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HomeMy WebLinkAboutLetters regarding position of impact fee - VII-A - 3-21-95 Tountu #I ovls COUNTY N t 200 EAST KING STREET H/ q E� HILLSBOROUGH, NORTH CAROLINA 27278-2570 PHONE: 919-732-8126 j "Sdtft tm Course for Success" March 21, 1995 MEMORANDUM TO! John Link, County Manager FROM: William C. Harrison lI� Superintendent REFERENCE: Orange County Board of Education Position on Impact Fees Based on a motion by Ralph Warren, seconded by Susan Dovenbarger, and approved by a vote of 6 to 1 (Keith Cook voting against the motion), the Orange County Board of Education has taken the following position on impact fees: 1 . The Board does not support impact fees as the solution to the school district's capital needs, 2. The Board opposes an increase to the impact fee, 3. The Board proposes keeping the fees as they presently exist for a year, during which time alternative mechanisms to address this issue are considered with a recommendation to broaden the non-residential tax base, and 4. Encourage the Commissioners to recruit business and industry as a means of expanding the tax base. /ha c: Orange County Board of Education 1508 Jones Ferry Road Chapel Hill, NC 27516 March 15, 1995 Orange County Board of County Commissioners P.O. Box 8181 Hillsborough, NC 27278 Dear County Commissioner: I am enclosing a position statement on the impact fee that was recently unanimously approved by the members of the Chapel Hill-Carrboro PTA Council. As the members of the PTA Council are elected by the parents in each individual school PTA, the position on the impact fee is representative of the parents of over 7500 children enrolled in the Chapel Hill-Carrboro City Schools. On behalf of all PTA members, I wish to thank you in advance for seriously considering our position in your deliberations on the impact fee. Should you have any questions about our statement, do not hesitate to contact me. i Very truly yours,` Harvey A. Goldstein President, PTA Council PTA Council of Chapel Hill-Carrboro POSITION ON THE IMPACT FEE Growth in the school district over the last few years has put enormous strain on the facilities of the school system, that has resulted in severe overcrowding in every school in the district except for one. The idea behind impact fees is to have new residents with school age children pay a larger share of the cost of adding new educational facilities than existing residents since the new residents are "requiring" the need for the new facilities. Impact fees have been deemed as a fair way of apportioning the high costs of new public facilities caused by new residential growth. Impact fee ordinances have been adopted in hundreds of communities throughout the United States and have served as a necessary source of revenue to accommodate growth without adding to the tax levels of existing residents. The present impact fee is $750 per dwelling unit throughout the county. The PTA Council supports raising this fee to an average of of at least $1500 per dwelling unit, but allowing for effective exemption of units built for low-income residents so as to not inhibit the availablility of affordable housing. One way to accomplish this is to fix the fee to the size of the house (in square feet). Tying the fee to the size of the unit would be consistent with the requirement that the magnitude of the fee be related to the impact, since there is a significant relationship between size of unit and number of school age children. But there are other ways to achieve the same results. The present fee, on average, is low compared to most impact fees nationwide. The impact fee for a $150,000 home, for example, is one-half of one percent of the sale price. For homes at this price level, i.e., around the median, and higher, there is very little likelihood that the additional cost has resulted in a drop off in demand for new houses in the county. If the impact fee were an economic burden, we would have seen a drop off in residential property values by the amount of $750, which has not occured. The PTA Council strongly supports increasing the average impact fee in order to pay for the severe capital facility needs facing the schools in the county brought on by high residential growth rates. The schools are literally bursting at the seams, and we need vision and leadership by our elected officials, not government as usual. Even a doubling of the average fee will likely have no negative impact on new housing demand for average and above average priced houses. An impact fee is a fair way to apportion the costs of new residential growth, and it can be implemented so as to not sacrifice the goal of having more affordable housing available in Orange County. Approved unanimously March 15, 1995 THE. 1NK SPOT 1b :9199330024 MAR 14 '95 10 :51 No .005 P .01 206 Adams Way Chapel Hill, NC 27516 January 20, 1995 Office of the County Commissioners Hillsborough, NC FAX # 644-3004 Orange County Commissioners: Like many Orange County residents, I an very concerned about the effect of our rapid growth on education in Chapel Hill and Orange County. We simply cannot keep up with the need for new schools, and their quality is rapidly slipping due to overcrowding. I believe the time has come to increase the impact fee on new construction. Just as it costs more to buy a new car than a used one, it should be expected that a new house will cost more than an existing one. I would like to see the fees tied to the size of the new house. My suggested plan is $.50 per square foot, which would actually decrease the fee on a 1000 square-foot home, and rise,for example,to a fee of$2,000 on a 4000 square-foot home. Sounds like a lot of money? It would barely be noticed In the cost of that house. And let's be honest, the builders who are opposed to raising the Impact fees are not the ones who will be paying it, it's passed along to the buyer. Think It's an unfair tax? Local real estate agents will be happy to show you some of the lovely resales that are on the market. And I'm certain that there will be plenty of demand for new houses anyway. In case it sounds like I'm passing the tax burden along to newcomers to our area, I am planning to build a new house here in the next year or so. When it comes to planning for the rapid growth in our area, consider zoning, transportation, and services, but please, think about the children first! Sincerely, '&1 �iduVrV' Betsy Spaulding