Hey all - The following is a letter I sent to the editors at The Ledger Sentinel this morning. It is in response to this editorial.

Any thoughts?

In the December 21^st issue, the editorial board gave their objections to Illinois Senate Bill 2777. According the editors, if passed into law SB 2777 would, “prevent local government from negotiating fair fees from developers and would transfer that power to Springfield.”  “This”, the editor declares, “is a recipe for disaster.”

I’ve always held the opinion that competition between municipal governments causes many to make poor decisions regarding fees. Local governments will often reduce these fees or make sales tax givebacks to avoid negotiating lower fees. They do this to entice a developer to annex to their own village instead of the one next door.

In addition - Aurora, Montgomery, and Yorkville (notably not Oswego) have all financed infrastructure improvements through the creation of Special Assessment (SA) taxing districts. Under this kind of plan, instead of developers paying for improvements first, then recovering their costs through higher priced housing - residents pay for improvements through a special tax on their homes. This can create problems. Over the past three years, over 100 homeowners in Montgomery’s Lakewood Creek subdivision have had tax liens placed against their property for failing to pay these additional taxes. [Source] This can ultimately result in the homeowner losing his property. There are only 740 homes in the Lakewood Creek SA area - so that’s almost 1 in 7 homes – in only three years. Aurora has faced similar problems and Yorkville soon will. Talk about a recipe for disaster.

I’ve further held that the way to eliminate this competitive pressure is to create a State administered system whereby developers pay a fair and equitable fee to local school districts for each parcel developed. This would make givebacks, fee reductions, and convoluted taxing schemes unnecessary. The State sets the fees; the developer pays the fees, no matter which municipality is involved – case closed.

Of course, just because I support the concept doesn’t necessarily mean I support SB 2777. I’d want to read it first -so I did. Here’s what I found; Senate Bill 2777 does not interfere with a local government’s right to negotiate fees and it certainly doesn’t transfer that power to Springfield. It does quite the opposite; it reinforces that right by limiting the time a developer has to file objections to the fees. The bill is clearly designed to protect local governing bodies from untimely lawsuits. It does nothing else. 

You can read it yourself on the Illinois General Assembly’s website www.ilga.gov . Just type in the bill number into the search box on the left. This will give you a brief summary of the bills content. Then click on “Full Text” if you want to see the entire bill. In the case of SB 2777 the entire text is less than 3 pages long.

Am I reading the right bill? If so, maybe someone can clarify this for me. Just what is so objectionable about this proposal and how it could be interpreted as something so completely different than what it really is?

Jim, excellent letter.  I have a friend who happens to be a developer in Yorkville (residential and commercial) and I'll ask him his thoughts.

What I do know is his subdivisions promote the fact that they are NOT SSA.  He understands the problem, both from a public policy (homes being sold for back taxes not good for long term reputation) and a financial standpoint.  Marketing against SSA subdivisions is good if you can get people to understand the complex issue which isn’t always easy (see Grand Reserve in Yorkville).

I also know that he and others feel that several local municipalities have inconsistent tax & fee structures in place.  Yorkville in particular has been very slow in increasing fees to levels of other surrounding communities from what I understand.

The premise of the editorial appears to be that local communities good, Springfield bad.  I never like absolutes like that especially on complex topics like this.  In fact, this premise begs to question (hypothetically)...If Oswego is getting, say $10,000 in impact fees per home, and Yorkville is getting, say $3,500 per home...who exactly is being 'protected' from those vultures in Springfield?  Who is getting the long-term shaft from the local city council?  Why didn't the Ledger equally call for consistency in taxes and fees for developers from local communities, especially those that share a border (city, school district, park district, etc) and thus, common concern on issues of funding?

Thanks again...I'll try to get back to this thread soon.

All Hail King Tom  (isn't there a way to put a little crown on the facey guy?)

You're right though. When the developer doesn't have to collect all of the approprite costs, It keeps home prices artificially low. This robs the county of the property taxes that they would get if the home were correctly valued in the first place. .