envision tomorrow + fiscal impact tool (et+fit) july 16 th, 2013
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Envision Tomorrow + Fiscal Impact Tool(ET+FIT)
July 16th, 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+)
FIT MODEL
ANNUAL REVENUE
ANNUAL EXPENDITURE
NET BENEFIT
PROJECTED
REVENUE
PROJECTED
EXPENDITURE
EXISTING
CONDITIONS
FUTURE
SCENARIOSWhat drives the model?
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
FUTURE
SCENARIOS
Scenario Impact
FIT MODEL
• Population change• Employment change• Private investment (value of new construction)• Infrastructure costs
Sample of ET+ Output
What is Envision Tomorrow?
• Suite of planning tools:• Prototype Builder
• Return on Investment (ROI) model
• Scenario Builder • Extension for ArcGIS
Density & MixTravelHealth
SustainabilityInvestment
Fiscal Impact
A Linked System of Spreadsheets and GIS
5 Story Mixed Use
2 Story Mixed Use
3 Story Apartment
Townhome
Compact Single Family
Conventional Single Family
BuildingsROI Model
GISPainting
ArcGIS
Town Center
Town Neighborhood
Residential Subdivision
Evaluation CriteriaScenario Spreadsheet
Development TypesScenario Spreadsheet
Scenario Building Process
Building Types Development Types
Scenario Development
Evaluation
Step 1: Model a library of building types that are financially feasible at the local level.
1
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
Step 2: Define the buildings, streets and amenities that make up all the “places” in which we live, work and play.
2
Development Type MixA 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
Plac
e Ty
pes
Mix of Buildings
Place Types Include Street Characteristics
Housing Units per Acre
Jobs per Acre Street Lane Miles per Acre
Intersection Density per Sq Mi
40 DU/Gross Acre 50 Jobs/Gross Acre .07 204
Place Type Example: Urban Center
Scenario Building Process
Building Types Development Types
Scenario Development
Evaluation
Step 3: Paint future land use scenarios to test the implications of different decisions or policies.
3
Hard Costs and Revenue From New Construction
PRIVATE INVESTMENT + EMPLOYMENT
CAPITAL OUTLAYS(INFRASTRUCTURE COSTS)
TO FISCAL IMPACT TOOL
NEW CONSTRUCTION
Scenario Building Process
Building Types Development Types
Scenario Development
Evaluation
Step 4: Compare the scenarios and monitor the impact of land use decisions in real-time.
4
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
FIT MODEL PROJECTED REVENUE
USER-DEFINED TAX RATES
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
Proportional Ramp-upProjecting Future Sales Tax Revenue
TIME
TAX
REVE
NU
E
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]
NO
N-T
AX R
EVEN
UE
POPULATION
Questions?
ET+FIT OverviewRevenue 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 MODELPROJECTEDEXPENDITURE
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 AssumptionsNew Infrastructure Costs
(Capital Costs only) Unit Cost
New Roadway Lane Mile $ 1,700,000
Streetscape Lineal Foot $ -
Sewerage Lineal Foot $ 100
Utilities - above-ground Mile $ 600,000
Water Lines Lineal Foot $ 227
Source:• Road – Arkansas DOT• Utilities - Western Mass. Electric Company• Sewerage – Dept. of Public Works, Ipswich, MA• Water Lines – Dept. of Public Works, Baltimore, MD
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 AssumptionProjecting Future O&M
POPULATION
OPE
RATI
ON
S AN
D M
AIN
TEN
ANCE
• We assume a fixed level of service.
• Per capita O&M stays constant as population increases
Questions?
ET+FIT OverviewRevenue ProjectionsExpenditure 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%)
FIT MODEL NET BENEFIT
PROJECTED
REVENUE
PROJECTED
EXPENDITURE
PROJECT ASSUMPTIONS Scenario 1
Years from up front to on-going 1
Discount Rate 3.8%
Period/Years 30
User enters rate and forecast period:
Outputs
Ramp-Up path: Raw Inflated Discounted
Year 1 3% $43,465,920 $44,543,874 $43,037,560Year 2 6% $43,465,920 $45,648,562 $42,613,422Year 3 10% $43,465,920 $46,780,647 $42,193,463Year 4 13% $43,465,920 $47,940,807 $41,777,644Year 5 16% $43,465,920 $49,129,739 $41,365,922Year 6 20% $43,465,920 $50,348,156 $40,958,258Year 7 23% $43,465,920 $51,596,791 $40,554,611Year 8 26% $43,465,920 $52,876,391 $40,154,942Year 9 30% $43,465,920 $54,187,726 $39,759,213Year 10 33% $43,465,920 $55,531,581 $39,367,383Year 11 36% $43,465,920 $56,908,764 $38,979,414Year 12 40% $43,465,920 $58,320,102 $38,595,269Year 13 43% $43,465,920 $59,766,440 $38,214,910Year 14 46% $43,465,920 $61,248,648 $37,838,299Year 15 50% $43,465,920 $62,767,614 $37,465,400Year 16 53% $43,465,920 $64,324,251 $37,096,176Year 17 56% $43,465,920 $65,919,493 $36,730,590Year 18 60% $43,465,920 $67,554,296 $36,368,608Year 19 63% $43,465,920 $69,229,643 $36,010,193Year 20 66% $43,465,920 $70,946,538 $35,655,310Year 21 70% $43,465,920 $72,706,012 $35,303,924Year 22 73% $43,465,920 $74,509,121 $34,956,001Year 23 76% $43,465,920 $76,356,947 $34,611,507Year 24 80% $43,465,920 $78,250,600 $34,270,408Year 25 83% $43,465,920 $80,191,214 $33,932,671Year 26 86% $43,465,920 $82,179,957 $33,598,262Year 27 90% $43,465,920 $84,218,019 $33,267,149Year 28 93% $43,465,920 $86,306,626 $32,939,299Year 29 96% $43,465,920 $88,447,031 $32,614,679Year 30 100% $43,465,920 $90,640,517 $32,293,259
Discount rates are applied to costs and revenues over the forecast horizon. User can define when costs and revenues “ramp up”
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.
30 yr. Net reduction ScenarioRevenue/Cost Ratio 16.83% -12.32% 65.25%
Scenario 1 Revenue Cost 30 yr. NetStream Value of chosen time horizon, in years: $783,436,635 $2,411,190,316 -$1,627,753,681Total, One-Time and Ongoing $783,436,635 $3,314,830,336 -$2,531,393,701 One-time $0 $903,640,020 Ongoing $62,071,065
Education $101,852,568 Everything Else $89,184,133
Revenue Source Taxes/Fees $6,655,054 Intergovernmental Transfers $53,863,862 Utilities/Services $1,946,688
Summary
• Annual “full ramp-up” costs and revenues are broken out into categories
SummaryOutput tab
Questions?
ET+FIT OverviewRevenue ProjectionsExpenditure ProjectionsOutput and Summary
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