Transit impact fee change will hurt nonprofits

San Francisco’s nonprofit health care, education, museum and housing providers may soon be hit with thousands of dollars in unexpected fees if harmful language is not omitted from pending legislation coming before the Board of Supervisors on Tuesday.

For 30 years, the Transit Impact Development Fee, or TIDF, has been assessed on new commercial development to offset associated costs to The City’s public-transportation systems. Nonprofits have historically been exempt from these fees, in part because it is recognized that the financial burden could reduce services the organizations provide.

The Board of Supervisors is scheduled to renew the fee, which it does every five years by law, at its next meeting.

In a move that will surprise unsuspecting nonprofits, language has been added to the fee update legislation that introduces fundamental policy changes to the program. Among these changes is the elimination of the nonprofit exemption beginning in 2014. This language reflects elements of the Transportation Sustainability Program, which will eventually replace TIDF and is currently undergoing environmental review.

Imposing transit fees on nonprofit providers will be detrimental to the financial stability of organizations already struggling to provide services to those most in need. Elimination of the exemption will hurt nonprofit job creation.

Further, it creates a misguided fiscal policy in which providers with city funding may resort to using funds from one city department to pay fees assessed by another department.

The proposed policy changes are enormously complex and the choice to introduce them now in the fee update legislation, without a thorough and transparent public process, is troubling at best. Most nonprofits that would be impacted have only recently become aware of the policy changes and have not had sufficient time to learn about the implications. Information has been late in coming and lacking in specificity, generating more questions than answers and creating a lack of clarity as to what exactly the board will vote on.

The new Transportation Sustainability Program will go through a robust public process in 2013 before it is adopted as The City’s new transit fee assessment policy. The Chamber of Commerce and Dignity Health join the Hospital Council of Northern and Central California, San Francisco Human Services Network, University of San Francisco, Council of Community Housing Organizations, NICOS Chinese Health Coalition and dozens of other nonprofit organizations urging  Mayor Ed Lee and the supervisors to retain the nonprofit transit fee exemption before it’s too late.

Steve Falk is president and CEO of the San Francisco Chamber of Commerce. Wade Rose is the vice president of Dignity Health.

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