Letter from Jim Nimon, Executive Director
I'm feeling energized as we prepare for Autumn 2014 to arrive next week. Along with working every day with local companies (see our article below on Farming Fungi), we at the Growth Council continue to work on a number of foundational issues that will help set the stage for future economic growth in the Sanford Region.
I'm talking specifically about moving from our broadband plan to implementation of a city-wide network so we can enhance community anchor institutions and entice high tech companies from away to give us a serious look. And coalescing as a community around the notion of a new, world-class high school and technical center that we richly deserve for our children and grandchildren, and that we can market as an extraordinary asset to young people not presently in Sanford who are interested in a great education and quality of life for their families (see the notice below left for the date of the Straw Poll at month's end).
We continue discussions with Unitil to extend the natural gas pipeline further into our city so more residents and companies have energy choices. The location of the new school has helped move the hypothetical conversations to real action so the high school and technical center will have access to natural gas along with others on the Main Street expansion route planned. We have provided information in past newsletters about natural gas so in the interest of educating consumers about energy choices we have included an information letter this month from the Maine Energy Marketers Association (see below). We continue to encourage you all to educate yourselves about energy options in the community and make the best choice for your business.
Another item "fresh off the press" is pending City Council action on the Sanford Road Impact Fee Ordinance. Earlier this week I testified at a City Council public hearing in order to express support for the suspension of the ordinance. This is a complicated matter that again requires us all to inform ourselves of the pros and cons of having a Road Impact Fee in Sanford. I praised the City Council for recognizing the problems associated with the current ordinance and their willingness to revisit both the rationale for the ordinance and technical language that directs how it presently works. Read the article below for some background on the Road Impact Fee, check out the links to documents and immerse yourself in the facts if you have the time and interest, and please "Save the Date" and come have your perspective heard at the City Council's second reading on Tuesday, October 7th.
As of last Tuesday, by a vote of 6-1, the City Council amended the language in Order #14-145.09 and eliminated the "retroactive" clause. This means that if the order is passed at the next City Council meeting, developers will not be subject to a retroactive fee once the issue is resolved, i.e. there will be no impact fees collected from the effective date of October 7th to the date additional action is taken by the City Council. A formal review of the ordinance will be undertaken and must be concluded within six months. Recommendations may include amending or eliminating the ordinance. Many of you have raised this as an important matter in the past and we hope you will be prepared to offer testimony to the City Council next month.
Municipal Impact Fees: Brief History & Pros and Cons
In Maine, the Legislature granted municipalities the ability to enact Impact Fees in 1988. The entire statute can be viewed here
. As of 2012 there were 28 states around the country that had adopted Impact Fee Enabling Acts. The list of states and their laws can be found here
and a map showing states with Impact Fee enabling acts is shown at right.
In January 2008, Sanford adopted the "Sanford Road Impact Fee Ordinance
" (note: "Roads and Traffic Control Devices" was one of the seven "infrastructure facilities" listed as eligible for impact fee consideration in Maine law).
Considerations to be Addressed Prior to Developing an Impact Fee Ordinance
~ Maine State Planning Office, January 2003, "Financing Infrastructure Improvements Through Impact Fees
"There are a number of issues that a community should consider prior to developing an impact fee ordinance, aside from the detailed technicalities of drafting the ordinance and determining the fee. Because of the potential effects of imposing impact fees on the cost of new development, the decision to collect an impact fee is not one a community should rush into. There must be sufficient planning and analysis of the needs of the community prior to adoption of a fee system." A truncated chart of pros & cons follows. Please see pp.10-13 of the State Planning Office Manual for the full listing of "Potential Advantages and Disadvantages of Impact Fees."
