Dr. Linda Tomaselli, GIS Research and Development Consultants (GISRDC)

Ms. Vasudha Pinnamaraju, Executive Director, McLean County

Regional Planning Commission (MCRPC), Illinois

APA National ConferenceMonday, May 8 10:30 a.m. - 11:45 a.m. Room: Hall 1E09 (JCC)

� Overview of Spatial Fiscal Impact and comparison to other

methods

� Concepts

� Process

� Results and how to present them

� Costs and Benefits

� Q and A

Agenda

Definition:

“A projection of the direct, current, public costs and revenues associated with residential or nonresidential growth to the local jurisdiction in which this growth is taking place.”

Corollary:

We know what the costs and revenues are for existing development.

Do we really know, or are we just guessing?

Fiscal Impact Analysis

� How many of you have been asked to estimate fiscal impact?

� Are you familiar with these books?

Your experience with Fiscal Impact Analysis

Handbook published in 1978

Practitioners Guide published in 1985

� Per Capita - residential

� Service Standard – residential

� Case Study - residential

� Comparable City - residential

� Employment Anticipation – C/I

� Proportional Valuation – C/I

� Residential or commercial/industrial land use, but not both

� They treat these types of land use as homogeneous blocks of development; they are not

� They totally ignore tax exempt uses

� Per capita most widely used; assumes all residential costs are related to population.

� However, consider the following costs:

� Public Safety

� Road maintenance

Shortcomings of non-spatial methods

• Key premise: Revenues and expenditures are spatial, and also unique to city • It comprehensively deals with all land uses • It is not a black box method; it is open and transparent; local data credible • The results are useful

- to understand the fiscal patterns that exist (the corollary – we know the costs)- to project the impact of future development (fiscal impact)- to identify areas in need of redevelopment - to build a robust planning database

• It uses Geographic Information Systems to process “big data”• Assessor’s parcel database is an organizing spatial framework for the entire

process

The Spatial Fiscal Impact Analysis Method

Revenues and expenditures are spatial

The ideal transaction processing system

Revenues Expenditures

Data Processing (transactions)

Operational Decisions

Tactical Decisions

Strategic Decisions

Parcel level analysis

Land Use / Neighborhood analysis

Comprehensive Plan analysis

Spending/ Capital Improvement decisions

• We do not have the ideal transaction processing system

• We do have factors that can be used as surrogates to model such a system that

can be approximately distributed among parcels:

o Population

o Employment

o Assessed Value

o Building Market Value

o Locally maintained road frontage, by type

o Police and Fire Calls

o Site-specific features

• Parcels are the lowest common denominator for land use so we can estimate and

summarize by detailed land use categories and neighborhoods; focus not on

individual parcel

Step 1 – Analyze city finances

Step 2 – Determine the factors to use in the analysis

Step 3 – Develop multipliers

Step 4 – Calculate fiscal impact

Step 5 – Summarize by land use and neighborhood

Step 6 – Retrospective view of infrastructure

Step 7 – Summarize and present the results

This is a brief summary. Obtain free copy of draft “how to” book.

A. Obtain the Comprehensive Annual Financial Report (CAFR)

B. Separate operating from capital

Operating – regular items that occur from year to year

Capital and Special – items than can vary from year to year, or are dedicated to special areas of the city

Examples:

-TIF districts

- road construction

- CDBG

- special taxing zones

• Revenue and Expenditure Categories

• Funds

• Control Totals:

� Revenue = $98,019,507

� Expenditures = $95,564,353

� Surplus = $2,155,154

1. Population

2. Employment

3. Assessed Value

4. Building Market Value

5. Addresses for matching

6. Police and Fire Calls

7. Locally maintained road frontage, by type

8. Site-specific features, like TIF districts, special taxing zones, etc..

9. Infrastructure Capacity

Cross-tabulation features

10. Detailed Land Use

11. Neighborhoods

12. Distance

13. Homestead status

14. Year built

Do Not use average and apply it to all housing units

Important: distribute population as realistically as

possible based on residential types.

