City Council Report


City Council Meeting: December 16, 2014

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 2013-14.


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 total Child Care Linkage Fee revenues for FY 2013-14 are $281,650.22. Staff will continue to monitor development projects and revenue collection of child care linkage fees.



On December 5, 2006 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. 


For FY 2013-14, the fees were the following:





$133.62/dwelling unit


$6.34/square foot


$4.54/square foot


$3.18/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 January 22, 2013.



In FY 2013-14, $3,013.36 in revenues were collected (fees totaling $1,580.26 and interest totaling $1,433.10) and deposited into Child Care Special Revenue Account 4.365203.  The revenues collected in FY 2013-14 were added to the prior year Special Revenue Account 4.365203 balance of $281,650.22. The ending balance as of June 30, 2014 for Special Revenue Account 4.365203 totaled $284,663.58. 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.


Staff is structuring administrative guidelines and following the municipal code to meet Child Care Linkage Fee Ordinance requirements. 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. The ECEC project will go before Council in 2015 and, at that time, Council will be asked to approve the lease with SMC and to possibly appropriate Child Care Linkage Fee revenues as a contingency. While CIP funds totaling $5,563,000 were budgeted in FY2011-12 for this project, construction costs have increased significantly which may necessitate additional funding as the ECEC is developed.   


Financial Impacts & Budget Actions

There is no immediate financial impact or budget action necessary as a result of the approval of revenue report of the Child Care Linkage Program for the reporting period of  FY 2013-14.


Prepared by: Julie Taren, Senior Administrative Analyst




Forwarded to Council:






Karen Ginsberg


Community and Cultural Services


Rod Gould

City Manager