2007 Traffic Impact Fee Study for Sanford Maine
| Direct Benefit:
Properly established, impact fees implement a policy where the beneficiaries of a service pay for the service. There may be cases that without the funds provided through impact fees, local voters would not be willing to finance improvements. The assessment of impact fees allows for improved municipal service by permitting facility improvements to progress.
| May Not Cover Total Infrastructure Costs:
Municipalities will not be able to shift the entire burden of facilities construction or i improvements to those responsible for new growth. Rarely will a new facility or an improvement to a new facility be built solely to serve growth without also either serving some existing developments or correcting existing deficiencies in service.
| Equity and Efficiency:
Many deem impact fees to be an equitable and efficient manner in which to raise funds for improvements to public facilities needed to accommodate new growth. The link between those who pay for the improvements and those who shoulder the costs for the improvements provides an equitable solution to difficult and costly public construction projects. Once established, impact fees are an efficient method of collecting funds.
| Difficult to Establish and Administer:
In order to establish a defensible impact fee system, the municipality must have completed a significant amount of research and planning. Impact fees must be based on identified needs with, at a minimum, a conceptual plan of solutions and cost estimates for that plan. Administration of an impact fee system requires long- term maintenance of segregated accounts, and a bookkeeping system that tracks contributions to and withdrawals from these accounts.
| Political Popularity:
Impact fees are frequently popular in localities that have seen rapid growth that causes a decrease in the levels of service local government can provide without large expenditures for facilities improvements. As an alternate source of revenue available to local government, impact fees remove some of the costs of growth from the taxpayers and shift those costs to the individuals directly responsible for the new or improved facilities.
| Fees Depend on Rate of New Development: The revenue flow from impact fees is as unpredictable as the rate of new construction. As the vagaries of the economy wax and wane, so will the annual total of fees collected. The construction of one large development may provide a large amount in fees one year that is not matched in subsequent years. This may lead to some fluctuation in the tax rate, as expenditures from taxation must change to reflect the amount of impact fees raised.
| Inclusion of Approved but Not Yet Built Projects:
Impact fees may be structured to include previously approved, unbuilt developments from which exactions pertaining to the public facilities to be financed through the fees remove some of the costs of growth from the taxpayers and shift those costs to the individuals directly responsible for the new or improved facilities.
| Some Question the Equity of Impact Fees:
As much as there is a strong argument for impact fees as an equitable tool to shift the burden of financing new public facilities to those who create the demand for those facilities, there is an argument that impact fees create an inequity. The philosophy promoted by some analysts is that today’s citizens and taxpayers are benefiting from investments made by previous taxpayers to construct the currently existing facilities and that impact fees remove their responsibility to provide for future citizens.
| May Reduce Borrowing and Debt Costs:
By providing an alternate mechanism for financing public infrastructure improvements, impact fees can lower the amount a municipality will be required to borrow for major capital projects. If an impact fee is collected for a period of time prior to the construction of the project, the municipality has opportunity to reduce the principal being borrowed by the total amount of collected fees. If the fees are being collected after initiation of the project, the amount to be borrowed will not be reduced, but a portion of debt service will originate from the impact fee and not be incorporated into the town’s tax rate.
| Effect on Low/Moderate Income Housing Prices:
When assessed on residential development, impact fees may have the effect of increasing housing prices or the rent necessary to carry the capital costs of new housing. Some have raised the concern that this may result in new housing being even less affordable to low-and-moderate income families. This is a legitimate concern when there are impact fees assessed throughout a majority of the housing market. However, in Maine the market for housing usually encompasses more than one municipality. All homes within that market area are competing with each other for buyers.
~ Wilbur Smith Associates, Portland ME, in Association with William J. Bray, P.E., Portland ME
In the introduction to the June 15, 2007 study, the consultants wrote that "Sanford is currently experiencing significant commercial and residential development pressures that will require expansion of their transportation system. The growth is forecast to continue, and in an attempt to equitably share cost among the users, Sanford is suggesting the adoption of a traffic impact fee program.
