School Impact Fee Project
4701 Sangamore Rd
Bethesda, MD 20816
Williamson County Government announces that an Educational Impact Fee Fact Sheet and Fee Schedule are available for review on the County’s website. This fact sheet is intended to provide answers to frequently asked questions regarding the Educational Impact Fee, its history and implementation.
The Educational Impact Fee was passed in November 2016 by the Williamson County Board of Commissioners. The Educational Impact Fee is assessed to Developers on the issuance of a new residential building permit for the proportionate share of new or expanded educational facilities needed to service new residential growth which is reasonably attributable to the need created by the new residential development within the Williamson County School System.
[click here for the fact sheet....]
Williamson County has experienced significant residential growth over the past several years and with it increased enrollment. To ensure public schools in Williamson County have adequate capacity to accommodate growth, Williamson County is considering implementation of an education impact fee to defray costs of constructing certain capital improvements required to serve new residential development. These capital improvements include school buildings, land, portable classrooms, support facilities, and buses. Williamson County retained TischlerBise to calculate impact fees for public schools to meet the demands generated by new residential development for school facilities in the county.
Williamson County is served by two school systems: Williamson County Schools (WCS) and the Franklin Special School District (FSSD). Students living in FSSD attend these schools from kindergarten through eighth grade, after which they attend WCS high schools. This study details only impact fees for WCS; therefore, only the high school component of the WCS impact fee will be assessed to new residential development located in FSSD—students generated from these homes will only attend WCS for high school. School impact fees are applied only to residential development and are per housing unit, reflecting the proportionate demand by type of unit.
On May 4, 2016 TischlerBise met with the Educational Impact Fee Task Force, members of the Planning Commission and County Board of Commissioners, and the Stakeholder Group to discuss preliminary growth projections, student generation rates, level-of-service standards, and cost factors. [CLICK HERE FOR PDF FILE]
The Educational Impact Fee Task Force, members of the Planning Commission and County Board of Commissioners, and the Stakeholder Group met with TischlerBise on July 13, 2016 to review updates to the study and to discuss draft fee schedules. [CLICK HERE FOR PDF FILE]
The next meeting is scheduled for August 22, 2016. The Educational Impact Fee Task Force, members of the Planning Commission and County Board of Commissioners, and the Stakeholder Group will be in attendance to discuss the use of credits and fee schedule options.
Impact Fee Overview
Impact fees are one-time payments used to fund capital improvements necessitated by new growth. This type of fee has been utilized by local governments in various forms for at least 50 years. Impact fees have limitations and should not be regarded as the total solution for infrastructure financing needs. Rather, they should be considered one component of a comprehensive portfolio to ensure adequate provision of public facilities with the goal of maintaining current levels of service in a community in the face of new growth. Any community considering impact fees should note the following limitations:
- Impact fees can only be used to finance capital infrastructure and cannot be used to finance ongoing operations and/or maintenance and rehabilitation costs.
- Impact fees cannot be deposited in the local government’s General Fund: the funds must be accounted for separately in individual accounts and earmarked for the capital expenses for which they were collected.
- Impact fees cannot be used to correct existing infrastructure deficiencies unless there is a funding plan in place to correct the deficiency for all current residents and businesses in the community.
There are three reasonable relationship requirements for development impact fees that are closely related to “rational nexus” or “reasonable relationship” requirements enunciated by a number of state courts. Although the term “dual rational nexus” is often used to characterize the standard by which courts evaluate the validity of development impact fees under the U.S. Constitution, we prefer a more rigorous formulation that recognizes three elements: “need,” “benefit,” and “proportionality.” The dual rational nexus test explicitly addresses only the first two, although proportionality is reasonably implied, and was specifically mentioned by the U.S. Supreme Court in the Dolan case (Dolan v. City of Tigard, OR, 1994).
Methodologies and Credits
Any one of several legitimate methods may be used to calculate impact fees. The choice of a particular method depends primarily on the service characteristics and planning requirements for the facility type being addressed. Each method has advantages and disadvantages in a particular situation, and to some extent can be interchangeable, because each allocates facility costs in proportion to the needs created by development.
Reduced to its simplest terms, the process of calculating impact fees involves two main steps: (1) determining the cost of development-related capital improvements and (2) allocating those costs equitably to various types of development. In practice, though, the calculation of impact fees can become quite complicated because of the many variables involved in defining the relationship between development and the need for facilities. The following paragraphs discuss three basic methods for calculating impact fees and how those methods can be applied.
Plan-Based Fee Calculation
The plan-based method allocates costs for a specified set of improvements to a specified amount of development. The improvements are identified by a facility plan and development is identified by a land use plan. In this method, the total cost of relevant facilities is divided by total demand to calculate a cost per unit of demand. Then, the cost per unit of demand is multiplied by the amount of demand per unit of development (e.g. housing units or square feet of building area) in each category to arrive at a cost per specific unit of development (e.g., single family detached unit).
Cost Recovery Fee Calculation
The rationale for the cost recovery approach is that new development is paying for its share of the useful life and remaining capacity of facilities already built or land already purchased from which new growth will benefit. This methodology is often used for systems that were oversized such as sewer and water facilities. To calculate a fee using the cost recovery approach, the facility cost is divided by ultimate number of demand units the facility will serve.
Incremental Expansion Fee Calculation
The incremental expansion method documents the current LOS for each type of public facility in both quantitative and qualitative measures, based on an existing service standard (such as square feet per student). The LOS standards are determined in a manner similar to the current replacement cost approach used by property insurance companies. However, in contrast to insurance practices, the fee revenues would not be for renewal and/or replacement of existing facilities. Rather, revenue will be used to expand or provide additional facilities, as needed, to accommodate new development. An incremental expansion cost method is best suited for public facilities that will be expanded in regular increments, with LOS standards based on current conditions in the community. This method is used to calculate education impact fees in Williamson County.