school adequate public facilities program and funding ... · the committee started with a general...

School Adequate Public Facilities Program and Funding

Review Committee

Final Report to the County Commissioners

February 14, 2014

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COUNTY COMMISSIONERS OF CHARLES COUNTY

Candice Quinn Kelly, President

Reuben B. Collins II, Esq., Vice President

Ken Robinson

Debra M. Davis, Esq.

Bobby Rucci

Mark Belton,

County Administrator

Peter Aluotto, Director,

Planning & Growth

Management

Mission Statement

The mission of Charles County Government is to provide our citizens the highest quality service

possible in a timely, efficient, and courteous manner. To achieve this goal, government must be

operated in an open and accessible atmosphere, be based on comprehensive long-and short-term

planning, have an appropriate managerial organization tempered by fiscal responsibility.

Vision

Charles County is a place where all people thrive and businesses grow and prosper; where the

preservation of our heritage is paramount; where government services to its citizens are provided at

the highest level of excellence; and where the quality of life is the best in the nation.

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Acknowledgements

Committee Members

County Commissioner Representatives: Candice Quinn Kelly, Reuben B. Collins II, Esq.

Board of Education Representatives: Jennifer Abell, Pamela A. Pedersen

Building Industry Representatives: Jim Lorenzi, Doug Meeker

Parent Representatives: Rosemin Daya, John W. Hayes, Glenda Harrison

Southern Maryland Board of Realtors Representatives: Jackie Alexander, Bud Humbert

Education Association of Charles County Representatives: Diana Johnson, Joseph McMahan

Technical Staff

Jason Groth, Co-Facilitator

Steve Andritz, Co-Facilitator

Jerry Barrett, CCPS

Dave Eicholtz, DFAS

John Mudd, PGM

Zak Krebeck, PGM

Sarah Sandy, PGM

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School Adequate Public Facilities Program and Funding Review Committee

Final Report to the County Commissioners

Table of Contents

Executive Summary ....................................................................................................................................... 1

Committee Charge .................................................................................................................................... 1

Summary of Approach .............................................................................................................................. 1

Summary of Recommended Actions ........................................................................................................ 1

Issues Identification .................................................................................................................................... 10

Synopsis of Initial Fact Finding Phase ..................................................................................................... 10

Outreach Meeting ................................................................................................................................... 11

Issues and Alternative Solutions Identified ............................................................................................ 11

Alternatives Evaluation ............................................................................................................................... 12

School Adequate Public Facilities Evaluation.......................................................................................... 12

Issue 1—Timing of adequate school facilities to match planned growth. .......................................... 12

Issue 2 -- Minor Subdivisions .............................................................................................................. 14

Issue 3: School Capacity Measurement .............................................................................................. 17

Issue 4: DRRA School Allocations ....................................................................................................... 23

Issue 5: Student Yield Factors ............................................................................................................ 26

School Construction Funding .................................................................................................................. 29

Issue 6: State Funding Sources. .......................................................................................................... 29

Issue 7: County funding sources ......................................................................................................... 30

School Construction Program ................................................................................................................. 42

Issue 8: School construction program versus projected enrollment and capacity ............................. 42

Issue 9: Procurement of School Sites .................................................................................................. 45

Appendices .................................................................................................................................................. 47

Appendix 1: Projected School Capacity by School Level (Step Charts) ....................................................... 48

Appendix 2: Issues Identification Worksheet ............................................................................................. 52

Appendix 3: Over State Rated Capacity Mapping ....................................................................................... 57

Appendix 4: Counties APF and Funding Survey .......................................................................................... 62

Appendix 5: County Revenue Comparison Table........................................................................................ 67

Appendix 6: Public-Private Partnerships for Schools Explored ................................................................... 69

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Appendix 7: Student Yield Factors by Selected Elementary School Districts ............................................. 72

Appendix 8: Adequate Public Facilities Provision for Schools in the St. Charles PUD ................................ 75

Appendix 9: New School Operating Budget Models ................................................................................... 77

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Executive Summary

Committee Charge

The Committee shall evaluate the County’s approach to ensuring adequate public facilities for

schools in the development approval process to determine if the current policy is achieving the

stated goals. The Committee should also develop solutions for addressing the timing of

providing adequate school facilities to match the planned growth in the County. The Committee

should work with designated staff to explore the feasibility and make recommendations on the

best method to work through the issues related to school redistricting, school capacity allocation,

and the timing and methods of school funding and construction.

Summary of Approach

The Committee met 21 times from March 13, 2013 through January 30, 2014. This included a

Public Outreach Meeting on April 10th

to receive citizen input on issues relating to school

capacity and development planning. The minutes of the meetings are on file in the Department of

Planning and Growth Management Offices. Most of the meetings were recorded and are posted

on the County’s Website under the CCGTV Section.

The Committee started with a general fact finding phase that included developing a thorough

understanding of the County’s School Adequate Public Facilities Program, School Construction

Program and the School Construction Financing. A synopsis of the fact finding phase is

included in the Issues Identification Section of the report.

Summary of Recommended Actions

The following is a summary of the identified issue and the recommended actions to address the

issue. The full analysis and recommendations for each issue are included in the Alternatives

Evaluation Section of the report.

Issue 1 -- Timing of adequate school facilities to match planned growth School capacity

provision in specific school districts has not kept pace with residential growth.

Recommendation -- All of the following techniques should be considered in the County’s

efforts to match the provision of school capacity to the residential growth planned for the

geographic regions of the County.

1. Increase the number of schools serving the student population by forward funding

schools. The CCPS should increase the pace of school construction to the degree feasible

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without sacrificing the potential to receive State funding. Spreading County forward

funding over two schools or a new school and a renovation may be a way to maximize

State participation. (Also addressed under Issue 8 - County’s school construction

program.)

2. Expand critical elements of the school such as classrooms and cafeterias to

accommodate growth. Expanding the number of classrooms and supporting facilities

could stretch limited resources and more quickly target capacity where the projected need

is apparent. The results of the School System-wide Facility Assessment being

recommended will provide the locations where such expansions are feasible.

3. Build new schools on the same site, where feasible. This alternative would negate the

need to find suitable school sites. It should minimize site development costs. It should

also minimize the disruption caused by redistricting for a newly located school. This

technique is only feasible when adequate land area exists on site or can be expanded to

adjoining properties. (This approach is further discussed under Issue 9.)

4. Target school capacity to geographic areas with the projected need. This strategy has

been clearly used by Charles County in recent years. The key to successfully using this

technique is to refine methods of enrollment projections based on school growth trends

and the probability of buildout of approved subdivisions. A refinement to the student

yield factors will help in projecting student enrollment.

5. Consider developer built schools or additions/renovations that add capacity.

Allowing developers to mitigate for their impacts by expanding the number of classrooms

and supporting facilities or even building schools would provide capacity directly

associated with impact of development. It would also stretch County and State funds by

permitting those funds to be used for other projects.

6. Consider Temporary reassignments of new projects not yet built to schools with

projected capacity. A similar approach that was used in Charles County with the 2009

Redistricting. One caution with this technique is that it could significantly increase

transportation costs if the projects reassigned are located too far from the school. One

limitation of this approach is that the impact on school overcrowding may take many

years as the project build out and the students enroll in the school with capacity. A clear

benefit is that students attending existing schools would not have to be redistricted. The

Committee also considered redistricting school attendance zones to balance student

attendance. Using redistricting of school attendance zones to balance student demand is a

common practice among Counties. Charles County, as well as other counties, has used

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this method of matching school capacity to residential growth. It was understood that the

BOE will continue to use this technique where it is deemed appropriate.

Issue 2 -- Minor Subdivisions. Minor subdivisions that would create more than 3 new lots must

sit on the school allocation waiting list for an indeterminate number of years until capacity

becomes available.

Recommendation – Upon review of how minor subdivisions are treated in the County’s

School APF program, it is recommended that the provisions be amended to require that the 3

bulk allocations for new lots can only be given out if there is capacity in all three receiving

schools; if there is no capacity they must be put on the waiting list until capacity becomes

available. The project may avail itself of any allowable mitigation such as the DRRA

payment approach.

Issue 3 -- School Capacity Measurement. If all schools are capped at State Rated Capacity

(SRC), over time, there could be an impact on the County’s ability to obtain State funding once

all the existing school allocations are used. This would occur only if mitigation for the lack of

school capacity is not allowed. This issue was identified primarily from input received at the

Public Outreach Meeting. The Committee reviewed the APF Program elements of several

counties in the State and found that the majority of the counties provide some flexibility over

state rated capacity. (See Appendix 4.) The Committee found that adding flexibility to the APF

program will help assure that the County can meet the threshold projected student enrollments

needed to qualify for State School Construction funding as well as generate adequate School

Construction Excise Tax and School Capacity Mitigation payments to fund school construction.

Recommendation - Charles County effectively allows mitigation payments through

Development Rights and Responsibilities Agreements (DRRA). At this time there is no cap

on the number of students over SRC that may be approved for a specific school. The

Committee evaluated the effect of a range of alternative school capacity caps on mitigation

payments as described in detail in the Alternatives Evaluation Section.

The Committee recommends that the County continue to allow school mitigation payments

through DRRAs when the SRC is exceeded to a maximum cap set at a point halfway

between SRC and the “local measurement of capacity with relocatables as determined by the

BOE” for each school. The cap would allow additional growth in the County, and therefore,

generate a greater amount of revenue via DRRA payments and excise tax than not allowing

mitigation of school capacity. The result would be to provide moderate funding of new

school capacity construction without undue increases in income and/or property taxes. The

cap would recognize the capacity limitations of individual schools as determined by the

BOE. Finally, by unanimous vote it is recommended that the Commissioners allow a 90

day window from the adoption of this provision to the effective date. This would allow a

grace period for land developers to propose a DRRA to address the school capacity

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deficiencies without the specified cap. The Committee considered this to be fair to projects

already partially completed and those that are ready to commence within the specified

timeframe.

This recommendation is made with the understanding that the “local measurement of

capacity with relocatables as determined by the BOE” may be amended after the completion

of the School Facility Assessment Study to be performed. It is further understood that no

mitigation is to be allowed after the BOE stated cap is reached.

Issue 4 -- DRRA School Allocations. The payment of contributions to mitigate student impacts

does not necessarily insure that the CCPS will be able to build the commensurate school capacity

in the appropriate locations by the time the students attend the schools.

Recommendations --After evaluating the identified alternatives the Committee recommends

the following approaches to address the concerns about using DRRAs for mitigating

inadequate school capacity.

1. Use of developer consortia to provide adequate resources to fully mitigate school

capacity deficiencies. This concept might include developer reimbursements for

excess capacity created. This approach could give enough resources to provide a

significant improvement in capacity to offset the impact from the cumulative

developments that would not be feasible for one developer. Success of this approach

would rely on having BOE identified projects to add capacity and begin the discussion

early in the development process. This approach will be assisted by the System-wide

School Facilities Assessment being performed by the Board of Education.

2. The proffer of school sites and facilities expansion through DRRAs as direct

mitigation for the lack of school capacity. This approach needs to occur early in the

development process. It has the best chance for success when used with large Planned

Developments and incorporated into the zoning approval. It should be noted that if

school sites are proffered with a DRRA the cost of the site should be removed from the

CIP Budget so that it is not included in the bond issue for the proposed school.

3. Require school mitigation discussion and strategy prior to the approval of the

Preliminary Plan by the Planning Commission. A preliminary test for school APF

will be performed as part of the Preliminary Plan review and included in the report to

Planning Commission. The report would include the developer’s plan for addressing any

deficiencies. Implementation could be achieved administratively through modifications to

the subdivision approval process. This approach could be helpful to identify the potential

for the dedication of school sites or facilities expansions earlier in the development

review process.

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4. Provide school site needs regionally to encourage the proffering of sites. The CCPS

and County staff will work together to proactively identify regional needs based on

student growth projections. This information would be used to negotiate with developers

at the preliminary plan stage or during the rezoning stage in the case of Planned

Development Zones.

Issue 5 -- Student Yield Factors. The computation and use of Student Yield Factors on a

county wide basis may not reflect potential differences in neighborhood student generation rates.

Prior to offering solutions, the Committee decided to test the hypothesis that Student Yield

Factors significantly vary throughout the County. This was done by spot testing certain school

attendance zones in County’s Development District and rural areas. The following were the

resulting student yield factors by region.

Region Elem. Student Yield Middle Student Yield High Student Yield

Rural 0.19 0.09 0.14

Development Dist. 0.24 0.12 0.18

County-wide 0.21 0.11 0.16

Recommendation - The Committee determined that using a differential in student yield

factors for purposes of allocating school capacity is not necessary at this time. However,

the Committee believes that the differential found in the analysis should be used for

making projections, and particularly, when projecting students for redistricting purpose.

Issue 6 -- State Funding Sources State funding is limited and competitive with other Counties

and Baltimore City resulting in the statewide underfunding of needed projects. The amount of

State funding for school construction has been static in recent years at the $8-9 million per year.

Recommendation – The County needs to maintain a strategy for maximizing State School

Construction Funding. Forward funding strategies need to insure the maximum funding.

The County needs to maintain a competitive position among other counties by developing a

CIP that reflects all the identified school capacity needs in the County. The projects need to

be submitted to the State in a timely manner so that the County’s needs will be in the

forefront of State consideration.

Issue 7 -- County funding sources. Whereas the combined revenues received from projects

making mitigation payments through a DRRA and the School Construction Excise Tax

approximates the costs per dwelling unit, there are a large number of projects with preliminary

plan approval and school allocations including St. Charles that do not pay an additional cash

contribution to cover the funding shortfall. Note that St. Charles makes contributions through

school site donation and infrastructure improvements to serve those sites. The Committee

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further found that State funding sources do not keep pace with the identified construction needs

in the County or Statewide. Finally, the Committee found that there are significant budgetary

demands on the BOE’s operating budget for one time start-up costs not included in the Capital

Budget as well as long term impacts for staffing and transportation. (See Appendix 9 – New

School Operating Budget Models.)