Susan L. Cheng 2817 Meacham Rd . Chapel Hill , NC 27516 March 11 , 1995 Dear Mr. Carey, I live in the Chapel Hill school district and currently have a daughter in the second grade at Frank Porter Graham Elementary. I also have two younger daughters who will attend the Chapel Hill schools in the future. I am growing increasingly concerned about the quality of the education they will receive. In the coming school year, the principal at FPG has told the parents, the school will face the loss of rooms now used to establish a base for the music, art, and science lab programs, as they are needed to provide classroom space. The school is already overcrowded. As a parent, I want to know where this will stop. We can apparently do nothing to control the growth in our town, but as that growth occurs, it is imperative that we protect the quality of life for all of us . When I look at my life, and I am the product of the public education system in the state of Virginia, I value the basic education I received in math, science, reading. I also treasure the exposure and appreciation I received for art, music, and physical pursuits . We cannot afford to sacrifice these as "extras" . We also cannot afford to continue to make the job that our teachers face more and more difficult. At FPG there are two toilets to serve over 50 staff, some teachers do not have time to eat lunch, and the students begin eating lunch at 10: 30 a.m. , so that there is time for all classes to eat . I fear that these will be - "the good old days" in the next few years as overcrowding worsens, and the system is even further strained . I am not even sure which of the following points are under your jurisdiction, but I want to say that I support increasing the one time tax on new homes to require that new residents help to pay for the increasing demands they place on our systems; that I fervently believe that wholistic city planning is crucial to the continued success of our education system, and that it should include requirement that large developments such as Southern Village and Meadowmont build or help to fund new schools, or be denied their applications; and finally, that I am willing to pay higher taxes to support this investment in our collective future. Thank you for your work in keeping the quality of life in Chapel Hill high. Sincerely, Susan L. Chen i M If S tl What's The Impact sic l9�l .i 0 In a search for new sources of revenue, one Utah school i district turned to impact fees for school construction BY DONALD J.FIELDER portionate share of the facilities that are built to serve them. The impact fees shift a portion of the cost of providing these new capital facilities from the general tax base to the new f your school system is a high-growth district like development. In many states, impact fees are now widely mine, you must be keenly aware of the impact of used to pay for roads, parks, libraries, sewers, and other new development in your district. Quite simply, necessary public services (see "Breaking new ground," on i new development means more people, and more page 33). people mean that more school buildings, roads, School facility impact fees are charges levied against new parks, libraries, and other public services will be residential units and are designed to offset the additional needed.The question is:Who will pay for them? costs new residential development brings to a school dis- We faced this issue in Park City, Utah, a 3,000-student trict. Impact fees are a one-time assessment; they are not a school district located in a ski resort area 30 miles east of tax, and they are not based on the assessed valuations of Salt Lake City. Our district had experienced double-digit property. In fact, the fees help to stabilize property taxes, percentage growth over each of the last seven years as because the cost of the new facilities is transferred from the thousands of people flocked here, attempting to flee cities general property tax base to the impact fees. beset with crime,pollution,and other urban problems. To assess impact fees on all new residentitt?gr.•owth, our To accommodate our rapidly growing student population, district needed the help of the city and county governments we determined that we needed $110 million in new con- that encompass the district and which,under Utah law,have struction over 20 years, starting with a $32 million school the authority to issue impact fees for infrastructure and pub- bond issue. We also recognized, though, that in this age of lic facilities. Thus, the school district needed—and're- disenchantment with government in general and with pub- ceived--the support of both the city and county ei:ected offi- lic schools in particular, voters often express their frustra- cials who could authorize school facility impact fees on tion by voting down school bond issues. In fact, our resi- behalf of the district. The three government agencies met dents told us as much:They said they would not support the and decided to work collaboratively to assess such fees— bond issue—scheduled to go to a vote this winter—unless the first use of such fees in Utah and in much of the West. new residents shared a greater percentage of the burden. Our first step was to develop a long-range capital-facilities We needed to identify a new source of revenue to help plan that outlined our anticipated building needs for the pay for the classrooms necessary to serve our growing stu- next 20 years. Then we engaged a law firm specializing in dent population. And so we turned to a bold new idea: the land-use planning and impact fees to help design and de- use of school facility impact fees. You might want to con- velop a comprehensive plan.That plan has three major com- sider this idea for your district as a way to alleviate the portents: an inventory of what buildings we had and what tremendous building costs associated with residential our tinat►cing capabilities were like;a projection of the build- growth. int;� that will be required; and a description of school im- Park City's experience pact it-4•�.including the formula we used to calculate the im- pact t4•c• What, exactly, are school facility impact fees?They are a Om tirm step was to develop cooperative agreements form of general impact fees—levies that local governments atntntt; the city, county, and school district. This process tnay impose so that new residential developments pay a pro- w aN a dimcult. time-consuming, and