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Agenda - Steering Committee - 06/22/2022
AGENDA SOUTH BURLINGTON STEERING COMMITTEE (Joint meeting of the City Council and School Board) 180 Market Street SOUTH BURLINGTON, VERMONT Participation Options In Person: 180 Market Street – Room 301 Assistive Listening Service Devices Available upon request Electronically: https://meet.goto.com/SouthBurlingtonVT/steering06-22-2022 You can also dial in using your phone. +1 (408) 650-3123 Access Code: 240-761-813 Special Meeting 6:30 P.M. Wednesday, June 22, 2022 1)Pledge of Allegiance (6:30 PM) 2)Instructions on exiting building in case of emergency and review of technology options – JessieBaker, City Manager (6:31 – 6:32 PM) 3)Agenda Review: Additions, deletions or changes in order of agenda items (6:33 – 6:34 PM) 4)Comments and questions from the public not related to the agenda (6:35 – 6:45 PM) 5)*** City Council and School Board discussion on School Impact Fee Report from Jonathan Slason, PE from RSG – David Young, Superintendent of Schools (6:45 – 7:30 PM) 6)Hold a Legislative session wrap-up discussion with the current South Burlington State delegation (7:30 – 8:00 PM) a)The Vermont League of Cities and Towns 2022 Legislative Wrap-Up is available here:https://www.vlct.org/2022-legislative-wrapb)The Education End-of-Session Legislative Summary for 2022 is available here:https://mailchi.mp/6c11d2baa93e/2017-education-legislative-update-716432?e=74c46f67f0 7)Update on the Climate Action Plan and request for South Burlington School District participation–Helen Riehle, Council Chair (8:00 PM – 8:20 PM) 8)Other Business (8:20 – 8:30 PM) 9) Adjourn (8:30 PM) Respectfully Submitted: Jessie Baker City Manager *** Attachments Included SOUTH BURLINGTON SCHOOL DISTRICT IMPACT FEES June 15, 2022 South Burlington School District DRAFT Cover Image Credit: City of South Burlington © 2022 RSG South Burlington School District SOUTH BURLINGTON SCHOOL DISTRICT IMPACT FEES i CONTENTS 1.0 INTRODUCTION ................................................................................ 1 1.1 LEGAL BACKGROUND ........................................................................... 2 2.0 COMMUNITY CONTEXT .................................................................... 4 2.1 POPULATION .......................................................................................... 4 2.2 HOUSEHOLDS ........................................................................................ 5 PERSONS PER HOUSEHOLD .............................................................. 6 BEDROOMS PER HOUSEHOLD ........................................................... 8 2.3 LAND USE FORECASTS ...................................................................... 10 COUNTYWIDE CONTEXT ................................................................... 10 FORECAST GROWTH IN HOUSING AND STUDENTS ...................... 11 3.0 SCHOOL DISTRICT FEE DEVELOPMENT .................................... 15 3.1 INTRODUCTION .................................................................................... 15 3.2 SERVICE STANDARD ........................................................................... 16 3.3 STUDENTS PER HOUSEHOLD ............................................................ 17 3.4 BASE IMPACT FEE ............................................................................... 21 CAPITAL COSTS .................................................................................. 22 BASE FEE CALCULATION .................................................................. 23 4.0 CREDITS .......................................................................................... 25 4.1 CREDITS ............................................................................................... 25 INFRASTRUCTURE CREDITS ............................................................ 25 REVENUE CREDITS ............................................................................ 25 4.2 REVENUE CREDITS ............................................................................. 26 PAST TAX ............................................................................................. 26 FUTURE TAX ....................................................................................... 26 TAX RATE ............................................................................................ 26 ii NET SCHOOL DISTRICT IMPACT FEE ............................................... 26 LIST OF FIGURES FIGURE 1: IMPACT FEE PROCESS ................................................................................... 1 FIGURE 2: SOUTH BURLINGTON POPULATION AND HOUSING ................................... 4 FIGURE 3: SOUTH BURLINGTON HOUSING PERMITS (HISTORICAL 1980 TO 2021) ....................................................................................................................... 6 FIGURE 4: AVERAGE HOUSEHOLD SIZE (1940–2016) ................................................... 7 FIGURE 5: EXISTING BEDROOM MIX OF HOUSING UNITS ............................................ 9 FIGURE 6: VERMONT PERSONS PER HOUSEHOLD BY BEDROOM ........................... 10 FIGURE 7: CHITTENDEN COUNTY POPULATION PROJECTIONS ............................... 11 FIGURE 8: NEAR TERM HOUSING UNITS BY BEDROOM MIX ..................................... 13 FIGURE 9: TOTAL ENROLLMENT FORECAST ............................................................... 14 FIGURE 10: VHFA PERCENT OF HOUSING TYPES WITH SCHOOL AGE CHILDREN .................................................................................................................. 19 FIGURE 11: SCHOOL AGE CHILDREN MULTIPLIERS (ECONSULT SOLUTIONS) .............................................................................................................. 20 LIST OF TABLES TABLE 1: AVERAGE PERSONS PER HOUSING UNIT ..................................................... 8 TABLE 2: SOUTH BURLINGTON BEDROOMS, BY HOUSEHOLD UNIT (2020 5-YEAR ACS) ............................................................................................................... 8 TABLE 3: SOUTH BURLINGTON 2020 HOUSEHOLD MIX BY BEDROOM ..................... 9 TABLE 4: REGIONAL LAND USE HOUSING FORECASTS FOR SOUTH BURLINGTON ............................................................................................................ 