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Envision Tomorrow + Fiscal Impact Tool (ET+FIT)

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

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Envision Tomorrow + Fiscal Impact Tool (ET+FIT)

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  1. Envision Tomorrow + Fiscal Impact Tool(ET+FIT) July 16th, 2013

  2. FIT Discussion Topics • ET+FIT Overview • Revenue Projections • Expenditure Projections • Output and Summary

  3. 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+)

  4. What drives the model? FUTURE SCENARIOS PROJECTED REVENUE FIT MODEL NET BENEFIT ANNUAL EXPENDITURE PROJECTED EXPENDITURE ANNUAL REVENUE EXISTING CONDITIONS

  5. 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

  6. 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

  7. FUTURE SCENARIOS FIT MODEL

  8. Scenario Impact FIT MODEL • Population change • Employment change • Private investment (value of new construction) • Infrastructure costs Sample of ET+ Output

  9. Suite of planning tools: Prototype Builder Return on Investment (ROI) model Scenario Builder Extension for ArcGIS What is Envision Tomorrow?

  10. A Linked System of Spreadsheets and GIS GIS PaintingArcGIS Buildings ROI Model Development Types Scenario Spreadsheet Evaluation Criteria Scenario Spreadsheet 5 Story Mixed Use Density & Mix Travel Health Sustainability Investment Fiscal Impact Town Center 2 Story Mixed Use 3 Story Apartment Town Neighborhood Townhome Compact Single Family Residential Subdivision Conventional Single Family

  11. Scenario Building Process Scenario Development Evaluation Building Types Development Types 1 Step 1: Model a library of building types that are financially feasible at the local level.

  12. Building Prototypes • Density and Design • Rents, Sales Prices • Market Value • Employment • Population • Costs and Affordability • Energy and Water Use

  13. Use Real-World Examples • Rents, sales prices calibrated to NEO region • Design and density modeled using local examples

  14. Scenario Building Process Scenario Development Evaluation Building Types Development Types 2 Step 2: Define the buildings, streets and amenities that make up all the “places” in which we live, work and play.

  15. Development Type MixA Variety of Buildings, Streets and Amenities Create a “Place” Town Center Medium-Density Residential Single-Family Residential

  16. Include one or many building types depending on scenario planning geography Parcels, Census Blocks, uniform grid Development Types are Scalable from Parcels to Districts

  17. Place Types Composed of Regionally Calibrated Prototype Buildings Mix of Buildings Place Types

  18. Place Types Include Street Characteristics

  19. Place Type Example: Urban Center

  20. Scenario Building Process Scenario Development Evaluation Building Types Development Types 3 Step 3: Paint future land use scenarios to test the implications of different decisions or policies.

  21. Hard Costs and Revenue From New Construction NEW CONSTRUCTION PRIVATE INVESTMENT + EMPLOYMENT CAPITAL OUTLAYS (INFRASTRUCTURE COSTS) TO FISCAL IMPACT TOOL

  22. Scenario Building Process Scenario Development Evaluation Building Types Development Types 4 Step 4: Compare the scenarios and monitor the impact of land use decisions in real-time.

  23. Questions? • ET+FIT Overview • Up Next: Revenue Projections • Expenditure Projections • Output and Summary

  24. 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 PROJECTED REVENUE

  25. 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

  26. 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

  27. 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

  28. Proportional Ramp-upProjecting 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 TAX REVENUE TIME

  29. Non-Tax Revenue Projection • Assume a constant per-capita revenue • [current non-tax revenue per person]*[new population in scenario] NON-TAX REVENUE POPULATION

  30. Questions? • ET+FIT Overview • Revenue Projections • Up Next: Expenditure Projections • Output and Summary

  31. 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 PROJECTED EXPENDITURE FIT MODEL

  32. 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

  33. 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

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

  35. Operations and Maintenance (O&M) Projection • The following categories are tracked: • Education • Hospitals • Roads • Police • Fire • Parks • Sewerage • Solid Waste • Utility

  36. 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.

  37. Level of Service AssumptionProjecting Future O&M OPERATIONS AND MAINTENANCE • We assume a fixed level of service. • Per capita O&M stays constant as population increases POPULATION

  38. Questions? • ET+FIT Overview • Revenue Projections • Expenditure Projections • Up Next: Output and Summary

  39. 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: PROJECTED REVENUE FIT MODEL NET BENEFIT PROJECTED EXPENDITURE

  40. Outputs Discount rates are applied to costs and revenues over the forecast horizon. User can define when costs and revenues “ramp up”

  41. 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.

  42. Summary • Annual “full ramp-up” costs and revenues are broken out into categories SummaryOutputtab

  43. Questions? • ET+FIT Overview • Revenue Projections • Expenditure Projections • Output and Summary

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