sometimes frustrating cMr that iook months to complete and involved attorneys Donald J. Fielder is superintendent of the Park City, Utah, in-m all thc• governmental entities. Despite some differ- School District. e•nct- (n opinion, though, we were able to develop working 32 MARCH 1995 THE AMERICAN SCHOOL BOARD JOURNAL Breaking new ground j nlpact fees for school facilities are an idea whose time and restrictive(in Texas and Illinois,for example)to very might come some day But,say those familiar with the brief,general laws(New Jersey and Indiana)that give local fees and their use,that day hasn't arrived yet governments considerable latitude,says Leitner,a special- According to Mary Fulton,a policy analyst for the Den- ist in zoning and land-use law.California,a leader in they ver-based Education Commission of the States,school field,levies impact fees not only on residential develop- leader sand tether policy makers have discussed the idea of ment but also on nonresidential development such as o` using impact fees as an option for generating more school fices and retail stores,based on square footage,says Leit- revenlle. But. Fulton says, she hasn't seen many examples ner,who predicts an"inexorable tide"toward the levying of of impact fees for school construction levied around the impact fees. country. "Not many districts have moved in this area,"she Even-without statewide enabling legislation,he notes, says. "(Impact fees) won't apply to many districts.unless -- impact fees are-used-all the time:Local governments ofi:en they are rapidly growing and can make arguments as to can levy them under their home rule or planning and zon- why these fees are necessary." ing powers.•Fibrida,for example,has no legislation that ex- Still,say some school board officials,the practice of as- plicitly allows impact'fees;,but local governments in that sessing impact fees for school facilities is one school - state have+levied-such fees;including those for new school boards might welcome. Randy Quinn,executive director of construction,since the mid-19709;such fees are used more the Colorado Association of School Boards,says schools in widely in Florida than in any other state in the country. his state,would benefit from impact fees because the state Still,when they have been imposed,school impact fees does not provide money for renovations or new buildings.> have not always successfully withstood scourt challenges. "If new people come in and bring new students,they Last summer,a district judge in Colorado struck down the should help finance the costs,"Quinn says.Impact fees will fees that Douglas County,a high growth school district near assist schools that can't keep up with growth using the tra- Denver,had imposed in 1992 to ensure that new residential ditional means,including borrowing money. development bore its share of the cost of building new Although school impact fees still are relatively rare,they schools,'Me judge held that the county did not have the au- could be part of a growing national trend toward impact thority to impose impact fees,according to an article in the fees in general.Nineteen states now have general legisla= Denver Post.The judge also said that Colorado's school fi- tion allowing the assessment of impact fees,compared with nance law,which was in effect when Douglas County levied 1986,when only three—Arizona,California;and New Jer- its impact fees,was created to ithprove equity among school sey—had such laws on the books.Two other states,Mary- districts and among property-tax payers in school districts. land and Tennessee,have adopted special legislation that According to state law,the judge said,all school districts allows individual counties to impose impact fees,according had to operate under the same finance formula. to attorney Martin Leitner,author of a survey of relevant For more information about using impact fees for school legislation published in the summer 1993 edition of the facilities, contact: Martin Leitner, managing paolner, Urban Dwyer. Freilich, Leitner and Carlisle, Suite 1000, 4600 Madison, Laws vary widely from state to state,however.Vermont, Kansas City, Mo. 64112-3012. Telephone: (816) 561-4414. 1 for example,allows unrestricted impact fees that can be can also provide information. Write me at Park City School used for any public facility,but Virginia's impact fees can District, P. O. Box 680310, Park City, Utah 84060. Te':e- be used only for roads.Other laws range from very specific phone: (801) 645-5600, ext. 125; fax: (801) 645-5609.—t1.1.r. ;1 ': • 1, !11, lit taint• \tit• staved I wit sed on the desired out- courts in California. Florida. Illinois. and \Vlx'ttll,in I'I!t• and imposition of impact fees to legal test usually applied to these fees—called tht. rational 1—ild lit '.k , lal< rotnns ter children. (Some differences of nexus test—requires that impact fees be charged in proper - It!lntM .0 trvt•r %N ho would determine the exact anlount tion to the facilities needed by the development imd that 0 !!I,- !t I old vv hether "allordable housing" would be ex- they be used for the benefit of the nett'developnu•nt- 111w i ht. lttrnwr \ta; resolved legally: "111e city and county the courts usually examine ;ix hu•lors then Ieukim, .t lint t10;e on the recommendation of the district. impact fees: r I t• ullcd in the decision not to vxemlll ally 1. Distance—the di,tance betwet'n the t;lcilitr ht•nl,g hulls I and the new developmenu ! !I, '1! !nd final ,tep in Park City was tht• formal ap- 2. lime—the time between the collection of the Iccs ;old hnl,art Ict•s and the agreements by all three the building of the new facility; � .t-nna'0ta11 ht,dit•. 0ur linal plan—which called for a tee 3. Cost—the anlount of funds collected from the ft'(" and ' 11 ij i l,t r hriln'll y dwelling; unit—complied with all ap- the cost of the new facility: !her !.ut I:rt,, local erdinancv;,and district policies. -1. Need—the relationship between the need for;ucll it ta• 1 IcL!,al frame%%ork cility a nd the type of developnu•nt payins_r 111v It's .i. I>t•11clit—Ilse hent•fil l0 Ihr• net\ dt \t lopntt n! I 01, It-tilt* lt*y!ad Iranlrwerk ler -4010011,161- lypr eI lac ility built: and %%hit h I< currcntly hcing usvd in it nutnbcr I; 1:armarkin.v—t lit• pro\ise thilt It's•; %01 ht. 11" t! „11;\ its I!!,- , ounlr\ and ha, beell uphold b\' build the IN pe of lalt'lllt\ ItIr tt'hich Ills' lt't t'ft t ,r11t II'")I.19(I\RI I if 11 I;\.