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School committee talks builder impact fees : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
School committee talks builder impact fees
Need to update land values on which fees are based discussed

by Lyle R. Rolfe


Individual builders and developers have been contacting the Oswego School District about residential developments in the district, so Dr. Paul O'Malley, associate superintendent, said he believes it is time for school officials to discuss impact fees.

Impact fees are fees residential developers pay to school districts to help them offset the cost of buying land, building new schools and educating children who come from new homes constructed in the school district. The fees are set by villages and cities located within the school district's boundaries.

O'Malley said he wants to have an up-to-date package of fees ready to give developers when they talk to the board. As a result, he asked Karl Ottosen, an attorney for the school district, to discuss the fees Monday night with members of the district's Citizens Advisory Board on Finances and Operations. This board has no power, but can make suggestions to the board.

Ottosen's firm represents the school district and the Village of Oswego. The school district encompasses a 68 square mile area and also serves sections of Montgomery, Aurora, Joliet, Plainfield and Yorkville.

Ottosen said the current per acre value on an improved acre of property was set in 2006 with a four percent escalator each year starting in 2007 or 2008. Improved means utilities would be extended to the land so it would be ready for development.

"At that time (2006), it was $110,000 per acre and it is now up to $144,000, and is expected to go up another four percent to almost $150,000, as of Jan. 1," he said.

"During the past five years, by village resolution, it's gone up 20 percent where everybody elses property has gone down by 40 percent, so it's kind to hard to say that's a valid number," he added.

Ottosen said according to the village ordinance, if a developer disagrees with the valuation given his property, he can file an official objection. If the village doesn't change the value, the case goes to court, he said.

The school district and other taxing bodies that would benefit from the impact fees are the ones who pay the attorney fees for the taxing bodies that would be supporting the fees in the ordinance. In addition to the school district and village, the agencies also would include fire, park and library districts.

"If this were to be challenged at $145,000 or $150,000 per acre of improved land, the attorney's handling the case would have a very difficult time proving it," Ottosen said.

Greg O'Neil, committee co-chairman and school board member, asked if the value was on the property the developer was looking at or the average value of lots in the entire village.

Ottosen said the developer would be challenging the value being placed on his property.

"If they only paid $20,000 an acre for unimproved land or they've come in and taken over property that was on the books to be developed, and has the subdivision all ready to go, and they bought it at a much lower dollar value than the last owner did, that's going to be a sale that comes into the appraised value of the property," he said.

Ottosen said the district would have to hire appraisers to see if the developer's figures were right.

"You can't just rely on the developers' number so you have to get your own appraisal and it becomes a battle of the experts," he said.

Actual cash comes into play when a school district says it does not need land in a development for a school, but wants the per acre value in cash.

O'Neil asked if improved meant all utilities such as water, gas, electric, lighting, sewer, roads and other utilities to which Ottosen said yes.

Ottosen said the village engineer sets a value on these items, which would be added to the raw land value. He said that from what he has been told, the value of these improvements and the cost of the raw land would not total $150,000 today.

One committee member asked if there had ever been any challenges. Dr. Paul O'Malley, associate superintendent, said one of the local communities challenged a developer but came to a settlement before it went to court.

O'Malley said this is beyond the district's control, adding that the village should be looking to expand new businesses in the district to generate additional property taxes.

Ottosen said the village sets the values, but said the affected taxing bodies can present their own appraisals to the village before it sets a value.

O'Neil said the developers probably would challenge any figure suggested by the school district, but Ottosen said this was not certain because there had not been a study of land values since 2006.

He said village officials also are looking at this and will not make any decisions without talking to the affected taxing bodies.

O'Neil said they should ask the village to help pay for an updated study of land values since they also will benefit.

O'Malley said he has given information with options to school board members, but no decisions have been made.

In his recommendation, O'Malley said that because the district serves parts of Kane, Kendall and Will counties as well as the cities and villages of Oswego, Aurora, Montgomery, Plainfield, Yorkville and Joliet, the school district administration will need to be involved in any and all reviews by these counties and municipalities.

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