City of Snoqualmie And Snoqualmie Valley School District Hopeful Over Impact Fee Progress

New homes in the Aster Creek neighborhood of Snoqualmie Ridge

It’s been a valley headline for nearly a year now – impact fees and the City of Snoqualmie not collecting the full 2011 amount assessed by the Snoqualmie Valley School District.  District officials and school board members contend Snoqualmie is not paying its fair share.

It seems a simple process. The school district writes a yearly Capital Facilities Plan, identifying possible construction projects, predicted enrollment growth rates and current school building capacity .  A complex formula then generates an impact fee which is approved by King County and assessed on newly constructed homes within the Snoqualmie Valley School District.  Cities in the district then collect the fee from builders and turn those funds over to the county/district.  The King County Growth Management Act allows for the collection of impact fees to help offset the costs of new school facilities.  The fees were NOT created to completely fund new school construction.  School districts can only spend impact fees on projects contained in their Capital Facilities Plan.  Historically, SVSD impact fees have ranged from $1700 – $4,000.  In 2009, no fee was assessed, even at the urging of Snoqualmie and North Bend administrators.

In 2011 the fee increased 300% to $8140, shocking builders.  They questioned the dramatic increase during an economic recession.  SVSD  stood by its fee and the formula that generated it; reminding builders and the public that an $8140 impact fee is only roughly 35% of what new homes actually cost the school district.  Builders questioned the district’s projected enrollment growth rates, saying the projected rates used to formulate the fee were higher than what was actually occurring.  They talked of lawsuits if SVSD’s 2010 school bonds didn’t pass, saying in previous years (2007-08) they paid the fees to help fund a new high school and elementary school, yet the district never passed bonds to secure the remaining construction financing.   Builders say that since impact fees only pay for Capital Facility Plan projects, without the key component -bond approval – they are essentially paying for projects that never materialize.

In March, while a $56 million bond was on the ballot, the district offered to decrease the fee using a new calculation based on the costs of annexing Snoqualmie Middle School to the high school and adding portables and additional common space at the two remaining middle schools.  That fee that was closer to $5,000.  According to councilwoman Maria Henriksen, this summer city officials offered to accept and collect this lower fee for the remainder of 2011.  The district said no, that the lowered fee was only meant as a stop-gap measure while bonds were on the ballot, not a permanent solution.  They would, though, continue negotiating the 2012 fee.

Several brand new homes in Snoqualmie Ridge Division II

Snoqualmie’s role in impact fees is only that of collector.  City officials contend that since they do not create the formula that generates the fee, they should not be held liable in any potential lawsuit.  Hence, Snoqualmie requested a strong “hold harmless” (idemnity) clause to negate their potential risk from a statutory challenge to the fee and/or a constitutional challenge to the city ordinance allowing Snoqualmie to collect impact fees without bond approval.  SVSD contends that an existing inter-local agreement between the two entities already protects the city with a broad idemnity clause and declined the request.   According to Snoqualmie Mayor, Matt Larson, even though a potential lawsuit could challenge a city ordinance, the lawsuit still targets the impact fee that Snoqualmie does not set, only collects.  Without full indemnification, the city will only collect the 2010 impact fee, roughly $5400 less than SVSD’s assessed amount.  Sammamish, North Bend and Fall City all collect the higher fee.

The city of Kirkland faced similar challenges earlier this year when it annexed the unincorporated areas of Finn Hill and Juanita into its city limits, but creatively solved the problem.   A program for collecting the impact fee was developed cooperatively between Kirkland, Lake Washington School District, Master Builders Association of King and Snohomish Counties, Seattle-King County Realtors, the Greater Kirkland Chamber of Commerce and local builders.  According to Kirkland City Manager, Kurt Triplett, the collaboration “was an outstanding example of Kirkland stakeholders coming together and working hard to find common ground.  Everyone was equally committed to the success of our schools while being sensitive to the impacts on the development industry that bears the cost of the new fee.”

It appears progress was made at a meeting yesterday between district officials, school board members, Snoqualmie and North Bend administrators and council members.   Tentative terms discussed:  district accepts extra indemnity language proposed by Snoqualmie and North Bend as well as language protecting the district from city errors; Snoqualmie (with expressed reservations) collects the full $8500 2012 impact fee; no further adjustments to the current 2011 fee; city’s ability to collect the fee when a new home sale closes vs. at the time of construction permitting, giving builders relief from carrying additional costs during home construction.  All terms still have to go through board and council channels before it is a binding solution.

