City Council

MINUTES CITY OF DEKALB CITY COUNCIL COMMITTEE OF THE WHOLE MEETING AUGUST 8, 2016 The City Council of DeKalb, Illinois, held a Committee of the Whole meeting on August 8, 2016 in the City Council Chambers of the DeKalb Municipal Building, 200 South Fourth Street, DeKalb, Illinois. Mayor Rey called the meeting to order at 5:02 p.m. A. ROLL CALL City Clerk Jennifer Jeep Johnson called the roll, and the following members of the City Council were present: Alderman Bill Finucane, Alderman Michael Marquardt, Alderman Bob Snow, Alderman Kate Noreiko, Alderman Tony Faivre, and Mayor John Rey. Alderman David Jacobson arrived at 5:04 p.m. Alderman Dave Baker was absent. Also present were: City Manager Anne Marie Gaura, City Attorney Dean Frieders, Finance Director Cathy Haley, Police Chief Gene Lowery, Fire Chief Eric Hicks, Community Development Director Ellen Divita, Human Resources Director Cris Randall, Principal Planner Jo Ellen Charlton, Economic Development Planner Jason Michnick, City Engineer John Laskowski, and City Clerk Jennifer Jeep Johnson. B. ITEMS ALSO ON THE REGULAR AGENDA There were none. C. CONSIDERATIONS 1. Policy Discussion on an Incentive Program for New Home Construction. Economic Development Planner Michnick introduced the topic, stating that in response to the Sanitary District’s program, the City sought to develop a plan to examine impact fees and how they might be reduced in order to attract new construction to DeKalb. He told Council that City staff are proposing to waive certain fees 100%, including water hookup fees, and more. Additionally, Economic Development Planner Michnick proposed a $1,000 sales tax rebate. He explained that residents would bring in sales receipts from new purchases for their homes, and it would be rebated up to $1,000. He explained that this incentive program would strictly be for new construction in specific neighborhoods over the next 24 months, and expects this program will take some time to get rolling. Committee of the Whole Minutes August 8, 2016 Page 2 of 5 It was clarified that the impact fees waived would only pertain to the City’s portion of the fees. Other taxing bodies are required to take specific action as to their fees. Alderman Noreiko asked whether there was any data to suggest that this kind of program is successful; a clear correlation that lowering these fees will spur home development. Economic Development Planner Michnick responded that the studies did not specifically address this issue, but the impact fees can have a negative effect on development. City Manager Gaura added that the areas targeted are for neighborhoods where building has halted, not new development areas. She added that in the Village of Montgomery, the impact fees were used to provide infrastructure for that growth; a water treatment plant, two water towers, a well, etc. Staff is not recommending waiver of these fees for good, but rather it is in an effort to join the Sanitary District in spurring new growth. Alderman Snow explained that the nature of this issue is hard to study. Rapid growth requires rapid need for new infrastructure, whereas slow growth can be absorbed. As such, he agreed that on a temporary basis it’s okay, but eventually the City will need the money to support it. Alderman Faivre wondered whether the amount listed will be enough to actually spur impact. Economic Development Planner Michnick explained that the median home is low in DeKalb, which is why the builders have not been eager to build. The $5,000 will help the builders, but isn’t enough, so they will be working to help. Alderman Noreiko wondered whether the school district has been approached to see what their potential contribution might be. City Manager Gaura said that both the school and park district had been approached in June, and both have a follow- up meeting scheduled. City Manager Gaura asked that they take a look at their numbers, and discuss it with their boards. Brief discussion ensued as to Iron Gate, and the impact on that potential development. Alderman Jacobson offered that there are considerations to examine. He wants new development, but data shows that the builders benefit from these incentives more often than the residents. He explained that it isn’t going to make a big enough impact to incentivize people to move. He offered that waiving the fees for those incoming, without helping those who already are here, might be disrespectful. The sale prices of homes is lower than purchase in most cases, so trying to spur development when so many are struggling to recoup is problematic. He likes incentivizing development, but for the buyer, not the builder. City Manager Gaura offered that the impact of the residents who live in the areas who haven’t built out, affects the quality of life for those here. She added that the initial focus was on incentivizing the owner, but through learning about the building process, it became evident that the builders need incentives to build, via a higher  Committee of the Whole Minutes August 8, 2016 Page 3 of 5 profit margin. She offered that the investments have been made in the multi-family residential, but not in single family new construction. It is one idea to spur development in the one area that hasn’t increased. Alderman Snow offered that the spec house is going to be built where it is cheapest to build, and that nothing will be given away until a home is built. Alderman Jacobson offered that the land is very cheap, especially compared to other communities, but that it isn’t enough. The City has the supply of adequately priced land, but it isn’t driving demand. The issue is, why don’t people want to build houses here. He thinks the City is