Board members seek more funding scenarios for new schools and time for discussion before they reach consensus on the matter
If the Sarasota County School Board wants to impose higher impact fees on the construction of new homes to help cover a projected $326 million expense for additional schools over the next 10 years, it must vote to do so by Oct. 20, staff stressed this week.
Kathie Ebaugh, the Sarasota school district’s director of planning, pointed out that the School Board moratorium on the imposition of impact fees will expire on Dec. 14. Because, by law, the County Commission would have to hold a public hearing on an ordinance setting new impact fees, the October School Board vote would be necessary to get the item on the County Commission’s Dec. 8 agenda, Ebaugh added.
If the School Board members choose to let the moratorium end, no action is needed, she pointed out. The moratorium has been in effect since December 2010.
Should the board choose to increase the fee, Ebaugh said during a morning workshop on Sept. 15, the $2,032 rate still would be in effect for the first 90 days after passage of the ordinance. According to the law, she explained, that “information period” is provided so the public can be made aware of the change.
During a Sept. 15 public hearing to gather comments on a consulting firm’s August 2015 draft regarding district growth management, Ebaugh explained that the impact fee would be assessed on any new construction for which the county approved a permit after the reinstatement of the fee. The money is not paid until a Certificate of Occupancy has been issued, she noted.
The last time the School Board acted on impact fees, the members voted unanimously on Oct. 21, 2014, to approve a one-year extension of the moratorium, through Dec. 14, 2015. Previously, the School Board had voted in 2012 for a two-year continuation of the original moratorium.
A growth management study the School Board commissioned last October, including an update of impact fees, was prepared by Tindale Oliver of Tampa. It projects another 14,569 students in the district by 2040. The analysis says the district may need to build up to seven more elementary schools, two new middle schools and two more high schools to accommodate that growth. Over the next 10 years, Tindale Oliver projects the district will need to fund up to four more elementary schools, one new middle school and another high school.
The last impact fee the School Board set for a single-family home in Sarasota County was $2,032, with the ordinance approved in 2004. That figure represented 100 percent of the amount the School Board at that time could justifiably ask the County Commission to impose, based on the economic conditions in the county, district staff says. The Tindale Oliver analysis provides data supporting a revised impact fee of $7,835 at the 100 percent level. At 25 percent, the amount would be $1,959; at 50 percent, $3,918; and at 75 percent, $5,876.
At the 100 percent mark, Tindale Oliver projects the district would bring in $168.5 million between 2016 and 2025.
During the Sept. 15 public hearing on growth management, two speakers urged the School Board not to raise impact fees, while two others stressed that current taxpayers should not be forced to pay for schools necessitated by increased population in the county.
A memo district staff provided to the board for the Sept. 15 workshop points out that staff held two public information sessions on growth management on Sept. 2. During the first one, attended by about 35 people, “The overwhelming message was clear, that some sort of impact fee should be assessed,” the memo says. During the second meeting, only four people were present and no clear position was evident, the memo adds.
The public hearing
During the Sept. 15 public hearing, Lucy Gallo, managing principal of Development Planning & Financing Group Inc. (DPFG), who was representing the Manatee-Sarasota Building Industry Association, questioned the student enrollment projects in the Tindale Oliver study — a point that also seemed to concern School Board members, as indicated by discussion earlier in the day.
Over the past 15 years, Gallo said, the district added 933 students, about 60 per year. Tindale Oliver’s projections “are pretty enormous compared to [those] trends,” she pointed out.
“I work extensively in real estate development,” Gallo continued, “and I’m not so sure our recovery’s been established in Sarasota County yet.”
She further noted that the Sarasota County population projection data for 2016-2040 that Tindale Oliver used was based on the March 2014 report by BEBR, the Bureau of Economic and Business Research. BEBR updated that data in a report issued on Sept. 10, Gallo noted. Those revised figures show the medium level of population growth could range from 18,500 to 170,300 by 2040. “In a financial world,” she said, “that is an enormous range upon which to make informed decisions.”
However, school district staff pointed out to the News Leader that the Tindale Oliver study did use the same population growth range that Gallo cited.
Also appearing before the School Board on behalf of the Building Industry Association, Sarasota attorney Morgan Bentley of Bentley & Bruning, questioned whether the growth management plan “meets the rational nexus test.” That test, as set forth in case law, including a Florida Supreme Court decision in 1976, requires the following:
- Proof that a new development needs specific infrastructure, such as schools.
- Identification of the infrastructure’s cost.
- A fee amount based on the extent to which the new development will realize a reasonable benefit from the infrastructure.
“You have some discretion,” Bentley told the School Board, “but it’s a pretty specific standard that you’ve got to meet. The way this information is coming in, I’m not sure we’re there yet. We may get there.”
Bentley requested the board’s permission “to interact with your staff and, especially, Mr. Hardy, to work through these issues for the legal side of things.” Art Hardy is the board attorney.
No School Board member responded.
