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1. Minnesota Statutes 9462.358, subd. 2b allows City to require
applicants to dedicate a reasonable portion of any subdivision for public use as parks,
playgrounds, trails, wetlands, or open space or an equivalent amount in cash.
The City Council finds that:
A) The preservation and development of parks, trails, and open space areas
within the City are essential to maintaining a healthy and desirable
environment for residents and persons employed within the City. Further,
the presence of parks, tails and open space within the City enhances the
value and attractiveness of residential and commerciallindustrial property.
B) New developments place a burden upon the City's parks systems. New
development requires new facilities in order to maintain the current level of
service and the quality of the environment. Therefore, new developments
shall be required to contribute toward the City's park system in rough
proportion to the relative burden they will place upon the park system, in
order to maintain the existing level of service to the community. All
applicable terms of this section shall be made part of all development
contracts or site plan approvals.
C)
Residential development of land creates approximately
the need for the park system within the City.
percent of
D) Commercial/industrial development of land creates approximately
percent of the need for the park system within the City.
Development of land for schools creates additional demand on City's
park system to the extent that the school serves students that do not live
within the City.
Subd.2. Definitions. The terms and words used in this section shall have the
[oIl owing meanings:
A) Applicant: Any person commencing an application for a division,
consolidation, rearrangement, subdivision, or re-subdivision of land,
including planned unit developments. An applicant is the owner of the land
or an individual representing the landowner who has express written
authority to act on behalf of the owner.
1
on
the site. number calculated by multiplying the maximum gross
area (in thousands of square feet) of structural improvement that the site
can support by the average projected number of employees per 1,000
square feet of floor area of the proposed type of development, as
determined by the City's Community Development Director, as follows:
Property Type
Office
Retail
Industrial
Office-Warehouse
Warehouse
Employees/LOOO sq. ft.
3.0
2.0
1.65
1.65
1.0
If the property type of the development is not know at the time of the
application, the number of employees shall be calculated by using the
property type which results in the highest number of employees projected
to work in the proposed development, based upon the uses allowed by the
Zoning Code.
C) Existing Park Land and Open Space Acreage: The total acres of
community playfields, city parks, city golf courses, neighborhood parks,
mini-parks, school parks, and county parks and open space existing within
the City in 2005, as documented by the City's Parks and Recreation
Director, acres), plus the land area of trail outlots dedicated to the
as of 2005 as measured the City's geographic information system
acres), or a total of acres.
D) Jobs: The number of jobs located within the City as of2005 as estimated
by the City's Community Development Director (38,000).
E)
Per Capita Commercial Industrial Share:
park land and s ace acreage, divided
City. acreage) / 38,000 =
percent of existing
the number of jobs within the
acres/capita]
F) Per Capita Residential Share: percent of existing park land and
open space acreage, divided by the City population as estimated the
Minnesota State Demo raphic Center for 2003 (34,080). x
acreage) / 34,080 = acres/capita]
2
m are not
detennined by the Community Development Director to be the most
to the proposed used based upon the number of employees projected to
work in the development
Industrial
Examples of Land Uses
Bank, medical/dental/veterinary clmic,
offices (professional or commercial)
All commercial development, other than
office
Assembly, automobile repair,
commercial printing, fabrication, food
processing, machine shop,
manufacturing, wholesale bakery
Laboratories, wholesale showrooms
Distribution center, indoor storage, mini
storage, truck terminal, waste facility
Property Type
Office
Retail
Office-Warehouse
Warehouse
H) Residents: The number of residents that are expected to reside in a
proposed residential development. This number is calculated by
multiplying the number of new residential units in the proposed
development by the average number of residents per unit for the type of
residential unit proposed, based upon the Metropolitan Council's official
estimates as follows:
Type of Dwelling
Single-family home
Duplex or Townhome
Multi-family (Apartments)
Residents per Unit
3.1
2.0
1.9
Subd. 3.
Land Dedications.
A)
The City shall have the right to determine the location and configuration of
any land dedicated, taking into consideration the suitability of the land.
Factors to be considered in determining suitability shall include size,
topography, geology, hydrology, tree cover, access, contemplated uses, and
needs of the City as identified in its park systems plan, comprehensive plan,
or trails plan.
B)
Prior to the dedication of the required property, the City shall be provided
with an acceptable title opinion or title insurance policy addressed to the
3
to
encumbrances or assessments, except easements or minor
title acceptable to the City. deeds for the transfer the property to the
City shall be recorded at the same times as a final plat or other recorded
document.
C) Applicants shall provide finished grading and ground cover for all land
dedicated for parks, playgrounds, and public open spaces. The removal of
trees or topsoil, storage of construction equipment, burying of construction
debris, or stockpiling of surplus soil on dedicated land or land purchased by
the City is forbidden without the written approval of the City.
Subd. 4. Amount of Dedication. The amount of land required to be dedicated shall
be in an amount equal to the proposed land use's proportional share of the park and open
space system within the City as determined by this section. A land use's proportional
share shall be determined as follows:
A) A residential development's proportional share is the per capita residential
share multiplied by the number of residents expected in the development.
B) A commercial/industrial development's proportional share is the per capita
commerciallindustrial share multiplied by the number of employees
expected in the proposed development.
C) A school's proportional share is the per capita residential share multiplied
by the number of students expected to attend the school who live outside of
the City.
The dedication requirements based upon the proposed use's proportional share of the
park space system the City are
may request a deviation from the presumptive requirements based upon the anticipated
impact of that particular use. The request must be made to the City Council as part of an
application for final approval.
Subd.5. Cash Contribution in Lieu of Dedication. The City may elect to receive a
cash contribution in lieu of a land dedication. The cash contribution shall be calculated
by the City estimating the fair market value of an acre of similarly zoned property in the
City and then multiplying that figure by the number of acres required to be dedicated
under this section.
4
it at
property from a qualified real estate appraiser,
fair market value of the land.
be
Subd. 6. Land/Cash Combination. The City may require a combination of cash
contribution and land dedication pursuant to the following: (1) the amount of land
required to be dedicated under this section shall be calculated; (2) from that total, the
actual amount ofland dedicated shall be subtracted; (3) the balance shall be converted
into a cash contribution in lieu ofland dedication in the manner outlined in subdivision 5.
Subd. Mixed Uses. Planned unit developments with mixed land uses shall make
land dedications and/or cash contributions based upon the percentage ofland devoted to
the various uses.
Subd. 8. Additional Purchase. The City shall have the first right to purchase land
that is part of the application and is in addition to land dedicated pursuant to this section.
The City shall have the right to determine the size and configuration of the land to be
purchased. Factors to be considered in making an additional purchase ofland shall
include size, topography, geology, hydrology, tree cover, access, contemplated uses, and
needs of the City as identified in its park systems plan, comprehensive plan, or trails plan.
The purchase shall be for fair market value determined pursuant to subdivision 5, except
that (1) the City may obtain the initial appraisal and (2) the cost of any appraisal obtained
by the City shall be at the City's expense.
Subd. 9. Payment. When a cash contribution is to be paid in lieu of, or in addition
to, a land dedication, the payment of such fee shall be as follows:
A) For residential developments, the cash contribution shall be paid prior to
the City's release of the signed final plat mylars for recording with Ramsey
County. The exception is that in the case of multiple-family
developments where the site plan review occurs after the time of final plat
approval, the contribution shall be paid prior to the issuance of any building
permits.
B) For commercial/industrial development and schools, the fee shall be paid
prior to the issuance of any building permits. A pro-rated portion of the fee
may be deferred if the applicant proposes to construct significantly less
square footage than the site supports, provided that any remaining
contributions shall be paid if and when additional square footage is
constructed on the site in the future.
5
or
outlots, provided that the park dedication
when such outlots are replatted.
be
Subd. 10. Waiver. The City Council, at its discretion, may waive or reduce the
requirements of this chapter when the proposed land use includes a City assisted
development or redevelopment area or achieves some other public purpose and the
requirements would create a financial hardship for the projects.
Subd. 11. Special Fund. Any cash contribution received in lieu of a dedication of
land shall be placed in a special fund and used only for park, playground, open space,
trail, or recreational purposes other than ongoing operation or maintenance.
Subd. 12. Re-platting. If a parcel has previously been part of an application in which
a full park dedication or a cash contribution in lieu of dedication was made, then the park
dedication requirements of this chapter shall apply only on the expanded use of the
parceL The applicant has the burden to prove that a previous land dedication or cash
contribution occurred.
6
a. fee is
and/or development and/or improvement of neighborhood and
community parks to provide both passive and active recreational
opportunities to the residents of Roseville in order to improve quality of
life and for the public health, welfare and benefit. New and
redevelopments within the City generates a need for added and improved
facilities and an increased demand upon existing facilities. This constitutes
a necessity to provide funding for such new and lor improved facilities
meeting established standards for such developments and
redevelopments.
2. Benefits
a. Increased funding for Park and Recreation Infrastructure equates to a
more desirable place to live, work and play.
b. Allows an opportunity for the Community and Target to work together to
create a more desirable place for all.
c. This is consistent with the City Policy/Vision that was communicated
3. Factual Support - General incremental increase in use of Park and
Recreation System based upon the following:
a. Increase of 36 employees - it is estimated that approximately 20% of
employees that live outside the City are anticipated to participate in
leagues, have picnics in the park, walk the trails, etc.
b. Increase of 23,741 square feet of sales space translates into:
additional merchandise, additional sales, additional employees,
additional shoppers, additional strain and ultimately additional use of
the Park and Recreation System.
c. Increase in sales transactions by 41 % translates into additional
shoppers coming into the City, therefore it is anticipated that there may
be an increase in the use of Park and Recreation System by
approximately 20% in various ways
d. New trip generation to the Super Target Store is anticipated at 381 per
day which may involve more than one person at any time and
ultimately it is anticipated that approximately 20% of those folks will
use the Parks and Recreation System
e. The site has not paid Park Dedication in the past because the original
Target site predated the Park Dedication Ordinance.
CIP/PIP Schedule of Needs
5. Similar Circumstances in Other Communities
a. Shoreview - Can't Recall
6. Cost
a. 5% of the FMV of the unimproved land values -estimated at $300,000
7. Leqal Support
a. Highly questionable - according to Scott Anderson
b. Existing City Ordinance # 1278 - based upon the key triggers
communicated, it does not qualify. (need definitive answers to
these questions)
-No replat??
-No PUD???
-No Subdivision of Land???
-Not a new lot created in excess of one acre
c. Existing State Law -State Statute - 462.358
- Nexus is that additional employees (36), additional sales
volume (40%), additional square feet (23,741) of space
may translate into additional strain and use on the Park
and Recreation System. Information indicates that
approximately 20% of employees and visitors will use the
Park and Recreation System in one way or another.
=8
Sales TransactionsfY ear
P = 1,270,000
S = 1,795,000
Difference - 525,000
Number of Employees
P = Total 220
Full time 30
Part time 190
State Farm 200
Perkins 79
Total 499
S = Total 400
Full time 50
Part time 350
Proposed Retail 25
Perkins 110
Total 535
Net Difference: 36 additional employees
Size of Structure
P = Total SF
Public/Sales
Private/Stock & Office
State Farm
Perkins
S = Total SF
Public/Sales
Private/Stock & Office
Proposed Retail
Perkins
126,971
94,407
2,564
40,000
5,820
Total
182,882
137,459
45,423
7,500
6,150
Total
Net Difference: Increase of 23,741 sq. ft.
1 sq. ft.
196,532 sq. ft.
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Sources of data and information for this report
City of Roseville Community Development
. Roseville Comprehensive Plan
SINGLE FAMILY
ATTACHED RENTED
(DUPLEX, TRIPEX, DBL- I
DWELL
178
1%
1
30
o
o
o
CONDOMINIUM
RENTED-SENIOR
I OWNED
OWNED-SENIOR
RENTED
TOWN HOME
OWNED
RENTED
I MOBILE HOME
57%
15,159 100%
Source: Excensus 1999
*Note: Ramsey County Property records indicate 8414 units as of 9/04
Excludes nursing homes, on-campus housing, dementia units and detention units
Excensus data sources
. MN Drivers License Records (1999 through 2003)
. MN Vehicle Registration Records (1999 through 2003)
fII and Records (1999
. Roseville School District - School Census (1999)
. Mounds View School District - School Census (1999)
. Roseville Water Utility Billing System (1999)
. US Census Bureau (2000 Census)
. City of Roseville - Address and property data (1999 through 2003)
Maps
. "Multiple Dwelling Units" map of city of Roseville showing location, type and # of
units of all MF dwellings in city
ROSEVILLE MUL TIF AMIL Y HOUSING REPORT
] O!l9/04
APPENDIX
section
or certificate of occupancy.
of future park land and of
exaction for
calculate a fee that will assessed at time
The funds collected by the will be used for the
and future parks,
Different of development must be translated into a common unit of measurement that reflects
the impact of new development on the demand for park land and facilities, This unit of measurement
is called a "service unit." The most common service unit used in park impact fee analysis is
population, Population estimates are based on three factors: the number of dwelling units, average
household sizes for various types of units and occupancy rates. The number of dwelling units can be
estimated with some degree of precision, and average household size has been declining somewhat
predictably but has been stabilizing in recent years, Occupancy rates, on the other hand, tend to vary
significantly over time, and not in predictable directions, Consequently, this report recommends the
use of a service unit that avoids the need to make assumptions about occupancy rates. This service
unit is the "equivalent dwelling unit" or EDU, which represents the impact of a typical single-family
dwelling, By definition, a typical single-family unit represents, on average, one EDU, Other types of
units each represent a fraction of an EDU, based on their relative average household sizes, Under the
proposed methodology, the park exactions will not be detenllined by the magnitude of the average
household size, but rather on the ratio of household sizes between various types of housing units. An
EDD is a unit that has an average household size equivalent to a typical single-family unit in Conway.
