The Pasco City Council could adopt the school impact fee requested by the Pasco School District next week.
The council hashed out the details Monday of a fee on new Pasco homes to pay for new students the homes are expected to bring.
But while Councilman Al Yenney and a developer advocated for a lower fee than the school district requested, three city council members expressed support for the district's proposal.
The school district has told the city it needs the fee to help pay for new schools.
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In the next six years, the district expects enrollment to grow by 34 percent, from 15,600 students to more than 21,000.
But the district's total capacity is closer to 14,800 students based on existing school buildings and portable classrooms.
The city council set the stage for creating a school impact fee when it approved the district's 2011-17 capital facilities plan on a 4-3 vote last week. Councilmen Yenney, Bob Hoffmann and Tom Larsen opposed the plan.
The fee suggested by the district's plan is $4,683 for a single-family home and $4,525 per unit in a multifamily project. While it's more than $1,000 less than the district's last proposal, builders and developers still claim the fees will be a barrier to growth and will drive up home prices.
Pasco would be the first city in Eastern Washington to approve school impact fees, school officials said.
The proposed impact fee is based on a formula using the actual cost per unit for the portion of new schools that would serve new students, according to the district's capital facilities plan. The fee was cut based on expected state matching money and estimated future property taxes from the new homes. Then the fee was discounted by 25 percent.
The school impact fee will change when the district's capital facilities plan is revised every two years, said Marnie Allen, an attorney with the Educational Service District 112 in Vancouver, Wash.
Yenney suggested a graduated fee that starts with a high discount, with the discount gradually decreasing to about 50 percent total. Then already approved lots could be developed under the lower fee. He said he has a problem with charging a retroactive fee on those lots.
But if the impact fees were discounted further, the community would get even more behind in paying for new schools, Councilman Saul Martinez said.
Yenney said changing the law to allow a real estate excise tax needs to be explored. Resold homes likely generate as many new students as new homes, he said.
If a real estate excise tax becomes a legal option, Pasco City Manager Gary Crutchfield said he would suggest the city use one to replace the impact fee. But that isn't a current option.
Builders have told the city that the same home in Pasco sells for about $10,000 less than in Kennewick or West Richland, Crutchfield said. It's difficult to accept the idea that the market won't accept the proposed fee of $4,683 for a single-family home.
Courtney Flora, who represents FBA Land Holdings, said the suggested multifamily impact fee would have a disproportionate affect on owners, builders and users and may slow growth. FBA Land Holdings -- which owns 14 acres north of Sandifur Parkway and west of Road 76 where Big Creek Land Co. of Idaho plans to build the 50-duplex Columbia Villas -- would prefer a 50 percent total reduction on the fee.
Flora urged the council to slow down the decision process. It's important to have a third-party review and have the data used to create the fee examined, she said.
"We believe the district hasn't shown it's work," she said.
But Allen said the capital facilities plan has been revised and worked for the last two years with input from real estate agents, builders, the city and a community task force. The details used to determine the fee are outlined in the plan.
And the district did bring in an outside consultant to examine the district's demographics, said John Morgan, the school district's director of operations.
While bonds are the best way to fund new schools, impact fees still are needed as part of the funding mix, Morgan said.
The school district wants to use about $3.6 million from the impact fees to help pay for $80.8 million in capital improvements -- two elementary schools, an early learning center and portables. Most of the money would come from voter-approved bonds and state matching money.
Suggested exemptions to the proposed fee include rebuilding an accidentally-destroyed home, additions or repairs to existing homes and senior projects, where the project includes age requirements, said Rick White, city community and economic development director.
Theresa Richardson, executive director of Habitat for Humanity Tri-Cities, asked the council to exempt low-income projects by qualified Community Housing Development Organizations from the fee or allow those organizations up to 10 exemptions per year.
The suggested fee would negatively affect the nonprofit's ability to partner with Pasco families to provide quality, affordable housing, she said.
The district would request having the exemption limited to 10 each year, with input from the district before approval, Allen said.
Pasco Mayor Matt Watkins said an exemption could be added after an impact fee ordinance is approved.
Crutchfield said he would suggest the council approve an impact fee and put it in place as soon as possible.
"We can't not act on this," Watkins said.
-- Kristi Pihl: 582-1512; email@example.com