12 TABLE 5: SQUARE FEET STANDARDS PER SOUTH BURLINGTON SCHOOL ..................................................................................................................... 16 TABLE 6: EXISTING SERVICE STANDARDS IN SOUTH BURLINGTON ....................... 17 TABLE 7: ACS PUMS DATA ON STUDENTS PER HOUSE BY BEDROOM .................. 18 TABLE 8: NUMBER OF STUDENTS PER HOUSING UNIT IN SOUTH BURLINGTON (2022) ................................................................................................. 20 TABLE 9: STUDENT GROWTH BY HOUSEHOLD TYPE ................................................ 21 TABLE 10: CAPITAL COSTS FOR PREFERRED ALL NEW CONSTRUCTION OPTION....................................................................................................................... 22 TABLE 11: NET BASE IMPACT FEE COST PER HOUSING UNIT (2022 DOLLARS) .................................................................................................................. 24 LIST OF ABBREVIATIONS ACS American Community Survey CCI [ENR] Construction Cost Index CCRPC Chittenden County Regional Planning Commission GFA Gross floor area MSBA Massachusetts School Building Authority MTP Metropolitan Transportation Plan PUMS Public Use Microdata Sample VHFA Vermont Housing Finance Agency South Burlington School District Impact Fees 1 1.0 INTRODUCTION This impact fee study report evaluates how residential land use development in the city of South Burlington places additional demands on the school district and on existing services and infrastructure. Impact fees are a type of land use regulation that local governments use to generate revenue to construct additional capacity to accommodate this demand. The School District retained RSG to develop this needs study to identify a fair and equitable impact fee structure for its capital expansion investments. Vermont statute authorizes municipalities to levy impact fees on new development. The purpose of these fees is to allocate the cost of new capital facilities to the development that will benefit from those facilities.1 This can include fees to offset the costs of facilities built in the past with excess capacity for anticipated future development, facilities planned to be built to accommodate future development, and marginal expansion of capacity in response to population growth and changes in community expectations. The statute states that the costs of such infrastructure should only include the portion associated with new capacity to accommodate the future land development’s demand. The process is visualized in Figure 1 below. FIGURE 1: IMPACT FEE PROCESS Source: RSG The methodology used in the School District Impact Study follows a “consumption” or standards based approach by expanding marginal capacity based on incremental changes in demand (i.e., student population). The consumption based approach identifies the standards by which the services are currently provided, compares those to expected standards of service, and uses a change in base demand to forecast how much additional capacity may be necessary in the 1 24 V.S.A. § 5200 South Burlington School District Impact Fees 2 future. The plan based approach uses an established plan or vision to identify the necessary capital investments to meet the needs of the future population. 1.1 LEGAL BACKGROUND The American Planning Association, which is a national organization dedicated to supporting local communities and planning processes, has developed standards for impact fees. These standards are as follows:2 The imposition of a fee must be rationally linked (the "rational nexus") to an impact created by a particular development and the demonstrated need for related capital improvements pursuant to a capital improvement plan and program. Some benefit must accrue to the development as a result of the payment of a fee. The amount of the fee must be a proportionate fair share of the costs of the improvements made necessary by the development and must not exceed the cost of the improvements. A fee cannot be imposed to address existing deficiencies except where they are exacerbated by new development. Funds received under such a program must be segregated from the general fund and used solely for the purposes for which the fee is established. The fees collected must be encumbered or expended within a reasonable timeframe to ensure that needed improvements are implemented. Six years in Vermont. The fee assessed cannot exceed the cost of the improvements, and credits must be given for outside funding sources (such as federal and state grants, developer initiated improvements for impacts related to new development, etc.) and local tax payments which fund capital improvements, for example. The fee cannot be used to cover normal (day to day) operation and maintenance or personnel costs, but must be used for capital improvements, or under some linkage programs, affordable housing, job training, child care, transit operations, etc. This expectation has to define costs attributed to mitigating the impacts associated with additional land use development. Typical management activities: The fee established for specific capital improvements should be reviewed at least every two years to determine whether an adjustment is required, and similarly the capital improvement plan and budget should be reviewed at least every 5 to 8 years. 2 American Planning Association. “APA Policy Guide on Impact Fees.” Available at: https://www.planning.org/policy/guides/adopted/impactfees.htm. South Burlington School District Impact Fees 3 Provisions must be included in the ordinance to permit refunds for projects that are not constructed, since no benefit will have manifested. Impact fee payments are typically required to be made as a condition of approval of the development, either at the time the building or occupancy permit is issued. Vermont’s impact fee statute does not preclude using funds for administrative duties associated with the management of the impact fee program. Nationally, it is common practice to collect and expend impact fees to cover time and expenses associated with the creation, management, and administration of the impact fee program. These funds often cover the salary portion of the impact fee administrator, staff time in the preparation and review of impact fee studies, consultant