Comments

  1. Good example of how agreement can be reached when involved parties put forth a good-faith effort to meet and compromise. Despite an invalid & way too optimistic enrollment forecast built into the SVSD facilities plan, the resulting higher impact fee does benefit our cities in helping to offset some of the WA state funding cuts to get schools built, which in turn help make our communities more appealing to potential buyers of new homes. Smart move to have the impact fee paid upon sale of a new home, which lightens an unnecessary burden on the builder while still providing what SVSD needs. Let’s now hope that this tentative agreement is approved by the councils/board of the parties.

  2. Mr. Kangas, I am not surprised by your viewpoint on this, because you always seem to think you are educated on issues, when in reality, you are not even close. I won’t get into all of the errors in your thinking, but let me ask you about why collecting impact fees at the point of sale is a ‘smart move’.
    How does collection of impact fee at the point of sale help the schools? Sure they ‘get their money’, but doesn’t the school need time to permit, purchase, and site additional buildings purchased with the impact fee monies? Are you telling me that can all be done AFTER the kids are actually living in the house? Last I checked, there isn’t a Target nearby that sells school facilities (although wouldn’t that be nice to have on in Snoqualmie with all that empty business space?). And I’m pretty sure the permitting process (especially in Snoqualmie and in the flood plain) takes a bit of time… I know you would be all over the Schools if they built a portable, because they expected kids to show up, but it then sat empty because their enrollment projection was ‘too optimistic’. And yet you would be forcing the school to do just that with fees being collected at point of sale.
    When I bought my house, I expected there to be a classroom immediately available for my kids. I wonder if the city’s ‘smart move’ will make it impossible for schools to have time to be prepared to receive the kids…. Kinda like Seattle Public Schools is currently facing. Maybe you think that we could do what Seattle is doing and we could just have class in the hallway until something could get built. But that would never happen, because you and your friend Carolyn Simpson say the schools aren’t full. Funny how Seattle apparently thought the same thing – isn’t hindsight so helpful? Maybe the School should be factoring hallway space into their numbers as viable capacity – since they obviously don’t have a clue or a ‘strategic plan’ as Ms. Simpson would suggest.
    Why does the City require streets and other infrastructure to be in place before a home can be built, but doesn’t see the importance of having school facilities in place as a pre-requisite. Since you were a strategic planner for a $500m company, maybe you can offer your services to the City to help them advocate for education?
    And yet for someone who claims to be an ‘education advocate’ on your website, I’m surprised you turn out to be so ‘developer friendly’. Perhaps it’s because you twist in the ‘Winds of Change’ to whatever suits you and your friends – the “NO” voters on the bond, like Carolyn Simpson.

    • Hi Jack, just want to make one quick point. As far as SVSD is concerned, they have an advantage over Seattle schools. They already know where the schools will go… they already own the land. It was part of mitigation agreement to build Snoqualmie Ridge. Developers gave the land for future schools to the district…..

    • Jack – To fix the mess we are currently in would require that we lobby the Legislature to ease restrictions on building to forecasts rather than actual students. Back in the 70s, the Seattle School District implemented bussing. This is when many families left and moved to the suburbs. Areas like Shoreline and Mercer Island passed bonds and built up school districts that people moved to because of the excellent schools, of course increasing property values. Shoreline has closed one high school and a middle school. This is part of the life cycle of a maturing neighborhood, but it is the reason for the current restrictions. We need to come together as a community and create a school district that people want to move to with the resources we have. This is not going to happen with the current leadership of our school district. Tunnel vision appears to be one of the issues. Just because you devote time studying and coming up with a plan, does not mean that you should not cut your losses and start over when conditions change. In addition, I have never seen this district put forth a bond that made sense. As a taxpayer, I will not pay for excessive amounts in studies, buildings that have no location yet, multiple projects on same bond and numbers that do not add up. I am still shocked that voters passed the bond where we spent 3.4 million on 6 modular classrooms and 1.4 million to move tennis courts. This is $566k per unit? We spent $566k for a modular shack that kids are supposed to learn in? Will another reasonable person please look at how this can be possible? A simple google search of school portable costs can help enlighten the skeptical. The District’s official response to me was that it costs more to build on a floodplain. I then pointed out that a private school spent 1.4 million to build 4 beautiful classrooms and new bathrooms on the same floodplain. I was then told that private schools can build for less than public schools. I also asked why we needed to buy rather than rent portables. The response was that the district may need them at somewhere else at a later time. During the elementary boundary change fiasco, I asked about moving these portables to CVES. I was told that this was impossible due to overcrowding of common areas. Sorry Jack, but I no longer trust this group of people with my money. In the 2009 bond, we bought a Hyundai for the price of a Cadillac. Let’s get the same builders that we are trying to collect impact fees from to give us their opinions on reasonable building costs as we should be able to build real buildings for less than these portables. We need creative solutions to ease crowding, pass a bond, and build a better school district. This is not going to happen with all of our leaders walking through the same tunnel.

