School impact fees bring about spirited debate

By Sally Gillie, Monitor

 

The Oct. 15 public hearing on school mitigation fees before the Monroe Planning Commission brought forward some spirited testimony from members of the school board, local residents and representatives of the building community.

The Planning Commission is being asked to make recommendations on two proposals regarding school mitigation fees.

The first proposal would remove the current policy language regarding school impact fees from the city’s Comprehensive Plan, which includes its rationale for the 25 percent discount offered to developers. In doing so, the city would keep administrative control over school impact fees, and not be forced to go through Comprehensive Plan amendment changes if it wishes to make adjustments to the discount rate.

The second proposal includes revising the city municipal code, which now calls for a 25 percent discount on school mitigation fees, and increase that discount to 50 percent.

That additional discount would save builders $992 dollars in impact fees for each new single family home in the city, a drop from the current $2,976 to $1,984. The impact fees for a multi-family dwelling would drop from the current $4,804 to $3,172.

Monroe School Board Director Jim Scott urged planning commissioners to think carefully before making a recommendation to lower school impact fees, which he said are needed to handle the projected growth in the schools.

“We still have 850 kids in 34 portables left over from the last growth cycle,” Scott said. He pointed out the city is in the process of adding 260 new building lots, and the current proposal to lower mitigation fees by an additional 25 percent would negatively impact the district’s ability to handle the predicted influx of students.

Arguments in favor of lowering school impact fees included testimony from Jennifer Anderson, a representative from the South Snohomish County Master Builders Association. She told the Planning Commission that reducing school impact fees is a way to keep Monroe competitive for prospective builders. New residents, she said, will bring in millions of dollars to Monroe’s economy and create as many as 50 new jobs in the community.

“The best way to support schools,” she said, “is through growing the local economy.”

After listening to public testimony, planning commissioners determined they needed more time to study the background materials provided by the school district and the city. The decision was made to continue deliberations on school fees until the next Planning Commission meeting this week.

The Planning Commission and the City Council received a letter from the Monroe School Board last week stating it is adamantly opposed to changes in the school mitigation fee collection schedule.

In the letter, signed by Monroe School Board President Tom MacIntyre, it stated, “school impact fees meet the temporary classroom needs of additional students until adequate enrollment is reached to justify the cost of building new permanent classrooms,” and with 34 portables now in use, “Monroe is already behind in adequate classroom space.”

The letter points out that $1 million in mitigation fees were used to reduce the cost of Fryelands Elementary School, built in 2005, reducing the cost to taxpayers.

The letter also pointed out that state funding now only covers about 70 percent of the costs of educating a child in Monroe, leaving the local community to pick up the remainder of the cost through levies.

In closing, the letter said it looks forward to discussing these concerns with the City Council on Nov. 6.

The impact fee for adding each new student to the public schools is determined by that school district’s capital facilities plan. Most students living in Monroe are in the Monroe School District, but there are some families in the Roosevelt Road area who fall within the Snohomish School District boundaries.

This year the city council will be adopting capital facilities plans for both school districts. Both districts use the same formula to calculate impact costs.

Although the Monroe School District has experienced a slight decline in enrollment in recent years, it is still operating at over-capacity with some 850 students being housed in portable classrooms. As the economy improves, enrollment throughout the school district is projected to grow accordingly.

Proponents of lowering school mitigation fees argue that Monroe has higher fees than elsewhere in the county, which makes it a less desirable place for builders to choose when they are looking at new home sites.

How much districts can collect from developers depends on the rate of growth in the district, among other factors.

School impact fees are currently discounted 50 percent in unincorporated Snohomish County. Lake Stevens is now charging $4,500 in impact fees for new single family homes; Marysville currently has impact fees of $4,200 for new single family homes in the Marysville School District and $1,780 for homes built in the Lakewood School District.

Cities including Bothell, Brier, Gold Bar and some parts of Arlington are charging no school impact fees.

School mitigation fees are not the only impact fees assessed to new home builders. Other impact fees include those for public parks and transportation. Currently, the city of Monroe charges new builders $4,579 in parks impact fees and $2,158 in transportation impact fees.  When added with building permits and costs for utility hook-up, the cost of building each new dwelling unit in the city runs about $24,669, according to a facts sheet prepared by the city.

The city will be looking at possibly reducing the parks impact fees in the future, according to Monroe Economic Development Director Jeff Sax.

In his testimony before the Planning Commission, School Board Director Scott pointed out that city revenues from parks and transportation are ongoing because they continue to be supported by taxpayers. Not so for school mitigation fees, which are collected once. He said mitigation fees are not the end-all, which is why school districts put bonds before voters to fund new construction.

“But we need the mitigation money to provide for the influx of kids based on projections,” Scott said. “We rely on mitigation fees to help us with temporary needs. That’s what mitigation does; it buys us time.” Getting portables is a temporary fix, he said. Scott said that buying and outfitting a portable costs between $140,000 to $170,000.

Scott, a former planning commissioner for Clyde Hill near Bellevue, also cautioned against amending the city’s Comprehensive Plan by removing language dealing with school mitigation fees. As someone who was involved in the early discussions regarding the state’s Growth Management Act, he said the intent of the GMA was for developers to pay their share. The change being proposed by the city, he said, “gives the Council the right to change or eliminate these fees as often as they want.”

Additional testimony against reducing school impact fees came from Monroe School Board Director Nancy Truitt Pierce, who said she wanted to speak more as a concerned resident than a board member. Truitt Pearce said that, while she believes growth is good, “my first priority is to the taxpayer,” she said. “The very best engine for growth is the quality of schools. It attracts developers as nothing else,” she said.

The Snohomish School District, Truitt Pearce pointed out, has passed more than $500 million in bonds in recent years. “They’re in a different place,” she said, pointing out that the Monroe School District is over-capacity and is now relying on portables as the solution. She said the District now has $90 million in deferred maintenance needs.

“This is not the time for lowering mitigation fees,” she said, “Right now we’re behind the eight ball.”

Argument in favor of lowering fees came from Emmet Lane, an Everett resident who described himself as “a recovering builder.” He said one of the first things a potential builder looks at when pricing land in a community are impact fees. He said that, in this current economy, builders are looking for private lending and private investors to get back in business.

“In today’s climate, affordable housing is very important,” he said. He added that high school impact fees in Arlington a few years back kept builders from choosing sites there. He told planning commissioners that a difference of $1,000 or so for building one new dwelling might not be significant, but developers who want to put in a large number of homes could find the total mitigation costs for a large project a real deterrent.

In the discussion following the public hearing, commissioners Dave Demarest and Wayne Rodland supported waiting for more information before making a recommendation. Demarest commented, “Of all the mitigation fees the city has, this one is the most emotional.”

“If the city wants to make changes to its parks or transportation impact fees, that’s one thing. School impact fees are different,” he said. In his more than 20 years on the Planning Commission, he said it’s been his experience that the Council defers to the School District on this, and has been there to support them.

Demarest said leaving the plan the way it is creates a certainty, and less opportunity for change. “Isn’t that a good thing?”