recommend changing that sentence to read as follows. Chair Weems recommended that should a covert replacement reserve fund be established, it be used blah from the replacement and so forth which leaves it clear that we didn't actually take any action or recommend anything at this point groupie okay [Sally Costello (Economic Development Director): that is] all i have is there anybody else with any comments on what someone like to make a motion to accept the minutes as amended motion to accept the minutes as amended thank you COUNSELOR EFTER, SECONDED BY COUNSELOR ELLIS. ALL IN FAVOR? THIS HAS BEEN ACCEPTED AS AMENDED. ALL RIGHT. LET'S MOVE INTO THE HIGHER INTEREST ITEMS. THE FINANCIAL REPORTS, THE FLOOR IS OPEN. [5:21] Julia Hens (Town Manager): LOOKING THROUGH, NOTHING, NONE OF OUR REVENUES OR EXPENDITURES ARE TRENDING. I don't want to say noticeably high right now. There's a couple of things that I would look into a little bit further. I will say that all of the interest has been booked and where we are now is about 23% of what we hope to capture throughout the course of the year. So that is for July and August. And it is not promising. I think the Fed just raised the rate again. So hopefully that will keep us in good shape. [6:00] Chair Weems: That will start us cooperating. Yes. Can I ask what is the number that we're at? All together? For interest, yeah. Which is 20-30% plus or minus in budget. It is. [6:30] Julia Hens (Town Manager): So if we're going through,. You'll notice under percent used, I'm looking on page two of the expense report. We have teen center and people plus. I know we've talked about them before, but those are at 196% and they just request their budget allocation at the beginning of the fiscal year. So those have been paid out in full. Transitioning to our revenues, we have booked all of our property taxes. classes. We had more liens than we expected last year, so our lien cost revenue is higher than anticipated. We're trending high in electrical permits, but that is something that I'm going to look into further and just make sure everything is in the correct account. There's a couple of larger numbers in there, and I just want to make sure that they don't need to be moved to building permits. And on page three, the unclassified promotion and development, we're at 28%. That's largely VDA and the Metro Breeze type things that we feed out of those. Are there any specific questions? [7:58] Chair Weems: We'll go back out to the electrical permits coming. Did you mean electrical permits or plumbing? Plumbing is the one that's higher. [8:07] Julia Hens (Town Manager): Plumbing. Yes, that went down. You are correct. Check the plumbing. Check the plumbing. [8:18] Councilor Ellis: That has been an operational question for town staff. When is enrollment period for benefits? November 15th to the 7th of November 15th. So you're kind of locked in as to not adopt, not locked in, but it isn't so much an estimate when we set these budgets as to adoption rate, like how many people are going to participate and whether they're single or family or whatever. [8:41] Sally Costello (Economic Development Director): On health benefits specifically is what I'm thinking. I don't understand your question. We use an annual, we annualize it. Okay, we go through, when we do the budget, we go through what people actually have and figure out because some people don't do, like a weighted average, and I think this year what we do, we use like twenty one thousand per employee for benefits but. [9:05] Councilor Ellis: The why, I guess what I'm getting at is to get to that number you're making assumptions that it would be like it was before. It's, I'm curious, I know like with my company you don't know how many people are going to choose your health insurance with their spouse or someone else, so you make the best assumption. [9:19] Sally Costello (Economic Development Director): Yeah, that's a long way, that 10% increase for the health insurance cost. Yeah, because our health insurance is up, changes midway through the fiscal year. Okay. Yes, our rates are January to December, whereas our budgets, so we're always doing an estimate of six months when we do the budget. [9:36] Councilor Ellis: Okay. So I was just curious, is that an item from a variability perspective that we look at? Is that a sizable enough one? I know it doesn't fall into these functional categories, per se, because it spreads across all, but I know health benefits are a significant and delivery item for our expenditure trade. It's part of our salary benefits assessment chunk. I guess what I'm asking is, how do we know if we're on track with that? [10:06] Sally Costello (Economic Development Director): So the line you can look for this is on page one, under employee benefits, you see risk management. Well, actually it's employee benefits there. That's where the fluctuation goes, because as Diane said, each employee is budgeted a flat amount. It doesn't matter what they take. We do what we're good. [10:33] Councilor Ellis: But if every employee came back this year and somehow had a family, and now they're all planning a family plan, I'm assuming we, like many others, the cost to us as an employer is probably higher on family plans than it is for individual plans. So that's what I'm getting at. I've never really that you have to make an assumption on. Yes, we don't get that granular. [10:52] Sally Costello (Economic Development Director): I mean, I mean, we could, we don't, we don't in this particular, I'm not saying you should, but it sounds [10:58] Councilor Ellis: like we don't get any surprises on that front either. There isn't a lot of shifting from here. [11:02] Sally Costello (Economic Development Director): Okay, there aren't a lot. Sometimes people will have a baby, but that doesn't change the price, right? It doesn't change the price. Yeah, you know, it's the same as family. Oh really? Yeah, so the [11:16] Councilor Ellis: contribution from the town to the employees the same for