By Sally Gillie, Monitor
The Monroe City Council welcomed Monroe School District Superintendent Dr. Ken Hoover and members of the Monroe School Board to the Nov. 6 council discussion on school mitigation fees.
The council is considering reducing school impact fees, offering a deeper discount to builders of new homes in Monroe as a way of encouraging growth and boosting the local economy. Monroe’s current 25 percent fee discount compares unfavorably with the 50 percent discount rate in unincorporated Snohomish County and other cities in the area, putting the city at a disadvantage as it competes for development dollars.
The school board has told the city they are adamantly opposed to lowering school mitigation fees, which can be used for the purchase of portables, land acquisition, building construction, or remodeling of existing classroom space to create more capacity for students.
Maintaining quality public schools, they say, is the most important way to attract new families to Monroe.
“We need a strong city with good roads and growth, and we also need a strong school district,” said Dr. Hoover. He told the council that past experience has shown what can be accomplished when there is cooperation between the city and the schools.
“An example,” he said, “is Fryelands Elementary School, which sits on a fairly small site with the school on a piece of it, and the playground and our park on city property. Partnership made that possible.”
School mitigation fees are most often used to buy portables, which are the fastest way to provide additional classroom space for new students. There are currently 34 portable classrooms throughout the district, serving a total of about 800 students.
The council and school district representatives agreed that with the district operating at capacity levels and the dilapidation of existing facilities, the best long term solution is to pass a bond measure for new construction.
That hasn’t happened since 2003, when voters approved a $21.8 million bond to build Fryelands Elementary School, modernize Maltby Elementary School, add technology, and build additions to Monroe High School and Hidden River Middle School.
Dr. Hoover said the 60 percent super majority requirement has made it difficult to pass a school bond.
“There’s no question we need to pass a bond issue,” said School Board Director Jim Scott, adding the last bond put to voters in 2010 failed due to the bad economy.
“But it’s important not to confuse the need for a bond with mitigation fees,” Scott said, because mitigation fees are the only way to pay for the short term needs of adding more students to the district.
“We’re talking about kids showing up on the first of September that weren’t here in June, and bond issues don’t help with that because it takes a year or more to get a bond issue on the ballot. And then if it passes, we have a three to four year process before we have a facility. The reason we ask for mitigation fees is because it takes six to nine months to get the house sold and the kids to show up, and it takes us about 10 months to get a portable sited at the appropriate location.”
School Board Director Nancy Truitt Pierce said she recognizes the city council’s challenge to balance the need for economic growth while protecting other important assets in the community, such as schools.
“As a board, we really need those (mitigation) dollars,” she said. “Any erosion of those dollars has to come out of the taxpayers’ pocket or operations. Operations are already underfunded.” She pointed out the high school’s recent award for achieving a 92 percent graduation rate is just one example of how the schools are headed in the right direction.
She said that if it’s necessary to reduce fees to attract new building, possibly the council could consider a reduction of other impact fees charged to builders rather than impact fees.
Mayor Zimmerman said the council will be looking at all the impact fees early next year, but mitigation fees were singled out to discuss earlier. “It’s an opportunity for us to discuss it as part of our budgeting process and part of our comprehensive plan opportunity.”
The council is also considering changing the city’s comprehensive plan to remove language that was added in 2001, setting city policy for the 25 percent discount.
“The council can choose to do nothing,” said Zimmerman. “It’s a policy decision, and I’m asking the council to consider that policy, in support of all the things that we have done as a city related to encouraging business development to come to Monroe.”
Discounting mitigation fees, he said, “is just one more piece, one more offering that Monroe has to offer to the development community to say, ‘we are continuing to remain open for business; we are doing our part to do our part in offering incentives for you to come to Monroe.’”
Zimmerman asked school district representatives to respond to those in the community who question the need for impact fees when they have seen two school closures in the past year.
Dr. Hoover explained that the district has not closed any schools. What it has done is consolidate the middle school population, an action taken in response to the state’s funding problems, which included a 15 percent cut to the district’s Alternative Learning Experience programs.
The middle school consolidation came about in the fall of 2011 as a way to provide students with a broader spectrum of electives, something the district had limited ability to accomplish with smaller student populations spread out among three schools, according to Rosemary O’Neil, communications director for Monroe Public Schools.
Since Monroe Middle School had the least amount of area to grow, its students were relocated to Park Place and Hidden River Middle Schools. That enabled the district to move its Sky Valley Education Center program to Monroe Middle School, saving money on space it had been leasing for that program in the Fryelands Business Park.
These changes have made the housing problem tighter, said Dr. Hoover. “We had 27 portables with kids in them before; now we have 34,” he said.
Mayor Zimmerman said that it’s clear there is a need for new facilities in the district, and to get those, a bond is needed. “Mitigation fees won’t solve the problem. They will put a band-aid on it, but won’t solve it,” he said.
Council member Jason Gamble asked Monroe Economic Development Director Jeff Sax if there was any data to support the idea that lowering school mitigation fees would bring more development to the city.
Sax said that, though there wasn’t that kind of data available, there are some real economic benefits to bringing in new families to the city.
“In my conversations with the school district,” he said, “there is a need for capital improvements, but there is also a need right now in Monroe for new housing.”
“We have an unemployment rate in excess of 10 percent,” he said, “and for every new home that’s built, the building industry will tell you that 4.3 jobs are created.” Sax said that with 150 to 250 new homes coming online in the city, that means sales tax being generated, plus real estate excise tax that’s collected, all a good thing for the local economy. Bringing new people to the community, he said, brings new dollars that are recycled into local business.
Sax said that Snohomish County established its 50 percent fee discount in 1991 to reflect the reality that new homes didn’t always mean new students moving into the district, as in cases where new homes are acquired by seniors or a young couple with no children.
In 2002, Sax said, the previous Monroe City Council made a policy decision to charge higher impact fees, “and embedded that language in the comprehensive plan, so that even if you wanted to change that you’d have to go through a comprehensive plan amendment.”
Making adjustments to school mitigation fees is another policy decision to be determined by the council, he said. “It’s a balance between whether we want to put 100 percent of the impact of growth on new construction, or do you want to discount it and take into consideration that not every new home that’s built is going to bring a child into the school district?”
Dr. Hoover pointed out that, according to the district’s updated 2012-2014 capital facilities plan, school impact fees under the current 25 percent discount are already dropping $900 for single family homes in Monroe.
“If you keep the discount the same, the prices will go down by about $900 for a single family home, and if you do drop to the 50 percent discount, the amount you would be asking for is less than when the program started in 1991. If you just stick with the 25 percent discount, you are still going to be getting part of what you want because the fee is going down automatically by itself.”
The city’s proposed changes to how school impact fees are calculated and assessed will go forward in phases.
The first phase will be to amend the capital facilities element of the city’s comprehensive plan to remove the 25 percent discount and the related text. Then the city will adopt the new changes in Monroe’s municipal code, and finally, adopt a new fee resolution setting the new impact fee discount.
At the current discount rate, builders in the city of Monroe are paying $3,172 dollars in mitigation fees for each new single dwelling unit built, and $4,804 for multi-family apartments. If the discount rate is changed to 50 percent, those rates will drop to $1,984 for each new single family dwelling built in the city, and $3,172 for each unit in a multi-family dwelling.