Recommendation – That the Commissioners acknowledge that, at this point in time, the 5

year CIP should include Elementary #3, planning and design for Elementary #4, and Middle

school #2 and/or adding needed capacity through school renovations and improvements

based on recommendations and priorities from a pending study by the Board of Education.

The Commissioners should establish a “balanced capital program”. To accomplish this

school capacity construction and renovation program, the following revenue sources should

be considered to supplement the County’s current revenue raising capability.

Revenues Targeted for Capacity Expansion and One Time Start-Up Costs

Increased DRRA contributions – In 2013 the County will receive $4.5 million from

DRRA payments. This current figure is the most indicative of the current market and

school allocation program restrictions. This figure does not include Heritage Green or

Scotland Heights since they are currently renegotiating their agreements. According to

the Department of Fiscal and Administrative Services (DFAS), these payments from

DRRAs will provide adequate funding to initiate the funding of the St. Charles High

School and a new elementary school assuming that the State continues to fund their share

which will reimburse the County. Recently, it was determined that the initial start-up

costs associated with the opening of a new school can result in funding shortfalls and are

not typically considered with the evaluation of DRRA proffers. It was also determined

that there may be unique needs associated with accommodating the students from new

development in the receiving schools that better enable the CCPS to accept the students

generated by the development. As a result it is recommended that the DRRA proffers

recognize the unique challenges in accommodating the new students in the receiving

schools and the proffers address those needs. It is further recommended that the funding

shortfalls experienced in the past for one time start-up costs be considered in the DRRA

proffers and that the impact of one time start-up costs be evaluated annually based on the

relationship that the per pupil expenditure has to the addition of new dwellings in the

County.

Increased Excise Tax – The Excise Tax for School Construction is based on formulas

and stipulations that would need to be renegotiated with the State Legislative Delegation.

It is recommended that the County seek amendments to the County’s Excise Tax found in

the Section 20-804 of the Local Government Article. The excise tax has been a fair and

effective revenue source for the past decade; however, the Committee believes there are

opportunities to improve on the law so that it better reflects the intent of the legislation

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and the current school construction environment. It is recommended that the County seek

the following amendments to Section 20-804 in the 2015 General Assembly:

1. Factor in the start-up costs associated with the opening of a new school not

considered in the formula for establishing the excise tax;

2. Include the cost of borrowing money to forward fund the State’s share;

3. Repeal the Producer Price Index as an inflation adjustment factor in favor of an

adjustment equal to the percentage change in the eligible costs per square foot set

annually by the State of Maryland Public School Construction Program; and,

4. Reset the base per dwelling tax annually to reflect the current student generation

rates for townhouse and multi-family dwellings which have increased during the

last decade.

Revenues Targeted for Renovations, Start-up Costs for New Schools, and Long term

Operating Costs

Income Tax Increase – Charles County is currently at an income tax rate of 3.03%. The

current maximum for counties is 3.20%. If the County increased the income tax to

3.20%, it would generate approximately $6.0 million per year. It is recommended that the

Commissioners reserve increases in the income tax to fund needed renovations, start-up

costs for new schools, and long term operating costs for new schools.

Utility Taxes – Six counties have enacted utilities taxes. The State allows the counties to

tax telephone service and electricity usage. The projected revenues below are based on a

per capita amount generated by other counties. Note that some counties use higher tax

rates which would yield more potential revenues.

Tax Rate Potential Yield

Telephone (Residential only) 8% sales tax (AA Co.) $1.5 million

Telephone (non-residential,

residential and wireless) 8% sales tax (PG Co.) $6.3 million

Electricity 1.25% per Kwh (St. Mary’s) $1.2 million

Electricity $0.006489 per Kwh (PG

Co.) $8.8 million

It is recommended that the Commissioners seek authority in the 2015 General Assembly

for the enactment of a utility tax on telephone and electricity usage. The proceeds of the

taxes are reserved to fund needed renovations, start-up costs for new schools, and long

term operating costs for new schools. The Committee’s recommended priority for the tax

revenues from this source would be for renovations and initial start-up costs rather than

long term operating costs.

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Transfer tax – Though Charles has not, most counties have enacted a transfer tax under

State authority. Charles may enact up to a 0.5% tax without State legislative authority

and up to 1.5% with legislative authority. If Charles applies a 0.5% tax to real estate

transfers, it would yield approximately $2.5 million per year based on FY 2013 sales

data. Since it is likely that the County will need multiple revenue sources to accomplish

the school renovation objectives and to pay for the start-up and long term costs of

opening new schools, it is recommended that the transfer tax be included as a potential

revenue source for those purposes. While this source of revenue was not preferred, if

used, it should be limited to less than the allowable 0.5 percent.

Issue 8: The County’s school construction program has not been able to keep pace with the

BOE’s enrollment and capacity projections in certain areas of the County.

Recommendations - The Committee recommends that the following strategies be used to

insure that the School Construction Program will keep pace with the student population in

all areas of the County. To implement these strategies, it is necessary that the County and

CCPS staff coordinate closely to insure success.

1. Expedite school construction by forward funding schools in advance of meeting the

needs criteria for state funding. The CCPS should increase the pace of school

construction to the degree feasible without sacrificing the potential to receive State

funding. Spreading the County’s forward funding over two schools or a new school and

a renovation may be a way to maximize State participation. (Also addressed under Issue

1 - Timing of providing adequate school facilities.)

2. Address the County’s renovation needs and add capacity to schools concurrently.

This approach was discussed in detail with Dr. Lever at the July 17th

meeting. Dr.

Lever discussed Charles County’s emphasis on new school construction versus

renovations or replacements. There was discussion on the part of the Committee about

how the County could address the renovation needs and add capacity at the same time.

The Committee recommends a School System Wide Facility Assessment to evaluate

schools, their building systems and educational requirements, and to prioritize the

corrective projects and costs. This would be done by evaluating every school needing

renovations for opportunities to add capacity. Adding capacity to a school as part of a

renovation may be an opportunity for developer contributions to help with the

expansion portion of the project.

3. Use Public-Private-Partnerships to expand the County’s capability to deliver

schools faster. As discussed by the Committee through a briefing paper at the June 26th

meeting, these are partnerships between a company, usually a consortium, and the

government regarding the funding, building, operation and maintenance of school

facilities. Typically a private company would build or renovate schools and maintain

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them for the life of the repayment of the facility. Currently, the only jurisdiction in the

U.S. doing this system-wide is Yonkers, NY, but it is more common in Europe, Canada

and Australia. It should be noted that the current state legislation requires that operation

and maintenance must be done by the public entity; therefore, new legislation would be

needed to fit the model being used in other countries. This may be a long term solution

to handle a need for school facilities that exceeds the County’s ability to deliver and/or

when the County’s debt affordability is maximized.

Issue 9 – School Site Acquisition. The Committee determined that one of the impediments to

timely school construction is the procuring of school sites.

Recommendations - The Committee recommended the following strategies to address

school site acquisition. The CCPS and County staff will work together to proactively locate

and acquire school sites based on regional needs.





adjoining properties. Anne Arundel County has experience with this technique. In one

case the new high school was built on the stadium and the new stadium was located on

the site of the old school. This means that the ball games needed to be relocated during

construction. Calvert County has also used this technique for Calvert High School.

Frederick County is currently replacing Frederick High School. Charles County has had

some experience in the past with doing major renovations that add substantial capacity.

The Committee recommends that the CCPS use the results of the School System Wide

Facility Assessment to look for opportunities to expand capacity on the same site thereby

eliminating the need to acquire additional school sites. (Also addressed under Issue 1

Timing of providing adequate school facilities.)

2. Encourage school sites and facilities expansion through DRRAs as direct mitigation

for the lack of school capacity. This approach needs to occur early in the development

process. It has the best chance for success when used with large Planned Developments

and incorporated into the zoning approval. It should be noted that if school sites are

proffered with a DRRA the cost of the site should be removed from the CIP Budget so

that it is not included in the bond issue for the proposed school. (Also addressed under

Issue 4 – DRRA School Allocations.)

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Issues Identification

Synopsis of Initial Fact Finding Phase

School Adequate Public Facilities Regulation

As part of the initial fact finding phase the Committee received an overview of the School

Allocation Program and Development Rights and Responsibilities Agreement (DRRA)

mitigation. Staff presented a slideshow on Evaluation of School Capacity Allocation as Related

to School Facility Planning. The Committee evaluated Charles County’s experience in meeting

the objectives of the APFO including the DRRA mitigation program. The status of the School

Allocation program including a review of school allocation commitments was provided.

Staff reviewed the School Allocations Expiration List highlighting the number of active school

allocations and the associated expiration date. Staff gave examples of the status of several of the

active subdivisions on the list to illustrate the range in activity of the projects. Staff provided

and reviewed an Analysis of Future Potential Student Impact from approved development.

Staff provided an overview of the Adequate Public Facilities requirements for schools as it

relates to the St. Charles Planned Unit Development (See Appendix 8). Mr. Craig Renner,

representing St. Charles, presented a more detailed description of the school sites donated and

the associated infrastructure provided including the approximate cost of those actions to mitigate

for the impact on school capacity.

School Funding

The Department of Fiscal and Administrative Services (FAS) presented the financial history and

financial plan for DRRA payments and Excise Tax Revenues. Board of Education Staff

presented an overview of State funding of school construction. The Committee discussed the

funding formula and ways of better positioning the County for increased State funding.

School Construction Program

A brief overview of the Status of 2014 School CIP for new school capacity as well as some

discussion about funding sources was provided by BOE Staff. BOE staff provided an overview

of the County’s School Capital Improvement Program process used to provide adequate capacity

in time for planned growth. It included a discussion of the State’s Interagency Committee (IAC)

approval process. To illustrate the process several case studies for actual schools recently

constructed were used.

The Student enrollment projections used for facility planning as prepared by the County Board of

Education and Maryland Department of Planning were presented to the Committee and a

discussion of the methodology used ensued. (See Appendix 1.) Finally, staff overviewed the

method of developing Student Yield Factors beginning with the source data from the Student

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Registration Forms that are updated each September. The Committee discussed the potential

need to develop student yield factors for different areas of the County that may exhibit different

student generating characteristics such as the Development District versus rural.

Board of Education Staff presented and reviewed the School District Boundary Maps for each

school level. The map showing the Inventory of Future School Sites was discussed.

Outreach Meeting

The Committee conducted a “Public Outreach” at Stone High School on April 10th

with 17

citizens in attendance. The Committee identified list of issues, concerns and ideas from the input.

The Committee reviewed the comments from the Public informational meeting and adjusted the

Work Plan as required. Several of the issues were included for further study.

Issues and Alternative Solutions Identified

Based on the initial fact finding, the Committee identified and concurred on the primary issues

needing further evaluation. The Committee identified 11 primary issues related to the

impediments to school construction to meet growth demands; school construction funding such

as forward funding including the total costs associated with start-up; staffing limitations;

program demands on facilities such as all-day kindergarten and special needs programs; and,

adequate State and local funding. Through the discussion, the Committee began to develop

alternative approaches to addressing the identified issues that would need further analysis by

staff. See Appendix 2, Issues Identification Worksheet.

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Alternatives Evaluation

School Adequate Public Facilities Evaluation

Issue 1—Timing of adequate school facilities to match planned growth. School capacity

provision in specific school districts has not kept pace with residential growth.

Summary of Findings

The Committee identified18 schools over State Rated Capacity. The elementary school level has

12 schools over state rated capacity which equates to 418 students countywide. The middle

school level has 3 schools over state rated capacity, however there is an excess of capacity

countywide. The high school level has 3 schools over state rated capacity which equates to 724

students countywide. The maps in Appendix 3 show the regions of the county in current need of

school capacity to alleviate the condition of operating in excess of state rated capacity. Note that

the St. Charles High School opening will free up school capacity beginning January 2014.

The Committee received testimony that certain schools have not been able to accommodate the

number of students enrolled during lunch periods resulting in more than the typical 3 lunch

periods. The Projected Enrollment and Capacity analysis (See Appendix 1, Step Charts)

indicates the need to open a new elementary school by 2018. Based on the Enrollment and

Capacity analysis, the need for a new Middle School will occur approximately in the years 2020-

21.

Regarding residential growth, the 2006 Comprehensive Plan envisioned a managed growth rate

of 1.95 % per year increase in residential housing unit to the year 2025. Since 2005 the housing

unit growth rate has maintained an average of 1.7 % per year. The actual rate or housing growth

has been less than the planned growth rate; however, the Committee recognized that certain areas

of the County are experiencing higher growth. This was evidenced by reviewing building permit

activity by major subdivision in the County since 1995. The Committee identified the projects

with the highest probability of building out and generating students.


1. Redistrict school attendance zones to balance student attendance. Using redistricting

of school attendance zones to balance student demand is a common practice among

Counties. Charles County, as well as other counties, has used this method of matching

school capacity to residential growth. One limitation is that redistricting too often can be

disruptive to the continuity of instruction for the students affected. It was understood that

the BOE will continue to use this technique where it is deemed appropriate; therefore, it

was eliminated from the recommendation.

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schools. This alternative would mean that the County would, through the necessity of

better matching school capacity to growth areas, fund schools even though the projected

enrollments may not warrant State School Construction Funding at this time. County

Fiscal Services Staff cautions that forward funding every other school may inadvertently

relieve the State Government from funding responsibilities. It is recommended that

County School Construction needs to use a strategy that maximizes State funding.