both. Some employers and it's not necessarily fair, but singles sometimes don't get as much contribution per se because the policy costs less. Okay. Never mind. It sounds like it's not something that's as good as other environments. [11:38] Chair Weems: Other comments? No, sorry. Yes, just quickly back to the revenue of page two. Revenue sharing again second month in a row seems to be trending higher than significantly higher than budget [11:57] Councilor Ellis: so [11:58] Sally Costello (Economic Development Director): revenue sharing doesn't come in at 12 equal installments, so when I talk to the capital every once a month I'm comparing typical August as opposed to 12th. So revenue sharing tends to be a little bit higher in the summer, and then go up again. So it does this thing. So you can't really just look at one 12th per month for revenue sharing. [12:32] Chair Weems: Okay. So any comments or view on how it looked versus September last year, or excuse me, [12:39] Sally Costello (Economic Development Director): August last year I believe I reported in your last meeting that look well wait a minute did I report on it yes September 21st in my report I'm going to remember my manager's report it was higher than a little bit higher than last year and above budget I believe a little bit not huge amount like 20 000 or something and second can I can we just go back to the [13:04] Chair Weems: the interest for a sec on page three. What was the number? [13:12] Councilor Ellis: There, Ann. [13:14] Julia Hens (Town Manager): So the number was booked in September, so it's not on this report. Yeah. But our total interest is $286,833.86. [13:26] Chair Weems: So it's, I wrote down 28%, but it's not right. [13:30] Julia Hens (Town Manager): It's 22.95. 22, okay, that's all right. [13:35] Chair Weems: One or two percent two months in, okay, thank you, take a turn here going back to the expense before when you just remind us what the first line item is that those are transfers out [13:55] Sally Costello (Economic Development Director): of July flourish or plumbing this year's budget no that those are transfers to capital projects including the reserves. So that first amount, 4338623, that was the budgeted transfer for all the capital reserves. The next number is the additional amount that was approved for, it looks high, I'll have to look at it, but for various capital projects like yeah plus what else is in there 's something else in there 's another number in there i'd have to look at the details the 175 for the senior property tax yeah senior property taxes in there and all the reserves and then what were the [14:44] Chair Weems: supplementals? Yeah, I wasn't wanting to drill down on that so much as just remind myself, but maybe others, that those are transfers out at the beginning of the year just to get budget lined up with what we approve, yes, in the spring. Down below under public safety, what is the emergency services dispatch line item card? So that's our communication, our dispatch [15:11] Sally Costello (Economic Development Director): department. Okay, all right, mostly people as you can imagine, right? That's in the police department, it's under the public safety organization, and is in the police station, yes, all right. [15:30] Chair Weems: and under the police chief i'm fond of that and i'm just trying to keep myself online here what the heck that labels mean and on the property taxes go back to the revenue report our top line item here is there any significance in the fact that you know we The $70 million is what was sent out as due for the year. Yes. Right? Is the semi-annual payment or the annual payment? Annual. [16:03] Sally Costello (Economic Development Director): It's the full year. The full year. [16:05] Chair Weems: And is there any significance to the fact that it will remain boxed over? Yes. [16:11] Sally Costello (Economic Development Director): What the budget is? Yes. So this was, as you know, the commitment was done on August 31st. And this report was run the same day. We did not yet transfer out the tax increment financing revenues, so that will go down by thank you [16:32] Chair Weems: and that exhausts my questions on the finance report, so while we're talking [16:38] Sally Costello (Economic Development Director): about the property taxes, you can see down below there's a homestead exemption reimbursement. This is an adjustment we're going to make to the budget. You can see it has no budget, but it brought in $989,000 year-to-date. So we will be adjusting between the property tax line and the homestead exemption line and the business equipment tax exemption line, which you don't even see here because we haven't received it yet. So that'll be a budget adjustment that we do. So when we put it all in newness, we put in the full property tax. But as you know, some of the amount we've found as property tax in the budget is actually money you receive back from the state for homestead exemption reimbursement and vetting reimbursement. So we record that as property tax. In your budget, it's part of the calculation. We don't. So the process, we just. Normally, we are committing taxes in September. We have a little time to clean up this report. When you see it this time, we do. So you're seeing the pre-work bit here. It'll look prettier next time. [17:56] Councilor Ellis: It's actually going to need to seal gears a little bit. [18:01] Chair Weems: Well, it's going to look prettier, I'm pretty sure. Yes. All right. Anything else on the financial reports? Going once, twice. It's a wrap on that. Moving to the next item. Cash revenue and financing. I am definitely going to turn this one over to Tom Maddox and her first while director who are here to find these items. [18:32] Sally Costello (Economic Development Director): Okay, so I'm going to share my screen and just run through a quick, very quick review of tax tips. tips just to remind everybody why we do this and now i'm going to be really quick with this so because most of you have