or staff time preparing impact fee needs reports, and ordinance support. Therefore, a 5% additional margin has been identified in this study as a reasonable cost for the administration of this program. South Burlington School District Impact Fees 4 2.0 COMMUNITY CONTEXT The South Burlington has played an important role in the growth and development of the greater Burlington region in northwestern Vermont. The city is located at the junction of three critical roadways (I-89, I-189, US2, US 7), traversed by the western railway line, is the home of the Burlington International Airport, and surrounds Vermont’s largest municipality, the City of Burlington. South Burlington covers approximately 16.5 square miles and is a regional employment, trade, housing, and transportation center. South Burlington is one of the fastest growing municipalities in Chittenden County and is poised to add more residents and businesses over the coming decades. The city has taken a proactive approach to planning and has been working with the school district, residents, businesses, and other stakeholders as the city refines, updates, and revisits these plans to remain valuable and insightful guides to the regulatory land use development process. 2.1 POPULATION The city of South Burlington is the third most populous municipality after Burlington and Essex (counting Essex Junction and Town) in Chittenden County, with an estimated population of 20,292 as of the 2020 Decennial Census. The city has experienced a sustained growth trajectory since 1940 as supported by population and housing data visualized in Figure 2. FIGURE 2: SOUTH BURLINGTON POPULATION AND HOUSING source: US Census Bureau and 2016 Comprehensive Plan South Burlington School District Impact Fees 5 2.2 HOUSEHOLDS To minimize adverse effects on housing affordability and build a strong nexus between the need for services and growth in the town, it is important to understand the actual number of people occupying the land uses being developed. Households is an accessible and commonly used term for forecasting growth and one of the few units of growth that is specifically used in the permitting process. Between 2000 and 2020 the city of South Bulington resident population grew by 36.4% while occupied housing stock increased by 46.2%. This aligns with long-term trends of decreasing household size. The land use based approach is informed by the use of the Chittenden County Regional Planning Commission’s (CCRPC), which is the regions Federally recognized Metropolitan Planning Organization, long-range population, employment, and housing unit projections for use in regional planning efforts. The most recent comprehensive review of future growth trends occurred during the 2017 update to the Metropolitan Transportation Plan. The CCRPC projections suggest an additional 719 housing units in South Burlington between 2020 and 2030, an 8% change. The city of South Burlington planning department has maintained that the regional forecasts are too low given the rate of residential construction anticipated over the next twenty years. City planning staff have indicated that annual changes of around 140 housing units is more realistic and consistent with past land use permits and growth patterns as shown in Figure 3. South Burlington School District Impact Fees 6 FIGURE 3: SOUTH BURLINGTON HOUSING PERMITS (HISTORICAL 1980 TO 2021) Bedrooms however is also a frequently used metric, guiding the size requirements for waste water and raw water as well as other land development permits. Both the number of households and the number of bedrooms in those households are known entities at the time a building permit is obtained prior to construction. The number of occupants, however, are not – which is the true source of demand for city services such as educational facilities. While we cannot assess the impact fee on the actual number of occupants, we have sufficient data to associate a correlation between the size of the household and number of bedrooms to the number of occupants. Persons per Household The American Community Survey estimates that as of 2020, there were 9,087 housing units.3 This is an increase of over 2,586 housing units since the 2000 Census and over 1,453 more than the 2010 census. Most of the housing units are owner occupied (59%) with an average of 2.32 persons per household. The remaining 41% of households are renter occupied with 2.00 persons per household4.The citywide average is 2.19 persons per household. 3 The ACS is an estimate based on a sampling of data. The City maintains a detailed record of housing permits and overall housing units. However, it is valuable to compare housing and population using a consistent dataset (i.e., ACS). 4 2020 American Community Survey 5-year estimates (Table B25010) South Burlington School District Impact Fees 7 There have been attempts nationally to reduce the effect that impact fees may have on housing costs, and especially, “affordable housing.” Changing the assessment on the size of the home or on the number of bedrooms provides a stronger relationship to the number of occupants and the likely impact on the school district. Nationally, over the past half century the average size (number of persons) of the household has dropped from 3.67 persons per household in 1940 to 2.53 in 2016 as shown in Figure 4. FIGURE 4: AVERAGE HOUSEHOLD SIZE (1940–2016) Source: US Census Bureau5 The number of occupants per household influences the number of housing units necessary to house the population and may also influence the degree to which any household may impact the needs for goods and services. Specifically, as it pertains to the school district, if there are fewer occupants, there may be a reduction in likely number of students that may be living in the household. Traditionally, impact fee studies often separated the fees based on ownership status or other proxies for ownership. Rightly or wrongly, the ownership may been an easier way to capture anticipated or degree of impact on the system. However, as shown in Table 1 there has 5 US Census Bureau. “Historical Households Tables.” December 2020. Available at: https://www.census.gov/data/tables/time-series/demo/families/households.html. South Burlington School District Impact Fees 8 been a trend toward convergence between owner occupied housing