The Kaneland School Board and the Elburn Village Board last week completed an Intergovernmental Agreement (IGA) that governs the collection of land/cash and capital impact payments that will be paid to the School District as new development enters the village.
This is a vital step toward securing a known amount of incoming fees to help offset the cost of new development to the school prior to the potential passage of the Elburn Station development in Elburn. Absent an IGA, potential existed for land/cash and capital impact payments to be on the negotiating table as part of the final negotiations for the development that would significantly add to the size of the village.
With the fee schedule now in place and agreed to by both the Elburn Village Board and the Kaneland School Board, the fees are pre-determined, and also provide a measure of stability for both parties.
The stability exists because any future developers—as well as future board members—will know in advance what the fee schedule will be, eliminating it as a negotiating point and creating a “race to the bottom” as developers try to negotiate with multiple municipalities in an attempt to find the best deal. For the existing fee schedule to decrease, the Kaneland School Board would first have to enter into an IGA with another municipality that contains the lower fees, and then, in a separate action, approve of a revised IGA with Elburn.
In other words, Kaneland would have to agree to any fee schedule lower than the one currently in place, which gives the School District a say in the negotiations for future development. Absent an IGA, Kaneland had no official voice and could merely suggest to municipalities a fee structure that the district had no authority to put in place.
Prior to Jan. 1, 2012, Kaneland had a joint IGA with all of the municipalities inside the School District, but it fell apart when Sugar Grove declined to extend it.
Hopefully, the IGA signed by Elburn and Kaneland will lead the other Kaneland municipalities to also sign on, as well. We believe that creating a situation in which school impact fees are equal throughout the Kaneland School District is vital, because scenarios in which the Kaneland municipalities use school impact fees as a bargaining tool will merely harm all existing and future residents. It will simply create a race to the bottom, risking creating a scenario in which the financial challenges faced by the School District will continue well past the existing economic slump.
We urge each of the Kaneland municipalities to consider joining the existing IGA as soon as possible.