HomeMy WebLinkAbout1998-09-02 PACKET 04.D.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
(�iEE71tVG ITE�
DATE 9/2/98 ��
PREPARED BY Administration RVan Schroeder
ORIGINATING DEPARTMENT STAFF AUTHOR
�.���.,.w.<>����.>.�«...�..��.��w.�.>���<�..� „ �
COUNCIL ACTBON REQUEST:
Authorize Fiscal Impact Study Participation
BUDGET IMPLICATION: $ $
BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE
SUPPORTING DOCUMENTS:
� MEMO/�ETTER:
❑ RESO�UTION:
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGAL RECOMMENDATION:
� OTHER: Draft ContracUSupporting Information
ADMINISTRATORS COMMENTS:
c{ � � ✓`t
City Administrator Date
r� z� k� w� x�> x+ a n�� x rr x� s: r� �* � s x s+ a+ w:t tr s� r++t a rt w e�>+��
COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
Memo to: Mayor and City Council
From: Ryan R. Schroeder
Subj.: Fiscal Impact Analysis
Date: August 18, 1998
As Council is aware the Metropolitan Council has determined to undertake a
Regional Fiscai Impact Study. Their format provides for in-depth analysis of
eight communities within the metropolitan area. The entire study work plan
will cost in the neighborhood of $450,000. Cottage Grove has been chosen as
one of the participants contingent upon a local contribution of $10,000. This
contribution level is inciuded in the 1999 budget.
Enclosed for your review is a draft contract between the Met Council and
participant cities. You wili note under paragraph 2(a) the financial participation
is noted for delivery shortly after adoption of the contract. The Met Council,
however, wili agree to a contract amendment that provides for payment by
Cottage Grove during the first quarter of 1999.
Enclosed, please find atl of the information we currently have on this project.
As noted earlier, other cities expected to participate are Minneapolis, Richfield,
Appie Vailey, Coon Rapids, Shakopee and Roseville. It is hoped that St. Paul
will be added to the list but they have not yet committed to the project.
Requested Council action is to authorize entering into the agreement
contingent upon attorney review and approval.
8 _13-1995 5:�2AM FROM �_2
1U�.'i0.l�l.��
REGIONAL FISCA� YMPFICT STUDY
FUNDING AGREEMENT
T�TTS FUNbTNG AGREEME?VT is between the Metrqpolxta�� Council ("Council°) and the
Cify of ("City"�.
WFIEREAS, the Council is w�dertaking a 1Zegional Fiscal Impact Study which will identify and
analyze tlae fasca� zznpaCts o�gzowth and development within the seven-county tzaetropolitan azea
azzd help tkae Couz�cil and otkaer roetrapolitan-area goverrunental units imglement the Councii's
Regroraa/ Growth Strategy; and
WHPI2EAS, the CounciPs governing body authorized its Regional Adsninistrator to execute a
contract with a nationally reeQgnized eonsultant to conduet a Regional Fiscal Impact Study; and
WHET2EAS, the Csty is willing to coritzibufe financial and other resources in support of the
Regional Fiscal Impa;.t Study and is willing to paziicipate as a case study community,
NpW T�IEREFORE, in consideralion of the mutual promises and Cove�iazlts contained in this
Fundin� Agreement, the City and die Council agree as follows:
1. Tlze Cotancil will provide or arrange for sufficient fundzng, sta�z�g and other resources
to complete 211e Regional Fiscal Impact Study in a timely manner. The Council also will hire a
consultant fo oonduct the Regioz�al Piscal Smpacf Study and will coordinate the consultant's
perfozar�ance of the study and the City's participation as a case study commurvty.
2. The City will pazticipate xs a case 5tudy eoxnzzaw�ity in the CounciYs Regional F�iscal
Impact S1udy. As a case study cornmunity the City wiIl:
(a) Provide $ to the Council which �the Councii wi11 use only for the �ui�oses
of funding the Kegional Fisc�l Tmpact Study and defraying the cost of the City's
individual case study, Tk�e City wa�l pxovxde tkae £unding to the Council within fiReen
(15) business days after final execution of this Funding Agreement. [ or r�ccQrding to
some other schedule that meets the Ciry's and the Council's needs ]
(b) Provide reasonable staff time and wzll work with Council staff to develop population,
household and employmrnt forecasts for two growth scenarios for the City, identify
fiscal impact zones within the City, and designate approximately eight (8} land use
prototypes within the City.
(c) In conjunetion with Council sta�', p�oduce a natzative on tl�e foz and Iazad use
assumptions for the City, including the rationale for the choices about fiscal impact
zones and lazxd use prototypes made as the basis for interviews wit1� the cdnsultant.
Page 1 of 2 Pages
�—I� ,yy5 S:��AM �kUM F.3
(d) Make appzopraate City staff and information available to the consultant for in-depth
interviews with the consultant that will focus on level of City services, costs and
revenues.
3. As a case study community azad in exchange for its contributions of financial assistance,
staff time and other resources, the City wi1� zecelve:
(a) A level of service and cost and revenue �aper speci�c to the City;
(b) A fiscal impact re�ort and related analysis specific to the City;
(c) A 1and use prototype fiscal impact results report spec9fic to the City; and
(�� b
(d) An opportunity to participate on the Liaison Cnoup tvhich will function as a reaction
group throughout the Regional Fiscal Impact 3tudy process, help shape the assumgtions
and direction of the study, and r�view tl�e zesults of d�e final report produced by the
consultant.
IN WITNESS WT-IEREO� tk�e Councxi and the City k�ave caused this fiunding Agreement to be
executed b�r their duly authorized representatives. This Funding Agreement is effective on the
date when both parties have signed this Funding Agreement.
M�T220PO�,ITAN COUNCIL CITY QF
:
Title:
Date:
(Signature ofAutho�ized Repnese�:tattv¢)
By: _
Title:
Date:
By: _
Title:
pate:
oJAufhorized Representatii�e)
e�scn�.00c
Page 2 of 2 F¢ges
(Signanire o/'Au[horized RepresenmUve)
Proposed Regional Fiscal Impact Study
(ravised June 22, 1998)
The A�Ietropolitan CounciPs a���roach for determining the fiecal impacts of development in the region is to conduct
detailed etudies of a number of ci[ies and school districts that are at different etages of the development �irocess. The
analysie will e�;ainine the fiscal iinpace of development for ri�+o 2020 growth scenarioe—continued regional trends and the
CounciPe growth strategy—and for a number of land use patterns. The case studies for each communiCy wi11 be used to
determine the marginal costs of providing services for expected growth in the coinmuniry. These resulta �vill then be used
to develo�� a]araer fisca] impact moclel for the region.
A consultant will be expacted to conduct in-depth interviews, gather loca] data, prepare a level of service paper and build
the fiscal impact inodel. Council staff will provide regiona7 data on the forecasts and growth scenaa�ios, as well as help the
con�ultant with land use pa�ttern assum��tions and similar information. The liaison group, described below, will be a
reaction group throughout the process, helping to shape Che asswnptions and direction of the work and to review the
results of tha final report.
Orga��izational Phase:
Establish liaison grou�. The Council ataff will create a liaieon group of organizations inost likely to be affacted by the
results of the study to help staff and consultant with study design and to cntique results along the way. This group ��ould
]lave ]oca] officials, an Association of Metropolitan AQunicipalities representative, counry officials, reZ�resentativas fi�oin
schooi dietricts, special interest representatives, buildersldevelopers and inembers fr�om the Council's °Cost of Growth"
study group that is already meeting with Council staff. Members of this study group include liniversity of Minnesota
faculty, Minnesota Depa�tment of Agri�ulture staff; Minnesotans for an Energy Efficient Economy staff; thz Builders
Association, the Land Sfewardship Project, and the Legislative Commission on t��innesota Resources. Tha initial meeting
wil] include review of the lessens leasned fi�om recent local studies on [he cost of gro�vth. The consultant will provide
technica] support for group (make presentations and/or res��ond to questions)--four �neetings.
SiQn uq communities. The case studp communities will be requirad to p�rovide time and resources for this study and
therefore must agree in advance to work with the consultanY. The incentive for tliem to partici��ate is that they will receive
an indiuidual fiscal analysis for their community. At this step, eight cmnmunities (two central cities, two fully developed
cities, two mamring suburbe and two developing suburbs) and two school districts must be signed up to pa�ticipate in the
study.
Case Study Design:
Develo� �sic assumptions. The study will look at two scenarios—current trends and the Council's adopted Regional
Gr�ox�th Strateg,v. The Council staff has communiry-level population, household and empioyment forecasts for thase two
scenarios, but various land uee categories (residential and cmrunercia]! industa�ia7} must be determined for eaoh of tl�e
seleeted communities and school districts. Finally, nonfiscal impacts (sueh as pollution, housing a�ffordability, crime, eta)
will be studied by the Council staff along with the fiscal impact analysis done by the consulta�nt. The list of nonfiscal
impacts to be etudied will be developed in Yhis atep. The consultant wiil provide teclmical support in determining
employment allocations and land use category assumptions. �
Allocate forecasts to case study communities. Council staff will allocate forecast» to each land use type under both
scenarios far the sample commonities and schoo] districts. Population and household forecasts will be allocated to
residential land use categories, and empioyment forecasts will be alloeated by indushy categories. Case study participants
will be asked to confirm that the allocationa are raasonable, at least for the pur��ose of the study.
Check in with liaison ra oup. Hold aecond meeting witli liaison group to go over scenarios, land use categoriea, case study
communities, �ropoaed nonfiscal iin��act study areas and the allacated foreca�ts. Thie is an important time for outside
input, prioi to the consultant going into the field with assumptions in place. The consultant wiil ��rovide support for tlie
ineeting.
Field Work:
Conduct coinmunirv interviews and t�re»are `9evel of service" papers. The consultant will conduct in-depth intaivie�Ns
with munici}�a�l staff of case study communities and gather data on costa, revenue sourcea and level of eervices provided
The data will include all funded activities that are affected by develo�ment. The data will also include capital costs, as
well as operating and maintena�nce espenses and revenues. The consultant will prepare a tevel of service paper for each
jurisdiction. The communities a�re not being asked to calculate future deinands—the fiscal impact inodel will do this.