  3. Thank you again to jd3mccall for all the wonderful research. I truly appreciate your time and the knowledge. I have a question for anyone who knows: Over the years since the Ridge started to be developed, have builders or the City of Snoqualmie been paying their fair share of impact fees? It seems to me that there has been a building moratorium in North Bend and there hasn’t been a lot of growth in Fall City, but if I understood what jd3mccall said, both NB and FC pay a lot more impact fees than Snoqualmie. Even $8500 a year sounds like a drop in the bucket for building a new school. Has anybody double checked the math? You mentioned some sort of complex formula. Does the formula include number of new houses build?

    • I have another question for anybody that knows. Issaquah School District is planning to propose another bond to combine Clark Elementary School and Tiger Mtn HS on the current Issaquah Middle School/Clark ES site and move IMS up to the Tiger Mtn site. This bond follows the Pacific Cascade 9th grade campus/middle school project. I know it is not good to compare two sister school districts, but our efforts at passing a bond pale in comparison. Why can’t we come to agreement and move forward? Issaquah is landlocked. They are tearing down and rebuilding. We have a gift of a plot of land that sits vacant. Why can’t we move forward? Here is a link to the Issaquah Press article that explains the ISD bond a lot better than I can: http://www.issaquahpress.com/2011/05/24/schools-consider-228-million-bond/.

  4. Danna, thank you for a very balanced and fair article concerning a very complex and difficult topic.

    Jack, the problems you describe have not been caused by when fees are collected. They are caused by voted bonds that fail and State restrictions.

    When CVES was opened, many in the community were frustrated that it was immediately overcrowded. Within a year, the District began to add portables. Bad planning? NO.

    When I raised this concern to Superintendent Rich McCullough some time ago, he gave me the following explanation. During the boom times in Bellevue years ago, their School District began to build several new schools in advance of the anticipated growth. The schools eventually filled up, but as new neighborhoods matured, many schools were left with empty classrooms. In other words, kids grew up graduated and eventually (we all pray) moved out. Yet new families did not move into these new maturing neighborhoods–in equal numbers–to replace the ones who had left. Enrollment numbers dropped correspondingly and officials realized that they had overbuilt. The State absorbed extra costs in two ways. First, by helping to fund schools that operated for two to four years before reaching capacity and, second, by paying for capacity that was ultimately not needed in later years.

    Consequently, the State added new tighter restrictions requiring Districts to demonstrate that a new school will be at or near full capacity when the doors open and to demonstrate that you are not overbuilding for long term growth projections. These restrictions have created the era of shuffling portables.

  5. Could I rephrase my question: I meant to ask about the last 10 or 15 years since houses started to be built on the Ridge. Has the City of Snoqualmie and the builders been paying an equitable amount over the last decade or so??

  6. Kumon: It is my understanding, based on the information provided in a SVSD board meeting, that the City of Snoqualmie has paid an “equitable” amount, meaning same as North Bend et al, in the past up until 2010, when the impact fee demanded by SVSD took a such a sharp jump (see Danna’s article here). Thus, it’s only been for the past year+ that there has been an inequity in City payments, and which would continue for up to a second year per the tentative agreement reached now.

