Fiscal Impact Calculator Methodology

Methodology

Our Fiscal Impact Calculator is designed to tabulate the city’s costs and revenues for proposed real estate development. As a tool for public decision making, it presents the summary as a cost-benefit and cash flow analysis. Fiscal impacts are only part of public policy discussions and must be weighed in the context of municipal goals and the public interest. As part of a deliberative policy process, fiscal impact helps by describing the projected financial costs and benefits of a proposal.

The UrbanInsights Fiscal Impact Calculator relies on municipal data including GIS Tax Assessor Parcels, selected City Statistics, localized Rates, and the City’s General Fund as described in its Annual Comprehensive Financial Report (ACFR).

Our model trends recent historical costs and revenues in the General Fund to understand, in current dollars, the projected future budget line expenses. Rather than using a single-year budget snapshot, this approach provides deeper confidence in understanding changing costs and guards against anomalies in annual budgets.

Budget line items are classed with a demand base. Demand bases indicate which variables are used to project changes to a budget line. Some common demand bases include population, employment, customers, enrollment, road miles, park acres, or built square feet. If a budget line is considered unlikely to change, it is classified as fixed. Also, if the ACFR lists employee benefits separately from department budgets, we attribute the proportion of benefits back to each department salary line. By tallying the demand base and dividing by the appropriate city data line, we understand the demand base cost per unit — for example, the cost per resident, cost per household, or cost per employee. Trends in the demand base over the recorded period are projected forward to anticipate future (non-inflationary) escalations. Finally, cost projections are attributed to building and use types.

We use a scenario-based model to project tax revenues and development fees from proposals and the costs of proposed capital improvements. For the future value of real estate, we project the market value of the proposed uses. This can be done either by estimating the construction value of the building (best for commercial buildings and rental apartments) or by using the prevailing market rate (particularly for for-sale residential units). Market values are configurable within each project.The city tax rate is applied to the projected value to determine tax revenues (and personal property tax, where applicable), and the construction cost is used to determine development and permit fees. Capital improvement costs should be entered and carefully reviewed by the City to ensure accurate projections.

The baseline analysis presents the existing tax revenues and the associated demand base costs of city services. Note that this does not include “fixed” demand base expenses or revenues. It does, however, provide a net revenue estimate to compare with development alternatives.

New development scenarios are not currently tied to geographic data, so proposed development can plan new lots or reimagine existing lot patterns. The costs and revenues of new uses are attributed from the associated demand bases and projected cost and value. Again, the net revenue does not include budget line items that are determined to be “fixed” and not expected to change with new development.

This methodology does not currently include spatial analysis to determine when emergency services require new facilities to service either increased capacity or travel time. Likewise, while projected new public school enrollment and the cost of education are included, any required new school facilities are not automatically calculated. In developing scenarios, the school district and emergency service departments should review plans to ensure existing capacity is adequate. Any required new facilities may be added in the capital improvements section.

Data

GIS Tax Assessor Parcels

We use your existing GIS tax assessor parcel data as a baseline to measure proposals against. These GIS files will be uploaded into the system, enabling quick creation of study area analyses based on existing parcels. Where available, past GIS database information is helpful to document previous estimates of City uses by square foot.

Land Use Indexing

Every tax assessor data set uses a Land Use Code for property classification — but these codes often vary from place to place. While we wait for the capability of AI to streamline this, we’ll need to manually index your local Use Codes to generalized categories to support consistent baseline analysis.

General Fund

Our Fiscal Impact Analysis focuses on understanding the impact of proposals on the revenues and expenses of the General Fund. The baseline information for this comes from your City’s ACFR, which records actual spending rather than proposed budgets. The ACFR typically provides detailed financial data by government department. Unless more granular data is provided, the ACFR remains the default analysis level. In our initial meeting, we’ll identify any General Fund transfers that should be included in the analysis. This includes transfers from the State for education, shares of sales tax reimbursement, or additional support for enterprise funds.

City Statistics

Many required City Statistics can be found in the appendix of your Annual Comprehensive Financial Report (ACFR), such as miles of road, public school enrollment, and acres of parks. Additional City data is pulled via an API link to the Census, including estimated population, household size, and school-age children per household. Some data, like average housing unit size (by units in building), estimated employment, existing built square footage, and existing retail space, will need to be input manually.

Rates

Key rates must be configured for the analysis, with the most important being projected assessment values for new uses. These can be estimated through construction rates or market value rates. Construction rates are also necessary for estimating public improvements. By default we’ll use estimated regional averages. City tax rates, development fee rates, and current and projected bond rates are required to determine revenues and the annual cost of improvements.