Title
Resolution amending the Childcare Impact Fee for the City of South San Francisco.
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WHEREAS, the City Council previously adopted and has kept in effect a Childcare Impact Fee (“Fee”) under the authority of Sections 66000 et seq. of the California Government Code (“Mitigation Fee Act”) that applies to residential and non-residential development projects in the City; and
WHEREAS, the Fee was enacted at chapter 20.310 of the South San Francisco Municipal Code and provides funding to establish new childcare spaces in the City for use by its residents and employees; and
WHEREAS, in August 2020 a study was prepared for the City by the Matrix Consulting Group to analyze the current relationship between new development in the City, the childcare services needed to serve that growth, and the estimated costs of those facilities to provide those childcare services, and to analyze new development’s fair share of childcare infrastructure costs; and
WHEREAS, a copy of the August 2020 study, titled Development Impact Fee Study (“Nexus Study”), is attached hereto as Exhibit A; and
WHEREAS, the Nexus Study estimates that the City will need to create 2,138 additional childcare spaces by 2040 to maintain current childcare services standards in the City and estimates that 1,069 of these needed spaces are expected to be met by traditional childcare facilities funded by the Fee; and
WHEREAS, the Nexus Study further estimates that the total projected cost to create these additional 1,069 childcare spaces is $43.5 million; and
WHEREAS, City wishes to update and amend the existing Childcare Impact Fee to better implement the goals contained in the Nexus Study of maintaining current childcare service levels for City residents and employees; and
WHEREAS, in accordance with Section 66016 of the Mitigation Fee Act, at least ten (10) days prior to the public hearing at which this Resolution was introduced, the Nexus Study was made available to the public for review; and
WHEREAS, the City Council finds as follows:
A. After considering the Nexus Study, the testimony received at the noticed public meeting at which this resolution was considered, the accompanying staff report, the General Plan, the General Plan EIR, and all correspondence received at or prior to the public meeting (the “Record”), the Council approves and adopts the Nexus Study; and the City Council further finds that the future development in the City will generate the need for the childcare infrastructure necessitating adoption of this resolution.
B. The purpose of the Childcare Impact Fee is to finance the creation of new childcare spaces in the City of South San Francisco through construction of new childcare facilities or the expansion of existing facilities, in order to maintain current service levels in light of the increased demand for childcare services caused by development in the City, and for new development to pay its fair and proportional share of such childcare spaces.
C. The Fee collected pursuant to this resolution shall be used to construct new childcare facilities or expand existing facilities identified in the Parks and Recreation Department’s capital improvement plans, or similar facilities consistent with the allowable use of Fee revenue described in the Nexus Study and this resolution.
D. That the City currently provides adequate childcare services within the City; that the Fee will be used to maintain current service levels (based on current service standards) in light of a projected increase in the service population; and that no existing deficiencies have been found to exist by the Nexus Study because the Fee is no greater than new development’s fair and proportionate share of the costs of facilities and equipment necessary to maintain service levels, as shown in the Nexus Study. Additionally, adoption of the Fee has no potential for physical effects on the environment because it involves an adoption of certain fees and/or charges imposed by the City, does not commit the City to any specific project, and said fees and/or charges are applicable to future development projects and/or activities, each of which future projects and/or activities will be fully evaluated in full compliance with the California Environmental Quality Act (“CEQA”) when sufficient physical details regarding said projects and/or activities are available to permit meaningful CEQA review (See CEQA Guidelines, Section 15004(b)(1)). Therefore, approval of the Fee and/or charges is not a “project” for purposes of CEQA, pursuant to CEQA Guidelines, Section 15378(b)(4); and, even if considered a “project” under CEQA, is exempt from CEQA review pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that approval of the Fee and/or charges may have a significant effect on the environment
E. In adopting this resolution, the City Council is exercising its powers under the Mitigation Fee Act, Article XI, §§5 and 7 of the California Constitution, Chapter 5 of Division 1 of the Government Code, commencing with Section 66000, collectively and separately.
