April 3, 2017

Increase District’s Revenue

Increase the District’s Revenue by Learning How Your City Calculates Square Footage

On a recent project involving the development of a residential apartment building, EH&A associates discovered that the school district was receiving considerably less development fees than they were entitled. The city staff had incorrectly removed the square footage for all internal corridors, stairways, laundry facilities, reception, as well as other shared spaces. Based on the original calculations from the city, the school fees would have been 23{310f4324ad65b0a2030a48dd153b38f905c81f5512720fdadc65be8f0797b958} lower than what they should have been when calculated according to education and government code. School districts are strongly encouraged to understand this calculation to maximize revenue generated in developer fees.

To mitigate the impact of increased enrollment resulting from residential development, school districts in California are authorized to levy school fees (EC 17620; GC 65995). The local planning department’s role is to calculate “the amount of the square footage within the perimeter of a residential structure…” (EC 65995(b)(1)). However, with new staff, lack of understanding of the intent of the statute and process oversight can negatively impact your district in in a lower calculation of the overall square footage. When this happens, the cause is generally that the city has taken the liberty of removing certain non-livable spaces in order to provide a square footage that captures the habitable space. Yet, this is NOT the calculation school districts should use to calculate developer fees. If the city uses a calculation based on “habitable” square footage, this number will likely be less than TOTAL square footage resulting in lower fees for the school district.

EH&A recommends the following:
• First, review your internal process to ensure that it is structured in such a way to maximize the collection of school fees.
• Second, contact the appropriate city office(s) and ask to review their process for providing “the square footage within the perimeter of a residential structure…” to your districts.

For further reading on this topic from a legal perspective, see this opinion from the law firm Bowie, Arneson, Wiles & Giannone, with whom we collaborated on the specific project mentioned in this article. BAW&G News Alert Re Calculation of Square Footage for School Fees – 1.30.17