Envision Tomorrow + Fiscal Impact Tool

(ET+FIT)

July 16 th , 2013

FIT Discussion Topics

• • • • ET+FIT Overview Revenue Projections Expenditure Projections Output and Summary

• • •

Model Overview

Method based on the Federal Reserve Fiscal Impact Tool (FIT) – County-level analysis – Aggregates all sub-county jurisdictions – Provides a standardized method for conducting planning-based fiscal assessments Revenues & Cost based on the Census of Gov’t finance data (2010) – Provides user override for all assumptions User inputs: – County / Municipal population – Annual taxable sales (County total & City) – Property & Sales tax rates (weighted average) – – Property assessment ratios (weighted average) Added population & employment (from ET+) – Added project value by land-use (from ET+)

What drives the model?

ANNUAL EXPENDITURE ANNUAL REVENUE FIT MODEL

NET BENEFIT

Existing Conditions

• • What is the current fiscal outlook?

Census of Governments (2010) County-level data Annual revenue, capital outlays, operations & maintenance Local data (2011) - Taxable sales - Tax rates - Assessment Ratios

Local Data Sources

• • • • More recent data (2011) gathered for each city, village and township and aggregated to the county level:

State Auditor of Ohio

- Summarized 2011 Annual Financial Data for all jurisdictions

Ohio Department of Taxation

– Sales tax and property tax rates for all jurisdictions

Assessor’s Data

– Assessed land and building valuation at the parcel level as an input to property tax calculations

Longitudinal Employer-Household Dynamics Data (Census)

– Counts of employment by location as an input to municipal income tax calculations

FIT Data Sheet

FIT MODEL

Scenario Impact

• • • • Population change Employment change Private investment (value of new construction) Infrastructure costs Sample of ET+ Output

FIT MODEL

What is Envision Tomorrow?

• • • Suite of planning tools: Prototype Builder • Return on Investment (ROI) model Scenario Builder • Extension for ArcGIS

A Linked System of Spreadsheets and GIS

Buildings ROI Model Development Types Scenario Spreadsheet GIS Painting ArcGIS Evaluation Criteria Scenario Spreadsheet 5 Story Mixed Use 2 Story Mixed Use 3 Story Apartment Townhome Compact Single Family Conventional Single Family Town Center Town Neighborhood Residential Subdivision Density & Mix Travel Health Sustainability Investment Fiscal Impact

Scenario Building Process

Building Types Development Types Scenario Development Evaluation 1

Step 1: Model a library of building types that are financially feasible at the local level.

Building Prototypes

• • • • • • • Density and Design

Rents, Sales Prices Market Value Employment Population

Costs and Affordability Energy and Water Use

Use Real-World Examples

• • Rents, sales prices calibrated to NEO region Design and density modeled using local examples

Scenario Building Process

Building Types Development Types Scenario Development Evaluation 2

Step 2: Define the buildings, streets and amenities that make up all the “places” in which we live, work and play.

Development Type Mix

A Variety of Buildings, Streets and Amenities Create a “Place”

Town Center Medium-Density Residential Single-Family Residential

• •

Development Types are Scalable from Parcels to Districts

Include one or many building types depending on scenario planning geography Parcels, Census Blocks, uniform grid

Place Types Composed of Regionally Calibrated Prototype Buildings Mix of Buildings

Place Types Include Street Characteristics

Place Type Example: Urban Center

Housing Units per Acre

40 DU/Gross Acre

Jobs per Acre

50 Jobs/Gross Acre

Street Lane Miles per Acre

.07

Intersection Density per Sq Mi

204

Scenario Building Process

Building Types Development Types Scenario Development 3

Step 3: Paint future land use scenarios to test the implications of different decisions or policies.

Evaluation

Hard Costs and Revenue From New Construction

NEW CONSTRUCTION PRIVATE INVESTMENT + EMPLOYMENT CAPITAL OUTLAYS (INFRASTRUCTURE COSTS)

TO FISCAL IMPACT TOOL

Scenario Building Process

Building Types Development Types Scenario Development Evaluation 4

Step 4: Compare the scenarios and monitor the impact of land use decisions in real-time.

Questions?

• • •  ET+FIT Overview

Up Next: Revenue Projections

Expenditure Projections Output and Summary

Projecting Future Revenue

• ET+ FIT applies user-defined tax rates to scenario-defined population, employment, and building values.

Revenue projections – – – – Property tax Sales tax Income tax Non-tax revenue • Sewerage • Solid waste • • Utility Intergovernmental

USER-DEFINED TAX RATES FIT MODEL

Sales Tax Revenue Projection

• • Annual sales tax revenue = [Total payroll in scenario] x [% consumer dollars spent subject to sales tax] Payroll based on County Business Patterns (CBP) data and scenario employment by sector

Property Tax Revenue Projection

• • Annual scenario property tax revenue = [market value of scenario construction] x [millage rate] x [assessment ratio] Broken out by residential and commercial property types

Income Tax Revenue Projection

• • [annual average wage by sector] x [scenario employment by sector] * [weighted average income tax rate] Weighted average based on municipal population ratio – incorporated v.s. unincorporated population in county

TIME

Proportional Ramp-up

Projecting Future Sales Tax Revenue We assume that the scenario ramps up at a constant rate over the scenario period For example, over a period of 30 years – 3.3% per year

Non-Tax Revenue Projection

• • Assume a constant per-capita revenue [current non-tax revenue per person]*[new population in scenario] POPULATION

Questions?

