New Civic Center Act Regulations Clarify Fee Calculations for Use of School Facilities and Grounds

July 2014

Districts that elect to charge outside entities for their use of school facilities and grounds now have a consistent method to calculate those fees under new regulations to the Civic Center Act that became effective on July 1, 2014. 

By way of background, under the Civic Center Act (Ed. Code, § 38130, et seq.), every public school facility is considered a “civic center,” where citizens, school-community councils and clubs, as well as senior, recreation, education, political, artistic, and other organizations may meet.  A district may grant the use of its facilities and grounds upon certain terms and conditions deemed proper by its governing board and subject to various limitations, requirements, and restrictions set forth in the law.  Additionally, it may impose a charge for the “direct costs” associated with such use. 

In recognition that costs to maintain facilities or grounds are not limited to the operational costs of an entity’s use, the Civic Center Act was amended in 2013 to expand the definition of “direct costs” for which a district’s governing board may charge.  Those costs now include a share of two categories of costs:  operating and maintenance costs (operational direct costs) and maintenance, repair, restoration, and refurbishment costs (capital direct costs) in proportion to an entity’s use.  This expanded definition is effective until January 1, 2020.

The legislature directed the State Board of Education to adopt regulations for use by districts to determine the proportionate share and the specific allowable costs that may be included as direct costs for the use of its facilities or grounds.  The full text of those final regulations may be found here.

Under the new regulations, “direct costs” consist of two categories:  “capital direct costs” and “operational direct costs.”

  • “Capital direct costs” include the estimated costs for maintenance, repair, restoration and refurbishment of the school facilities or grounds used under the Civic Center Act.  “School facilities” are limited to non-classroom space, but may apply to specialty teaching spaces including, as examples, dance studios, music practice or performance spaces and theaters.  Capital direct costs do not apply to classroom-based programs that operate after school hours, such as after school programs, tutoring programs, or child care programs.  Capital direct costs also do not apply to organizations retained by the school or school district to provide instruction or instructional activities to pupils during school hours.   Funds collected by a school district as capital direct costs must be deposited into a special fund that will only be used for capital maintenance, repair, restoration, and refurbishment. 
  • “Operational direct costs” include the estimated costs of supplies, utilities, janitorial services, services of school district employees, and/or contracted workers and salaries and benefits paid to school district employees directly associated with the administration of activities under the Civic Center Act to operate and maintain school facilities or grounds.

The regulations provide a formula for districts to quantify annual capital direct costs and operational direct costs.  Once this is done, another calculation is used to determine an hourly rate for an entity’s use of facilities and grounds based on a ratio of total hours of expected use over the year.  A district may determine this “proportionate share” either for each school site or by categorizing like facilities or grounds (e.g., all high school football fields, all gymnasiums, etc.).

Districts have the flexibility to charge applicants for both categories of direct costs, or for only one - capital or operational.  The formula provided by the regulations calculates the maximum amount a district is authorized to charge for use of its facilities and grounds.  Nothing in the statute or the new rules prohibits districts from charging less than the total amount authorized or from not assessing any fee at all, except districts must charge fair rental value for certain non-charitable entertainment events, and must charge at least direct costs for religious organizations holding services.

If a district elects to charge fees under the Civic Center Act, its governing board is required to adopt a fee schedule that includes the hourly fee for each specific facility and grounds.  The governing board may elect to discount direct cost fees based on the type or category of applicant, including those with tax-exempt status.  All such discounts must be included in the adopted fee schedule. 

Now that districts have official directives for determining fees under the Civic Center Act, those that have Civic Center Act policies and fee schedules should take steps to revise them. Districts with no policies in place might wish to use this opportunity to adopt them based on the new rules.

If you have any questions regarding the new regulations or need assistance in applying the steps to calculate costs for use of school facilities or grounds, please call one of our six offices.

F3 NewsFlash prepared by Kathleen J. McKee, Luke A. Boughen and John W. Norlin.
Kathleen is a Partner in the F3 San Diego office.
Luke is an Associate in the San Diego office.
John is Special Counsel in the F3 San Diego office.

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