sizes and renter occupied housing sizes. Since 2000 the city has seen a decline in average persons per owner occupied unit, and from 2010 to today an increase in the overall household size of rented units. TABLE 1: AVERAGE PERSONS PER HOUSING UNIT AVG. PERSONS PER OWNER OCCUPIED UNIT AVG. PERSONS PER RENTER OCCUPIED UNIT 2000 Census 2.44 2.02 2010 Census 2.50 1.75 2015 ACS 2.38 1.84 2020 ACS 2.32 2.00 Source: US Census Data (Table B25010) To move away from ownership status, it is important to acknowledge that the simple metric of household is too gross of a measure. There is a wide variation in the number of occupants and the behaviors of those occupants that should be better accounted for. Additionally, the Comprehensive Plan reinforces the notion that policies such as impact fees, should be designed to be avoid unintentional adverse impacts on affordable housing policies. Bedrooms per Household The 2020 breakdown of households and the number bedrooms is shown in Table 2. Note that the total number of housing units estimated by the ACS is slightly different than what the City Planning office considers to be an accurate count of housing units. The ACS aides in the understanding of the relative makeup of each of the units in the city. TABLE 2: SOUTH BURLINGTON BEDROOMS, BY HOUSEHOLD UNIT (2020 5-YEAR ACS) HOUSEHOLD BEDROOM COUNT COUNT PERCENT No Bedroom (i.e., studio or efficiency unit) 202 2% 1 Bedroom 1,137 13% 2 Bedrooms 3,360 37% 3 Bedrooms 2,807 31% 4 Bedrooms 1,340 15% 5 or More Bedrooms 241 3% Total Housing Units 9,087 100% The weighted average number of bedrooms per unit is 2.5. Aggregated into three levels (0 to 1 bedroom, 2 bedroom, and 3+ bedroom) units can be helpful and easier for practical applications. The percentages as a share of the overall housing mix is shown in Figure 5. South Burlington School District Impact Fees 9 FIGURE 5: EXISTING BEDROOM MIX OF HOUSING UNITS Source: American Community Survey (2020 5-year. Table B250401) The planning department at the city of South Burlington maintains a robust record of the housing permits and based on the local data there are 9,500 housing units as of 2020. Using the ACS percentage of households by the number of bedrooms the 2020 share of households by bedrooms is shown in Table 3. TABLE 3: SOUTH BURLINGTON 2020 HOUSEHOLD MIX BY BEDROOM TOTAL 0-1 BR 2 BR 3+ BR Units 9,500 1,400 3,515 4,560 Percent 15% 37% 48% Source: City of South Burlington records using ACS percentages Lastly, the U.S. Census Public Use Microdata Sample (PUMS) regularly surveys around 1% of the U.S. population each year across the full set of variables surveyed in the ACS. The 2019 five-year PUMS data was downloaded using the statistical software R and exported for the state of Vermont geography, providing occupancy data on 32,056 households. The data accessed compares persons per household and the number of bedrooms in that household. The relationship is visualized in Figure 6 below. South Burlington School District Impact Fees 10 FIGURE 6: VERMONT PERSONS PER HOUSEHOLD BY BEDROOM Source: Census PUMS data analyzed by RSG A strong linear relationship exists between the number of bedrooms a household has and the number of persons in that household. This is a helpful check to confirm that bedroom count can be a reliable measure of the number of occupants, and therefore, the impact on the city of South Burlington facilities, including schools. 2.3 LAND USE FORECASTS The Comprehensive Plan supports the city’s vision for robust and significant growth in both population and employment. The city is expected to remain one of the faster growing communities in Vermont and in Chittenden County. The 2020 Census data indicates the state population grew 2.8%, or 0.28% annually between 2010 and 2020, while South Burlington grew 13.34%, or 1.25% annually6, from 17,904 to 20,292 residents between 2010 and 2020. Countywide Context The 2018 ECOS Metropolitan Transportation Plan (MTP) produced by the CCRPC developed countywide and municipal forecasts out to 2050. The 2018 projections have countywide 6 Using a natural log growth equation with US Census 2010 and 2020 population estimates South Burlington School District Impact Fees 11 population projected to increase from 165,000 in 20207 to 183,000 in 2050. The population is anticipated to slow in annual growth rates through the 2020s and then increase again starting in the 2030s as the ‘millennials’ fully enter an age typical of household formation. Figure 7 shows the chart for the projected countywide population growth through year 2050. The chart indicates that annual growth rates between 2010 and 2020 are around 0.56% and forecast between 2020 and 2030 at 0.4%. South Burlington data indicates that the city is adding residents faster than the Chittenden County average. FIGURE 7: CHITTENDEN COUNTY POPULATION PROJECTIONS Source: CCRPC 2018 ECOS MTP (developed by Economic Policy Resources, Inc. and RSG) Forecast Growth in Housing and Students The city of South Burlington is forecast to see an increase in employment and population over the coming decades. By 2030 regional growth forecasts8 suggest South Burlington could see an increase in over 2,000 residents and 3,400 jobs from 2015. These forecasts were developed as part of a regional effort in 2017 by the CCRPC to account for New England wide trends in a Vermont context and then work with local agencies and governments to refine forecasts for each community within Chittenden County. The forecasts were completed going out to the future year 2050, the current planning horizon for the regional long-range planning efforts. The growth anticipated for South Burlington in the regional planning effort (shown in Table 4) shows 7 The 2019 ACS data indicates Chittenden County has a population of 163,774 8 CCRPC MTP Forecasts for year 2030. 