Impact fees account for only 14 percent of the school district’s
facilities revenue
Gilroy – When school district officials began courting the city this year with a request to bypass Gilroy’s building permit competition, many council members balked.
City officials claimed the move was the equivalent of cutting in line and said they didn’t understand the rush to sell the Las Animas Elementary School plot of land. But ask Assistant Superintendent Steve Brinkman to explain the fast track plan of attack and expect to hear a reference to impact fees.
The already cash-strapped district only receives $2.63 per square foot in developer fees for every home built in Gilroy, according to a 2006 Developer Fee Justification Report. And the construction cost of a school last year was $9.45 per square foot.
That means the district would collect $5,675 for 2,158 square feet instead of $20,393. Actually, impact fees only make up 14 percent of the district’s overall facilities plan.
That’s one of the reasons the district desperately needed to sell the Las Animas site quickly and use the cash to help cover the cost of the new high school.
“It causes us to go ahead and find other funding sources including selling all of our land,” Brinkman said.
But eventually GUSD will run out of that source of revenue, which comprises 19 percent of the overall facilities budget, once all the excess property is sold. The current developer fees pay for portable classrooms and “that’s just about it,” Brinkman said.
Still, the district is stuck in a tight spot because, according to state law, Gilroy is already charging the maximum allowed. Under Senate Bill 50, the district only qualifies for Level I funding and would have to increase its average student per household ratio from 0.6 to 0.75 to raise the impact fees.
But Gary Walton rues the day when that happens. When contacted by phone the Gilroy developer immediately asked, with concern in his voice, if the rates were being raised.
Walton, who owns the Gilroy-based business Custom One, said he thinks the time will come when so many fees are tacked on that even fewer Californians will be able to buy a pricey sun-drenched home.
“You know, I don’t think I have to worry about it because pretty soon nobody will be able to afford to buy a house (in California),” he said.
While impact fees are picked up by the developer and added onto the price of the home, the place may not sell for that price. In that case, the developer would end up covering that extra cost.
Walton explained that the continuing escalation of housing prices on homes that are already costly, will drive young people out of the state. And the result will be a city filled with only the elite, he said.
“They really need to consider what Californians are making and they really need to understand where young people will live,” he said noting that California has one of the lowest home ownership rates in the country. “There’s just a multitude of expenses besides the cost of land. There’s a limit, I think, to what people are willing to pay to live in California.”