F. The Record establishes:
1. That there is a reasonable relationship between the Fee’s use and the type of development for which the Fee is charged because Fee revenue will be used to fund the childcare facilities, or similar infrastructure consistent with the allowable use of Fee revenue described in the Nexus Study and this resolution, which are needed to accommodate new development; and
2. That there is a reasonable relationship between the need for the facilities and the types of development for which the Fee is charged, in that both residential and non-residential development place increased demand on childcare services and infrastructure; and
3. That there is a reasonable relationship between the amount of the Fee and the cost of the facilities, or portion thereof attributable to development, in the City because (1) the Fee is no greater than the existing level of investment in the City’s childcare services infrastructure, and (2) the Fee is calculated based on the proportionate cost to create a childcare space, allocated between residents and employees to reflect the higher demand for services created by residential development; and
4. That the cost estimates set forth in the Nexus Study are reasonable cost estimates in 2020 dollars for constructing the facilities, and the Fees expected to be generated by future development will not exceed the projected costs of constructing the facilities; and
5. The Fees is consistent with the General Plan and, pursuant to Government Code Section 65913.2, the City Council has considered the effects of the Fee with respect to the City’s housing needs as established in the housing element of the General Plan.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of South San Francisco as follows:
1. Childcare Impact Fee Titled
This Fee shall be known as the Childcare Impact Fee and all documents will refer to the Fee by this title.
2. Definitions
A. “Commercial/Retail” shall mean any development constructed or to be constructed on land having a General Plan land use designation or zoning designation for facilities for the purchase or sale of commodities or services and/or the sales, servicing, installation, or repair of such commodities or services and other space uses incidental to these activities. Commercial land uses include but are not limited to: apparel and clothing stores; auto dealers and malls; auto accessories stores; banks and savings and loans; beauty salons; book stores; discount stores and centers; dry cleaners; drug stores; eating and drinking establishments; furniture stores and outlets; general merchandise stores; hardware stores; home furnishings and improvement centers; laundromats; liquor stores; restaurants; service stations; shopping centers; supermarkets; and theaters. “Retail” includes the Commercial land use designation in the General Plan.
B. “Facilities” shall mean the childcare facilities specified in the Parks and Recreation Department’s capital improvement or other plans, the Nexus Study, or similar facilities consistent with the allowable use of Fee revenue. Facilities may include new facilities, expanded existing facilities, or facilities occupying leased commercial space, and facilities operated by the City, South San Francisco Unified School District, or other governmental organizations, or privately operated facilities and family childcare homes (whether new or existing, but not occupying leased commercial space).
C. “Fee” is the Childcare Impact Fee imposed by this resolution and codified in South San Francisco Municipal Code chapter 20.310.
D. “High density” shall mean any residential development with densities ranging from 18.1 to 30.0 units per net acre.
E. “Hotel / Visitor” shall mean a commercial facility containing guestrooms for the temporary use of transients where access to individual units is predominantly by means of common interior or exterior hallways.
F. “Industrial” shall mean shall mean any development constructed or to be constructed on land having a General Plan land use or zoning designation for the manufacture, production, assembly, or processing of consumer goods and/or other space uses incidental to these activities. Industrial land uses include but are not limited to: assembly; concrete and asphalt batching plants; contractors’ storage yards; fabrication; lumber yards; manufacturing; outdoor stockyards and service yards; printing; processing; warehouse and distribution; and wholesale and heavy commercial uses. “Industrial” includes the mixed industrial General Plan land use
designation.
G. “Low Density” shall mean residential development, with densities ranging up to 8 units per net acre.
H. “Medium Density” shall mean residential development, with densities ranging from 8.1 to 18 units per net acre.
I. “Nexus Study” shall mean the August 2020 study prepared for the City by the Matrix Consulting Group titled Development Impact Fee Study and attached hereto as Exhibit A.
J. “Office / Research and Development” or “Office / R&D” shall mean any development constructed or to be constructed on land having a General Plan land use or zoning designation for general business offices, medical or professional offices, administrative or headquarters offices, offices for large wholesaling or manufacturing operations, research and/or development, research and development campus development with ancillary retail and services, and other space uses incidental to these activities. Office land uses include but are not limited to: administrative headquarters; business parks; finance offices; insurance offices; legal offices; medical and health services offices and office buildings; professional and administrative offices; professional associations; real estate offices; research and/or development offices and travel agencies.