\l. \I\lit I I I"" I:; Impact fee systems generally must demonstrate that the when a building permit is issued; the person who receives fee imposed satisfies these six factors. Usually, that means the permit—either an individual homeowner, builder, or de- 1 impact fees are restricted to capital expenditures and cannot veloper—must pay the fee, which the count✓ collects and be used for normal maintenance and operation. The fees forwards to the school district. We pay a small administra- j must be spent within a relatively short period of time (typi- five charge for that collection service.The money,which we catty between three and seven years), and maintained in a have in a four-year escrow account, will be used strictly to l separate account. Fees may be used for new facilities only; build new facilities and not to renovate existing facilities. Ul- monies may not be used for the repair of existing buildings. timately, expecting that we will raise some$20 million over In addition to the general limitations listed above that the next 20 years, the impact fees will be used to repay our apply to all types of impact fees, school facilities fees usually $32 million bond issue. have some additional requirements. These include: requir- Arguments pro and con ing an annual review of the data used to derive the amount of the impact fees and raising or lowering the amount when Our community has been very supportive of the impact warranted; crediting property owners for past taxes paid on fees. In a survey we took, 87 percent of the people within the land and for future taxes to be paid on bonded indebted- our school district were in favor of the fees, and we had ties- of already existing school facilities; exempting com- unanimous support from the school board and from city mercial property from fees; charging second homes less and county elected officials. We also won support from real than primary residential units; and restricting the expendi- estate brokers, developers, and home builders, some of ture of the funds to schools while prohibiting use of the whom had already voluntarily provided impact fees. funds for the building of district offices, bus facilities, ware- The imposition of impact fees in our district has not gone houses,and other structures without classrooms. uncontested, though. Last December, a bill was introduced We used all these techniques when we established impact in the state Legislature that would prohibit school impact i fees for the Park City School District. fees from being issued, and serious efforts are being made I� Calculating the fee at the legislative level to countermand our efforts in Park City.Opponents have raised the issue of affordable housing, Although some states specify a total fee (usually based on claiming that the cost of housing will rise so significantly a specific dollar amount per square foot or per bedroom or that people, especially first-time home owners, will no bathroom), many states do not. In some states, school dis- longer be able to afford to buy a house. tricts may devise their own method for calculating the fee, Nationally, other arguments have been made against taking the following six variables into account: school facility impact fees. Opponents argue that impact I. Capacity of current facilities—The greater the capacity fees are really nothing more than user fees that conflict with or the more room that exists in current buildings, the less most state constitutions that, in turn, require a free and uni- need there is to build new facilities and, consequently, the form system of public education to be provided at public ex- smaller the amount the impact fee is likely to be. pense. It is this constitutional requirement that makes 2. The school district standard—Each school district school facility impact fees different from every other type of must establish a local standard for the number of children impact fee,opponents contend. per classroom its citizens wish the schools to maintain.The In the July 1992 issue of Land Use Law,though,authors C. greater the number per classroom, the less the amount of L. Siemon and M.J. Zimet contend that a#bblic school dis- the impact fee. trict is no less free or uniform simply because the district re- i3. Average school costs—The cost of land, construction, quires developers to pay a pro-rata share of the cost of addi- and equipment for a new school will differ from location to tional school buildings needed to accommodate the student location.The size of the school will also determine the aver- growth directly caused by their developments. The Florida age cost of a school per student.The lower the cost of build- Supreme Court agreed with that assertion when it upheld ing,the lower the amount of the impact fee. the constitutionality of school building impact fees in the St. 4. Projected student growth—The past student growth in Johns County,Florida v. Northeast Builders Association. a school district, as well as other growth factors such as the There are limitations to what school facility impact fees state of the general economy, the attractiveness of the area, can accomplish, however. They clearly cannot pay for the and the economic incentives given to businesses to relocate, entire cost of new construction,since the simple act of cred- help determine the growth a school district can reasonably iting past and future taxes significantly lowers the amount i expect in the future. The lower the projected growth, the of the impact fee. In Park City, such credits lowered the less the amount of the impact fee. amount of the fee by 38 percent. Other factors, such as pro- 5. Student generation rate—The number of children per jected student growth, reduced the figure even more. As a household or dwelling unit will affect the total facilities result, we currently estimate our school facility impact fees needed. Thus, the lower the number of students per house- to generate only between 25 percent and 35 percent of the hold,the lower the amount of the impact fee. funds necessary to build new facilities. Nonetheless. 