Case study communities wi11 be asked to co�rin tha�t die level of service pa�per describes reasonable assumptions about
service levele, costs and revenues and that the data az�e accurate.
Conduct nonfiscal im��act anal,�. Council staff will design and conduct nonfiacal impaet studies in topic areas
determined earlier.
Check in with liaison �up. The consultant wil] review level of service papers with the lia�ison group.
Fiscal Im pact Ytodel Development and Analysis--Case Studies:
Pre��are fisca7 im��act �nodel and fiscal impact Taport. $ased on inteivie�n�s and leval of service paper. In the fiscal impact
report fhe consultant will diecuss the reasons for the annualized expenditures as well as revenues to the communities by
rype of service and by typ� of land use. The revenues will include ail revenue sources, and t11e costs will include bot11
operating aapenses and capital costs. Therefore the cotnmunity will understand the magnitude of any net costs that exist�
for the diffarent land uses under the two a7tematives. Tl�e consultant will present fiscal impact reports to liaison group and
the Metropolitan Council.
Regional F'iscal Impacf Analysis:
Prepare reeional fiscal imnact assessment. Couneil staff will work with the consuttant to apply case study fiscal im�act
findings for ]and use prototypes to communities across the region to estimate overall fiscal impact of growtli scenarios.
Council staff will �n�epare a paper discussing l�olicy implications of finding9. The consultant will provide technical review
offindings and critique ofrecommendations.
Expected Results:
• Level of seivice benchinarks for eacl� type of jurisdiction.
�• Fiscal impact ana7ysis for eaclt sampla eommuniry and both sample scllool districts.
• Fiscal impact analysis of land use prototypes for application on a broader scale.
• Application and analysia of impacts and ��rotorypes to ragion as a whole.
• Analysis of nonfiscal im��acts of growt�h.
• Review of impact of growth development patterns on susta�inable development.
Ho�a� fhe Metropolitan Council Will Use the Results:
The results of the study �Will be used (1) to asaist local governments in analyzing anpacts of local land use deoisione; (2) to
seek a�ppra�riate legislative tools to encourage better planned, cost-effective development; and (3) to inform the Council
as it works with local govermnents en development actions.
The Council will ��ublish and distributa the results of fhe study thiough the media, the CounciPs Data Center and the
Council's ��%eb Pag�. The results ��ill also be coin�nunicated to local government� Airough the Council's Sector
Representative prograin. In addition, staff will uee Yhe information when working with locai governments in reviewing
their comprehensive plans.
One of the Council's important tasks in implementing tile Reglona] GrowCh Stra�tegy is to convey its ideas to local
governments. The Council has daveloped an interaoYive multimedia presentation to communicate its regional growth
management policies and strat�egies regarding community development, density, land use patterns and urban design in the
seven-counry ineh�opoliYan area. The inultiinedia presentation is ueed with local officials, cominuniYy groups and others te
explore iesues of development a�nd redevelopinent. The information contained in the show includes GIS (geographic
information eystein), maps of land use regional system services and facilities, aad land use patterns. Photography and
computer generated pictures az�e used to illustrat�e various planning concepty neeessary for ]ivable com�nunities—for
example, "transit� friendly developmanf," "mixed use," "life-cycic housing" a�nd "environmentally sustainable
development pra�cticee."
The results obtained from tha Cost of Growth study will add fiscai im�act data to this multimedia show and should
provide more persuasive azguments for seeking local government cooperation in planning for more cornpact development.
At fhe ]egislature, there are regular debate, about the causes of urban sprawl, subsidization of suburban davelopment,
redevelopment and reinvestment in the core area, etc. Lep slative posifions are ba�ed, for the inost pa11, on each pereon's
version of "conventional wisdom." The data and results froin this study will be used to add clariYy to these deba[es and
inove the discussion to t1�e more important issues of what to do at�out redevelopinent and reinvestment in the core azeas,
liow to encourage more compact development on the suburban edge, and how the sfate's tax and� fiscal� systeins mi�ht
affect local government and conswner choices.
C�oordination ��ith the liaison group will ensure that representative of affacted ��oups a�nd or�anizatione will all be
exposed Co the same information produced by the study, strengthening a com�non understanding of the issu�s and results.
Regional Fiscal Lnpact Study -- Estimated Costs
Consultant Costs = $425,9p0
(Note: typical fiscal impact study �$40,000 fo $50,000)
Metropolitan Council Staff Costs = $72,200
Metro�olitan Council Printing Costs = $17,800
Regional Fiscal Impact Study -- Projected F+unding Sources for Cmisultant
Metropolitan Council
Tti�in Cities Builder� Association
McKnight Foundafion
Eigl�t cities
Two School Districts
$225,000
$25,000
$50,000
� ?? �
g ???
Fiscal Impact.Analysis -- what cities get for participating
Level of Service and Cost and Revenue Ractor paoer �
In depth interviawe witl� ci'ry departinents to detennine infrasd capacities, capital costs, operating cost, revenue
sources and level of saivicea currently being provided by Yhe city. Paper providey baseline assuinptions drawn from
inte�views on level of services, costs and revenues. Ciry approves these assumpflons before fiscal imF�act work is
undertaken.
Fiscal Analvsis Zones (includin�d�investment analvsis where zonae aa�e not erowin�l
Cities allowed to divide their community into fiacal analysis zones (up to four), essentially geographic subareas.
Allows further refinement in the de�nands for services, availa�ble a�nd excess capacity of capita7 facilities and different
im�acts on costs as cvell as poseibly revenuas. For example, in �linneapolis or St. Paul tlaere might be a�reay where
disinvestment is occuiring and the fiscal analysia zone could show the financia] consequences af not addressing
problems in these az�eas, ae wall as what it might take to address the financial issues there.
Fiscal Impact Report
Each ciry gets an individual fiscal impact report for their coinmunity. It wi11 show the net fiscal impact (revenues lesa
costs) for two twenty year growth acenarios -- continued trends and the Council's Regional Gro��th Strategy (a
strategy that calls for more coin��act devalopinenf over the next twenty years and would add no more than 60,000
additional acres of land with urban se�vices to the develo��ed part of ihe region). The report will give cumulative fiscal
results (2 scenarios, 20 years), annual fiscal results, ca�pital facility needs, major revenue findings, rnajor capital cosfs
findings and major operating expensa findings.
Prototyj�e Fiscal Im�act Result�s
Once tlie overall fiscal impact study is done, the consultant will calculata the fiscal ii�ipacts of different land use
prototypes for fhe individual emnmunities. Each cominuniry inay choose up to 8 land use rypes to be analyz.ed. T11is
allows communifies to anal,yze what kinds of residential and non-reeiaential development they might want to
encourage a�nd fhe impacts of each, The Council is l�a��ticularly interested in looking at low income 1lousing as one of
the protorypes for soma cities.
How this information can be used bv the cities
Planning
Development ycenarios and im}�acts
Effects of demographic & economic changes on [heir cornmuniry
Rezonings
Annexafion
Infrashvcture planning
Leveraging public dellars
Finance/B udget
Capital im}�rovement programming
Fiscal equity anal}�sis
Revenue forecasting
Level of service changes
Cost and revenue changes
Balancing different types of development
Estimating cumulative fiscal effects of development
, y ,�
Ttscru.ex ac
Acsocv�s, INC.
4701 $2ngzm0�e RoeO
Suite N210
6ethestla, MD 2�8i6
(30')320-6900
Fax (301)3244860
60 Annantlale Road
Pasedenz. CA 9� 1�5-14D4
(ai e� �sa�si ro
�� �s�s;?eo c2ss
(B00) 42a-a? t 8
F��SCZI Impact analysis
Gapi�z� f ac�hry AnalyS�s
impact f¢C SyslemS
GtoW�hPo��Cy Plann�09
Fcnnomic anQ Markei Analysis
�' . G
Z. DESCRIP'TION OF P120POSED SERVxCES A.ND PR017T�CTS
1. ualit ConUol. We believe a inajor reason fo� TA's natAOnal reputation for
comprehensive fiscal a�alysis as the qualrty control approach to our work products.
We bring a"deviPs advocate" approach to this assignmcnt. That is, we wi11 evaluate
the information and data zn terms of being snpponable a��d snstaii�able. Another part
of �he quality control consideration is our national exper�ise ia the azeas of financ-iai
analysis and ecoaozs�ics, capital imp:oveinent planning, revenue strategies, land usc,
dcrnographics and growth policy analysis.
2. Technical A roach. There are several fascal impzcc methodologies one could
utili2e. The most common is the average cost-per capita approach, T11e ma,jor
problem with this methodology is that it nlasks timing as well as geographic issues.
For example, if the parks and recreation budget were divided by population ro derive
a pez capita f�gure, this �igure would be applied ro population regardless o:` wk�ere and
wher. the oew housing occurred. Another approach which is sometimes used on a
regional or state basis is a eoinbina[ioz� of tl:e per czpita-a��erage cost app�oach,
se:vice standard multiplier approacta and p:oportional evaluation approach. The
combination of these methodologies can resuit in signifieant d�isrort�ions of the fCSCaI
impacts because of the various disadvantages to che methodologies. A change o£ a.1
factor against 2�number of the service stan3ard factors used could be very influcr.tia!
in �he fiscal findings. A❑ examp�e of the problems with these regional or sta�e
approaches is discussed undcr refercnces.
Ur.der [he case study-maz�gina] cost approac!;, a more rcalistic methodo(ogy, the
a��ailable eapacity of parks would be a�scertained, aatd the nced for a new park would
be forecasted with the resulting cap;tal cost's for land and equipment. Onec open, ttic
pperating expenses would also be incorporated specific to that park. Od1er rel�vant
operatiag eosts would also be noted. Under this approach, the location of 200 homes
in a newiy ope�ed up area of a Ciry could havc z significantly different impact tt�ao if
those 200 humes were in an i[�Fill situation. This czsc study-marginaf cost appz�oach is
more [ime eonsuming and therefoze more cosd}�. As noted further beiow, thc ca5e
study-marginal cost approach will be utilized by TA in this assignment.
II. PROPOSED SERVICES AND PTZ�DL'C'1'S
It is our understanding that there will be eigttt junsdictions and two school disti4cts
inc�uded as pazt of this work effo�t. The challenge oT this scopc of work is to conduct a
reaiistic �'iseal impact assessment using the case study�-marginal cost approach and also
[o be able to utitize the findings to heCp pre�are a regional fiscal impact assessment.
