The Orange County school impact fee advisory committee just finalized a new school impact fee assessment to present to the school board and county commissioners this fall.
At a meeting held Friday, members and consultants from Tindale Oliver discussed how to go about charging new development based upon student demand and the number of students a dwelling unit is expected to generate.
The last time Orange County updated its school impact fees was in 2016. A study proposing new updates was presented to the board of commissioners last year, but never made it to implementation.
The latest study reviewed by the advisory committee takes into account a channel of revenue the school board lost last year relating to school crowding — the Capacity Enhancement Agreement (CEA) process, which generated about $3 million per year.
Over the life of the program, CEAs generated about $23 million.
Tindale Oliver’s newest methodology recommends costlier fees than its previous study (for the most part) and offers different implementations to go about charging rates.
For one, it recommends a tiered-rate structure that would charge higher impact fees for homes expected to generate more students.
At a previous meeting, members agreed to recommend using the system, which bases rates on several single-family home sizes. For example, impact fees for single-family homes less than 2,000 square feet and homes larger than 4,000 square feet will have less of a fee than homes ranging between 2,500 square feet to 3,999 square feet.
Consultants told members that data shows single-family homes larger than 4,000 square feet don’t typically generate students or they generate students that tend to go to private schools.
In addition to the tiered-rate system, consultants also provided options where the impact fees are increased 11% to account for interest costs to the district during school construction periods and to reduce the credit it applies from other funding sources, such as sales tax and ad valorem revenue.
Committee member Tara Tedrow, a partner and shareholder at Lowndes, made a motion to exclude an increased rate that was based on the construction interest cost. It was approved, but members were not able to reach a consensus on the residential credit component.
If Orange County approves the committee recommendations and chooses to add on a residential credit, then impact fees could cost $12,243 for a typical new home between 2,500 and 3,000 square feet. That’s a nearly 40% increase over the current rate ($8,784) and a 28% increase over the rate that was under consideration a year ago ($9,560).
For homes between 3,000 and 4,000 square feet, the rate would jump up to $12,902, a nearly 35% increase from the rate recommended in the 2019 study.
School impact fees in Orange County are slated to rise for every residential category, including single-family, townhouse, multifamily and mobile home, with the exception of a new category being proposed — multifamily high-rises.
With a separate category in place for high-rises, multifamily school impacts fees for high-rise developments would significantly decrease 95 percent to $307 (without the residential credit).
According to the study, a significantly lower amount of students occupy high-rise developments. The previous study showed only 54 of the 182,678 students enrolled in Orange County schools live in existing high-rise towers.
Committee members also recommended to increase school impact fees in phases. At the meeting, assistant county attorney Whitney Evers said Orange County aims to implement the school impact fees by February 2021.