HALLOWELL — The City Council nudged the Kennebec Ice Arena’s tax increment finance proposal another step ahead at a Monday meeting, but not without staunch opposition.

Acceptance of arena owner Peter Prescott’s preliminary application, modified last week from a 20 year, 100 percent TIF to a 10-year, 100 percent TIF proposal with a 10-year option for extension, passed the City Council 3-2 — councilors Steven Vellani and Lisa Harvey-McPherson voted against it.

Two councilors, Edmund Cervone and Mark Walker, were absent. Councilors Peter Schumacher, Phillip Lindley and Gail Wipplehauser cast votes for the TIF.

“I don’t feel like we should ever give a 100 percent TIF — any entity,” Vellani said. Former city councilor Andy McPherson spoke out against the TIF, calling it the beginning of a “slippery slope.”

“Somebody’s got to be the devil’s advocate,” he said. “I always had a rule of thumb on the city council. Does it benefit half the people in Hallowell?”

“Somebody’s got to be the devil’s advocate,” he said. “I always had a rule of thumb on the city council. Does it benefit half the people in Hallowell?”

“I don’t think so,” McPherson continued, estimating that 5 percent of Hallowell citizens likely used the arena, which collapsed in March under a snow burden.

Michael Stillings, Prescott’s accountant, called the arena “a unique situation,” saying Prescott hasn’t taken profit out of the arena.

Les Wilkinson, an attorney representing Prescott, spoke briefly, saying that if the arena isn’t built, Hallowell would see no tax revenue.

When Harvey-McPherson spoke against the TIF, calling it bad for city “fiscal policy,” Kevan Deckelmann, an attorney representing Prescott, could be heard saying “She doesn’t get it.”

If the TIF is accepted, the city would essentially lock the assessed value of the property in at $287,900 for the TIF’s duration. Prescott would pay taxes based on that number.

Prescott would not have to pay taxes on the value between the land’s value, $287,900, and the new property’s value, estimated to be around $4.3 million.

After the meeting, Harvey-McPherson called the arena “a worthy project,” but said she would never support a TIF over 50 percent, her “upper limit.”

Vellani, also after the meeting, said Hallowell citizens he has talked to in the past week “share an appetite” for a 50 percent TIF.

After the vote, Prescott had strong words for opposing councilors.

“They can stand up and say whatever they want,” he said. “Are you going to be a reasonable person, or are you going to get nothing?”

“That’s speculation at this point,” Vellani said in response to that argument. “The future’s still unwritten.”

He also said Prescott has a prime location in Hallowell, and said he believes Prescott should build there with or without the TIF.

Vellani said the vote was one of the toughest decisions he’s had to make in five years on the council.

“I want it and I know it’s a great service,” he said. “I don’t think it strikes a good balance between commercial and residential (taxes).”

Jane Orbeton, the chair of Hallowell’s Planning Board, asked the council to postpone the decision, citing need for more information on impact on local business and municipal revenue.

The proposal still faces a long road to materializing — Prescott’s team must now prepare a final application. There will then be a public hearing, followed by an appearance before the city’s planning board.

The process ends with final council approval, and then the Maine Department of Economic and Community Development then must sign off.

“I think it would be important for people, before we finalize things, to have some really good figures,” she said.

Members of the local hockey community spoke on behalf of the arena, with former DECD Commissioner Steve Levesque, of Farmingdale, also a former hockey coach and former owner of the Maine Moose, a Hallowell-based junior hockey organization, recommending the passage of the TIF on the basis of recouping otherwise lost tax revenue.

Hallowell resident and downtown psychotherapist Todd MacFarlane sayid the arena’s loss would “exacerbate a whole wellness problem in the state of Maine.”

Chris Buck, a Hallowell resident and city employee, referenced his grandfather, Robert Ballard, who Prescott bought the Whitten Road land the arena sat on from.

“40 years ago, Mr. Prescott came to my grandfather, who owned the land. It was a hard sell, just like now,” Buck said. “Peter told him it was for the kids — it was a recreational facilty. And he was sold.

City Manager Michael Starn said in July the city should expect to lose approximately $36,720 annually in revenue because of the TIF.

Though the city doesn’t collect as much tax revenue, it benefits in a TIF. Money sheltered in doesn’t count toward a municipality’s overall property tax value during the TIF’s life, meaning state revenue sharing, which affects school budgets, is not lowered. In other business, the council approved municipal expenditure and revenue budgets after third readings, finalizing them.

The city expects to spend $2,152,852 to run its affairs. Starn said he expects the figure to rise to around $4.37 million after school budgets are factored in.

Debt service and insurance are slated to make up more than $664,000 of the budget, while administration and public works are expected to cost $459,000 together, according to budget documents.

The police department was allocated more than $284,000, while the water district got $100,196.

The city expects to take in $641,284 in revenues, a document says — most of that from excise taxes and state revenue sharing.

Last year’s budget, schools included, was approximately $4.1 million, Starn said. He said this budget won’t result in any mill rate increase. Hallowell’s mill rate is currently at $15.80 per $1,000 of property value.

Michael Shepherd — 621-5662