Spreading County forward funding over two schools may better maximize State

participation.


accommodate growth. Expanding the number of classrooms and supporting facilities

could stretch limited resources and more quickly target capacity where the projected need

is apparent. Board of Ed. Staff cautions that additions may trigger the need for

retrofitting and doing required renovations to gain State Board of Education approval.

This would add to the cost of the project.







the site of the old school. This means that the ball games needed to relocated during


Frederick County is replacing Frederick High School.

5. Target school capacity to geographic areas with the projected need. This strategy has

been clearly used by Charles County in recent years. The key to successfully using this

technique is to refine methods of enrollment projections based on school growth trends

and the probability of buildout of approved subdivisions. A refinement to the student

yield factors by region may help in projecting student enrollment.

6. Consider developer built schools or additions/renovations that add capacity.

Allowing developers to mitigate for their impacts by expanding the number of classrooms

and supporting facilities or even building schools would provide capacity directly

associated with impact of development. It would also stretch County and State funds by

permitting those funds to be used for other projects. Anne Arundel County has

experience with developer built school capacity since they do not allow mitigation

through cash payments.

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7. Consider Temporary reassignments of new projects not yet built to schools with

projected capacity. A similar approach that was used in Charles County with the 2009

Redistricting. One caution with this technique is that it could significantly increase

transportation costs if the projects reassigned are located too far from the school. One

limitation of this approach is that the impact on school overcrowding may take many

years as the project build out and the students enroll in the school with capacity. A clear

benefit is that students attending existing schools would not have to be redistricted.

Recommendations

All of the following techniques should be considered in the County’s efforts to match the

provision of school capacity to the residential growth planned for the geographic regions of the

County.


schools.

2. Expand critical elements of the school such as classrooms and cafeterias to accommodate

growth.

3. Build new schools on the same site, where feasible.

4. Target school capacity to geographic areas with the projected need.

5. Consider developer built schools or additions/renovations.

6. Consider Temporary reassignments of new projects not yet built to schools with projected

capacity. A similar approach that was taken with the 2009 Redistricting.

Issue 2 -- Minor Subdivisions. Minor subdivisions that would create more than 3 new lots must

sit on the school allocation waiting list for an indeterminate number of years until capacity

becomes available.

Summary of Findings

This issue was identified primarily from input received at the Public Outreach Meeting. Mr.

Boarman stated that he has been on the waiting list since 2006. The Committee reviewed the

practices of selected counties in Maryland and found that some allow more lots as an exemption

to the APF requirements while others are more restrictive than Charles County. Further the

Committee found that certain counties cap the number of years a project has to wait for adequate

school capacity from 4 to 7 years.

As part of the alternatives evaluation, the Committee looked at the historic use of the amount of

capacity being set aside for bulk school allocations. (See attached table and graph.) The trends

15

show that the set aside has declined over time due to reduced excess capacity. The usage has

also declined since 2006. This is primarily due to the decline in the inventory of lots of record

that were grandfathered under the initiation of the School Allocation Program in 1999. Note that

the method of counting the set-aside changed in July of 2008 when the program began setting

aside amounts for each school. Cumulatively this would be a large number, so the total for the

most limiting school level is used. Finally, in recent years there has been a surplus of dwelling

unit allocations reserved for minor subdivisions and existing lots of record.

The Committee found that, in spite of excess capacity in the bulk allocation granted, there is a

deficit in the number of allocations granted over time, and therefore, the minor subdivisions

should be held to a similar standard as the major subdivisions.

Bulk Allocations Used versus Set- aside

Bulk Allocations 2006 2007 2008 2009 2010 2011 2012

Set-Aside 264 254 168 180 190 184 122

Used 378 260 126 71 54 28 33

0

50

100

150

200

250

300

350

400

2006 2007 2008 2009 2010 2011 2012

Bulk Allocations: Used versus Set- aside

Set-Aside

Used

16


1. Cap the number of years, say 5 to 6, a minor subdivision must sit on the waiting list

before it may receive allocations. From the selected APF programs, it was found that 3

Counties set a cap on the length of time any residential project must wait for adequate

school capacity. The number of years range from 4 to 7. If a cap was set for just the minor

subdivisions on the waiting list, the impact would be minimal since there are currently only

3 minor subdivisions waiting for school capacity. Two subdivisions have been waiting 7

years and one 2 years.

2. Evaluate the allowance for minor subdivisions with more than 3 new lots to pull from

the bulk set aside. As part of this evaluation, the historic use of the amount of capacity

being set aside for bulk school allocations was considered. (See attached Bulk Allocation

table and graph.) There has been a trend toward excess residential dwelling allocations

reserved for minor subdivisions and lots of record. In 2012, there were 89 allocations not

used. There were 14 minor subdivisions approved in 2012. For purposes of analysis, it is

assumed that all minor subdivisions could receive bulk allocations. Assuming the worst

case and they were all the maximum of 7 lots, then that would have used 42 additional bulk

allocations from the 89 surplus.

From the Counties Survey it was determined that 3 of the 7 counties allow 5 lot minor

subdivisions.

3. Permit minor subdivisions that are deed restricted for intra-family transfer only to use

bulk allocations. Intra-family transfer exemptions are used for Forest Conservation and

Critical Area Requirements. In the past an exemption was given to intra-family

subdivisions for road requirements and there was evidence of circumventing the intent of

the law with straw deeds. If this technique is used, there needs to be a mechanism to track

the deed restriction over time. One approach is to make the County party to the restriction

as we do with age-restricted housing.

Howard County is the only county from the selected APF programs that exempts intra-

family transfers. They allow one lot with certain restrictions.

Recommendations

Upon review of how minor subdivisions are treated in the County’s School APF program, it is

recommended that the provisions be amended to require that the 3 bulk allocations for new lots

can only be given out if there is capacity in all three receiving schools; if there is no capacity

they must be put on the waiting list until capacity becomes available. The project may avail

itself of any allowable mitigation such as the DRRA payment approach.

17

Issue 3: School Capacity Measurement. If all schools are capped at State Rated Capacity

(SRC), over time, there could be an impact on the County’s ability to obtain State funding once

all the existing school allocations are used. This would occur only if mitigation for the lack of

school capacity is not allowed.

Summary of Findings

This issue was identified primarily from input received at the Public Outreach Meeting. The

Committee reviewed the APF Program elements of several counties in the State (see Appendix

4) and found that the majority of the counties provide some flexibility over state rated capacity.

Among those that use 100% of state rated capacity, some additional flexibility is generally

allowed. For example, Anne Arundel allows projects to exceed SRC if there is capacity for any

portion of a project and Frederick allows projects to exceed SRC if they make a “school

construction payment” to mitigate for impacts on school capacity. In addition to the selected

County APF Programs evaluated, it was found that Baltimore, Harford and Prince Georges allow

a certain percent over SRC when applying the APF test. The Committee found that adding

flexibility to the APF program will help assure that the County can meet the threshold projected

student enrollments needed to qualify for State School Construction funding.


1. Allow an additional percentage over SRC when determining adequacy of school

facilities. This approach commonly used by other counties would allow school enrollments

to reach the threshold requirements of approximately 65 to 70% of projected enrollments of

a new school to qualify for state funding. The downside as experienced in Charles County

is that if mitigation is permitted, some schools may exceed the capacity allowances. The CIP

must then keep pace with the rate of growth.

2. Use a county determined maximum capacity. Four of the seven county programs

evaluated used some form of locally determined capacity. Some exceed SRC and some may

be less for certain schools. This approach would use the maximum capacity a school could

accommodate based on the physical space and the program limitations. In the case that the

locally determined capacity is greater than the SRC, it contributes to the necessary demand

to qualify for state funding.

3. Measure SRC by region. Howard, St. Mary’s and Montgomery Counties use a regional

approach to measuring adequacy of school capacity. St. Mary’s divides the County between

the Northern and Southern region. Montgomery measures the capacity available in all the

elementary schools that will feed into a specific high school district. To minimize the

impact to one school, Howard limits individual elementary schools to no more than 300

allocations (or about 60 students over capacity) if the elementary region is over state rated

18

capacity. Prior to 2008, Charles County considered the capacity of elementary and middle

schools based on the students attending within a given high school zone. This resulted in an

averaging of school capacity within a given high school zone. This approach allows

individual schools to exceed capacity provided there is capacity in the region. Howard caps

each school at 115 % of SRC to insure that an individual school will not be overburdened by

residential growth.

4. Take into consideration CIP projects approved by the IAC. Most counties base their

measurement of capacity on enrollment projections several years into the future. This

allows the county to count the capacity created by CIP projects in the projected enrollments.

The counties surveyed use from 2 to 6 years. This approach recognizes that students from

planned development will not enroll in schools for several years after plans and plats are

approved. In Charles, the CIP capacity is currently counted 9 months in advance of the

school opening.

5. Allow mitigation payments either through DRRAs or through mandatory school

facility payments when SRC is exceeded. Charles County effectively allows mitigation

payments through Development Rights and Responsibilities Agreements (DRRA). At this

time there is no cap on the number of students over SRC that may be approved for a specific

school. Frederick and Montgomery Counties have preset school facility payments required

to obtain allocation when schools are over capacity. Both Counties cap the ability to

mitigate to not more than 120% over SRC or the locally established capacity. The

Committee evaluated the effect of a range of alternative caps on mitigation payments as

described below and shown on the Table titled “Alternative Caps and Enrollment Analysis.”

The following alternative Recommendations were generated from the discussion at Meeting

14 on September 25th

. Staff has included a qualitative staff evaluation of each alternative.

These alternative recommendations correspond to the analysis provided for each alternative

on the table titled “Alternative Caps and Enrollment Comparison.”

1. Allow no mitigation payments either through DRRAs or through mandatory school

facility payments when SRC would be exceeded.

Staff Evaluation -- This approach would allow virtually no additional growth in the

County outside of the St. Charles PUD and the Towns of La Plata and Indian Head, and

therefore, generate no mitigation payments and limited excise tax and/or impact fees.

The result would be to severely limit new school capacity construction funding without

increased income and/or property taxes.

19

2. Allow mitigation payments either through DRRAs or through mandatory school facility

payments when the SRC is exceeded to a maximum cap as indicated in the range of

alternative approaches 2A-2E below. It is understood that the “local measurement of

capacity with relocatables as determined by the BOE” may be amended after the

completion of the School Facility Assessment Study to be performed. It is further

understood that no mitigation is to be allowed after the BOE stated cap is reached.

Staff Evaluation – The following caps would allow a range of additional growth

scenarios in the County outside of the St. Charles PUD and the Towns of La Plata and

Indian Head, and therefore, offer a range of potential mitigation payments and excise tax

and/or impact fees. These options recognize the need for additional growth to help fund

schools while also recognizing that there are a number of existing school allocations

granted to current projects that will result in student enrollments that would not be

affected by the cap.

2A. Set the cap at 105% over SRC, but in no case greater than the “local measurement of

capacity with relocatables as determined by the BOE.”

Staff Evaluation -- This cap would allow some additional growth in the County and

therefore, generate a limited amount of mitigation payments and excise tax and/or impact

fees. Referring to the Table, this alternative Cap provides the least amount of available

capacity. The result would be to provide some funding of new school capacity

construction without complete dependence on income and/or property taxes.

2B. Set the cap at a point halfway between SRC and the “local measurement of capacity

with relocatables as determined by the BOE” for each school.

Staff Evaluation – This cap will fluctuate depending on the actual capacity available for

each school. In some cases there may be no available capacity and in others (especially

new schools) it may approach 110% of SRC. This cap would allow additional growth in

the County, and therefore, generate a greater amount of mitigation payments and excise

tax and/or impact fees. The result would be to provide moderate funding of new school

capacity construction without undue increases in income and/or property taxes. As noted

below, this alternative cap is similar in impact countywide to Alternative 2C; however,

since it fluctuates with the school capacity it would do a better job of preventing

overcrowding in an individual school.

2C. Set the cap at 110% over SRC, but in no case greater than the “local measurement of

capacity with relocatables as determined by the BOE.”

Staff Evaluation – Based on the Table, this cap would allow a similar degree of

additional growth in the County as Alternative 2B. In fact at the middle school level they

are virtually the same countywide. Therefore, these two alternative caps will generate

approximately the same amount of mitigation payments and excise tax and/or impact

fees. The result would be to provide moderate funding of new school capacity

20

construction and minimize increased income and/or property taxes. The straight 110%

computation across the board would be administratively easier to implement and

understand.

2D. Set the cap at 95% of the local measurement of capacity.

Staff Evaluation – Though not shown on the Table, this cap would allow somewhat less

additional growth in the County than allowing the cap to equal the “local measurement

of capacity with relocatables,”and therefore, generate a somewhat lesser amount of

mitigation payments and excise tax and/or impact fees. The result would be to provide

slightly less funding of new school capacity construction than Alternative 2E without

increased income and/or property taxes.

2E. Set the cap at the “local measurement of capacity with relocatables as determined by

the BOE.”

Staff Evaluation – As shown on the Table, this cap would clearly allow the most

additional growth in the County among the alternatives 2A-2E, and therefore, generate a

greater amount of mitigation payments and excise tax and/or impact fees. The result

would be to provide the most funding of new school capacity construction among

alternatives 2A-2E without increased income and/or property taxes.

3. Allow mitigation payments either through DRRAs or through mandatory school facility

payments when the SRC is exceeded up to a maximum of 120%. No mitigation is to be

allowed after a school reaches the level of 120% of SRC.

Staff Evaluation -- This cap would allow maximum growth potential in the county outside

of the St. Charles PUD and the Towns of La Plata and Indian Head, and therefore,

generate the greatest amount of mitigation payments and excise tax and/or impact fees.

