School Districts Quick to Impose New Building Fees

In a move that has angered the building industry, many California school districts are taking advantage of a new state law by imposing fees on new houses and commercial development.

School districts throughout the state started moving in December to enact the fees, making them effective at the beginning of the new year, said a spokesman for the California Building Industry Assn. in Sacramento.

Buyers of new homes will find the fees passed on in the prices they pay. Homeowners building “habitable” additions, such as new family rooms, on their existing homes also must pay the fees if they live in participating school districts. Non-habitable additions, such as garages, aren’t subject to the fees.

The new law allows districts to assess up to $1.50 per square foot on newly built or newly remodeled residences, and up to 25 cents a square foot on commercial development.

For example, the fee could be as much as $4,500 for a 3,000-square-foot home, or $450 for a 300-square-foot addition.

New Construction

Money from the fees can be used by districts for school construction or for renovating existing schools. Although the law doesn’t limit which districts can impose the fees, some building industry officials claim that the intent of the legislation is to help districts facing major growth.

Instead, builders have complained, the fees are being imposed by almost all school districts, regardless of their need.

The law “is being abused because fees are being imposed by school districts that have stable or declining enrollment,” said John Erskine, executive director of the Orange County chapter of the California Building Industry Assn.

Not so, say school officials, adding that the law wasn’t intended only for districts experiencing growth.

“What some of the builders are forgetting is that many districts like ours have schools that are 25 to 30 years old and are in bad need of repair,” said Cheryl Norton, communications coordinator for the Fountain Valley School District. “The state for years has known that we need maintenance money, but when budget cuts have come down, maintenance money is the first thing that goes.”

Popular With Educators

What is clear so far is that the law is proving popular with educators. Although no tally is yet available on how many school districts in California have taken advantage of the law by imposing fees, “there’s a good likelihood” that virtually all school districts ultimately will adopt them, said a lobbyist for the California School Boards Assn.

Under the new law, a school district now can directly impose building fees. In the past, school districts seeking to impose fees had to get permission from either a city council or a county board of supervisors.

2 ‘The $1.50 per square foot . . . was supposed to be the ceiling, but you know how these things work--the ceiling becomes the floor.’

--John Erskine, executive director, Orange County chapter of the California Building Industry Assn.

The Legislature’s action in granting direct fee-assessing power to school districts was a “dramatic shift in authority,” the school boards association noted in a recent newsletter.

“School districts who have been unable to persuade their cities and counties to levy development fees are pleased that the legislation gives them direct authority to levy these fees,” the newsletter added.

Said Norton of Fountain Valley: “Some of the cities hate this new law. We were surprised that the City of Fountain Valley didn’t oppose our school district when we adopted this in December.”

Erskine of the Orange County builders group said that he and various city officials tried--unsuccessfully--to talk several school boards out of imposing the building fees.

“And where the school boards have acted, they’ve usually voted the entire amount,” Erskine said. “The $1.50 per square foot on residential construction was supposed to be the ceiling, but you know how these things work--the ceiling becomes the floor.”

Already Imposed Fees

A complete survey of Orange County’s school districts wasn’t possible during the Christmas and New Year holiday period. Erskine, however, estimated that about three-fourths of the county’s school districts already have imposed the new building fees. Some districts that haven’t yet enacted the fees, such as Anaheim Union High School District, have indicated that they probably will do so this month.

Where elementary school districts overlap a high school district, the districts have been told to share portions of the total fee. In such cases, for example, an elementary school district would impose part of the $1.50-per-square-foot fee and the high school district would impose the remaining portion.

Fountain Valley School District is an example. It is an elementary school district that is part of larger Huntington Beach Union High School District. Fountain Valley reached an agreement with the Huntington Beach Union High School District so that the total fee would be split.

“Fountain Valley will collect 61% of the fee, and the high school district will get 39%,” Norton said.

Bonnie Castrey, president of Huntington Beach Union High School District board, said the other three elementary districts within the high school district reached similar agreements.

Refurbishing Work

“The reason we acted on this in Huntington Beach is because we have many buildings that need refurbishing,” Castrey said. “When the Legislature passed this law, they recognized that many districts such as ours need to have funds for repairs and refurbishing. Also, as the move for smaller classes continues, we will need more room, and so funds are needed for this.”

The law is vague about whether overlapping school districts can each impose the maximum fee on residential and commercial development. The California School Boards Assn.’s recent newsletter said: “It is not clear . . . that anything in the legislation restricts both school districts from levying the maximum fee.” But the association warned school districts that it would be wiser to seek a split of the fees because “the Legislature intended that the $1.50 and $.25 per square foot cap be split between elementary and high school districts.”

Developers, who promoted an early version of the bill but then weren’t happy with the outcome, already have launched a move to get the law modified.

Bills to lower the amount of fees that school districts can impose or to repeal the fee-imposing power altogether are being prepared by Sacramento critics of the law, said Karen Steentofte, senior legislative advocate for the California School Boards Assn. She said the association would “fight tooth and nail” to oppose such moves in the current legislative session.

Cap Too Low

“We already think the cap on the fees is too low as it is,” she said.

Despite the complaints in Orange County, the fees were adopted in neighboring Los Angeles County with no opposition.

Bill Rivera, a spokesman for Los Angeles Unified School District, said that system--the largest in the state--approved the new fees on Dec. 15 without protest from builders or any other group.

Although builders are complaining about the new law, they were early supporters of a move that led to its passage.

Last year, after some school districts had succeeded in getting cities or boards of supervisors to adopt building fees for new schools, builders complained that the fees were much too high in some areas, including in south Orange County’s Saddleback Valley Unified School District.

Saddleback Valley Unified angered builders last January when the school board requested that the county Board of Supervisors impose a 500% increase in the building fee it charged on new homes. Builders said that other school districts, notably some in San Diego County, also were seeking “exorbitant” building fees on new construction.

Heading Off Trend

To head off the trend, the building industry asked the Legislature last winter to pass a state law putting a cap on the amount of fees a school district could seek on new construction. School districts at the same time asked the Legislature for the right to impose the fees directly, without having to go to a city council or a board of supervisors.

The bill that finally passed, AB 2926, was sponsored by Assemblyman Larry Stirling (R-San Diego). His office said that he introduced it at the request of the California School Boards Assn.

Erskine, of the Orange County Building Industry Assn. chapter, said compromise legislation initially agreeable to both the school districts and the builders was skewed during the closing days of the Legislature to give more leeway to school districts than the building industry feels is necessary.

“We think that school districts should have to prove the need for imposing the fees on residential development in their areas,” Erskine said. “Districts that have stable or declining enrollments don’t need new schools.”

“It’s a dual form of taxation,” Erskine said. He said some critics are calling the new law a “run around Proposition 13,” the historic 1978 property tax reduction measure.