Title/Name/Summary
Homeowners Association (HOA) Facility Transfer and Voluntary Annexation Program
History
Over the years, developers have constructed subdivisions with privately owned infrastructure that was intended to be owned and maintained by a Homeowners Association (HOA). These improvements often include:
• Private streets with non-standard widths, curb designs, or pavement sections.
• Decorative street lighting and light poles.
• Sidewalks and pedestrian pathways that do not front individual homes or provide connections within the subdivision.
• Stormwater detention and retention facilities designed to manage runoff, reduce flooding, and protect downstream waterways and adjacent properties.
As these subdivisions mature, infrastructure ages, maintenance costs increase, and HOAs often seek to transfer ownership and maintenance responsibilities to the Village. In many cases, residents are also interested in voluntarily annexing into Orland Park to receive Village services and become part of the community.
To provide a consistent and transparent approach, staff is proposing a coordinated framework consisting of an HOA Facility Transfer Program and a Voluntary Annexation Program. While the two programs are complementary and may occur simultaneously, each can also function independently depending on the circumstances of a particular subdivision.
HOA Facility Transfer Program
The HOA Facility Transfer Program establishes a standardized process for evaluating requests for the Village to assume ownership and long-term maintenance of HOA-owned infrastructure. The program provides a transparent, financially responsible, and consistent review process that evaluates feasibility, long-term maintenance obligations, and regulatory compliance.
The proposed process includes:
1. HOA Inquiry: The HOA contacts Public Works expressing interest in transferring facilities to the Village.
2. Application: Public Works provides a no-fee application for the HOA to complete. (See attached PW SOP and Application Form)
3. HOA Authorization: The HOA submits the application, including documentation demonstrating that at least two-thirds of the HOA membership supports exploring the transfer and the creation of a Special Service Area (SSA) or Special Assessment (SA) as the case my be, if required.
4. Technical Review: Public Works conducts an engineering evaluation of the infrastructure, identifies improvements necessary to meet Village standards, estimates long-term maintenance obligations, and coordinates with Development Services on regulatory requirements.
5. Financial Analysis: Finance prepares an analysis of the required capital improvements, ongoing maintenance costs, and estimated SSA or SA assessment for each property. The information will be shared with the HOA.
6. HOA Decision & Agreement: After reviewing the financial analysis, the HOA determines whether to proceed. If so, the Village Attorney prepares a formal agreement outlining the terms of the transfer and the HOA's support for the SSA or SA.
7. Village Board Review: Once the HOA signs the agreement, Development Services schedules the transfer agreement, facility transfer, and SSA/SA on the Committee and Board agendas for consideration. Acceptance of the facilities is contingent upon approval of the SSA or SA.
Because these improvements primarily benefit the residents within the subdivision, staff recommends utilizing a SSA or SA to fund both the initial improvements required to bring the infrastructure up to Village standards and the long-term maintenance of those facilities.
An SSA or SA ensures that the costs of infrastructure improvements and ongoing maintenance are borne by the properties that directly benefit from those improvements, rather than by Village-wide taxpayers.
Voluntary Annexation Program
The Village has recently received several inquiries from neighboring subdivisions interested in voluntarily annexing into Orland Park. Recent examples include Tampier of Palos Park, located near Wolf Road and 131st Street, and Brittany Glen, located near Our Lady of the Woods Church on 131st Street.
Residents have identified several reasons for seeking annexation, including:
• Access to Village amenities and services.
• Lower refuse collection costs.
• Potential increase in property values.
• Connection to Village water and sewer services.
• Village maintenance of local streets and snowplowing services.
• Police services.
• Opportunity to dissolve an existing HOA.
The Voluntary Annexation Program establishes a consistent process for evaluating annexation requests and includes:
• Confirmation by Development Services that the annexation request satisfies all applicable Illinois statutory requirements.
• Evaluation of existing infrastructure by Public Works, where applicable.
• Identification of any infrastructure improvements necessary to meet Village standards.
• Consideration of funding mechanisms, including a SSA or SA, where initial capital improvements such as roadway or utility upgrades are required.
• Negotiation of an Annexation Agreement.
• Review and approval of the Annexation Agreement and annexation by the Village Board.
Where initial infrastructure improvements are required, the Village may advance construction costs, with the benefiting property owners repaying those costs over an established period.
Land Development Code Amendment
Should the Village Board wish to establish these programs, staff will prepare the necessary amendments to the Land Development Code, including the addition of the Homeowners Association Facility Transfer Program to Section 5-112 - Development and Subdivision Requirements. The proposed amendments will be presented to the Plan Commission for a public hearing and recommendation before returning to the Village Board for final approval.
Financial Impact
Staff time.
Recommended Action/Motion
I move to direct staff to prepare the necessary Land Development Code amendments and administrative procedures to establish a Homeowners Association (HOA) Facility Transfer Program and a Voluntary Annexation Program, as presented.