Bentley also asked the board to renew the impact fee moratorium for two more years “while we look at this.”
On the opposite side of the issue, Control Growth Now President Dan Lobeck, a Sarasota attorney, told the board, “If you don’t think we’re in a construction recovery right now, you haven’t been following the facts. We’re solidly in a construction recovery.”
Even if the board opted to raise the impact fee to the maximum level outlined in the Tindale Oliver study, Lobeck pointed out, the revenue over the next 10 years — $168,500,000 — still would not cover the projected expense of the schools.
Lobeck also noted that as the district is forced to allocate more of its money to construction, the less funding it will have for maintenance, the purchase of equipment, updating technology, renovations and school buses, among many other demands.
If the board members will not raise the impact fee for all new home construction, he said, they at least should implement a fee of 100 percent of the proposed level — $7,835 — for construction in the county’s 2050 area, east of the Urban Service Boundary. The county’s 2050 plan “says growth out east is supposed to pay its own way,” Lobeck stressed.
However, Lobeck said, “I’m asking that you not slash [the fees] … at all.”
School concurrency is another option, he noted, and it is allowed through an interlocal agreement between the School Board and County Commission.
In conclusion, Lobeck asked the board members to put aside their association with the “real estate industry” and the thought of any campaign contributions they have received from developers. “I hope I can trust you. I hope the people of Sarasota County can trust you just to do the right thing for the schoolchildren.”
The last person to make his way to the podium during the public hearing was Terry Rawson, a Sarasota resident. People he had spoken with, he said, cannot believe the board members might refuse to raise the impact fees. Increasing those fees has “just gotta happen,” he added.
During the workshop that morning, Deputy Superintendent Scott Lempe joined Ebaugh, the planning director, in reviewing school construction funding scenarios prepared for the board.
Board member Shirley Brown was among the most vocal in wanting to see more of those options before the board makes a decision on impact fees.
In response to a question from board member Jane Goodwin, Ebaugh said the law requires that impact fee revenue be spent within seven years of its collection; otherwise, it must be returned to the entities that paid the money.
Board member Shirley Brown pointed out that a request is expected to go to the Legislature next year to allow districts to raise their capital millage rates, especially because some districts that borrowed extensively to maintain operations during the Great Recession are having trouble covering their debt. More capital funds would help the Sarasota district in planning for new schools, she said.
Further, new development will mean more ad valorem tax revenue for the district, Brown noted, which will help pay for new schools. District staff has factored in a 6 percent increase in the tax base each year through the 2019-20 school year and 4 percent annually after that. “I think [that is] a little too conservative,” Brown said.
This year, the district’s tax base was up 7.5 percent.
However, Ebaugh responded, construction costs could go up as well.
Regarding enrollment projections in the Tindale Oliver study, Lempe noted that in-house estimates for the current school year were off “literally about a classroom across the district” for the elementary and middle schools, with 27 more youngsters so far at the former level and 20 at the latter. However, 316 more students were enrolled in the high schools than district staff had anticipated, based on the five-day count.
If enrollment for the 2016-17 school year falls below the study’s estimates, Lempe said, the board could put off its planning for new schools for another year.
A chart presented to the board shows the first elementary school would be needed in north Venice, necessitating a land purchase of about $2,575,000 in 2016. The $28,119,000 cost of construction also would be budgeted for 2016. The school would open in 2018, Ebaugh said.
The construction estimate, Lempe said, is derived from the cost of the district’s most recently completed elementary school, with adjustments based on today’s building expenses and a 3 percent inflation factor for 2016.
The second school on the list, also for elementary students, is proposed for the West Villages area, part of the 2050 plan. The property purchase —estimated at $2,575,000 — would be planned in 2016 as well.
Lempe pointed out, “Our schools are a bit more expensive on a per-student station cost basis, and that’s on purpose.” For example, he said, thermal storage equipment in new schools is enabling the district to achieve “dramatic savings on [the] electric bill — from the day you open — dramatic.”
Further, new schools are constructed of brick, he continued. District staff already is planning to paint Riverview High School for the first time since it was completed, at a cost in the range of $200,000, Lempe noted. The school will have to be repainted every seven years, he added.
In response to board members’ requests for more funding scenarios, Lempe said staff probably could have those ready “in relatively short order.”
If any board members want more variations, he added, they are welcome to ask for them.
All board members will receive all the scenarios, regardless of which person requests them, Superintendent Lori White said. “Request it directly to Scott, and please don’t have conversations in between times between board members, which you all know,” she added.
With the Oct. 20 deadline looming, discussion ensued about when the board would discuss the issue again. The next workshop is set for Oct. 20, White noted, though another option is the regular board session on Oct. 6 in Venice.
Editor’s note: Sections of this story were updated in the afternoon of Sept. 18. Those changes pertained to the 2004 impact fee, population projections in the Tindale Oliver study, estimates of increases in ad valorem tax revenue and the inflation factor used to figure future construction costs.