The EDDs associated with each housing type and unit size category are shown in Table 22,
Conway\Road and Park Impact Fee Study April] 5.2003 DRAFT, Page 22
Table 22
EQUIVALENT DWELLING UNIT MULTIPLIERS
Housing Type
Avg.
HH Size
EDUsl
Unit
Single-Family Detached 2.71 1.00
Multi-Family 1.89 0.70
Mobile Home 2.370.87
Single-Family, 2-Bedroom, 1,129 sq. ft. avg. 2.140.78
Single-Family, 3-Bedroom, 1.688 sq. ft avg. 2.92 ] .06
Single-Family, 4-Bedroom, 2,684 sq. avg. 3.32 1.20
Single-Family, 5-Bedroom, 3,923 sq. avg.3.54 .28
Ali Single-Family Detached Units 2.76] .00
Source.' Average household size for detached, multi-family and mobile
units Table 4; average bedroom for
units from Table 5 and correspondence between and square feet
Table 6.
In order to detemline the existing level of service, it is necessary to estimate the total number of EDDs
in the City of Conway, The first step is to compile an estimate of existing 2003 dwelling units, which
is summarized in Table 23 below.
Table 23
ESTIMATED DWELLING UNITS, 2003
2000
The final total service units is to the number of residential units
by the EDUs per unit calculated earlier based on relative average household sizes. To detem1ine total
existing EDUs for the purpose of the park impact fees, the estimated number of
dwelling units of each housing type is multiplied by the appropriate EDUs per unit and the results for
all housing types are summed, As shown in Table 24, there are an estimated 17,239 park service units
(EDUs) in Conway,
Table 24
EXISTING PARK SERVICE UNITS
Housing Type
2003
Units
EDUs!
Unit
Total
EDlis
Single-Family Detached 11,888 .00 1 ,888
Multi-Fami]y 6,007 0.70 4,205
Mobile Home 1,3170.87 ],146
Total Park Service Units 17,239
2003 units from Table 23; EDUs per unit from Table 22.
Conway\Road and Park Impact Fee Study April 15,2003 DRAFT, Page 23
COST PER SERVICE UNIT
Since the City has not purchased any park land in recent years, the City contacted a local property
appraiser, who estimated that the City's existing park land is currently worth approximately $39,000
per acre, as shown in Table 25. To be conservative, the City has decided to use a cost of $20,000 per
acre in developing the impact fee.
Table 25
P ARK LAND COST PER ACRE
Facility Acres
Estimated
Value
Cost!
Acre
Airport Park 6.0 5240.000 S40,000
Beaverfork Park 50.052,500,000550,000
Bainbridge Park 6.0 5 J 50,000 525,000
Curtis Walker Park] 5.05675,000545,000
Don Owen Park J 25055,000,000540,000
5th A venue Park] 0.0 5500,000550,000
Gatlin Park] 3.05325,000525,000
Laure] Park J 9.05950,000550,000
McGee Sports Ccntcr 14.0 $700,000 S50,OOO
Pine Street Park .5 559,000539,000
Tucker Creek Trail 30.0 5270,000 $9,000
Tota] 289,5 S] ] ,369,000 $39,000
Assumed Land Cost per Acre 520,000
Source: Estimated park land value from \Vayne Coates, January 10,
park land Pine Street estimated consultant using
<i\'erage cost per acre for the sum of all park land.
first
centers: the Don Owen Center and the McGee
skateboard constmcted in In order to calculate the Clment cost of these
historic constmction costs were to 2003 dollars, as shown in Table 26,
Table 26
SPORTS CENTER COST
Facility
Year
Built
Original
Cost
Cost
Factor
CUITcnt
Cost
Don Owen Sports Center 1994 S 1,938,295 .228 S2.380,226
McGee Sports Center 2000 S3,500,000 1.067 S3,734,500
Skateboard Park 2002 S75,000 1.016 S76,200
Total, Sports Centers S6,190,926
Original and )'ear built from Conway Parks and Recreation
memorandum; cost factor based on Engineering
from ww\v.enr.cOnl.
December 03,
Cost Index for
The inventory of existing park improvements, other than the sports centers, is presented in the
Appendix, Multiplying the number of facilities by the current unit cost of each facility and summing
yields the estimated replacement cost for the City's existing park facilities, as summarized in Table
27. The replacement cost of existing park land based on the conservative cost assumption of
per acre is also included in Table 27,
Conway\Road and Park Impact Fcc Study April 15. 2003 DRAFT. Page 24
Table 27
P ARK REPLACEMENT COST
Park Systcm Componcnt lJnits Cost/Unit Total Cost
Park land (acres) 289.5520,000 S5,790,000
Sports Centers na na S6,190,926
Baseball Backstop 2 S10,000 S20,000
Baseball Field, lighted 1 S 132.500 S132,500
Basketball Goal 15 Sl,200 S]8,000
Basketball Goal, lighted 2 S42,000 S84,000
Bench 39 S275 SI0.725
Bleachers, 25 People 18 SI,304 S23,472
Bleachers, 50 People 3 S2,300 S6,900
Boat Dock 2 52,000 S4,000
Boat Ramp 2 S2.000 S4,000
Caretakers House 1 S60,000 S60,000
Crawl Tunnel 2 S700 S 1,400
Dumpster, Three Yard 8 S435 53,480
Dumpster, Six Yard 4 S640 S2,560
Fishing Pier S99,093 S99,093
Grill 19 S200 S3,800
MelTy-Go-Round I S 1,2005 1,200
Bars 5 I ,00053.000
Parkmg, Car I,OM 5460 $489,440
Parking, Boat & Trailer 65 5460 529,900
Pavilion, Small 2 514,000528,000
Pavilion, large 6 $22,000 SI32,OOO
Picnic Table 74 5475 535,150
Play Center, Medium 2 $ 13,000 526,000
Play Center, large 2 S18,500 $37.000
Pump House 3 $2,500 57,500
Restroom 7 530,000 S21O,000
Rocking Animal 5 $450 S2,250
$2,000
Storage, 5 Bay I $6,000 $6.000
Swing Set, Three Seat I $3,500 $3,500
Swing Set. Four Seat 9 $4,000 $36,000
Swing Set, Six Seat 3 $6,000 8,000
T-Ba!1 Field 6 $1,200 S7,200
8
55 27
Volleyball Court, Sand 2
Volleyball Net I $300
Walking Trail 3.8 $189,475 $720,005
Water Fountain 5800 $800
Tota! Replacement Cost 5 I 5,216.951
Park from Appendix: center from Table
from Conwa y Parks and Recreation Department, 2002.
Conway\Road and Park Impact Fee Study April] 5,2003 DRAFT. Page 25
Dividing the total replacement cost of existing park land and facilities by the number of existing
EDUs yields the cost per service unit to maintain the existing level of service, as shown in Table 28,
Table 28
P ARK COST PER SERVICE UNIT
Total Replacement Cost $15,216,951
Park Equivalent Dwelling Units, 2003 17,239
Park Cost per EDU $883
Total replacement cost trom park trom Table 24.
NET COST PER SERVICE UNIT
Some of the cost to provide new residents with park facilities will be paid the new residents
themselves through future payments that will be used to retire outstanding debt. In addition, some of
the capital costs to serve growth will be paid by outside funding sources. Consequently, the cost per
service unit should be reduced to take account of these factors, and the result is referred to as the net
cost. Historically, the City's primary funding source for park capital improvements has been Sales and
Use Tax Capital Improvement Bonds. An analysis of past bond issues indicates that currently the
City's outstanding debt is $21,635,000, of which $2,596,200 is attributable to park development. This
amounts to $151 of outstanding park debt for every park service unit in Conway, as shown in Table 29
below,
Table 29
P ARK DEBT CREDIT
Outstanding Debt Principal
Percent Attributable to Parks 12%
Total Outstanding Park Debt Principal 52,596,200
Existing Park EDUs. 2003 17,239
Park Debt Credit per EDU S 151
Source: Total outstanding debt as of December 2002 and percent attributable to parks from the City
of Conway Finance Depat1ment, Decelnber 10. 2002 memorandum; percent attributable to parks
derived from 1997 bond issue of 525,665,000, of which 53,080,000 was allocated for parks; 2003
park EDUs from Table 24.
Another factor that should be considered is potential outside funding that could be used to cover a
portion of growth-related costs. The cost per service unit should be reduced to account for the
likelihood that some growth-related park costs can be paid for with Federal and State grants, Over the
last five years, the City has received an average of $126,000 annually in grants for park
improvements, as summarized in Table 30.
Conway\Road and Park Impaet Fee Study April15, 2003 DRAFT, Page 26
1998
Center
A~ m
Federal Highway Enhancement Fund 2002
Total Grant Funding 998-2002 $627,727
Average Annual Grant $126.000
Parks December
It is reasonable to assume that the grant received per park service unit in the past will continue
in the future. Dividing the average annual grant funding by existing service units yields annual
funding per service unit. Multiplying that by the present value factor results in the cunent lump sum
amount that is the equivalent of the future stream of outside funding the will receive over the next
20 years to help fund park improvements, Based on these assumptions, the appropriate credit for
potential grant funding for parks is $93 for each new single-family home, or park service unit
equivalent, as shown in Table 31.
Table 31
P ARK GRANT FUNDING CREDIT
Average Annual Grant Funding $126,000
Existing Park EDUs, 2003 7,239
Annual Funding per EDU $7.31
Present Value Factor (20 years @ 4.7%) 12.79
Grant Funding Credit per EDU $93
Source: Average annual gmnt funding from Table 30; existing
park EDUs from Table 24; discount rate for present value factor
from 11,
Reducing the cost per service unit the debt credit and the anticipated grant funding per service unit
leaves a net cost of $639 per EDU to maintain the existing level of service.
Table 32
P ARK NET COST PER SERVICE UNIT
Cost per EDU S883
Debt Credit per EDU S151
Grant Funding Credit per EDU S93
Net Cost per EDU S639
Source: Cost per EDU fyom Table 28; debt credit per EDU fyom Table 29; grant funding
credit per EDU from Table 31
Conway\Road and Park Impact Fee Study April 15,2003 DRAFT, Page 27
Figure 13
PARK FEES BY BEDROOM CATEGORIES
POTENTIAL IMP ACT FEES
The maximum park impact fees that could be charged within the City limits, based on the data,
methodology and assumptions utilized in this repOli, are presented in Table 33, Two altemative
methods of assessing park impact fees for single-family detached housing units are presented in the
table: a flat fee per unit or a variable fee by number of bedrooms, A third altemative is for the fees to
be charged based on a cost per square foot. This last altemative is recommended if a variable fee
Table 33
P ARK NET COST PER DWELLING UNIT
Housing Type
EDUs!
Unit
Net Cost!
EDU
Net Cost!
Unit
1 29
3-Bedroom, 1,688 sq.
Single-Family, 2,684
Single-Family,5-Bedroom, sq.
Ai] Detached Units 1
Multi-Family 0.7056395447
Mobile Home 0.87 5639 5556
Source: EDUs per unit lI0111 Table 22; net cost per EDU from Table 32.
1
avg. 1.20
avg 128 5639 5818
56395639
As with the road impact fees, the park net cost schedule would allow several altemative ways of
charging single-family detached units: all single-family units could be charged the same
the single-family average shown in the fee schedule; (2) the fees could vary the size of the
unit. This last altemative is described more fully below, New development could be assessed on the
basis of unit size in several ways, One way would be to create size categories that cOlTespond to the
number of bedrooms using the midpoints between the averages, A problem with this approach is that
as you cross the size threshold between a two-bedroom and a three bedroom unit, for example, the fee
would go up by almost $200 for adding one additional square foot (see Figure 13).
3The equation is y 250 * Ln(x) 1,225, where y is the maximum impact fee for the dwelling unit and x is the floor area of the unit
square
feet; the R2 is 0.930, the adjusted R2 is 0.896 and the T-statistics are -3.3 for the intercept and 5.2 for the coefficient.
