MANCHESTER — An agreement between the Manchester Water Works and the town of Auburn that could reduce the city's tax burden by nearly $400,000 over five years took another step forward on Monday.
The aldermen's Committee on Land and Buildings on Monday approved easements requested by the town as part of the deal. The proposal will go before the full Board of Mayor and Aldermen this evening.
Water Works owns 7,200 acres in the Lake Massabesic watershed – the main source of the Manchester area's water supply – and 4,000 acres of it are in Auburn. Under state law, a water district is liable for the amount of property tax a private owner would pay on the same land.
The city has long sought to reduce its property tax burden for the watershed land, and earlier this year the Water Works was actively considering selling the land to conservation groups.
The agreement with Auburn was made possible by a new state law that allows a negotiated payment in lieu of taxes (PILOT) for land a water district owns in a separate community. The five-year agreement calls for the bill paid by the Water Works to Auburn to drop from $680,000 this year to $300,000 in 2018.
The easements will allow Auburn to use a 200-foot stretch of land for an access road to a couple properties until a faulty bridge is repaired, as well as an approximately five-acre parcel of land for a planned community center or playground.
Water Works Director David Paris told the aldermen that the easements would increase the likelihood that the agreement would continue beyond the initial five years. "The incentive we built into the PILOT we feel will promote its extension beyond five years. We also have had conversations with the town about seeking to change the state law to go beyond five years," he said.
Paris said savings from the agreement would go back into the Water Works capital project fund. "It will go toward the main relay... Our capital program will greatly benefit from our ability to invest in capital infrastructure," he said. "It will be put to good use. This is a monumental process that is not taken lightly."
Paris said after the meeting that he hopes a final draft of the agreement can be completed in the next couple weeks.
The Water Works also pays taxes on watershed land in Candia, Chester and Hooksett. Paris said no deals have been reached with the other communities, but that he'd like to have conversations with them "in the future."