e-Bulletin: Upcoming Increase In Statutory School Fees

January 25, 2006 Sacramento, California--The State Allocation Board meets to consider increasing the statutory school fees school districts are permitted to charge on new residential and commercial/industrial development pursuant to Government Code Section 65995 et seq. and Education Code Section 17620 et seq. Currently, the statutorily authorized fees are $2.24 per square foot of residential development and $.36 per square foot of commercial/industrial development. In 2002, these fees were increased $.10 for residential development (from $2.14 per square foot to $2.24) and $.02 for commercial/industrial development (from $.34 to $.36 per square foot).

Given the dramatic increase in construction costs, home prices and land values in California over the last two years, we anticipate that the SAB will approve a significant increase in the statutory fee that is at least as large as the increase adopted in 2004. Accordingly, for school districts currently charging statutory school fees, we recommend that these districts adopt the increased statutory school fees, pursuant to the requirements of Government Code Section 66016 et seq. The most important requirement is the preparation of a new Fee Justification Study establishing the reasonable relationship between the amount of the new fees and the impact it is designed to offset. This process also requires that the Fee Justification Study be circulated for public review and that a public hearing on the fees be conducted.

If your school district needs assistance in preparing or adopting a new Fee Justification Study in order to take advantage of the anticipated increase in statutory school fees or if you would like more information on this matter, please contact Best Best & Krieger, attorneys Peggy Strand, Dina Harris or Tyree Dorward.