Gilroy
– School officials scrambling to shore up a $13 million budget
deficit are wary of any more freebies for developers – at least
until the district gets a little something in return.
Gilroy – School officials scrambling to shore up a $13 million budget deficit are wary of any more freebies for developers – at least until the district gets a little something in return.
In the last two years, the Gilroy Unified School District has freed developers from more than $250,000 in “impact fees” under a program to spur downtown renewal. Though limited to a handful of projects, such fees have grown more dear to the district as it tumbles further into debt.
For months, school officials have warned that growth is outpacing their ability to pay for new facilities. They have begged City Hall to force developers to shoulder a bigger share of costs for new schools. And for months, city leaders have said their hands are tied by state law in the matter, even as numerous Bay Area governments work with – and in some cases browbeat – developers into cooperation.
During a joint city council and school board meeting Monday, city leaders unveiled plans to get developers to do more for the district. They also asked school officials to continue passing up thousands of dollars in impact fees.
“It’s probably not wise for the school district to be waiving fees,” school board trustee Francisco Dominguez said after the meeting. “We’ll continue the discussion, but we’re not in a good financial position to be waiving fees. The city does it because it generates tax revenues. But for us to recoup the costs, it’s almost impossible.”
The school district currently collects $2.63 for every square foot of new housing and $.43 for every square foot of commercial development. Those fees – capped by state laws backed by the development lobby – added up to about $101,000 in lost fees on a single building rising at the corner of Monterey and Lewis streets, according to GUSD Assistant Superintendent Steve Brinkman.
“Since we already have a deficit, every additional dollar we lose makes it worse,” he said.
The city convinced the school district to waive downtown development fees two years ago, as part of a broad package of polices aimed at reviving the area. The policies have had the desired effect. A handful of new buildings have already risen and more than 20 other projects are under discussion.
At the city’s request, the district renewed the fee waiver program through 2006, and now city officials hope the district will extend the waiver for another year, followed by a year in which only half the impact fees would be waived.
Aware of the district’s budget crisis, Mayor Al Pinheiro proposed that school officials at least waive fees for buildings deemed unsafe during earthquakes. Roughly two dozen hazardous buildings have been flagged for renovations or demolition, and city council is anxious to motivate owners to upgrade their properties.
“With everything on their plate, I understand their position,” Pinheiro said of the school district. “But our job is to ask the question.”
City leaders have approved hundreds of homes that were never planned, fueling concerns about school overcrowding. But after months of pleading by school officials, City Hall and GUSD are taking the first steps toward getting developers to ease the strain on the district’s budget. That effort could take the form of a policy calling for land donations, increased impact fees, or assistance in constructing roads and sidewalks near schools.
In recent months, a handful of developers have approached the school district about ways to offset the impacts of their projects. Nonprofit builder South County Housing has offered to pay $280,000 in extra fees, while Shapell Industries, developer of the gated Eagle Ridge community in west Gilroy, has offered to donate land for a new school. The latter offer is part of a 1,000 home project targeted for southwest Gilroy.
When it comes to downtown development, school trustee Javier Aguirre said he has not decided if the school district should continue passing up thousands of dollars in impact fees.
“It’s a balancing act,” Aguirre said. “Looking toward the future, knowing that the district does not get adequate fees from residential development, and knowing that the city anticipates a lot of growth, it behooves the school district to work with the city to obtain more help from developers.”
School board officials plan to vote on an extension of the downtown fee waivers at a March 1 meeting.