They then referenced the SPO Manual and explained that "Impact fees are charges assessed against new development that attempt to cover cost of providing capital facility needs to serve the new development." They went on to state that "Their use has been promoted as a way for growth to 'pay its own way' by charging at the beginning for infrastructure needed by new development. Impact fees provide one way to help ensure that existing residents will not bear the cost of new facilities necessitated by new developments." The study, as a framework for future Council action, went on to describe a recommended process that could be implemented, maps of the effected roads, literature reviewed and an example road impact fee ordinance for the council's consideration. Click on the image above to read the full study.
2008 Sanford Road Impact Fee Ordinance (Chapter 136)
Sanford's ordinance was adopted on January 2, 2008. Its purpose as explained in Section 1 is "to raise funds and deposit them into trust accounts to help pay the costs for future roadway improvements at identified locations. The proposed improvements have been determined to be necessary to provide capacity to accommodate new traffic generated by new development projects.... This ordinance will help to assure that each new development pays a proportionate share of the cost of improvements based upon the development's use of the new roadway capacity." The ordinance goes on to include definitions, procedures, fee calculations and effected roadway locations. It describes how fees are to be paid, where they are to be kept, how they are to be used and how fees may be refunded. There are also five exemptions to the ordinance listed and a section outlining how credits against fees may be provided in certain instances. Section 14 covers "amendments" and states that "This ordinance may be amended from time to time" by the City Council. Furthermore "amendments may include deletion of impact fee locations" when the Council determines "that all required capital improvements have been made." Also new impact fee locations may be added "after studies determine the need." The entire ordinance can be viewed here
2014 Sanford City Council Order
On September 2nd, the City Council voted 7-0 in support of Order #14-132.02 to "suspend enforcement of Chapter 136, Impact Fees, until further action of the Council following a pending Public Hearing on September 16th." The City Council then held the Public Hearing on Tuesday, September 16th "to seek comments to consider the suspension or amendments to Chapter 136, Impact Fees, Pursuant to Council directives and time table." We expressed our appreciation for the recognition of the inherent problems with the existing ordinance and welcomed the timely review and possible amending or eliminating of the ordinance in the near future. Later that evening by a vote of 6-1 the Council voted to amend Order #14-145.09 and essentially stop the calculating and collecting of road impact fees from the October 7th effective date until the ordinance review is completed within six months, and City Council action is taken.
A second reading on the amended order is scheduled for the next City Council meeting on Tuesday, October 7th. The council will vote that night so it is important that any business or developer with an understanding of the issues and an opinion about amending or eliminating the existing Sanford Road Impact Fee Ordinance be present for the agenda item. The Growth Council and City Council are encouraging your attendance and feedback.
Micro-Enterprise Assistance Program
In June, the Sanford City Council voted to accept $100,000 in DECD grant funds which the City successfully competed for to help establish the Sanford Micro-Enterprise Assistance Program (MEA). These funds will be used to help very small companies in Sanford and Springvale expand their businesses or make them more sustainable through new equipment purchases, technology upgrades, or other improvements. To be eligible to apply, companies must:
- have five or fewer employees
- be owned by someone who meets low to moderate income guidelines
- have been in business in Sanford or Springvale for at least the 6 months prior to application
Eligible companies can apply for up to $25,000 and must provide matching funds of at least 25% of the total project cost. The awarded funds will be in the form of a forgivable loan, which will be reduced annually and then completely forgiven after the business has remained open in Sanford/Springvale for three years. All funded companies must work on their business plan with the Small Business Development Center in Springvale, and participate in quarterly progress meetings with staff.
A five-member loan committee has been formed and is finalizing program policy and procedures as required by the DECD. It is anticipated that applications for the program will be accepted starting later this month. We will be providing further outreach to the community shortly with a pre-application checklist and required forms. Meanwhile, if you or someone you know is interested and may be eligible, please let us know by calling 207-324-9155 or by email at email@example.com.