COllway\Road and Park Impact Fee 5tudy April! 5, 2003 DRAFT, Page 28
Figure 14
P ARK FEES BY UNIT SIZE
To avoid these kinds of threshold effects, park impact fees for single-family units could be assessed
using a sliding scale, Regression analysis was used to detemline the curve that best fits the four data
points (shown as squares in Figure 14), The resulting semi-logarithmic equation (shown as the dashed
line in Figure 14) explains 93 percent of the variance.3 The graphed relationship corresponds with
common sense, which suggests that the number of residents per square foot will begin to taper off
with very large units, While pemlit clerks cannot be expected to calculate fees at the counter using a
logarithmic equation, it is a simple matter to develop a fee schedule using 100 square foot or other
intervals, of such a schedule 250 and 500 square foot intervals is shown in Table 34
below,
Table 34
SAMPLE VARIABLE PARK FEE SCHEDULE
Dwelling Sq. Ft, Fee
750 - I ,000 5469
1,001 - 1,250 5531
1,251 - 1,500 5582
1,50 I - 1.750 5623
1,751 2,0005659
2,001 2,2505690
2,251 - 2,500 5718
2,501 - 3,000 5755
3,001 - 3,5005797
3,501 4,000 5832
15,
Figure 15
P ARK FEES BY UNIT SIZE CATEGORIES
POTENTIAL REVENUES
If the proposed park impact fees are adopted, potential annual revenue could total close to
as shown Table 35, Actual fee collections are likely to be lower, however, since in some cases
may credit for park land dedicated to the
Table 35
POTENTIAL ANNUAL PARK FEE REVENUE
Housing Type
New
lJllits
Feel
Unit
Total
Revenue
Single-Family Detached 400 5639 5255,600
Multi-Family 300 5447 $134,100
Total 700 5389,700
based on historica I trends frorn
23: lees per unit
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Research Bulletin
Research [1 Analysis on Current
September 1990
Fiscal Impact Analysis:
What It Is and How To Use It
lJfichael L. Siegel and Susan Robinson
The concept of systematically estimating the costs and benefits of anticipated economic and
changes is by no means new, Local, state and federal governments have long undertaken cost-benefit,
financial capability and fiscal impact studies to assess the fiscal and economic effects of large-scale
energy and defense projects and other facilities, Fiscal impact analysis (FIA) has been used by the
planning profession for the last fifty years, Traditionally, planners used it on a project-by-project basis to
determine the local consequences of specific development proposals, More recently, FIA is being used on
a jurisdiction-wide level to evaluate the financial effects of alternative land use and economic
development policies, as well as to model and evaluate the effects of demographic and economic trends.
In the budget or finance office, fiscal impact analysis can be used to assist in capital improvement
programming, to forecast revenues and to project a jurisdiction's financial position in future years, Fiscal
impact analysis provides an opportunity for finance officers and local officials to examine the costs of
providing services and how they can be funded,
WHAT FISCAL IMPACT ANALYSIS IS
Fiscal impact analysis is a method used to measure the fiscal consequences of changes to existing
community conditions, It provides a structural approach to determine the effect of a change in the
operating environment on the revenues, expenditures and net fiscal flows of a particular governmental
entity over a specified period of time, Most contemporary fiscal impact analysis is conducted using
computer models to establish the structural approach. Following are situations in which fiscal impact
can be used:
* General population growth, FIA could be used to project the differential impact of a 2 percent growth
rate as opposed to a 4 percent growth rate,
* Demographic changes and effects of urbanization, An FIA could estimate the fiscal implications of
high-density growth as compared to low density.
*Location or relocation of major employers or industries, An example would be to estimate the impacts
of the location of a power plant or loss of a major manufacturing facility,
* Location or relocation of governmental facilities. An example would be to estimate the effects on a
jurisdiction of public housing, solid waste facilities, prisons or other major governmental facilities,
*Changes in programs, policies or revenue structures, An example would be to anticipate the fiscal
consequences of providing tax incentives for certain economic development projects.
* Changes in the service area boundaries, An FIA could be used to determine the impacts of a major
annexation, rezoning or consolidation of governmental services,
* Evaluate financial conditions, FIA can provide an early warning system for signs of financial stress.
fiscal nows, The net fiscal flow is the revenues less the
either be positive (deficit) or zero
There are many methods used to perform fiscal impact analysis, But it is important to remember that FIA
must be designed to the tasks described above. FIA is a its upon the
accuracy of interrelationships among its components, assumptions and variables. No fiscal impact model
can make policy rather a model can produce information about the consequences of
a decision or development, given specific economic and demographic assumptions provided the
user.
FREQUENTLY USED
FISCAL IMPACT METHODOLOGIES
T,'end Analysis
Trend analysis relies on history to project the future, For example, expenditures for social services may
be found to have increased an average of 3 percent annually for the last five years in constant do lial's ,
Trend analysis would extend the 3 percent growth rate into the future,
Advantages: Quick, inexpensive, and easily implemented. Low data analysis requirements. Does not
require special training,
Disadvantages. Ignores the effect of demographic and economic conditions, does not consider
changes.
Average Cost (Revenue)
The average-cost or average-revenue approach determines the per capita costs or revenue and then
multiplies this figure by the incoming population, If per capita operating costs for primary and secondary
education are $2,000 per pupil per year and a development would add 100 new pupils, the average cost
method would assign a cost of $200,000 for schools,
Advantages: Quick, inexpensive and easily implemented, Moderate data analysis requirements.
Disadvantages: Ignores the effect of demographic and economic conditions, does not consider major
changes. Does not consider marginal costs.
Deterministic Analysis
Deterministic analysis relies on a policy-derived approach to project the future, For instance, staffing
analysis may determine that for each thousand persons a jurisdiction there should be one police officer.
This approach applies standard cost factors for the police officer and associated support staft~ vehicles and
determine the per thousand residents of services. This
to the projected population determines the cost attributable to the project.
Advantages: Higher degree of accuracy than average-cost approach, Considers marginal costs,
Disadvantages: Requires substantial budget and data analysis, greater amount of time to accomplish,
Econometric Techniques
Econometric analysis relies on establishing statistically significant links between "dependent" and
"independent" variables using regression analysis of historic data, It may be determined through
regression analysis that there is a relationship between personal income. and the amount of sales taxes
generated, Thus, given personal income, econometric analysis could provide a forecast of sales tax
revenue based on the statistical relationship,
Advantages: Higher degree of accuracy for some items, Considers economic changes.
Disadvantages: Requires knowledge of statistical techniques, Requires projection of dependent variables,
2
Jurisdictions
makes based upon revenue or of similar
may be used to modify expenditure or revenue of the
being studied, This approach is useful when the community anticipates a substantial
in its character that might render historic patterns unreliable.
Advantages: Enables projections to be based upon actual data of the selected
. Requires substantial budget analysis. Jurisdictions may not be to
being studied.
Expert Judgement
Expert judgement relies on the ability of local officials to predict how changes may affect their
For instance, an interview with the public works director may indicate that no new road
transportation facilities are needed for several years since a major expansion program has been
completed and resources are to be shifted into a maintenance program. This would lead to lower
projections of capital outlay and higher estimates for operations and maintenance.
Advantages: Inexpensive, easily implemented, Low data analysis requirements. Does not require special
training.
Disadvantages: Not replicable. May require significant time for interviews, Tendency of managers to
overstate impacts. Short-term bias.
Microsimulation
Microsimulation utilizes interview and survey techniques to determine individual, consumption and
service demand characteristics, The results of surveys are extrapolated to the population at For
instance, microsimulation may be used to determine commuting habits and practices, which are then used
to project gasoline consumption and vehicle trips, important factors in forecasting gas tax receipts and
road construction,
. High degree of accuracy for revenues and some expenditure items. modified for
selection of variables to be analyzed,
Disadvantages. Expensive and time-consuming, Relies on small survey samples. Not applicable to
capital facilities,
Integrated Approach
An integrated approach uses a combination of the above techniques to project revenue and expenditure
items. For example, a trend projection may be modified by expert judgement or econometric techniques
may be used to forecast sales tax revenue while deterministic and average cost techniques are used to
forecast major items.
Advantages: Allows for selection of most appropriate technique depending on item being projected.
Considers economic factors.
. Expensive and time-consuming, May require use of outside staff. High degree of data
analysis.
THE FISCAL IMPACT PROCESS
There are typically four steps in performing a fiscal impact analysis. First it is necessary to defIne and
quantify the change that is to be measured, The second step is the development of revenue and
expenditure characteristics. Usually these are based on actual operating budgets, annual reports and other
financial documents of the subject jurisdiction. Third is the capital facilities analysis, Capital facilities are
usually treated separately from the operating budget as they are nonrecurring, have unique timing and
financing characteristics, and often involve issuance of debt or dedicated revenues, Fourth is the
3
discussed
form the foundation of the FIA, Economic or
the user at the outset--or may be derived in the FIA process,
of economic and demographic variables is often required even when these are
used demographic and economic variables are described below and listed in
The economic and demographic
can be
Additional
Some of the most
Figure ].
Population/Demographic. Subsets of population would distinguish between in-migration and natural
increases attributable to more bilths than deaths, age-co hOlt characteristics, school enrollment
characteristics, patterns and population multipliers,
* subsets include jobs by type (temporary, construction or
occupation or industry, direct, induced and indirect employment, labor force
unemployment rates, resident employment, wages and salaries.
* Housing subsets include housing type, tenure and occupancy, density
units per acre), vacancy rates, and housing unit value,
* Nonresidential development. Nonresidential development subsets include commercial, industrial, retail,
office and public buildings. Subsets may also include value, occupancy and density characteristics,
rates,
expressed in
Revenue and Expenditure Chal"acteristics
An FIA should be budget-based if it is to provide useful results. The general fund revenues and
expenditures should be compiled and analyzed for the previous three to five years using actual budget
data. Historic data will need to be converted to constant dollars in order to eliminate the effects of
inflation.
Revenues and expenditures are treated separately and are usually disaggregated into the largest
objects or functions required for projection and study purposes, General purpose government revenue
sources, which usually require disaggregation for analysis and projection purposes, include sales,
property, income, business, gasoline, utility and franchise taxes, building and permit fees, interest
earnings and intergovernmental revenues, Smaller sources of revenue may be lumped together and
projected as a group. Expenditure categories may include such functions as general government, fire and
4
fund
from
water and sewer,
items may be handled in the same manner
fund fund
public transportation or solid waste,
but should be itemized and
may be made such functions as
In can occur that must be reconciled to a clean data series.
errors can result. Common sources of forecasting error are changes in tax rates or
assessment procedures, consolidation of or transfer of services, one time capital outlays, interfund
transfers, and end-of-year balances,
To correct for changes in tax practices the new rate or assessment procedure should be applied to the old
tax base the amount of funds that would have been raised equivalent assessment
or rates. If services have been transferred or consolidated, the projection series should
data that reflect the consolidation or change in service. One-time capital should either be removed
from the data or distributed over the historic period on an average annual outlay basis, Interfund transfers
should be traced and counted as an expenditure only in the account in which they are expended for a
particular object or function. With respect to end-of-year fund balances, only uncommitted balances
should be carried forward as a source of funds for the subsequent year.
Capital Facilities
Analysis of capital facilities relies on expert judgement combined with deterministic techniques. Facility
forecasts may be based 00 review of capital improvement plans or application of existing or planned
facility standards, A recent capital improvements plan (ClP) can often serve as the starting point for the
capital facility analysis,
To estimate the demand for new capital facilities, existing capacities must be determined Next, projects
itemized in the ClF' should be distinguished according to how much, if any, new capacity is provided as
opposed to upgrades, repairs and replacements of existing facilities, The information in the ClP can be
supplemented by interviews with departmental and capital projects staff.
Another technique is to apply capital-facility standards appropriate to the community to the projected
population or development.
Capacity for water or sewer facilities can be projected based on usage characteristics of a new
development. This necessitates estimation of flow volumes for each development type to determine the
total average and peak daily flows, The result can then be compared to the existing system capacity to
determine if and when additional treatment capacity is required,
5
Oi fficulties can arise in the portion of the capital to the
ihis occurs when a development may exceed current capacity, but due to engineering considerations and
economies of scale, the new facility must be constructed with excess capacity beyond that for the
development being analyzed. This situation can be resolved in three ways, One is to attribute the
carrying costs of the additional capacity to the development being analyzed until such time as the excess
capacity is absorbed, Another method would be to assign the costs of the excess capacity to the
community as a whole until such time as the excess capacity is absorbed. Finally, if future development is
uncertain, it may be appropriate to assign 100 percent of the cost of a new facility to the development
being analyzed.
Projection Series
The projection series assembles the above information in an interactive framework The revenue and
expenditure categories are linked to variables and projected over the forecast period (usually 5-10 years,
although some models may go out as far as 20 years), When projections are made for two or more
scenarios, the series will also include a comparison of the results, The summary will calculate the net
change, or net fiscal flows, between the impact scenario and the baseline for operating and capital
and revenues.
FIA IN PRACTICE:
THE "TOTAL IMPACT MANAGEMENT
MODEL"
The Government Finance Research Center (GFRC), in association with the META consulting group,
recently completed a fiscal impact analysis for Loudoun County, Virginia, a rapidly developing "exurb"
on the fringe of the Washington, D,C. metropolitan area, The county has undergone substantial
development in the eastern end, near Dulles International Airport. Several major national and
international corporations have opened offices in the county. Development permits are currently
outstanding for 20,000 residential units and 8 million square feet of commercial and industrial
development by 1999.
County officials requested GFRC/MET A to provide a model that would project the financial effects of
several growth, development, distributional and density scenarios. In particular, the FIA model was
developed to:
I). Assess the financial consequences of projected development at the aggregate county level over the
next two decades,
6
Estimate the direct and financial impact of individual development
commercial and industrial developments located within specific subareas of the
JS')<)
Selected model results are displayed in Exhibits I and 2, Exhibit j displays forecasted growth variables
for the county, Given these variables, Exhibit 2 displays the effects of a sample growth scenario on the
county's operating cash flow (revenues less operating expenditures) assuming current tax rates.