6. Credits for back and future taxes paid for bonded in- throughout the nation these percentages can add up to bil- debtedness—Landowners should receive credit for the lions of new dollars. back taxes they have paid or the future taxes they will pay The real justification of impact fees, though. ultimately ! to help finance school construction bonds.The more taxes rests with our future—our children. To educate our chil- 1 that are paid,the lower the amount of the impact fee. dren for the 21st century,we must have adequate classroom Taking those variables into account, we developed a for- space. In our experience, school impact fees are the fairest i mula in Park City that resulted in a fee of$3,400 per unit,for and most sensible way of raising the funds necessary to. a total of about $1 million for the first year. The fee is paid build the schools of the future. ®' I 34 MARCH 1995 THE AMERICAN SCHOOL BOARD.101'RNA]. i For Presentation to the County Commissioners Alan Belch -Putting Children First March 21, 1995 Putting Children First(PCF)first addressed the overcrowding issue during the discussion of school construction last fall with both the school board and the County Commission. PCF put forward a Comprehensive Redesign Option that would have alleviated the overcrowding problem at Chapel Hill High next school year. The Option was to delay building the new high school and redistribute the voter-approved bond money to expand the existing high school for the 95-96 school year and to build a simplified design elementary school. The expanded space at Chapel Hill High would have then been available for transformation to a middle school in the future. The land purchased for the new high school could have been held to build another high school in the future or for a desperately needed elementary school on the east side of Chapel Hill. The plan would have had the added benefit of using existing approved bond funds. Unfortunately, this plan was not considered. Many who are now advocating higher impact fees urged the school system to go ahead with its plans. We ended up with bids that far exceeded the available bond money for the new high school. The school board cut significant portions of the design leaving a facility that many will find inadequate when complete. The bids for the elementary school funded for at least the next ten years by pay-as-you-go funds previously allocated for repair projects also came in over budget. The school system solution does little to deal with the immediate overcrowding situation, especially at the high school. The same old solutions that the board and now SOS advocate create for you a political situation where it will be much more difficult to pass needed bond issues. Recent history makes it difficult to convince voters to trust the existing power structure with bond money for construction. Increases in the impact fee will not provide enough money to build additional schools. PCF thinks that it is time to deal with the real issues and make the following recommendations to the Board of County Commissioners: 1. Hold the impact fee at $750. Increasing impact fees may have the undesired effect of stifling economic development in Orange County, thus eroding future tax base, and create a problem with affordable housing. 2. Use all political and legal influence to have the Chapel Hill-Carrboro School system fully implement the recommendations of the Pannesi report and save $143 million out of the overhead and administrative budget. This money would be available for building and education programs. 3. Immediately appoint the committee on setting affordable school building standards in Orange County as suggested by your members in earlier County Commission meetings. 4. Demand zero-based budgeting and program accountability from the Chapel Hill- Carrboro City Schools as requested in the past two years of budget hearings. Once the school system has demonstrated fiscal responsibility, submit a bond issue to the voters and accelerate the proposed building program to prevent the projected overcrowding outlined in the current capital plans. 5. Fund new schools through bond issues and not Certificates of Participation. Trust the voters who trusted you by putting you there. Putting Children First sees that real solutions to our immediate and long-term overcrowding situation are possible. We are encouraged by the Orange County System's creative consideration of using existing school buildings to deal with their overcrowding situation. We encourage our system to consider similar creative solutions such as using the Lincoln Center to alleviate overcrowding. We hope that our Board of Education and Board of Commissioners will consider our proposal a real solution to the overcrowding problem. ORANGE COUNTY AFFORDABLE HOUSING COALITION P . 0. Box 1057, Chapel Hill, NC 27514 March 21, 1995 Orange County Commissioners 200 S . Cameron Street Hillsborough, NC 27278 Dear Commissioners : Thank you for this opportunity to comment on the proposed School Construction Impact Fee increase . Our Coalition has been working to advocate creation of rental and home- ownership opportunities for many of those who labor in our county who, because of the escalating cost of housing, are increasingly forced to commute from outlying areas . Obviously any increase in the cost of a home purchase impacts those at the lower economic scale the most . At the same time, we recognize the need to obtain additional funds to cover the added education services new homeowners require . Impact fees meet that need . However, we cannot endorse the proposed increase in the impact fee to $1, 000 without the inclusion of a progressive system of implementing the tax. We recommend that a method be established to insure the impact fee does not place a larger burden on those least able to pay. That method could include, but not be limited to, using indexing, a sliding fee, or tax credits to insure fairness . In your deliberations, we urge you to keep in mind the goal of providing housing possibilities for those in the lower economic levels . They should have a choice to be a part of Orange County during their non-working hours, to share in its festivals, to join its houses of worship, to educate their children in our school system, and to give back to the community where they work . We urge you to make whatever effort is necessary to establish a progressive tax plan that insures that Orange County remains a welcoming, diverse community, enjoying the benefits of the energies, talents, and dreams of people of every income level who want to live here . inc rely yours, Cha es E. Zi for Ora e County A fordable Housing Coalition Town of Chapel Hill Fax:919-967-8406 Mar 21 '95 9:26 P.01101 tL c CA TOWN OF CHAAL HILL e {�e GpraC_ 306 NORTH COLUMBIA STREET