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Elimination of impact fees concerns OES

Fees used to offset cost of more students, elimination meant to spur development

Ottawa Elementary School District officials are concerned about being left with less cash and more students if the city temporarily ends impact fees to spur new residential growth.

City Commissioner Tom Ganiere suggested during a council meeting last week to place a moratorium on the fees, which are used to offset the costs associated with an increased number of residents to nearby parks and schools, in an effort to attract interest in new subdivision development.

Superintendent Cleve Threadgill, Board President Mark Fisher and Board Member Ron Henson met with Ganiere during a board committee meeting at City Hall and expressed concern that a large influx of children and no additional money from the fees may make it difficult to maintain business as usual.

Threadgill invited the city council to tour McKinley Elementary School “to see how tight it is” currently.

“We would be in favor of expansion and more homes and we would be in favor of the tax revenue but we also have to look carefully at the brick and mortar and if we’re going to have a large influx that’s going to cost money,” Threadgill said.

New subdivisions could lead to more costs for district

Threadgill said additional costs could come in the form of requiring a new bus at about $100,000 or possibly requiring a new teacher and classroom for younger students and thus would require an expansion.

The elimination of the impact fees was suggested at an earlier council meeting as Gainere had spoken to three developers in town who cited the fees as a “significant stumbling block.”

“That’s, in this current climate, cost prohibitive for a developer to start opening up a new division and we sorely need lots to build on,” Gainere said.

Ganiere suggested that the district will see increased money from the taxes associated with newly developed property.

New subdivision means more returns from property taxes

Ganiere estimated the district would receive $1,000 per lot in a newly developed subdivision within the district but both parties would see more long-term in property taxes.

“I don’t want to harm the school district but we have to do a balancing act here,” Ganiere said. “If the property doesn’t get developed then both you and I are collecting property taxes on vacant land which is minimal. If it does get developed then both you and I are increasing significantly the property taxes we collect.”

The school district is not currently receiving money from impact fees as there has not been substantial development, but any money associated with property taxes would take a couple years to roll in and would not be acquired immediately.

Ganiere has not spoken with interested developers specifically regarding how many new lots could be possible by the next year’s building season but estimated an additional 30 units were possible at both Pembrook and Briarcrest subdivisions.

He added any development in the school district would likely be on the South Side.

“The potential for residential development in the Ottawa school district is pretty much all south,” Gainere said. “There’s other potential outside the district but with Ottawa (school district) it’s pretty much the South Side.”

Fisher asked whether the city had considered paying the impact fees to the schools, but Gainere said it was unlikely.

City could reduce impact fees for schools, rather than eliminate

Threadgill asked that the school district be brought into the conversation as it continues and hopes to “work with the city” regarding the future of impact fees.

He said the school district will receive more money from the developed property but will likely also require additional funds from either impact fees or the average taxpayer if subdivision growth occurs at a large rate.

Both parties acknowledged that it’s difficult to determine what sort of homeowner would move into the area and how many of those homeowners will have students.

“It’s true that more students can bring us a little more money in the funding formula but it’s not going to cover the cost it will take to add on or build,” Threadgill said.

Following the meeting, Gainere said while he still believes the impact fees paid to the city for parks as well as water and sewer connections should be eliminated, he’s open to only reducing the impact fees that go toward the schools.

Gainere said the Ottawa City Council will likely return to the discussion in September or October in order for developers to start building in 2019.

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