    Jack: Despite your mean-spirited post, I’ll take a moment to try to address a couple of your points… The “smart move” to agree to impact fee payment at the time of house sale is my reference to a compromise that helped the parties reach agreement. If you indeed head a $1B business (altho your tone & comments don’t really indicate that), you’ll already know from experience negotiating deals that compromise has to happen in nearly all situations in order to come to contract agreement. And given that in a high-growth rate housing development environment, which no longer exists today, the worst case (ie, shortest time) is about 9 mos avg between permitting & sale thus leaving a bit over 1 yr between SVSD bond approval and opening the doors to a new school as the “gap” for possible over-crowding. That sounds pretty reasonable to me. But then, when you look at today’s growth rate where there are building permits awarded and sitting on a desk waiting to be built for 18-24 mos, that gap has more than disappeared. Of course, all that assumes that SVSD is not building future capacity out over an unreasonably long period of time, such is indicated by the way overly optimistic enrollment forecast used as the basis for the SVSD facilities plans and assocaited impact fee calculation. Therefore, it appears to me that changing the fee payment timing to a *slight* disadvantage to SVSD to provide a little advantage to developers that the City has to collect from is a reasonable compromise on a point that led to a agreed upon solution. It could have been worse, as I expected the enrollment forecast basis for the impact fee would have to be revised downward in order to gain agreement from the City of Snoqualmie. Remember, the forecast used for the SVSD facilities plan was purposely made very high (as evidenced by comments made by scbhool board and administration during public work sessions and at least one board meeting), and is one of at least 4 forecasts used by SVSD for different purposes (eg, one of the lower ones is used for budget planning, and even it is turning out to exceed reality, a topic of the most recent board meeting). The other point: I’m sorry you are having trouble reconciling my admitted “no” vote on this last SVSD bond proposal to my being such a staunch education advocate, so let me restate a few points I’ve made many times, inc in the context of that bond… (1) placing bond proposals on the ballot costs teachers, building the associated schools costs many more teachers (in terms of general fund money that pays for their salaries, curriculum, materials, etc), thus it is a matter of priority (empty classrooms don’t teach kids…teachers do); (2) academic outcomes decline as student-to-teacher ratios go up (aka “class sizes”), so what we need are smaller classes which require more teachers to accomplish; (3) SVSD’s MSHS is no where near reaching over-capacity in 2013, which was the basis for this last whacky bond (another erroneous enrollment forecast prepared to justify the bond), therefore it’s not needed for several more years; (4) taxpayers are in an economic crunch right now in this down economy, and I don’t want to see them develop an attitude of automatically voting bonds down when we *really* need them in the future, which I submit this past bond proposal has further contributed to taxpayer exhaustion and suspicion. WIth that said, a good, valid question we should all be debating is “what is a reasonable capcity build-out time frame?” Ie, should are property owners be funding building out school capacity for 50 yrs from now? 20 yrs? 10 yrs? 5?, 2? (it takes 2 yrs from bond passage to opening a new school’s doors). Let’s try to have a civil conversation about that question and I think it will help our voting taxpayers support future bonds (although other issues like enrollment forecasts that predict capacity limit years, separation of sports vs academic facilties bond proposals, and other primary issues among our community voters need resolution, also).

  7. Snoqualmie Trivia Source says:

    I can fill in a few details.

    Actually JD3Mcall, the Seattle Schools have even more land than we do – right now they have empty buildings. In fact, there was an article on their web landing page this weekend about surging enrollments and the school district’s underestimation. http://seattletimes.nwsource.com/html/localnews/2016515476_enrollment16m.html Also, many people are under the false impression that the land which our school district owns was given to the district however they acquired these parcels at a very favorable price but were not gifted. This was explained in the 2009-2010 SVSD Facilities Plan, which I found on the district’s website to confirm before stating that.

    KumonSnoqualmie, it is my understanding that over the years developers have paid all the impact fees which have been approved for assessment. However, in 2010 the City of Snoqualmie suddenly changed their stance and refused to collect the entire fee which the school district had determined. North Bend, Sammamish, and Fall City all collect the exact fees determined by the district. You are correct, there was a moratorium – water, I believe but am not 100% – and that is no longer the case. John Day Homes is now developing in North Bend and they are paying the entire amount. The difference between what the district calculated as the impact fee and what the city agreed to collect is roughly a $5400 difference. So far roughly $620,000 in potential school impact fees have been lost this year. If the information in this article is correct, I imagine the district is in a difficult position as the funds are needed to help with facilities plans yet holding another jurisdiction harmless for “any” potential lawsuit seems to be risky.

    A school impact fee is based on a standard formula that takes into account forecast growth, capacity of existing schools, and the need and cost of additional facilities. The formula allocates a portion of the cost to build new school facilities based on the average number of school-aged students expected from the new housing. The calculation ensures that new development is not charged more than its fair share of the cost of future schools, so deductions are made to lessen the actual fee. Our impact fee is roughly 35% of the cost of total school impact. The city collects the fee on behalf of the district and is held harmless in their “interlocal agreement” should there be error or omission in the calculation or application of funds. Before the impact fee can be assessed it must pass an audit by King County. So yes, the math has been double checked using a safety process in place.

    For more information about the progression of the impact fee debate through the lens of our local papers you can go to http://www.change.org/petitions/city-of-snoqualmie-be-fair-and-align-school-impact-fees. It is curious that this petition which has been signed by 167 people fro mthroughout this district would not have made it into this story and a petition with only a handful of signatures made it onto the front page of our local paper. http://snovalleystar.com/2011/10/13/neighbors-want-out-of-school-district

    KumonSnoqualmie, in the 1980s when Issaquah was in a time of growth during the development of Klahanie they could not pass a bond to save their lives. Things eventually changed and Issaquah Schools now find themselves in more friendlier territory. Only 8 out of 33 bonds passed in our state this year – it is the lowest rate in over 20 years. Many of the larger districts with greater commercial bases use levies to pass their building initiatives, which only require a 50% passage (Bellevue and Central Kitsap are two). We do not have a large enough population nor commercial tax base to use levies rather than bonds. Not passing bonds in our district is neither unique of our stage of “suburban” development nor to the current economy. I have hope that we will pass one soon!

    Hope this helps.

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