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Developer Fee Basics

l  A fee on residential and commercial development (e.g. residential additions, new houses or new business facilities)

l  A common source of funding to pay for local facility needs.

l  Fees are collected by the City of Los Angeles or by the District’s Developer Fee Office (for areas outside the City of LA)

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Level 1 Developer Fees

l  Level 1 Fees on residential and commercial development are established by the State Allocation Board every 2 years

l  The SAB adopted a new increase in February 2016: l  Residential - $3.48 per square foot l  Commercial/industrial - $0.56 per square foot

l  A justification study establishing the District’s need for this new rate will be submitted to the Board on May 9

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Level 2 Developer Fees

l  A higher Level 2 Fee may only be assessed when the District meets certain statutorily defined overcrowding/facilities needs

l  The District last assessed a Level 2 Fee in 12-13 and is currently not eligible to assess a Level 2 Fee due to excess facility capacity issues at the elementary level

Fees can be used for:

¢  Construction or reconstruction of school facilities, ¢  Costs associated with conducting a study, finding,

needs analysis or determination required as part of the process to adopt the developer fee, or

¢  Costs for administering the fee, ¢  Costs associated with conducting the meeting(s)

required for levying a fee Ed Code § 17620 Gov. Code § 65995.5, subd. (f) Gov. Code § 66016, subd. (c)

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Fees generally cannot be used for:

¢ The regular maintenance or routine repair of school building facilities,

¢ Asbestos work other than that incidental to regular construction or reconstruction, or

¢ Deferred maintenance

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Next Steps

¢ A justification study establishing the District’s need for the new Level 1 Developer Fee will be submitted to the Board on May 9

¢ New fees will be effective 60 days after Board Adoption

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DEVELOPER FEES

§  Net Collections – $65 million per year

§  Refunding of COPs – $9.5 million per year

§  Amount Available for Projects – $54 million per year

* Based on fees collected for last 4 fiscal years

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§  Amount Received Through 6/30/2016 $652 million

§  Amount Allocated (In Project Funding Strategy) $581 million

§  Amount Not Yet Allocated to Projects $71 million

§  Amount Spent Through 3/31/2017 $496 million

§  89% of the Developer Fees received by Facilities so far has been allocated to projects

DEVELOPER FEES IN FACILITIES SEP

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Ø  Extends reach of Bond Program

Ø  Facilities Division is responsible for allocating Developer Fees to eligible projects

Ø  Fees provided to Facilities Division have been

primarily allocated for projects involving new seat construction and/or school facilities expansion

Ø  Allocated $489 million to new school projects

FUNDING STRATEGY

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Ø Porter Ranch Community School Classroom Addition

Ø International Studies Learning Center Addition

Ø Playa Vista ES Classroom Addition

Ø South Gate MS Portable Removal

Ø South Region HS#8

ACTIVE PROJECTS FUNDED BY DEVELOPER FEES

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Ø  Funding projects that add classroom capacity or reconstruction of an existing school

Ø  The remaining and any additional funds to be received by Facilities will be utilized for:

§  22 Comprehensive Modernization Projects with an estimated project budget of $3 billion §  75% of the scope of work is either new or reconstruction

§  Colfax Elementary School Classroom Addition Project

§  Replacing aging portables with new permanent buildings

MOVING FORWARD

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Ø  Projects that are currently in feasibility studies which may require Developer Fees:

§  Oso Academy of Integrated Arts and Technology

§  Hale/Highlander Academy for Visual and Performing Arts

§  Playa Vista ES Expansion Project

Ø We will never run out of projects to fund with Developer Fees 

MOVING FORWARD

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