3. Purpose
The City Council finds and determines that the City’s childcare services infrastructure must be expanded to accommodate the increased demand in childcare services created by new development projected within South San Francisco. The purpose of the Fee is to finance the necessary facilities to provide these childcare services, which benefit development, and for each new development to pay its fair and proportional share of these improvements.
4. Application of Fee
A. The Fee shall apply to all residential and non-residential developments, except the Fee shall not apply to any development projects undertaken by the City or any public or semi-public development on lands designated Public/Quasi Public, School, and Parks and Recreation on the General Plan Land Use Map.
B. The City Council may waive, at its discretion and upon request by the developer, the application of the Fee for any residential development that targets households earning 120 percent or less of the area median income. Any waiver granted shall only waive that portion of the Fee that is attributable to the housing units that meet the 120 percent threshold.
C. The Fee shall apply to all development projects, as specified, whether consisting of construction of a new building or intensification of use or expansion of an existing building, including a vacant building. An intensification of use occurs when a development project would pay a higher fee under the proposed use compared to the existing permitted use based on the current Fee schedule, as set forth in Exhibit B. Accessory dwelling units added within the existing building footprint are not considered an intensification of use and no Fee will be applied.
D. Any use of land that does not clearly conform to one of the use categories specifically defined in this resolution shall be assigned by the City Manager, or his or her designee, to one of the defined land use categories, as necessary to maintain as much consistency as possible with the definitions of such terms.
E. The Fee shall apply to any non-residential development with an application that is deemed complete on or after the date the Fee goes into effect. The Fee shall apply to any residential development with an application deemed complete on or after January 1, 2022.
5. Amount of Fee
The amount of the Fee shall be as shown in the “Adopted Childcare Impact Fee” column in Table 1, below, which is less than the maximum fee justified in the Nexus Study. The Fee includes a 3.34 percent charge for program administration. The program administration charge may be increased to four percent, but shall be no greater than the cost incurred by the City to administer the Fee program.
Table 1: Childcare Impact Fee (2020 dollars)
|
Land Use |
Maximum Justified Childcare Impact Fee |
Adopted Childcare Impact Fee |
|
Residential |
|
|
|
Low Density |
$5,748 per dwelling unit |
$3,463.48 per dwelling unit |
|
Medium Density |
$5,034 per dwelling unit |
$3,033.16 per dwelling unit |
|
High Density |
$4,285 per dwelling unit |
$2,582.20 per dwelling unit |
|
Non-Residential |
|
|
|
Commercial/Retail |
$0.82 per square foot |
$0.68 per square foot |
|
Hotel/Visitor |
$0.32 per square foot |
$0.25 per square foot |
|
Office/R&D |
$1.49 per square foot |
$1.26 per square foot |
|
Industrial |
$0.50 per square foot |
$0.50 per square foot |
6. Calculation of Fee
The calculation of the Fee due for a development, whether residential or non-residential, shall be based the Fee in effect at the time that payment of the Fee is required. The amount of the Fee due shall be calculated based on the applicable formula in Exhibit B, attached hereto, unless otherwise provided by the Administrative Guidelines issued pursuant to Section 12.
7. Timing of Payment of Fee
A. Non-residential development. The Fee shall be charged and paid for a non-residential development when the building permit is issued for construction of such building or structure.
B. Single family residential development. The Fee shall be charged and paid for any single family residential development (constructed or to be constructed on land with a dwelling unit designed for occupancy by one household and located on a separate lot from any other unit) upon the date of final inspection or issuance of the certificate of occupancy, whichever occurs first. However, if the Fee is to reimburse the City for expenditures previously made, or if the City determines that the Fee will be collected for improvements for which an account has been established and funds appropriated and for which the City has adopted a proposed construction schedule prior to issuance of the building permit for such residential development, then the Fee shall be charged and paid upon issuance of the building permit for such development. With respect to a residential development proposed by a nonprofit housing developer in which at least forty-nine percent of the total units are reserved for occupancy by lower income households (as defined in Health and Safety Code Section 50079.5) at an affordable rent (as defined in Health and Safety Code Section 50053), the payment procedures described in Government Code Section 66007(b)(2)(A)-(B) shall apply.
