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Oregon City Council temporarily lowers impact fees

The Oregon City Council accepted a recommendation from the Economic Community Development Committee (ECDC) to temporarily reduce impact and hookup fees, but not everyone on the council agreed with the decision.

In an effort to attract homeowners considering building new homes to Oregon, the ECDC made a recommendation to the council: temporarily lower the impact and utility connection fees.

Currently when building a new home, the city impact fees range from $168 for a two-bedroom house to $1,143 for a five-bedroom, and water and sewer hook-ups each cost $1,500 regardless of bedrooms.

Proposed reductions eliminate city impact fees entirely, and bring water and sewer hook-ups to $250 each. This averages around a $3,000 reduction to build.

The fees would be lowered for either a period of 12 months or until 12 new homes have been built, whichever came first.

Impact and utility connection fees are fees imposed by governments on new or proposed development projects, and they help finance infrastructure and public services.

“We are having an inventory shortage in Oregon’s real estate market; we have people who are wanting to move into our community, but there is no housing,” said Rebecca Hazzard, owner of the Oregon RE/MAX and member of the ECDC board.

Other local governments have taken to lowering impact fees to attract development. Stillman Valley lowered their impact fees until 2019, and Freeport is waiving property taxes on new developments for three years.

“We’re losing buyers to other communities because of our lack of housing,” said Hazzard. “I strongly advise you vote for this.”

Commissioner and former mayor Jim Barnes was not in support of the idea.

“This is a hair-brained idea that was not talked about at the council meetings, but was suggested by the economic development committee,” said Barnes. “[The ECDC] has four people that do not live in Oregon, two that do not live in Ogle County, and two that don’t live in Oregon own property.”

Barnes says the burden keeps falling on the taxpayers.

“We raised the water rate last year, again last month, and will do so again this fall. Again, we’re sticking it to the residents of Oregon,” said Barnes. “If this passes, I hope the citizens of Oregon remember next election time.”

Mayor Ken Williams said he understood Barnes’ position, but did not agree about the impact the temporary reduction would have on the citizens.

“None of this money needs to be ‘made back;’ these are fees that, if you don’t build the homes, they’re not going to be there,” said Williams. “Impact fees are not part of the budget; they are additional money.”

Williams said that getting homes built and families moved in will, over time, outweigh any income the unaltered impact fees would have provided.

“If we get more homes coming into the city, we’ll be getting about $720 per year in additional income from water and sewer bills that you wouldn’t get if the homes were not there,” said Williams. “If we get 10 homes, that’s over $7,000 per year in the water and sewer fund.”

Williams added that the city also receive $600 per home in shared revenue from the state, based on the Local Government Distributive Fund, and the school district would benefit from families moving in.

The council voted 3-1 in favor of accepting the recommendation. Williams, Terry Schuster, and Tom Izer voted yes against Barnes’ no. Commissioner Kurt Wilson did not attend the meeting.

The city council meets again on Tuesday, April 25 at 5:30 p.m. at the city hall. The meeting is open to the public.

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