The Lockport City Council took time to assess what action to take in reducing school facilities impact, municipal impact, and water and sewer tap-on fees at its Dec. 6 meeting.
“I know there’s some anxiety out there over this issue,” Mayor Steven Streit said.
The idea of reducing the fees was first presented to the council at its Nov. 1 meeting, at which point no school officials were in attendance. Officials continued the discussion at their Nov. 15 meeting.
Representatives from Homer Community Consolidated School District 33C and Fairmont School District 89 were on hand at the Dec. 6 meeting.
Streit acknowledged that there is a debate between the City and school districts over how much to adjust the facilities impact fees and said this matter should have been dealt with long ago.
Municipal codes stipulate that the fees are to be used by school district’s to pay for new school buildings, building additions and improvements, school site improvements, and related infrastructure expenses incurring with anticipated and continued growth in the student population. With the downturn in the economy and a drop in the building of new homes, the City staff noted that funds continued to be issued.
“We have no idea how the monies been used, and if it has been used for instead of capital and has been transferred over to operational,” Third Ward Alderman Darren Deskin said.
Over the years, the City determined that oversight was lost.
“We have not done that,” said Christi Tyler, assistant superintendent for business for Homer 33C.
Tyler outlined the various ways the school district is working with the city to support Lockport residents and said costs incur not only at Butler School, which is located in Lockport, but also those enrolled at Homer Junior High, Schilling and Hadley schools based in Homer Glen.
“I can tell you that Homer 33C has collected about a million dollars in land cash and facility [impact] fees … from Lockport subdivisions, alone, since 2005,” Tyler said.
Developers had petitioned the City of Lockport to reduce its school facilities impact fees to encourage new development.
The council’s discussion and action was also predicated on the fact that nearby communities, Homer Glen and New Lenox, issue lower school facilities impact fees.
Streit touted the fact that Lockport has worked hard to bring new businesses to industrial areas in town to offset the impact of development on school districts.
Tyler said while it’s important for the city to consider its desire to attract new developments, it’s also worth it to pay attention to how adjusting the fees will impact the school districts and their preparedness for change.
Homer 33C, like many school districts, is anticipating the possibility of a multi-year property tax freeze being implemented by the State of Illinois.
Tyler acknowledged that a majority of the district’s impact fees are collected from Lockport and suggested that the council seek a 40 percent reduction, instead of 80 percent.
For fiscal year 2017, Homer 33C received roughly $127,000 in school facility impact fees from the city.
“For me to be comfortable with that, which I’m not, and say that the new property tax revenue from three warehouse buildings that are over in Homer 33C, which generate the numbers the mayor gave you were not even fully assessed numbers, it’s $295,000 that Homer 33C collected,” Deskin said.
Streit contended that Lockport and Homer 33C are arguing over a 20 percent difference and said the money the city is replacing with industrial growth offsets that.
In a pair of 6-1-1 decisions, the council came to consensus to make some changes. Alderman Jim Petrakos abstained, and Alderwoman Catherine Perretta cast a dissenting vote.
Beginning in July 2018, an 80 percent reduction will be applied to the school facilities impact fees, as well as 40 percent decreases in the municipal impact and water and sewer tap-on fees. Council action also eliminated the annual escalator fee, enacted in 2004. What that means is a $4,452 reduction is applied to a four-bedroom home in school facilities impact fees and another $7,200 for the City’s municipal impact and water and sewer tap-on fees.
Property tax levy of $6.3 million approved
Also at the meeting, officials adopted an ordinance for the levying and assessing of 2017 taxes owed to the City.
The funds, as requested, will help pay for Lockport’s operations for the 2018 calendar year, and it includes $898,800 in bonds and interest.
State law stipulates that a taxing body’s levy cannot exceed the consumer price index, or the rate of inflation, for the prior year, plus new growth.
For Lockport, the consumer price index amounts to 2.1 percent. Will County will not have finalized figures for new growth until the spring of 2018, though estimates show building activity and annexation of property valued at $42 million, to date.
Lockport has an estimated increase of $79 million of existing equalized assessed valuation of property this year. As a result, the city anticipates that its estimated tax rate decreases from 0.91 to 0.87. That change in value is predicated on how a property owner’s equalized assessed valuation changed last year.
Projections show a $250,000 market value house pays $7.96 less in 2017 property taxes to the City.
A public hearing was held at the council’s Nov. 15 meeting in correspondence with another law that requires a taxing body to satisfy this aim if the levy, excluding the debt portion, exceeds the prior year’s extension by more than 5 percent.
The City is required to meet the Will County Clerk’s Dec. 26 filing deadline.