seen it already but i want to set the stage for what we're going to do next so as you know we have five tiff districts the downtown district which is also attacks the transit oriented tiff district and these pretty colors on here are part of the transit oriented part of it the circle is the hub and the other things are the what are they called the buffer and the i forget what they're called emily could probably have corridors that's what they're called so then seahawk tiff district which we'll be talking about later this is out on brunswick landing and it's it's this area where maliki wild oats flight deck are [19:38] Chair Weems: Then there's a little back to that one just for a half a second, is Wild Oats on that. [19:44] Sally Costello (Economic Development Director): Map, or is it not yet, because when the district was created it did not exist, it's 2019. [19:53] Councilor Efter: All right, and now we have Morning Glory out there too, yep. [19:57] Councilor Ellis: Although that building exists here to go yellow is morning stuff, yeah, that was the real, this one. [20:03] Sally Costello (Economic Development Director): But this was a newly constructed building. I mean, I don't think it was fully constructed when we created the TIF district. So then Brunswick Landing. [20:21] Councilor Efter: Sorry, going back to that. It looks like the roads, Ryan and Pegasus, are not part of the TIF. Is that right? And Seahawk and Admiral Fitch? [20:28] Sally Costello (Economic Development Director): Generally roads are not, no, they're not. I mean, it's drawn around the taxable parcels because when you draw a TIF district, you're trying to capture the district's increment. [20:44] Councilor Efter: So the roads in that thread box are not, would be, again, you said roads that just aren't qualified TIF. [20:55] Sally Costello (Economic Development Director): They're not taxable. [20:56] Councilor Ellis: They're not taxable. [20:58] Councilor Efter: I'm thinking the other way. Oh, for the development program. [21:01] Sally Costello (Economic Development Director): Every development program is different. So in some cases, there's, you know, there's like downtown. Or, for example, like downtown, all these roads are within the TIF district. So the TIF district is this yellow line. And you're thinking about infrastructures and improvements within. So I'm ahead. head. Emily, do chime in if you think we should. You should. [21:32] Speaker F (unidentified): Yeah, the only thing I was going to add is that even though the roads surrounding a TIF district are not in the TIF district necessarily, project costs that are allowed via the statute do allow for improvements to the roads surrounding the TIF district with the tax increment revenues. revenues [21:53] Sally Costello (Economic Development Director): thanks particularly if i mean if it's outlined in the development program obviously when the seahawk tip was instilled the town doesn't own any of those roads so [Julia Hens (Town Manager): this is brunswick] executive airport and brunswick landing tip districts which and then this in the middle is seahawk the screen and then the newest one is the coax corner tiff district so very quickly this is a graph of the captured assessed values and the TIP revenues. So the bar are the captured values. You can see we have a couple of points where there is a reval and the value jumps up, but you can also see that the revenue doesn't necessarily. Of course, that's what we are trying to understand about revaluations. It doesn't mean that the revenues increase necessarily because the tax rate goes down. [22:56] Chair Weems: So these are the five TIF district revenues, why is the Bath Road and the Business Parkway on this particular presentation the top two there that are not TIF districts? [23:11] Sally Costello (Economic Development Director): They are old. They were contributing back in the beginning of this graph. So back in 10, 11,, 12,, 13,, 14, the Business Parkway District was in existence. [23:26] Chair Weems: I see them now, right. They're finished. They're finished. [23:32] Councilor Ellis: And just to clarify, so I'm not assuming incorrectly, the blue for Cook's Corner is the one on the top of this bar chart, whereas the blue is the one on the bottom of the... [23:42] Sally Costello (Economic Development Director): Yes. We're sorry for the... Oh, it's okay. Vision, it's always a challenge. So we talked briefly about the development programs. These are really bare bones. What is eligible usage of the TIFF revenues and development programs? The Brunswick Executive Airport and Brunswick Landing Municipal TIFF are twins. They're exactly the same. So we always, I just put them together. We also really treat them together when we were talking about anything to do with this. So this chart also says when the date was created, and all of them are 30 years long, so it has the year ending and the acreage. And these are typical, this is information that is also in the development programs, but it gives you an idea of the types of things that can be, yeah. [24:47] Chair Weems: i think the significance there is that 's obvious maybe but just to restate it that the development the uses of the funds have nothing to do with the boundaries of the district of itself in many respects it has to do with what's in a developed program which is related but yes so for example the post-carnative can be used to fund general economic development and downtown tiff projects just as an example even though it's [25:18] Sally Costello (Economic Development Director): the close corner of TIFF. Yes, there's a bit of a wrinkle with the downtown TIFF projects, and I haven't been able to resolve it with either TIFF attorneys or the state, and that is you can only port other TIFF revenues into the downtown if you're already capturing 100 of the downtown, and we do not capture 100 because the revalve has thrown everything out of whack, so that you'll see the downtown TIFF in all of these, but realistically we can't