Title
Capital Facilities Fund (School Impact Fee) Annual Report for 2025-26
Finance Office
end
Brief Description:
description
(Capital Facilities Fund [School Impact Fee] Annual Report for 2025-26) Recommends the adoption of the resolution of the Capital Facilities Fund annual accounting report summarizing the fund description and its fiscal year 2026 financial information.
end
Recommendation
Action Proposed:
Adopt the attached resolution (Attachment A) regarding the Capital Facilities Fund Annual Accounting Report (Attachment B) in accordance with Government Code Sections 66000 et esq.
end
Body
Background:
Education Code Section 17620 allows school districts to assess fees on residential and commercial construction within their respective boundaries when a reasonable relationship exists between the need for new or reconstructed school facilities and resident, commercial, and industrial development. These fees are paid by property owners and developers to school districts to mitigate the impact created by new development within a school district’s boundaries on the school facilities.
School impact fees may be used only for the (a) construction and reconstruction of school facilities, (b) costs associated with conducting any study, finding, needs analysis, or determination required as part of the process to adopt the school impact fees, (c) costs for administering the fee, and (d) costs associated with conducting the meeting(s) required for levying a fee. Education Code section 17620 clarifies that the “construction or reconstruction of school facilities” does not encompass: (a) regular maintenance or routine repair of school buildings and facilities, (b) the inspection, sampling, analysis, encapsulation, or removal of asbestos-containing materials except where incidental to school facilities construction or reconstruction, or (c) or deferred maintenance.
Per District policy, once the costs related to administering the school impact fees and fulfilling the required analysis and reporting duties have been subtracted, the adjusted school impact fees shall be used on permissible projects that have already been approved by the Board of Education (Board). If the project includes bond funding, the School Impact Fee amount shall be included in Facilities’ Strategic Execution Plan (SEP).
Attachment C lists the FY26 expenditures for construction and reconstruction of school facilities expenditures on permissible projects that have been approved by the Board and incorporated into the Facilities SEP.
Per Government Code section 66006, a school district that collects school impact fees is obliged to provide an annual financial report of fees collected, including starting and ending balances, collected fee amounts, interest earned, and the amount of expenditures on each public improvement on which fees were expended including the percentage of the project funded with fees.
This report must be submitted within 180 days after the conclusion of each fiscal year (refer to attachments B and C).
Expected Outcomes:
The District shall be in compliance with Government Code Sections 66000 et seq.
Board Options and Consequences:
If the Board adopts the resolution on the annual accounting report, the District will comply with Government Code Sections 66000 et seq.
If the Board does not adopt the resolution, the District will be out of compliance, which could affect its ability to assess school impact fees or require refunds of unspent school impact fee proceeds.
Policy Implications:
In accordance with the School Impact Fees Policy, the Chief Financial Officer is presenting the annual accounting report of the Capital Facilities Fund's beginning and ending balances, fees collected, interest and other income received, expenditures by project and refunds made for fiscal year 2026.
Budget Impact:
None.
Student Impact:
School impact fees assessed upon new residential, commercial, or industrial development projects located within District boundaries are used to provide funds for construction and reconstruction of school facilities to accommodate students generated from new development projects. School impact fees are only allocated to permissible projects that have already been approved by the Board. These projects are incorporated into the Facilities SEP unless the project’s budget does not include local bond funding. Projects funded in full or partially by School Impact Fee revenue, may provide additional capacity to accommodate an increase in students in a certain neighborhood(s) and/or provide reconstructed/modernized school facilities to ensure schools are safe and can be occupied, and that the District can maintain existing facilities levels of service for students, and has facilities in place to accommodate additional students from residential developments.
Equity Impact:
Not applicable.
Issues and Analysis:
None.
Attachments:
Attachment A - Resolution of the Board of Education of Los Angeles Unified School District
Adopting the Annual Accounting Report
Attachment B - Description of the Fund and Financial Information
Attachment C - Detailed Listing of Expenditures
Submitted:
10/22/2026