HomeMy WebLinkAbout110921-04.2
STUDY STUDY SESSION MEMORANDUM 4.2
TO: Mayor and Town Council November 9, 2021
SUBJECT: Use of Town-collected Child Care Fees
BACKGROUND
In 1989, the Town adopted an ordinance imposing a development impact fee to assist in
providing child care facilities within the Town. The fee was based on the shortage of
existing facilities and the demand for child care created by new development. The
ordinance provides that the fees (which are placed into a dedicated Child Care Fund)
may be used for any of the following purposes:
• To establish school-age child care facilities on SRVUSD campuses
• To purchase land for development of preschool or school age child care facilities
• To construct or improve child care facilities
Since adoption of the fee, the Town has used accumulated child care funds to: assist Kids
Country in establishing facilities at school district sites; help fund the purchase of
portables for use as teen centers at the three SRVUSD middle schools in Town ; and,
provide a loan to a non-profit child care provider for renovations and improvements to a
newly acquired site for their facility.
DISCUSSION
The Town was recently approached by the owner/operator of a local, non-profit child
care facility in Town inquiring as to whether the child care fund could be used to help
pay for needed renovations of their existing physical facilities. This informal request
prompted Town staff to question how best to use remaining available funds going
forward. While no changes to the ordinance are necessary, direction from the Town
Council on the following issues will help frame policy going forward:
• While the use of the fund to date has been to assist with the acquisition or
construction of new facilities, that purpose appears to have been largely satisfied
and no new funding requests have been received for some time. Between Kids
Country facilities and the Town’s teen centers, there are child care facilities on all
SRVUSD campuses in Town. There are also at least nine existing child care
facilities in Town, outside of home-based child care providers. What many of
Child Care Funds 2 November 9, 2021
these existing facilities are now or will be facing , is the need to
renovate/rehabilitate their existing facilities.
o Question: Should the Town allow the use of the child care fund for
renovation/rehabilitation of existing child care facilities?
• The Town’s prior use of the fund (with the exception of the Town’s purchase of
portables for the teen centers) has involved variations of loans. With the original
loan to Kids Country, the Town agreed to pay the interest on a commercial loan,
with Kids Country paying the principal. In the loan to Valley Parent Preschool,
the Town loaned money to the provider from the child care fund. The provider
was required to make monthly, interest only, payments to the Town with the
stipulation that if they made all payments and continued to operate as a child
care provider for the term of the loan, the payments would be applied towards
the principal. This in effect made it a no interest loan. The Town has never
approved grants from the fund.
o Question: Should the Town continue to use the fund for interest free loans as
opposed to grants?
• The current fund balance in the child care fund is approximately $298,000 and is
unlikely to grow much in coming years. The Town collects a fee of $335 per new
single-family unit, $115 per multi-family unit and $0.25 per square foot of net
leasable commercial/office space. Given the funds that are available, and the
likely need to allocate some funding to upgrade/renovate each of the Town’s three
existing middle school teen centers in the coming years, it would make sense to
limit the amount made available to any given child care provider.
o Question: Should the Town limit the amount of any individual use of the child care
fund and, if so, what would be an appropriate limit?
RECOMMENDATION
Provide direction to Town staff regarding future use of the child care fund. Any policy
decisions can be memorialized in a resolution. Individual disbursement of funds requires
Council action.
Prepared by:
Robert B. Ewing
City Attorney