Legal limits constrain earmarking developer fees for specific school projects, consultant tells board

Board members asked whether a percentage of developer (capital facilities) fees could be directed to new projects in specific areas. Stephen G of Key Analytics explained that California's Government Code requires any developer fee to be justified in a study and spent in conformance with that study; creating a segregated fee for a single project carries a risk of refund obligations if the project is not completed or is no longer needed within the statutory timeframe.

"If you segregated a portion of the fee for a specific project ... it's highly likely that the district would then have to pursue the reimbursement of those fees from the individuals who paid that fee," Stephen G said, explaining the five‑year project completion standard in many fee contexts and the need to document justification and expenditure timing. He recommended that districts generally maintain a broader basket of eligible capital projects rather than earmarking at collection.

Board members discussed practical options — including phasing expenditures for permitting and environmental studies and clarifying resolutions — and heard that changes to justifications and administrative systems would be required to support any targeted allocation. The consultant also contrasted fee rules with bond authorization rules (Prop 39) where authorized facility lists differ in how they are managed.

No formal policy change was adopted in open session; the briefing served as legal and fiscal context for future board deliberations on developer‑fee allocation and capital planning.