The result would be to provide the most adequate funding of new school capacity

construction without increased income and/or property taxes.

Recommendations

The Committee recommends that the County continue to allow school mitigation payments

through DRRAs when the SRC is exceeded to a maximum cap set at a point halfway between

SRC and the “local measurement of capacity with relocatables as determined by the BOE” for

each school. The cap would allow additional growth in the County, and therefore, generate a

greater amount of DRRA payments and excise tax than not allowing mitigation of school

capacity. The result would be to provide moderate funding of new school capacity construction

without undue increases in income and/or property taxes. The cap would recognize the capacity

limitations of individual schools as determined by the BOE. Finally, by unanimous vote it is

recommended that the Commissioners allow a 90 day window from the adoption of this

provision to the effective date. This would allow a grace period for land developers to propose a

21

DRRA to address the school capacity deficiencies without the specified cap. The Committee

considered this to be fair to projects already partially completed and those that are ready to

commence within the specified timeframe.

This recommendation is made with the understanding that the “local measurement of capacity

with relocatables as determined by the BOE” may be amended after the completion of the School

Facility Assessment Study to be performed. It is further understood that no mitigation is to be

allowed after the BOE stated cap is reached.

23

Issue 4: DRRA School Allocations. The payment of contributions to mitigate student impacts

does not necessarily insure that the CCPS will be able to build the commensurate school capacity

in the appropriate locations by the time the students attend the schools.

Summary of Findings

It was determined that DRRA contributions are used for school capacity provided by the

school(s) next in line in the CIP. The Department of FAS has verified that the flow of

contributions has, since 2006, and will continue to allow the County to forward fund the planned

schools provided the State will continue to make payments to the County for approved schools.

The County will receive approximately $4.5 million in developer contributions in 2013. The

schools planned in the CIP are not always in close proximity to the projects that are making the

contributions being used for school capacity. Consequently, the use of DRRAs to provide school

allocations may allow certain schools to be increasingly over SRC in the short term. The

Committee learned that not all costs associated with the start-up of a new school including

furnishings and equipment were taken into consideration when evaluating the DRRA proffers.

Finally, the Committee determined that one of the impediments to timely school construction is

the procuring of school sites.


1. Direct mitigation payments or infrastructure improvements to provide capacity in

the affected region or school. This approach could be achieved by Commissioner

Policy formalized in the APF manual and/or DRRA legislation. The policy shift would

require that DRRAs be used for mitigating impacts from the proposed development.

Infrastructure improvements or payments could be targeted to regions such as High

School districts where the benefit would be more directed to the schools affected.

However, the effectiveness of this strategy will only be achieved if there is enough

contributions in that district. Spreading out funds regionally may result in difficulties in

completing the necessary capacity enhancements without adequate funding levels for a

given project.

2. Assist in the increasing the rate of school construction by increasing contributions

per dwelling unit. In 2013 the County will receive $4.5 million from DRRA payments.

This current figure is the most indicative of the current market and school allocation

program restrictions. This figure does not include Heritage Green or Scotland Heights

since they are currently renegotiating their agreements. According to the Department of

Fiscal and Administrative Services (DFAS), these payments will provide adequate

funding to initiate the funding of the St. Charles High School and a new elementary

school assuming that the State continues to fund their share which will reimburse the

County. Increasing DRRA contributions for future projects or phases of projects may be

feasible in some cases; however, since each project has unique financing arrangements,

24

some projects may not be able to afford increased contributions and would opt out of the

voluntary program. One justification for the increased contributions is to factor in the

start-up costs associated with the opening of a new school not typically considered with

the evaluation of DRRA proffers. (This approach was addressed in Issue Paper #4

and was rejected as a viable revenue source.)

3. Encourage developer consortia to provide adequate resources to fully mitigate

school capacity deficiencies. This concept might include developer reimbursements

for excess capacity created. This approach could give enough resources to provide a

significant improvement in capacity to offset the impact from the cumulative

developments that would not be feasible for one developer. Success of this approach

would rely on having BOE identified projects to add capacity and begin the discussion

early in the development process.






that it is not included in the bond issue for the proposed school.

5. Create residential density incentives, where appropriate, to add value to projects

that can be used for school capacity mitigation. Granting density bonuses in the

Waldorf Urban Redevelopment Corridor (WURC) for school sites is an example of

how this could be implemented. If pursued, this technique would need to be evaluated

in conjunction with the other density bonus programs currently being implemented by the

County. For example, additional bonus densities for school mitigation may have a

negative impact on the County’s Transferable Development Rights (TDR) program and

Affordable Housing Program. There is a question as to whether mixed use areas such as

the WURC will generate enough students to warrant a school in that location.

6. Encourage school mitigation discussion and strategy prior to the approval of the

Preliminary Plan by the Planning Commission. A preliminary test for school APF

could be performed as part of the Preliminary Plan review and included in the report to

Planning Commission. The report would include the developer’s plan for addressing any

deficiencies. Implementation could be achieved administratively through modifications to

the subdivision approval process.

7. Provide school site needs regionally to encourage the proffering of sites. The CCPS

would provide regional needs based on student growth projections. This information

25

would be used to negotiate with developers at the preliminary plan stage or during the

rezoning stage in the case of Planned Development Zones.

8. Cap the degree to which projected student enrollments from DRRA allocations can

exceed SRC for affected schools. Frederick and Montgomery Counties cap the

percentage over capacity that may be mitigated to 120%. The County Commissioners as

a matter of policy could cap the level of school capacity that may be increased from

DRRA school allocations. This approach would limit the negative impact on any one

school from DRRA allocations. Currently, Charles has 3 elementary schools and no

middle schools over 120 % of SRC. If projected enrollments are used the number of

schools over the 120 % level would increase unless new school capacity is programmed.

(This approach was also addressed in Issue Paper #3. The Committee rejected this

approach in favor of a lesser cap.)

9. Eliminate the practice of using DRRAs for mitigating a project’s impact on school

facilities by cash payments in favor of a pre-set school facilities payment. This

approach would only allow a project to mitigate by cash payments by paying the pre-set

school facilities payment as discussed in Issue Paper #4. This would be the approach

similar to Montgomery and Frederick Counties also discussed in Issue Paper 3 that would

allow the payments as long as the school capacity remains below the determined capacity

cap. This approach would continue to allow developers to use DRRAs to proffer school

sites or build school capacity, similar to the practice in Anne Arundel County.

Recommendations

After evaluating the identified alternatives the Committee recommends the following approaches

to address the concerns about using DRRAs for mitigating inadequate school capacity.

Use of developer consortia to provide adequate resources to fully mitigate school capacity

deficiencies. This concept might include developer reimbursements for excess capacity

created. This approach could give enough resources to provide a significant improvement in

capacity to offset the impact from the cumulative developments that would not be feasible for

one developer. Success of this approach would rely on having BOE identified projects to add

capacity and begin the discussion early in the development process. This approach will be

assisted by the System-wide School Facilities Assessment being performed by the Board of

Education.

The proffer of school sites and facilities expansion through DRRAs as direct mitigation for

the lack of school capacity. This approach needs to occur early in the development process. It

has the best chance for success when used with large Planned Developments and incorporated

into the zoning approval. It should be noted that if school sites are proffered with a DRRA the

26

cost of the site should be removed from the CIP Budget so that it is not included in the bond

issue for the proposed school.

Require school mitigation discussion and strategy prior to the approval of the Preliminary

Plan by the Planning Commission. A preliminary test for school APF will be performed as

part of the Preliminary Plan review and included in the report to Planning Commission. The

report would include the developer’s plan for addressing any deficiencies. Implementation could

be achieved administratively through modifications to the subdivision approval process. This

approach could be helpful to identify the potential for the dedication of school sites or facilities

expansions earlier in the development review process.

Provide school site needs regionally to encourage the proffering of sites. The CCPS and

County staff will work together to proactively identify regional needs based on student growth

projections. This information would be used to negotiate with developers at the preliminary plan

stage or during the rezoning stage in the case of Planned Development Zones.

Issue 5: Student Yield Factors. The computation and use of Student Yield Factors on a county

wide basis may not reflect potential differences in neighborhood student generation rates.

Summary of Findings

Prior to offering solutions, the Committee agreed to test the hypothesis that Student Yield

Factors significantly vary throughout the County. This was done by spot testing certain school

attendance zones in suburban and rural areas. See the geographic distribution shown on the Map

titled Elementary School Districts. The differences were tested to see if there were significant

enough differences to change policy. The seven attendance zones throughout the County were

evaluated by determining the number of dwellings by type in the geographic area and the

corresponding number of students at all three school levels. From that information the student

yield factors were evaluated. (See Appendix 7) An average for each elementary attendance zone

was computed with a weighting for the various housing types. The weighting approach is also

used when determining the county-wide student yield factors for purposes of granting school

allocations on a per dwelling unit basis.


The weighted averages were compared against county-wide student yield factors to determine

the relative percentage difference in the regional numbers. (See Chart __ titled “Student Yield

Factors Compared to County-wide.”) The composite yield factors for the rural region and the

Development District region of the County were evaluated by the Committee.

27

Recommendation

The Committee determined that using a differential in student yield factors for purposes of

allocating school capacity is not necessary at this time. However, the Committee believes that

the differential found in the analysis should be used for making projections, and particularly,

when projecting students for redistricting purposes.

28

Student Yield Factors Compared to County-wide

School District Elem. Students

Student Yield

% of County-wide

Middle Students

Student Yield

% of County-wide

High Students

Student Yield

% of County-wide

Diggs ES 795 0.26 124% 480 0.16 145% 799 0.26 163% Brown ES 448 0.19 90% 203 0.09 82% 322 0.14 88% Gail Bailey ES 464 0.19 90% 242 0.10 91% 337 0.14 88% Mitchell ES 670 0.18 86% 324 0.09 82% 576 0.16 100% Neal ES 659 0.32 152% 273 0.13 118% 345 0.17 106% TC Martin ES 572 0.19 90% 256 0.08 73% 426 0.14 88% Wade ES 743 0.24 114% 397 0.13 118% 545 0.18 113% Rural 0.19 90% 0.09 82% 0.14 88% Development Dist. 0.24 114% 0.12 109% 0.18 113% County-wide 0.21 100% 0.11 100% 0.16 100%

Notes 1. Source: MDP 2011 MD Property View Data and CCPS September 28, 2012 Enrollments

2. Out of zone students counted in student's home zone 3. Students that were with housing code listed as senior housing, motel, or homeless shelter are not counted

4. Student yield factors are a weighted average for all housing types. 5. Rural is determined by an average of the yield factors for T.C. Martin and Gail Bailey school boundaries.

6. Development Dist. determined by an average of the yield factors for the Diggs, Neal, Wade, Brown and Mitchell school boundaries.

Revised 9/24/2013

29

School Construction Funding

Issue 6: State Funding Sources. State funding is limited and competitive with other Counties

and Baltimore City resulting in a statewide underfunding of needed projects.

Summary of Findings

The Committee was briefed by Charles County Public School Staff, as well as Dr. David Lever,

Executive Director of the Public School Construction Program about the State’s role in school

facility funding. Dr. Lever’s briefing included the following topics.

How the CIP project funding priorities are determined from the many projects

proposed by the 24 Counties each year. He discussed the elements that are

evaluated for new capacity, renovations, and systemic improvements funding

priorities. It was determined that there is no limitation on the County for

submitting new construction projects and needed renovations simultaneously. The

best way for the County to insure that the maximum State funding is received is to:

1) submit all needed projects that meet the eligibility requirements and can be

supported by the County; and 2) make sure the projects stay on schedule and the

required documentation is provided to the State.

He explained the state CIP share reimbursement timeframe philosophy for paying

back local government for forward funding the state share. The distinction in the

State’s view between “forward funding” and “local funding” was explained.

Forward funding is when the County covers the State’s share in advance of their

payments. Locally funded projects are when a county moves ahead with design

and/or construction before approval by the IAC. It was stated that if a project

request is submitted to the State within 2 years of the school opening and meets the

eligibility and need requirements, the State can usually reimburse the county for

their share.

He gave a prognosis on the future of State School Construction Funding. Future

funding levels will depend on the policies of future administrations. It is safe to

assume a sustained level of at least $250 million per year during Governor

O’Malley’s term.

He discussed Charles County’s emphasis on new school construction versus

renovations or replacements. It was stated that Charles County was the only LEA

(Local Education Agency) in Maryland that has not had any full school renovation

projects under construction, in bidding, or under design for the last several years.

He acknowledged the County’s growth status and need for added capacity. There

was discussion on the part of the Committee about how the County could address

the renovation needs and add capacity at the same time. He recommended that the

County perform School System Wide Facility Assessments to evaluate schools,

their building systems and educational requirements, and to prioritize the

30

corrective projects and costs. A letter to Dr. Kimberly Hill on this topic was

referenced and distributed to the membership.

When the Program started in 1971, the State covered a broader range of eligible costs than it

does now. For example the State does not cover A/E fees, movable furniture and equipment, or

site acquisition. The County’s share is affected by the funding formula primarily based on

wealth and need. The State Currently pays 67 % of eligible costs for projects approved by the

Interagency Committee on School Construction (IAC). That amount will be reduced to 63 % in

FY 15.

The Committee found that regardless of the need expressed by the BOE, the amount of State

funding for school construction has been static in recent years at the $8-9 million per year. It

was determined that over a period of years, the State’s consistent allocation will compensate the

County for the projects

Recommendation

The County needs to maintain a strategy for maximizing State School Construction Funding.

Forward funding strategies need to insure the maximum funding. The County needs to maintain

a competitive position among other counties by developing a CIP that reflects all the identified

school capacity needs in the County. The projects need to be submitted to the State in a timely

manner so that the County’s needs will be in the forefront of State consideration.

