SAB unlikely to untangle developer fee problem

SAB unlikely to untangle developer fee problem

(Calif.) The State Allocation Board is set to meet today to take up a number of pressing issues concerning school overcrowding and dilapidated facilities. But don’t be surprised if they punt on the elephant in the room–what to do about a controversial hike in developer fees.

The fees, authorized in May by the board after state coffers ran dry, imposed a first-ever, blanket burden on builders to potentially pay the whole cost of a school project.

Then, last month, voters approved a ballot measure authorizing the sale of $9 billion in bonds to cover the state’s share of school construction needs over the next few years, theoretically removing the need for the higher fees.

But it turns out that state law is silent on how to roll back the fees, and many around the Capitol had been expecting that the Allocation Board and their attorneys would bring a plan forward at today’s meeting.

That probably will not be the case, insiders said late last week. The conclusion that legal counsel has come to, sources said, is that while the Allocation Board had authority to authorize the higher fees, they have no legal footing for rolling them back.

If so, attention would turn to a legislative solution because, if nothing is done, schools could impose the higher fees while also accepting a share of the bond money–something not even many in the education community support.

The messy situation derives from a complex set of rules created by the Legislature in 1998 for sharing the cost of new schools and classrooms between the state, local school boards and developers.

Under the Leroy F Greene School Facility Act, districts were provided the ability to collect Level 1 fees from builders that cost about $3.50 per square foot on residential projects, and 56 cents per square foot on commercial construction.

Districts are also allowed to hike the builders’ contribution to the Level 2 under certain circumstances, and escalation to the Level 3 fees–which prior to this summer had never been triggered–can only be authorized by the State Allocation Board when they determine that the state’s funding for school construction has run dry.

Because Gov. Jerry Brown had resisted on a number of occasions legislation that would have put a statewide bond measure before voters, the state’s pool of money for school construction was officially recognized by the SAB as “unavailable” in May.

Meanwhile, in an effort to head off the higher fees, the BIA along with school groups qualified Proposition 51 for the November ballot–which passed, and thus, authorized the sale of some $9 billion in bonds to provide the state’s share of school building needs.

Fearful that the higher fees would damage the slow-building recovery in the housing market, the BIA sued the state in hopes of rolling back the higher fees. They challenged the State Allocation Board’s determination that all the money had been exhausted–it lost at the appellate level and may be appealed to the State Supreme Court.