Envision Tomorrow + Fiscal Impact Tool
(ET+FIT)
July 16th, 2013
FIT Discussion Topics
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ET+FIT Overview
Revenue Projections
Expenditure Projections
Output and Summary
Model Overview
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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+)
What drives the model?
ANNUAL
EXPENDITURE
ANNUAL
REVENUE
FIT MODEL
NET BENEFIT
Existing Conditions
What is the current fiscal outlook?
• Census of Governments (2010)
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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:
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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
Scenario Impact
FIT MODEL
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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
A Linked System of Spreadsheets and GIS
Buildings
Development Types
ROI Model
Scenario Spreadsheet
5 Story
Mixed Use
Town Center
2 Story
Mixed Use
3 Story
Apartment
Town
Neighborhood
Townhome
Compact
Single Family
Conventional
Single Family
Residential
Subdivision
GIS
Painting
ArcGIS
Evaluation Criteria
Scenario Spreadsheet
Density & Mix
Travel
Health
Sustainability
Investment
Fiscal Impact
Scenario Building Process
Building Types
Development
Types
Scenario
Development
Evaluation
1
Step 1: Model a library of building types that are
financially feasible at the local level.
Building Prototypes
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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
2
Step 2: Define the buildings, streets and amenities that
make up all the “places” in which we live, work and play.
Development Type Mix
A 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
Place Types
Mix of Buildings
Place Types Include Street
Characteristics
Place Type Example: Urban Center
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
Scenario Building Process
Building Types
Development
Types
Scenario
Development
3
Step 3: Paint future land use scenarios to test the
implications of different decisions or policies.
Evaluation
Hard Costs and Revenue From
New Construction
NEW
CONSTRUCTION
PRIVATE
INVESTMENT +
EMPLOYMENT
CAPITAL OUTLAYS
(INFRASTRUCTURE
COSTS)
TO FISCAL
IMPACT
TOOL
Scenario Building Process
Building Types
Development
Types
Scenario
Development
Evaluation
4
Step 4: Compare the scenarios and monitor the impact
of land use decisions in real-time.
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
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Property tax
Sales tax
Income tax
Non-tax revenue
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Sewerage
Solid waste
Utility
Intergovernmental
USER-DEFINED
TAX RATES
FIT MODEL
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-up
Projecting Future Sales Tax Revenue
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
TIME
Non-Tax Revenue Projection
NON-TAX REVENUE
• Assume a constant per-capita revenue
• [current non-tax revenue per person]*[new
population in scenario]
POPULATION
Questions?
ET+FIT Overview
Revenue 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 MODEL
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 Assumptions
New Infrastructure Costs
(Capital Costs only)
Unit
Cost
New Roadway
Lane Mile
$
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
1,700,000
Operations and Maintenance
(O&M) Projection
• The following categories are tracked:
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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 Assumption
OPERATIONS AND MAINTENANCE
Projecting Future O&M
• We assume a fixed level of
service.
• Per capita O&M stays
constant as population
increases
POPULATION
Questions?
ET+FIT Overview
Revenue Projections
Expenditure 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%)
User enters rate and forecast period:
PROJECT ASSUMPTIONS
Years from up front to on-going
Discount Rate
Period/Years
Scenario 1
1
3.8%
30
FIT MODEL
NET BENEFIT
Outputs
RampUp path:
Discount rates are applied to
costs and revenues over the
forecast horizon. User can
define when costs and
revenues “ramp up”
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20
Year 21
Year 22
Year 23
Year 24
Year 25
Year 26
Year 27
Year 28
Year 29
Year 30
3%
6%
10%
13%
16%
20%
23%
26%
30%
33%
36%
40%
43%
46%
50%
53%
56%
60%
63%
66%
70%
73%
76%
80%
83%
86%
90%
93%
96%
100%
Raw
Inflated
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$43,465,920
$44,543,874
$45,648,562
$46,780,647
$47,940,807
$49,129,739
$50,348,156
$51,596,791
$52,876,391
$54,187,726
$55,531,581
$56,908,764
$58,320,102
$59,766,440
$61,248,648
$62,767,614
$64,324,251
$65,919,493
$67,554,296
$69,229,643
$70,946,538
$72,706,012
$74,509,121
$76,356,947
$78,250,600
$80,191,214
$82,179,957
$84,218,019
$86,306,626
$88,447,031
$90,640,517
Discounted
$43,037,560
$42,613,422
$42,193,463
$41,777,644
$41,365,922
$40,958,258
$40,554,611
$40,154,942
$39,759,213
$39,367,383
$38,979,414
$38,595,269
$38,214,910
$37,838,299
$37,465,400
$37,096,176
$36,730,590
$36,368,608
$36,010,193
$35,655,310
$35,303,924
$34,956,001
$34,611,507
$34,270,408
$33,932,671
$33,598,262
$33,267,149
$32,939,299
$32,614,679
$32,293,259
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.
Revenue/Cost Ratio
30 yr.
16.83%
Net reduction
-12.32%
Scenario
65.25%
Summary
• Annual “full ramp-up” costs and revenues are
broken out into categories
SummaryOutput tab
Scenario 1
Stream Value of chosen time horizon, in years:
Total, One-Time and Ongoing
One-time
Ongoing
Education
Everything Else
Revenue Source
Taxes/Fees
Intergovernmental Transfers
Utilities/Services
Revenue
$783,436,635
$783,436,635
Cost
$2,411,190,316
$3,314,830,336
$0
$62,071,065
$903,640,020
$101,852,568
$89,184,133
$6,655,054
$53,863,862
$1,946,688
30 yr. Net
-$1,627,753,681
-$2,531,393,701
Questions?
ET+FIT Overview
Revenue Projections
Expenditure Projections
Output and Summary