RAPID GROWTH COSTS TAXPAYERS MONEY
Rapid growth has arrived in McCordsville. The pace of new residential development is very rapid compared to previous years in McCordsville. In general, residential developers present their plans for a subdivision to the McCordsville Town Council. Usually, the developers have discussions with Town of McCordsville planning staff. However, this “preliminary presentation” to the Town Council is the first public view of their plans. A typical plan encompasses 40-100 acres of farmland which the developer has an agreed-on purchase price from the farmer, if the developer receives the approvals from the Town that they are requesting.
After the preliminary presentation the developer may modify their plan based on Town Council comments or may proceed to the McCordsville Plan Commission to ask for their approval. The developer has the right to proceed even if preliminary comments from the Town Council are negative. The process is in public view to the extent that meetings are open to the public and McCordsville allows public comments. Public comments are limited to two minutes in person at the meeting. Email addresses of the plan commission members are hidden from the public. Emails with comments about the plan being discussed go to the town plan office which may choose to share some or all with the plan commission members. Notice (by USPS mail) to the public about proposed developments near them are limited to two parcels deep around the land which is planned for a subdivision. Signs are also placed on the land under discussion. The signs look like real estate “FOR SALE” signs but are yellow and black.
The developer works with the town planners and the Plan Commission until there is general agreement about how the subdivision will be built. Then the plan commission votes to approve or disapprove the subdivision. If approved (almost all are approved) the issue moves to the Town Council. A formal presentation is made to the council at one of their regular meetings (7 PM Town Hall second Tuesday of each month-public welcome). Public comments are welcome but limited to two minutes per person. Those commenting are sworn in and the entire meeting is audio recorded and minutes are prepared. The minutes are available at McCordsville.org. At some point the Council votes to approve or perhaps table or continue discussion about the plan. Some parts of the plan may be “commitments” meaning the developer is bound to exactly what the commitment says, and it can be enforced on them if they don’t comply.
The developer may proceed after Council approval. The developer is responsible for building the infrastructure within the boundaries of the development. This includes streets, utilities, lots, grading, drainage and usually some perimeter landscaping. Sometimes amenities for use by the future homeowners are included.
The Town of McCordsville is responsible for providing road repairs and improvements around the development, police, parks, and sewer services if in the McCordsville sewer district which has boundaries that are generally larger than the Town. Vernon Township is responsible for providing fire and EMS services. The Vernon Township School Corporation is responsible for K-12 education. The Fortville-McCordsville Library is responsible for library services which currently have limited availability in McCordsville.
WHO PAYS WHAT?
The developer pays for building out the subdivision. The developer gets paid when a complete house is sold. A developer might make 25% profit on a subdivision. For example, a subdivision with 100 homes that sell for an average price of $400,000 each is a $40,000,000 project. This is BIG BUSINESS! A developer stands to earn $10,000,000! Of course, they must produce and sell their lots and houses which is very challenging. And they likely need to borrow money, so they have a large risk should they run into problems. Most of their “profit” comes from the last 25% of sales of a fully sold-out subdivision as dollars from earlier sales need to be put back into building out the project.
Taxpayers pay for the things the various political subdivisions provide. You can think of a political subdivision as governmental entity that can levy taxes on property owners in the form of a real estate tax. These taxes are levied on residential real estate at an assessed value which is determined by the Hancock County Assessor. The assessment is determined after the assessor receives an Indiana real estate sales disclosure which is required when a house and lot are sold. The taxes are assessed in the first year and then levied and paid the next year. There is a time lag between the sale of a home and the actual receipt of tax dollars by the various tax levying political subdivisions.
Many things are considered before the final tax dollars are available to spend. These include the Indiana 1% real estate property tax cap. The tax cap means a single-family residence occupied by its owner can’t be taxed above 1% of its assessed value. This can result in loss of tax dollars by towns, townships and schools. Thus, the needs for police, fire, EMS, street and road repair, traffic improvements, schools, parks and libraries are immediate since people needing service arrive almost immediately after a sale, but the tax dollars are delayed.
This means EXISTING TAXPAYERS must pay the price or the services cannot be provided, a least until somewhat later.
HOW MUCH DOES IT COST?
There are common ways to estimate costs depending on what service is being evaluated.
The Metropolitan Police Department of McCordsville estimates that one officer, not counting the chief and assistant chief, is needed for every 500 citizens. Each new home is estimated to have 2.5 occupants, so a one hundred home subdivision would likely have around 250 new citizens. This produces a need for another one half of a police officer. Each police officer costs around $100,000 the first year. The officer needs to be hired, trained with months of on-the-job training and mandatory attendance at the Indiana Police Academy, evaluated by a mandatory physical exam for inclusion in the public employees retirement system, and equipped. The new officer needs weapons, uniforms, communication devices, and a take home vehicle. So, this new 100 home subdivision will add around $50,000 to CURENT RESIDENT TAXPAYER COSTS. This is $500 per new home loaded onto taxpayers by developers.
Homes produce an estimated 220 gallons a day of sewage. This sewage needs to be processed. McCordsville recently doubled the capacity of its sewer plant to 1,000,000 gallons per day. Based on subdivisions already APPROVED BUT NOT YET BUILT, I estimate that the capacity will need to at least double in the next 3-5 years. It takes a year to plan a new sewer plant and two construction seasons to build it. A new plant costs $7-9 dollars per gallon to build. A 100-home subdivision will produce around 22,000 gallons of sewage per day that needs to be processed NOW. The recent sewer plant expansion expansion was financed with a municipal REVENUE BOND, which means that after cash from the McCordsville Sewer fund, the added cost of construction of the new expansion is borrowed with repayment guaranteed by sewer fees. Thus, sewer fees were increased by McCordsville to do this. SO CURRENT SEWER CUSTOMERS are paying the costs now for future customers to have an adequate sewer plant in place when they arrive. Sewer fees will increase yet again when the deficit in planned capacity is fully realized. The new plant will cost around $7,000,000 to $9,000,000 to build. It is possible that some of the cost may fall on taxpayers rather than just on sewer customers as interest rates are now going up and revenue from current sewer customers might not be enough to satisfy potential bondholders. This works out to $1750 per new home loaded on taxpayers and sewer customers by developers.