CHAPEL HILL,NDRTH CAROLINA 27516 ex-) - (919)968-2714 February 22, 1995 FAX 91%%7-8406 Mr. Moses Carey, Jr. , Chair Orange County Hoard of Commissioners PO Box 8181 Hillaborough, NC 27278 Dear Moses: Re: .5chool, impact fees ; I'm writing on behalf of the Town Council to encourage the Hoard of Commissioners to increase the present school impact fees. . The Council believes this fee 'is an equitable means of funding new school facilities which 'are needed as a result of new development. The Council understand* that the ,fee was initially, set below the amount which mould be necessary to. recover the school facility I allocable to:a now home. On behalf of the Council, Z" urg6 the Board Of Commissa.nnerS to increase the school impact fee so :that residents in new homes will pay more of their fair share of school costs. To the extent that owners of now residential development pay more of their share, the -Leas they will ' have to" be" subsidized from taxes on existing -.development-,- b*th residential and non-residential. At the same time, the Council also supports action by the Board of Commissioners which will reduce or. waive .school impact fees. for new housing specifically built for low-income families: I be13,eve that school facility costs associated with housing for low-income " housing can be appr•optiately funded through.the overall .tax base. Thank you for your consideration of these comments. Sincerely, Kenneth S. Broun Mayor Cc: Town Council Pant-its'brand tax transmittal memo #-+wws•. 1 Co- Cw. r" )ts Banc� ► Dear Commissioners, March 21 , 1995 My wife Robin and I do not support the proposed increase in the impact fee for new homes from $750 to $1000 or beyond. According to the annual report for the FY 1993-94 revenues collected in the Orange County School District represented only 27%, for the Chapel Hill-Carrboro School District only 28% of the Planning Department's projected revenues. The supporters will angry that due to the shortfall this should warrant the increase in the impact fee. There was a rush to obtain building permits in May and June before the impact fee became effective on July 1 , 1993. The Planning Department's technical report provided projections of impact fee revenues based on past building trends, without any consideration for the expected rush to obtain a permit before the fee became effective. The Orange County Planning Department demonstrated a total lack of COMMON SENSE in estimating the revenues to be generated by the fee. At least the County Budget Department demonstrated some sense when it cut the revenue projections in half for the capital improvement program. Errors by the Planning Department should not constitute action on our part. Any projections by the Planning Department should be fully scrutinized. I know some people will say, yea tax those outsiders coming in. If that was only true, it would gain a lot of support. The truth is that it does not matter if you have lived here one week or all your life, such as my wife Robin who has lived some 30 plus years in Orange County and whose family dates back well over 200 years. If you buy or built a new home you pay an impact fee. The fact is the majority of the newcomers purchase resale homes and there are more resale homes on the market than new homes being built. How many people who have paid the impact fee have lived in the County 5 years or more? How many newcomers have actually paid the impact fee?! What really needs to be done is to tax those newcomers who have lived here less than five years whether they buy a home just completed or one that is 100 years old. As it stands right now if that family of four who just moved here buys that 100 year old home they pay no impact fee. How would you administer such a program? Simply put if you paid county taxes less than 5 years you pay an impact fee. In my opinion this would also deal with the affordable housing issue to a great deal . Granted it would not solve the issue but it would reduce it to a level that is more manageable. Another possibility is a transfer fee for each deed that can be base on a flat fee or a percentage of the price of the property. If the law has to be changed then do so, it is not our fault that it wasn't done right the first time. On March 8 this Board voted 4 to 1 to ask the state lawmakers to put sexual orientation into the county's civil rights law, but when it comes to correcting the inequity of the impact fee you show a total lack of leadership and backbone. I will admit that you should not bear all the blame, that Mr. Hackney and Ms. Barnes our representatives in the House are more interested in there own image verses there constituents' needs. If you ask for nothing you will receive nothing! 9 Republicans are not that difficult to talk to. You talk to me and I'm a Republican and I have discussed a number of issues with each of you and I haven't bitten one of you yet. I will volunteer my time to assist in the passage of a law that will correct the inequity in the impact fee that I have outlined. There is one last recommendation we would like to make. I was at the February 9 work session between this Board and the two Boards of Education. When money came up and the need for more of it, the Chapel Hill-Carrboro Board would start foaming at the mouth as if it the had rabies. The Commissioners need to scrutinize this Board's budget because I'm not sure the leadership can spot fat that needs to be cut. According to some estimates upwards to 3 million dollars in administrative costs could be cut with no damage to the system. The school board needs to demonstrate that it can spend tax dollars in a responsible way before requesting more funds. Thank you for your time. As you can see by the length of this letter we would have exceeded our allotted 3 minutes at the public hearing. Since1r-elyp Patrick Mulkey 3812 Hwy. 54 West Chapel Hill, NC 27516 942-3814 CHAPEL HILUCARRBORO SCHOOL DISTRICT SCHOOL FACILITIES PLANNING March 21, 1995 Present Situation With the influx of some 360 students per year from 1990 to 1995 and an inadequate rate of new school construction, the present facilities are being utilized over their design capacity. At the Ephesus Road school where my wife and I tutor, we started the school year at 634 students, and as of this week are at 686. We're now up to five trailers, holding classes in the library as well as the atrium, and last week I found classes in the lunch