Pasco School Board weighs asking city for increase to housing impact fee

Members of the Pasco School Board are considering asking the city of Pasco to increase a new home construction fee that helps the school district pay for portable classrooms and other infrastructure needs.

District staff recently recommended during a board work session not to seek an increase to the fee, which is $4,700 for a single-family home. It’s generated more than $5 million in revenue for the district since 2013, allowing the district to pay down the principal on its 2013 bond and buy portable classrooms this year.

Despite the recommendation, Assistant Superintendent Sarah Thornton said district growth is still sufficient to justify increasing the fee. A few board members said it’s clear money received from the fee could do more to help the district ease school crowding. One noted the fee hasn’t stopped development.

“Every time I go to work, I just cringe,” said board member Aaron Richardson of home construction he sees. “Where are these kids going to go to school?”

The board did not vote on the issue but is expected to at an upcoming meeting. The discussion was enough to concern an advocate for Tri-City home builders, who noted that new home permits are down 50 percent in Pasco since just before the fee went into effect and that it shouldn’t be a goal to halt growth.

“It’s new home construction that allowed the city to lower its taxes,” said Jeff Losey, executive director of the Home Builders Association of the Tri-Cities.

The board and district officials sought the fee in 2012 as they struggled to keep up with explosive student enrollment that put the schools over capacity by hundreds of students. While the city agreed to charge the fee to developers, Franklin County commissioners refused to impose it on new homes built outside the city.

Student growth hasn’t slowed. The district reported having more than 17,300 students in October, more than 1,000 students more than what it reported in October 2012. The district also is striving to reduce class sizes, particularly at elementary levels, to comply with a voter-approved statewide initiative.

Even with the district considering about half of its more than 200 portable classrooms as permanent space, the district’s buildings are largely over capacity, Thornton said in her report.

The formula the district used to recommend the fee, which considers interest rates, student population and costs, assessed value and other data, indicates that even now the fee should be closer to $7,600 for a single-family home and even more for a multifamily project.

Still, as the district prepares to update its capital facilities plan with the city as part of the agreement that allows it to receive proceeds from the fee, Thornton said it isn’t advisable to request an increase.

“It is ultimately an agreement between the city and the district,” Thornton said. “It has to be a number we all agree with.”

Richardson was the only board member to say outright he would support asking the city to charge a higher fee. Board member Amy Phillips at first said she’d have a hard time supporting an increase, noting that the district’s growth has slowed from a few years ago. She said she still wants more information and that if evidence supports to asking for more, she’d endorse the plan.

Board Vice President Steve Christensen noted that part of the issue may lie in that the fee the district actually could recommend to the city — $5,706.16 — is itself a 25 percent reduction from what the district’s calculation said it should be.

“We can’t reflect what the real impact is in our impact fees,” he said. “At some point we have to decide what we’re going to do.”

Builders and others opposed the fee from the start, concerned it would affect growth in Pasco. Losey told the Herald data collected over recent years bears that fear out, as the city of Pasco tallied about 240 new single-family home permits in 2015, down from 483 in 2011. The city’s share of the new home construction market also declined, from 36 percent to less than a quarter.

Losey’s figures didn’t include multifamily housing, of which there was a single 8-unit building constructed in 2011, while permits for 62 duplexes were issued in 2015. Multifamily projects have to pay a slightly lower fee to the district per unit.

New home construction in the Tri-Cities is down overall compared to 2011, Losey acknowledged, and numerous other issues feed into housing market trends. He also understands the district is trying to serve students.

But he and others warned there could be consequences and pushing for a fee increase will exacerbate them, including limiting the growth of assessed land value in the school district, which affects how the district seeks bonds from voters.

“This is frustrating,” Losey said. “I feel like I’m reliving what we did in 2012.”

This story was originally published March 15, 2016 at 8:54 PM with the headline "Pasco School Board weighs asking city for increase to housing impact fee."