do that, and unless Emily can figure out a way for me to do that. Can you explain that a little more, that we don't capture 100 percent of the downtown stuff? Right, because so on Brunswick Landing, and there was zero taxable value when the original assessed value was zero, and so we can, we capture all the growth, and what happens in a reval is the tax rate goes down, and you're, so the revenue stays relatively low. However, in the downtown, there was original assessed value. We, the TIFF captured a certain amount, and then when the rebound happened, the whole thing went huge and if we'd captured the huge increase it wasn't true growth yeah right so if so we had to back down the percentage that we were capturing of the increment and so we're now i have it somewhere we're only capturing 40 of the increment or something like that and the way the tiff statute reads unless you're capturing a hundred percent of the increment you can't port downtown you can't report other tip revenues downtown it's a it's sorry we could in some ways that makes sense where it is yeah because the [27:16] Councilor Ellis: shelter is supposed to be to encourage development projects that increase the value of what you have and if there's already value there and that growth as you know this market it's organic growth that would have happened whether you did anything or nothing at all and so capturing that as tiff value i think it falls out along with it i will say too it's curious to me and i wasn't obviously here for the discussions on this but the cook's corner tiff being downtown projects potentially being noted or eligible for that and general economic development as someone who would want to defend investments in district one and development it's surprising to me that it seems as though that creates less focus on the developmental issues that the cook's corner area may or may not have like we've included those particular options but i think it would almost be heresy if i were to say hey you know what why don't we add into the downtown tiff the ability for that to fund things out in east brunswick people would be apoplectic about that and so and it [28:19] Sally Costello (Economic Development Director): it also isn't legal. [Julia Hens (Town Manager): You can only] pour it into the downtown by state statute. [28:26] Councilor Ellis: So downtowns are treated specially within the state statute? Yes, Emily probably speaks to that. [Sally Costello (Economic Development Director): Because I would] want to hope that most of the TIF revenue that's captured in Cook's Corner would be focused on Cook's Corner, I guess is what I'm saying. Yes. And it's not that I don't like the downtown, but my god, we've done a lot of investment in the downtown. [28:47] Sally Costello (Economic Development Director): Emily, maybe you could explain [28:48] Speaker F (unidentified): the why downtown TIFs are treated differently? Yes, so in general, the idea is that the downtown area, you know, I'll put myself in the video as well, that the downtown area holds quite a bit of the infrastructure pieces for economic improvement. So think of it as, you know, whether it be a lot of commercial buildings, but really the town's heart and soul as far as the town hall, all the fire stations sometimes are there, police stations, etc. The things that are necessary for improvement outside of the downtown district and for economic improvement in other areas, but that, you know, you're not going to have in every single economic district its own fire station. That's going to be usually in one or two, you know, a few different hubs, and so when the statute was amended to specifically create these downtown districts the idea was hey the improvements that need that the to the infrastructure that are needed for the economic development in these particular areas may require additional improvements in the downtown hub area so it allows for porting to it whether or not there is a need to it's quite yeah it's dependent on the on the various municipalities that's so porting is the legal term for that correct yeah because [30:20] Councilor Ellis: I'll spend some time on my own time just learn more about that, you know. They would say that part of the tip thing that's always interested me is I've often thought that this was also related to blight, right? Like part of this to try to encourage that you don't have these areas is where you have problems, and at least in my mind, Cook's Corner begins to approach that at times, and so, and it's not, it's not complete. I've seen other areas where entire strip malls are dead and empty. It's not that, but if I were to compare that to the downtown, the downtown's a significantly better place than Cook's Corner is today, even five years, seven years ago, yeah. And so thinking of any dollars flowing out of Cook's Corner right now would bother me as somebody who would want to defend that district. [31:05] Sally Costello (Economic Development Director): So it also, I believe, is, you know, there was a time when downtowns were struggling because the Walmarts and the outer places were developing. And so part of the idea was, you know, you capture the growth in the commercial area that's outside and be able to use it to keep your downtown alive. From back in, I mean, there was definitely a period, just 15 years, well, about 20 years ago, and that was really [31:33] Councilor Ellis: a concern. And that impacted Brunswick as well. I mean, we had businesses in downtown. We had a stationary business. I think some of the big box stores killed some of that opportunity for smaller businesses. We had clothing stores down there. That's a very hard prospect when you're competing with big boxes. [31:50] Chair Weems: Can I ask a quick question, just going back to that for one second? So is the net effect of that we don't port money over from Cook's Corner to downtown? Yes. [31:59] Sally Costello (Economic Development Director): We did early on, when we were still capturing 100% of the increment, we