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ELF Financing Strategy San Mateo County ELF Study‐2016 February 21, 2017 Prepared by Brion Economics Team Final Report 15 and people with disabilities; maintaining fire and emergency medical/paramedic response; maintaining preschool, afterschool, and library programs for children and teens; addressing the effects of sea level rise; keeping County parks open; maintaining countywide gang and drug task forces; and providing neighborhood health clinics.12 Developer Impact Fees Counties and cities have the option of adopting developer impact fees to fund infrastructure and public facilities projects, under Government Code 66000 or the Mitigation Fee Act (MFA). Development impact fees are exclusively for capital improvements serving new development to offset the impact of a particular project or new growth, and cannot fund existing deficiencies. Nor can a city charge new development for higher standards than currently exist in a community. In order to adopt a fee, it is necessary to identify the additional capital facilities needed to maintain the current level of service for the applicable improvements. Higher standards of service can be adopted if there is a plan to bring existing development up to that standard. Costs associated with these new capital facilities are calculated and distributed across land use based on expected growth, normally over a 20‐year period, and a developer impact fee is calculated based on projected costs. Developer impact fees are adopted by local decision makers, such as a city council or board of supervisors, before they can be levied on future development projects in a jurisdiction by resolution and ordinance. Two jurisdictions in San Mateo County already assess a child care impact fee to help fund early learning facilities: South San Francisco and the City of San Mateo. This is one way to help local jurisdictions and child care providers offset the capital costs associated with developing licensed child care centers. Developer impact fees may augment other sources of funding as well. South San Francisco Child Care Impact Fee The child care impact fee program was adopted by the City of South San Francisco in 2001, based on a nexus study which identified the need for new and expanded child care facilities in the City.13 The fee includes a 5% administrative fee and is adjusted for inflation periodically. Based on the nexus study, the estimated cost for new and expanded child care facilities was $43.9 million, of which 24.6% or $11.3 million (including the 5% administrative fee) was attributable to new development in the City. The remaining 75.4% of the cost needed to be funded without the impact fee, either through the General Fund, grants, Community Development Block Grants (CDBGs), developer contributions, etc.14 The most recent information available shows that $2.5 million was collected in fees as of June 30, 2016, as well as $670,000 in interest earnings. At that time, only $620,000 had been spent on projects 12 Measure K Initiatives and Expenditures 2013‐2016: http://cmo.smcgov.org/measure‐k‐initiatives‐and‐expenditures‐2013‐2016 Measure K Links and Info: http://cmo.smcgov.org/measureK 13 Brion Economics, Inc., under our former name, Brion & Associates, prepared the nexus study for the City in 2001. 14 See Annual Impact Fee Report 2014‐2015 for the City of South San Francisco for Fiscal Year 2014‐2015. Viewed online at http://www.ssf.net/DocumentCenter/View/12891 on January 17, 2017. 8.C. - Page 34