165,803 172,596 174,764 183,129 155,000 160,000 165,000 170,000 175,000 180,000 185,000 190,000 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 South Burlington School District Impact Fees 12 a significantly slower rate of growth than the historical average of 140 units per year shown in Figure 3. If the 140 units per year remains a long-run average, the city could reasonably expect nearly 11,000 housing units by the year 2030. This comparison between the different forecasts is only helpful to provide a perspective on the amount of growth and development expected in the city. TABLE 4: REGIONAL LAND USE HOUSING FORECASTS FOR SOUTH BURLINGTON HOUSEHOLDS HOUSEHOLDS ANNUALIZED GROWTH RATE 2020 9,500 2025 9,793 0.62% 2030 10,219 0.87% 2035 10,644 0.83% 2040 11,069 0.80% 2045 11,495 0.77% 2050 11,920 0.74% Source: CCRP 2018 MTP Forecasts (pivoted using actual 2020 housing units) However, the overall number of housing units is only part of the story. The City Planning Department identified a near-term growth projection using an identified list of known or likely land use development projects to occur within the next decade, by 2030. The size, scale, and bedroom composition of these units are expected to be markedly different than what has been the recent historical housing type within South Burlington. Figure 8 shows the existing mix of housing units by bedroom count along with the type of housing unit anticipated over the next few years in the city. The figure shows a clear shift in the composition of the housing units. This will likely affect the anticipated number of students residing in these units. South Burlington School District Impact Fees 13 FIGURE 8: NEAR-TERM HOUSING UNITS BY BEDROOM MIX Source: City of South Burlington Planning Department (May 2022) The number of students residing and enrolled in South Burlington schools has traditionally been based on forecasts from McKibben Demographics to inform key inputs such as school by school enrollment by year. The analysis uses a range of demographic factors such as migration (in and out), births and deaths, and historical data that is used to inform the future rate of change in the student populations by grade. At an aggregate level, the October 20, 2021 McKibben report indicates 2,349 resident students in 2020 and forecasts 2,604 in 2030 (and 2,635 by 2032). This is a 10.8% change over the next 10 years, with an annual average increase of nearly 26 students per year. In addition to simply resident students, there are nearly 200 tuition students from nearby communities who attend school in South Burlington. These numbers are expected to remain stable. It is both a service to the wider community in northwestern Vermont but also a benefit for the additional revenue that can offset local education costs. Figure 9 shows the McKibben total school district enrollment forecast out ten years to year 2032. South Burlington School District Impact Fees 14 FIGURE 9: TOTAL ENROLLMENT FORECAST Source: McKibben Demographics (October 20, 2021) A detailed methodology and assumptions of McKibben’s work is included in the appendix of the May 2019 Phase 2 Master Planning & Visioning report, titled Demographic Study Report 2019 from McKibben Demographics. The analysis is detailed with the many assumptions that are critical to understanding the future forecasts that were made. Foremost among them is the assumed number of new housing units constructed. The 2019 report states an assumed 500 new units by 2028. This is well short of the amount the City Planning Department has indicated based on historical averages (~140 units per year) as well as near-term growth expectations. It will be important for city and school district staff to monitor the changes in enrollment as it relates to housing growth and development. The following chapters rely on the attributes of the housing being constructed in the city as well as the demands on the school facility to accommodate the future growth in student enrollment. South Burlington School District Impact Fees 15 3.0 SCHOOL DISTRICT FEE DEVELOPMENT 3.1 INTRODUCTION The school district has been proactive in developing plans for additional school capacity. Over the past decade a handful of options have been identified such as consolidation at the K-5 level, rebuilding schools, or building anew. This impact fee study report supports the Master Planning Process that continues today to identify pathways forward to maximize student performance by improving the educational capital facilities. Impact fees can support the expansion of the schools within the district as long as there is a sound nexus between the growth in the community, a unit of growth – being households, the demand for additional school space as a result of that growth, and a capital plan to build the additional capacity. This chapter sets out the necessary components of an impact fee including developing the service standard, developing a cost per unit of growth, and including mechanisms for credits and avoiding issues of double payment. The district has a long-term vision of high-quality facilities that are flexible, adaptable and resilient to the inevitable changes in instructional format. The Master Planning Process has included numerous studies and evaluations of the facilities as well as public engagement activities to educate the community on the conditions and capacity challenges at the schools.9 The Master Planning documents along with others including demographic projections were reviewed and informed this impact fee study report, including the following: Phase 1 - Master Planning and Visioning Process: Site & Building Assessments, Dore and Whittier. April 24, 2018. South Burlington School District, Redistricting Study Option Statistics, Cropper GIS. May 2, 2019. Phase 2 – Master Planning and Visioning Process: Educational Component, Dore and Whittier. May 31, 2019. School District Enrollment Projections. Cropper GIS/McKibben Demographics. September 23, 2019. Population and enrollment Forecasts: 2021 Series, McKibben Demographics. October 20, 2021. Elementary School Building Assessment: Programming Update, Dore and Whittier. November 30, 2021. 9 Master Planning and Visioning site. https://www.sbschools.net/Page/736 South Burlington School District Impact Fees 16 Elementary School Building Assessment: Options Analysis, Dore and Whittier. April 26, 2022. 