The Total Impact Management Model (TIMM) consists of a computer-based model that calculates and
tabulates demographic, economic, budgetary, and other data associated with anticipated development in
Loudoun County. These data are tabulated on a county, subarea and individual-project level.
The TIMM was designed to independently derive incremental service costs attributable to each type of
development. The model was developed to specifically incorporate density, valuation and other factors
that affect the cost of services in a nonlinear manner. These are then combined with demographic
projection; to forecast t1.1ture costs, service levels, and revenues, thereby yielding a composite projection
of the county's fiscal position, Since the county was changing from a rural to an urbanized character, a
comparative approach utilizing econometric variables was selected to develop cost and demand factors.
Six modules were developed:
.. Economic/Demographic Module;
.. Expenditure Module;
.. Revenue
.. Capital Module;
.. Sanitation Module; and
.. Summary Module.
7
The TIMM IS now being used to run scenanos of
Loudon also is the subarea component of the model
comprehensive land-use plan. The project analysis will be used
individual development projects.
to the impacts of a new
the county to evaluate impacts of
The authors are me/nbers GFOA 's Govermnent Finance Research Center: Michael L. Siegel heads
the GFRC planning and environmental finance group; Susan G. Robinson is a GFRC manager
and was project leader for the Loudoun County A demonstration disk the Total
Management Model is available /i'onz GFRC To receive a copy please fill out the attached
For more information about GFRC's Fiscal/nzpact Services and Inodel contact either Michael
Siegel or Sue Robinson at 202/429-2750.
8
s J
Fiscal Impact of a Subdivision on Perry Farm:
The Tax Benefits of Open Space Preservation vs. Residential Development
By
Robert 1. Johnston
Department of Environmental and Natural Resource Economics
University of Rhode Island
Prepared for
The Aquidneck Island Partnership
September 2, 1998
Acknowledgements: This repol1 was made possible through the assistance of Michael Emhury, Mary Hutchinson, Richard
Youngken and Jennifer McCann. Any mistakes or omissions are the sole responsibility oftlle autlior.
Additional copies of this publication are available Irom the Rhode Island Sea Grant Communications Office, University of Rhode
Island Bay Campus, NalTagansett, RI 02882-1197, Order PISOO,
Loan copies are available from the National Sea Grant Depository, Pel1 Library Building, University of Rhode Island Bay
Campus, Nan-agansett, Rl 02882-1197, Order RIU 1098-003,
This summarizes the results of a fiscal of a 49-unit
Fann Subdivision." and indicates the net fiscal benefits received Middletown as
result of the of the Fann property the Island Land Trust and
other community parhlers. The report considers all primary fiscal impacts over a 30-year time
horizon, state-of.-the-art economic and fiscal impact models. The resulting analysis shows
that over the next 30 years, residential development of the Perry propeliy would cost Middletown
taxpayers between $920,680 and $2,679,775 (in net discounted 1998 dollars), even after one
considers all the tax and other revenues generated new residential units. In total non-
discounted dollars, cunent Middletown taxpayers would pay as much as in additional
taxes over the next 30 years if a 49-house subdivision were to be built on Farm2
Considering only the most probable outcomes, the preservation agreement likely saved the
taxpayers of Middletown between $1,671 ,614 and $2,089,378, in discounted tax dollars, over the
next 30 years, In annual terms, this would translate to an additional $24 in property taxes paid
each Middletown household, each year, to support the additional net fiscal losses generated by a
hypothetical Peny Farm subdivision, This report, along with a companion report discussing the
fiscal impact of preserving the Kempenaar Valley parcels, illustrate the types of fiscal benefits
that can be generated by actions which prevent large-scale residential subdivision of
Middletown's remaining open space.
i Much of the wording of tllis report, as well as the description of fiscal impact analysis, is shared by the compamon
report "Fiscal Impact of a Subdivision on Kempenaar Valley: The Tax Benefits of Greenway Preservation vs.
Residential Development." However, the analysis and results presented by this report are unique to the Kempenaar
parcels (in the Middletown Town Center). The results of the Kempenaar study are summarized by Appendix Five.
For mf0ll11ation regarding discounting and its lmphcatlOns, see Appendix ll1ree, Section
2
The Town of Middletown
town supported a
acres of land on Island. As of 1
of 19,460 residents and 7,104 housing units, representing a
of 13 and housing of 9.6 percent (Rhode Island Economic
Development Corporation, Since of new housing units has continued
at a rapid pace, with 471 building permits issued 1990-1997 Island Builders
Association and US Census Bureau), Aquidneck Island Geographic Infom1ation
data for Middletown shows that at least 33 percent of the town is developed for residential uses,
compared to less than 25 in agricultural use and 9 percent in
forest/brush land (AIGIS 1997). Recent subdivisions have further increased the amount of low-
to mid-density residential "sprawl." Along with this increase in residential housing has come a
decrease in the amenities of fam1, forest and open space land valued by local residents and
visitors, and an increase in traffic and congestion (Johnston 1997). Although significant areas of
Middletown retain the diverse, semi-agricultural character of a small New England coastal
community, this character is threatened by ongoing residential development of remaining
undeveloped open space and agricultural land.
Costs and Benefits of Residential Development vs. Open Space Preservation
In response to these changes, concerned citizens, businesses, non-profit organizations and the
town government of Middletown have taken significant steps to preserve undeveloped land uses
(Sweeney 1998; Ruggieri 1997a, b; O'Brien 1997a, b; Ottaviano 1997), Despite the many
economic, ecological and other benefits that such actions provide to local residents (Johnston
1997), taxpayers occasionally question the fiscal impacts of policies which limit development.
Taxpayer concern is often reflected in two common, yet generally false claims:
False Claim #1 :
Residential subdivisions and sprawl development will
lower property taxes increasing the tax base.
False Claim #2:
Open space, including public parks, open fields, and
productive forests and farn11and are costly to local towns
and lead to higher property taxes,
Illustrating the false and misleading nature of these claims, dozens of Cost
Services studies have demonstrated that residential land does not generate sufticient revenues to
support its expenses, leading to a net fiscal loss for local communities. Open space, forests and
fannland generate revenues in excess of their expenses, leading to a net fiscal benefit for local
communities (Johnston 1997), Although residential development expands the gross tax base, tax
revenue increases are almost always negated by even larger increases in the costs of public
education (schools, libraries), public services (fire, police, snow plowing), and infrastructure
(sewer, roads) generated by new housing.
3
the fiscal and tax benefits associated with open space III taxpayers
may wish to identify the fiscal impacts associated with the preservation of specific parcels of
land. For in 1998 the Aquidneck Island Land Trust (AIL T) broke red an agreement
with public and partners to preserve the Perry Farm, the largest remaining undeveloped
in Middletown, The was paid approximately $765,000 for the 82-acre
25 acres of which will now be farmed the Newport Vineyards and while the
remaining 55+ acres are for use as part of a proposed National Golf Course
(Sweeney 1998). As a result of the preservation agreement, development rights on all portions of
the property will be extinguished. Although Middletown tax revenues were not used to purchase
the property, the preservation of this land will have important fIscal consequences for
Middletown and its taxpayers. This repOli presents the results of a detailed fiscal impact
analysis, designed to assess the fiscal impact of this effort to preserve a significant parcel of open
space in Middletown.
To assess the fiscal impact of the AIL T preservation agreement, this report compares the current
condition of Middletown's public revenues and expenses to that which would occur if the
Farm were to be developed as residential housing-the almost certain outcome in the absence of
the preservation agreement. It is assumed that the property would be developed as a typical
subdivision, similar to other recent Middletown housing developments such as East Meadow,
West Meadow and Kesson Fam1. As is the case with existing subdivisions, the hypothetical
"PeITY subdivision" would have numerous impacts on public revenues and expenses. Ultimately,
these impacts would result in a change in the propeliy taxes paid by resident each year to the
Town of Middletown. This repOli considers all primary fiscal impacts over a 30-year time
horizon, using state-of-the-ari economic and fiscal impact models. The result of this analysis
shows that over the next 30 years, residential development of the PelTY property would cost
Middletown taxpayers between $920,680 and $2,679,775 net discounted 1998 dollars), even
after one considers all the tax and other revenues generated new residential units. In total
non-discounted dollars, CIllTent Middletown taxpayers would pay as much as 10.602 in
additional taxes over the next 30 years, if a 49-house subdivision were to be built on PelTY Fam1.
Mechanics of a Fiscal Impact Analysis: A Brief Overview
Fiscal Impact Methodologies
Fiscal Impact analysis compares the public costs and revenues generated by residential or
commercial development (Burchell et al. 1994). Although fiscal impacts may be projected for
any jurisdiction, the following analysis assesses public costs and revenues at the community
(town) level. Various fiscal impact methods exist, each suited to specific types of development
and sets of community characteristics. Despite differences in the exact methods used to forecast
future costs and benefits of residential development, all fIscal impact methods share four basic
steps (Burchell et al. 1994):
I] Detennine the number of housing units and increase in population generated
by the residential growth,
4
3J Forecast annual
revenues
the residential
4 J Compare new costs to new revenues over a selected time horizon. If costs
exceed revenues, the development will generate a deficit (loss), If revenues
exceed costs, the development will generate a surplus.
The current combines the case multiplier method of fiscal
described Burchell et a1. The case study method relies on detailed site-
interviews of officials combined with intensive review of
information and department expenses to estimate the impacts of proposed development on public
revenues and costs. The case study method assumes that capacity constraints and other factors
will cause certain departments of community government to incur different relative cost
increases as a result of residential development. The fiscal multiplier approach assumes a fixed-
multiplier impact on department expenses, based on the percentage increase in population or
housing units, Each method is most appropriate for specific types of community expenses and
departments, depending on the characteristics of the community and of the specific expense(s)
considered.
Modeling the Perry Farm Subdivision' A Build-Out
A fOlTIlal build-out analysis of Perry Farnl indicates that the property would support a 49-house
subdivision of typical three-bedroom houses. This analysis accounts for the current zoning
classification of the Perry property, the size of the parcel, the placement of roads and
infrastructure, and wetland restrictions which would prevent building on certain parts of the
property, The characteristics of new housing units, and thus the assessed value of these units, is
modeled after recent subdivisions in Middletown.
Changes in Public
New housing units require town services, including police and fire protection, public schooling
for children and other government services. Case study interviews andlor budget assessments
were combined with fiscal multiplier methods to assess the resulting costs imposed on the
Middletown school department, fire department, police department, public works department,
sewer and water department, town support services and capital improvement budget. Together,
these departments represent approximately 85 percent of all Middletown government expenses.
New costs imposed on other departments, including the town clerk, town administrator, town
planner and tax assessor, are estimated using fiscal multiplier methods and fall back ratios, as
described in Appendix One.
Assessing Changes in Public Revenues
Changes in tax revenues are estimated based on the build-out analysis of the PelTY Farm property
(Hingorany 1998), combined with an analysis of tax revenues generated by recent Middletown
subdivisions, Impact fees are estimated at $350 per housing unit. Other revenue impacts are
5
details
6
This fiscal a scientific as
This applied when celtain critical factors in an economic scenario
(such as the discount rate or the assessed value of new houses) are unknown. Rather than
one celtainly incorrect) value for these unknown factors, a sensitivity
estimates fiscal a wide range of possible values for these factors, For example,
on the discount rate and the assessed value of new homes, a Farm subdivision
could generate a net loss of between $920,680 and discounted 1998
sensitivity calculates fiscal impact for this full range of potential values,
makers to assess the fiscal impact at various assessment levels and discount rates.
Inzpacts Not Included in a Fiscal Impact Analysis
Fiscal impact analysis is a well-defined tool considering only "net local public costs and
revenues" (Burchell and Listokin 1983), as ret1ected in taxes paid by local propelty owners.
Fiscal impact analysis does not consider numerous impOltant economic, environmental, equity,
quality-of-life and other impacts which often accompany new development. In many cases,
these other impacts provide an even stronger argument for open space and fanl1land preservation
(Johnston 1997, National Park Service 1995), This analysis also ignores "secondary impacts" of
residential development, such as wages paid to constmction workers and money spent by new
residents at local shops, Although secondary impacts are sometimes (incorrectly) included in
simplified applications of benefit-cost analysis, it is well-established that inclusion of sllch
impacts is inappropriate, and leads to biased benefit-cost estimates (Sassone and Schaffer 1978),
Fiscal Impact Analysis of a Hypothetical Subdivision of Perry Farm: Results
Details of fiscal impact methodology and calculation are described in Appendices One, Two and
Three. Costs are calculated based on a 49-unit development of standard three-bedroom homes,
each valued between $150,000 and $190,000, It is assumed that build-out and purchase of new
homes would occur over four years, in even 25 percent increments (12.25 homes are built and
purchased each year, until all 49 homes are occupied in the fomth year), Based on standardized
demographic multipliers, a typical three-bedroom home in New England houses an average of
3,3163 residents, and places 0,7792 children in local schools (Burchill et a!. 1994). Accordingly,
the Perry subdivision is assumed to generate approximately 38 school age children and 162 total
residents. All infrastmcture is assumed to be paid by housing developers, who in addition pay a
$350 per unit impact fee to the town. However, it is assumed that the town would provide basic
services to these new residential units, including public schooling, police, fire, water, sewer and
street maintenance (plowing, sweeping). Residential units are assumed to generate taxes at
Middletown's current tax rate 6,60 per thousand of assessed value), to pay a share
town fees as described by Appendix Two. Residential units are also assumed to pay for all water
and sewer services used, except for "overage charges" spread across all system users3
Overage charges are fees charged to the Town of Middletown by the City of Newport, based on each day that
Middletown's use of the Newport sewage treatment facilities exceed contractual limits. These fees are spread across
all users of the sewer system.
