A new bill working its way through the California legislature could make it easier for school districts to levy higher developer fees on new construction to pay for key facilities.
Assembly Bill 2173, a piece of legislation authored by Assemblywoman Anna Caballero (D-Salinas) that will help school districts raise the funds they need to build new schools, passed the Senate Education Committee and will be heard next by the Senate Appropriations Committee.
The new bill aims to update the existing law by ridding it of policies that require school districts to clear a variety of hurdles before levying steeper developer fees. Currently, the district collects $2.97 per square foot on residential properties and 47 cents per square foot on commercial property, not enough to adequately accommodate its burgeoning student population, Gilroy Unified School District officials said.
The school board has authorized the sale of $33 million worth of certificates of participation, a debt that will be paid back by revenues from developer fees. A recent study of the school district's facilities revealed that the district will collect an estimated $500,000 in developer fees this year, less than half of what was collected in 2007. The district has enough money in its reserves to pay its COP debt for two years, but if the current rate of developer fee revenue is any indication, subsequent years could be tight, said Jim Bush of School Site Solutions, which conducted the survey.
AB 2173 would give school districts more flexibility in what they can ask of developers, said Willie Armstrong, Caballero's legislative director. Prior to 1987, school districts relied on their city governments to levy fees. A 1987 law changed that, allowing school districts to impose Level 1 fees directly, said Tom Duffy, legislative director and chief lobbyist with the Coalition for Adequate School Housing, the association sponsoring the bill. Level 1 fees are capped at $2.97 and 47 cents for residential and commercial property, respectively, across the state.
Districts have to meet several prerequisites in order to levy Level 2 fees, like operating multi-track, year-round facilities, housing 20 percent of students in portable classrooms and unsuccessfully trying to pass a local bond. The new bill adds another option to the list: the district has to have issued debt or incurred obligations for capital projects in an amount equivalent to 15 percent of the district's local bonding capacity - a percentage the Gilroy Unified School District has already far surpassed, said Keiko Mizuno, director of business services.
Level 2 fees are derived from a complex calculation based upon a district's needs and the amount of state funding received, Duffy said, and can vary widely from district to district.
"They're totally different for everyone," Duffy said.
However, Level 2 fees could mean $6 or $7 per square foot instead of $3, he loosely estimated, and have to be justified by an annual facilities needs report. Several Gilroy developers have already kicked in a voluntary $6.61 per square foot instead of the mandated $2.97.
The bill would preserve existing requirements that school districts try to raise local dollars from local bond measures before adopting higher developer fees to help fund school facilities.
The bill was born out of discussions Caballero held with the GUSD school board and city council members last year about the deficiencies of the current developer fee program.
"We were all very deeply concerned because our current laws regarding developer fees are simply outdated," Caballero said. "AB 2173 would ensure that developers pay their fair share of the costs to build the schools our communities so badly need to keep up with population growth."
District officials couldn't agree more.
"Our unmet school facility needs are in the range of $100 million, and we can't meet them with the current developer fee system in place," Superintendent Deborah Flores said in April. "Our voters passed a local bond measure to help meet our local share of costs and we will probably put another bond measures before the voters this fall" - which the school board has already voted to do. Voters will see a $150 million school bond on the November ballot.
Sara Suddes Sara Suddes is the education reporter for South Valley Newspapers. Send her an email or (408) 847-7158.
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