Issue 7: County funding sources. Whereas the combined revenues received from projects

making mitigation payments through a DRRA and the School Construction Excise Tax

approximates the costs per dwelling unit, there are a large number of projects with preliminary

plan approval and school allocations including St. Charles that do not pay an additional cash

contribution to cover the funding shortfall. Note that St. Charles makes contributions through

school site donation and infrastructure improvements to serve those sites (See Appendix 8).

Summary of Findings

The Committee found that State funding sources do not keep pace with the identified

construction needs in the County or Statewide. To meet this shortfall and to augment the excise

tax revenues, the Committee evaluated alternative revenue sources used in other Maryland

Counties. The sources included those sources from development related fees and other general

fund revenue sources. Generally, it was found that most counties need to supplement the

development generated revenues and State funding to implement their Capital Improvements

Program (CIP). The Committee learned that not all costs associated with the start-up of a new

school including furnishings, equipment and the initial costs for staffing were taken into

consideration when planning and budgeting for new schools. Finally, the Committee found that

31

there are significant budgetary demands on the BOE’s operating budget for one time start-up

costs not included in the Capital Budget as well as long term impacts for staffing and

transportation. (See Appendix 9 – New School Operating Budget Models.)

Revenue Source Alternatives Evaluation

Income Tax Increase – Charles County is currently at an income tax rate of 3.03%. The current

maximum for counties is 3.20%. If the County increased the income tax to 3.20%, it would

generate approximately $6.0 million per year.

Eligible Use - General Revenue can be used for infrastructure or operating cost. The

Commissioners can earmark the funds for educational uses.

Advantages

Has a relatively high revenue yield potential.

Easy to administer and implement since the Commissioners may enact the

increase locally.

Is a very stable revenue source since County incomes have historically increased

steadily over time.

Can be used for school renovations not creating additional capacity.

Can be used for new school start-up costs not associated with capital outlay.

Disadvantages

Increases taxes on senior households that have no impact on school capacity.

Increases taxes on businesses that have no impact on school capacity.

Real Estate Tax Increase -- Charles County has the authority to raise the Real Estate tax rate

without restriction.



Advantages


increase locally.

32

Is a stable revenue source since County property values have historically

increased steadily with the exception of the most recent recession.



The revenue falls equally on all residents throughout the County.

Disadvantages


Not considered a strong potential revenue yield since Charles County currently

has the second highest real estate tax rate in the State. (Baltimore City is the

highest.)

The Committee eliminated this tax as a preferred funding source for school construction and

operating costs. It is understood that the Commissioners may raise taxes for this purpose, but it

is preferred that the other identified alternatives be used first.

Increased DRRA contributions – In 2013 the County will receive $4.5 million from DRRA

payments. This current figure is the most indicative of the current market and school allocation

program restrictions. This figure does not include Heritage Green or Scotland Heights since they

are currently renegotiating their agreements. According to the Department of Fiscal and

Administrative Services (DFAS), these payments from DRRAs will provide adequate funding to

initiate the funding of the St. Charles High School and a new elementary school assuming that

the State continues to fund their share which will reimburse the County. One justification for the

increased contributions is to factor in the start-up costs associated with the opening of a new

school not typically considered with the evaluation of DRRA proffers.

Eligible Use - This revenue source can be used for the “financing of public facilities.”

Whether the payments could be used for renovations not resulting in increased capacity

should be evaluated by the County Attorney’s office since the agreements grant school

allocations where capacity is not available.

Advantages

Has a high degree of administrative ease of implementation since the

recommended proffer could be suggested by the County Commissioners. The

recommendation would be based on the total costs associated with building

school capacity. The computation would be based on a comprehensive analysis

similar to the cost studies to derive a defensible impact fee.

33

Disadvantages

Not believed to give a large increase in revenue since the current proffers

approximately cover the State’s share of school construction. The increase would

be approximately equal to the school construction and start-up costs not recovered

by the excise tax.

Not considered to be a highly stable revenue source since the voluntary proffers

are directly dependent on the market fluctuations.

Increasing DRRA contributions for future projects or phases of projects may be

feasible in some cases; however, since each project has unique financing

arrangements, some projects may not be able to afford increased contributions and

would opt out of the voluntary program.

School Facilities Payment – Frederick and Montgomery Counties use this form of mitigation

payment over and above the established impact fees when the development will impact schools

that are considered over capacity. For example, Frederick County allows a mitigation payment

for schools over 100% SRC, but less than 120% of SRC. The payments are generally based on a

combination of per pupil school construction costs and pupil generation rates by housing types.

Eligible Use - This payment is mitigation for inadequate school capacity; therefore, it

must be used for infrastructure to create capacity.

Advantages

Provides a means for collecting shortfalls in the total cost of providing school

capacity and funding the initial start-up not derived from the excise tax.

The stability of the revenue should be comparable to the excise tax in the

sensitivity to the market.

Disadvantages

Since the legal determination is that the school facilities payment or mitigation fee

may not exceed the total costs of providing school capacity for a dwelling unit

less the State’s share, the potential revenue yield will be less than the original

estimates based on the Frederick and Montgomery County models. If schools are

forward funded without State construction money, then the justification for

greater fees could be made. It is not expected that the calculated fee excluding the

State share will be significantly more than the excise tax.

34

The legal determination is that the County must receive authority for the School

mitigation fee from the General Assembly. The computation would be based on a

comprehensive analysis similar to the cost studies to derive a defensible impact

fee. It is anticipated that a school facilities fee would not add a significant amount

of revenue in excess of the excise tax; therefore, may not be worth obtaining the

authority from the General Assembly or the cost of administration of the new fee.

Initially the Committee saw this approach as a revenue source similar to DRRA payments;

however, after consideration of the risks associated with legal challenges and the resulting

diminished revenue potential, the approach was rejected by the Committee.

Impact Fee – Adding impact fees would take enabling legislation since, generally, an impact fee

is used in lieu of an excise tax, not in addition.

Eligible Use - Is intended to offset the cost of school capacity; therefore, it must be used

for infrastructure.

Advantages

Provides a means for collecting the total cost of providing school capacity and

funding the initial start-up. The legal determination is that an impact fee would

not be justified if the County continues to levy an excise tax for school

construction.

The stability of the revenue should be comparable to the excise tax in the

sensitivity to the market.

Disadvantages

Since the legal determination is that a school fee may not exceed the total costs of

providing school capacity for a dwelling unit less the State’s share, the potential

revenue yield would not be substantially more than the excise tax. If schools are

forward funded without State construction money, then the justification for

greater fees could be made. It is not expected that the calculated fee excluding the

State share will be significantly more than the excise tax.

The legal determination is that the County must receive authority for the school

impact fee from the General Assembly. The computation would be based on a

comprehensive analysis or cost study to derive a defensible fee. The General

Assembly generally prohibits Code Home Rule Counties from enacting both an

excise tax and an impact fee since they are designed to accomplish the same

thing. Therefore, Charles County would have to repeal the school construction

35

excise tax to enact an impact fee which would not accomplish a substantial

increase in revenues.

The Committee rejected the use of impact fees for similar reasons as stated above for the School

Facilities Payment fee. It was also determined that the impact fee would yield the same revenue

potential and for the same purpose as the County’s excise tax.

Transfer tax – Though Charles has not, most counties have enacted a transfer tax under State

authority. Charles may enact up to a 0.5% tax without State legislative authority and up to 1.5%

with legislative authority. If Charles applies a 0.5% tax to real estate transfers, it would yield

approximately $2.5 million per year based on FY 2013 sales data.



Advantages

Has a moderate revenue yield potential.


increase locally up to 0.5%.

Is a moderately stable revenue source since there is always activity in the transfer

of property; however, the sales activity will dip during housing recessions.



The burden of this tax would fall on re-sales of homes as well as new home

purchases. Therefore, new home buyers with school age children would pay the

tax that could potentially be used for school construction and renovation.

Disadvantages

There is some information to suggest that a transfer tax of 0.5% would reduce real

estate sales since the cost of closing would increase by $500 per $100,000 of

housing value.

The tax burden would also fall on the commercial property owners that have no

impact on school capacity.

36

Utility Taxes – Six counties have enacted utilities taxes. The State allows the Counties to tax

telephone service and electricity usage. The projected revenues below are based on a per capita

amount generated by other counties.

Tax Rate Potential Yield/Year






Co.) $8.8 million

While Charles County’s predominate energy usage is from electricity, it should be noted that 5

counties tax other energy sources such as natural gas, LP gas, and fuel oil.



Advantages

Has a relatively high revenue yield potential if the Prince Georges County

approach is used. (If the St. Mary’s and Anne Arundel approaches are used the

revenues would be modest.)

Is a stable revenue source since electricity and telephone usage will grow with

development in the County.



Disadvantages


The tax burden would also fall on the commercial and institutional users that have

no impact on school capacity. This could be mitigated by levying tax on

residential users only; however, the revenues would be reduced substantially.

More difficult to administer and implement since the County must receive the

taxing authority from the General Assembly and the basis and methodology for

taxation must be established.

Increased Excise Tax – The Excise Tax for School Construction is based on formulas that

would need to be renegotiated with the State Legislative Delegation. Justifications for the

37

increased tax are (1) to factor in the start-up costs associated with the opening of a new school

not considered in the formula for establishing the excise tax, (2) include the cost of borrowing

money to forward fund the State’s share, (3) repeal the Producer Price Index as an inflation

adjustment factor in favor of actual School Construction cost factors as issued by the Maryland

State Board of Education and (4) to recognize the current student generation rates for townhouse

and multi-family dwellings. Again, this would require changes in the law. Some of the start-up

costs discussed by the Committee such as computers and salaries are not costs that would

typically qualify for long term financing through bonds. Some items such as furnishings and

library books could be financed through long term bonds as described in the Excise Tax

legislation.

Eligible Use - This tax is limited to County costs incurred to construct new capacity for

school facilities which includes equipment costs.

Advantages

Provides a means for collecting the total local-share cost of providing school

capacity and funding the capital related start-up costs.

Amending the excise tax enabling legislation, though it requires State Legislative

approval, may be easier to justify and explain to the local delegation than adding

additional fees such as an impact fee or APF mitigation fee. One approach to

increasing the excise tax would be to: 1) tie the inflation multiplier to the actual

cost of school construction as computed by the State Bd. of Ed.; 2) Amend the

law to include the cost of borrowing money (interest payments, etc.) needed to

forward fund (finance) the State’s share; 3) Amend the law to recognize that

townhouse and multi-family dwellings generate more students than they did 2003

(the current base year for generation rates) and 4).

Disadvantages

It is not expected that the calculated tax will be significantly more than the current

excise tax initially. However, by tying the escalation of the tax to the actual cost

of school construction, the County would be assured that the revenues will keep

pace with the true inflationary costs of school construction.

Initially, the Committee did not consider amending the excise tax to be preferred since the added

revenue potential would be limited. Considering the limitations on the School Facilities payment

approach and the potential modifications to the law that could be made, the Committee added

this revenue source back for consideration.

38

The Committee evaluated each potential revenue source based on the eligible uses as shown in

the Table below.

County Revenue Sources – Eligible Uses

Potential Revenue

Source

Eligible for Capital or Operating Expenditures (including renovations

to existing schools and teacher salaries.)

Income Tax

Increase

General Revenue can be used for infrastructure or operating cost. The


Utility Taxes General Revenue can be used for infrastructure or operating cost. The


Transfer tax General Revenue can be used for infrastructure or operating cost. The


Real Estate Tax

Increase

General Revenue can be used for infrastructure or operating cost. The


Potential Revenue

Source

Eligible Only for Capital Expenditures that Create Capacity

School Facilities

Payment

This payment is a mitigation for inadequate school capacity; therefore,

it must be used for infrastructure to create capacity.

Impact Fee Is intended to offset the cost of school capacity; therefore, it must be

used for infrastructure.

Increased DRRA

contributions

This revenue source can be used for the “financing of public

facilities.” Whether the payments could be used for renovations not

resulting in increased capacity should be evaluated by the County

Attorney’s office since the agreements grant school allocations where

capacity is not available.

Increased Excise

Tax

This tax is limited to County costs incurred to construct new capacity

for school facilities which includes equipment costs.

39

The Committee further evaluated the potential revenue sources based on the following criteria:

relative expected revenue yield; administrative ease of implementation; and, the stability of the

revenue source.

County Revenue Sources – Selection Matrix

Criteria

Potential Revenue

Source

Relative

Revenue Yield

Administrative Ease

of Implementation

Stability of

Revenue Source

Total Score

Income Tax

Increase

4 4 5 13

Utility Taxes

(PGCo approach)

5 2 5 12

Transfer tax 3 4 4 11

School Facilities

Payment*

4 3 3

10

Utility Taxes (AA

and St. Mary’s

approach)

2 2 5

9

Real Estate Tax

Increase

1 3

5

9

Increased DRRA

contributions

1 5 2 8

Increased Excise

Tax

1 1 4

6

Scoring: 5 = High degree of achieving the criteria and 1= Low degree of achieving the

criteria.

*School facilities payments and impact fees were re-evaluated by the Committee based on

legal considerations which would severely limit potential revenue yields.

Recommendations

It is recommended that the Commissioners acknowledge that, at this point in time, the 5 year CIP

should include Elementary #3, planning and design for Elementary #4, and Middle school #2

and/or adding needed capacity through school renovations and improvements based on

recommendations and priorities from a pending study by the Board of Education. The

Commissioners should establish a “balanced capital program”. To accomplish this school

capacity construction and renovation program, the following revenue sources should be

considered to supplement the County’s current revenue raising capability.