Success Grows for Springvale Mushroom Company
It is clear that when the Sharood family decided to go into business together, it wasn’t just about business – it was about family. John Sharood, father of business partners Robert and Emily and husband of business partner Sandra, says, “We started this company for a couple of family reasons. Our family has always been interested in food, nature and in mushrooms in particular, but mainly as hobbies and activities. For about ten years I ran companies in the Boston area, commuting 150 to 160 miles a day every day. It was fun, but I never got to see much of my family. When Bob and Emily began working, they struggled to find jobs that were more than just a job, things that would be creative. I was tired of commuting and looking for something to grow locally.”
With John’s extensive background in business and start-ups, and with his son Robert’s development of a method to grow mushrooms in a controlled indoor environment, their dinner time conversations led them to explore a compelling market opportunity that also appealed personally: the specialty mushroom business. Daughter Emily volunteered to help, bringing her marketing background to the table, and the three jumped into it full time starting in 2011, forming Farming Fungi, LLC, which trades as Mousam Valley Mushrooms
and is based in Springvale, Maine. The company grows and harvests beautiful organic mushrooms year round in computer-controlled indoor growing environments that incorporate a repeatable and scale-able production flow monitored with process data tracking at every step.
Robert Sharood has a passion for sustainable farming, food safety, and fungi. His formal education focuses on business administration and he currently studies at Saint Joseph’s college, but Robert also studies and grows many varieties of mushrooms in their preferred natural environment: the great outdoors. He has translated the information he gathered from nature into a mushroom farming system which is the basis of the company's operations.
Robert now leads the Research and Development efforts and Quality Control protocol at Mousam Valley Mushrooms. The company distributes three varieties of organic oyster mushrooms year round via Hannaford’s stores and Whole Foods Markets across New England and has grown from three employees in 2011 to 11 employees today. Robert is currently planning expansions to the indoor mushroom farm, which will increase the quality, volume and variety of mushrooms produced.
John Sharood is CEO of Mousam Valley Mushrooms. John has a background in business consulting and new company start-ups. Prior to this, John led two management buyouts of high tech engineering companies. He previously led several different enterprise software businesses for Invensys Software Systems (ISS), and led ISS’ Business Development effort. Prior to joining ISS, John founded Invensys Network Systems in the home and commercial automation market. John was formerly Chief Financial Officer (CFO) of Invensys Appliance Controls, and of Bowman Distribution, Inc.
He began his career at GE, holding a variety of positions, including CFO of GE Power Controls. He led GE’s International Audit Staff based in London, England and led operational consulting projects, and participated in numerous acquisition and divestiture transactions while at GE.
John is a graduate of GE’s Financial Management Program and earned a BA, Magna Cum Laude from James Madison College of Michigan State University. He also holds an MSM in International Business from Purdue University and an MBA from Corvinius University in Budapest, Hungary. He is co-author of six patents in the controls automation field. He is also a volunteer member of the Facilities Committee of Maine Regional School Unit 21, and served as a publicly elected Director of RSU 21 for eight years.
Emily Sharood is currently Grow Manager at Mousam Valley Mushrooms as well as head of marketing for its products. As Grow Manager, Emily ensures an optimal crop environment at all stages of the mushroom’s life cycle while ensuring a safe organic product that has been processed, handled, and distributed under federal and state regulations. She is currently beginning the process in seeking a graduate certificate in Food & Science geared specifically towards mushrooms at the University of Maine Orono.
Emily has a background in marketing and design with a Bachelor of Science Degree from the New England Institute of Art. She has designed all of the product packaging, promotional products, and vendor signage. She is currently working on the redesign of the website, and has also created a consumer network through social media. She is looking forward to leading in-store sampling of their current and new products in the Hannaford and Whole Foods Market stores in the New England region.
Read the full company profile
on Mousam Valley Mushrooms on our website to learn more about this fascinating local business and to see photos of mushroom production in action!