On January 24, 2018, the State Allocation Board ("SAB") will consider the approval of an increase in the assessment of statutory school facilities fees (Level I School Fees) levied by school districts. The proposed new rates are as a follows: $3.79 per square foot for residential developments and $0.61 per square foot for commercial/industrial developments. These new rates are based on the increase in the Class B construction cost index during the two-year period from January 2016 to January 2018. During this time period, the index increased by 8.78 percent, resulting in a $0.31 increase for residential developments and $0.05 increase for commercial/industrial developments.

Government Code § 65995(b)(3) requires the SAB to increase Level I School Fees every even year "according to the adjustment for inflation set forth in the statewide cost index for class B construction…" In January 2016, the SAB chose the RS Means Construction Cost Index as the most appropriate cost index for construction projects in California for 2016 and future years. The SAB, during its January 24, 2018 meeting, is also considering the adoption of a 4.17 percent increase for the 2018 School Facility Program grants, based on the RS Means Construction Cost Index.

In order to take full advantage of the increase, school districts desiring to adopt the new Level I School Fee rate should follow the necessary steps, including:

  • Development of a fee justification study which properly justifies assessment of school facilities fees at the newly increased rate, or higher;
  • Publication and posting of a notice for a public hearing on the proposed Level I School Fee increase to be held at a regularly scheduled meeting of the school district’s governing board;
  • Mailing of the public notice to any party that has requested, in writing, to receive notice of school fee increase proceedings;
  • Making the school district’s fee justification study available to the public; Adopting a resolution approving the Level I School Fee increase after the required public hearing; and
  • Providing notice of the adopted Level I School Fee increase and school district boundaries to the city and county agencies responsible for the issuance of building permits and/or collection of school facilities fees, as well as the Office of Statewide Health Planning and Development.

New Level I School Fee rates are effective sixty (60) days after a school district’s governing board’s adoption of a fee increase.