ORRINGTON – Selectmen in town are so concerned about the potential effects of the Palesky tax cap on the community that they decided Monday to create a committee to look into “the guts” of the matter.

“It certainly will have a devastating impact on the town and the school and we should be prepared,” Chairman Paul White said. “I do believe it will have a major effect on services provided and employees.”

Center Street School Superintendent Allan Snell and Kay Allcroft, chairwoman of the Orrington school board, will be asked to sit on the committee with White, Smith and Selectman R. Trevett Hooper.

The so-called Carol Palesky initiative, which is set to go before voters in November, would cap property taxes at $10 per $1,000 of assessed 1996-’97 valuation. It also would limit assessments to an increase of only 2 percent a year as long as the property remains in a family.

Part of the tax cap would roll back property values to their 1996-97 level but this rollback already has been deemed unconstitutional by the Maine Supreme Judicial Court, so it may be eliminated.

Because of the confusion over which property values will be used, if the initiative is passed, there are a lot of numbers floating around, Town Manager Dexter Johnson said.

“The bottom line is there is going to be a significant impact on municipalities,” he said.

Under the tax cap and using current property values, Orrington would lose approximately $1.4 million or approximately 31.6 percent of this year’s budget amount.

“Be ready to take this issue to the town to explain to them its effect,” White said.

In other business, White told residents that the town and company officials from Penobscot Energy Recovery Co. are working together to cut the smell of the waste-to-energy processing plant.

“It’s supposed to be odorless,” White said. “Odors are unacceptable. I’ve had a couple complaints in recent weeks. These have not gone unchecked and have not fallen on deaf ears.”

There have been years of frustration over the lack of action when dealing with the smells coming from the plant, White said.

A new procedure requires a town and company official to meet at the site of any reported odors to review the situation; a phone call to PERC will activate the procedure.

Residents with odor issues should first call PERC at 825-4566, ext. 24 or 25, and then the town hall at 825-3340 to make a report.

“Something needs to be done and we’re going to do it,” said White, who added PERC officials are being cooperative and “want to be good neighbors.”

At the meeting, selectmen also:

. Set Oct. 12 as a public hearing date to discuss new sewer billing. The meeting will be held at the Center Street School and will begin at 7 p.m.

. Approved the annual contract with Town Manager Dexter Johnson with a $46,105 salary and benefits package, which is the same amount as last year.