Harpswell Information

Mr. Loyd

Ms. Weil

Misconception #1. Harpswell is over taxed. This is simply not so. No tax is easy to pay, especially a property tax. Harpswell’s tax rate – its mill rate – is among the lowest in coastal Maine. In fact, statistics compiled by the Maine Revenue Service show that Harpswell has far and away the lowest tax rate of all towns in Cumberland, Sagadahoc and York Counties. Harpswell’s mill rate is lower than all but four towns in Lincoln County and lower than all but one town in Knox County. Even if you believe that Harpswell may be bearing a disproportionate share of S.A.D. 75’s annual budget we are not over taxed. If Harpswell’s share of the S.A.D budget is of concern to the voters, we should deal with that issue directly rather than allow that it to muddy the discussion about Fairwinds.

The Selectmen have postulated that the Harpswell tax rate is about to grow out of control yet not once have any of them provided the voters of Harpswell with an analysis of why they believe that to be so. How can we be expected to embrace a heavy industrial project of this magnitude on unsupported claims that our taxes are about to grow out of control.

Harpswell is overtaxed for its schools and the level of services provided by the town to its residents. It is not as easy to deal with the financial burden placed on the town by SAD 75. As Mr. Loyd is well aware, Harpswell is party to a contract with three other towns, and this would have to be renegotiated. If the contract is reopened, the other towns are in a position to make the financial burden on Harpswell more onerous.

More immediately, while four of the directors on the SAD 75 board are from Harpswell, voting is weighted according to the national census population numbers. As Harpswell's population is not growing as quickly as that of other communities, Harpswell's influence on the board is declining. In the future, we can see Topsham demanding more school programs and services largely underwritten by Harpswell's property taxes.

In 2003 approximately 60 per cent of Harpswell's property tax revenues went to SAD 75.

The town provides minimal services to residents. We have volunteer firefighting and emergency services. We have largely contributory summer programs for children. Our small libraries are run primarily by volunteers. We take our own refuse to the recycling center or pay for haulage. We do not have a community center or recreation center.

Fortunately, we ask little from town government. Generally speaking, we are happy if the town offices appear to be functioning efficiently, law enforcement officials are in evidence from time to time and the roads are plowed in winter.

1. The question of whether Harpswell is overtaxed is a matter of opinion not of fact.

2. JL: Our low mill rate is a well-known fact.

3. JL: Disproportionate share of SAD 75as well as what to do about it.  are opinions.

4. "The Selectmen have postulated that the Harpswell tax rate is about to grow out of control" could be described as a scare tactic on the part of the Selectman and RW because they are predicting something terrible without any evidence/

5. RW: "Harpswell is overtaxed for its schools and the level of services provided by the town to its residents." is an opinion. RW provides no facts or substantiation of this assertion in para 1. She merely says it could get worse. (scare tactic)

6. RW makes a good point about Harpswell's declining influence. Unfortunately, she does not tell us how imminent this threat is.

7. Also, unfortunately, when she says, "In the future, we can see Topsham demanding more school programs and services largely underwritten by Harpswell's property taxes." This strikes me as a prejudicial comment about Topsham, and an unsubstantiated comment about about the future. I would consider it a scare tactic.

8. "In 2003 approximately 60 per cent of Harpswell's property tax revenues went to SAD 75." This may be a fact and may not be a fact, but it irrelevant to her point. Would we pay more, less or the same taxes, if 80% of property tax revenues went to SAD 75. There is no way of knowing. Also, she does not tell us about what per cent is paid by other communities, nor does she mention the 13+ million dollars the other three communities bring to the table in non-property tax revenue (from the state as state aid.)

9. "The town provides minimal services to residents." Opinion, not fact, but I agree with the statement. Some people think we provide too many services. For example, Mr. Weil once considered getting rid of the town recycling center to further reduce taxes. Ironically, one way of reducing the percentage of our property tax revenues paid to SAD 75 would be to increase the services that the town provides. That would mean a lower percent of our tax revenue would go to SAD 75

This is as far as I have time to go.

Misconception #2. Reduced property taxes will make Harpswell a more affordable place in which to live. Most of us in Harpswell are understandably concerned about the rapidly escalating cost of real estate in Harpswell and the fact that it is making it difficult and often impossible for Harpswell’s younger generations to stay in Harpswell or to return to Harpswell. This is an unfortunate truth that applies to my family just as it applies to others. Real estate prices are changing the Town as the population becomes increasingly older and includes a larger portion who are “from away.” Many arguments have been made that the revenue stream from the ConocoPhillips project will somehow allow us to reverse this trend or at least slow it down. However, an economic analysis of this argument revels that this simply won’t happen! In fact, any tax relief from the Fairwinds project is likely to increase real estate prices.

