Last week, we reported that the village of Sugar Grove voted to extend its Intergovernmental Agreement with the Kaneland School District for one year.
The agreement, which was set to expire in January, creates a scenario in which the village would charge a set of agreed-upon impact and transition fees to developers, collect them and then turn them over to the Kaneland School District. These fees exist to prevent current residents from subsidizing the costs of new growth. Because it can take up to 18 months for new growth to pay for itself, the fees are there to provide the funding that fills in that gap of time.
The key to this agreement is that every village within the district, of which there are many, complies with the same schedule of fees. If one of the villages fails to join the agreement, then the agreement may as well not exist, because incoming developers can play one village off the others to get the best deal. And if one of the villages chooses to be aggressive in that hypothetical competitive scenario, those school fees could ultimately be eliminated entirely.
To prevent that situation from occurring, Kaneland had reached a new agreement with every municipality other than Sugar Grove, before its officials pushed to reduce the impact fees—which go to “brick-and-mortar” activities—and eliminate the transition fees—which go toward school operations.
Rather than negotiate the new terms beyond the life of the current agreement, the parties agreed to extend the current agreement for one more year while they negotiate for the future.
We are glad to see that this compromise was reached, since having no agreement in place at all could prove disastrous to all School District residents in the future. For example, if Sugar Grove had reached an annexation agreement with a developer with no intergovernmental agreement in place at the time, the potential reduction or elimination of school fees would be in place for the life of that development. For many large-scale developments in the past, that could mean for as long as 10 years and hundreds of homes—as well as hundreds of new students—and current Kaneland residents would have to foot the bill to cover the 18-month gap.
While we are glad that this compromise was reached, we hope that during the upcoming negotiation on the new agreement, local officials refrain from sacrificing the long term in the hopes of gaining a short-term benefit.
From an economic standpoint, there are few thoughts more frustrating than the idea that as our local residents begin to emerge from our current economic doldrums, they suddenly get hit with new costs as they subsidize a new round of growth because there were not adequate impact fees to protect against it.