Developer Impact fees (DIF) are collected to pay for the capital improvements necessary to support the increase in population associated with a development. More people leads to a need for more parks, fire stations, roads, and libraries.
Up until 2022, San Diego collected and spent DIF based on the 52 communities spread across the region. After 2022 the DIF program was reformed under Build Better SD to be city-wide. this allowed for a more equitable distribution of funds. However funds that were collected prior to the change were left behind in the 52 “lockboxes” without solid plans to augment those funds to complete the capital infrastructure projects that were attached to (encumbered) those funds.
California Government Code § 66001(e) states refund is to be made to the then current record owner or owners of the lots or units, as identified on the last equalized assessment roll of the development project or projects on a prorated basis, including any interest accrued thereon.
As stated earlier, there is an issue of how to spend funds that were left behind and a Grand Jury report from 2023 states:
DIF funds often remain unspent since the California Government Code (§66001(a)(3)(4)) governing the collection of these funds restricts them from being spent, or shared, across neighborhood lines – hence they are effectively “locked-up.” Thus, the term “community lockbox” has evolved to euphemistically describe them. For many of these accounts the only activity is the expenses for City staff to “administer” the account.
This large amount of money sitting idle, affects the individual communities for which the funds were collected. Because DIF funds are generally not sufficient to cover the full cost of the infrastructure projects, they may not be initiated or completed in a timely fashion. In most situations projects require additional funds, which typically must be allocated from other sources such as the City’s general fund or other infrastructure funds.
Without the commitment of additional funds, many DIF projects may never materialize resulting in the lack of the promised infrastructure in the affected communities. This effectively deprives communities of the timely benefits the funds were designed to fulfill. Unfortunately, as time passes the cost of every needed project grows and thus the fund balances are always chasing an upwardly moving target.
Bottom line, there is money that can be used to build a library, it just needs the Mayor’s signature.