were able to port some money in order to build Station Avenue. So there was some that was ported very early on. [32:13] Chair Weems: All right, okay, thank you. [32:16] Sally Costello (Economic Development Director): Moving on. Credit enhancement agreement. So we'll be talking about these. This is just a table that is of our existing credit enhancement agreements. How much has been sort of a brief explanation of each of them, and then what the amounts distributed to the businesses has been since the inception of each of these. This slide used to include the credit enhancement agreement for the inn, the Brunswick Hotel. I took it off because the print was getting too small, and that is done now. I mean, that hasn't been around for a number of years. So we'll be talking about credit enhancement agreements. So- [33:05] Chair Weems: And Admiral Fitch LLC, is it Sandbiber? Yes. [33:10] Sally Costello (Economic Development Director): Yeah. I should put that on there. [33:13] Councilor Efter: No, it's okay, because that's the- That's the only one. That's the only one. Right. [33:18] Sally Costello (Economic Development Director): And then this is just a slide to show what from the last 15 years, and it doesn't include the year we're in, what the TIF revenues have been spent on. So we have realized $32,905,000 in TIF revenues over those 15 years. The top amount is credit enhancement agreements. That is the amount that has been spent on credit enhancement agreements. And then these other projects, as the council knows, we use TIF revenues whenever possible to in our CLP. We use it to match grants whenever we can. We use it to pay Brunswick Downtown Association's annual allocation. We use it to pay the rent for the train station visitor center. We have some sort of regular things that we're using it to pay for. And all of our TIFs... Can I just go back to that? Yeah. Just to [34:20] Councilor Efter: one of the councilors desire to hear a little bit about cook's corner is that it really it there's some creative uses of it as well like the affordable housing support fund 250 000 helped our fund they came out of tip revenues from the cook's corner fund so i think there's some really interesting ways we can use money and tackle a lot of different issues [34:41] Councilor Ellis: And I don't know whether it makes sense to do this now. You mentioned we were going to be talking about CEAs, whether at that point in time we'd be talking about just a layman's definition of what those are and why you would do them, I think is... I'm going to talk about that. [34:56] Sally Costello (Economic Development Director): The next thing we're going to get into is the TIFF and CEA policy that's in your packet, and we can really dig into what they are for that. And the only reason I raise it is what, [35:08] Councilor Ellis: maybe 40% of what's come out of those 32 million, so we're not forcing spitball. Is it exactly like that? I have all that. Right. [35:18] Sally Costello (Economic Development Director): So I kept out all the slides from tax shifts in this case. That is a whole other thing. Currently, I just did a rough calculation. And for every tax dollar, every TIF tax dollar that we didn't have in captured tax dollars, is we'd be losing 66% in other benefit. So that 66% tax shift, and that's my estimate for the year we're in. So that means, we talked about it earlier, that means that if you want to give an incentive to somebody to come, the new taxes they bring in, you'd be giving up 66% anyway if it wasn't in a TIF district. So that's the whole tax shift thing that I'm not really going into at this point, but we can. So, and then this is my last slide. And it's just so, we do have a page on the town's website for tax increment financing. We have all the TIF, all the development programs are there, all the documents are there. We're going to stop sharing so [36:41] Chair Weems: All right so that was every yes that takes care of agenda item 5a which is a brief review of tiffs. Yeah we're about to go to 5b which is to review the tax increment financing credit enhancement policy. I just want to insert a note here that Julie and I had a conversation earlier today and we I think we agreed that it would be more sufficient today since we want to go into executive session to discuss the really important things that we get a briefing on this and acknowledge that any changes that we might want to make to it as a policy matter can be deferred to a future discussion and we may learn something from the specific examples that are before us. Surely it would help us understand how and if we need to modify the policy. So this is not an invitation to fix the policy in any way people see it needing to be fixed, it's to understand what it is a prelim to the third [37:44] Councilor Ellis: And can I ask on this one is this one of these policies that were required to review periodically [37:51] Sally Costello (Economic Development Director): We do, yes. Finance committee reviews this, so I know there are a couple of things that we have sort of uncheck. Those are things we must do. Yeah, we typically have a meeting where we discuss tips and we review this policy, so it's been done each year. Yeah, so it's not necessarily because [38:08] Councilor Ellis: there's a problem with it that we're discussing it. This is regular review. Yeah, all right. [38:14] Sally Costello (Economic Development Director): So this was created when did Sally worked on this. All right, what year was that? 22. Yeah, wow. Yeah, it feels like it was ages ago and just yesterday. And it was around the time of the sandpiper. Right, that's right. And it was just sort of because the town didn't have one before, and it really made sense to spell out what. Sometimes the developer will come to us and say, we want you to create a TIF district and then give us a credit enhancement agreement. So the credit enhancement agreement within a TIF district, page two, is an economic development tool to provide incentives to business