40

Revenues Targeted for Capacity Expansion and One Time Start-Up Costs

Increased DRRA contributions – In 2013 the County will receive $4.5 million from

DRRA payments. This current figure is the most indicative of the current market and

school allocation program restrictions. This figure does not include Heritage Green or

Scotland Heights since they are currently renegotiating their agreements. According to

the Department of Fiscal and Administrative Services (DFAS), these payments from

DRRAs will provide adequate funding to initiate the funding of the St. Charles High

School and a new elementary school assuming that the State continues to fund their share

which will reimburse the County. Recently, it was determined that the initial start-up

costs associated with the opening of a new school can result in funding shortfalls and are

not typically considered with the evaluation of DRRA proffers. It was also determined

that there may be unique needs associated with accommodating the students from new

development in the receiving schools that better enable the CCPS to accept the students

generated by the development. As a result it is recommended that the DRRA proffers

recognize the unique challenges in accommodating the new students in the receiving

schools and the proffers address those needs. It is further recommended that the funding

shortfalls experienced in the past for one time start-up costs be considered in the DRRA

proffers and that the impact of one time start-up costs be evaluated annually based on the

relationship that the per pupil expenditure has to the addition of new dwellings in the

County..

Increased Excise Tax – The Excise Tax for School Construction is based on formulas

and stipulations that would need to be renegotiated with the State Legislative Delegation.

It is recommended that the County seek amendments to the County’s Excise Tax found in

the Section 20-804 of the Local Government Article. The excise tax has been a fair and

effective revenue source for the past decade; however, the Committee believes there are

opportunities to improve on the law so that it better reflects the intent of the legislation

and the current school construction environment. It is recommended that the County seek

the following amendments to Section 20-804 in the 2015 General Assembly:

1. Factor in the start-up costs associated with the opening of a new school not

considered in the formula for establishing the excise tax;

2. Include the cost of borrowing money to forward fund the State’s share;

3. Repeal the Producer Price Index as an inflation adjustment factor in favor of an

adjustment equal to the percentage change in the eligible costs per square foot set

annually by the State of Maryland Public School Construction Program; and,

4. Reset the base per dwelling tax annually to reflect the current student generation

rates for townhouse and multi-family dwellings which have increased during the

last decade.

41

Revenues Targeted for Renovations, Start-up Costs for New Schools, and Long term

Operating Costs

Income Tax Increase – Charles County is currently at an income tax rate of 3.03%. The

current maximum for counties is 3.20%. If the County increased the income tax to

3.20%, it would generate approximately $6.0 million per year. It is recommended that the

Commissioners reserve increases in the income tax to fund needed renovations, start-up

costs for new schools, and long term operating costs for new schools.

Utility Taxes – Six counties have enacted utilities taxes. The State allows the counties to

tax telephone service and electricity usage. The projected revenues below are based on a

per capita amount generated by other counties. Note that some counties use higher tax

rates which would yield more potential revenues.

Tax Rate Potential Yield






Co.) $8.8 million

It is recommended that the Commissioners seek authority in the 2015 General Assembly

for the enactment of a utility tax on telephone and electricity usage. The proceeds of the

tax are reserved to fund needed renovations, start-up costs for new schools, and long term

operating costs for new schools. The Committee’s recommended priority for the tax

revenues from this source would be for renovations and initial start-up costs rather than

long term operating costs.

Transfer tax – Though Charles has not, most counties have enacted a transfer tax under

State authority. Charles may enact up to a 0.5% tax without State legislative authority

and up to 1.5% with legislative authority. If Charles applies a 0.5% tax to real estate

transfers, it would yield approximately $2.5 million per year based on FY 2013 sales

data. Since it is likely that the County will need multiple revenue sources to accomplish

the school renovation objectives and to pay for the start-up and long term costs of

opening new schools, it is recommended that the transfer tax be included as a potential

revenue source for those purposes. While this source of revenue was not preferred, if

used, it should be limited to less than the allowable 0.5 percent.

42


Issue 8: School construction program versus projected enrollment and capacity. The

County’s school construction program has not been able to keep pace with the BOE’s enrollment

and capacity projections in certain areas of the County.

Summary of Findings

The Committee found that the current School Construction CIP has a new high school opening

September 2014. The Projected Enrollment and Capacity analysis (Step Charts) indicates the

need to open a new elementary school by 2018. The current CIP includes a new elementary

school to satisfy the projected need on a county-wide basis. Based on the Enrollment and

Capacity analysis, the county-wide need for a new Middle School will occur approximately in

the years 2020-21. The Committee acknowledged that the county-wide need may not reflect the

regional need for elementary and middle schools. Recognizing that it is not always feasible or

desirable to bus students long distances to balance the capacity to need discrepancies, there may

be a need to accelerate school construction ahead of the planned CIP. Once this need is

established, then it will be necessary to determine the best way to meet the need. For example, is

new school construction the optimum approach or can additions serve the localized capacity

needs?

Based on the discussion at the October 9th

Meeting, the Committee wanted to make sure that the

student generation from the WURC development will be adequately considered in the future

planning of school facilities in the area. The projected impacts from Phase 1 of the Waldorf

Center of the WURC are shown below.

Phase 1 Student Generation by School Level

Elementary (Ryon) Middle (Hanson) High (Stone)

Excess Student

Capacity 78 (SY 13-14) 77 (SY 13-14) 253 (Projected second

year St. Charles is

open)

Students

Generated from

Phase 1 WURC

(402 Apts.)

88

36

12



needs criteria for state funding. One approach is to seek State funding for every other

school to accelerate the Board of Education’s construction program. Fiscal Services

43

Staff cautions that forward funding every other school may inadvertently relieve the State

Government from funding responsibilities. It is recommended that County School

Construction needs to use a strategy that maximizes State funding. Spreading County

forward funding over two schools may better maximize State participation. (Also

discussed in Issue Paper #1.)

2. Maximize existing school capacity by moving relocatables. (From Public Outreach

Meeting) Any alternatives regarding moving relocatable classrooms needs to be sensitive

to the Cost/Benefit of the action. A 2005 Analysis by the BOE will be helpful in

analyzing an alternative involving the moving of portable classrooms. Any analysis

should include the determination of ownership of the classrooms since 61 units in the

County system are State owned. It should be noted that State owned units have

restrictions and protocols to follow before relocating. BOE staff generally finds that

moving relocatables is not a cost effective way to add temporary capacity to a school.

The Committee found that the BOE will continue to move relocatable classrooms on an

as needed basis when it is found to be cost-effective. It was determined that there was no

need to change the policy at this time.



meeting. Dr. Lever

discussed Charles County’s emphasis on new school construction versus renovations or

replacements. There was discussion on the part of the Committee about how the County

could address the renovation needs and add capacity at the same time. The Committee

entertained the idea of a School System Wide Facility Assessment to evaluate schools,

their building systems and educational requirements, and to prioritize the corrective

projects and costs. This would be done by evaluating every school needing renovations

for opportunities to add capacity. Adding capacity to a school as part of a renovation

may be an opportunity for developer contributions to help with the expansion portion of

the project.

4. Use Public-Private-Partnerships to expand the County’s capability to deliver schools

faster. As discussed by the Committee through a briefing paper (See Appendix 6) at the

June 26th

meeting, these are partnerships between a company, usually a consortium, and

the government regarding the funding, building, operation and maintenance of school

facilities. Typically a private company would build or renovate schools and maintain

them for the life of the repayment of the facility. Currently, the only jurisdiction in the

U.S. doing this system-wide is Yonkers, NY, but it is more common in Europe, Canada

and Australia. It should be noted that the current state legislation requires that operation

and maintenance must be done by the public entity; therefore, new legislation would be

needed to fit the model being used in other countries. This may be a long term solution to

44

handle a need for school facilities that exceeds the County’s ability to deliver and when

the County’s debt affordability is maximized.

Recommendations

The Committee recommends that the following strategies be used to insure that the School

Construction Program will keep pace with the student population in all areas of the County.

To implement these strategies, it is necessary that the County and CCPS staff coordinate

closely to insure success.


needs criteria for state funding. The CCPS should increase the pace of school

construction to the degree feasible without sacrificing the potential to receive State

funding. Spreading County forward funding expenditures over two schools or a new

school and a renovation may be a way to maximize State participation. (Also discussed

under Issue 1.)



meeting. Dr. Lever

discussed Charles County’s emphasis on new school construction versus renovations or

replacements. There was discussion on the part of the Committee about how the County

could address the renovation needs and add capacity at the same time. The Committee

recommends a School System Wide Facility Assessment to evaluate schools, their

building systems and educational requirements, and to prioritize the corrective projects

and costs. This would be done by evaluating every school needing renovations for

opportunities to add capacity. Adding capacity to a school as part of a renovation may be

an opportunity for developer contributions to help with the expansion portion of the

project.

3. Use Public-Private-Partnerships to expand the County’s capability to deliver schools

faster. As discussed by the Committee through a briefing paper at the June 26th

meeting,

these are partnerships between a company, usually a consortium, and the government

regarding the funding, building, operation and maintenance of school facilities. Typically

a private company would build or renovate schools and maintain them for the life of the

repayment of the facility. Currently, the only jurisdiction in the U.S. doing this system-

wide is Yonkers, NY, but it is more common in Europe, Canada and Australia. It should

be noted that the current state legislation requires that operation and maintenance must be

done by the public entity; therefore, new legislation would be needed to fit the model

being used in other countries. This may be a long term solution to handle a need for

school facilities that exceeds the County’s ability to deliver and when the County’s debt

affordability is maximized.

45

4. Future Planning Considerations. It is the Committee’s recommendation that future

school facility planning and funding should take into consideration the school impact of

Phase 1 of the WURC. The CCPS planning should assume the build out of Phase 1

within the 5 to 10 year planning horizon and Phase 2 within the 10 to 15 year time frame.

Issue 9: Procurement of School Sites. The Committee determined that one of the impediments

to timely school construction is the procuring of school sites.

Summary of Findings

The Committee found that St. Charles has and will continue to provide school sites in a timely

manner; however, those sites are not always close to the need found elsewhere in the County.

Most developers do not have a large enough project to support school site dedication. A DRRA

is a mechanism to allow developer dedications of land to support school construction. Some

counties, including Charles, have expanded school capacity on existing sites and rebuilt schools

on existing sites limiting the need for the acquisition of new sites. Finally, it was determined that

the BOE has no staff dedicated solely for the purpose of site acquisition.








the site of the old school. This means that the ball games needed to be relocated during


Frederick County is currently replacing Frederick High School. (Also discussed in Issue

Paper 1)






that it is not included in the bond issue for the proposed school. (Also discussed in Issue

Paper 5)

3. Dedicate BOE staff resources to the function of site acquisition. A position or a

portion of a position could be used to identify land suitable for acquisition and assist in

46

procuring the site. The staff person could work with the County Dept. of PGM on

potential developer proffered sites that might be suitable for school construction. The

staff person would negotiate the best value and handle services such as appraisals, title

searches and feasibility studies. It was determined that the staffing of the CCPS is under

the purview of the Superintendent and will be addressed when appropriate.

Recommendations

The Committee recommended the following strategies to address school site acquisition.

The CCPS and County staff will work together to proactively locate and acquire school sites

based on regional needs.

1. Build new schools on the same site, where feasible. This alternative would negate

the need to find suitable school sites. It should minimize site development costs. It

should also minimize the disruption caused by redistricting for a newly located

school. This technique is only feasible when adequate land area exists on site or can

be expanded to adjoining properties. Anne Arundel County has experience with this

technique. In one case the new high school was built on the stadium and the new

stadium was located on the site of the old school. This means that the ball games

needed to be relocated during construction. Calvert County has also used this

technique for Calvert High School. Frederick County is currently replacing Frederick

High School. Charles County has had some experience with doing major renovations

that add substantial capacity. The Committee recommends that the CCPS use the

results of the School System Wide Facility Assessment to look for opportunities to

expand capacity on the same site thereby eliminating the need to acquire additional

school sites. (Also addressed under Issue 1.)

2. Encourage school sites and facilities expansion through DRRAs as direct

mitigation for the lack of school capacity. This approach needs to occur early in

the development process. It has the best chance for success when used with large

Planned Developments and incorporated into the zoning approval. It should be noted

that if school sites are proffered with a DRRA the cost of the site should be removed

from the CIP Budget so that it is not included in the bond issue for the proposed

school. (Also addressed under Issue 4)

47

Appendices

Appendix 1: Projected School Capacity by School Level (Step Charts)

Appendix 2: Issues Identification Worksheet

Appendix 3: Over State Rated Capacity Mapping

Appendix 4: Counties APF and Funding Survey

Appendix 5: County Revenue Comparison Table

Appendix 6: Public-Private Partnerships for Schools Explored

Appendix 7: Student Yield Factors by Selected Elementary School Districts

Appendix 8: Adequate Public Facilities Provision for Schools in the St. Charles PUD

Appendix 9: New School Operating Budget Models

48

Appendix 1: Projected School Capacity by School Level (Step Charts)

52

Appendix 2: Issues Identification Worksheet

53

School Adequate Public Facilities Program and Funding Review Committee

Issues Identification Worksheet (May 8, 2013)

Charge - The Committee shall evaluate the County’s approach to ensuring adequate public

facilities for schools in the development approval process to determine if the

current policy is achieving the stated goals. The Committee should also develop

solutions for addressing the timing of providing adequate school facilities to match

the planned growth in the County. The Committee should work with designated

staff to explore the feasibility and make recommendations on the best method to

work through the issues related to school redistricting, school capacity allocation,

and the timing and methods of school funding and construction.

School Adequate Public Facilities Regulation

Issue 1 Timing of providing adequate school facilities to match the planned growth in

the County. School capacity in specific school districts has not kept pace with

residential growth.

