Kaneland District Looking to Change Impact Payment Agreement

The Kaneland School District is looking to change the way impact fees and other costs are paid. But school officials say their new proposal shouldn’t cost municipalities any more money.

Kaneland has proposed a five-year deal with the towns it serves: Elburn, Virgil, Sugar Grove, Maple Park, Kaneville, Cortland and . The idea, according to Superintendent Jeff Schuler, is to get everyone on the same page: the seven municipalities previously all had different ways of handling impact payments and land/cash agreements.

The intergovernmental agreement will cover two types of payments from local governments to the school district. Impact payments are intended to offset the cost of educating an expected number of children in each new home, and are paid when the permit for a new house is issued, Schuler said.

Governments charge developers impact fees—which are also used to pay for new infrastructure, like water and sewer lines, needed for new homes—and they pay the district out of this money. Kaneland’s impact payments are determined through a complex table set up by Northern Illinois University’s Center for Governmental Studies, Schuler said.

The second type is a land/cash agreement, a one-time set-aside for the school district when a government annexes land into that district. This payment can come in the form of land, on which the district may build a school, or an equivalent amount of cash. Developers ordinarily pass both types of payments on to homebuyers.

These payments to the district would only occur if a new subdivision project were annexed into the village. It would not impact current subdivisions in the Kaneland district, like Foxmoor.

All of this money, Schuler said, goes into Kaneland’s capital improvement fund, to pay for the construction of new schools and new district buildings. He said there are no such projects on the horizon.

In Montgomery, the new agreement would replace a one-year deal that expires at the end of 2011. There are two significant changes to the agreement, Schuler explained, and they should even out, costing the village no more money.

In the previous agreement, Schuler said, the district had agreed to drop its impact payment to 60 percent of what it would be owed.

“As the economy shifted and home building slowed down, there were concerns expressed that the impact payments were too high,” Schuler said, adding that these concerns came from both developers and municipalities.

The new agreement puts that total back to 100 percent, with a cap of $2,500. But Schuler said that would be offset by the second change: the transitional payments have been eliminated.

Transitional payments, he said, are meant to help the school district get through the lag time between homebuyers purchasing a house, and sees the full value assessed. The district still educates the children during that time, but it’s often months before they see any payments for it, Schuler said.

He said the district has decided it can do without that fee, as long as it gets 100 percent of the impact payment.

The new deal drew confusion from trustees at last week’s Committee of the Whole meeting, with Trustee Pete Heinz being the most vocal.

“The way the economy is, and they want to raise that (impact payment)? I can’t agree with that,” he said.

Schuler said the agreement has met with similar concerns in other communities, which is why the Kaneland district has set a meeting with all the municipalities on Oct. 31 to go through it. Though a vote was scheduled for Monday in Montgomery, it has been postponed until after that meeting.

Village Manager Anne Marie Gaura said there are three school districts in high-growth areas of Montgomery: Kaneland, Oswego and Yorkville. The first two use a formula to determine impact payments, she said, while Yorkville gets a flat fee of $3,000 per new unit built.