7
The time horizon is chosen as it is the time span of on new
housing units, Discount rates indicate the rate of time preference of the community, and account
for the fact that future impacts are generally valued less than present impacts. Higher discount
rates force a lower valuation of future fiscal impacts, as described by and Samatt (I
Tables 1, 2 and 3 illustrate the estimated net fiscal impact of the hypothetical Perry subdivision,
accounting for all and foreseeable fiscal revenues and costs. Table 1 illustrates fiscal
impacts based on a $1 per unit assessment. Table 2 illustrates fiscal impacts based on
$170,000 per unit assessment. Table 3 illustrates fiscal impacts based on a $150,000 per unit
assessment. Each table illustrates fiscal impact for a range of discount rates from 4 percent to 12
percent per year 1998 dollars), together with the total non-discounted Note that in all
cases, the net impact is negative-the lowest possible net loss associated with the
hypothetical PelT)! subdivision is over $920,000. As all net impacts are losses, the fiscal impact
estimates Inay be interpreted as additional tax revenues that would have to be paid current
Middletovvn residents, to help pay the excess community costs associated vvith a new subdivision.
Fiscal Impacts Charts: Losses Associated with modeled Perry Farm Subdivision
Each of the following tables shows net fiscal losses for discount rates ranging from 4 percent to
12 percent. In addition, the 0 percent column illustrates the "raw fiscal impact, or the total
number of dollars lost over the 30-year time horizon, if one does not discount future cash flows.
Discounting accounts for the fact that current benefits and costs are valued more highly than
future benefits and costs, and allows economists to compare present and future fiscal impacts,
Accordingly, the numbers presented in this repOli reflect the discounting of future impacts at
between 4 percent and 12 percent. F or additional infonnation regarding discounting, see
Appendix Three.
Table 1.
Net Fiscal Losses Generated by 49-House Perry Farm Subdivision
Case I: $I90,000 Per-House Assessment, 30 Year Impact
"" S3.883,326
'" S4.000.000
'"
"" S3.500.000
"
$3.000.000
,g i:n $2.500.000
e. ~
z S2.000.000
] Q
Sl.500,OO()
..
~ S 1.0OO.O()O
"
z
SO
0<;;(-, 4%
S J ,685,854
$ 1.348.330
1,103.1
$920,680
6%
8%
10%
12%
Discount Rate
8
2. Generated 49-House
Case II: $170,000 PeI'-House Assessment, 30 Year Impact
QO
~
~
"0
~
~~
~ Q
.3
$3,500,000
$2,500,000
$2,000,000
$1,500.000
;;
~ $I,OOOJJOO
z
$4,346,964
OC/(,
$2,421,336
40Ir}
$1,337,616
60;(,
Discount Rate
$1,509,972
3%
$1,235,671
100/,)
Table 3. Net Fiscal Losses Generated by 49-House Perry Farm Subdivision
Case III: $150,000 Per-House Assessment, 30 Year Impact
54,500.000
QO
~ $4,000,000
00:5
~
~ :r,
~ -
~.!:
'"
~ 0
$!
$3.500,000
53,000,000
$2,500,000
52,000.000
"
~. ,000.000
" 5500,000
z
54,310,602
50
52,679,775
4%
52,039,378
60/0
51,671,614
3D'
/0
Discount Rate
51,363,158
12%
5 1422 8
10%
12%
O(Yo
The above tables show a range of possible impacts associated with the hypothetical Perry Fam1
subdivision scenario, However, some are more probable and realistic than others, Although it is
impossible to predict hypothetical future events with certainty, it is possible to identifY the most
likely, or most realistic scenarios based on a few simple assumptions and pieces of infol1nation,
First, based on the price of homes in recent Middletown subdivisions, it seems most likely that
the homes built on a Perry Fal1n subdivision would be aimed at the "entry home" market, and
9
set rates, the federal
8, 1998 the federal funds rate was 5.66
while the prime rate was 8,5 Given these two indicators, it is that the "real"
discount rate of is between 6 percent and 8 percent Accordingly, the most fiscal
impact of a 49-house Perry Farm subdivision would be a loss of between $1 ,614 and
$2,089,378, that this fiscal loss would be balanced (or a tax
rate to all Middletown taxpayers, this translates to between $254 and $317 in additional real tax
costs for every Middletown household, discounted over a 30-year period. In nominal (non-
discounted) tax dollars, each Middletown house would pay an additional $24 in property taxes
each year to support the additional net fiscal losses generated by the Perry subdivision.
Summary
This report summarizes the results of a fiscal impact analysis of a hypothetical Fam1
Subdivision," and indicates the net fiscal benefits received by Middletown taxpayers as a result
of the preservation of the Perry Fann property. In return for the $765,000 investment of private
and state funds required to purchase and preserve the property, the Aquidneck Island Land Trust
likely saved the taxpayers of Middletown between $1,671,614 and $2,089,378, This savings
represents excess community costs that would have been generated by residential development of
Peny Fann, over and above all resulting tax revenues, In annual tenns, this would translate to an
additional $24 in propeIty taxes paid by each Middletown household, each year, to support the
additional net fiscal losses generated by an hypothetical Perry Fam1 subdivision.
10
11
Data Sources
.. Middletown Revenue and Expenditure Report, 1998-1999 Budget).
It Middletown Fire 1997 Annual Report
.. Middletown Police Department, 1998
.. Assessments for and 1998
It Build-out of 1998
" School Department and Revenues, 1998.
" Interview with Police Chief William 1. Bums
.. Interview with Fire Chief David Carlisle
It Interviews (4) with Town Administrator Michael E, Embury
.. Phone Interview with Richard Y ounken, Ne\vpOli Collaborative Architects
It Data from Middletown Tax Assessor's Office (William H. Shorey, Assessor)
.. Rhode Island Geographic Infurmation System maps and data (RIGIS) of Middletown and
Farm, updated 1994. Provided by Mapping and Planning Services, Jamestown, Rhode
Island.
.. Rhode Island Builders Association and US Bureau of the Census, 1998 Data: New
Permits Registered for Middletown, Rhode Island. Provided by Mapping and Planning
Services, Jamestown, Rhode Island.
.. United States Census data for Middletown, RI, 1990. (Source: www.riedc.com/mcds)
Citations
Burchell, R.W., D. W.R. Dolphin, and SJ. 1994.
Impact Assessment Handbook. Washington, D.C.. Urban Land Institute.
Burchell, R.W., and D. Listokin. 1983, The Fiscal Impact Handbook: Estimating the Local Costs
and Benefits orLand Development, Piscataway, NJ: The Center for Urban Policy Research.
Hingorany, K. 1998. Development Analysis- Perry Farm, Portsmouth, RI: Narragansett
Engineer, Ine.
RJ. 1997. Island and Open Space: An EconOlnic Perspective. Rhode Island
Coastal Resources Center. Nanagansett, Rhode Island.
Levy, H. and M. Samatt 1990. Capital Investnzent and Financial Decisions, 4th ed. New York:
Prentice Hall.
National Park Service, 1995. The econOlnic impacts of protection rivers, trails, and greenway
corridors. Rivers, Trails, and Conservation Assistance Program, National Park Service,
12
J. 1997a. "Land trust announces
10/24/97.
for 82 acres." The Providence Journal
J. 1997b. "Aquidneck Island fam1land won't be growing house lots." The Providence
Sunday Journal 10/26197.
B. 997, "Local Group
to Protect Open Space. Newport This Week 10/16/97.
Rhode Island Economic Corporation. 1998.
Population Estimates Program, Population Division, U. S.
Release Date: November 18.1997.
Source:
Bureau of the Census. Intemet
Ruggieri, J. 1997a, "Open Space is Good: Land preservation movement gathers steam locally,
nationally." Newport DailyNews 10/24/97,
Ruggieri, J. 1997b. "Land trust will buy 82 acres of Perry Farn1 for open space" Ne\vport Daily
News 10/24/97
Sassone, P.G., and Schaffer, W.A. 1978. Cost-Benefit
Academic Press.
A Handbook New York:
Sweeney, P. 1998, "Land trust to purchase Perry Farm." Newport Daily News, 4/22/98.
13
calculated based on a 49-unit subdivision of three-bedroom houses. This
increase of 1,05 in the number of residential
Middletown. for New England et al.
houses are assumed to generate approximately 162 residents and 38 school children,
a 0.84 increase in population. for all town departments the
sewer and wateL and school increases in costs were assessed in two steps:
I] Calculate total department expense related solely to residential
development in Middletown.
2] Estimate the increase in these residential expenses that would be caused
the new subdivision.
Estimation of the percentage of departmental expenses related to residential development (Step
1) was either calculated based on in-depth analysis of departmental budgets and interviews with
town officials, or was calculated based on various fall back ratios. Fall back ratios are "default"
means of establishing residential costs, when no other objective means is practical or possible.
The two fall back ratios used in fiscal calculations, as well as the departments to which they are
applied are illustrated in Table A-I, Residential expenses for those departments not mentioned
in Table A-I were calculated using case study interviews and in-depth budget analysis, as
described by Burchell et aL (1994). For example, the percentage of police expenses allocated to
residential property was calculated through interviews with the police chief, together with 1I1-
depth analysis of the computer logs of police activity during 1998. Residential expenses for the
fire department were allocated in a similar fashion.
Table A-I.
Fall Back Ratios Used to Estimate the Percentage of a Department's
Ex enses Related to Develo ed Residential Pro erty.
Fall Back Ratio
Calculation Method
Resulting Percent of
Expenditures Classified
"Residential"
Departments I Budget
Items to Which Ratio is
Applied
Standard eDeS
Ratio (Total Assessment of
Residential Property) 7 (Total
Assessment of All Town Property)
69.68%
Benefits, Boards,
Contingencies, Finance,
Insurance, Municipal
Court, Principal and
Interest.
Administrator. Town
Clerk, Town Council,
Town Solicitor
Parcel-Based
Ratio = (Number of DeveJoped
Residential Parceis) -7 (Total Number
of Land Parcels in Town)
69.39%
I
I Building Inspector,
Planning, Tax Assessor
14
In
based on either the
percent), or the
for the
calculations were
considerations, Calculations used to estimate annual increases in
department are described by Table A-2. Note that Table A-2 provides
the much more extensive spreadsheet used for actual calculations.
. .
mcrease ll1
increase in population
units
additional
or other
costs for each town
a brief summary of
Budget Line
Table A-2. Summar of Fiscal Cost 1m acts and Calculation Methods
Education
Boards
Building Inspector
Canvassing
Contingencies
Finance
Fire
Insurance
Municipal Coml
Police
Principal and
Interest
Probate
Percent of Total
Town Expenses
67.95~~)
0.79'/0
OAI%
0.14%
0.37%
0.64%
4.650/,
0.32'%
CHJ7%
606%
1.15%
0.02%
Percent of Department
Expenses Related to
Developed Residential
Pro erty
100.00%
(Case-Study Calculation)
69.68%
(COCS Fall Back Ratio)
69.68%
I (COCS Fall Back Ratio)
69.39%
(Parcel Fall Back Ratio)
Methods Used to Estimate Departmental Cost
Cost Increase of Residential Increase Generated by
Share Perry Subdivision
Multiply estimated number
I of added school children by
I town school cost per child
($4969.57)
$ 174.25301
Calculation based on percent
increase in residential parcels
Calculation based on percent
increase in residential parcels
Calculation based on percent
increase in residential parcels
$91373
$446 92
100.00% , Calculation based on percent
(Case-Study Calculation) I increase in residential parcels
69.68%
(COCS Fall Back Ratio)
I Calculation based on percent
increase in residential
$844 15
69.68% Calculation based
(COCS Fall Back Ratio) I increase in residential parcels
$ 11 ,396.55
74.27%
(Case-Study Calculation)
69.68%
(COCS Fall Back Ratio)
69.68%
(COCS Fall Back Ratio)
Calculation based on percent
increase residential
pareels, plus amOltized sbare
of capital cost of new
pumper truck.
Calculation based on percent
increase in residential parcels I
572336
80.50%
(Case-Study Calculation)
(Parcel Fall Back Ratio) ll1crease
69.68%
(COCS Fall Back Ratio)
100.00%
(Case-Study Calculation)
15
Calcu lation based on percent
increase in residential parcels
$2.58177
Calculation based on percent
$557]
Senior Center
Support Services
Tax Assessor
Clerk
Town Council
Capital
Improvement
Sewer and Water
Fund
CUlTont Net
Revenues from
Peny Farm
11
0.17%
2.88%
0.36%
OAO%
OA6%
0.06%
1.61%
036%
NA
NA
100.00%
(Case-Study Calculation)
71.24%
(Case-Study Calculation)
69.39%
(Parcel Fall Back Ratio)
69.68%
(COCS Fall Back Ratio)
6968%
(COCS Fall Back Ratio)
69.68%
(COCS Fall Back Ratio)
100.00%
(Case-Study Calculation)
69.68%
(COCS Fall Back Ratio)
84.91%
(Case-Study Calculation)
NA
NA
Calculation based on percent
increase in population
$424.82
$896.70
Calculation based on percent
increase in residential parcels
Calculation based on percent
increase in residential parcels
$ I ,042.80
i Calculation based on percent
increase in residential
$139.68
109.53
Calculation based on percent I
increase in residential parcels
$81 I.52
Calculation based on percent.
increase in residential parcels
S6,14633
Based on City ofNewpOlt
overage charge spread over
all system users
$l.l72. 80
CUlTent tax revenues from
\. Perry Farm minus estimated
communIty costs.
