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SR-12-10-2013-3BCity Council Meeting: December 10, 2013 Agenda Item: -3-B To: Mayor and City Council From: Karen Ginsberg, Director of Community and Cultural Services Subject: Annual Report on the City's Child Care Linkage Program Recommended Action Staff recommends that the City Council receive the Child Care Linkage Program Annual Report for Fiscal Year 2012 -13. Executive Summary In compliance with Santa Monica Municipal Code 9.72.090, this report transmits information regarding the revenue received pursuant to the City's Child Care Linkage Program for the reporting period of FY 2012 -13. The Child Care Linkage Fee revenues for FY 2012 -13 total $215,986. Staff will continue to monitor development projects and revenue collection of child care linkage fees. Background On Decelnlbe_. 5. =006 Council adopted ordinance Chapter 9.72 of the Santa Monica Municipal Code (SMMC) to establish a child care linkage fee program. This fee is intended to address the increased demand for childcare triggered by the development of commercial projects adding floor area of at least 7,500 square feet or multi - family residential projects. Developers can satisfy the ordinance requirements by either paying a fee or by agreeing to participate in the construction or establishment of one or more child care facilities. Child care linkage fees shall be paid by the final inspection date and prior to the issuance of the Certificate of Occupancy. Fees are computed annually on July 1St, increasing by a percentage equal to the Construction Cost Index as published by Engineering News Record. 1 For FY 2012 -13, the fees were the following: Project Fee Residential $133,48 /dwelling unit Office $6.34 /square foot Retail $4.53 /square foot Hotel $3.17 /square foot Following adoption of the ordinance, the City established a Child Care Linkage Fee Reserve Account for the collection of fees to be used to create new child care spaces. The ordinance requires an annual report to City Council within 180 days after the last day of each fiscal year. Since adoption of the ordinance in 2006, Council has received an annual update on Child Care Linkage Fee Program revenues with the first actual receipts realized in FY 2011 -12 as reported to Council on Jw u, iv 2 — 2013. Discussion In FY 2012 -13, fees totaling $215,031 and interest totaling $955 were collected and deposited into Child Care Special Revenue Account 4.365203. The revenues collected in FY 2012 -13 were added to the prior year Special Revenue Account 4.365203 balance of $65,664. The ending balance as of June 30, 2013 for Special Revenue Account 4.365203 totaled $281,650. Staff will continue to closely monitor proposed development projects and revenue collection. Section 9.72.070 of the ordinance specifies that funds collected in the Child Care Linkage Fee Reserve Account shall be restricted to costs related to property acquisition, development and construction of child care facilities within the City of Santa Monica in addition to any administrative costs incurred by the City to manage the reserve account. Eligible expenditures shall not include ongoing operating expenses and general maintenance of child care facilities. W Staff is completing administrative guidelines to expend fees on eligible projects as set forth in Chapter 9.72 of the SMMC. These guidelines will be structured to enable the City to set the criteria and priorities for projects to meet current or emerging community needs. To that end, the Early Childhood Education Center (ECEC), a partnership project between the City and Santa Monica College to be built in the Santa Monica Civic Center, is identified as a priority project for disbursement of funds. Staff will return to Council with specific project recommendations for use of the Child Linkage Fee revenues. Financial Impacts & Budget Actions There is no budget impact resulting from the approval of revenue report of the Child Care Linkage Program for reporting period of FY 2012 -13. Prepared by: Sergio Ramirez, Senior Administrative Analyst Approved: Karen Ginsbergf, Director Community and Cultural W, Forwarded to Council: Rod Gould City Manager