development, which will result in a public benefit. So it doesn't really say what that is, but what that is, returning some of the developer's tax revenue to them. It isn't a reduced tax rate. Some people get confused about that. It is, they pay the same tax rate as everybody else on all their new value, and by the agreement, we then send them a check after they pay the bill. Rebate of that. [39:24] Councilor Efter: I mean, rebate. It's a rebate. But it is a negotiated tax payment. Yeah. Because you are being reimbursed. You paid up front, but you are being reimbursed. Yes. So it's a negotiated tax payment over time. Yeah. [39:35] Sally Costello (Economic Development Director): Right. So that confuses people, and people think, oh, you're getting different taxes than the rest of us. Yeah. They're just getting some of your taxes back. Right. [39:44] Councilor Ellis: That could be completely wrong on this, but we have a tax attorney on the call here, so she could correct me, but I think that we're restricted by the state of not being able to discount taxes. Like I think the rebate is the only vehicle that a municipality has to potentially alter what a person is paying in property taxes in some manner. Like and it came up, the reason I'm thinking this is it came up when we were talking about but we had to kick back for people of certain ages to get rebates from The town or we had talked about, you know, is there possibly one that we could establish for economic disadvantage or what have you? And I think at that point in time it was, we discussed a little bit of having to be a rebate, not a reduction type of thing. So I don't know if this, the whole reason that this is a rebate not that, is the same reason, but it seems to be that the state is pretty protective of not having multiple taxation. [40:39] Councilor Efter: We do have to work with the state to establish the TIP districts. That's why we need a TIP attorney. Because we have to go forward and go through the whole process with the state. [40:49] Sally Costello (Economic Development Director): But some of the question was also, can we charge commercial different rates than residential? [40:54] Councilor Ellis: Nope. No. By a state constitution. Correct. You can in SimCity, but that's a different thing. [41:03] Speaker F (unidentified): Yeah, there are certain exemptions that are allowed by the state, you know, for benevolent organizations or whatnot, but Maine's a little bit different as compared to, you'll see a lot of states have pilot programs or payment-in-move taxes where it's either they pay a reduced amount or a different rate, and that is not currently allowed by the Maine Constitution. [41:28] Councilor Ellis: Yeah, and there's no way to bucket commercial, industrial, and residential into different rights according to the main constitution. [41:35] Speaker F (unidentified): I was going to say, other than a constitutional amendment. Yeah, exactly. [41:42] Chair Weems: This is a point of fact that I do think we can do, we can abate taxes to poverty. [41:50] Sally Costello (Economic Development Director): Oh, yes, but that is abate. That's abate. It's different taxation. Yeah. [41:55] Councilor Ellis: Correct. Yeah. Yeah. So that's still be taxed with the abatement. It's like a rebate as well. Yeah, it's the same thing. [42:04] Sally Costello (Economic Development Director): So this policy in general, it's supposed to lay out the guidelines for when the town would consider designating a TIP district and what the process would be for a developer who came to the town and wanted to ask for one. And then goes into how a developer would ask for a credit enhancement agreement. We do try to keep them separate. So the first step, you know, so not every developer comes asking for a TIF district. Some come asking for a credit enhancement agreement within an already existing TIF [42:42] Councilor Efter: district. So and can I add one thing? I will say that we do get requests to grade these TIF districts, but it really is supposed to be in a difficult development area. So that would be a really good case for that, and so we tend to try to do something different than just keeping, you know, going forward with new districts. [43:04] Sally Costello (Economic Development Director): We also have quite a lot of our town already in TIF districts. [43:11] Chair Weems: So a credit enhancement agreement needs to be nested within a TIF district? Yes. [43:18] Sally Costello (Economic Development Director): Yes. It's a good way of putting it. And it needs to be allowed by the development program. So this policy spells out the application process and then also the general priorities and then the evaluation factors, because historically, you know, TIP districts were, I mean, there's all kinds of metrics you can use. Soon you can talk about this a little bit, you know, certainly Maliki was for job creation, yeah and [44:00] Councilor Efter: and it's really determined by public benefit, so like the one that was for Sam Piper, that was because they're doing, they were above and beyond what was required for affordable housing. It was before we did the inclusionary zoning, and they agreed to do 20 of their units as affordable, so that was something that the town council decided to move forward on based on that benefit, it and then also bringing infrastructure, so there are different kinds of, you know, reasons to do this, and I think, you know, we'll have these are going to be two different very different examples I'm going to be talking about today [44:35] Chair Weems: Can we get maybe staff's view on the but four test in terms of, well, maybe it's going to come up in your exam, it is going to come up, okay, exactly, yeah, we will definitely. Yeah. [44:51] Sally Costello (Economic Development Director): So obviously, the Finance Committee will be looking at specifics, which have some proprietary information in them. So that's why we recommend going into executive session for that purpose. [45:08] Chair Weems: Yeah, I'll just