3.2 SERVICE STANDARD Schools are dynamic and flexible spaces within a rigid structural shell. They must respond to evolving educational practices and year to year variations in enrollment. These challenges are among the hundreds of others that have been considered in the Master Planning and Visioning process that the school district organized over the past few years. The process convened working groups and committees to determine the preferred configuration and size of the future schools within South Burlington to meet the expected student population. Vermont has historically used a blanket, one size fits all, 160 square feet of gross square feet per student as the service standard that applies for all schools across all ages in Vermont. The standard has not changed for several decades and is considered inadequate to reflect the changing demands on the educational facilities. Alternatively, Massachusetts provides a current set of design standards that have been identified by the district’s architects as superior to Vermont’s standard and more accurately reflect the desired conditions. The Massachusetts School Building Authority (MSBA) Regulations apply to all public schools and communities that receive state funding assistance in Massachusetts.10 The architects for the South Burlington school district have pointed out that the Massachusetts standards should not be followed indiscriminately and require context and consideration of the local South Burlington situation. However, they do provide a helpful and powerful source of information for the purposes of establishing impact fees by providing a straightforward rubric as to the amount of space a pupil requires. The MSBA square footage standards per student vary by the age of the students (i.e., different standards for elementary vs. high school) and the total enrollment of the school. Table 5 shows the MSBA standard square feet per student standards for the five schools within South Burlington as well as the weighted average for the elementary schools and the overall weighted average. TABLE 5: SQUARE FEET STANDARDS PER SOUTH BURLINGTON SCHOOL SCHOOL SERVICE STANDARD SQUARE FEET PER STUDENT (USING THE MSBA STANDARDS) Average (weighted by size of student population) 180 10 Massachusetts School Grant Building Program. https://www.mass.gov/regulations/963-CMR-200- school-building-grant-program South Burlington School District Impact Fees 17 PK-5 Elementary 173 Rick Marcotte School 165 Chamberlin School 178 Orchard School 162 6-8 Tuttle Middle School 173 9-12 High School 200 Source: RSG analysis of the MSBA Standards The service standards for any future condition are compared to the existing condition to understand whether any deficiency exists today. Existing deficiencies are not eligible for funding through impact fees and must be funded with other sources. The existing enrollment and size of each school and resulting square feet per student is shown in Table 6. The MSBA standards and resulting size of each school and the resulting deficiency is included. TABLE 6: EXISTING SERVICE STANDARDS IN SOUTH BURLINGTON SCHOOL CURRENT TOTAL ENROLLMENT (2022) EXISTING SQUARE FEET OF SCHOOL EXISTING SQUARE FEET PER STUDENT MSBA REQUIREMENTS (SQUARE FEET) MSBA SQ FT PER STUDENT EXISTING CURRENT SPACE DEFICIENCY PER STUDENT Total 2,536 446,534 176 498,892 180 4 PK-5 1,125 167,440 149 194,540 173 24 RMCS 415 55,526 134 68,299 165 31 CS 269 54,792 204 54,792 178 0 OS 441 57,122 130 71,449 162 32 6-8 492 120,552 245 120,552 173 0 9-12 919 158,542 173 183,800 200 27 Source: RSG The analysis indicates that existing deficiencies are particularly acute at the high school and two of the elementary schools. Interim plans include adding temporary classrooms as well as shifting some of the districts to shift students from one school to another. However, as indicated by the overall deficiency of 4 square feet per student, the entire district is space deficient per the MSBA standards. This is the deficiency at the time of this impact fee study and it is expected to increase if capital investments are not made. 3.3 STUDENTS PER HOUSEHOLD Section 2.3 summarized the expectation that South Burlington and the school district is expected to add over 1,000 housing units (up to 1,400 if long-term trends continue) over the next ten years. A portion of those households and the residents living in them are likely to, or at some point in the future, house school-age children, adding to the overall demand for educational facilities in the school district. South Burlington School District Impact Fees 18 This chapter sets out the methodology for estimating the number of students that any housing unit in the city may generate, and subsequently, demand for additional capital infrastructure. The McKibben Demographics report indicated a total of 2,349 resident students were enrolled in 2020. The City Planning Department has indicated that there were 9,500 housing units in 2020. This produces an average of 0.247 students per housing unit across the entire city. The ACS also estimates that only 23.3% of households in the city have one or more resident under the age of 18. Roughly, these two numbers indicate that 1 in 4 households has a student in the district. These numbers are citywide averages that could be further divided into the types of housing units being occupied. Recognizing that the city is changing and the demand for smaller housing units is also growing as household size has reduced over the last few decades (see Figure 4). The U.S. Census PUMS regularly surveys around 1% of the U.S. population each year across the full set of variables surveyed in the ACS. The 2019 five-year PUMS data was downloaded using the statistical software R and exported for the northwestern part of Vermont, providing data on students per household for 443 households in the study area. The PUMS data shows trend of higher numbers of students residing per unit as the number of bedrooms increases. For instance, single family homes with 4 bedrooms include an average of 0.61 students compared to 3 bedroom units having 0.44 students, and 2 bedroom units having 0.13 students. The data is obviously limited, but provides a local sample to inform this process. TABLE 7: ACS PUMS DATA ON STUDENTS PER HOUSE BY BEDROOM BEDROOMS PER UNIT STUDENTS PER HOUSEHOLD 0 0 1 0 2 0.13 3 0.44 4 0.61 Source: RSG analysis northwestern Vermont household PUMS data (2019 5-year) The 2019 PUMS analysis is juxtaposed against an alternative picture of historical data using the 2000 Census data analyzed by the Vermont Housing Finance Agency (VHFA) shown in Figure 10. The VHFA analysis suggests the current overall average (0.247) is reasonable, albeit lower than historical Vermont averages. South Burlington School District Impact Fees 19 FIGURE 10: VHFA PERCENT OF HOUSING