The Town of McCordsville has a Parks Board. Several years ago, the Parks Board conducted a study of McCordsville Parks. The study showed the Town is severely UNDERPARKED. A PARKS IMPACT FEE resulted. Every new residential lot in the TOWN of McCordsville must pay a $750 park impact fee. This means every new residential lot/home sold in the Town will cost $750 more. The fee is paid by the developer who in turn marks up their product by $750. The cost is passed on the buyer who usually secures a mortgage which finances their home purchase. This plan appropriately loads the cost on developers and future residents rather than on current taxpayers.
However, the Parks Board conducted a study of potential park sites where these substantial funds will be spent. Eleven sites were narrowed to five sites. All five future park sites selected are NORTH OF THE CSX tracks where McCordsville is almost completely built out. This means that most new homes in McCordsville will be built SOUTH OF THE CSX TRACKS and will pay a park impact fee but will have NO NEW SOUTHSIDE PARKS. There is one park south of the CSX tracks. This is the OLD SCHOOL PARK which was donated to McCordsville by the Vernon Township Trustee who found it to be a financial burden. Nonetheless there are no trails, bicycle paths or crosswalks for this park.
The Vernon Township School Corporation is responsible for K-12 student education throughout their district which includes all the Town of McCordsville. The school system is well led by Superintendent Dr. Jack Parker. A solid long term financial plan showed the school district might grow by 50% in the next decade. The school district knows additional funds will be needed to sustain financial viability and fulfill their mission. As a result, Mt. Vernon (which is a taxing authority) has placed a referendum on the ballot this May at the rate of $.17 per $100 assessed valuation. If this passes every CURRENT TAXPAYER will pay this tax which will serve to educate the children of future residents. The funds are clearly needed.
But it may be more appropriate to require developers to pay a SCHOOL IMPACT FEE of $.17 per $100 of assessed valuation. This would be $680 per new home (assuming a price point and assessed valuation of $400,000) which would be paid by developers and ultimately paid by the home buyer likely long term financed in their mortgage. If the tax referendum passes too; then the schools will be even better. Mt. Vernon can use the money!
ROADS and TRAFFIC:
The critical traffic choke point in the Town of McCordsville is the intersection of Pendleton Pike and Mt. Comfort Road at the CSX dual rail track crossing. An underpass has been selected as the best option to improve this intersection after at least a decade of debate and study. The estimated cost is $40,000,000. The Town is actively seeking grants for this much needed improvement but has been repeatedly unsuccessful as other more pressing projects around the state are funded. Residential developers around the new town center location have been asked by the town to contribute to help alleviate traffic congestion related to their enormous developments. The developers (Jacobi Farms and Colonnade) did respond favorably and are contributing funding for roundabouts at W 700 N and W 750 N at their intersection with Mt. Comfort Road. But those contributions and the necessary improvements are BACKLOADED meaning they won’t happen for years. It is time to begin requiring IMPACT FEES for every new home in McCordsville for the major road improvement needed in McCordsville and Hancock County. Rapid economic development may increase the population of McCordsville from around 7500 to 10,000. A fair goal for the fund to improve the intersection would be $1,000,000 spread over the build out of the entire town. Each new home should have an intersection improvement impact fee of $1,000 paid by developers, which will help move this project forward without substantially increasing the price of new homes.
FIRE PROTECTION AND EMERGENCY MEDICAL SERVICES:
Fire and EMS services are provided by the Vernon Township Fire Territory operated by the Vernon Township Trustee. Our current trustee, Florence May, did a very good job turning around the dismal situation she inherited when she became the new township trustee. She has made plans for a new fire station in McCordsville. She has constructed a new fire station in Fortville. She has incorporated the EMS service in house which was previous outsourced. She has placed temporary 24 hours housing for firefighters adjacent to the old McCordsville Fire station which allows 24/7 service to McCordsville. She has transformed a previously all volunteer firefighting force to a professional force which is well trained and well led.
Mrs. May was forced to place a tax increase for the new FIRE TERRITORY on a previous ballot to begin to pay for these services (the fire tax was approved, and taxes increased). The new fire station planned for McCordsville at W 950 N and Mt. Comfort Road will cost around $3,000,000. This need is driven by growth occurring now. It is only fair that future residents pay for some of the cost of infrastructure needed for their protection. A 25% increase in population should contribute $750,000 to offset the cost of the new fire station not to mention the new fire truck it will house. Two new firetrucks have already been purchased to augment the aged equipment in the fleet. A new fire truck costs around $600,000. A fire impact fee paid to the Vernon Township Trustee/ Vernon township Fire Territory of $750 per new home will be appropriate.
You can see that rapid residential growth leads to large costs to CURRENT TAXPAYERS who will be supporting developers’ profits and subsidizing new residents who won’t even begin to pay real estate taxes until the second year after their arrival. This is not fair. The McCordsville Town Council has absolute control over developers and their projects. They already proved this to be so by instituting their park impact fee. The developers must pay THEIR FAIR SHARE.
BRYAN BURNEY will work to see that developers pay their fair share when elected to the town council at large position in the May 2 primary and November 11 general election.