Title/Name/Summary
Build Orland
History
The ‘Build Orland’ program was adopted by the Village Board of Trustees on February 15, 2010. The goal of the program was to encourage new growth and development through the temporary reduction and deferral of permit and impact fees.
In summary, commercial projects received a 10% reduction in permit/impact fees and a 50% reduction on water tap fees. New residential projects received a 25% reduction on permit/impact fees and a 50% reduction on water tap fees. In addition to these direct financial savings, projects were also allowed to defer the payment until final occupancy. Projects with pre-existing incentive/inducement agreements (i.e. sales tax sharing) were not eligible for the program.
The Results - March 15th through November 8, 2010
A total of 166 projects benefitted from the program, with an overall financial savings of $153,171. Commercial projects totaled 149 (YTD) and included both new construction and remodels/additions. The majority of commercial projects chose not to defer payment.
New residential projects totaled 18, including 1 new townhome building (9 units). The total savings for new residential projects is $79,771 (YTD). Additionally, all of the residential builders/owners took advantage of the deferred payment option. Therefore, the majority of these permit fees will be paid in 2011/2012 - at the time of final inspection/occupancy.
Program Recommendations for 2011
Based upon builder/contractor feedback and staff analysis, it appears the program had the greatest benefit on our local residential builders. They had the highest utilization rate for payment deferrals. Feedback from these builders also suggests that the savings did make a difference in their decision to move forward with construction.
On the contrary, feedback from the commercial contractors indicate the program did not play into the decision to move forward on construction projects. While they were pleased with the savings, the projects would have proceeded forward regardless of the program. Based upon this information, staff is recommending renewal of the ‘Build Orland’ program for new residential permits only.
Staff is also recommending a minor clarification, as it relates to existing annexation/development agreements. The intent of the program was to exclude projects with incentive/inducement agreement; however, development/annexation agreements were not part of this exclusion. Since many of these already have building/impact fees set by agreement that are significantly less than current code fees - staff is recommending exclusion of these for the 2011 program, as well. This eliminates the possibility of receiving two discounts in permit/impact fees. Residential builders/developers will be given the choice between what is set by their subdivision agreement or the Build Orland program - whichever results in the greatest savings to their project.
On November 15, 2010, this item was reviewed and approved by the Development Services and Planning Committee and referred to the Board for approval.
Financial Impact
The budget impact of this program has been included in the FY2011 budget as an estimate and the actual impact will depend on the number and types of permits issued.
Recommended Action/Motion
I move to approve and extend the ‘Build Orland’ program for the FY 2011, for new residential permits, as fully referenced above.