C. Multi-Family development. For any residential development not included in section B above, the Fee shall be charged and paid for on a lump-sum basis when the first dwelling in the development receives its final inspection or certificate of occupancy, whichever occurs first. However, if the Fee is to reimburse the City for expenditures previously made, or if the City determines that the Fee will be collected for improvements for which an account has been established and funds appropriated and for which the City has adopted a proposed construction schedule prior to issuance of the building permit for such residential development, then the Fee shall be charged and paid upon issuance of the building permit for such development. With respect to a residential development proposed by a nonprofit housing developer in which at least forty-nine percent of the total units are reserved for occupancy by lower income households (as defined in Health and Safety Code Section 50079.5) at an affordable rent (as defined in Health and Safety Code Section 50053), the payment procedures described in Government Code Section 66007(b)(2)(A)-(B) shall apply.
8. Use of Fee Revenue
The revenues raised by payment of the Fee shall be accounted for in a City capital facilities fund. A separate and special account within the fund shall be used to account for revenues, along with any interest earnings on such account. The revenues (and interest) shall be used for the following purposes:
A. To pay for design, engineering, environmental review, permits, right-of-way acquisition, utility relocation, project management, and construction of the Facilities, and the reasonable costs of outside consultant studies related thereto;
B. To reimburse the City for the costs of facilities that otherwise would have been eligible for funding with fee revenue and that were leased or constructed by the City with funds, other than gifts or grants intended by the grantor to be used for childcare facilities, from other sources together with accrued interest;
C. To provide a fee credit and/or reimbursement to developers who have constructed childcare facilities that otherwise would have been eligible for funding with fee revenue where such construction or material is beyond that which would otherwise be required for approval of the proposed development, and based on actual cost of construction or acquisition; and/or
D. To pay for and/or reimburse costs of program development and ongoing administration of the Fee program, including, but not limited to, the cost of studies, legal costs, and other costs of updating the fee.
9. Developer Construction of Improvements
If a developer is required, as a condition of approval of a permit, to construct a childcare Facility that has been designated to be financed with the Fee, then the developer shall receive a credit against the amount of the Fee that otherwise would be levied on the development project. If the cost of the improvement or portion of the improvement as represented in the Fee program, adjusted for inflation, that is the developer’s responsibility is greater than the Fee obligation for the development project, then a reimbursement agreement with the developer shall be offered by the City. The reimbursement amount shall equal the difference between the Fee obligation and the actual cost of the improvement that is the developer’s responsibility. Reimbursements shall be paid only when and to the extent that moneys are available in the Fee fund. Credits must be approved by the City Manager or his or her designee.
10. Periodic Review
The Fee shall be reviewed periodically as indicated below or as provided for in the Administrative Guidelines:
A. Within 180 days following the end of each fiscal year the City Manager, or his or her designee, shall make available to the public information regarding the Fee pursuant to Government Code Section 66006.
B. Pursuant to Government Code Section 66002, the City Council shall annually review, based on the current Capital Improvement Program, the approximate location, size, time of availability and estimates of cost for all Improvements to be financed with the Fee.
C. Pursuant to Government Code Section 66001(d), for the fifth fiscal year following the first deposit into the Fee fund, and every five years thereafter, the City shall make certain findings with respect to that portion of the Fee fund remaining unexpended, whether committed or uncommitted.
11. Automatic Increase in Fees
Unless otherwise indicated by an updated Nexus Study, beginning July 1, 2021 and each July 1 thereafter, the City Manager, or his or her designee, shall adjust the Fee in accordance with the annual percentage increase in the Engineering New Record Construction Cost Index (CCI) for the San Francisco area for the month of May over the same CCI for the month of May of the prior year.
12. Administrative Guidelines
The City Manager may approve and maintain Administrative Guidelines to facilitate implementation of the Fee pursuant to this resolution. Such guidelines must be consistent with the provisions of this resolution and any operative ordinance governing the Fee.
13. Severability
Each component of the Fee and all portions of this resolution are severable. Should any individual component of the Fee or other provision of this resolution be adjudged to be invalid and unenforceable, the remaining provisions shall be and continue to be fully effective, and the Fee shall be fully effective except as to that portion that has been judged to be invalid.
14. Effective Date
This resolution shall become effective immediately and pursuant to Government Code Sections 66017 and 66019, and the Fee shall be effective sixty (60) days from the effective date of the resolution.
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