note for future discussion, when we come back to this, I have two points of interest, primary points. One is to get the climate action plan specifically noted in here, so there are a couple of different places. Yeah. Secondly, to play around a little bit with the application process, but that's for a future discussion, not for today. Day. It's going to kind of put a marker down about those when we come back to it. Okay, are we, are we ready to go into the next session? Or are we going to get more explanation of the policy [45:49] Councilor Efter: elements in this itself? Well, I would, if you want to just know kind of what the some of the metrics are, I mean, we clearly look at tax revenue that would otherwise not project and go forward some you know that we would not have. We look at how it addresses vacancies. We look at job creation now. We look at affordable housing. I absolutely agree with you. We should have had that in there because that was one of the metrics that we used for the sandpiper with some supreme building materials and efficient design and generally energy efficient you know measures that meet our climate action plan. I don't think our climate action plan was so we definitely should put that in there and you know attracting businesses supporting business expansion. I mean those are kind of the primary things that we look at and the but for I will just say I mean that's an easy thing to explain if this were not if this credit enhancement agreement didn't go forward the project wouldn't be able to move forward. I mean I think when projects have gaps we tend to think of how do we fill those gaps and if you put just absolute capital in there versus a reduction on your operating it doesn't move the deal as much. I mean a reduction on your operating really is what tends to make jobs pencil and get to what you need just even small reductions. So that's why businesses come to ask for credit enhancement agreements because that I'll be talking about that because they come to me for different reasons you know or whether it's infrastructure needs or, you know, a reduction on their property taxes, but there's different use of the tip, and it can fit a lot of different ways, so we've got two very different examples today. [47:39] Councilor Ellis: Am I safe in assuming were I a business, I would of course ask for the waiver of this. I'm assuming that staff uses their professional judgment to determine. And again I would probably ask for more than I needed but I'm assuming staff has to sort of be able to push back on that [48:01] Councilor Efter: we don't we ask for their cash flow statements for former rental operating budget development budget. These are not things that we share with the public it's all protected information. We run our own modeling to make sure that what they're saying is what we understand. We go back and forth I mean we've been talking to you know one company one project for about six months, the other one's been about a year. So there's a lot of back and forth before we get to even a place where [48:30] Chair Weems: we'll bring it forward. So there's a lot of professional [48:32] Councilor Ellis: Pressure testing on the request. [48:34] Councilor Efter: Oh yeah, I mean it's not just because you ask. I mean, you know, I've had people say, you know, get upset about that. But just because you ask doesn't mean that 's why we do it. You know, it has to be a reason and it has to be a public benefit along with it. [48:48] Chair Weems: Yeah, one more question. So that establishes the agreement. How about the measurement of metrics? Who's responsible to do that? How is that verified? We have reporting requirements that [49:07] Councilor Efter: they have to submit. So let's, you know, in the case of some, it's they get and they get more reimbursement by the number of jobs that they have. We'll talk a little bit about that. And so then they have to do these jobs reports, which they submit. You know, obviously one metric is that they, for the sandpipers, that they built the affordable housing. And then they also have to work with the housing authority and vet the tenants that they have the right, you know, within the area median income. So there's different metrics for different things that they have to do. [49:39] Sally Costello (Economic Development Director): And so on an operational side, those reports, they typically come in January, which is when, you know, but that would be in effect for the following fiscal year. And so we, you know, Sally and I, finance, get the reports, and then finance calculates what they're – how it works in the CEA. [49:59] Chair Weems: Okay. And are they – how are they verified, or how are they – do they have to certify these things, or how do they – [50:05] Sally Costello (Economic Development Director): So in the employment reports, they send us their employee list. Yeah. And they certify that 's their employee list. in the in the housing one brunswick housing authority is our is the agent who certifies for them so we have a yeah we were careful not to make it we're not a housing authority so we're careful to not make it our add to our job to figure that out so we have a third party [50:34] Councilor Ellis: you're paid for by them. Yeah, is same type or the only one of our [50:39] Councilor Efter: Yeah, that was the first one that we did that had the affordable housing. So that's how we started thinking through, we need a lot more robust understanding about what these tools are, what the policy, we didn't have a policy, how they're evaluated, and then just what is public benefit. And it can be in many ways. So I think that, yeah. [51:00] Councilor Ellis: So with that, is that, because I know affordable housing is a technical term. I think some people think it's a, well, I can't afford that. It's not that. It's a technical based on median income. Is that a hundred percent? So that one was [51:14] Councilor Efter: Are you talking about that specific one? Yeah, so yeah, it's really affordable in all on