 ET+FIT Overview • •  Revenue Projections

Up Next: Expenditure Projections

Output and Summary

Projecting Future Expenditures

• • One-time expenditures (capital outlays) – New roadways, sewage treatment plant, school construction On-going expenditures (operations & maintenance) – Public safety, housing and community development, roadway maintenance

FIT MODEL

Capital Outlay Projection

• Envision Tomorrow + tracks capital outlay costs related to infrastructure: – Roads – lane miles of new roadway – Utilities – miles of overhead electric – Water/Sewerage – lineal feet of pipe

Development Type Assumptions

• • • • Each development type has associated road lane miles per vacant acre assumptions Less than 100% of these are publicly financed City Architecture provided estimates of % publicly financed by development type It is assumed that sewer, water, and utilities scale with miles of new roadway Sample of Development Type Street Assumptions

Infrastructure Cost Assumptions

New Infrastructure Costs (Capital Costs only)

New Roadway Streetscape Sewerage Utilities - above-ground Water Lines

Unit

• • • • Source: Road – Arkansas DOT Utilities - Western Mass. Electric Company Sewerage – Dept. of Public Works, Ipswich, MA Water Lines – Dept. of Public Works, Baltimore, MD

Cost

Lane Mile Lineal Foot Lineal Foot Mile Lineal Foot $ 1,700,000 $ $ 100 $ 600,000 $ 227

Operations and Maintenance (O&M) Projection

• The following categories are tracked: – Education – Hospitals – – Roads Police – Fire – Parks – Sewerage – Solid Waste – Utility

Operations and Maintenance (O&M) Projection

• • • • ET+FIT uses scenario capital outlay to “pivot” around existing annual per capita O&M Future O&M is a factor of the change in average annual capital outlays Future per capita O&M = [Baseline per capita O&M] x [% change in average annual capital outlay] In estimating future O&M costs, it is assumed that all roads in a shared right of way will eventually be publicly maintained, even if privately constructed.

Level of Service Assumption

Projecting Future O&M • • We assume a fixed level of service. Per capita O&M stays constant as population increases POPULATION

Questions?

 ET+FIT Overview •  Revenue Projections  Expenditure Projections

Up Next: Output and Summary

Outputs

• • ET+FIT calculates the net present value of expenditure and revenue over the forecast horizon Discount rate of 3.8% is same as the average federal funds rate over the last 30 years (1980-2010), less inflation (2%) User enters rate and forecast period:

PROJECT ASSUMPTIONS

Years from up front to on-going Discount Rate Period/Years

Scenario 1

1 3.8% 30

FIT MODEL

NET BENEFIT

Discount rates are applied to costs and revenues over the forecast horizon. User can define when costs and revenues “ramp up” Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30

Outputs

Ramp Up path: 3% 6% 10% 13% 16% 20% 23% 26% 30% 33% 36% 40% 43% 46% 50% 53% 56% 60% 63% 66% 70% 73% 76% 80% 83% 86% 90% 93% 96% 100% Raw $43,465,920 Inflated $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $43,465,920 $44,543,874 Discounted $43,037,560 $45,648,562 $46,780,647 $42,613,422 $42,193,463 $47,940,807 $49,129,739 $50,348,156 $51,596,791 $41,777,644 $41,365,922 $40,958,258 $40,554,611 $52,876,391 $54,187,726 $55,531,581 $56,908,764 $58,320,102 $59,766,440 $61,248,648 $62,767,614 $40,154,942 $39,759,213 $39,367,383 $38,979,414 $38,595,269 $38,214,910 $37,838,299 $37,465,400 $64,324,251 $65,919,493 $67,554,296 $69,229,643 $70,946,538 $72,706,012 $74,509,121 $76,356,947 $78,250,600 $80,191,214 $82,179,957 $84,218,019 $86,306,626 $88,447,031 $90,640,517 $37,096,176 $36,730,590 $36,368,608 $36,010,193 $35,655,310 $35,303,924 $34,956,001 $34,611,507 $34,270,408 $33,932,671 $33,598,262 $33,267,149 $32,939,299 $32,614,679 $32,293,259

Summary

• • • • The summary tab aggregates existing costs and revenues with 30 year cost and revenue streams to provide a revenue/cost ratio If revenue/cost ratio is positive, revenue exceeds costs over the forecast horizon.

Net reduction tells us the direct impact of the scenario on the cost to revenue ratio. Positive means that there was a negative impact.

Scenario tells us the revenue/cost ratio of the scenario development by itself.

Revenue/Cost Ratio 30 yr.

16.83% Net reduction -12.32% Scenario 65.25%

Summary

• Annual “full ramp-up” costs and revenues are broken out into categories SummaryOutput tab Stream Value of chosen time horizon, in years: Total, One-Time and Ongoing Revenue $783,436,635 $783,436,635

Scenario 1

Cost $2,411,190,316 $3,314,830,336

30 yr. Net

-$1,627,753,681 -$2,531,393,701

One-time Ongoing Education Everything Else Revenue Source Taxes/Fees Intergovernmental Transfers Utilities/Services $0 $62,071,065 $6,655,054 $53,863,862 $1,946,688 $903,640,020 $101,852,568 $89,184,133

Questions?

 ET+FIT Overview  Revenue Projections  Expenditure Projections  Output and Summary