TYPES WITH SCHOOL-AGE CHILDREN Source: VHFA: Housing and Vermont’s School Enrollment. January 2007. A more recent analysis of 2015 data (2011-2015 ACS data) prepared by Econsult Solutions titled “Who Moves into Vermont Housing” completed in November 2017 shows an extensive breakdown of school-age children by housing unit by bedroom count. The report states that these are derived from national sample and then further filtered to represent Vermont and not sensitive to specific community conditions. The data analyzes households moving into Vermont within four years of the ACS sample (in this case, the earliest move in date is 2008). South Burlington School District Impact Fees 20 FIGURE 11: SCHOOL-AGE CHILDREN MULTIPLIERS (ECONSULT SOLUTIONS) Source: Econsult Solutions. November 2017. The data sources (citywide average students per housing unit, the PUMS data for Vermont, and the two reports) are used to estimate the current South Burlington specific rates of students per housing unit by number of bedrooms shown in Table 8. TABLE 8: NUMBER OF STUDENTS PER HOUSING UNIT IN SOUTH BURLINGTON (2022) 0-1 BEDROOM UNITS 2 BEDROOM UNITS 3+ BEDROOM UNITS WEIGHTED AVERAGE STUDENTS PER UNIT Students per housing unit 0.02 0.13 0.41 0.248 Source: RSG The number of students generated per housing unit is used to relate the necessary amount of school facility space needed in the district to accommodate for additional housing units being constructed. The ratios for South Burlington appear to be lower than the recent PUMS data for northwestern Vermont and lower than the statewide averages analyzed by VHFA and Econsult. South Burlington School District Impact Fees 21 The actual number of students added to the district over the coming years will be a function of the number of housing units and the composition of those units. For example, the next few years could look something similar what is shown below in Table 9 based on the expected number of housing units by bedroom type and the number of students per household type. TABLE 9: STUDENT GROWTH BY HOUSEHOLD TYPE YEAR TOTAL HH PER YEAR ANNUAL HOUSING SHARE BY NUMBER OF BEDROOMS NUMBER OF HOUSEHOLDS BY BEDROOM (STUDENTS BY HOUSEHOLD TYPE) ANNUAL ADDITIONAL STUDENTS TOTAL NEW STUDENTS 0-1 BR 2 BR 3+ BR 0-1 BR (0.02) 2 BR (.13) 3+ BR (0.41) 2022 169 52% 21% 27% 88 35 46 25 25 2023 333 51% 29% 21% 170 96 70 45 70 2024 284 58% 24% 19% 164 67 53 34 103 2025 142 46% 37% 18% 65 52 25 18 122 2026 140 50% 30% 20% 70 42 28 18 140 2027 140 50% 30% 20% 70 42 28 18 158 2028 140 50% 30% 20% 70 42 28 18 177 2029 140 50% 30% 20% 70 42 28 18 195 2030 140 50% 30% 20% 70 42 28 18 213 This possible configuration generally aligns with the forecasts that were prepared by McKibben Demographics (see Figure 9), however, derived from different data and methodology. Future planning between the school district and the city should seek to monitor the housing units, the type of unit, and ideally the numbers of students based on the housing type. This data can be important to monitor and can identify and possibly predict of enrollment pressures before they occur. 3.4 BASE IMPACT FEE The base impact fee has been designed to encompass the entire school district, with improvements to each of the three elementary schools, the middle school, and the high school. The base fee is designed for the option to reconstruct, improve, and expand each of the school facilities in the district. Alternatively, a renovation and expansion option was subsequently considered and dismissed by the school board and is included in an appendix (To be created). The basic formula for the impact fee assessment is: Square Foot per student x Cost per square foot x Students per housing unit = Base capital cost per housing unit (-) subtract cost per feet for existing deficiencies = Base impact fee per housing South Burlington School District Impact Fees 22 (-) subtract for property taxes that may be paid on future debt for school (see Chapter 4.0 for Credits) = Final impact fee per housing unit This impact fee approach uses the consumption or ratio method as the fee is assessed on the marginal basis of expansion. Each unit of growth (student per household) is associated with a specific amount of additional capacity (square feet of space per student). The school district can collect annual impact fees as the means to pay for the new capacity while using more traditional funding sources such as bonds and grants, to pay for the overall project. Any impact fee revenue from annual housing permits will offset the annual bond payments. Capital Costs The capital costs in 2022 dollars for replacing and expanding each of the five schools are shown in Table 10. The capital costs are estimated after a rigorous and comprehensive process to analyze the various options for shifting students within schools, replacing and consolidating schools, as well as the preferred configuration of rebuilding and expanding each of the schools in the district. The values in this table reflect recommendations from an ad-hoc enrollment committee facilitated and organized by the school district. The preferred option for all new construction treats the overall district as one entity rather than fees for specific schools or grade levels. Developing a school impact fee at the district level that uses a districtwide average cost per foot also provides greater flexibility as to the use and spending of the impact fees to pursue any and all opportunities for capital expansion throughout the district. The overall weighted average cost of the new construction option is $587.21 in 2022 dollars. TABLE 10: CAPITAL COSTS FOR PREFERRED ALL NEW CONSTRUCTION OPTION SCHOOL EXISTING SQUARE FOOTAGE FINAL CONSTRUCTED SQUARE FOOTAGE ALL NEW PROJECT COST (MILLION) COST PER SQ FOOT (DOLLARS) NEW CAPACITY COST (MILLION) - 2022 DOLLARS % OF COST OF NEW CAPACITY Total 446,534 571,681 $ 335.70 $ 587.21 $ 67.61 20% PK-5 167,440 206,681 $ 134.34 $ 650.00 $ 7.89 6% RMCS 55,526 75,384 $ 49.00 $ 650.06 $ 4.61 9% CS 54,792 55,153 $ 35.85 $ 649.94 $ 0.23 1% OS 57,122 76,144 $ 49.49 $ 649.97 $ 3.05 6% 6-8 120,552 130,000 $ 71.98 $ 553.68 $ 5.23 7% 9-12 158,542 235,000 $ 130.11 $ 553.65 $ 28.35 22% Source: Dore and Whittier (May 2022 estimates) South Burlington School District Impact Fees 23 Table 10 shows the existing and proposed square footage anticipated