1'he major point of znterest for each jurisdiction is the flscal implieatioz�s uf di�ferent
development scenanos as it affeets that jurisdiction. Unless a cas� study-m<u�;inaf cost
approach i, utilized, it is highly unlik¢ly that the cit}' maoage�, fin�nce direerot' andJor
o,her interested parties wi11 "buy intd` the fi5cal findir,g.�.
MUNiES, FISCFIS & CPIM
Fiscal impatl sytlBmS t2ilored
�.. c `..�._. ... . .�i-. r r �.. . r. O
There e��e several other tasks �uhich will help to translatc ti�ese community/school distnet findings to
xesults that can be �tilized for the regioi�, One [ask is tlle calculation of prorotype fiscal x�esults for
speeific land uses� Unlike the comprehensivc fiscat evaluations conducted for tl�e t�ao scenano,, which
include the interaction of the forecasted residentiaUnonresidential l��d uses, the prototype fisc�] analysis
takes a snap shot o£ what the direct fiseal resu�t is by type of la�;d use. We wil! calcula[e tlie cost for a
single-familv unit as weli as the ocher relevant land uses as discussed la[er.
Another taslc wttich will meet the objec[ives of tbas RFP is ro work with Metrq Councii sraff in
prepazing a regional fisca] impact asscssment. The consultant �eam wi(3 bring iu expertise from
throughout the US and also heip to further interprec the findings of the ten en;ities to de��elop a regional
fiscal impact assessment. Anothec �mportanc [ask is the preparation of a papec on possible
implemei�tation strategies wbach recommends ways in which the va�ious comnluni[ies in the region
might entaance the de�elpp patcems in the Mecro area.
TASK 1 Provide Tec�nicxt Assistance Regatding Scenarios for �:ach Comenunity and/or
School District.
A eriiical first step is to further define che two scenarzos - currenr nends and the Councii's adoptcd
r�giorzal grow�h strategy - in terms of land use cate�;ories. Since the Council st�Aff has communiry levcl
popuiazion, household and employment forecaets, we will reco*rvnend the specific land use categories
tha� sliould be uulized for each of the selected cormnuiuties and school districts. For� example, there ar�
Iikely to be at le�st two residenti2l oatcgories and four nonresidential categories The specifi� land usc
categories are likcly co vary by particu�ar� eommuniry based on their zoningP.and use classification_
I3o���ever aA� effozt wilZ be made [o evaluatc Yairly standard c.,tegorics. As pa�rt� of tl�i.v �a�k�, we w;il
pro�ide technic�l �upport in detennining the employment allocatiocis and land usc ente�oGy
assumptions.
As pari of thfs task, we wi(1 aiso provide input to the �ist of non-fiscal impaets that Cou�cil siaff will
study durina the saaze time frame.
An option for eaeh of the selected communitics and sehool districts wA1l be tq have up ro Tour fiscal
analysis zones or geographic subaseas. The benefit o; having such a fiscal analysis zone (FAZ) is t��
a]low a fuRher refinemen[ in the demands for services, available and excess capacity of capitai facili[ies
and different impacts on costs as we11 �u possibly revenues. For exa�np}e, if St. Pau! is onc of :ne
sample communities, there could be an azea within tkae City where there is disir.vestment. If ao FAZ
reflectcd disinvestmcnt, TA would consider caot only thc loss in revenues witlun that 1=,A7,., but also
increased costs incurled. (TA conducted one of the fxrst disinvestmer.i fiscal xnalyses fvr Little Rockj,
TA will discuss the practicality as well as the desirabiliry of� the specific PAZs witk� Council staff and
those representing the commuaity andlor school distrjct. The land nse assumptions will bc forceasted
for eaeh FAZ. Therefore, it is lilcely ik�at for some �AZs experiencing stagnation or disinvestmene,
there may be decreases in certain types oF land use. '1'he fotec2sts will be for up to 20 yeau s.
WorkPrpduct Memorar2da as Apprapriafe Com�tteruing on !-crnd Use Foreca.cts' t��td Nanative
for the Tivo Sccr�urios.
2
Tiscnier & Assoc�a�es !nc
L�
0
�
�
TASK 2 Attend Liaison Group :Yleeting
We will attend a tiaison �roup mceung in which rhe ��arious scena�iea�, land use cacegories, Cor�casts by
PAZ, and o�her [opics a��e discusses. We will be a resource at the meeting and be available to answer
relevant ques�ion� and expiain various approaches.
CVork Product:
� TASK 3
Ueilities, ati �+e(1 as roads, will be included if appropnaie infu�afior. is a��za;ablc from Ciry sources on
the Ciry costs.
� In tiiis task we wlll interview the community and/or school distnct prvv;ders i[� order to evaluate the
� Ievel of setviee and eost and revenue factars which will be utilized in the analysis. The intent, reflecting
the case study marginai cost approach, will be to ineludc 2�1 general funded activities which will be
� affecte� by dev�elopment It is impoztarit to note tha: TA wtll not be ask�ng the dcpartments to calculatc
the future demands 1 ro 20 years frqm now for each altea�ative. Rather we wi31 in[ervicw thc �
� depa�tment and ascertain relevant faetors and informatio� to utilize O�r fiscal system designed �or
each communitylschool distiiet will then calculate these demands. Our data colleetion wiil include
� capital eosts, operating and maintenanee expenses affected by any capi.al facility chaoges, other
operatiog expei.ses as well as all reveiiues.
Tn oiscussing capital facility needs with the Cllent, we wall utilize one o:`,���o epp:oaches One ap�roacl:
wlll be di:ect entry of eapitzl faciliry information, if it is knou�e ?h,ough ±he CiF' that the facility u�iil be
constn�cted and will �artially or fully serve new growth. A second anproaeh is for our fiscai in;p�e!
sqsten� to calculate ihe need for new capital facililies as a funetion of the axisting available capacity and
the dcrian�s ior scrvice generated by the n�w devclopment.
As par*, of ttus task we an[icipate having some panicipatlo , from Boi;estroo, Rosene, Andexlik and
Assciciates. Theix� engineerang and cost analysis exper�ence znd information rega;dino infras�ruc;ure in
thc Metro Counci] area is extensive. They will assist us regarding this topic as appropriate.
V✓ork Producr
TASK 4
Presentatfon arid Approprioce Supporring Materiai.
Conduct Comnxuniry Levei of Service and Cost ar�d Re��enue Factor Interviews
See Be1ow
Prepare Level of Sez'vace and Cost and Revenue Factor Memocandum
Tkae infonnation coflec[ed through the onsite interviews, as weli as other sources will be described in ttic
Leve� of Sen�ice and Cost and Revenue Factor Memorandum. Given the seaie of some of cirylschoof
district operations, it is likely thaf some operating costs will be semivariable or fixed. Nowever, it i.�
also possible that there may bc "lumpy" capital facilities that necd to be built to serve new growth undcr
some of the altemacives. The clocument wi(1 coniain data assumptions, anpropriate natrative and a flow
chart showing the reiationship to the demand for scrvices. The dreft will be set�i to eact�
coiYUnunicylschool district for its "sign off'. Afrec mutually a�reed changes are made the flnal
memorandum will be issued.
3
Tischler & Associates mc.
��, ��� �. v� �� r.b
Work Prvduct.
Level of Service and Cost ¢nd Revenue Factor Memoranda.
TA5K 5 Meeting,s to Present Level of Service and Cost and Kevenue i� acYOr Memoranda
We anticipate a scries of ineedngs over scvcral consecutive days with the participa:ing
communities/school districts to present the level of service and eost and revenuc factor mcmorandUm to
each en[ity. Tn addition, a presentation will be given to the ]iaison group to review t�he fe�vel of sero;ce
memoranda.
Yt'prk Produci
TA$K 6
Presentation anclAppropr Supporting Materiul in Addition to Memornrufn.
Desigv snd �uz� the Fiscal Impact A�aaysAS Model; Analyze Results
Based on the informauon collecred for this assigntnenC, we wil3 design a fisczl impact modcl fo: each
entity. Wc will input the da<.a and ma the systeni for ehe alternatives_ We «ill then at�alyze the results
for the preparation of the next �asks.
Work Product
TA,S� 7
See Belaw
Prepare Fiscai Impact Report for Each Common9tylSehool District
We Evill prep�ue a fiscal impaet report which describes in suecinct fasMon thc fiscal f�nding, for thc
diffei�ent alternativas. It is anticipated the r�poR will have the following cate_ories-
Executive Su;runarv
Cumuierive Fiscal Results by Altemauve
Annual Fiscal Resuits by A�ternative
Averagc Annual Fiseal lmpact Results by Prototype Fiscal Tr,:pact Results
Capital Pacility Needs By Alternative
Major Revenue Findings
Major Capital Cost Findings
Major Operating Expcnse Findings
Tk�e fiseal report will be a stand-alone doc ument w�ich will be cleazly understood by :il! ir,terested
parties. The analysis will address each of the sccnarios.
Thc fiscai impacc report will present zll of the major findiags and the reasons for the results. Thi� will
ine�ude issues regarding difference� between the aiternatives, staging, impacts on major departments,
and other issues. It will also include a fc�recast of capital improvement facilities as apprapriate for cach
o£ tkze alternatives and ref7ect the cash/debt financing scenarios. Associatec O& M costs wili ai,o be
included since the fiscal system wili reflect the cost of land, equipmcni, other capital itea�is and ther, ;hc
aRnuai eXpCnse�: We wj13 ptepate a dtaft fisCal impact report •cnd subiTlil it .or review to che Metro
Council staff and cotnmunil'ylschool district. Once mutually agreed upon chaztges are �t�adc we will
issue the final repor.
