Fort Mill School District laying out cost numbers, seeks cooperation

jmarks@fortmilltimes.comMarch 24, 2014 

— The Fort Mill School District wants to educate municipalities on the impact of a continuing flurry of new home construction.

Last week, district leaders met with Tega Cay City Council, and on Monday addressed Fort Mill Town Council. York County Council comes next on April 7. They’re showing off a new template that gives specifics on the impact when new homes, apartments or other residential construction arrives.

The hope is that elected officials can use the models to show developers ways of using property that will have a softer impact on the district without cutting into their profits. The models include larger lots for commercial development to apartments that generate a commercial tax base new homes don’t.

“We feel like growth can’t be stopped,” said Patrick White, school board chairman. “We feel like we’ve embraced growth as as a district.”

The template crunches present-day numbers. It assumes 2.69 new people per home which works out to .31 students at an elementary school, .14 students at a middle school and .2 students at a high school. It uses the present cost of building new schools at $29.3 million for elementary, $34.4 million for middle and $106.7 million for high schools.

Also factored are the $2,500 impact fees collected by the district on new construction and taxes collected on homes, $855 annually for a $250,000 home. The template addresses only debt service because, since a 2006 change in state law, operations costs are separate.

How it works

Last month, Fort Mill annexed a Crescent Communities property along Sutton Road that will bring up to 650 new homes. Plugged into the template, the community will bring 423 new students, which will take up 25 percent of an elementary school, 11 percent of a middle school and 7 percent of a high school.

If new schools were built, those students would cost $18.3 million for construction. They would bring in $1.6 million in one-time impact fees, $555,000 in home tax revenue and $175,000 in property tax revenue for $2.35 million in new funding. In a 10-year projection, the debt service cost of educating those new students against the revenue generated by their homes creates a $9.4 million deficit.

The 1,300-home Waterside on the Catawba project the town annexed last year would come up $18.8 million short during 10 years. The template also shows an opposite impact: Recently a York County rezoning to allow more than 100 town homes for Villages at Palmetto near S.C. 160 and Gold Hill Road failed, leaving developers with just more than 30 units allowed. The difference of 70 units equates to a $1.01 million gain for the district during 10 years.

The district estimates there will be 10,000 new homes within its boundaries in the next five or six years, either built or approved for future building. That figure puts the district, according to its calculations, at a $144 million deficit between the debt service cost and the income from those homes during 10 years.

Managing rooftops

Town council members Monday thanked the school board for its work crunching numbers, and for being a driving force behind Fort Mill’s growth as parents choose the area due to local schools. Mayor Danny Funderburk said the town has 6.7 million square feet of nonresidential construction planned which will bring in tax dollars for schools without new students.

“There is some relief coming,” he said.

Yet there’s only so much the town can do to tell landowners or developers where they can’t put homes.

“It’s really not as easy as one might think,” said Councilwoman Guynn Savage. “We’ve begun to look at the legality of, how do you say no?”

Savage said it’s “no secret that one of the major reasons people want to move here is the school district.” She said while the town and district have models for what they’d like to see, so do businesses and residential developers.

“We are attractive to rooftops,” Savage said. “Unfortunately, that’s what people want here. They want to live here.”

Councilman Tom Adams reiterated Monday a point he’s made several times in recent months, that annexing new residential construction can be in the town’s interests when it’s coming regardless. Annexation gives the town some say in what goes in rather than no voice on projects that will impact schools, parks and other town services.

“We find ourselves in a situation where if we leave it alone, it gets built anyway,” Adams said.

Other funding concerns

White said the school district is “very concerned” with its funding situation, much of it resulting from the state’s Act 388 in 2006. The law eliminated school operating tax revenue from owner-occupied homes in favor of a sales tax increase. Second homes and businesses weren’t exempted from the measure, billed as an all-in-one state-wide property tax relief and education funding reform package.

White called Act 388 “fairly devastating.” Fort Mill ranks 77th out of 83 districts statewide in student spending – though it consistently ranks among one of the best performing in S.C. As of fiscal year 2012, the district spent $7,789 per student.

Fort Mill is the only district in the state that charges an impact fee, getting it in place in a window when lawmakers allowed it. White said there was concern among lawmakers that an impact fee would scare off development, leading them to repeal the law – although Fort Mill, the only district collecting the fee at the time, was grandfathered in. Fort Mill hasn’t seen any such reluctance by developers since it started collecting the fee.

“I don’t think growth recognizes that it’s even there,” White said.

An “unintended consequence” of Act 388, he said, is the shift to businesses in paying for operations. So an apartment complex paying a 6 percent commercial tax rate helps the district much more than a new home development of the same number of units.

The district hopes its new template will be a tool for asking developers for larger lot sizes, more commercial land use and perhaps even school site donations. The template will need regular revising as school construction prices or other variables change, White said.

John Marks •  803-831-8166

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