$5.638.65
Based on calculations summarized above, the total annual (nominal) fiscal cost generated by the
hypothetical Perry subdivision is estimated to be $295,326. This number, however, is subject to
discounting prior to the calculation of final impacts, as discussed in Appendix Three.
16
17
Revenue are based on the assumed value of each nev;; unit
in the subdivision. Tax revenues are calculated at the current Middletown rate
$16.60 per thousand assessed value for each of the 49 units. Assumed values range
which a total of $ in tax revenues, to $ per
$1 revenues, These values are based on those of recent
aimed at the market. The new units are also
assumed to produce increases in licenses, fees and town revenues. Based on an
analysis of these revenue sources and the size of the hypothetical subdivision relative to existing
residential development in Middletown, this non-tax revenue increase is estimated to be
approximately $3,977 per year. In total, annual revenues from the hypothetical subdivision range
from $ to $ depending on the assessed value of housing units. In addition, each
of the new units is assumed to pay a one-time impact fee of $350 to the town.
payments for water and sewer services are assumed to cover all costs of these
overage that are distributed across all system users. See Footnote 1 on page one in the
main text for a brief description of overage charges.
Nominal annual revenues from the subdivision are assumed constant over the 30-year time
horizon of the model, with the exception of the impact fee discussed above, However, these
revenues are discounted prior to calculation of final net impacts, as discussed in Appendix Three.
18
19
Final net fiscal in its subtraction annual
costs from summed over all years where costs and benefit calculations are
summarized above. In this net impacts are summed over a time horizon, In
addition to these the analysis also accounts for a of factors which
the model:
This fiscal assesses discounted benefits over a time
various rates of discount percent to 12 percent), This generates the present value of all
future fiscal impacts, in 1998 dollars, over the 30-year time horizon considered, Discounting
accounts for the fact that current benefits and costs are valued more than future
benefits and costs, and allows economists to compare present and future fiscal impacts. For
example, a 4 percent discount rate implies that $1 received one year from today is worth 4
percent less than $1 received today ($1+ 1.04), At the same discount rate, $1 received two
years from today is worth 8.16 percent less than $1 received today ($1+ 1 Total
discounted impacts are calculated by "discounting" future impacts by the chosen discount
rate, as shown then adding the annual discounted for each year considered.
Non-discounted impacts are calculated through simple addition of all annual impacts, without
discounting. This is equivalent to an assumption of a 0 percent discount rate. For those
interested in additional mechanics and details of discounting and present value calculation,
see and Samatt (l
2. The full set of 49 housing units would not be constructed and occupied during a the first year
of development. Therefore, the model must allow for an "absorption period" during which
the new units are built and occupied, This model assumes a four-year absorption period, and
an even 25 percent increase in occupied units each year. To assess fiscal impact for years
one through four, annual fiscal impact is calculated assuming 100 percent absorption, then
multiplied by the percentage of houses actually assumed built a specific year. For
example, for every $100 of fiscal impact that would occur if all (l00 percent) of the 49
houses were built and occupied, only $25 dollars (or 25 percent) of impact will occur during
year one, when only 25 percent of the houses are assumed built and occupied. This
percentage rises by 25 percent each year, until full absorption is reached in year four. Note
that the model also discounts net impacts in years one through four, as described above.
3. The model assumes that the annual (nominal) value of revenues and costs will remain
constant over the 30 year time horizon of the analysis, subject to the allowance for the
absorption period, The only exception is the impact fee of $350 per unit, which is assumed
to be paid as the houses are built. For the case of new capital goods (such as trucks and
capital equipment), the model calculates the yearly payment that would be charged to finance
the purchase, at a 7 percent interest rate, then assesses the share of this payment attributable
to the new development (generally 1.05 percent, based on the percentage increase in
developed residential parcels).
20
are assumed valued that results for the full range
shown, Also note that these results are net for each year, calculated
discounted costs from discounted benefits, Calculations for years one four also
account for the absorption period discussed above, Similar spreadsheets are used to calculate
net fiscal in the $1 and $190,000 assessment cases, generating the results
shown in the main text.
Table A-3. Final Fiscal Impact Table
Case III. $150,000 Per-House Assessment, Thirty Year Horizon
Discounted Net Fiscal Impacts
Build Out Discount Rate
Year 40;(. 6'\10 8% 10''il, 12%
o 0% Built $0 $0 $0 $0 $0
1 250;(, Built -$40,785 -$40,015 -$39,274 -$38,560 -$37,871
2 50% Built -$78,432 -$75,500 -$72,730 -$70,109 -$67,627
3 75% Built -$113,123 -$ I 06,840 -$101,013 -$95.603 -$90,572
4 100% Built -$ 145,029 -$ 134,390 -$ 124,708 -$ 115,883 -$ 1 07.824
5 -$139,451 -$ 126,783 -$ 115,470 -$ I 05.348 -$96,272
6 -$ 134,088 -$119,606 -$106.917 -$95,771 -$85,957
-$128.931 -$ 112.836 -$98.997 -$87,O(i4 -$76.747
8 -$ 123,972 -$ I 06,449 -$91.664 -$79.149 -$68,524
9 -$119.204 -$100.424 -$84,874 -$71,954 -$61.182
C -$114,619 -$94,739 -$78,587 -$65,413 -$54,627
J
II -$110,210 -$89,377 -$72,766 -$59,466 -$48,774
12 -$105,971 -$84,318 -$67,376 -$54,060 -$43,548
3 -$101,896 -$79,545 -$62,385 -$49.146 -$38,883
14 -$97,977 -$75,042 -$57,764 -$44,678 -$34,
15 -$94,208 -$70,795 -$53.485 -$40.616 -$30,997
16 -$90,585 -$66,788 -$49,523 -$36,924 -$27.676
17 -$87,IOl -$63,007 -$45,855 -$33,567 -$24,7
18 -$83,751 -$59,441 -$42,458 -$30,516 -$22,063
19 -$80.530 -$56,076 -$39,313 -$27. 741 -$ 19.699
20 -$77.432 -$52.902 -$36,401 -$25.219 -$ 17,588
21 -$74,454 -$49,908 -$33,705 -$22,927 -$15,704
22 -$71,591 -$47,083 -$31,208 -$20,843 -$14,021
23 -$68,837 -$44,418 -$28,896 -$ 18,948 -$12,519
24 -$66,189 -$41,903 -$26,756 -$ 17,225 -$11,178
25 -$63,644 -$39,531 -$24,774 -$ 15,659 -$9.980
26 -$61,196 -$37.294 -$22,939 -$ 14,236 -$8.911
)'7 -$58,842 -$35,183 -$21,240 -$]2,942 -$7,956
_I
-$56,579 -$33,191 -$ 19,666 -$ I .765 -$7,104
29 -$54,403 -$31,313 -$ 18.21 0 -$ I 0,696 -$6,343
30 -$52,31 -$29,540 -$ 16,861 -$9,723 -$5.663
-$2,695,338 -$2,104,234 -$1,685,815 -$1,381,749 -$1,155,240
21
Four,
"Fiscal
Benefits of
of tbe Fiscal
of a Subdivision on tbe
Preservation vs. Residential
The Tax
This "Fiscal of a Subdivision on the The Tax
Benefits of Preservation vs. Residential Development," summarizes the results of a
fiscal impact analysis of an hypothetical 55-unit "Kempenaar Valley subdivision," and indicates
the net fiscal benefits that would be received by Middletown taxpayers as a result of the
preservation of the two Kempenaar Valley properties as open space. Employing the same basic
methodology used to assess fiscal impacts of a PelTY Fam1 subdivision, the analysis shows that
over the next 30 years, residential development of the Kempenaar Valley properties would cost
Middletown taxpayers between $1,065,754 and $3,083,359 (in net discounted 1998
even after one considers all the tax and other revenues generated by new residential units. In
total non-discounted dollars, CUlTent Middletown taxpayers would pay as much as $5,545,393 III
additional taxes over the next 30 years, if a 55-house subdivision were to be built m the
Kempenaar Valley. Considering only the most probable outcomes, preservation of the
Kempenaar Valley would likely save the taxpayers of Middletown between $1,923,491 and
$2,404,122, in discounted tax dollars over the next 30 years. In annual ten11s, this would
translate to an additional $28 in property taxes paid by each Middletown household, each year,
to support the additional net fiscal losses generated by a hypothetical Kempenaar
subdivision in the Middletown Town Center. The results of the Kempenaar Valley study are
summarized the tables.
Fiscal Impact Charts: Losses Associated with Modeled Kempenaar Valley Subdivision
Table 1. Net Fiscal Losses Generated by 55-House Kempenaar Valley Subdivision
Case I: $190,000 Per-House Assessment, 30 Year Impact
$6,000,000
-0 $5,500,000
~
.... $5,000,000 $4,504,573
c:
0 $4,500,000
<.I ~ $4,000,000
'" '"
~ '-
- C':
'-=
'" 0 $2,503, i 89
~ Q
'"
'" QC
C; ~ $2,000,000
- ~
C': $1,500,000
<.I
'" $1,000,000
~.
t:
z $0
0%, 4% 6%
$1,560,621 $1 276 94"
" , ~ $1,065,754
8(;0
10%
J2%
Discount Rate
22
Table 2. Net Fiscal Losses Generated 55-House Kempenaar
Case II: $170,000 Per-House Assessment, 30 Year Impact
~ $6,000,000
'='
..0
~.
o
.~ ~
e~
~ "0
~ 0
o
~.
-;;
~
;i:
0%
$2,793,274
4%
$2,177,654
6%
Discount Rate
$1,742,056
8%
$1,425,656
Subdivision
$U90,086
Table 3. Net Fiscal Losses Generated by 55-House Kempenaar Valley Subdivision
Case III: $150,000 Per-House Assessment, 30 Year Impact
;:;.
z
$4.500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
os
....
:::
:I
o
<J ~
r:.n r.n
Q ;
"" -
r.n '0
~ Q
r;r; 00
~ :1',
0\
$6,000,000
$5,500,000
$5,000,000
$4,500,000
$4,000,000
$3,500,000
$3,000,000
$2,500,000
",;
~
'"
~
....
I))
Z
$] ,500,000
$500,000
$0
$5,545,393
$3,083,359
0%
$2,404,122
40/
/0
6%
Discount Rate
8%
23
$1,923.49]
, $] ,574,366
$] ,314,419
10%
12%
24
Abstract
The integration of fiscal impact analysis into local comprehensive planning has been a qualified success
in two case study communities, A detailed look into the development and application of fiscal impact
analysis in Howard County, MD and Loudoun County, V A has resulted in a greater understanding of
development costs and revenue impacts. Despite its nalTOW acceptance and use by the planning
profession in general, fiscal analysIs has been institutionalized within these two planning processes and
has proven useful in ways not envisioned when the models were developed, Useful lessons other
communities considering the use of fiscal analysis are described,
I. Background
Over the past forty years, local level urban and regional planners have used a variety of economic
analysis techniques to incorporate economic and fiscal considerations into comprehensive plans, One
such techmque, fiscal impact analysis, first appeared to many planners in the seventies with the
publication of Fiscal Impacts of Land Development: A Critiqt1e: ofMe:thods <ll1cl Re:vie:w OfISSlle:S by
ThOill<lS Mue:lle:r (1976) and the FiSC<lUillP<lCt I-I<ll1clbook by Burchell and Listokin (1978), While these
and other works spulTed some interest in the technique at that time, fiscal impact analysis has yet to
achieve widespread application, However, fiscal impact analysis models have proven to be valuable
tools in communities where they have been conscientiously applied.
Howard County, Maryland, and Loudoun County, Virginia, two of the fast growing suburbs of
Washington, DC, are among the few communities to fully utilize the fiscal impact approach in
integrating economic factors into their comprehensive plans, Both have won national recognition for
their comprehensive plans. Howard County's The: 199Q Ge:l1e:I<ll P1<ll1,.. a six point pian for the future
won the American Planning Association award for planning excellence in 1990, Two years later,
Loudoun County's Choices and Chal1ges General pl<ln was similarly honored. The process of the
development and implementation of fiscal impact analysis, as it has been incorporated into two award-
winning planning efforts, is described in this study, Specifically, each case study site was investigated in
the context of the following research questions:
1. What are the characteristics of the fiscal impact analysis model in tenns of variables, complexity
and flexibility?
