Schools Fear Fee Hike May Hurt, Not Help : Law: Measure lets districts charge developers more to offset impact of construction. But it bans separate pacts, which are often more lucrative.

Under an obscure state law that went into effect Jan. 1, school districts that are struggling with crowded classrooms can collect higher fees from residential developers to help offset the costs of school construction. But local school officials say the new law may actually hinder their efforts to build schools in fast-growing regions.

The law, which sailed through the Legislature during its final days in session last summer, increased the maximum fee a school district may charge a developer to $2.65 a square foot, $1 more than before.

School officials from Calabasas to Irvine, however, say the law will mean no net increase in building fees for many districts. It also bars individual agreements with developers, which some districts have found more lucrative than the fees, and it will eventually abolish the state’s school building program, a major source of school construction money.

“I think it could have a negative impact on our district,” said Don Zimring, assistant superintendent of business services at Las Virgenes Unified School District in Calabasas.

Like many other school districts throughout the state, Las Virgenes has struck deals in the last few years with developers of new housing tracts that call for the developers to go beyond the state-sanctioned building fees and contribute land, cash and even buildings for new schools. In exchange, the districts throw their support behind the real estate projects through the permit approval process.

But aside from raising the school building fee, the new law seeks to reverse a series of court decisions that allow the type of agreements reached in Las Virgenes. The law says that the fees are to be the exclusive method that districts use to mitigate the impact of development on school facilities.

“SB 1287 was a legislative solution to say the limit is the limit,” said Cliff Allenby, vice president of the California Building Industry Assn., which championed the bill.

Many school districts, however, say they are getting a raw deal at a time when the need for new classrooms is acute.

J. Michael McGrath, Newhall School District superintendent, said that under an agreement the district reached two years ago with the developer of the giant Stevenson Ranch housing project, it received $6.25 million and land on which to build three schools.

“This agreement is probably worth 30% more than even the new developer fees would have been,” McGrath said.

Officials at other districts that receive matching building funds under a state assistance program say the fee increase will not help them because any additional money collected from developers will be deducted from the state allocation.

“It’s a wash,” said Paul Reed, deputy superintendent of the Irvine Unified School District. “If you’re in the match, whatever you collect you send to Sacramento.”

School administrators also note that an increase in developers’ fees does little to help them at a time when the statewide recession has stalled most real estate development.

Doug Brown, deputy facilities administrator for the Los Angeles Unified School District, said developers’ fees collected by the district have fallen from $44 million annually several years ago to less than $14 million last year. The district, Brown said, needs more than $3 billion to pay for new construction to accommodate the number of students it expects over the next 12 years.

At the Glendale Unified School District, collections of developers’ fees have plunged from $3.5 million in 1989 to $670,000 last year. “If there are no projects being constructed, it doesn’t matter what the fee is,” said Steve Hodgson, assistant superintendent for business services.

Laura Walker, senior legislative advocate for the California School Boards Assn., also criticized SB 1287, calling it a ill-conceived and vaguely worded bill. She said the association also opposes the provision that would abolish the state’s school building program in 1996. The program, which dispenses state funds to local districts for construction, is continually short of money and widely viewed as a bureaucratic morass.

While acknowledging that the program is in need of reform, Walker said, “It makes us nervous to have nothing there that replaces it.”

SB 1287’s longevity is tied to the outcome of a June, 1994, ballot measure that is strongly supported by school boards throughout the state. Sponsored by Assemblyman Jack O’Connell (D-Carpinteria), the measure would change the vote needed to pass local school bond issues from two-thirds to a simple majority. That ability was largely taken away by Proposition 13, said Rick Simpson, a former assistant to O’Connell who works for Assembly Speaker Willie Brown.

If the ballot measure is defeated, the pre-SB 1287 rules on developers’ fees would prevail--meaning that districts could collect the lower fees but would again be free to pursue more lucrative deals with developers.

SB 1287’s backers had figured that if the ballot initiative passed, the state school building program would no longer be needed and could be replaced with a more streamlined version.

Despite the criticism of SB 1287, Allenby of the building association said that it was no easy sell among association members.

“We did not have unanimous support within the industry,” he said. “A number of our members are going to be paying more as a result of this.”

Regardless of the law’s intent, some school officials say they will continue to try to bargain with developers for concessions. “Frankly, we will continue to work with developers and expect them to negotiate in good faith,” said Zimring of Las Virgenes. “We don’t intend to change our stance.”

Walker said the school board association has begun lobbying for changes in SB 1287. Nonetheless, she said, court battles will probably ensue over the new law. “Until a school district gets sued, we’re not really going to know what the fallout of this is.”