• Employment does affect the costs of delivering city

services

• Distributing it among parcels can be difficult

• An Employment Inventory would be ideal

Factor 3 – Building Market Value• Assessed value starts with land and building market values

• Land does not demand services; People and businesses do

• Building market value reflects the intensity of the demand as well as some types of revenue

• Gets at both residential and C/I demands• Should include tax exempt building market value

• Comes straight from the Assessor

• Used to calculate property taxes

• Values may be far less than actual market value, but for all

parcels they are relative to the fair market value, and relative

among parcels

• Other adjustments: senior citizens, homestead status

• Assessor’s file has parcel addresses

• The street names and addresses may need to be

standardized for consistent spelling and street types

• GIS tools can help with that

• The addresses are used to assign things like police and fire

calls as well as utility billing to parcels.

• Public Safety is usually the biggest

expense item – 43% in Bloomington

• Call data from police and fire/EMS

• Addresses in assessor’s file used to assign

police and fire calls to parcels

• Other calls to intersections and blocks;

use centerline data to locate

• Duration of calls is important

• Later used police call equivalents

• Road maintenance is a big city expense item

• Locally maintained road frontage is

• needed to allocate the cost

• Need to create a right of way file and then

• Measure the amount of frontage on locally maintained streets

• Commercial/industrial uses are more likely to be

located along county or state highways

• Single family has more road frontage than

apartments and is almost always located on local

streets; mobile homes typically have private streets

• Sewer force mains in outlying areas with unused capacity

• City maintained roads with taxable parcels on only one side, or passing through unincorporated, non taxable areas

• Assessor’s file provides basic land use information for commercial/industrial, residential types and tax exempt

• Bloomington there was no breakdown of commercial, a big shortcoming

• Planners can provide more detail

• Restaurants

• Banks

• Auto service

• Retail

• Personal services

Central city – 2.5 mile radius

Others:Primarily residential

Primarily commercial

Urban fringe

Urban sprawl

Factor 11 – Distance

• Distance affects the cost of providing services

• Development beyond 2.5 miles requires satellite facilities –

mostly police and fire/EMS

• Distance factor:

(% population + % building market value) times

distance from center

Amount Distribution Factor WeightDistribution

Amount

Factor

AmountMultiplier Description

$11,431,189 Population 45% $5,144,035 77679 $66.22 per capita

Employment 10% $1,143,119 62300 $18.35 per employee

Police Calls 6% $685,871 109010 $6.29 per police call equivalent

Fire Calls 31% $3,543,669 14634 $242.15 per fire call equivalent

Road Frontage 8% $914,495 3246670 $0.28 per front foot

$17,541,312 Net Assessed Value 100% $17,541,312 1716746188 $10.22 per $1,000

Revenue Category

General Government

Charges for Services

Property Taxes

Amount Distribution Factor WeightDistribution

AmountFactor Amount Multiplier Description

$41,102,503

Police Call Equivalents 19% $7,809,476 87,364 $89.39 per police call equivalent

Police Street Calls 6% $2,466,150 100% $24,661.50 per % Distance Factor

Fire Call Equivalents 22% $9,042,551 12,517 $722.42 per fire call equivalent

Building Safety

and Code Enforcement

Commercial /Industrial

and Apartment Market

Value

5% $2,055,125 495,953,368 $4.14 per $1,000 of value

Patrolling and Readiness

Population 14% $5,754,350 77,679 $74.08 per capita

Total Building Market

Value15% $6,165,375 1,708,719,772 $3.61 per $1,000 of value

Distance Factor 13% $5,343,325 100% $53,433.25 per % Distance Factor

Employment 6% $2,466,150 62,300 $39.59 per employee

Expenditure Category

Public Safety

Police and Fire Calls

Multipliers

summarized by the

allocation factor

Allocation Factor Revenue Expense

Multiplier Multiplier

Population $449.6070 $253.7945

Employment $114.6894 $96.1585

Police call equivalents $29.0836 $104.7577

Fire call equivalents $295.2253 $735.2863

Net assessed value $0.0138

Local road frontage $0.2842

Commercial/indust. BMV $0.0240

Residential BMV $0.0060

Commercial/indust./apartment BMV $0.0041

Building Market Value (BMV) $0.0054

Arterial road frontage $5.7034

Collector road frontage $4.7305

Local road frontage $1.1803

Alleys $0.4844

Population and BMV distance factor $12,145,559

• Operating Fiscal Impact plus

• Capital Fiscal Impact plus

• Allocation of the negative fiscal

impact of tax exempt =

• Net Fiscal Impact

NUMBER

OF PARCELSACRES

PRELIMINARY

FISCAL

IMPACT

ADJUSTMENT

FOR TAX EXEMPT

AND SURPLUS

AMOUNT PER ACRE PER UNIT

COMMERCIAL 1,555 2,739 6,830,087 -1,784,529 5,045,557 $1,842

INDUSTRIAL 29 220 228,532 -54,662 173,871 $791

INSTITUTIONAL 10 3 30,122 -7,001 23,121 $7,178

RECREATION AND OPEN SPACE 92 1,583 -697,628 -99,661 -797,289 ($504)

RESIDENTIAL 22,034 5,667 2,654,975 -6,474,612 -3,819,637 ($674) ($106)

TRANSPORTATION 4 350 -146,652 -98,617 -245,269 ($701)

VACANT 1,108 522 -313,185 -67,169 -380,354 ($728)

SUBTOTAL 24,832 11,084 $8,586,251 ($8,586,251) $0 $0

TAXABLE LAND USE NET TAXABLE FISCAL IMPACT

By Neighborhood

Other summaries:

• By land use by neighborhood

• By detailed land use

• By year built

• By homestead status (renter

versus owner)

• By square footage

• And on, and on

• What has the city built in the past

and is still paying for?

• How long until it is paid for?

• What is the unused capacity?

• What is the relationship to current

land use patterns?

Note: Data may be hard to come by because it happened in

the past and record keeping may be lacking

• Tailor your message

• Purpose

• Audience

• Outcome

• Save the details, paint the big picture

• Don’t make it personal

• Exercise caution when presenting fiscal impacts of a policy.

-$343

-$2,438

$872

$61$2,239

$4,138

$7-$488

-$450

-$521Fox Creek

Grove

� Approved around 2005

� Public Costs: 11 Million total

� Recouped $0.5 Million or 4.5%

as of 2013.

Grove Subdivision Fox Creek Subdivision

� Approved around 23 years ago

� Public Costs: 10 Million total

� Recouped $1.5 Million or 15%

as of 2013.

• Purpose: to inform the

comprehensive plan.

• Audience:

• Council, Residents,

Businesses, Developers,

Realtors, Engineers

• Big picture:

• Slower economy and

slow population growth

• Aging infrastructure and

deferred maintenance

• Complete buy-in from

the Council and the

community.

• Still a disconnect

between planning and

engineering professions

Bloomington Project (population about 80,000):

• Preliminary estimate - $60,000

• Subsidized amount - $30,000

Actual time spent: about 800 hours, or about 1 hour per 100 population

Skills Needed

• This is not “rocket science”; it is just common sense

• Staff need basic GIS and database skills

• ArcGIS or even the old ArcView

• Use ArcGIS Model Builder

• No longer guessing at what is the existing fiscal impact of land use

• Project the impact of a proposed development: residential, commercial or tax

exempt

• Identify areas in need of redevelopment

• Project impact of Comprehensive Plan

• Work with finance department and operational departments and gain better

understanding of issues

• Develop robust planning database, maybe update every 5 years

• Others: “Payment in Lieu of Taxes”, long range financial planning, impact fees

• Presentation will be available at www.Bloomington-fiscal-

impact.com, along with the entire final report for Bloomington.

• Draft of forthcoming book available free of charge: please email at

Ltomaselli@GISRDC.com for access.

• Looking for other research and development cities.