2, What specific applications of the fiscal impact analysis model have been used in comprehensive
planning? and
3. What are the perceived strengths and weaknesses of fiscal impact modeling as it relates to
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Section II provides a broad of economic analysIs techniques as have to
comprehensive planning. Key elements of the fiscal impact analysis concept are then presented in
Section III. dimensions of the Howard County and Loudoun County models, and their
comprehensive planning, are described in Section IV, Finally, Section V analyzes the perceived
weaknesses, and applicability of fiscal impact analysis based on the case study descriptions
the opinions of those have implemented the two models,
II. Antecedents to Fiscal Impact Modeling
Planning, as a common local govemment practice, appeared with the rapid growth and suburbanization
that took place in the ,S, after World War II. Over the course of the past fifty years, a variety of
analysis techniques have been developed to incorporate economic and market factors into
comprehensive planning practice, Each of these techniques has met a specific set of needs for the
planning profession,
One the earliest economic analysis techniques commonly used in local comprehensive planning was
the economic base approach, First conceived in the 1920s, the economic base concept was popularized
by Homer Hoyt and Richard B, Adams in the post-WWII period (Murphy 1966), Economic base
analysis was introduced to a new generation of planning students in '
1965), one of the first general planning textbooks and in
(lCMA 1968), another planning text also widely used by practicing planners. Planners used the
economic base approach to derive employment projections, consider local economic factors, and project
land use need by category - the most fundamental requirements for local comprehensive plans, This
approach required only readily available secondary data which, when coupled with relatively simple
analytical techniques, soon made economic base analysis a common tool in comprehensive planning.
The planning-programming-budgeting-system (PPBS) was an analytical approach of defining
measurable goals, setting aItel11atives, evaluating each aItel11ative for cost and effectiveness, and
choosing the best means for implementation (lCMA 1979), PPBS was introduced at the local level as an
outgrowth of its expanding use for complex projects at the federal widespread
categorical federal assistance to local govel11ments in the sixties, especially Model Cities, hastened the
spread of program budgeting, While PPBS linked planning and budgeting, its complexity prevented it
from being sustained once federal pressures for its use declined,
Subsequent to the brief life of PPBS, planners were offered a range of modeling techniques designed to
aid 111 understanding local and regional economies. Input-output analysis, shift-share analysis, and fiscal
impact analysis were described as planning tools in The: Practice: of Local Government Planning (ICMA
1979). The first two techniques found their advocates at the regional level while fiscal impact analysis
was found to be most applicable at the local level, where land use and budget responsibilities are closely
linked (McLean and Voytek 1992), Cost-benefit analysis techniques also found their way into the
planning literature, including matrix display techniques such as the planning balance sheet (Schofield
1987), Matrix display techniques permit the inclusion of non-quantitative data within planning analyses,
incorporating a wide variety of qualitative social and environmental factors with more quantitative
economic measures. Cost-benefit analysis has also come to playa major role in growth management as
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rights,
easements, others. analysis has been used to develop mechanisms to
manage growth allocating and shifting many of the costs of growth from the public sector to
who benefit most: new and businesses.
The allocation of the costs between those moving into a the
population, has became a major political issue in many rapidly growing
areas (Snyder and Stegman 1986), Economic analysis techniques were soon applied to compute
appropriate development impact fees based on the scope, location, and timing of growth (Nicholas,
Nelson, and Juergensmeyer 1991). The need to fully understand the costs of growth, in order to establish
impact fees or proffers lieu of impact fees, lead to the use of fiscal impact analysis techniques in the
case study communities of Howard and Loudoun Counties,
III. Key Elements of Fiscal Impact Analysis
The (Burchell and Listokin 1978) uses the tern1 "fiscal impact analysIs"
interchangeably with "cost-revenue analysis," It is a sub-set of cost-benefit analysis which considers
only net public costs and revenues, Fiscal impact analysis is concemed with the public cost and revenue
implications of changes in population or employment at the urban jurisdiction level. The costs of both
facilities and services, in the long run, are typically incorporated into fiscal impact models.
Fiscal impact analysis is a systems approach - it links economic, demographic, capital, and service
factors, Development is market driven, If service levels are held constant, the demand for increased
government services and facilities is largely development driven, Other market factors such as the price
of housing, the value ofland and commercial/industrial property, and the industrial mix all have an
affect on the taxable base. The expenditures required to provide new services and facilities, and the
revenues available, are directly dependent on market demand as it affects the pace, value, and location
of development. Fiscal impact analysis is the one technique that links planning with the economics of
the market.
Application of fiscal impact analysis occurs on two levels. At the macro level, it is used to analyze
as it It is to
the overall community at the micro level. Both are of interest to planners, although, without
development of a community-wide model, project related impact analyses are difficult and generally
inaccurate, The community-wide model enables analysis of altemative development patterns, land uses
and growth rates on tax rates, capital facilities expenditures and services costs. Project analysis, which is
focused on product mix, pricing, and absorption rates allows local governments to consider the marginal
costs of a specific development when facing requests for approval of major projects through the zoning,
special exception, or use pennit processes, The case studies of Howard and Loudoun Counties describe
how these communities have used fiscal impact analysis at the comprehensive plan level and how
project analysis in being incorporated into the incrementalnnplementation of their plans,
IV. Case Studies - Howard County, Maryland and Loudoun
County, Virginia
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use alternatives (Kaiser
County's General Plan,
Godschalk 1995). These same characteristics
were populated with sophisticated citizens and developers who were acquainted
with growth management concepts and planning law, Planners needed to ensure that
process was "legally and that growth management policies could withstand the
constitutional challenges based on tests of rational nexus and takings. Fiscal
was into the planning processes not only to ensure due diligence related to the
costs of growth, but also because it "was a way of testing the implications of planning safely" (Avin),
These two case studies are intended to provide an understanding of the dimensions or characteristics of
the fiscal impact analysis models and the application of fiscal impact analysis in each community, The
two models are different in detail, but strikingly similar in scope and complexity. With similar tools,
each community has found different uses for fiscal impact analysis in response to community needs.
A. Howard County, Maryland
During the process of developing the 199Q G~I1~ra1 Plal1, Howard County retained the services of
Tischler & Associates, Inc. to prepare an analysis of the costs and revenues associated with development
of the county according to the land uses and pace of growth envisioned by the preliminary plan. The
consultant was asked to project the net costs associated with growth over a 20 year period, holding the
level of services and tax rate constant and accelerating the purchase of parkland and school sites.
issues paper, (Howard County I
that the plan would cause revenues and expenditures to increase at roughly the same rate. County staff
subsequently drew from the consultant's report to create a spreadsheet model which featured the same
input and output formats used in the plan's background study.
Dimensions of the Model - On the revenue side, the model directly linked the zoning and land uses, as
proposed in the draft plan, with the projected growth of housing units, by type and price, and
commerciallindustrial space, by value, More specifically, residential development was divided into
several unit types, based largely on differing school-aged children generation rates, Single family
detached, single family attached, apartment, condominium, and "other" unit types were allocated
according to historical trends of annual market demand for such units, Thus, market factors related to
product type, price, and production were integral to the fiscal impact model growth assumptions,
A fundamental element of the proposed comprehensive plan was an annual quota or cap on residential
development. The level of permitted development, however, closely matched anticipated housing
demand based on long term trends for housing starts, The cap was intended to dampen the "boom and
bust" cycle of housing growth which made the concurrent provision of adequate government facilities
difficult.
Market-related factors were also utilized in projecting non-residential growth, Development was
allocated among retail, office and R&D, and industrial and warehouse uses by square footage and
market value. Like the residential market, cycles were eliminated through the use of longer term trends
in non-residential space absorption.
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Revenue projections were based on long ten11 economic trends and ignored less predictable short term
market fluctuations, The real estate bust of the early 1990s resulted in a real decline in assessed values,
and a consequent reduction the taxable base soon after the adoption of the comprehensive plan, This
base had to be offset by a comparable increase in tax rates, in order to keep revenue
relatively constant on a per capita basis, While the model could not predict market it
was useful in explaining the effects of the recession on county revenues.
Howard County's model used both marginal and average cost approaches in projecting expenditures
(Howard County 1989). Facilities needs are incremental, with substantial new expenditures needed at
the threshold of the next increment, making the marginal cost approach preferable to the average cost
approach in projecting capital costs (Nicholas, Nelson, and Juergensmeyer 1991), Capital expenditures
were projected based on marginal costs while operating expenditures were based on per capita costs,
Service or operating expenditures were allocated among 43 categories, The four largest categories were
related to the costs of operating schools, and were based on enrollment projections derived from
anticipated housing unit growth, Highway, development agency, and miscellaneous inspection costs
were also based on marginal housing unit development. The great majority of the remaining costs were
based on average, per capita, measures, According to the typology presented in the FisGaJ Il11paGt
Hanclbook (Burchell and Listokin 1978), the costing approach used by Howard County was a
combination of the per capita multiplier and the service standard approaches. The Howard County fiscal
impact analysis model, and the comprehensive plan, assumed that service levels and real service costs
would remain level over the tel111 of the plan, a period of twenty years, There was virtually no public
debate or controversy on these assumptions,
Application of the Model - Howard County used the fiscal impact analysis model to validate the
affordability of the proposed comprehensive plan. By holding service costs constant, on a per capita
basis, the model outputs verified that the tax rate would require only slight increases over the 20 year
study period. Outputs also demonstrated the value of accelerating the construction of some of the needed
capital facilities. Howard County's use of the model increased the confidence of both elected officials
and general public in the fiscal soundness of the plan.
The model was also used to calculate the "breakeven" value of a new home - the price required to
generate taxes sufficient to cover all associated service and capital costs, In 1990, that value was
approximately $300,000, an amount significantly above the average value of new units being built in the
County, This number was widely publicized in order to demonstrate the need for economic
development. Since non-residential development was seen to "subsidize" residential growth, attaining
the projected levels of commercial and industrial development was imperative, Howard County was
committed to remaining a diverse community with a wide variety of housing choices, A mix of housing,
with an adequate supply of affordable units, was a premise of the plan, Available affordable housing
units were important to employers in attracting labor, even though affordable units required more
"subsidy" than executive housing. Fiscal arguments were used to link the plan's proposed housing and
employment policies.
Howard County development, business, and citizen interests have all been generally suppOliive of the
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next review
to used in the planning process in similar to use In
plans to use a new project based model to evaluate future
thresholds, It is also envisioned that this new model win be used to
evaluate of incentive packages proposed as part of the County's industrial recruitment
effort. Howard County is continuing to integrate fiscal impact analysis into the planning process
innovative ways.
B. Loudoun County, Virginia
In 1 during the mitial stages preparation of the Loudoun
County retained the Govemment Finance Research Center (GFRC) to develop a comprehensive fiscal
impact analysis model for use in determining the costs of growth. The model was to have twin functions,
being applicable to both countywide and project analyses, Fiscal impact analysis was used to evaluate
altemative countywide development scenarios related to the pattern and pace of development in the
preparation of the new comprehensive plan. It was also fundamental to the development of proffer
guidelines to be applied during rezonings. Model outputs of various alternatives were discussed during
plan adoption, but fiscal analysis was only one of many policy considerations and did not drive the
debate. The adopted plan required an annual review and update of the fiscal impact model, indicating
that it was seen as integral to the continuing planning process.
Dimensions of the Model - The Loudoun County Fiscal Impact Model (FIM) was specifically designed
for application in Loudoun County, The FIM featured inter-dependent modules which incorporated
demographic, revenue, capital, and service level assumptions, County staff were directly involved in
developing or verifying the assumptions associated with each of these modules, Loudoun's model was
significantly more complex than most other fiscal impact models in use at that time,
The demographic module contained approximately 125 growth-related variables. The assumptions
associated with each variable were explicit and included such factors as pupil generation rates by
housing unit type, employment per square foot by type of commerciallindustrial use, real income
growth, etc. The flexibility of the model enabled analysts to vary many assumptions, including unit mix,
absorption rates, and prices/values of new construction, The Loudoun County FIM provided both
substantial detail and flexibility, It also incorporated local economic and market factors as they related to
projected development.
The tax rate was modeled as a dependent variable, with capital and services expenditures based on
projected development as the independent variables, The revenue module also permitted analysis of the
fiscal impacts of constant tax rates on the capital and services budgets. The FIM could be used as a
budget analysis as well as development analysis tool.
Service expenditures were calculated using a method similar to that used in Howard County - average
per capita costs for most factors, with school costs based on the marginal costs for students generated by
the new units to be built each year. The Loudoun FIM additionally incorporated a number of embedded
algorithms that accounted for economies of scale in service costs as the County urbanized, even when
the growth assumptions held service levels constant (Johnson 1988). These "invisible" factors,
associated with the comparable community modeling approach as described in the Fiscal Impact
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the application of the fiscal impact
was to four sub-area growth scenarios being considered through the comprehensive
planning process (Loudoun 1991). model tested the fiscal impacts of providing public water
and sewer, and thus permitting suburban scale development, into areas not necessarily planned
development. In summary, the provision of services and the wider distribution of development was
assumed that opening additional areas to development would not result greater overall growth)
resulted in projections of less favorable fiscal positions for the County in three of the four areas,
Ultimately, fiscal impact analysis was considered as one input into a complex decision process and did
not, solely, drive the final plan recommendations, The Choices and Changes plan did, however,
institutionalize fiscal impact analysis in the planning process, requiring an annual update of the model.
Development remained a highly politicized issue m Loudoun County, as local elected officials
continued to approve rezonings which enabled development of tens of thousands of additional
residential units (Loudoun County 1995). The real estate slump of the early 1990s lead to increasing
fiscal stress as the County government experienced substantial reductions in assessments, even as new
housing construction continued at relatively high levels, Although elected officials considered using the
FIM for the analysis of individual projects, the development community questioned the validity of the
model in light of the "invisible" embedded algorithms, Politically, the model was viewed as
indefensible, and staff undertook substantial "off-line" work to supplement and document the model.