Alternative Solutions Discussed to date:

1. Redistricting to balance student attendance.

2. Increase the number of schools serving the student population by forward

funding schools.


accommodate growth.

4. Target school capacity to geographic areas in need.

5. Consider developer built schools or additions/renovations. (Board of Ed.

Staff cautions that additions may trigger the need for retrofitting and

doing required renovations to gain State Board of Education approval.

These improvements would likely have to come from other funding

sources)

6. Consider Temporary reassignments of new projects not yet built to

schools with projected capacity. A similar approach that was taken with

the 2009 Redistricting.

Issue 2 Student Yield Factors. The computation and use of Student Yield Factors on a

county wide basis may not reflect potential differences in neighborhood student

generation rates.

Alternative Solutions Discussed to date: Prior to offering solutions, the

Committee agreed to test the hypothesis that Student Yield Factors significantly

vary throughout the County. This will be done by spot testing certain school

54

attendance zones in suburban and rural areas. The differences will be tested to

see if they are significant enough to change policy.

Issue 3 School Capacity Measurement. If all schools are capped at State Rated

Capacity, over time, there could be an impact on the County’s ability to obtain

State funding once all the existing school allocations are used. This would occur

only if mitigation for the lack of school capacity is not allowed. (From Public

Outreach Meeting)

Issue 4 DRRA School Allocations. The payment of contributions to mitigate student

impacts does not necessarily insure that the CCPS will be able to build the

commensurate school capacity in the appropriate locations by the time the students

attend the schools.


1. Evaluate the possibility of directing mitigation payments or infrastructure

improvements to provide capacity in the affected region or school.

2. Increase the rate of school construction.

3. Encourage developer consortia to provide adequate resources to fully

mitigate the deficiencies. This concept might include Developer

reimbursements for excess capacity created.

4. Encourage school sites and facilities expansion in DRRAs as direct

mitigation for the lack of school capacity.

5. Create residential density incentives, where appropriate, to add value to

projects that can be used for school capacity mitigation. Granting density

bonuses in the Waldorf Urban Redevelopment Corridor (WURC) for

school sites is an example of how this could be implemented.

6. Encourage school mitigation discussion and strategy prior to the approval

of the Preliminary Plan by the Planning Commission.

7. Provide school site needs regionally to encourage the proffering of sites.

Issue 5 Minor Subdivisions. Minor subdivisions that would create more than 3 new lots

must sit on the school allocation waiting list for an indeterminate number of years

until capacity becomes available. (From Public Outreach Meeting)


1. Cap the number of years, say 5 to 6, a minor subdivision must sit on the

waiting list before it may receive allocations.

2. Evaluate the allowance for minor subdivisions with more than 3 new lots to

pull from the bulk set aside. As part of this alternative evaluate historic use

of the amount of capacity being set aside for bulk school allocations.

55

3. Permit minor subdivisions that are deed restricted for intra-family

transfer only to use bulk allocations.


Issue 1 The County’s school construction program has not been able to keep pace with

the BOE’s enrollment and capacity projections in certain areas of the County.


1. Evaluate the ability to expedite school construction by forward funding every

other school to accelerate the Board of Education’s construction program.

The result may be to seek funding from the State for every other school.

Fiscal Services Staff cautions that forward funding every other school

may inadvertently relieve the State Government from funding

responsibilities. It is recommended that County School Construction

needs to use a strategy that maximizes State funding. Spreading County

forward funding over two schools may better maximize State

participation.

Issue 2 Use of Existing School Capacity. Existing school capacity in school and in

relocatables is not being maximized. (From Public Outreach Meeting) Any

alternatives regarding moving relocatable classrooms needs to be sensitive to

the Cost/Benefit of the action. A 2005 Analysis by the BOE will be helpful in

analyzing an alternative involving the moving of portable classrooms. Any

further analysis should include the fact that 61 units are State owned.

School Construction Funding

Issue 1 State Share Funding. State funding sources do not keep pace with the identified

construction needs in the County or Statewide.

Alternative Solutions Discussed to date: Better position the County for State

Funding. (As discussed under School Construction Program Issue 1 above.)

Identify and implement alternative revenue sources. Potential sources discussed

were income tax increases, real estate taxes, transfer taxes, increased excise tax,

increase DRRA contributions impact fees and/or cost saving measures (such as

shared facilities).

Issue 2 County funding. Whereas the combined revenues received from projects making

mitigation payments through a DRRA and the School Construction Excise Tax

approximates the costs per dwelling unit, there are a large number of projects with

preliminary plan approval and school allocations including St. Charles that do not

56

pay an additional cash contribution to cover the funding shortfall. Note that St.

Charles makes contributions through school site donation and infrastructure

improvements to serve sites.

Alternative Solutions Discussed to date: Identify and implement alternative

revenue sources. Potential sources discussed were income tax increases, real

estate taxes, increased DRRA contributions, impact fees, transfer taxes, utility

taxes and/or increased excise tax.

Issue 3 Total Costs of School Construction. The planning for funding of school

construction needs to include all costs associated with the start up of a new school

including furnishings, equipment and the initial costs for staffing.

Alternative Solutions Discussed to date: Include total costs associated with

school construction in the fiscal planning for new schools or expansion of

schools.

Issue 4 Competing Needs. Program changes such as all day kindergarten and State

required renovations compete for funding which could otherwise be used for

building capacity.

57

Appendix 3: Over State Rated Capacity Mapping

62

Appendix 4: Counties APF and Funding Survey

63

School APF/Funding Survey for Selected Counties

Key Elements of the School APF Programs

County APF Test Limitations are measured

by attendance zone, region, or

planning area.

When are schools considered

over capacity? (i.e. 115% over

capacity, etc.)

Exemptions or Modifications to

the School APF Requirements

When are projects tested

for School APF?

Do relocatables

count in the avail -

able capacity used

in the APF Test?

Cap for projects

on waiting list

for school

capacity.

Time Limit on

Allocations or capacity

reserved.

When can Planned

Capacity be

Counted?

Charles School Attendance Zone Exceed SRC Age Restricted, 3 Lot Minor

Subdivisions.

Prior to Final Plat

approval

No None 2 years with one 2 yr.

extension.

January prior to the

Sept Opening.

Anne

Arundel

School Attendance Zone, BOE

provides an Open/Closed list.

Capacity is projected 3 years in

future.

Exceed SRC. If a school is

open by 1 student, the entire

project can be approved.

Age Restricted, 3 Lot Minor

Subdivisions. Exempt Odenton

and Parole Growth Mgmt

Areas.

Prior to Final Plat

approval. Sketch Plan or

Preliminary Plan

Optional

No, but impact

fees may fund

moving

relocatables.

6 years Project must meet

required milestones. 1

yr. to submit Final Plat.

I yr. to approval of plat

mtg.

Counts if school

capacity is available

within 3 year

projections.

Howard Use Elementary as the limiting level.

BOE develops an open/closed list.

Housing allocations are tied to the

Comp Plan Districts

115% of “Program Capacity”

as determined by BOE. May

be over or under SRC.

Projections are by individual

school.

Age Restricted and Affordable

by Resolution of Council, 1 Lot

Minor Subdivisions if meet

hardship test.

Sketch Plan or Site

Development Plan

No 4 years Project must meet

required milestones.

Recordation of project

or Phase in 3 years.

(Extensions granted

during recession.

Counts if school

capacity is available

within 3 year

projections.

St. Marys Northern and Southern Regions 107% Elem, 109% Middle,

116% High over SRC.

Age Restricted, 2 Lots Minor

Subdivisions since 2008.

Prior to Preliminary Plan No None No limit. 1st 3 yrs of CIP. Site

must be secured.

Montgomery School Clusters (Feeder System) For

example all elementary capacity in

the cluster is considered

5 year projected enrollments

>105% of “Program Capacity”

must make payment. >120%

under moratorium (Currently

none)

Age Restricted, MPDUs, 3 Lot

Subdivisions if make School

Facilities Payment. Exempt

Enterprise Zones. (Wheaton

CBD)

Prior to Preliminary Plan

N/A

N/A

Not less than 5 yrs or >

10 yrs after Preliminary

approval date. Longer

if phased developmt.

Capacity projected

to be in place within

5 years including

CIP.

Calvert School Attendance Zone 100% of “APF Rated”

Capacity. Formula in Zoning

Ord. Tends to be a little higher

than SRC since additional

Rooms are counted.

Age Restricted, 3 Lots after

1988, 5 lots before 1988.

Prior to Final Plat

approval

No 7 years Renewed annually up

to 7 years.

N/A

Carroll School Attendance Zone Projected capacity including 6

year CIP to be > 120% of SRC

for Elem. and High. For

Middle > 120% of “Functional

Capacity.”

Minor subdivisions,

Subdivisions of prop. with Ag.

Land Preservation Easmt. Age

restricted.

Preliminary test at

Preliminary Plan.

Retested at Final Plat

No None May be extended

annually by Planning

Director.

6 months before

opening.

Frederick School Attendance Zone 2 year projected enrollments

>100% of SRC may make

school const. payment..

>120% under moratorium.

Age Restricted, Minor

subdivisions of 5 lots.

Preliminary Plan

approval subject to

mitigation.

No

N/A

N/A

2 years prior to

opening.

N/A = Not available at this time.

64

School APF/Funding Survey for Selected Counties

Key Elements of the School APF Programs (Continued)

N/A = Not available at this time.

County Primary Dedicated Revenue Source Other Sources including

Supplementary Fees /Surcharges

Is Mitigation for lack of School

Capacity permitted?

Is redistricting used to balance student

demand?

Do you forward fund schools.

Charles Excise Tax ($13,139 for SFD in FY 14) See DRRA Payments. Yes, through DRRA. Monetary

Payment Approx. $14,500

Yes Yes

Anne Arundel Impact Fee($7,141 for 2,499 sq. ft.

residential unit.) May be used to move

relocatables.

County Issues G.O. Bonds. A

new Source is "Casino Money."

Yes, through a School Capacity

Mitigation Agmt. Developer must

provide capacity, no cash

payments.

Yes, currently doing redistricting with no

new school. May affect all 15 schools in the

feeder zone.

Yes, Usually the forward

funding involves funding

ahead of State Appropriation.

Howard Excise Tax ($1.21 per sq. ft.) $3,024 for

2499 sq. ft. residential unit.

25% of Transfer tax goes to

School Construction ($27M)

37 % of G.O Bonds goes to

School Construction.

No. Yes, do readjustment redistricting. “30% of

Co. in past decade.” Currently doing a

global redistricting. Building and

redistricting 1 school per year in boom yrs.

Yes

St. Marys Impact Fee ($3,375 for residential unit.) Transfer Tax. Not dedicated to

schools, but has been used.

Yes, but only for school site

dedication.

Yes, for minor adjustments. No

Montgomery Impact Fee ($23,868 for SFD.) “School Facilities Payment”

$6,493 for SFD in Elementary

District. May be paid when

school cluster is > than 105% but

< 120% over “program capacity.”

Yes, through School Facilities

Payment when school cluster is >

than 105% but < 120% over

“program capacity.”

N/A N/A

Calvert Excise Tax ($7,800 for SFD) General Fund Not by policy, however, recently a

school site was proffered as part of

an annexation since the Town did

not require excise tax or have APF

requirements.

Yes, currently doing redistricting with no

new school opening.

No, not at this time.

Carroll Impact Fee ($6,836 per SFD in FY 12)

Currently suspended due to excess

capacity.

N/A

N/A

N/A

N/A

Frederick Impact Fee ($14,426 for SFD) Excise tax

(0.25 per sq. ft.) $625 for 2,499 sq. ft.

unit. Total of $15,051.

“School Construction Fee”

$3,870 for SFD in Elementary

District. May be paid when

school is > than 100% but <

120% over SRC.

Yes, by APFO Letter of

Understanding and payment of the

School Construction Fee.

Yes, If an adjoining school is at least 20%

below SRC, the BOE must consider

redistricting.

Yes. A couple of times

proceeded w/o State Planning

approval. Initially, almost all

schools are funded by County

subject to reimbursement.

65

School Impact Fees and Excise Taxes Levied for Maryland Counties

County Primary Dedicated

Revenue Source

Other Sources

including

Supplementary Fees

/Surcharges

Is Mitigation for lack of

School Capacity

permitted?

Charles Excise Tax ($13,139

for SFD FY 14)

Yes, through DRRA.

Monetary Payment

Approx. $14,500

Anne Arundel Impact Fee($7,141 for

2,499 sq. ft. residential

unit) Sliding scale by

sq. ft. category.

N/A

Yes, through a School

Capacity Mitigation

Agmt. Developer must

provide capacity, no cash

payments.

Howard Excise Tax ($1.21 per

sq. ft.) $3,024 for 2499

sq. ft. residential unit.

25% of Transfer tax

goes to School

Construction ($27M)

37 % of G.O Bonds

goes to School

Construction.

No.

St. Mary’s Impact Fee ($3,375 for

residential unit.)

Transfer Tax Yes, but only for school

site dedication.

Montgomery Impact Fee ($23,868

for SFD.)

“School Facilities

Payment” $6,493 for SFD

in Elementary District.

May be paid when school

cluster is > than 105% but

< 120% over “program

capacity.”

Yes, through “School

Facilities Payment”

when school cluster is >

105% but less than

120%.

Calvert Excise Tax ($7,800 for

SFD)

N/A Not by policy, however,

recently a school site was

proffered as part of an

annexation since the

Town did not require

excise tax or have APF

requirements.

Carroll Impact Fee ($6,836 per

SFD in FY 12)

Currently suspended

due to excess capacity.

N/A

N/A

Frederick Impact Fee ($14,426

for SFD). Excise tax

(0.25 per sq. ft.) $625

for 2,499 sq. ft. unit.