treating the symptoms, not the root question. He believes the root issue requiring examination is, why don’t people want to live in DeKalb. Ken Andersen, Executive Officer of the DeKalb County Building & Development Association, thanked staff for meeting with the organization. He explained that the Sanitary District got the ball rolling by waiving their fees. Mr. Andersen explained that their association has come to DeKalb to see what they can do to jumpstart this market. He offered that the incentive program needs to be sweetened in order to be effective, but it’s a good start. Mr. Andersen read aloud a letter from their Board of Directors that stated their request to the City to freeze all impact and related fees for new construction in the City. He added that waiving the impact fees will not be the only thing that will spur development, but it’s also a good start. Mr. Andersen added that as a home rule community, the City has the right to freeze or halt fees on the other districts as well. Dewayne Brown offered that the City needs a reduction on fees given the non- existent growth in DeKalb. He highlighted the importance of new housing. He also emphasized the problem with the high real estate taxes. Mr. Brown offered that Dr. Collins’ speech several weeks ago was right, and the City needs to do something to incentivize new development. He offered that it should be approved in order to help improve the community. Steve Kapitan stated he was impressed by the depth of the conversation between the Council and staff. He offered that his opinion on the matter is aligned with Alderman Jacobson. Mr. Kapitan offered that his recollection that impact fees were not an issue during the discussion with Shodeen during Iron Gate. He wondered whether the arrangement with the school district’s arrangement had any potential impact on the decision before Council. Bessie Chronopoulos offered that this is a complicated issue, and the City needs to have deeper and more discussions. She said that impact fees do not stop growth. She agreed that the real question is why do people not want to build and live here, and why are people leaving. Ms. Chronopoulos offered that the only way to answer that question is to pull the entities together. She suggested that the homes that can’t be sold in established neighborhoods is equally important to the Committee of the Whole Minutes August 8, 2016 Page 4 of 5 matter. She said there is a huge disconnect between the school and park districts, and the City. Alderman Jacobson wondered whether the City has examined the surrounding communities, and Economic Development Planner Michnick stated they are comparable. He offered that cost isn’t the issue, so the City needs to look at why people don’t want to live here. The savings isn’t enough to motivate new growth. If the underlying issues still exist, nothing will be spurred. The City needs to understand what the market looks like, and what the reservations to moving here are. Community Development Director Divita offered that the builders explained that the same house sells for more money in Sycamore, and the amount of rental housing, and code enforcement is relayed as the impediment to housing. She offered that EAV throughout the community will lessen the tax burden on the individual owner. She offered there is money in buying and fixing homes, and that it should be incentivized. Alderman Finucane offered that there needs to be a continued conversation, and this subject requires more than one 45 minute conversation. More questions need to be examined as to the potential impact of this solution. Alderman Noreiko would like more information so they aren’t making this decision in a vacuum. Alderman Jacobson stated this issue is a catalyst to a conversation the City needs to be having, but it is the tip of the iceberg. He believes that schools, crime (and perception of crime), and high rentals are an issue. He thinks a workshop should be held on this issue, and Council and staff should understand from the community why people don’t want to live here. The Mayor offered that the conversation needs to be comprehensive to understand what services the community is willing to give up, as well as what’s offered. City Manager Gaura stated that her understanding is that more conversation needs to occur. She reiterated that only 8% of the tax bill is related to the City, and 1% of that is the library tax. The rest is for the schools. She encouraged the Council to come forward with ideas. City Manager Gaura recommended moving to the next item in the interest of time, as she anticipated a lengthy conversation. 2. Personnel Manual and Benefits Handbook  Committee of the Whole Minutes August 8, 2016 Page 5 of 5 City Manager Gaura suggested that any questions be directed to either her or Human Resources Director Randall. It was decided to move this issue to the next Committee of the Whole meeting. D. PUBLIC PARTICIPATION There was none. E. RECESS FOR EXECUTIVE SESSION OF THE CITY COUNCIL 1. Approval to Hold an Executive Session to Discuss Personnel as Provided for in 5 ILCS 120/2(c)(1). 2. Approval to Hold an Executive Session to Discuss Pending or Imminent Litigation as Provided for in 5 ILCS 120/2(c)(11). Neither item was acted upon. F. ADJOURNMENT MOTION Alderman Jacobson moved to adjourn the Committee of the Whole meeting; seconded by Alderman Noreiko. VOTE Motion carried on a 7-0-1 voice vote. Aye: Jacobson, Finucane, Marquardt, Snow, Noreiko, Faivre, Rey. Nay: None. Absent: Baker. Mayor Rey declared the motion passed, and concluded the meeting at 6:02 p.m. _____________________________________ JENNIFER JEEP JOHNSON, City Clerk Approved by City Council: September 12, 2016.