Developer Fees: a School Lesson in Justification*

Cayucos Elementary and Coast Unified are not in compliance with California Education Code section 17623 as they are operating without a fee splitting agreement since it expired in 2010. It is accurate that the developer fee agreement between Cayucos Elementary and Coast Unified has expired and the parties do not have a current development fee splitting agreement. The districts are very close to completing a successor fee splitting agreement in compliance with Education Code section 17623. The County Office is committed to assisting the school districts resolve this issue.

The fees for development projects in Cayucos might need to be paid to two separate locations since Cayucos Elementary and Coast Unified cannot agree on having the fees collected at a single site. ■ 3350 EDUCATION DRIVE ■ SAN LUIS OBISPO, CA 93401 ■ 805-543-7732 ■ FAX 805-541-1105 San Luis Obispo County Grand Jury Presiding Judge Dodie A. Harman August 20, 2014 I disagree with this finding. My office is offering to assist the parties by collecting developer fees at the County Office of Education. The County Office will not charge the parties to collect developer fees. Coast Unified's proportion of Cayucos developer fees have been expended at

locations other than Coast Union High School in breach of the fee splitting agreement between the school districts, and also it does not meet the reasonable relationship established by the Government Code section 66001(a)(3) between the imposition of the fee on a Cayucos development and the benefit within Coast Unified. I disagree with this finding. The fee splitting agreement does not limit expenditures to the Coast Unified High School only. I will remind Coast Unified to review Government Code section 66001(a)(3). Neither Cayucos Elementary nor Coast Unified have verified their compliance

with Government Code section 66001(d) that mandates five-year audits of the developer fee programs. I partially disagree with this finding. It is my understanding that both school districts provided pertinent information available regarding the imposition and expenditure of developer fees to the Grand Jury. The Grand Jury's analysis is well-taken, and the County Office is available to assist both school districts to ensure a more strict compliance with Government Code section 66001(d). Despite the intent within the justification studies to demonstrate student

enrollment growth, the increased enrollment projected by both districts has not been realized as Cayucos Elementary and Coast Unified school districts have both experienced stagnant or declining enrollment and under capacity of maximum enrollment. I disagree with this finding. The developer fee justification study is based on the increase in residential and commercial space and projected enrollment. The developer fee justification study is not based on actual enrollment. Cayucos Elementary and Coast Unified school districts appear to have properly projected enrollment as required by the Government Code.

The Education or Government Code does not provide for administrative oversight of developer fees beyond their local school board. Therefore, school districts have the authority to act independently with no oversight, especially from the County Office of Education. I agree with this finding. San Luis Obispo County Grand Jury Presiding Judge Dodie A. Harman August 20, 2014 RESPONSE TO GRAND JURY'S RECOMMENDATIONS