Committee of the Whole Minutes
VILLAGE OF NORTH AURORA
COMMITTEE OF THE WHOLE MEETING MINUTES
MARCH 18, 2013
CALL TO ORDER
Mayor Berman called the meeting to order.
In attendance: Mayor Dale Berman, Trustee Chris Faber, Trustee Mark Guethle, Trustee Mark Gaffino, Trustee Laura Curtis, Trustee Vince Mancini, Village Clerk Lori Murray.
Staff in attendance: Interim Village Administrator and Police Chief Dave Summer, Finance Director Bill Hannah, Community and Economic Development Director Mike Toth, Water Superintendent Paul Young, Public Works Superintendent Mike Glock, Village Attorney Kevin Drendel.
AUDIENCE COMMENTS - None
TRUSTEE COMMENTS - None
1. Discussion on Building Permit Incentives.
Community and Economic Development Director Mike Toth said that in regard to the building permit incentives, the last program did not show significant gain. The idea of land/cash values is something Staff has been hearing a lot about through discussions with the Board, the public and the industry. Staff is looking at a reassessment of land/cash value fees. Toth said that a lot of temporary programs in other communities involve communities that are in a different situation than the Village. Those communities have higher vacancy and their programs focus a lot on impact fees.
Toth said that Staff does not want to look at a temporary solution which was not adequate when it was adopted in 2009. A proposal was submitted by Robert Dahlstrom and Staff will have more information at the next Board meeting regarding land/cash value fees.
Trustee Guethle asked how many empty lots were in the Village in 2012 and how many permits were issued. Toth said there were 280 vacant lots and 24 permits were issued. Guethle said that at that rate it would take the Village 10 years to build 280 homes.
Trustee Curtis said the Village budget shows that the actual beat the budgeted and projected amount of revenue for permits. In addition, the Village is budgeting an increase in permits for next year. Curtis said that the MLS and Kane County data indicate new home starts on the upswing and since trends are going up, the Village does not need to give money away. .
Trustee Faber said that the Yorkville plan gives the incentive check to the owner. Trustee Mancini said that if the true direction of the Board is to pass something to help bring people to buy a home and build in North Aurora, it is to give them the incentive and not the builder. Mancini said he was not in favor of the proposal as it stands.
Guethle noted that the reduction in the past came in the form of lowering the price of the house. Mancini said it is a better program to give the money directly to the homeowner.
Mayor Berman said there is a feeling that if the Village is working to improve development, the Village wants to spur development. This is an opportunity to do something the Village feels could have an effect on development. Berman added that he would like to see an increase in the number of homes built in the community.
Mancini said it is a good idea to give the incentive to the homeowner but not to the builder. Faber said he is not opposed to doing something, but not sure this is the right thing.
Adam Dontz addressed the Board with the following information:
Information from the Aurora Township Assessor shows that the Village has lost $36,095,501 of equalized value from the peak in 2009 to 2012, which is a 22% decline. MLS data of average home sales in North Aurora shows that the average home sales in 2012 was $280,450 and that has declined to $211,383, a 25% drop. Dontz asked that the Village look at the entire fee schedule in correlation to the actual value of the housing. Dontz said he had heard a lot of comments about a lack of a trend and therefore a lack of success for the last building permit fee reduction. Dontz said it was very short in duration (8 months).
In 2011 the Village issued 17 building permits, and in 2012, 24 building permits. Yorkville has had a sustained fee program for a number of years and did 69 permits last year. Shorewood: 78, Plainfield: 112. Dontz said that there is some delineation between impact fees vs. building fees. What is the bottom line end cost of a building permit? Permits are actually being issued the absolute dollar cost in line with the temporary reduction granted.
Guethle asked if the fee reduction went to the homebuyer in the past. Dontz said there are a number of ways to apply the reduction and one is to lower the base price of the home. Dontz said there has been discussion as to whether or not $6500 is enough to sway a buyer. Dontz said that when it is done in conjunction with the different sales incentives a builder offers, it is, with mortgage interest buy downs. Dontz noted that when the incentive is given directly to the homebuyer, they are taxed on that income. In the Yorkville program, they do not issue the check until after the closing, so the homebuyer cannot use that for closing costs, interest rate buy down or anything related to the purchase of the home.
Curtis said it appears that the builder is looking for a tax break and the Village should not have to give the builder a tax break for something the market will correct in increased demand. Curtis added that this is not the right move for the Village.
Faber asked about the percentage of increase for Montgomery, Batavia and Aurora. Toth said he spoke with Geneva and they did not need the incentive program since they are built out. Faber asked for a comparison with those communities.
Faber asked about the vacancies in Yorkville. Toth said there are 7400 single family lots and 21% of those have been constructed. Yorkville issued 69 permits last year. Faber noted that the Village has 300 vacant lots and issued 24 permits last year. Geuthle asked about numbers for Sugar Grove and Elburn. Toth said he would have to look into that and get back to the Board.
Mancini said he wanted the builder to come to the Village and let the Village know what they are willing to do if they get the break. Dontz said that is something he could definitely work on.
Guethle said the proposal is a temporary measure and he was in favor of seeing it move forward.
Mayor Berman said that discussion would continue at the next meeting.
Motion to adjourn made by Trustee Guethle and seconded by Trustee Faber. All in favor. Motion approved.
Lori J. Murray