“School Construction

Fee” $3,870 for SFD in

Elementary District. May

be paid when school is >

than 100% but < 120%

over SRC.

Yes, by APFO Letter of

Understanding and

payment of the School

Construction Fee.

Caroline Excise tax $5,000 per

Residential unit

N/A N/A

66

Dorchester Excise tax $3,555 per

SFD

N/A N/A

Harford Impact fee $6,000 per

unit (not specified for

schools only).

N/A N/A

Prince George’s

School Surcharge

$14,682 Outside

Beltway. $8565 Inside

Beltway

N/A N/A

Queen Anne’s Impact Fee ($3.68 per

sq. ft.) $9,196 for

2499 sq. ft. residential

unit.

N/A N/A

County Primary Dedicated

Revenue Source

Other Sources including

Supplementary Fees

/Surcharges

Is Mitigation for lack of

School Capacity

permitted?

Talbot Impact Fee $2,804 per

SFD

N/A N/A

Washington Excise tax ($3.00 per

sq. ft.) $7,497 for a

2,499 sq. ft. dwelling.

N/A N/A

Wicomico Impact fee $5,231 per

unit (not specified for

schools only).

N/A N/A

N/A = Not Available at this time.

Source: Primary source is “County Development Impact Fees and Building Excise Tax in

Maryland” Department of Legislative Services. January 2012. Anne Arundel, Frederick and

Howard Counties have been updated to FY 13 levies. Charles represents the FY 14 Excise Tax

levy.

67

Appendix 5: County Revenue Comparison Table

68

Property

Tax Rates

(non-

municipal

) Rank

Income

Tax Rate Rank

Recordatio

n Tax

Transfer

Tax

Hotel/Mote

l Tax

Admissions

&

Amusement

Tax

Telephone

Tax

Electricity Tax -

Non-residental

per kwh

Electricity

Tax -

Residental

per kwh

Allegany $0.9810 11 3.05% 9 $3.50 0.50% 8.0% 7.5% No No No

Anne Arundel $0.9410 15 2.56% 22 $3.50 1.00% 7.0% 10.0% 8% sales tax $0.0025/$0.0020 No

Baltimore City $2.2680 1 3.20% 1 $5.00 1.50% 9.5% 10.0% $4 per line $0.007626 $0.002442

Baltimore County $1.1000 3 2.83% 15 $2.50 1.50% 8.0% 10.0% 8% sales tax $0.00530 No

Calvert $0.8920 17 2.80% 16 $5.00 No 5.0% 1.0% No No No

Caroline $0.8900 18 2.63% 20 $5.00 0.50% 5.0% No No No No

Carroll $1.0180 6 3.05% 10 $5.00 No 5.0% 10.0% No No No

Cecil $0.9907 9 2.80% 17 $4.10 $10/deed 3.0% 6.0% No No No

Charles $1.1410 2 3.03% 11 $5.00 No 5.0% 10.0% No No No

Dorchester $0.9760 12 2.62% 21 $5.00 0.75% 5.0% 0.5% No No No

Frederick $0.9360 16 2.96% 13 $6.00 No 3.0% 0.0% No No No

Garrett $0.9900 10 2.65% 19 $3.50 1.00% 6.0% 4.5% No No No

Harford $1.0420 4 3.06% 8 $3.30 1.00% No 5.0% No No No

Howard $1.0140 7 3.20% 1 $2.50 1.00% 7.0% 7.5% No No No

Kent $1.0220 5 2.85% 14 $3.30 0.50% 5.0% 4.5% No No No

Montgomery $0.9910 8 3.20% 1 $3.45 0.25%-6% 7.0% 7.0% $2.00 / $3.50 $0.2124 $0.12250

Prince George's $0.9600 13 3.20% 1 $2.75 1.40% 5.0% 10.0% 8% sales tax $0.007454 $0.007454

Queen Anne's $0.8471 21 3.20% 1 $4.95 0.50% 5.0% 5.0% No No No

St. Mary's $0.8570 20 3.00% 12 $4.00 1.00% 5.0% 2.0% No $1.25% / kwh $1.25% / kwh

Somerset $0.8837 19 3.15% 7 $3.30 No 5.0% 4.0% No No No

Talbot $0.4910 24 2.40% 23 $6.00 1.00% 4.0% 5.0% No No No

Washington $0.9480 14 2.80% 18 $3.80 0.50% 6.0% 3% - 5% No No No

Wicomico $0.8404 22 3.20% 1 $3.50 No 6.0% 6.0% No No No

Worcester $0.7700 23 1.25% 24 $3.30 0.50% 4.5% 3.0% No No No

NOTE: Charles County's rates are for FY 2014; other County's rates are for FY 2013.

SOURCE: Maryland Association of Counties/Department of Legislative Services, Budget and Tax Rate Survey August 2012

Maryland Counties - Revenue Sources

69

Appendix 6: Public-Private Partnerships for Schools Explored

70

Public-Private Partnerships for Schools Explored

Background

As part of the APF Committee’s desire to “think outside the box” for alternative solutions, Board

of Education and County PGM Staff, attended a meeting at Dr. Lever’s invitation to explore the

possibilities of using Public-Private Partnerships for providing school infrastructure in Maryland.

The staff met with firms that have been successful in providing school infrastructure

internationally. Recently, the City of Yonkers, New York will be using this approach to provide

capital construction needs for the long term. Staff looked at the ability of the approach to

expedite school construction and provide “value for money.”

Maryland’s Public School Facilities Act of 2004 has paved the way for these types of public-

private partnerships. The most noteworthy use of the law was Washington County Public

School’s Barbara Ingram School for the Arts project.

Public-Private Partnerships (P3) Defined

Public School Facilities Act of 2004 defines Public-private partnership agreements when “a

county board contracts with a private entity for the acquisition, design, construction,

improvement, renovation, expansion, equipping, or financing of a public school, and may

include provisions for cooperative use of the school or an adjacent property and generation of

revenue to offset the cost of construction or use of the school.” These Public-Private

Partnerships or P3s, as referred to by the industry, can range from simple Design-Build (DB)

arrangements to the Design-Build-Finance-Maintain-Operate (DBFMO).

Advantages and Disadvantages

The Board of Education and County staff were able to identify the following potential

advantages and disadvantages of using P3.

Advantages

Can accelerate a project to address an urgent educational issue that may be too large for

the School District to handle. For example, the Yonkers, New York case.

Can offset the increased finance cost by forestalling construction cost escalation. For

example, construction costs are relatively low now, but may not be when the public

funding is available to build schools.

May create efficiencies in the life-cycle costs of the project that can be calculated to show

that there is an overall Value for Money. The privatization usually means amortizing the

life cycle cost of the infrastructure so it does not allow the local agency to defer the cost

of preventative maintenance and repairs.

71

Can Reduce risk to the Local Government. The industry points out that the County

would be “held harmless” from cost overruns during construction, and material and

construction defects as well as the escalation of O&M costs.

Can free up capital that can be used for other infrastructure projects such as school

building upgrades and repairs.

Disadvantages

The private sector does not have access to funds at the same favorable interest rates as do

local and State governments, which can pledge the full faith and credit of the public to

support the bonds. For Example, Charles County’s AAA bond rating allows low cost

borrowing.

To prevent the private operators from cutting corners, there needs to be extensive

contractual protections and oversight which can be costly when outside legal and

management firms must be consulted. There is no question that the institutional

structures have been established in other countries to procure, award, and manage public

private partnership (P3) contracts; however, they are daunting in their complexity and

demands for expertise.

The threshold size of the program would be about $200 to $500 million to attract private

investment and to make sense for the School District. Not typically used for one school

at a time. The idea of a Consortium of Counties was discussed to get the threshold scale

of the program.

Conclusions

Staff believes it is important for the APF Committee to understand that P3 is a potential tool

available to counties in Maryland. Currently, there is very limited use so the Maryland and even

U.S. experience is limited. The utility for P3 may change if there is a tightening in the County’s

or State’s borrowing market. There may be some utility if the County decides to embark on an

aggressive infrastructure improvement program that exceeds the County’s resources to execute.

Any use of P3 would require a detailed “apples to apples” evaluation to make sure the traditional

school infrastructure funding and delivery approach is not more cost-effective.

72

Appendix 7: Student Yield Factors by Selected Elementary School Districts

73

Computation of Student Yield Factors by Selected Elementary School Districts

School District Housing Type # Units %

Elem.

Students

Student

Yield

Middle

Students

Student

Yield

High

Students

Student

Yield

Diggs ES 23 Apartment 0 0.00 0 0.00 0 0.00 0 0.00

Single Family 2,598 0.86 688 0.26 419 0.16 697 0.27

Townhouse 430 0.14 103 0.24 61 0.14 100 0.23

Mobile Home 8 0.00 4 0.50 0 0.00 2 0.25

Sub Total 3,036 795 - 480 - 799

Weighted Avg. 0.26 0.16 0.26

Brown ES 1 Apartment 469 0.20 69 0.15 24 0.05 27 0.06

Single Family 1,472 0.64 313 0.21 137 0.09 234 0.16

Townhouse 362 0.16 66 0.18 42 0.12 61 0.17

Mobile Home 0 - 0 0.00 0 0.00 0 0.00

Sub Total 2,303 448 203 322

Weighted Avg.

0.19 0.09 0.14

Gail Bailey

ES 3 Apartment 10 0.00 4 0.40 0 0.00 6 0.60

Single Family 2,442 0.98 457 0.19 238 0.10 329 0.13

Townhouse 0 - 0 0.00 0 0.00 0 0.00

Mobile Home 30 0.01 3 0.10 4 0.13 2 0.07

Sub Total 2,482 464 242 337

Weighted Avg.

0.19 0.10 0.14

Mitchell ES 10 Apartment 72 0.02 14 0.19 4 0.06 13 0.18

Condominium 121 0.03 8 0.07 3 0.02 8 0.07

Single Family 3,152 0.86 568 0.18 289 0.09 515 0.16

Townhouse 308 0.08 77 0.25 28 0.09 39 0.13

Mobile Home 4 0.00 3 0.75 0 0.00 1 0.25

Sub Total 3,657 670 324 576

74

Weighted Avg. 0.18 0.09 0.16

Neal ES 24 Apartment 645 0.32 173 0.27 65 0.10 70 0.11

Single Family 1,029 0.51 405 0.39 181 0.18 235 0.23

Townhouse 357 0.18 81 0.23 27 0.08 40 0.11

Mobile Home 0 - 0 0.00 0 0.00 0 0.00

Sub Total 2,031 659 273 345

Weighted Avg.

0.32 0.13 0.17

TC Martin

ES 8 Apartment 22 0.01 2 0.09 2 0.09 1 0.05

Single Family 3,044 0.99 570 0.19 254 0.08 424 0.14

Townhouse 0 - 0 0.00 0 0.00 0 0.00

Mobile Home 15 0.00 0 0.00 0 0.00 1 0.07

Sub Total 3,081 572 256 426

Weighted Avg.

0.19 0.08 0.14

Wade ES 19 Apartment 536 0.18 99 0.18 46 0.09 58 0.11

Single Family 1,683 0.55 429 0.25 248 0.15 333 0.20

Townhouse 818 0.27 215 0.26 103 0.13 154 0.19

Mobile Home 0 - 0 0.00 0 0.00 0 0.00

Sub Total 3,037 743 397 545

Weighted Avg. 0.24 0.13 0.18

Total 19,627 4351 0.22 2175 0.11 3350 0.17

Notes

1. Source: MDP 2011 MD Property View Data and CCPS September 28, 2012 Enrollments

2. Out of zone students counted in student's home zone

3. Students that were with housing code listed as senior housing, motel, or homeless shelter are not counted

Revised 9/23/2013

75

Appendix 8: Adequate Public Facilities Provision for Schools in the St. Charles

PUD

76

Adequate Public Facilities Provision for Schools in the St. Charles PUD

Historically, St. Charles has provided school sites as a form of mitigation for the impact on school capacity.

Most recently St. Charles provided the school sites for Neal Elementary School and St. Charles High School.

For the development of the remaining Villages of Piney Reach and Wooded Glen, St. Charles Community,

LLC has committed to providing schools as noted on the approved Master Plan and as stated below:

“23. The number, type, size, development condition and location of school sites shall be

negotiated with Charles County Public Schools. St. Charles Community, LLC will provide

school sites phased consistently with the demand indicated from the student yield rates by

school level and housing type. Prior to the approval of each preliminary subdivision plan, St.

Charles will provide evidence to Charles County that Charles County Public Schools (CCPS) has

determined that the location and size of the school sites being proffered are sufficient based

on CCPS.”

The granting of annual school allocations began effectively in January of 2006. According to the

Memorandum of Understanding dated July 25, 2005 St. Charles Community, LLC and the County

“determined that the number of school allocations necessary to sustain the continued development of the St.

Charles PUD shall be 300 units per year during the period of time commencing with the issuance of the bonds

and the continuing until such bonds are repaid in full. These 300 units will be used as a current baseline

assumption of the number of units per year as a measure of probable minimum sustained viability when the

County and SCC [St. Charles Community, LLC] meet on or after January 1, 2006 as provided in paragraph 7.b

of the Amended Docket 90 Order.”

Since 2006 the St. Charles PUD has used the allocations as shown below. Note that the number of

allocations has stayed below the 300 allocations granted annually by the County Commissioners.

Year 2006 2007 2008 2009 2010 2011 2012

Number of Allocations

Used

278 252 268 117 65 147 244

Updated 4/24/13

F:\PGMS2\RIM\School APF\School APF Commitee\2012\April 24 (Meeting 4)\APF Provision for School in the St Charles.docx

77

Appendix 9: New School Operating Budget Models

school adequate public facilities program and funding ... · the committee started with a general...

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