Milpitas Unified School District and the City of Milpitas disagree about how residential development plans particularly the Transit Area Specific Plan in south Milpitas will impact local schools, and who should pay for expansion if it is necessary. Studies commissioned by the school district estimate that the total expense needed to accommodate students from a 40 percent increase in Milpitas' housing stock (upward of 10,000 new housing units) would be $145.8 million, not including land costs. The district currently collects developer fees for the Midtown Specific and Transit Area plans where the growth is forecast, but contends that it will be unable to produce the funds necessary for expansion, and that it will require additional mitigation from the city.

The city, however, says it is prohibited from collecting money from builders beyond designated developer fee levels.

"Senate Bill 50, which passed in 1998, prohibits us from mitigating, except for the contribution of development fees," City Manager Tom Williams said.

He said he was taken aback by comments made by the members of Milpitas' Board of Education at their April 8 meeting, implying that the city was not doing enough to help the district deal with impacts from new and proposed housing developments.

"I was disappointed by the school district's handling of the situation. They know what we can and cannot do," Williams said.

A central point of contention between the district and the city involves

legal interpretation of precisely that issue: what the city can and cannot do in regard to collecting funds from developers to provide to the district.

"The district's legal counsel was very careful to say that, in their experiences in other towns, developers can be influenced to mitigate these types of situations," Williams said. "But the development community is well aware of SB 50. If we overstep our boundaries, the city could very well end up in a lawsuit."

Conversely, schools Super-intendent Karl Black said, "The city has the power, without breaking the law, to support us by influencing developers to assist in mitigating our expansion."

Black said that the most pressing priority for the district is the need for a new elementary school in the Transit Area, where an estimated 7,200 housing units are envisioned. Pearl Zanker Elementary School is the closest existing school to the Transit Area, which is close to GreatMall.

A 2006 report by consultants Kinzie & Associates wrote that Zanker is a "very small site" with "limited expansion potential." The district argues that Zanker's limited expansion capacity necessitates a new elementary school to serve Transit Area residents.

According to Black, the district is seeking mitigation for the direct impact from the Transit Area development.

"Do we expect the developers to pay the entire $150 million for expansion? Absolutely not," he said. "What we are asking for is a designated piece of land in the Transit Area for us to build an elementary school, and for reasonable financial mitigation."

Black added, "For the city to give us development fees only is not reasonable. Those funds cannot pay for the land for an elementary school, let alone pay for building it."

"Overstating the problem"

Citing a recent report, Williams said, "The district currently has the capacity to accommodate more students. They are significantly overstating the problem."

Williams calculated that the projected growth of students would equal approximately one new student at every grade level in each district school. However, Black said, "That calculation would be fine if the development was spread out. But the new housing is concentrated in the GreatMall area, so there will be 500 new students in one neighborhood." The district has found success in maintaining elementary schools that specifically serve their surrounding neighborhoods, according to Black. He said that, unless a new school is built in the Transit Area, some Milpitas parents would need to take their children to elementary schools in other areas of the city.

Black contends that, while the district has the physical capacity to absorb more students, expanding enrollment "would not be in the interest of students." He said that enrollment at Milpitas High School would swell to an estimated 3,500 students, and that the middle schools would be forced to house up to 900 students each.

The Kinzie report wrote that Milpitas High already faces "educational and logistical challenges" due to its large student body, and that "further increase in enrollment may render school operations unmanageable and bring a highly undesirable traffic increase to the area."

The district selected a strategy, based on recommendations in the Kinzie report, to accommodate projected growth that includes acquiring land in the Transit Plan area to build a new elementary school; provide Zanker with a larger multi-purpose room and two new classrooms; replace portable classrooms at Anthony Spangler Elementary School with a two-story, 10-classroom building; redevelop Rancho Milpitas Middle School as a second high school serving the southern Milpitas area; and redevelop the former site of Murphy Elementary School which the district currently leases as a middle school for Rancho students.

Developer fees

The school district is currently collecting Level I developer fees from the Transit Area and Midtown Area plans, which allows them to collect $2.97 per-square-foot on residential properties and 47 cents per-square-foot on commercial properties. According to Superintendent Black, those fees cover only one-third of the funds necessary to build a new elementary school.

The district recently applied for permission to levy steeper Level II fees. Williams fears that levying heavier taxes on developers for what he called "existing deficiencies" in the school system could cause problems, as was the case recently in Santa Clara, where developers balked at higher fees.

"I think the city is being used as a scapegoat by the district for their own lack of planning and policy decisions to accommodate their growth over the last 30 years," Williams said.

Other options for additional funds that the district is actively exploring include obtaining monies from the city redevelopment funds, a bond measure, and state facilities funding.

Denying accusations

In a sign of the discord between the city and the district, Williams made two assertions, which Black refuted. Williams claimed that Black told him the district was planning to acquire more portable classrooms to meet state requirement for receiving Level II development fees. Black denied making any such statements, and said, "If we get more portables, it's because of need."

Williams also claimed that Black turned down an offer from developers of the future Fairfield residential development south of state Route 237 to purchase a school bus for the district, and pay the salary and benefits of an additional bus driver for 10 years. Black said that he went to the Fairfield developers and requested they purchase a school bus and pay 10 years of driver salary and benefits an estimated cost between $625,000 and $725,000 and the developers countered with an offer of $50,000, which he declined. "If they had offered me a bus and a driver, I would obviously have gone straight to the board and recommended we take it," Black said.

Toward resolution

Black said he hopes to work out a mutually beneficial solution with the city.

"My hand is out. We want to work together with the city to find a solution where everybody wins," Black said. "The developers will sell more houses because they will have a local school; the citizens will win because of prosperous development; and the school district will win."

Williams called on the district to do more to accommodate the city. "(The city) will continue positive communication in leading the effort to find a solution," Williams said. "I'd like to see the district, instead of pointing fingers, reach out and participate fairly and equitably with the city, and uphold their end of the bargain."