The proponents of the ConocoPhillips project argue that if there is tax relief as a result of the ConocoPhillips project, Harpswell real estate well become more affordable or that prices will stabilize. That simply is not so, because, while the property tax mill rate is partially driven by the value of real property the reverse is not true. The value of Harpswell real estate is driven by market forces – not the tax rate. The only reduction in the market value of Harpswell real estate that is likely to occur if the ConocoPhillips project is approved will affect property on Harpswell Neck alone, due to the unfortunate and undesirable proximity of the property to the LNG site.

Elsewhere in Harpswell (which is most of the Town, geographically) the market value of real estate will continue to rise or fall as a function of market demand for real estate. To the extent that the ConocoPhillips project revenue does provide property tax relief it will probably have the perverse result of driving up the price of Harpswell real estate. This acceleration in the rate of increase in market value will come from the fact that Harpswell will be perceived to have a more favorable real estate tax climate compared to other coastal towns. This factor will likely make Harpswell real estate more attractive by comparison and will drive up real estate prices all the more.

As we all know, there is a finite amount of coastal real estate and an increasing number of buyers in search of coastal real estate. This creates the classic set up for the operation of the economic law of “supply and demand.” Regardless of the Fairwinds project and any tax relief that the Fairwinds lease might generate, Harpswell real estate pricing will remain a function of the supply and demand for coastal property and, as the inventory of available coastal real estate diminishes or remains constant against a growing number of buyers, we can expect the price of Harpswell land to increase accordingly. There is absolutely nothing we can do about this. A vote for Fairwinds to obtain tax relief is a vote to increase the market value of real estate in Harpswell and to make the affordability problem worse than it is now.

Reduced property taxes will make Harpswell a more affordable place to live.

It is incorrect to look only at the mill rate when discussing property taxes. It is true that the town of Harpswell has a lower mill rate than other coastal communities. However, Harpswell has more shoreline than any other community in Maine, and that shoreline is highly valued. As a result, our taxes are not low.

Moreover, we will have a revaluation in 2004. All indications are that the state will increase Harpswell's valuation substantially. In recent years new construction in town has resulted in increased revenues that have allowed the town to hold the tax rate relatively constant, thus masking much of the increase in valuation. This will not continue forever.

No one has claimed that reducing property taxes will make Harpswell a more affordable town in which to purchase property. The concern is for those families already living in Harpswell who are having difficulty paying taxes. Paying taxes in a matter of pride - and there are individuals in this town who are foregoing food and medication in order to make those payments. In many cases, these families have owned their land for many years; and they are not interested in selling their property.

Mr. Loyd neglected to mention that Fairwinds has stated its intent to hire employees in town. It might provide up to 50 good-paying jobs for local men and women, jobs with health insurance and retirement benefits. These jobs would replace those lost in Harpswell when the fuel depot closed. They would make it possible for some of our children to remain in town, and to maintain inherited property or to purchase property.

My husband and I have lived within one-half mile of the fuel depot for more than 30 years. The old fuel depot was a benign presence in our community. It did not impact our property values. We do not perceive the proposed LNG facility having more than a short-term negative impact on property values.

Misconception #3. The lease’s revenue stream will be used for tax relief. As I write this and before the first nickel is paid to the Town, the call has been sounded by Harpswell citizens for an incredible wish list; a senior center, a youth center, bike paths, a swimming pool, health center, library, withdrawal from the S.A.D. while assuming our share of the S.A.D. bonded debt, our own schools, a college scholarship fund for all Harpswell students,…and the list grows by the week. ConocoPhillips uses the ever expanding wish list to demonstrate to the Town that, with the revenue from the lease “the sky is the limit” – we can do and afford whatever we want – a seductive siren call for sure.

In the first full year of the lease, after construction and the project is operational, the lease payment will bring in nearly $9 million. Nine million dollars is a lot of money by any measure, but as much money as it is, it is barely enough to do all that is needed now, let alone to begin to satisfy even the smallest portion of the Town’s wish list. When one begins to tally the costs to the Town that it must and should assume if it enters into the Fairwinds’ lease there is little left over for tax relief. For example: The Town has to start off by establishing a $4 million reserve for the fishermen’s mitigation fund – that is the upper limit of the Town’s responsibility under the lease. Whatever is not spent in any year on mitigation can be carried forward but – to the extent that the mitigation reserve is used – the funds will have to be replaced. So, if most of the mitigation fund is spent in any lease year the Town will have to set aside $4 million for the next year, then the next, and so on, for the term of the lease. Add to that the “set aside” investment fund that, in the exercise of prudence, the Town must create and maintain to guard against the precipitous loss of revenue to the Town on the day, 30 or 50 years from now, when ConocoPhillips decommissions the facility. Most money managers would recommend that upwards of one half of the revenue stream be used to fund the Town investment fund in order to avoid leaving a fiscal time bomb for our children. In the first year of the lease, assuming a flat municipal budget and before we have our own schools or build the swimming pool, we might have a net contribution to the Town budget of $1 million. If the Town does what it must to be fiscally prudent and the Town budget grows at a rate that is just a smidgen greater than the rate of inflation, the net contribution to the Town budget likely will be only $300,000 - $500,000 in the fist year. Thereafter, in later years, the net contribution to the Town budget may appear to increase but, because of inflation and the tendency for government to grow, in real terms, the net contribution to the Town will not increase appreciably if at all. Personally, I do not believe that contributions to the Town budget of any amount justify the irreparable harm that the Fairwinds project will do to Harpswell, but net contributions to the Town budget of $300,000 - $500,000 are not worth even a moment’s consideration.