Work Product l%isca( Impact Re�qn
4
Tlschler & Assoc�ates Inc
.. �. ..��.... �.. . , ,.... t'. b
TASK 8 Calculate Qrototype Flscal Impact Results
The previous fiscal impact work will have calculated the demands for servtces and resulting fiscai
consequences of development for all of'the releva��t )and use activitics. It wiCl reffect a true case s�udy-
maz�ginal cost approach. This task will use the infor,nation collected antl caleulate ihe cosu for up to
eigh[ land use cacegories on a"snapshoP' prototype basis. As an exa�nple, if the case study-marginal
cose approach reflected en increase in park eapatzl costs over che foreca�t period of $500,000 znd the
community increased its population by 25,OOD persons, the pez capita cost will be $20 for tkae packs and
reereauon capilal costs. An Appropriate calcu:ation zzaethodology wiil be utzEized for all revenues,
capital costs aztd operating expenses. The methodology will be different in most cases from the per
capita-ave�age cost approach in which tkze cunent rccreation budget wo�ld be divided by current
�opulation to equal the cost per capita,
We wAli �repare the fiscai report on up to eight land use types for each community. This cepon will
discuss the, full cost zilocation for each prqtot�pe land use, (the average sha�e of capical costs operatin�
expenses and AeveG�ues by lasd use typc) and wfll be presented on a per uni[ basis for residentiai and a
square foot basis for nonresidential. Azt Appendix to the repon will contain a brief description of tha
cost and revenue assumptioz�s as utilized and modi"xed from the previous �evel of service and cost'and
t�evenue facroz ;nemorandum.
For each school distnct, we will atilize the appropnatc residential cate�ories.
We will prepare a draft zeport for eaeh communitylschool dis[nct. After mutualiy agreecl chanee, a�e
mxde we wi1': prepare a final repor.
t/Jork Pi'oduct: L.artd Use Prototype Fiscal �esi�lts Report
TASK 9 Assist in rtegional kyscai Im�act Analysis Activities
We will work with the council stafi to app3y tk�e caee study-mazginal cost fiscal impact findings [oeeti�er
vritl� the land use proiotypes for eackz of the eommunities/scl�ool districts t�o the M�tro Council mea�be:,
ir� order to provide a proxy in terms of the ovet'all Fiscril impaet estimates� of both scenaA�ioti. T:�is ls
likely to includc a discussion of the hierarct�y of land uses by rype. We wili provide a technic�l re��iew
of the Council staff oaper discussing poiicy imp;ications of tlie findinas aad will provide a c;itique nf
the rec ommendations.
Work Product: A4emarundu as Appropriate.
TASK lfl Assist in Tteview of No�-fucc+l Impacts of Growih
VJc uc preparcd to providc our cxpertisc in eozr�menting on the council staf;' non imp�ct �tudie.s
in vanous topic ezeas. TA and F'L,&C have worked on several assignmet�ts in which other
considerations besides fiscal results were considered. Tlus team expe-ien�e wall be benef�cial i; this
task.
5
Tischier & Associates, inc
.. � , . � ...... ... . ...�-. , .,., r.
Wnrk Product: Memoranda as Appropriate.
TASK 11 Discuss Possible Implementatiott Strategies
There are over fozty possible impiementation techniGues to tr�anaging growth. Thcsc can take the fonn
of ineentives oc disincentives. They ean Cocus pnmarily on direct financiai components, laz�d u.;c
elements or cambination of these and other faaors. TA arad FL,C wzli be working on this task. F7_C has
been ac�ively involved in the preparation, evaluat9on, selection and impieineniation of various
altemative development scenarios, As such they k�ave expertise ot� the non-fiscal impacts of $1owlh,
including but not limited to, secondacy pk�ysical, environmental, housing, econornic development and
related impact. TA's cutrent u�ork �uith the Middle Rio Grande Council of Gove��ments (MRGCOG)
on evaluating the econornic sustainability issues for the region is one example of the fiim'� studies
focusing on non-fiscal impact issues. We wi11 prepare a draft of the memoranduni on possible
implementation strategies. Aitez m�tually agreed ehanges are made we will issue a fii�al memoran�'un:,
Work Product: Possible Irnptementaiian Slrategies Memofandum.
TASK 12 Presentations of Previous Reports
Aher the eompletAon of the fiscal impact repott, prototype fiscal results, nor-fiseal impacts o.` growth,
and possible implementation su�ategies, we cecomfnerd that presentations be gi�en to the narticiozti�g
communAties, liaison comr.vt;ee and Met�o Council members. �✓e }�avc assumed these presei�[ar�>ns
will occur a maximum of three consecutive days. �
Wor'k Product: Psesentatlans and Appropriate Supporting Material.
There may be other tasks that are �z�utually aorecd upon. These may involve additional pzrticipation h;
the firms alrcady noted. We are willing to work with other firms w�10 havc discus,ed their speci�!ized
experienee with us. For example, Richardson, Riehler and rlssociates, li�c. hav� extens���c experienec
with Metro Council regarding community outreach and �'acilitatioc�
III. PROPOSED PERIQD OF PER�ORMA.�'CE
Based on Previaus discussion with Metso Council staff and the requSred period of perforrzaance, we have
established what we think is a re2listic time fra�ne for perfotxnance. Th�s assumes that we wi11 be ablc
ro begin Task 3, Conduct Commuiuty Level of Serviee and Cost and Revenue Facror interviews, the
first week in September. We a�ticipace }aaving two persons focusing on the c�n cot�imuni;ies/school
districts. Otie would work on the two targe communities and the two sehool dA�iric�s azTd i3i� otheG
would work on the remaining six commuaities. Thfs wi4t enable some consistency atid intercha�i�e to
be aehieved and sti11 meet a reasonabte time period. 7he time chart rnz 1h� nexr pa�,�e lndicutc� tna
,slaging. Thrs time period allows for pdeqculte review of producr.r by the respective clients
6
Tlschier & Associates, inc
U�
C
��
o --
U o
c �
�° o
... �
'o � �
L
p C6 U
d
d � E
�a�
�
c
2
aF�-�s �e �e:sa F�oM:
T0:61245B2297 PAG�:�c
••
. .�
I7ear Reader.
We are pieased to present chis article, which
was excoryted in The Growth Management Reportar
(GMR). GMR i� a newsletter of che non•profit
Growth Managemem Instieute, "...dedicated to
impmving the policy and practice of growth
managemmP'. For informadon about the Ineutute
ories newsletter, cali 301-6569560,
`:�.TA is a fiscai, economic and planning consulting ,,
fum specializing in: ��
�� �
f . ,,y, ° r w'���
• Fie"caJ Impact Analysis � � h ' �� �'�
Impect Focs r -' � i
;`-; .: •
±�CzpitaJ Improvement Programs : o, ',j�".
t�Re�enue S�rategfes � ;,; ",-
�'Meiket and Beono:ttic Feasibility � `"�' � t
«¢ �v '�
� Gtowth Policy Studies _ , r; F,.,
j „ ES, FLSCALS � CRTM Softwam + , L�
��.�. , , � Y { k �,�t� k �
i' r��'s f S�$�� i171p0.tt C0713U1CiTlg GCQCrienCE 16'r ?*�"' �"�� w
� ��` } urpassed. ,T,J+ hss�conducted over 200 Ssce+l.. *' ��� ;
act smdies ,for cououes'citiea, rowns, viltRge `;' S :°
kc�tiool Ciatncts and developers. ;These fucat `�lpect�;,; r �
studies have focused ondChe msigina] cost-ceses4td�;`*<
sppioach, versti�a tho averagc cou•per capita approacti�' .
�.,
M . : i, �:
' TA has the most cumprehensive, }lexible ecd ;" ,`i,'
witlely used fiscal impect systems in the counuy.�'«
3basa aystems, MUNffiS. FLSCALS and CR�l�.aie�t: ;;,;';�
�,. ,
tailored for the specific jwisqiction. Paul S. T'.iectaer; ,>.;,-
ttie author of Uie article, 6av ovcr 25 yeus of islevant ,;�'�
eon9u]ting ezperience. '
�,a,:a�.�.. , . .. _. ...
`:' Clients for whom 7A hu coaducted fiscal
` s'riidles include (paniat liering):'
• King Counry, wA
• Post Falls, ID
� Stqa ofidxho
• Pasad�na, CA
• Chino Hills, CA
• Pima County, A2
• Phocnix, AZ
• Albuquerque, NM
• Cnstle Rock. CO
• Linooln, NE
• Plymouth, MN
• Kenoshe, WI
• St. Lnuis, MI
� Little Rock, AK
� Nqga Head, NC
• Douglas County, GA
• Hillsborough, Counry, Fl,
• Venice, FL
• Faitfa�c County, vA
• Chesapeake, VA
• Saltimore County, MD
• Wtstminster, MD
• Lancaster Counry, PA
• H�mps�ead, NY
• Graton, CT
• Newtoo Crnrer, MA
Please ca11 T4 at 800/a2a-4318 to obmin funher
infurmutiun ur co discuss TA's fiscpl impact
eva�uenons, impac� fee, and other consulung servicec.
t ,��:
... �.
� +... ,�
�I5CAL IMPACT ANALYSLS,
READER BEWARE:
SOME �VEATS
By Paul S. Tischler
mce comprehensiv� plans need to have fiscal
reality to be implemented, this arsicle discusses
some important assumptions which can dramatically
affeet the fiscal impact (net surpluses or deficits)
of development un the public sector.
METHODOLOGICAL APPROACH
❑e very impnrtant ;�ssumption is obviowly the
methodologicnl approach, The two main
approaches aze the average cost•per capita agproach
and the case studymazginal cost approaeh. Fire
service is a simpte compatison. The per capi�a apprnach
might divide the [otal fire budgec by populadon and
obtain a per capica amount. The fisca! impact would
De the sazne regazdless of the location and amir,g of
housing The c�re srody-marginal cost approach
involves more extensive on-site interviews. tiew
Comprehensive Plans should have fiscal reality
to be implemented.
population residang in new housing in e contiguous
or infiil simation could have no marginai cost impact
on fire facilities. However, the same housing in a
leepfrog situation could necessitate a new fire stauon
and the assqciated operating expenses. This is a
more accurace portrayal than the per capita approach.
When Howard County. Marytand, located becween
Baltimore and Washington, began dtafting its new
Genetal Plan, TA was retained to evalnate a
number of different land use scenarios. TA used
the case study-marg�nal cost epproach. The
The case study-marginal eost opproach is likel�
to rejlecl gteater fescal reality than the aver¢ge
cos!-per capita approach.
