The special study of School Impact Fees in the unincorporated areas of King County was included in the King County Auditor’s Office 1999 work program adopted by the Metropolitan King County Council.

Residential growth development has contributed to an increase in student population in several school districts located in King County. With the increase in students, school districts have to build schools or expand their existing facilities for the additional space needed to serve growth. In most cases, school districts’ funds have not been sufficient to provide for growth in classroom space. Consequently, in 1991 the King County Council, authorized by state law, adopted a school impact fee ordinance to provide an additional source of funds to school districts reasonably related to the impacts caused by growth in residential development within each district. In order for the impact fees to be collected in the incorporated areas, each city, by request of the school districts, must adopt its own school impact fee ordinance.

The county, through the Department of Development and Environmental Services, assesses sixty-five dollars ($65.00) per dwelling unit for the cost of administering the school impact fee program. DDES retained about $188,000 in 1998 and $181,000 in 1999 from collected school impact fees for administration costs.

The objectives of the special study were to determine the reasonableness of the basis of School Impact Fees and the financial data used in computing school impact fees, the consistency of the data with the districts’ capital facilities plans, and the adequacy of the county’s system for evaluating the information provided by the school districts.

The general conclusion of the special study was that the school districts’ financial data and the bases for cost elements used in the calculation of school impact fees in 1998 and 1999 were generally reasonable and consistent with the districts’ capital facilities plans. Also, the School Technical Review Committee (STRC) generally had properly discharged its function by adequately reviewing and evaluating the information in the capital facilities plans that were submitted by the school districts.

Finding 2.  The School Districts Could Improve the Process of Computing School Impact Fees by Identifying and Disclosing in the Capital Facilities Plan the Bases Used in Estimating Cost Elements and the Changes in the Bases, if Any, During the Reporting Year.

In order to achieve consistency and better understanding of the methods used in estimating the cost elements, the study recommended that each school district should, as much as practicable, maintain a consistent application of the bases for its school impact fees from year to year. However, recognizing that district-specific circumstances may require a change in bases or methodologies used, each district should identify the bases used in the computation of impact fees in its capital facilities plan, and if the basis has changed, explain the rationale for the change.

The "student factor" as defined in the King County Code is the number derived by a school district to describe how many students of each grade span are expected to be generated by each single family and multi-family dwelling unit. Student factors are developed based on the school district records of average actual student generation rates for new developments constructed over a period of not more than five years prior to the date of calculation. If the district does not have such information available, the data from adjacent districts with similar demographics, or countywide averages, could be used.

School districts generally updated their student generation factors every year except for Fife and Issaquah School Districts which used the same student factors data for the last three and four years, respectively.

Audit staff believe that current student generation factors should be used in the calculation of school impact fees to determine fairly the share in the cost of providing space for students generated by the new residential developments.

The study recommended that School Review Technical Committee should develop and submit, to the Metropolitan King County Council for its approval, proposed guidelines which address the process and frequency (e.g., annual, biennial) of the development of student factors which are used in the calculation of school impact fees for single family and multi-family units.

Finding 4.  The School Technical Review Committee Generally Had Properly Discharged Its Function by Adequately Reviewing and Evaluating the Information in the Capital Facilities Plans That Were Submitted by the School Districts.

The School Technical Review Committee (STRC) is responsible for reviewing each school district’s capital facilities plan, enrollment projections, standard of service, the district’s overall capacity for the next six (6) years to ensure consistency with the Growth Management Act, King County Comprehensive Plan, adopted community plans, and the district’s calculation and rationale for the proposed impact fees.

The STRC conducted many meetings with the representatives of the school districts. The districts’ representatives made presentations of their capital facilities plans and provided answers to questions and information requested by the committee. The meetings were advertised and open to the public. Audit staff noted that there were no formal written minutes of the meetings which could be made available to the public. Audit staff believe that the STRC is required to maintain minutes of its public meetings.

The study recommended that STRC should keep and maintain complete written minutes of its meetings and such records should be readily made available for public inspection. The administrative fee collected by King County for administering the school impact fee program should be applied to support STRC staffing for this purpose.

Finding 5.  It Would Be Beneficial if the School Technical Review Committee Provided School Districts With Written Guidelines to Assist the Districts in the Preparation of Their Capital Facilities Plans and to Address Some Issues Which Affect the Calculation of School Impact Fees.

The STRC is charged with the responsibility of reviewing and approving the school districts’ draft capital facilities plans and the calculation of school impact fees.