In addition, it would behoove all of us to look at the negative experience of towns like Wiscasset, East Millinocket, Millinocket and Lincoln to see the consequences of total reliance on a single industrial facility.

No one has committed the revenue stream to any purposes.

We all know that it is far too early to count upon Fairwind's producing revenues, as the project is not approved by the town or by the regulatory authorities.

But the selectmen have produced a document that is available in the town office, showing the projected revenue stream from Fairwinds. It points out that the revenue stream before completion of construction is small. The selectmen have assumed that some of the funds received annually after project completion would be used to reduce property taxes. However, it also assumes that 50 percent of the funds received after completion of construction would be set aside to ensure continuing tax relief in the future. This is a financially conservative approach, and it would be subject to a vote of the town.

Prior to the offer from Conoco-Phillips and TransCanada, a list of impacted fishermen was developed. There are about 300 active fishermen in the town of Harpswell. Approximately 60 to 65 fishermen from Harpswell and neighboring towns fish in the Middle Bay area that would be impacted by the passage of LNG tankers. Not all of their traps are in the impacted area. Not all of these fishermen are opposed to this project. The possible negative economic effect of the Fairwinds project on the fishery has been overblown and overdramatized by a few fishermen.

Moreover, I would suggest strongly to the fishermen that their outcry is directed at the incorrect target. The creation of a state boat launch on Mere Point will allow hundreds of boaters to launch their vessels every day during the prime lobstering months. Many of these boats have blades on their props intended to cut fishing lines in their way. No one will compensate the fishermen for the time they have to spend grappling for their traps or for gear after their lines are cut. There is no control over oil or gasoline spills from small craft. The boat launch is potentially far more dangerous environmentally and economically to the fishery than the proposed LNG facility.

Moreover, the younger fishermen might consider their own futures. Fishing is less attractive as one gets older and develops arthritic or mechanical problems with one's hands, wrists, elbows and shoulders. A good paying job in town might be attractive.

Misconception #4. The former fuel depot site is so contaminated that it cannot be used for any purpose other than the ConocoPhillips project. I serve on the fuel depot committee and, as a member of that committee, I am aware of the environmental conditions of the former fuel depot site. Based on the information available to the committee and from the Maine Department of Environmental Protection it is clear that the environmental condition of the site and level of contamination of the site is being intentionally distorted and misreported. The site has been “remediated” – cleaned up – and is approved for all uses other than residential housing – period. What little contamination remains is located deep in the soil and is rapidly being consumed and cleaned up by naturally occurring bacteria. Let me say this another way – the former fuel depot site is safe for all uses except residential housing and it has tremendous potential for many uses, commercial, recreational and otherwise.

Misconception #5. Harpswell is under the gun for the cost of removal of buildings and the pier if the Town does not approve the ConocoPhillips project. The projected cost of removal of these structures is estimated to be between $1 million and $2 million. The Town appears to be in a headlong rush to remove these structures before we know whether any potential commercial or light industrial tenant of the former fuel depot can use these structures or would be willing to remove all or some of them as part of its lease obligation to the Town. There is no need to rush to remove these structures. The Town should continue its search for one or more suitable tenants for the former fuel depot site and negotiate the use or removal of the structures with these tenants.

Is Harpswell under the gun to remove the buildings and the pier at the fuel depot?

No, Harpswell is not "under the gun" to remove the facilities at the fuel depot; but we do have to keep in mind that this will have to be done. With each passing year the facilities become less usable, or reusable, and more of a nuisance. The buildings already have been subject to extensive and recurring vandalism.

Over the years the Fuel Depot Committee has been approached by a number of individuals and several corporations about the use of the fuel depot. We have approached educational and research institutions. All have either wanted the town of Harpswell to provide funding for their efforts or have found the restrictions placed by the Department of Environmental Protection on the property to be too onerous. The committee and past boards of selectmen have not been inclined to pursue these projects, as they would place a greater burden on property taxes and the outcome might be uncertain financially for the town.