Cnun{y was diwded into five geographic areas to
reflect different demographic eharacteristics,
(con�inueA nn nesr pogel
FFR-15 98 10:51 FROM:
TD:6124582897 P���;�3
capital facility capecities and other ronsider$lions.
Subsequently. the Maryland OfPce of Planning
•(OP) proposed .tatcwide latid u+e crt�gorie> Por
local gov�rnments, as part of grnwth management
legislation. Their proposal utilized a swtewide fisCa)
analysis using an average cost approach.
As compared to Noward's General Pian", OP
prUjections assumed fewer large-lot, single family
dwelling units in the rural western part of the
County. Convercely, OP assumed more townhouse,
multifamily, and higher clensuy single family units
in the more urbanized eastern Counry. This was
con5isrent with the proposed state grow(n manage-
ment sysrem, which sought to encourage higher
density land uses for both residential and non-
residential development.
Subsequendy, TA compared the fiscal results ro
Howazd Coun�y using OP's projections, versus the
pro}�etions f'rom the General Plan. The fiscal results
genereted by the two scty of projections were very
different. Although costs ro the Counry were
greater under thc General Plan projections, revenues
were also higher. The Generai Plan projections
resulted in net revenues Uver $17$ milli0n greater
chan under the OP projeccions for the 20 years.
These results are contrary ro what was suggested in
the OP analysis study using the average cost•per
capite approach.
DEMOGRAPHIC CAVEATS
ne of the mosi important OP assumptions
regarded household size. 7'he OP projactions
decreased the supply of single family detached units
in Huward Counry, and increased ehe supply of
townhouses. In realiry, with a limited supply uf
single family units. consumers would become
interested in buyin� larger than a�erage townhouses.
Homebuilders would tfien begin to supply such
uni�s. The average hqusehold size for townhouse
units probably would increase.
OP, however, assumed that the larger !'amilies
typically found in single famiiy dwellings would
mov� outside H��aard ro otherjurisdictions with
° 7he Gencral Piun won ihe Americun Y'i�nninp Asxocimion
nutionai �ward 1'or brsi cumprehen.rive pl;�n, The Gcnctnl Plan
and TA's fiac�i �nulysis werr alsu Icawrcd in Iht fitrl AICP
Plunncr'r Caccbc�ok pu6lishctl in 199�.
bttter supplies of units. They also acsumed that the
increa+ed number of townhouse units in Noward
would cpntinue to have the smaller househoid size
Constraints on the housing market witt a,�'ect
houeehold size, raarkel values of new unUs,
and other key demographic vuriahles
essential to fiscal anafysis.
usuaJly asspciated with such uni[s. The resul! was
Iower projecced population, ftwer sch0olchildren,
and lower co5ts using the OP assumptions.
The ca�eat here is that constraints on the housing
marke� will affect household size, market values of
new units, and other key demographic vatiables
essential to fisca] analysis.
i�1ARKET AND L�'COME CAVEATS
he OP assumptions limited [he supply of
housing but did not assume increased market
values of units. In rCality, with a limited suppty but
steady demand, mazket values for all types of units
would inerea5e. Households unabte to buy single
family units would pay more for larger townhouses.
Households unabte to buy townhouses wouid pay
more for multi-family units. Assuming �igher
market values, average household income by rype of
unit would also inerease. Tncreased househpld income
wiil affect lota! revenues, such as Maryland's loca]
income tax ("piggybuked° on the State income wc.)
Within the Countywide housing market, subareas
might be affected differently by changes in densiry.
Foz example, if one subazea received a concentra-
tion of townhouse and multifamily units, market
velues in that subsrea might decrease. Such varis-
tions are more likely to be captured in a case study-
marginal cost fiscal analysis than in an average
co5t•per capita study.
FISCAL IMPACTS VERSUS
"COSTS OF GROWTH"
A number of studies have fo<used on che "eosts"
of growth. $eginning with "The Costs of
Sprawl" in 1974, these studies have shown that lower
densiry development wi)I generate greater costs for
infrastrucwre. While that may be generally vue, [here
are s4me notable exceptions. For eznmple, the OP
APR-15 9H 10:51 FR�M.
T0:6I245828°7 PRGE:�4
scatrwide scudy a.ssumes chat the cost of adding to
mfrnstructure in suburban counties wi11 be less ihan
estending infrasvucturc to exurban and ru�ui coun-
ties. In reality, the results could be the opposite. For
example, to expand utilities and roads in an urban-
ized settjng coufd be prohibitively cosdy. Two
examples of this are ins�alling entire new uciliry lines
The capacity and obrlity oJesisting
infrastructure to expand is qddressed in
a ccue study-marginal cost fucal anatysis.
�n an urbanized azea which does not have ezisting
capaciry, and adding a significant number of uips to
roads which cannot be expanded because of a lack of
nght of way. 7'hC Capacity 6nd ability of existing
infrastructure to expand is addtessed in a case swdy-
marginai cust tiscal analysis.
In addition to capital epsts, there are two other
parts of the fiscal impact equation. One is operating
costs. In general operacing costs will vary as a
functioo of demographic chazacteristics such as
number pf residents and schoolchildren. Operating
eosts associated with capital faeilities may also be
higher in che case of an expansion of eziscing
infrastructure. A new facility may be rnore efficient
and therefore less expensi�e to operate. Again, a
case study fiscal analysis should capmre this differ-
ence in operacing costs.
The third part of the f�scal impact eGuation is
revenues. Because lower densiry singIp family
housing has the highest market values, this rype of
deveJopment generates higher property tax rovenucs
to local governmenL One•time fees such as transfer
tazes are also higher. Finnlly, higher market values
Even thaugh lower de►rsity develppment
+nay have greater eos�s, u may have
higher net revenues...
are associated with higher household incomes This
resuits in higher revenues from income taxcs, sales
ta�ces, and other loca! rev��ues. Therefore, even
though lower density development may require
greater infrasWCmre and other costs, its hlgher reve-
nues may result in more favorable fiscal results ihan
higher densicy residentiai development.
For nonresidenuat development, higher value
ofFice and related acnvities still tend [o be located in
the more dense sreas of a jurisdiction. However, this
...these faetors are tikety to r¢sutt in more
quality nonresidential development tocating
in lower density oreas.
may change due to a number of factors such as
telecommu6ng, desire to reduce travel time to work,
effotts ro improve air quatity, need ro be neaz
child�aze, and time pressures on fazrulies wich two
working paeents. These factors are likely to result in
an increasad tendency for Guality nonrasidential
development to locate in lower dtnsity areas. This
will tend to increas� nonresidential market values in
the lower densiry areas, resulting in more posl[ive
fiscal impac�s Iherc.
(conrinued on nexe pageJ
�-------------------------------------------�
i I� Tischler and Associates, Inc CALL TOLL FREE (800) 424�4318 �
� PIe85C SE(Id thC f0110wip�; 4101 Sangamorc Roed, Sui� N110 139 South Orange Dnvc �
� Beehesda, MD 20B 16 Los Angeles, CA 90036 I
' U Recem TA Fiscal & Economic Newsl�uers (301) 3?a69W • FAX (301) 32D•4860 (113) 935-2350 � FAX (?; 3) 935�047
I Wormation about TA Consuiting Services: �
' p Fiscai lmpacc Analysis �
I 0 Impaci Feec �
� Cepitai Impravemrni Programs N•me �
� � Revenue Stretegies �
� O Growth Pol;cy Studie� T���O �6���Y TelepAone� �
� G Dcvclopmeat Economics �
I 0 Markoi Analysi� S�m� (
� 0 Other i
� 0 WartrlenOn eboui Ml1NIES, FISCALS, & CRlM CkY Sute 21P �
�------------------------------------R----____1
A��-;s �e ie:sz FROM:
To:6iza5eeeg� Pa��:es
CONCLUSIDNS
he Above di.acussiun has highlighted the
d�,fer�nce between calculating only costc and
calculating the net fiscal impacts of new devel-
opment (revenues min�s costs). Another important
caveat is the need to understand key demographic
assumptions; the analyst should make sure ihat these
assumptio�s are reasonable and reflect reality.
Finally, the Howard Counry example shows the
impoRance of reelistic assumpuons to the bottom line
tiscal results. Readers of fiscal studies should seek to
understand the detai) supporting summary findings.
The reader should note that TA does not advocate
"sprawl" at the expenst of open space. In fact, we
Fiscat impact analysis of comprehensive plan
alternatives should be evaluated at the
beginning, not lhe end of the platt process.
recently oumpteted tt study for the Lancactet
Counry, Pennsylvania Planning Commission, in
which we found that opett space provided greater
fiscal beneYics than residentia,l development.
We do advocate a Ihorough fiscal analysis to
compare land uae al�ematives. For exampie,
junsdictions shoutd evaivare the fiscal impact of
different comprehensive plan altematives prinr to
devdoping the plan. Thic wi11 enable p�anners to
determine if land use, staging and locacion assump-
tionS generete net revcnues or net costs to the
jurisdiction. In other word$, fisca! impuct analysis
of comprehensive plan alternaeives should be
evaluated a� chc beginning, no� che end of the
plan process.
Fiscal analysis early in the planning proces's can
also address objectives such asincreasing levels of
service for cultural and recreation facilities. Costs
for more libraries, higher pazk standards, or more
opcn space, can be estimated and discussed in public
forums. TA believe5 ehat informed discussion can
resutt in iess polarized debate and more racionai
decisionsin orderco achieve such objeceives.
A repnne from: The Gruwrh Managemenr Reponrr
"Fisesl Impact Analysis, Reader Beware, ,
Some Caveets" �
�
i� Tischler &
Associates, Inc.
