Wednesday, May 21, 2003

Builders behind in payments to schools

By Sheila McLaughlin
The Cincinnati Enquirer

HAMILTON TWP. - A school district that is being squeezed by the explosion of residential construction here would be nearly $300,000 richer if developers would pony up the money they owe.

An Enquirer analysis shows that 14 developers, some of them building the largest projects in the southern Warren County township, owe Little Miami Schools $266,082 in growth fees - about one-third what the district stands to gain by the time the subdivisions are built out. Fees on growth, or impact fees, are paid to ease costs related to new development.

It was a trade-off developers have agreed to since at least 1996 to secure zoning from the township, now one of the hot spots in Ohio's second-fastest-growing county. But some developers say they don't have to pay, and don't plan to.

The township and Little Miami Schools - which last year endured temporary but deep cuts in staffing and after-school activities because of budget woes - are now trying to figure out how to collect the fees, which largely relied on developer good will.

"It's an honor system thing on their part, and they forgot their honor," said O.T. Bishop, president of the township board of trustees.

Since 1998, only a handful of developers have made payments totaling $37,218 to the schools, district records show. One appears to have overpaid; another is paid up. Most haven't sent a dime. Some say they don't think they owe the money.

For example, officials at Gallenstein Bros. Inc., in the midst of one of the township's largest projects with an estimated 955 housing units, indicated they don't intend to pay the $57,500 owed on the project so far.

"We do have some developers I've met with that just said flat out, 'I'm not going to pay it,' " Little Miami Superintendent Ralph Shell said.

At the same time, 500 more students have entered the district since development heated up in the township in 1998.

The influx of new bodies put such a squeeze on finances, that the school board was forced to cut teaching and other staff positions, and force students to pay up to $200 to play sports before voters passed an emergency operating levy last November.

Shell said the district has sent out letters to developers over the years reminding them that they need to pay up, but have received virtually no responses. "We don't have any clout," Shell said. School officials have said the township made the agreement with developers, so it's up to them to collect the fees. "What it all comes down to is the township says, 'It's not our responsibility to collect this money,' and the schools say, 'What do we do?' " said Liz Gloshen a mother of two who has been after the school district to get the money they are due.

Gloshen lives in Wethersfield. However, documents obtained by the Enquirer indicate that her community's developers, Drees and Richard Gallenstein, who is not connected to Gallenstein Bros. Inc., are actually ahead on their payments.

A resident of the township for four years after moving from Kansas City, Gloshen thinks developers should be shut down if they don't pay up.

"The developers aren't living in this community. They don't care," said Gloshen, who has children in elementary school.

Under the zoning agreements with the township, developers promised to donate a specific amount of money for each occupancy permit issued, with the funds to be sent to the schools annually on Dec. 31. The majority of the agreements call for fees of $250 for each home built Some developers said they'll pay Little Miami what they owe, but questioned why nobody billed them.

"I guess we expected the school district to give us a bill or something," said Dave Coletta, who is developing the 28-home Willow Grove project along Striker Road with Don Carter, of Carter Construction. The township estimates that 19 homes are completed, meaning Coletta and Carter owe $4,750.

"I'm not saying it's not our obligation" Coletta said. "The school board is always crying they're broke. They don't want to do anything but sit back and take the money."

Brad Austing, general manager of Towne Properties which developed Thornton Grove off U.S. 22/Ohio 3, said: "Whatever we owe legally, we'll pay it. But we need to know what we owe."

However, Jerome Cain, controller of Blue Ash-based Gallenstein Bros. Inc., said his company isn't responsible for the fees to Little Miami, and indicated he thinks it's the builder's job to pay.

Attorneys for the township and school district met last week to share ideas on how to collect the impact fees. One suggestion was to hold up construction on future phases of projects.

"I think we will collect every penny," said Warren Ritchie, the township's law director. "It's just a question of how hard (developers) are going to make it on us and on themselves."


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