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Envision Tomorrow + Fiscal Impact Tool(ET+FIT)
July 16th, 2013
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FIT Discussion Topics
• ET+FIT Overview• Revenue Projections• Expenditure Projections• Output and Summary
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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+)
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FIT MODEL
ANNUAL REVENUE
ANNUAL EXPENDITURE
NET BENEFIT
PROJECTED
REVENUE
PROJECTED
EXPENDITURE
EXISTING
CONDITIONS
FUTURE
SCENARIOSWhat drives the model?
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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
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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
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FIT MODEL
FUTURE
SCENARIOS
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Scenario Impact
FIT MODEL
• Population change• Employment change• Private investment (value of new construction)• Infrastructure costs
Sample of ET+ Output
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What is Envision Tomorrow?
• Suite of planning tools:• Prototype Builder
• Return on Investment (ROI) model
• Scenario Builder • Extension for ArcGIS
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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
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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
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Building Prototypes
• Density and Design• Rents, Sales Prices• Market Value• Employment• Population• Costs and Affordability• Energy and Water Use
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Use Real-World Examples
• Rents, sales prices calibrated to NEO region
• Design and density modeled using local examples
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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
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Development Type MixA Variety of Buildings, Streets and Amenities Create a “Place”
Town Center
Medium-Density Residential
Single-Family Residential
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Development Types are Scalable from Parcels to Districts
• Include one or many building types depending on scenario planning geography
• Parcels, Census Blocks, uniform grid
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Place Types Composed of Regionally Calibrated Prototype Buildings
Plac
e Ty
pes
Mix of Buildings
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Place Types Include Street Characteristics
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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
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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
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Hard Costs and Revenue From New Construction
PRIVATE INVESTMENT + EMPLOYMENT
CAPITAL OUTLAYS(INFRASTRUCTURE COSTS)
TO FISCAL IMPACT TOOL
NEW CONSTRUCTION
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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
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Questions?
ET+FIT Overview• Up Next: Revenue Projections• Expenditure Projections• Output and Summary
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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
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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
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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
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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
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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
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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
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Questions?
ET+FIT OverviewRevenue Projections• Up Next: Expenditure Projections• Output and Summary
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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
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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
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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
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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
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Operations and Maintenance (O&M) Projection
• The following categories are tracked:– Education– Hospitals– Roads– Police– Fire– Parks– Sewerage– Solid Waste– Utility
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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.
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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
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Questions?
ET+FIT OverviewRevenue ProjectionsExpenditure Projections• Up Next: Output and Summary
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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:
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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”
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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%
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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
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Questions?
ET+FIT OverviewRevenue ProjectionsExpenditure ProjectionsOutput and Summary