47pi Sengamom Rood.Sui�e N?10 139 South Orange Dmc
Bethesda. MD :0816 Loc Ange)es, CA 90036
Providing Solutions for Growth
• Fiscai lmpaci Anely,is
• lmpact Fccs
• Capiial Imp:ovemeni Progrums
. Rtvunue $lratepiet
• Markt� & HCOnomir Ftesibi(iry
• Gmv.�th PolieV Smdies
$00-424-431 8
� MUMES
• FISCALS
� CRIM
� ClPS
BUi„}C RATE
li.5, � GE
PERMIT #if08
A1F.XA1v�RiA, V,4
APR-15 98 10:52 FRCM:
.�
� ■ '
�
Deer Reader: .X
�,
We are pleaeed to Presenr this occerpt from the MI�
Rtport which wea ru�hored by paul S, TLc1�ta;
principa2 of Tixts�er & A�eociatne, inc, (TA), TA u f
flacal, ecanomit- and . plannitiH conaulting Am
speda�liing in R8Ca1 liYipact eMl te�BtOd �C�DtfOTYilC
analyeie, Sevdies Include flacal uinlyeig, Capital faclllty'
forecasang, revenue ectategies tnd lmpect fee attalyeti;
In rt�ny we.e, TA ueca tha MtJNIES or FISGAI.S
fiscal eysoem and piousa eailoced �or each jurtediaion)
For morc informadoa, or tp rcceye n�u TA PLcd� 6r-
Economic Newelqcters, p(ease conaa us wll-fiee u
(800) 424-4318. ;:°,
MIS Reporra eee publiahexi monchly by the Ma�vgemenR
tnfocrosNon Srrvice, Inmrnariona! C3ry MaeugemonE`
Aseoclaeon, 1120 G St�et, N.W., W�ehington, p,C.
20pp5. C,opyri¢h4 m 198$ by the lnternadoewl pty
Managemen� Aawciation. No pvc of �2su e�mct emy be;;
reproducad wichout permiesio� of ehe wpyrl�l,c owner.
'I�+ae repo�ta are tnanded primarily co provide timoty
tnformacton on �ubjeaa of peaceicd inxreac ro loal
goveenment odminiatrerora, dep�rtment hads, btu�pet
and reaurch analysrs, ndmisilscsaeive aaeutanu, �nd
ochece reaponaible for and cooeerned wich opennonal
aapects of lac�( government.
M1S Repo�en are Issued w p�r� of q eubreetprion eerWce
.vailable m eil locel goverc+arscnn. A oubcnpdon ro che
R�4a�ugtment lnformadon Service indudm unllmi�d acme
to the MIS lnqulry $erv{ce---},aelced up by ehe ICMA
aumrtuted daa baee; che MIS Buliecin; lnfo Packeca; and
othee publieac{ons.
T0:6124582897 PRGE:06
�'::. �".�" �•
$ � '�� � _
� '� ..:i�: � 1 1 �
ANALYZtNG
THE FISCAI, IMPACT
C3F DEVELOPMENT
oat stntes require local
governments to prepare a balanced
budger on an annual basis. However, moat
scates do not require chat jurisdictions
conduct fiscal impact evaluntions to heip
enaure tha�local officials underscand the
short• and long-term fiecal effects of land.
use and development policies and of new
develppments thac are approved. A fiscal
impact analyeie darifies the financial
effects of such policies and praccicca by
proje�ting net caeh flow to the public
sector resulting from residential and non-
rcaidon[ial developmeat. SuCh an analysis
can enablo local governments to eddress a
numbes of short� and long-eerm planning,
budget, and finance issues.
This report discusses ehe benefies of
fieaf impact an¢lysie and reviews
eommon methodologies used to collect
and analyae information. Five caee studies
are provided to illuatrate how fiecal
impact analysis can be used in differen[
situacions. The eeport cancludes by
cecommending an approach fot con.
ducting Fiscal impact evaluations.
Reprintcd wlth pam�ion of LCMA
RrK-�s �e ie:sz F�oM:
Anclyzing the Fiscal lmpccf
of Development
DEFINING PISCAL IMPACT ANALY515
A Rsca1 impact analysia projeae che nec cash EloW co rhe
public srccor (she local governmenc and, in many cases, che
xhool dietritt) resuiting kom new dwdopmenc —
raidennal, commerctal, induscriai, or ocher. lc w sunibr co
the cash tlow qnatysis a developet conducta in oeda ro
projea cosm and revenuts li�ely m result ftom a propo6ed
dcwelopmmt for cwo co mn yeua in rhe futuee,
� A fiacal impact analyeia proje�cta the
net cseh flow to the pubiic aeetor
The dynamic.9 of fiscai impncc ue shown in F�chibi� 1.
In ewluacing The cosu assc�ci�ctd with providing she
acceppble levels oF service, c}tt local govtrcunent should
consider eniating unuaed capadde of public eervica and
progtams, espcciallY of capltal fncilldev. Yhe new
developmenc, or new demand, wtlt be oxpressed in oerms of
changee in population, employmenc, or l�nd uae projeaed
co result from dtie scenarios bnag evalusted.
Slnce q fiscal amtysis v,�ill indicate whaher and w�en a
jurisdiccion could fue deficit budgas, �he local govertunent
is able so weigh land•uce policy dedaioc�, accepoble levels
of service, plana for cepiral invesunen[a, wnd tong.arm
bozrowing ne«is. 1n addiHon, a pmjeaed itecal deflcit cnn
prompc local officule co ewlwm current rnd Futurc
revenut wutca, Even if a ftaea! rn(twtion ltdicatea o
surplua, the lacal aovernment may wieh ro change ita uoe of
revenue soutces Co fund inEtaett�ctvee tepls�ement ot
hieher tevele of Bcrvice.
The gaal. . ie to forewa all relevant
opentinQ e:penaes, capiral cqt�, snd
rerenuee
Fiscal impacc analysis idenafia che ircreasee in tnnud
end cumulative eYpetuee for al! setv{etv that will �esult
from oew development. 'fhia includ� annwi opentie�
expenees (including new staff ntedai per ye�r) and capital
axP��au sesocumd with conanuctin$ or cxpanding
faclines. The fixal impatt antemtnt cm alao aummariu
the jucudiecfon's bonded dobr, ire bdndln�{ capaciry as a
perccnnge of che �ncreaee in rhe tax broe; che Ircreaae in ihe
mx b�ae; and ehe Fiecu7 tueplua or deRcie when Qenera!
tevenuea are appUed ag�lrue Yhe net of all apecipl tevenurs
and e�rycn�s aawciattd wteh rhe dweloFmenc.
T0:6124582297 PaGE:e?
Pad S. Tischler, Are�M�t oJ TucAla fir Aaractato,
tnc., auihorod thia tepon. Tixhle and Asta•v+rl,
IM., u a setheula, rvta,ym�d ca,,,u4,� hn„
spaiafiar� in jird imE�cr ard *dared e�onamic
anal7ru� �Y+r�! p*o4�ammir�q� md faertur anoxgits.
TTi�e f�'*m dex(opei nnd we.i a PCbarat fiuul irr�ux
softwsre package eirh¢r y MI1?.rIES or flSCAIS.
M.. TucA(a has a$,A. in aror�amtp md an M.H.A.
in iazt atate and ur�m� dn�eioprnerit. He kRwro and
witea on fi,tca! impcux analy.+i+ and related wpiq.
EXMIBiT 1— The dynomlc� ot flscai imooct
Chonpesln
lond use
oemograpnica
Service �qvels
Cos�t/Revanues etc
c
0
a
`
E
E
$
c9
�
Cnanpes in
PUbIIC S6NIC8
Demanes
ChO��esin
FYpentlitures
FISCAL
S
lMPACT
SOUro9: 11scN6r � Ps�oclatee, Inc�
Cnongesi�
Revenue
Sources
C�cngesln
�+evenuea
MPUGAT10N5 FOR FISCAL IMPqCT ANAIYSiS
Fieca! impea enpJyeia is hdpful in ehorc- and ton�.rnnge
land•use polity plantune estd flnence plancung. Its appUca�
tiohs for dedsion making are discussed below.
Planninp Itiu�a
ei fiseel impaec eveluacio� can be uaed aa an effeaive plan-
ning tool, Many lxal governmcnte view �� planttiing
process ae moniconng and enfercing Iand•uee decisions and
1'Cgu�edoM.. ifld pey COO �Ct�t aTte�40A W �pt1g•1'gt1�C
planning iasues, including whecher future growth wt(( be
affordable. The six appticu�ons below iridicare how fiacnt
�nalysie can be an effettive policy coo( for long•rRn4e
plannfng.
Lnd•use �Iiriee. Should a juriedieeion encouewgt hl�kta
denelty land u,e oT alloW ,,, oKrlay dVa�cc �, a cauin
AFR-;5 98 ;a:5c FROM;
subuea? po ics currcnt laind•uac poUcta make setue? if
C06l9� as well as otha faaora, ere ro be cooaidaed, rhen a
hscal impoa ewluadon will help in rhe decuion-msktng
proce5s.
Demotraphic.ecanomic efunga. Many eleaed 'dnd
appointtd local gowrnment officials can ttll inoerested
parctes hou� chry thieilc cheir cqmmunity wiU look in ten ot
ewency yeas in crrma of popularion, housing, and employ
ment. But very few can say whac che fiscat impaa will be
—wheches service levels will zemain cAe sme ar daeriocaca;
under precauro from a gcowing populncian. Similar(y, when
making changes ro land•uee regulallone few jurladicdoas„
evalus�c alcrmacive devdopmenc poUdw from a fiynl `
perspective. Evelunting c{evetopmettt elternaeives ia e
valuable use of Ascal impea analyais. --
Etewnln�.. A raoning changea the denairy or rypc of uee
for e percel; it may alao be a aignnl of a change in devSloy-" �
ment policy, Too often, signiAcanr cezonittg cases are na
euffidendy evntwted from a fiscst pers�xaive.;
anatysis can bs helpful in local govemmenedevi�tope� ';`.
negocianons.
Mneurion. An area thac may be anne�d us�mlly has =
some acisHng pubtic urvicu. One of the uses of Raca1_:=:
impqtt enalyau ia to aecatain the cost of improving thei ,..
snvues in rhe area propoxd for annexacion in ordc co
mnke chem compattbie ro the annexing �uriadicdon'e kvel.,
of service. The enalyste can calcutau whecher ehere will kx"
an anntul financial sueplus ot de£uit from the ptoposed
anru�mcion during each yeu of che forccaet period.
InErueructuee plat�ning. One of che by �PtOCSuttfi OE 8
good Aacal arulysia ia che focecac of infrasaucsure needs co
m�cc ancicipeced changa in e commwlity. My change in
land uae, populanon, or omploymenc wiq have an impatt
on e number of capiral�inconstve xrvices i}tCllyf�jflQ 6Mttb
and uclltla.
