The Census Bureau, in a special census requested by the City of DeKalb, counted 540 school aged children in the new subdivisions. When DeKalb’s Community Development Director, Russ Farnum, applied the Article 8 formula to the actual Census Bureau count those 540 students were exaggerated into 945 students.

EXHIBIT THREE: This table shows how DeKalb Community Development Director, Russ Farnum, applied the ISCS Article 8 formula to the U.S. Census Bureau actual count of school aged children in targeted new subdivisions in DeKalb. The City of DeKalb paid $85,000 for this study:

The DCBDA is currently reviewing requests for proposals from firms to formally appeal under the guidelines of Article 8 and conduct a demographic study on all new subdivisions in DeKalb. However, we are confident in the ability and reliability of the U.S. Census Bureau. The City of DeKalb paid $85,000 for this Special Census and deliberately chose new subdivisions  because they wanted the revenue produced by increased population. We believe the City of DeKalb has accurate data from the Census Bureau that, if applied to the impact fee formulas would result in a reduction in school and park impact fees, not an increase.

City Staff maintains the difference between the ISCS projections and the actual Census Bureau count is negligible and our concerns immaterial. The exaggeration of 405 students multiplied by the $8,050 per student operating expense amounts to a $3.2 million over statement of operating expenses. When the formula is properly applied to the Special Census count, it results in a $7 million dollar overstatement of school capital costs when compared to Russ Farnum’s application of the Article 8 formula to the Special Census count. A total $10-plus million overstatement of costs is not immaterial. It is structurally, and legally, flawed.

EXHIBIT FOUR: This table uses the same percentage of grade level as the ISCS student projection formula used in Article 8 to project the number of students in each grade level. When totaled, the number of students equals 540, which is the same as the U.S. Census bureau count:

The recommendations made by staff are in omnibus form which means a single vote is required to pass all of these proposed fees. Staff maintains the position that these fees, in their entirety, are simply structured as annexation agreements, and are therefore, according to City Legal Division memo 05-CA-27, legally defensible, if structured properly. That's a really big if.

The DCBDA stands firm that there are serious legal implications in this position. The proposed park impact fee increase, based on structurally flawed population projections, are in ordinance form as 8 point 0 2, and therefore cannot be implemented as an annexation agreement. I also refer you to Community Development Department Memo PC112- 05, that states that land valuations were amended to 75 thousand dollars per acre, in 2002, by ordinance 02-68, and that, by that same ordinance, the school and park districts agreed not to request changes to the land value, until after July 1, 2007.

Yet the Park Board has requested, and staff has granted, reviews of the land value as well, and has requested an adjustment to $100,000 per acre. The net resulting land cash fee for a 4 bedroom home would increase to $4,378.05, almost tripling the current fee of $1,570.39.

Staff recommends that these fees apply to already annexed land that may seek zoning changes. This recommendation completely destroys Annexation Agreements as the legally defensible method to impose these fees. (NOTE: The City Council is considering "grandfathering" -not applying the proposed fee increases to- land currently zoned commercial/industrial that would be changed to residential, if the final plat for doing so is properly recorded before July 1, 2006)

The proposed impact fees are not proportional to home values, or to occupants’ incomes. The owner of a three-bedroom $100 thousand house is assessed the same impact fee as the owner of a $500 thousand three-bedroom home. Since low-and-moderate-income families pay more of their incomes toward housing to begin with, these impact fees will cause a larger proportional increase in housing costs for less-affluent families, and therefore are regressive in nature. The problem becomes even more severe when we extend fees to public services that traditionally have been provided to offer equality of opportunity without regard to the ability to pay.

The affordability concern is magnified by the Chicagoland Metropolis 2020 report, conducted by the Suburban Mayors Caucus, that identified 730 thousand families, in the six collar counties east of us, who are on mortgages that exceed 30 percent of their household income. Many of these are on adjustable rate mortgages, and interest rates are rising. This report also identifies a crisis-level glut in expensive large homes, on large lots, unsold on the market, and a severe need for workforce affordable housing. Our builder members are already reporting price resistance at the 300 thousand dollar level. The absorption rate is deteriorating. Adding more than 23 thousand dollars to the upfront, non-construction related costs of a home, cannot help with the affordability issue.

EXHIBITS 5-6: A severe glut of large expensive homes throughout northeastern Illinois. Local residents feel the pinch of the lack of affordable housing:

We agree with Plan Commission member, Vince Frye, who believes that this proposal is a piling on of fees. We concur with Mr. Frye that there needs to be a prioritizing of these fees. The DCBDA does not envy the position the City of DeKalb finds itself in, but it is your responsibility to prioritize these fees. This association would support a system of Annexation Agreements that are based on structurally sound principles. But this proposal is not structurally sound.

EXHIBIT 7: The piling on of Impact Fees: