CHINA — Town officials have proposed a tax increment financing district to shelter new revenue created by power line improvements and to finance upgrades to lakeshore infrastructure and economic development.

The TIF will be presented to voters at the annual Town Meeting on Saturday.

Voters will also act on an approximately $2.2 million municipal budget for 2015.

According to the town’s application to the Maine Department of Economic and Community Development for approval of a development proposal, the TIF district would encompass about 110 acres, almost entirely within the power lines that bisect the town north to south.

A 345-kilovolt transmission line is expected to be installed in town as part of Central Maine Power company’s Maine Power Reliability Program, a state-wide project aimed at strengthening and expanding the company’s distribution system.

If the development is sheltered in a TIF district, tax value created can’t be assessed for county taxes or the state’s education funding formula. Instead, it will be deposited into a special revenue account that can be used to pay for projects included in the development plan over the district’s 20-year lifespan.

If the TIF is approved, the line improvements are expected to bring the town an average of almost $255,000 in TIF revenue per year for a total of $5.09 million by 2035, according to the application. Officials are waiting for the results of Saturday’s vote before submitting the application to DECD.

“Realistically, this allows the town to put money toward projects that it might otherwise take a long time to put together,” said Code Enforcement Officer Bill Najpauer, who drafted the TIF application.

The power lines would incorporate about 98 acres of the entire TIF district, but the revenue generated from it would be invested in areas unconnected to the property, including boat launches at the north and south end of China Lake, property near the town office and recreational trails in town.

According to the proposed development program, revenue will be directed for such improvements as $450,000 for better water access at the Causeway and South China boat launch and $350,000 to transform a portion of town-owned property near the town office for use as a commercial site.

The development plan proposes annual spending on a variety of other activities, such as $45,000 to fund economic development, $35,000 for recreational trails, $25,000 to fund a revolving loan program for local businesses and $90,000 to match state and local grants.

Funding will also be directed to smaller projects such as annual events like China Days and marketing the municipality as a business destination.

In total, officials estimate it will fund $4.6 million in projects through the revenues generated by the TIF, according to its application.

However, the town has leeway in how it applies the development program, Najpauer said.

For example, in its 2015 budget, the town dedicates more than $62,000 in estimated TIF revenue to things not explicitly in the proposed development program, like $38,000 for FirstPark dues and $15,000 for the China Region Lakes Alliance.

“The development plan can identify specific things, but by its nature, the language is very broad,” he said. The town put in whatever it thought could fit into the realm of possibility for TIF funding, he said.

At a Feb. 9 public hearing, town assessor William Van Tuinen noted that if the CMP development is not sheltered in a TIF, it will increase the town’s total valuation, leading to higher Kennebec County taxes and could mean a reduction in state aid for education, according to minutes from the hearing.

The proposed $2.2 million 2015 town budget is down about $115,000 from last year and may result in a small decrease in property taxes, according to Town Manager Dan L’Heureux.

Individual budgets for town administration, the transfer station and road maintenance are down from last year, L’Heureux said. He attributed most of the budget reduction to effective town administration.

“I really think the town is getting more efficient at what it is doing,” he said. In particular, the implementation of a voluntary recycling program at the town’s transfer station has helped bring costs down, L’Heureux said. The transfer station’s budget is now actually lower than it was 11 years ago, he said.

In general, town officials have been able to hold the line on its expenses in previous years, L’Heureux said. “The town is very sensitive to the local economy,” he noted.

The annual town meeting will be held at 9 a.m. Saturday at China Middle School on Lakewood Drive in South China.

Peter McGuire — 861-9239

pmcguire@centralmaine.com

Twitter: @PeteL_McGuire