A H�al impcc mnalyeu help� idcnt3fy
the economic develppment secateQy
that makes the most fi�cal eecuc.
Iaveneing publie dollar�. Local officuls consldering
how co promote econom�c growth often fatt rhe quesnon
of how to inveac lirtticed funds so zs tq rtwYimize fhe recum.
Fiscal evaluadons cpn ltdp them make rheir invesmtenta
wisely. For exampk, d�fferent economic development
strate�es can be evaluqced for their impecte on land uee.
Land uae in tum affeas eer�ces, toeu, and eevenuea. A
fiscn( impacc analysis helpe idendfy ehe economis develap�
mme s�rtcegy that makes the most ftatal aenae. (f a local
governmenc has $ZS milGon for emnomic develqpment
pro�rama and wancs co decidt whether to allocate it qmong
uvcral commercial distntts within cho community, a Asca!
tmprcc analyaia can provtde weful infqrmadon on che
potentu� �NflCtY�l�CCLO.
TO:o124582897 PRGE:��
Flnonce Iaeues
Thae ue a number of woys in wh�ch fixa! impact
evtluallone cyn nddress budga and fincnce queanons. Av
noted eariia, � fiscal impaet nnalywa focuses on change,
gene:ally over a nva co �en-year period, Aitho�gh che
aceuqcy of the projeaions dimin�sh6 ovet pmc, che
analycis can hefp tu r�ise budga end firsan�e polity issues
end suggeat a(mrna[ive tpproaches fot addreseittg them.
Some of che ivsues oct disc�ssed below.
Capial impmvement prc[enmminQ. Gpial improvr-
ment planning rrkes on cn e:era dimenaion with rhe use of
ftscnl qtulyeis, which ettablts a local government co forecaet
the netd for addinone! capital fadlitia �ven projeaed
iacreqses in ppp�ylacipn or employment Individual
departmen� seidom incorponre mar�a forcea or land-use
plans inco �heir CIP requacs. A fiscal analysia chat looks ac
eubaeas of che community can hetp addreas t}ua issue,
Fiecat analysis also clarifies chc riming of inErsvaueture
improvemenss. By incorporating fueure demc'�graphic end
economic peo�ettlons, the fiscel snaly�is will indicate nc�
demand for capical fadlldee in the near as well eb che langec
term, Une communiry discovered through fiscal impycc
analysia that tAe amount of park tend includtd in its CtP
uas insuffidcnt ro provide the desired lwel of servtce even
for exisnng dwelopment.
This approach can afso be used m cakuua rhe coec
and dming Eor replacitig exisdng in�sastzucture. Infzastzuc-
cu� replacemenc cosa are one of rhe bigg�sc fiacal
problems facing many 1«al govercunena, M inventory of
esLvdng cppital Eodlina and chtir relqtcd fusure costs c�n be
obeained by esdmaong che rmuining uoeful pfe of mch
fadliry and ite replacemenc or rehabilic�non cone.
Revenue foeeta�titfg. For pucpoBes pf this dLscusaion, a
rCVenue forecast defines the pro�taed chattge in revenues
(aaeuming exisdng tates) due to land•LLCe or demogeaphic
changec in �he communiry, The ttvenue forGCast is one of
the tasults of a fiscal evqluation,
Fiseal p4uessir�. Piacal planning is different from budgec
planning because fiscal plAnning focuses on change and uers
e cwo- co un-yenr dme hame. Fiscal p4uuvng provides a
long•cerm perspeccive on ehe cos�a and revenuea a5sociated
with each department and attivicy of a lotal governmenc,
affaing Incat officuts she opporn,niry eo reconaida plans
And policies.
HudQet proje4io�u. Fiscal impan armtysia eesulta in both
shorc- and long-ctnge budga projeetions for each depart-
ment in tht laal gov�mment. For ewample, en incre�e fn
she in�eneiry of land use w��1 generace a higha level of
domand for police servicm. The �nalyaia offers a budget
projection for che police deppctment, based on rhese
chnnga and acsumiag sptclfied service levels, over cho
forec�se petiod. Local officials can look u th�e in(orrtuCion
for elternarive levels of xrvice, and projett tht effttYa vf
chosK alcernadvea on rhe budQec.
FGK :s �e ie:s3 F�oM:
Ix�el of �rrvice thangty. A growirtg nurhber of (ocal
go�ernmencs are findi�g it use{ul to focua policy
discussions on che bacic level� of public xrvices chac
ciri=ens want and arc willing to pay for. 'fhe intreasing uae
of impaa fens and user kra elso riykes ic impor�nc co
cleazly IdenciFy a level of xryce standard, sp chac
epptopriaee fee can 6e stt and colleeted.
What u rhe coet of pro.-iciing different
levele of eervicet
Quandfying exisung Ievels of secvice and tht costs of
different service Irvtls can heip lesd to more cqtucrue2{ve
discuggions, since all parda will undersrand ehe flxaa
ronstquoncee of changing the levet of service.
Coet and revenue chan�ea. A fiscal analyeis will apow
che locai govemment co vazy any number of coa� and
revsnue sssumptlons. Police cars, utiliry plart addidona,
salerirs and fnnge benefits are juac some of rhe items rhar
tan be reviewed for cheit ftnancial impra at wnoua rates.
fn a simikr Faahion, eevenue races snd aourea ran be
reviewtd. Using a f�5cal impnet it7e(ysie compuroz madel
ma�e changes in assumpn0as tasy eo mnsidtt.
BfNEFITS OF A fISCAl. (MPACS ANAIYSIS
Fuca! imputt analysis hu many bemfice, wherha ic u vseci
for budgeting or for land-use or capinl or financin!
planninq. (Sse �hr Juli Mts Repvn Jor che nar,ad�e)
METMODOIQGIES
There ere twa banic appronches ro fiaeal evalundone: using
avetage coats and using macgic�a,j coscs. Aveingc cost
approa<ha are sunplor and mott popular — cosu nnd
re�enues are cakula�ted bsaed on cht svenge coet per unit
of service dmes chr demand foi chac unit. Average cosc
approache� aseume a linesr relauonahip qnd do not
consider ezcas or deflcienc capadry of faciUties or rervlen
over dme. A prr capin relacionshlp ia an rfampk of an
avaage mbt ppprbnch.
I�Largina! coec appzopches describe tho uniquc
tharacterisnca of o jurisdiction's capial fadUda. Although
ovcr the long ttrtn, avenge pnd rrurginal coet roechniques
will produce similar raulu, che real value of fiec�l aeulysia
is in the cwq• ro xn-year nmc period. Marqinal coet qnalysu
is most useful t� this cime frame.
Sqlocllnp a MofhodoloQy
To ga che most accurete information from m fiacql impttt
analysu, mcue tocal governmrncs find che cae study
approach prefaable. Although comparitons m rc�onal
and cutional scanduda can be he(pfu1, each community is
unique. lt has ics ou�n ltvels oFse�vica, geogrwphk service
boundanes, cwt and reycnue faaors, and avqilable capedry
of cRwnng ap�ral facilicia. Given t3�e potential bentAcs of
hscel im�ct analysie, it ie worrh rhe cfine and effore to uet
che ca.e eeudy apprach. Whae d�cA u no� roedlly avelVble
?0:61245E2E�7 PRGE:�9
EXHISIT Z—Impocf o� now q�c„vfh undvr thrw
ON�rncflve�.
a...
�
saarce� ��cnler 6 lusxiotea, Inc„ MUNiES Compufer
Output.
or whae it ia difficulc co define r,he service kvel retananehip
on a m�e mugina! besis, !t makes senee to use the per capim
average cosc epprcmch to aupplemenc deparmunmi
wamaces. 'I�e local �m�ernmenc may wiah co �eftne rhe daca
wtng tnarginai cost dvt� if nnd when moa deqUai
infomutlon bemrno nvnllxbte.
CA�E SIUDIE3
This eectiott dtecuases Ave c3se sndiea thac Illueenee dif-
ferent appllcarions of flaca! analysis. The Rrst three caee
enuliew look at diffatnt Iend•uee or growth alcernatives and
revenue stncegies. 'Ihe laat two ceses diecttse economic do
vtlopment alternapve6 and capita( jmprpvemenc progi�sms.
($ee ehe M15 Report for a fult diuwrian)
�armantqwn, i�nn��wo_Evaluotion of tond-uw
11lhmO1N��
GermaAtown (population 32 ,000}, p suburb of Memphis,
deadrd eo review the fiscal �mpa,�z of Eurure tand-use
alxena�ivea. As in any juriadictson, one lo¢!ed alarsuave
wae ehc condnuaHon of present reenda: en emphub em
lowdeneicy singie-family houeinQ wlch enou�h �omtrc�
Cm' OF GaewwroWN
MFNUAI 9UAPli18 OR DEF1CtT
DUE TD NEW ORONTM
tn+ ti.aoo u
RPR-15.?B 10:54 FROM:
T0:61z4582897 PRGE:la
acrivi�y to provide servicea ro residoncs. GermAnrown
offidals were aiso considaing ewo othtt alcernanves: one
was to encournge npnraidenpQ�, light-induatnal and oEflct
uaes; che ocher urea co incre�se tho denairy of cesidencinl
dtvelopmenc. Thc ftvcal tmpaa analysis focu�ed on
marg�nal coe[s And revenues bqsed on loeal daq fectocs
—che case scudY apptoech was uved whereva posaible.
Eochibit 2 indicates ttut all rhree a2ternaaves would have
poeitive ftruncial rtsults for che city.
Tht scvdy conArm4d chet the cuttenc land�uae altanacive
emphas�xing (ow.drnsiry aingle-funily houeing utill enable
Gezmwn�own ro rcmain inn a positive fixa! posture far rhe
Eorcseeable furure, The pcojeced curnuleNve burplu9 of S41
mitllon is ¢bouc �7 petten[ of t}�e surplu8 [}fnt might be
generqced bv the high employment scenario. Etetted
officiale have found thet ;he fiacal impatt analysis kuts given
chem � more spedfic baeelitx agairmt wh(ch to measure
requata propostd by dwelopers. The nyyor and aldrrtnen
now are able to ask whetha a propoanl would luve an
economic tmpect avet and ebo�e that projecttd baeed on.
the future Iend-uee p1an.