to be constructed for each of the facilities. Overall, an estimated 20% of the total new square footage is expected to be additional space over and above the space in existing facilities. The total cost of $335.70 million includes $5.88 million to address existing deficiencies, $262.21 million to replace the existing capacity, and $67.61 million to increase the capacity of the system. Important to note – at the time of this study preparation – the total cost excludes any financing costs such as interest. Base Fee Calculation The base impact fee is a result of the additional square feet of space needed to accommodate additional students as a result of new students occupying an increasing number of housing units in South Burlington. a) Space per student: The overall average space per student required in the district is 180 square feet. This standard is based on the MSBA given the typical enrollment of the school and the grade levels of students in the school. b) Cost per square foot: The overall average cost per square foot of educational space in the district is $587.21 in 2022 dollars. c) Number of students per housing unit: The number of students that may occupy any housing unit in the city does vary by the size of the unit, typically aligned with the number of bedrooms. The overall average of 0.248 students per household or per the table below by the bedroom count (Table 8). 0-1 BEDROOM UNITS 2 BEDROOM UNITS 3+ BEDROOM UNITS WEIGHTED AVERAGE STUDENTS PER UNIT Students per housing unit 0.02 0.13 0.41 0.248 d) Existing deficiency: The district currently has an average deficiency of 4 square feet of education space per student. This is calculated using the existing square footage (446,534 square feet) divided by the current enrollment (2,536 students) = 176 square feet per student. The MSBA weighted average for the district is 180 square feet per student. The current cost per square foot estimates ($587.21) includes costs to rebuild existing capacity, address the deficiency, and expand the facility. Therefore, the cost of addressing the existing deficiency is removed from the cost per square foot that is embedded in the overall project cost estimates. South Burlington School District Impact Fees 24 The net base impact fee cost per housing unit is shown for housing units by bedroom or by the citywide average in Table 11. The fee can be established on either a bedroom bases or on a straight average which would assess each housing unit the same fee regardless of bedroom count. TABLE 11: NET BASE IMPACT FEE COST PER HOUSING UNIT (2022 DOLLARS) 0-1 BR 2 BR 3+ BR AVERAGE Students per unit 0.020 0.130 0.410 0.248 Sq feet of School Required per housing unit (180 square feet per student x no of students) 3.601 23.403 73.811 44.62 Cost per square foot: $587.21 Base impact fee cost per housing unit $2,114.26 $13,742.68 $43,342.31 $ 26,201 Deficiency (4 sq ft per student x no. students x cost per square foot) ($46.37) ($ 301.38 ) ($950.49 ) ($575) Net base impact fee cost per unit (Base impact fee - Deficiency) $2,067.89 $13,441.31 $42,391.82 $ 25,626 The fee would also be assessed on housing expansions that add bedrooms. If a two-bedroom unit were to be expanded to add another bedroom, then it would be logical to assess a fee that reflects the greater likelihood that the house will have a student residing in it. The difference between the existing number of bedrooms and the future number of bedrooms could be a reasonable method to calculate the assessed fee. The bedroom fee is a reflection of the data that smaller housing units are likely to house fewer students compared to larger homes or those with more bedrooms. The fee is structured to recognize the smaller degree of impact on the school system that houses with fewer bedrooms have, by assessing a lower fee per household. The impact is that the houses with 3 or more bedrooms are faced with a substantially higher burden per household. While this may be equitable from the standpoint of impact to the school system, it may create a financial burden by increasing the overall cost of housing for larger families. The cost of new homes will likely increase as a result of internalizing the wider community costs (schools, transportation, water, recreation, library, police, fire, etc.) of new housing through impact fees. South Burlington School District Impact Fees 25 4.0 CREDITS 4.1 CREDITS Credits are adjustments to the base impact fee that a land use would be assessed. Credits are applicable for the school district impact fee developed in Section 3.4. Two credits are used to offset impact fees: infrastructure credit and revenue credits. The credits are applied after the base impact fee is calculated, as per equation: Infrastructure Credits A land use development applicant that constructs or directly funds any of the capital items funded through impact fees. In the case of the school district, it is unlikely that a private entity may construct additional education capacity and be eligible for an infrastructure impact fee credit. Revenue Credits Revenue credits discount the base impact fee to reduce the chance that a land use development in South Burlington would fund the same capital improvement through two different funds. This frequently occurs when the developer pays property taxes (prior to the development of the land and after the development) and a portion of which goes to fund the capital project that the impact fee contributed toward. In this situation, it is necessary to offset the impact fee by a credit value to eliminate the double payment toward the same capacity. Property tax is paid by a parcel owner on undeveloped land prior to a land use development and future taxes once the land is developed. The taxes on the undeveloped land that contribute to paying the school district bond debt is referred to as the “past tax payments.” The property tax payments on the developed land that will contribute to district debt is referred to as “future tax payments.” The streams of past and future tax payments are translated into net present values using an assumed 3% discount rate. Property Valuation Approach Impact Fee = (Cost per Unit of Growth x New Units of Growth) – (Applicable Credits) South Burlington School District Impact Fees 26 4.2 REVENUE CREDITS Past Tax Future Tax Tax Rate Net School District Impact Fee