“Fiscal Impact Analysis – Measuring the Impacts of Growth ”

1. “Fiscal Impact Analysis – Measuring the Impacts of Growth” June 9, 2011 Presentation to the Virginia Government Finance Officers Association

2. Introductions • Me “No Good Deed Goes Unpunished” • Loudoun County “Victims of Our Own Success” Presentation to Virginia Government Finance Officers Association

3. What is Fiscal Impact Analysis ? • In this case, it is the attempt to estimate the financial implications, over time, of an individual or series of actions relating to the use of land Presentation to Virginia Government Finance Officers Association

4. What types of projects trigger an analysis: • Major Economic Development project • Land Use change • Rezoning for PUD • Transportation Corridor Plan • Area Plan • General Plan Revision or Amendment • TIFF or Special Tax District Proposal • Community Development Authority • Major Infrastructure Project • Sports/Cultural Facilities Presentation to Virginia Government Finance Officers Association

5. Review or Commission? • We commission (or in house) studies for new patterns or types • General Plan Revision • Area Plan Revisions • Corridor Plan Studies • New Types • Lansdowne PUD and Hotel Complex • High Density Transit Oriented Development • WorldComm – high density • Dulles Rail • We review private sector initiated studies for • Special Districts • Community Development Authorities • Major Rezonings • Major Comprehensive Plan Amendments Presentation to Virginia Government Finance Officers Association

6. What are we measuring? • Across all Governmental Funds and the School Fund • Over Time • 20 Years • 30 Years • “Buildout” • Revenues • Expenditures • Capital Facility Needs • Capital Costs • Debt Service • Water/Wastewater/Municipal Solid Waste Impacts Presentation to Virginia Government Finance Officers Association

7. What are the Formats of the Analysis? • Average Cost • Marginal Cost • Multivariate Presentation to Virginia Government Finance Officers Association

8. Which Type is Appropriate? • Marginal Cost works best for static communities • Average Cost better for growing communities • Multivariate best for large/long-range analysis, but there are drawbacks Presentation to Virginia Government Finance Officers Association

9. What Drives the Analysis? • Business/Development Plan • Quantifiable Units • People • School Age Children • Other Specific Demographic Subgroups • Households • Housing Units (SFD/SFA/MF) • Non-residential square footage by type • Employees • Hotel Rooms • Developed/Undeveloped Acreage Presentation to Virginia Government Finance Officers Association

10. Applied Against? • Programmatic and Revenue Data from Schedule 1 (other funds as necessary) • Rolls up into larger categories • Demand or Source Allocation % from Residential / % from Commercial Presentation to Virginia Government Finance Officers Association

11. Usual Components - Demographic Modules • People per Housing Unit and Type • School Age Children Per Unit and Type • Occupancy Rate/Unit Type • Square Foot per Employee by Type Presentation to Virginia Government Finance Officers Association

12. Usual Components - Revenue Module • Real Property • Residential Development • Basic Housing Type (SFD/SFA/MF) • SFD acreage delineation (1/4 acre, ½ acre, acre…) • MF Condominium vs. Rental • Senior Housing • Affordable Units • Other Residential components • Executive Housing • Elevator Apartments/condos • “workforce” housing • Golf Course homes Presentation to Virginia Government Finance Officers Association

13. Usual Components - Revenue Module • Real Property - continued • Undeveloped Land • Initial State • Impact of Regulatory Change (Rezoning/Permits/Utilties/Roads) • Acreage driven and declines over development horizon • Commercial Development • Development Type (Office/Flex/Industrial/Other) • Hotels by Room • Assessed Value Assumptions Presentation to Virginia Government Finance Officers Association

14. Usual Components - Revenue Module • Personal Property • Residential usually based on Per Housing Unit basis • Business usually based on per employee or sq. ft. • Sales Tax • Per HH and Per Employee • Others • Per HH and Per Employee Presentation to Virginia Government Finance Officers Association

15. Usual Components - Revenue Module • Revenue related to Construction • Permits Fees, and BPOL • Related to sq. ft. or assessed value • State Aid for Education • Per Child • Hotel/Motel Per Room Presentation to Virginia Government Finance Officers Association

16. Usual Components - Expenditure Module • Average Cost • Allocated by generator: Residential/Commercial) • Per Person and Per Employee Components • Education Cost Per Child Presentation to Virginia Government Finance Officers Association

17. Usual Components - Capital Flows • General Government (including Schools) Facility Drivers • Capital Standards (CIP/Existing) • Population/Child/Employee based • Trigger Basis (100%, 80%,?) • Facility Costs • Proffers • Other Revenues/Cash • Debt Service • Transportation, Solid Waste and Water/Wastewater • Facility Drivers • Standards • Population/Households/Vehicle Trips • Trigger Basis Presentation to Virginia Government Finance Officers Association

18. Usual Components - Summary Module • Annual or Five-year Summaries • Totals, all years • “Buildout” Presentation to Virginia Government Finance Officers Association

19. Key Concepts and Issues • Base Year Conditions • Fund Balance • Service Delivery Change • State Aid/ARRA • Overall Inflation / Property Appreciation / Expenditure Inflators • Proffers and Construction Inflation • Net Development Versus Gross • Rearranging the Deck Chairs Presentation to Virginia Government Finance Officers Association

20. Key Concepts and Issues • Scope of Analysis • Project • Area • County-wide • Aggressive Development Schedules • Fronting the $ Presentation to Virginia Government Finance Officers Association

21. Key Concepts and Issues • Scenarios • Base Case • Should be current zoned/planned use of land with reasonable assumptions • What is the regional/local demand for product types? • Are there regionally agreed upon forecasts? • Weldon Cooper • Developed Scenario(s) • Same Demand Questions • Summary of Net Differences • Reminder: You are not providing answers, merely ranges of possibilities Presentation to Virginia Government Finance Officers Association

22. Key Concepts and Issues • Induced Commercial/Retail Development • Breakeven • Multipliers Presentation to Virginia Government Finance Officers Association

23. Best Practice RecommendationsLoudoun Experience • Public/Public/Public “Open covenants of peace, openly arrived at, after which there shall be no private international understandings of any kind but diplomacy shall proceed always frankly and in the public view” 14 Points, Woodrow Wilson • Inter-Departmental Advisory Group • Finance/Budget/Planning/Zoning/Economic Development/Administration and as much help as possible from Schools/Utilities and Transportation • If possible, get a formal public advisory board • Get a financially concerned Board/Council member involved if possible • Diverse advisory panel • At least 40% local development community (HB 3202) • Avoid “Black Box” models Presentation to Virginia Government Finance Officers Association

24. Best Practice RecommendationsLoudoun Experience • Adopt demographic and capital standards • Triennial Census Data • American Community Survey • Weldon Cooper • Capital Standards (Start with CIP) • Know your CAFR and Budget • Know why and how mergers, realignments and department changes happened • Interview your Line Departments about service demand • Know your demographics • Call your neighbors Presentation to Virginia Government Finance Officers Association

25. Questions? Benjamin Mays Deputy CFO Management and Financial Services Loudoun County, Virginia 1 Harrison Street, NE Leesburg, VA 20175 703/777-0569 ben.mays@loudoun.gov Presentation to Virginia Government Finance Officers Association