Gezmanmwn purchased a tailoeed sofcwace syamn for
fucurc ftscal ewluallons. As quoud in the C'er,ronwum
News, rhe adminfetramr said, "We npw heve a tooL We
can uae rhia sn�dy co c�lculatc what it witl coec, bpth in d�e
shott and long ttrm, to meintain and develop the city in
wrioua waye." 2'he city has conttnued w use the progrpm
for threa primarY P�P°�S: r�viewing onnemrion ques-
dons, evalu¢ring che impect of proposed lazgo develop�
mrncs (bo�F, shopping cencers and reeidandat), �nd copial
improvemencs plannitig.
Cxrmantown haa an annual antu�ncion procc$s throuQh
which i� looke ac rhe cosca and revenues chac would r�eulc
from Addirional atuu�Non. E'aced with high �owth
proaures, the city }ws found che &scal impaa onnlyaia
safewate program worthwhik in helping tht pLnning
tommisslon and cht boerd of tnayor and a�damen review
the fiaca! effects of new �rowtlS.
4tt [he capita� improvements pla[u�itg ptoaoe,
Germancown uaea ehe flaca! ianptc� anatyeis pro�am in
pianning for funsx flre and pollce eervice neqds.
Germansown hae e five•yea capital improvemqn�
program, and uaes tht fiacal impoa analysis ittfomiaricm�or
back�round in scoping out budgec proposn�e and rekced
cqPiwl impcovementa reqwxw by departtttenc.
Overali, fiseal imFaa analysis enab�es Germentown to
mainnin In land•uet policia and undcsmnc� and ardculate
the aesumptiona On whkh they are ba�ed and rhelr flscal
ramifications.
V�nlco, fiorlda—Dwelopinp StrataQlo� Io
S�rva Futur� GeowPh
Venice depded co addresa xveral itcma in ite 1987
ftaca! impct �nalysia. [c wanad ro evQluate swo growrh
�lxrnatives, devetop a capial improvement pragrem [ha�
��d idenqfy exia�c�g- deficitncia and pr�ea
fotility neede due ' fo`'giowt2r, �nd creptc a tevenue•
developmee� scrategy.
The firsc atcernanve easurn�d grow�F, would condnue
co che ycar 2000 aa projrcred in rhe comprehecuive p4n.
The second alterrunve ascumed chec q�itiotta! growtt�
would tesult f�om annezaPion of an erep co che nocth and
e�at of thr exisnng nty Iiinjis,
Ciry departmepc heads snd the consultanc ngrced on
aerviu Ievel, cosc, a�'rednue faaors, and cheae wcre used
in che fivcal evaluanon of che nvo aloemanves. 'The fisc�l
evaivarion forecasr:#��.'ne�1 fo� new capiotl fadl�nes to
xrve gzowsh revulong from annezadon,
Floride sate law requires rhac loca! govemmenu pro-
nde a Avc.year pco�c�rton of fecAtaea m serve new develop
ment, Consequcndy, cheac new fadliGCr were incoeporaced
into a pretim;nary CepipaJ,impcnvemcnc Ekment (CIE) fac
Venice. According cv �he bmm Inw, che CSE muat nleo
G{esceibe exi.tdng de�ici'et�te3'in capinl fadUdes co aern the
ptesent popu]allon� pnd..c}S`l opereting expeq&ts of
thoae faeilina, and discua,�`�he rtvenue sourco the local
govemmonc imm�df'ip uac �o paV for che needed capiset
fedlldes, 'Ihis lassi-reqcsir�ens was parc oF che reasan
Venlce dedded co develop a revenue s�raugy ss part of ics
fleca� impa[t ailily6ls _ . �., ..
The eumuLdve res4iyfa�vf Venfce's sn,dy inclicated a
Fisca] surplua unda bot2, alrernaHves. ,qn important rason
for thie was cF�at the baeic road netwqrk and echoola ue
providtd nor by Venice buc by Sarpsom Counry. '�e
aleernaove 6ased on rhe compreheneive ptan wae nli�dy
mote beneAdnl (rom a fisca! percpective ptusurily becyux
annexanon wvuld requia th�c addtdorul capi�al fnnUCa
be buiic wichin o few yeus of she ssu�e�non.
. . .the fiecal imguce enatlyeie haa
heiped the elcct��#ici�le eApeas
thcir viyion for the Eutuire. ...
Ralalqh, North Carollna—MGiy=inp EconomiC
Dtvoloprttenf impq�}�
Evatuadng eubaraa of a communiry is a vafuabfe approach
for fiscal imqpcc artalyats since, a9 in t�t ase of southeqst
Raleip�, emsting captewl faall�y capacidea can be spedfied
and revenue strste�pee can bt argeted, (See the M!S Repo.t
fa a fult diuxsnon)
The city of Vemce, Rorida, hu q permanent popuktton of
abouc 15.000 end a seasocml popu{ation of 19,Q00.
Locascd in Seraaoca Counry on che booming Gulf caasc,
Venice ia experiencing �owth preaautee. Developers in dse
country are requesdng ennexAeion, in large pptt becaux the
dty can provide better eervl�ea to future recldenta �han euf
the counry.
Plymoufh, Mlnnetofa—Mclyxinq tand-Use
Alharmqtives ancJ Costi fot a Copllqf Foclllly
Repincement ikogram
Plymouth i� a Minneapol�s su6urb vn[h a populsrion of
abou� 4§,000. In 1984, a coee revenue su6commi¢ee com•
poetd of priva�e a�ttor repraenmpvee requesoed chyt the
RF.R-15 98 1e:54 FROM:
ary conJuct a fucu! ana�ysis of shc imp�R of land•uat plen
slternarives. Four aicern�tives wcre eva�utted: the tatadng
land-ux plan (the base t�a�); a duplex ot hig}�decuity
taidentiel alternanve; an esrice or lowdtnsity ceside�ml
alternanve: �nd � reseurch and developmenc, or employ
mmt, altern�tive. q11 four scervrio5 projett an inecet�e in
ehe ciry's ��opularion o( :6.3� over 15 years. Ths �indings
indicoted that che base case wrs as fiscally benefe�ial as rht
otha iltcTnativa (Ex}+ibit 3).
Ocxe che city seleaed rhe bace case sv ehe atcernative
to puzsue, che softu�ce prpgcam used by the city calculaced
che casts of � capiral faaliry replacement progcaam.
Plymouch used rhe sokware to compile arsd iaalytt deta on
all cpp¢el fadlicies, i�ctuding each item"s prc�jeczed
remaming ;ifo and esrimared replactrtttnt coat. 'rhe capial
fadlitia ntoded co serve new qrowth added to the pcojeaed
infruttucture replacement coeta eyua!(ed the to41 dollars
EXHIBIT J—Surpius to Plymouth general fund due
to prowth between 19E5 ond 2000
p� mllilpns of consront doliara).
o.o eo �:
T0:512455z897 PAGE:il
�eeded to conanut co provide the ntuena with urvtte at
exisdng Ievola.
Tha city �� �� 3nalyau » n guide for budgcc
forecqspng, p4rticulgTly (or peisonnel ptoieas by divisions
wichin dep�rcmencs. 'ihe ciry hay found ic helpful tn
foacrring dixuasiocu abouc rh� assumpdona und�rlying che
numbers in the budgtt and, to a lesser exunt, che cap��l
fpuliry roplacemenc program. Cicy Marugez Jim Willls
esnm�tts cha[ 10 co 25 percenc of che aasumpaons have
bcen changed since Plymoudi 6egnn ueing fiscal ie�pqtt
■�alycic. '1'htse changa reflta the evoludon of needs and
the gatheri�g of new informapon since the program 6e�an
co be used. Witlis commenced rhac a{cey co using fucal
impact anilyaia effeccive(y ia tq underscand Your own
operanoiu and what noeda co be measured. lt is icnporqn�
rp undersand che fup range of raslcs for whkh people are
resPonsible, so that ievets of service can be esutnaated
aCNtate{y,
USING FISCAL lMPACT ANALYSIS
'ihis seaion diacusae� sreps a locat governmene un ptke in
conducnng a fisoal impaa analysis and planni�g e���
steacegy bosed on ics findinge. There are many p�ble
approachts buc rhis settion highlighta the most unpotTant
sape in the process (tee MIS Repon Jor nqrmri„e)
CONClUSlON
Ist summary, virruallv a11 �pplicazions for fiscai imy��c
analysis easlat a Jurisdiccion in addressing finnruiai
management and p4nning issues. Whecher che producc is
an evaluenon pf p thange in 1eve1 of service, a forocast o{
capita( faclfinra to be repLtces3 or added, or a piccure of
upcoming budgec changee due on new devefopmenc, fi�n1
impqcC armlysu cen be adopted as a tegulac procedure to
imptove ma r ugtt nent dedaions.
( �The eymplm o! cpinpuxr projectionp uaed 1n thly �yport yeie
i produced by rhr MUME'S (MuNc�{ml 4np�a Ewludan Syetem), o
SOUrce: Tischler $ qssoelale5. l�C,. MUNIES COmp4�9r �� �MptR ohwitR fHmm provided by 'I7�chJer $� �yqp�y� �
Oulput. �nd enlbred for ach l�rWkmn. �pr (urthcr inforn�atlon nd wt
eamptn, emssa Tbchlet d. Aroc�aea, ine., ti701 &�,g.moes Road,
SWa N2I0, BrdKada. 1dp 2C816
T]SCHLFP s iSRX.Lii�S. ISC,
FISCAI, 8� ECONOMIC
i701 Sar.gamore R�xici • tiuire v2)0 • Brthesct�, A1D ?0816
Pr�z�ding Solutions for Croic�th
� Fixul hnpad An�ly,<is . .411T(IES
• Gpir,d Imprtrvemcnt Pmy;minnting • fttiCALi
Buu A�sp
V.9. oC5*nOC
���o
PEPY�' ��g
ua+•I�na w
� Impdn F; c Vltzlclin� • CIPS
• Ar�rnuv 5�r�te�;ic� • DEMS
� �amoimc h'rt�ihiliry:�ir�lysts
• Gn�wlh I'nlicY �tUtJi��s
Bose D�plex Estole Employment
CO59 AliBmafive A118rnative All9mbtive