Board hears annual and five-year developer fee report; funds earmarked for Fallbrook Union High relocatable and ag improvements

Doug Floyd, representing Coppell and Gruber Public Finance, told the Fallbrook Union High School District Board of Trustees that the meeting packet included the district's annual and five-year developer fee report and that the document had been available for public review since Dec. 20 as required by law.

The report covers developer fees accounted for in Fund 25, which the district collects as one-time, statutory level-1 fees on new residential and commercial construction. Floyd said the report showed a beginning balance for the 2023—24 year of about $3.3 million, roughly $450,000 in fees collected during the year, about $170,000 in interest and investment gains, and about $1.2 million spent on school-facilities projects, leaving an approximate balance of $2.7 million.

The document also contains the district's five-year findings and identifies planned uses for unspent fees: a new relocatable at Fallbrook Union High and facility improvements, including classrooms and restrooms tied to the agricultural program. Floyd said the 2024 reporting changes require districts to report whether projects described in the prior report were commenced; he told trustees the agricultural program project listed in last year's report had in fact commenced.

Floyd explained statutory constraints on developer fees to the board. He said the maximum fee a district may charge is set by state law and that the State Allocation Board may adjust that cap every even-numbered year using a construction-cost index. He added that unified districts may charge up to $5.17 per square foot for residential construction and $0.84 per square foot for commercial/industrial construction and that unified districts must split the residential amount with the elementary district. Floyd said the district's last fee-justification study was prepared in 2016 and that staff is working on an updated justification study that could support a higher fee level.

The district's legal counsel, Dennis Walter Kelly, assisted with the report, Floyd said. Floyd opened the presentation to questions from trustees; the transcript does not record a final motion or vote on the item in the excerpt provided.

Why it matters: developer fees are intended to pay for the additional capacity and facilities that new residential and commercial development creates. Annual availability of the report and the five-year findings are statutory requirements and affect what projects the district can finance from Fund 25.

The board packet included additional supporting detail on fees collected, interest earnings, and expenditures. District staff indicated they will pursue an updated fee-justification study during the year.