educational facilities developer fee information october 2010

Educational FacilitiesDeveloper Fee Information

October 2010

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FEE BASICS AND TYPES

Allowed by statute (EC 17620; GC 65995)

For new development, renovations, and reconstruction to mitigate impact

Level I & Commercial/IndustrialLevel II -- ”Alternative”Level III

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Level I and Commercial/Industrial

Minimum amount allowed by Statute (EC 17620)Adjusted biannually by SAB (January

2010 for next increase)Fee Justification Study (FJS) required

FEE BASICS AND TYPES(continued)

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Level II – “Alternative”

Increased fees allowable with certain criteria met

Residential onlySchool Facilities Needs Analysis (SFNA)

requiredValid for one year

FEE BASICS AND TYPES(continued)

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Level III

Allowable only if/when SAB finds that funds are no longer available; has

yet to occur.

FEE BASICS AND TYPES(continued)

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Separate account maintained for developer feesAmounts attributable to each fee are segregatedLevel I:

Residential (currently $2.97) Commercial/Industrial (currently $0.47)

Level IIMitigation paymentsCFDs

ACCOUNTING FOR FEES

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REPORTING FREQUENCY

Five (5) Year -- Govt. Code 66001(d)

Annual -- Govt. Code 66006

Fees levied and unexpended in 5th fiscal year following the first

deposit into the developer fee fund and every 5 years thereafter.1988/89 (first deposit)1993/94 (5th fiscal year)1998/99 (5 years thereafter)And every 5 years thereafter

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Per Gov’t Code Section 66001(d)

FIVE-YEAR REPORT

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Report must include findings in regard to the funds that remain unexpended and whether or not such funds are committed or uncommitted to specific school facilities projects. Fees levied and unexpended in 5th fiscal year following the first deposit into the developer fee fund and every 5 years thereafter (which means each year a ‘new dollar’ turns 5, thereby the need for a 5-Year Report annually as well).

FIVE-YEAR REPORT(continued)

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FIVE-YEAR REPORT (continued)

Identify purpose of feeDemonstrate relationship:

fee purposeIdentify anticipated funding sources and amounts to complete financingDesignate approximate dates on which funding is expected to be deposited into account/fundUpdate annually (because each year a dollar turns 5)

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ANNUAL REPORT

Per Govt. Code Section 66006Applies to each account established

to finance public improvements.

Must be made available within 180 days after last day of fiscal year (December 27, 2010).Must be made available 15 days prior to public meeting of governing board to act on Annual Report.

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REPORTING PROCESS

Plan on beginning preparation process no later than October to ensure compliance.

Board must review annual and five–year reports at a regularly scheduled

meeting not less than 15 days after the report is made available to the public.Notice requirements:

Mail notice 15 days before meetingto anyone who filed written

request.

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REPORTS INFORMATION

Fees collection:Description of type of fees collected;Amounts that may be collected;Beginning and ending balances of

accounts and sub-accounts;Total amounts collected and interest earned.

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Project expenditures:Detailed information on each project for which Fees were expended;Percentage actually funded by Responsible Fees for project;Descriptions of any inter-fund transfers or loans;Amount of any refunds made.

REPORTS INFORMATION (continued)

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REPORTS INFORMATION (continued)

Maintenance of records:

Information should be obtained from internal business records;

Separate files of this information should be kept;File should include all relevant information to assist in making required findings.

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Understanding How to Increase Fees

Increase in fees due January 2010 (remained the same as 2008 per State Allocation Board)

Update Fee Justification StudyConduct Public Review PeriodMake available to public 10 days before Public

Hearing.Meet 10-day mailing, posting, and publishing notice requirements.Schedule Public Hearing in mid-February (recommendation).

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Understanding How to Increase Fees (continued)

After the Public Hearing and Governing Board adopts a Resolution Fee Justification

Study, statutory feed do not take effect for 60 days unless urgency resolutions are adopted.Up to two urgency resolutions may be adopted

which provide interim authorization for the adopted fees for 30 days per urgency resolution.

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PROPER EXPENDITURE OF FEES

Section 17620(a)(3) states fees cannot be used for:

Regular maintenanceRoutine repair of facilitiesInspection, sampling, analysis, encapsulation, or removal of asbestos–containing materials

Except where incidental to construction or reconstruction in which the expenditure of fees is not

prohibitedDeferred maintenance

Described in Section 17582

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PROPER EXPENDITURE OF FEES (continued)

Flexibility:

Education Code Section 17620(a)(5) allows paying cost to perform needs analysisDescribed in Govt. Code 65995.6.Allows 3% fees for reimbursement of administrative costs.3% can only be calculated against Level I

Fees collected.Not allowed for Level II or III Fees collected.

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NOTES

If you are considering spending developer fees on something other than the actual allowances noted in Code, it is recommended you discuss the idea with legal counsel.

The Building Industry Association (BIA) is going to begin asking for these

reports in the near future.

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Missed reporting and/or action deadlines

Declining enrollmentFee Justification Study (FJS) or

School Facilities Needs Assessment (SFNA) not updated regularly.Other (any district experiences?)

POTENTIAL BIA AND DEVELOPER CHALLENGES

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Sample reports and templates are available at the Educational

Facility Solutions Group web site:

www.sdcoe.net: Business Services Division – Educational Facility Solutions Group– Developer Fees

AVAILABLE RESOURCES