room. Beyond the approved high school and the McDougle school to open August 1996, there are no funded elementary or middle schools on the drawing boards. New schools seem to be planned at the 650-700 capacity level. You'll note that with 360 new students added each year, the system needs the equivalent of a new school every two years even to stay at today's overcrowded level. Commentary The growing need for additional schools is apparent. The investment in a new elementary school is about $14 million...a new middle school will cost some $18 million for a total of$32 million and a capacity of 1350 students. The average capital investment for each new student is, therefore, $23,700. To deal with the problem of building and financing the construction of these urgently needed facilities calls for an objective, careful examination of the true impact of new home construction on student population growth. Developers are required to build roads, bridges, sidewalks, sewage and water systems to avoid having the general public picking up the capital coasts. The same should apply to the added school facilities these developments provoke. For example, if three new homes bring two additional students into the system, the three homes should cover the actual capital outlay of two times $23,700 divided by three, or $15,800. Today's impact fee is a mere $750. Recommendation I urge the County Commissioners meet with authorities of Chapel Hill and Carrboro as well as the local School Board and school officials to quickly measure the level of today's overcrowding, agree upon a forecast of student population growth through 2002 and establish a realistic building program. Secondly, after reviewing the true impact of new home construction on the school system, hold public hearings to arrive at a new, fair impact fee that more accurately assesses those costs to new home construction. Prepared by: Robert P. Foley :x Presentation to Orange County Commioners by Peter Morcombe at the OWASA building rift March 21,1995 Most of us are here tonight to express our-concern about the over crowding of our schools. In PCF, we believe the problem can be sOlVed without raising taxes. In spite of our many constructive proposals, PCF has been bilsrepresented in the media as people who do not care about education. In fact, we care passionately about it. Most of us expect to have children in the public schools foi many, many years. For example, my youngest son will graduate from high school in the year 2012. In PCF, we know that more money will not help when financial actunett is jacking. The proposed impact fee increase is not siifficient to fill the financial hole created by the Chapel Hill-Carrboro City Schools. Raising property taxes by an amount that is sufficient to solve the problem will face massive. opposition from many sectors of the community. The only viable option is to reduce costs. Last year our Board of Education threatened to cut funds for the Blue Ribbon 'Task Force, the debating team, the band and many other popular programs unless taxes Were raised. The Orange County Commissioners were not fooled by this ruse and refused their request. Insb--ad of heeding your clear message, they are back again with the same old solution. We ask you to demand more creativity. There are ways to save large sums of money without affecting instruction or successful programs. On March 18, the Herald Sun reporb--d that the Durham Schools, faced with large capital costs, propose to cut many administrative positions. Here are just a few that were listed: POSITION SALARY Associate superintendent for curriculum &instruction $98,683 Assistant superintendent for innovative programs $92,515 Executive director for auxiliary programs $72,162 Savings of this kind can provide ten times more funds than the proposed hike in impact fees. Besides the salary costs, these positions have fringe benefits, secretarial support and fine offices which will no longer be needed. There are no equivalents of these positions in private education and we will find that we do not need them either. It is time for Neil Pedersen to start working on a similar list. �7,�� 11 1 -'21� -�//V - My husband and I have lived in this community for the past twenty-five years. We presently have a fifth grade child at one of the many overcrowded schools. For the past seventeen years my husband has made a daily commute of ninety miles so that we could live and raise our family here and enjoy the benefits of this excellent community, including the fine school system. We've seen the "village" grow into a bustling small city, Carrboro become a dynamic town, and Hillsborough benefit from growth and development. The growth has provided jobs and a healthy economy even during times when the rest of the country suffered recession. One of the primary growth industries has been residential housing, as more people flock to this area, noted and promoted for its many amenities, among them one of the state's flagship school systems. Well,folks, the flagship is taking on water and slowly sinking. With all the growth in residential housing one variable seems to have been left out of the equation: providing schools for the hundreds of new students the school system is gaining yearly. When our daughter was born in 1984 I thought, "It's been more than a decade with no new elementary school; surely by the time she's in kindergarten...........wrong! Adding mobile units will never ultimately remedy the problem because there are physical limitations such as land, optimum capacities of libraries, cafeterias, gymnasiums, art, music, resource and health rooms. Transportation-and safety issues also exist. For example, we were notified in October that our child cannot even have a friend ride home on the bus with her because the bus was "at capacity." y Severe overcrowding is detrimental to the feeling of"ownership" and community among teachers, children and parents, thus adversely affecting the working/learning environment. Additionally, overcrowding poses difficulties in effective management of the daily school program for which administration and staff is responsible. Those most affected are the least able to advocate for themselves: the children. For example, in each of our child's last three grades there have been textbook shortages, due, in part, to sheer numbers of children. She has regular school library visits only every other week due to numbers of children