To my knowledge no one has distorted or misrepresented the condition of the site or the level of contamination. Remediation has occurred - as far as is possible with the technology available to us today. However, there is residual fuel in the bedrock. This is why there are test wells throughout the fuel depot that are monitored twice a year. This is why the Department of Defense retains liability for future pollution found at the site.

The voters of the town of Harpswell have been told repeatedly that if nature continues on its present course, the property will probably be judged to be "clean" in approximately 40 to 50 years.

Misconception #6. The ConocoPhillips project is Harpswell’s last chance to develop the former fuel depot site – if we don’t approve Fairwinds the Town will have missed the opportunity to develop the site. The fuel depot committee has investigated, in a non-strategic and somewhat relaxed manner, a handful of possible light industrial or commercial uses and tenants for the site. But the fact is that the Town and the Committee have not taken a serious, systematic strategic approach to the economic development of the site. If the Town approached the economic development of the former fuel depot site in a direct and sophisticated manner, say, in the way that Topsham and Brunswick have for their available sites, I have no doubt that a huge number of potential tenants for the site would be identified and that leases would ensue – if that is what the town’s voters wish. More to the point, if the Town had put a fraction of the time and energy into finding a suitable tenant for the former fuel depot site as it has in dealing with ConocoPhillips, there is no doubt that we would have had one or more appropriate tenants some time ago. Let’s simply resolve to approach the development of the former fuel depot site using appropriate and professional economic development techniques and in time Harpswell will have what it wants and needs – one or more tenants that are appropriate to the site, that may well cover all or some of the cost of removing the structures on the site and that will provide revenue and increase the Town’s tax base.

Is the Conoco-Phillips/ TransCanada project Harpswell's last chance to develop the fuel depot?

To my knowledge only Mr. Loyd in his article has suggested that Fairwinds is Harpswell's last chance to develop the Fuel Depot. No one has said that. However, only Conoco-Phillips and Trans-Canada have studied the property and made a serious financial offer to the town. Because the Fairwinds proposal is the only serious offer that the town of Harpswell has received, it is incumbent upon us as a town to consider this proposal.

Mr. Loyd is correct in one respect: The Fuel Depot Committee has been relaxed about seeking to develop the fuel depot. We have enjoyed the beauty of the land and its permanent nature. It would be wonderful to have property of this size and attractiveness available over the long-term to the residents of Harpswell. But the town's Budget Advisory Committee has, in my view, regarded the fuel depot as being of marginal interest as they have struggled to prevent substantial property tax increases. No private individual has stepped forward with the funds to create a permanent park.

Several months ago, The Times Record published a letter from a Brunswick resident. The gist of the letter was that if Harpswell behaves this way in response to the Fairwinds proposal, who in their right mind would ever want to set up a business in that town? Unfortunately, this mirrors my own belief. Mr. Loyd is far too optimistic in believing that we will receive another offer in the near future for the use of the Fuel Depot - and far too optimistic in believing that it also will not be opposed.

Misconception #7. ConocoPhillips will save Harpswell. Harpswell does not need to be saved, it is a wonderful place in which to live, raise a family and work – now. The only thing that Harpswell needs to be saved from are those who are willing to sacrifice the character, culture, environment, health and safety of the Town and Middle Bay for a seductive and illusory income stream.

Economic issues are only a few of the important issues that Harpswell voters should consider in connection with the ConocoPhillips proposal. I hope my focus on important basic economic issues, such as taxes, property values, and the former fuel depot site will help Harpswell voters consider the real facts and economic considerations and not have their opinions biased by the large amount of misinformation on these issues.

Do we need Fairwinds?

The offer the town of Harpswell has received from Conoco-Phillips and TransCanada Pipelines is very financially remunerative to the town. The lease contains many safeguards for the town and promises town representation.

Mr. Loyd is correct in saying that Harpswell does not need to be saved financially. That is why the lease is so very positive for the town of Harpswell. For once, we were negotiating from a position of strength.

Mr. Loyd's article, like much of the campaign against Fairwinds, concentrates on ME. It is a very personal ME. He discounts or ignores intentionally the possible economic and financial benefit to the greater ME - the region and the state of Maine.

During the construction period, contracts would be let and workers hired. Some of this money would be spent in the state of Maine. To the extent that it is spent in Maine, the positive multiplier effect would be felt throughout the local and regional economy. Moreover, the state would receive more tax revenues. The state's simulation model suggests that during construction the benefit to the region will be as much as $257 million per year and that increased tax revenues to the state will be $6.5 million annually.

During and after construction, there will be a need for many ancillary services. Many of these services could be provided by Harpswell residents or by firms in neighboring cities and towns. The multiplier effect would not be temporary, it would be long-term and sustainable. Here the state's simulation model suggests that the benefits might total $105 million annually.

If the LNG could be sold to power the Cousin's Island power plant, Harpswell and Maine would have significantly better air quality. This, in turn, should lead to reduced medical expenses for lung-related illnesses.