a continuum, right? It's 30 percent of people's income, it's affordable, and then you've got sort of the HUD standard of area income, and you've got these ranges that are, you know, lower all the way up to, you know, 100, which is considered market rate. If you think about that for homeownership, it's It's 120% area median income. But that gets adjusted every year. Every day that gets adjusted. So that's why we pay it to the area median income. And that's why the state does it. [51:49] Councilor Ellis: The reason I asked that is I was surprised with the Hawthorne project that we just went through. I think I almost targeted with 80%. One of the proposals came in on that. We are clustered not with Portland, which is good. But the estimates that I saw was that 80% for Brunswick, because of the area's income, puts us right about what that means or what that translates into is about half of the people in Brunswick would be able to afford it, and the other half wouldn't, because our specific incomes are this. And so that wondering, questions that I've heard from other people, well, that's affordable for that hat. But I think sometimes when people think about affordable housing, they think about people who can't afford housing. And what are we doing to put steps for those people? [52:34] Councilor Efter: You're not wrong in saying that. That's a very good point. We do have, we are looked at separate from Cumberland County, LaFrance, your town. It's a little bit lower than Portland. But you're right. Many people, at least many people have the equation. The housing committee is looking at other things now like not just area median income, it's it's it's unit cost, right, so like just what people can afford but not related to area median income, like we're looking at unit sizes, I mean we've denied because you know it's again there's there's a lot there should be more factors than just area median income but and unfortunately it is it does because we do have our town has a lot of people who are there are people who have meetings and there are a lot of people who are not so then there are this middle group that's why they kept talking about the missing middle. I mean for the state they've come back with numbers to say that no it's absolutely the you know the 80 under that need the help. So we 're we're starting to kind of work through that the housing committee trying to target our you know our conversations with people into you know lower than 80 60 seems to be like kind of you know a little bit more helpful for our population right now. [53:45] Councilor Ellis: what i'm trying to work to at least within my own communication as a counselor is i think there's a disconnect from a layman's perspective that's what affordable housing means. And so it's trying to get out of like how do you best communicate sort of what we're doing and what our policies are. So understanding that was why i was asking that question to understand it's a really good question. I don't think that if i were somebody who would say 50 percent of median income in the area all right. somebody might need help with housing and this is no knock on them but i'm not going to be able to afford the sandpiper even their affordable housing. And so i think that disconnect and trying to find a way to message that so that people understand what it is we're actually doing now it is literally technically affordable housing but for specific population. [54:27] Councilor Efter: and it's yeah you're right that's right i mean we can tag it for like you know what people's salaries are you know normal people you know nurses you know teachers firefighters policemen and say you know you know what can they afford and what does that correlate to is it six is it really more 60 percent area median income or is it 80 you know. So i'm just saying the area median income does not tell like we've been trying to talk to main housing to say there needs to be more metrics to this than. just the area it does leave a lot of people out of the equation and it's. [55:00] Councilor Ellis: It's a good thing we're not in the 4.0, but I would say that was surprising. [55:03] Councilor Efter: It's still likely, but we still have pretty, you know, again, haves and have nots. I know there are a lot of people that are struggling, but we do have a lot of people that skew up here. [55:15] Julia Hens (Town Manager): Yeah. Yeah. [55:18] Chair Weems: Can I insert here and say, let's wrap on that aspect of the discussion. And I do want to just mention that in response to what Councillor Rafferty asked about metrics, It does seem that when we create more innovative metrics, we want to make metrics we can actually verify. Yes. And there are probably many that would be desirable that would be too hard to verify to really make the cut. I do want to take us back just briefly, but hopefully briefly, because it is an important business to do an executive session here, to the comment about the but-for. four, you made a comment about but four as a criterion. I presume it's a criterion on the list and not a requirement. It's not a requirement. [56:07] Councilor Efter: It is a criteria. It is a very good [56:12] Sally Costello (Economic Development Director): one, but there are reasons [56:13] Julia Hens (Town Manager): for moving forward. [56:15] Chair Weems: Thank you. Just wanted to clarify that. Yeah. It's not a requirement. No, it's not a requirement. Any further discussion that you want to bring forward in our understanding about this? [56:29] Councilor Efter: No, I know. I'm not, you know, I think it was great that Julia did an overview. I know you all in certain times have seen this, but it's good to just kind of review it before we get started on the actual [56:41] Chair Weems: requests. Right. So with that, I'm going to make a motion. I'm going to call it, call this complete on agenda item number five, the tax increment financing briefing [57:20] Sally Costello (Economic Development Director): cool yeah that's what I wanted to say you know