needing to be served, especially the younger ones needing basic library skills instruction. We have excellent teachers who are trying to do their best but their efforts are compromised by the overcrowded conditions out of their control and out of control. Flagship school system? I don't think so. Regardless of how and why elected officials (council, aldermen, county commissioners, school board,) and advisory boards (planning, zoning, public works,) kept out of each other's affairs in the past, the children need you to work together effectively from this point forward to address the situation of land use planning, population growth and school overcrowding. Parents, students, teachers, and the business community will also need to participate. This community has come together to tackle many issues during the twenty five years I've lived here. We can do it! School children deserve more than cursory bottom-line treatment. Their quality of education should be a top priority. They are the future. 01"1 - /g'!"YIPl Me L(Am Q��. C�'1 C 4✓t/r/( d�lJ) L 1� L�D G(/(/L Q ( 1.11 0 7 LtJ \.� ice"` dim Orange County Commissioners 22 March 1995 Good Evening, I am a parent of three children in the elementary, middle and high schools of the Chapel Hill-Carrboro City Schools. It is in my best interest to have safe and effective schools. Tonight you will hear that our schools don't have enough money. I disagree. I think that 23 M$ is more than enough to construct a single high school. To spend more on the existing school system is to further widen the gap between the Orange County and Chapel Hill City Schools. Given the difficulties in the County, I could not argue that the CHCCS are more important. The problems which confront us are very difficult. Logically, the answers will be equally challenging. We just can't afford the "same old solutions". We must go beyond the ordinary, "mo money" answers. Towards this end, there are several logical steps which should be considered. First, The Chapel Hill-Carrboro Schools should adopt zero-baseline budgeting. The present budget model is one used by the US Congress to run up a 4 trillion dollar debt. Under this type of budgeting, you take whatever was spent last year and inflate it by a certain percentage for the next year. Under zero-baseline budgeting, schools would have to justify each program, line by line. Second, turn more of the day-to-day operations over to the school governance councils (SGC) which, at present, only write school improvement plans. With increased reliance on the non-paid SGCs, fewer employees will be needed in the central administration. The savings could be redirected to the classrooms. Third, turn the former Lincoln high school back into a school, if only for a short while. We all know that the proposed high school in Chapel Hill will be late and over-budget. We own the Lincoln high school and could renovate it within a short time. Fourth, as is common in private industry today, when demand exceeds capacity, outsource. The manifestation of this is charter schools which, under contract, provide us with a opportunities more palatable than trailers. In sum, the reason that the schools are out of money is not because we are taxed too little but that the local school board spends too much. . It is said "when you find yourself in a hole, stop digging". I say, give them alternatives, not a bigger shovel. John Reinhard (942-7811) Presentation to the OCC at OWASA 3/21/95 Overcrowded schools in Chapel Hill is the unfortunate situation facing the Commissioners and the CHCCSB. It' s one of tantamount pandimonium for the school year 1995-96. Last July in Cedar Grove, Mr. Link warned that there may be problems in mortgaging the school system for the next 10 years with the Certificates of Participation and that just possibly the system would not have enough money to make much needed repairs in our existing buildings. Mr Link did not know of the prophetic nature of his comment. Some of the administrators outside of Orange Grove noted to us that we would actually need "2" elementary schools for the 96 school year. Many thanks to the information supplied by Mr. Halkiotis in those meetings last summer. He showed us how 2-3 schools could be built with the same money being spent on one elaborate school; especially since the money was coming from a source other than a bond referendum. Using the Certificates of Participation, and skirting the voters will on this issue, and then spending the money for only one school when we really need "2" is sending a message of missmanagement and a feeling of mistrust with the taxpayers dollars. Again thanks to Miss Gordon for her suggestion that a committee be formed to come up with more cost effective building plans. I hope that the committee is formed most expeditiously. The Status Quo of spending more and more taxpayer dollars without any accountability has now gotten us into a fix. Our School Board has an annual budget of nearly $40 Million dollars . There is no accountability for this money to the Commissioners. Mr Ron Panessi a professor of the Kenan-Flagler Business School, has completed an in-depth report on the operating budget for the CHCCS. He has stated that $1-3 Million could be saved each year out of the overhead and administrative budget alone. This money could be available for building and education programs. This savings represents 5-10% of this operating budget. In a family medical emergency where a child has to have physical therapy for a year or more and insurance would not cover all the expenses, I daresay that most of us could and would cut our family budgets by 5% to pay for these much needed treatments, because it would be an investment in our childs future. This is all that we are saying to our school board, cut the budget by 5% to pay for the buildings and education of our children. Show the taxpayers that in fact you are willing to invest in the future of all children. Then the taxpayers will gladly pass a bond referendum to build the schools . The most important part of Mr. Panessi' s report is the ZERO Based Budgeting that begs the accountability necessary to show where the money is going. We would urgently recommend to the commissioners that they use all of the influence in their power to strongly recommend full implementation of the Panessi Report and help get our school back on track to eliminate overcrowding. Please don't leave us with the STATUS QUO! ! !