The process of documenting all assumptions and conducting sensitivity analyses of the model"
the fonnation of a publicly appointed group to provide oversight. The resulting Technical Review
Committee (TRC) was comprised of prominent members of groups that included development,
environmental, school, and taxpayer interests, Working through rules requiring consensus, the TRC
validated all 125 assumptions in the demographic module, the element containing the development
related assumptions. While the proprietary algorithms remained unknown, the model was generaIly
demystified and accepted for limited application,
Subsequent to the work of the TRC, the most acceptable elements of the model were the development
assumptions and these were used during the review of County agency service plans, These service plans
were developed independently by individual agencies, and the aggregate capital facility timing and cost
had not closely scmtinized in any comprehensive manner. The named
for the Board of Supervisors member requesting the analysis, led to a review of the long term fiscal
impacts of the service plans using the FIM. Ultimately, the service plans were reconsidered in total and
the County developed a twenty year Cilpital Nt;t;ds Anillysis. Fiscal impact analysis had been
successfully used to tie long term capital budgeting into the planning process,
The FIM was also used to analyze the fiscal impacts of two area plans, the and the
IoU ROild Plan, By the time these area plans were prepared, the application of fiscal impact analysis had
become more accepted. It proved useful in generating public and interest group support for the area
plans, The initial concerns with the black-box issue have not disappeared, however, and Loudoun's use
of fiscal impact analysis has not attained the same level of public acceptability as Howard County's,
Applications of the FIM were related to broad countywide or area plan analyses. There remains a desire
on the part of elected officials and planning commissioners for a project-based model applicable to
individual rezoning or special exception cases, It is likely that the development of a project model will
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Fiscal Impact
Applicability
Strengths, Weaknesses, and
benefits of a case approach are derived from the collection of a variety perspectives on a
single tOpIC or issue. section provides an analysis of opinions of the eight mdividuals
interviewed for this study, Based on their experience in implementing fiscal impact analysis in
Howard County, Maryland and Loudoun County, Virginia, interviewees were asked to summarize the
strengths and weaknesses of the fiscal impact analysis technique. They were also asked to comment on
fiscal impact analysis has not been more widely applied in comprehensive planning,
Strengths
A significant virtue of fiscal impact analysis was that it began "to brmg a realistic sense of costs
growth into the public discussion (McLaughlin)." The community benefited from the "objective screen"
that fiscal impact analysis provided. It also lead to a better understanding of the relationships among the
factors contributing to growth and development. Fiscal analysis was viewed as a tool that enabled the
linkage of the costs of growth to the local budget.
A secondary benefit was a by-product of the work required to develop and implement fiscal impact
analysis - the information collection and development tracking processes in both communities were
greatly improved. Data collection became routine and institutionalized, More and better information
about development impacts and facilities needs and costs resulted from the FIM development and
documentation process,
Weaknesses
The most frequently mentioned weakness of the fiscal impact analysis approach was related to the
"inherent limitations" associated with any modeling technique. "Outputs are only as good as the inputs"
and their specific application to the subject community, While fiscal analysis can provide important
information about the direction or tendencies of impacts, it's outputs are not "the answer." Policy
decisions often "get bogged down by numbers," rather than illuminated by them. Outputs are "always
subject to debate," regardless of the quality of the model. Planners worry that fiscal factors may become
the sole deteIminant of policy decisions, rather than simply one of many inputs in those decisions,
Public expectations of fiscal analysis remain unfulfilled, The question, "if the (development) business
can have a bottom line, why can't the County?" has not been adequately addressed. Additionally,
Loudoun's "black box" problem, stemming from use of the comparable city method of analysis,
significantly eroded the public's trust and confidence in the fiscal impact model. The model's
"proprietary fonnula was a fatal flaw (Maio),"
Good models are complex, and consequently expensive, difficult, and time consuming to maintain, The
state of the art in fiscal impact modeling (at least as it stood in 1989) is not user friendly, Users feel that
models are cumbersome and data needs are "overkill," while at the same time maintaining high levels of
utility requires complexity, Statistically sophisticated staff are needed to maintain and interpret fiscal
impact analysis model outputs,
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are on
Fiscal be less
For example, when independent
water and sewer facilities, roads, parks construction or other large capital expenditures, the local
government may not have adequate reason to invest in fiscal impact analysis. The scope and scale of the
planning project also affects the applicability of complex analysis, The initial expense, coupled with the
for knowledge of modeling and statistics, may limit the applicability of fiscal impact
to only the largest, most complex efforts,
Planners themselves are sometimes hesitant to undertake fiscal impact analysis, The "fear
also extends to planners, who may be intimidated by the complexity of the models, Finally,
that impact analysis will drive entire planning effort, instead of serving as one of
many considerations,
Conclusions
Based on the case studies of Howard County, Maryland and Loudoun County, Virginia, some
generalizations can be made on how fiscal impact analysis has been integrated into local comprehensive
planmng, In summary, fiscal impact analysis models in these two communities have:
1. incorporated a wide variety of market factors into the models as inputs, effectively linking
economics and comprehensive planning;
2, lead to a greater understanding of how market demand drives development and how this growth
impacts the local government budget;
3. lead to useful applications of fiscal analysis not originally envisioned when the models were
developed e,g, capital facilities needs analysis and the analysis of tax incentives for economic
development; and
4, been integrated into the planning process so thoroughly that project based applications are now
being demanded,
In spite of its expense, complexity, and limitations, both case study communities have found significant
value in fiscal impact analysis and are working to expand its applicability,
The lessons learned from Howard and Loudoun Counties' experience with fiscal impact analysis may be
useful to other communities considering its application. Most of these are practical considerations that
ultimately affect the acceptability and usability of the models:
1. ensure that the model features user friendliness and flexibility - spreadsheet software now
available should permit substantial improvements in the user characteristics over earlier models;
2, ensure that the model's outputs are fully explainable - even though Loudoun County planners
understood the structure and details of the model, they could not adequately "explain" the outputs
due to some hidden proprietary calculations; and
3, provide adequate interdepartmental staff resources and training - multiple departments or agencies
may need to be involved in fiscal impact analysis, including planning, budget, public works, and
school personnel.
Future research should focus on a broader sample of users of fiscal impact analysis models, The two
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may substantially add to
VI. Bibliography
Anderson, Larz (1995), Guidelines for Preparing Urban Plans, Chicago: American Planning
AssocIation,
1
Telephone
by author.
Burchell, Robert W, and Listokin, David, (1978), Fiscal Impact Handbook, New Brunswick,
Urban Policy Research, Rutgers University,
Center
George, Roselle. 1997, Interview by author. Ellicott City, MD, 9 April.
Howard County, Department of Planning and Zoning, (1990). The 1990 General Plan.., a six point plan
for the future. Ellicott City, MD: Author.
Howard County, Department of Planning and Zoning. (1990), Issue Paper: Development Trends and
their Fiscal Impacts - 1990 General Plan, Ellicott City, MD: Author.
Intemational City Management Association. (1979). The Practice of Local Government Planning,
Washington, DC: Author.
International City Manager's Association. (1968), Principles and Practice of Urban Planning,
Washington, DC: Author.
Johnson, Thomas C. (1988), Fiscal Impact Models for Virginia Communities. Govemment Finance
Review, 8:36-38
Kaiser, Edward J. and Godschalk, David R. (1995). Twentieth century land use planning: a stalwart
family tree, Journal of the American Planning Association v61 n3:365-386
Loudoun County Department of Economic Development. (1995), Annual Growth Summary. Leesburg,
Author.
Loudoun County Department of Planning, (1991). Choices and Changes General Plan, Leesburg, VA:
Author.
Loudoun County Fiscal Impact Technical Review Committee. (1997), Demographic, Revenue and
Expenditure Modules and 20- Year Growth Scenarios, Leesburg, V A: Author.
Maio, Peggy, 1997, Telephone interview by author. 23 April.
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1
Issues. Washington,
of Methods
Murphy, Raymond
American City: An Urban Geography.
James Arthur Nelson, and Julian C. Juergensmeyer. (1991), Practitioner's Guide to
Development Impact Fees, Chicago, IL: American Planning Association,
Pastor, Julie, 1997, Interview by author. Lessburg, VA. 24 April.
Richmond, Cynthia. 1997, Interview by author, Leesburg, VA. 4 April.
Schofield, 1. A. (1987), Cost-benefit Analysis in Urban & Regional Planning, London: Allen & Unwll1.
Snyder, Thomas P. and Stegman, Michael A. (1986). Paying for Growth: Using Development Fees to
Finance Infrastructure, Washington, DC: Urban Land Institute,
Wacks, Raymond S, 1997. Telephone interview by author. 23 April.
Wells, John, 1997. Interview by author. Leesburg, VA. 4 April.
VII. Acknowledgements
The author would like to thank the individuals who agreed to be interviewed for this research paper. Any
misrepresentations of their comments are solely the responsibility of the author.
Uri A vin, former Director, Howard County Department of Planning and Zoning,
Roselle George, Director of Research, Howard County Department of Planning and Zoning.
Peggy Maio, Loudoun Chapter of the Piedmont Environmental Council and member ofthe Fiscal
Impact Analysis Technical Review Committee,
Marsha McLaughlin, Deputy Director, Howard County Department of Planning and Zoning,
Julie Pastor, Director, Loudoun County Department of Planning,
Cynthia Richmond, Assistant Director, Loudoun County Department of Economic Development.
Raymond S. Wacks, Administrator, Howard County Office of Budget.
John Wells, Deputy County Administrator, Loudoun County, Virginia,
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1
Parks Fee
$500 was assessed per new residential unit. This amount was based on projected future recreation
needs valued at $6,844,633,96 divided by 13,687 new residential units,
During 2002 and 2003, the Parks and Recreation Staff re-evaluated the future parks and recreation
needs in the City, and the amount of those needs come to $20,155,000,
If this figure were divided by the projected 12,288 new residential units, the new Recreational Park
Impact fee would be $1,640,22.
Staff has contacted other Cities in the surrounding areas, and the highest impact fee being charged
for Parks and Recreation at the present time, is in the City of Winter Park ($2,000), followed by the
City of Oviedo ($1,201) and the City of Winter Springs ($914,53),
Staff believes that due to the cost of the future parks and recreation needs in the City of Ocoee, the
City's Recreational Park Impact Fees should be increased to $1,640 per residential unit.
Issue:
Should the Mayor & City Commissioners increase the Recreational Park Impact Fees?
Recommendations
Staff recommends the Mayor & City Commissioners adopt an ordinance to increase City's
Recreational Impact Fees from $500 per residential unit to $1640 per residential unit.
Attachments:
City of Ocoee - Parks and Open Space Impact Fee Study - Revised April 2004
Park Impact Fee Comparison
Park Impact Fee Slide Show
Recreational Park Impact Fee Ordinance
COMMUNITY DEVELOPMENT
DEPARTMENT
651 Pine Street, N. Wing - 5th Floor
Martinez, CA 94553
Telephone: (925) 335-1260
FAX: (925) 335-1265
MEMORANDUM
DATE:
TO:
FROM:
SUBJECT:
August 9, 2004
Board of Supervisors Transportation, Water, and Infrastructure
Committee
Supervisor Millie Greenberg, Chairperson
Supervisor Gayle B. Uilkema, Member
Dennis M. BaITY, Community Development Director
By: Bob Calkins $ b
Draft Park Impact Fees Nexus Study
RECOMMENDATIONS
1. ACCEPT Park Impact Fees Nexus Study and provide comments and
direction;
2. DIRECT the Community Development Department to present the draft Park
Impact Fee Nexus Study to the Developer Liaison Committee for comments;
3. DIRECT the Community Development Department to prepare a
recommendation to the Board of Supervisors implementing the adoption of (1)
a new park dedication fee to reflect CU11'ent land values and the County's
maximum allowable park acreage per capita standard under the Quimby Act;
(2) a park development impact fee to finance the cost of park improvements to
serve new developments; and (3) a park and trails master planning fee,
pursuant to AB 2936, to fund park and trails master planning costs attributable
to new development.
6-1
On May 6, 2002, the Board of Supervisors retclTed the matter of County parks to the
Transportation, Water, and Infrastructure Committee (TWIC). Over the last two years,
the Community Development and the Public Works Departments have been coordinating
issues through a regular, interdepmimental committee process, the Park, Creeks and
Trails Committee (PCTC).
On July 21, 2003 and September 15, 2003, the TWIC considered the preliminary
interdepartmental report on County parks and staff recommendations for exploring
development of a Parks Master Plan and recommended the Board of Supervisors take the
following actions with respect to parks:
I. Acceptinterdep31imental report of County parks;
2. Direct the Community Development and Public Works Directors to prepare a
recommendation to the Board of Supervisors regarding preparation of a Parks
Master Plan for unincorporated Contra Costa County, including purpose, scope of
work, and proposed funding;
3. Authorize the Community Development and Public Works Directors to study
funding the Master Plan through the use of an amended application fee, as
enabled by passage of AB2936;
4. Authorize the Community Development and Public Works Directors to review the
County's park dedication fees.
5. Direct staff to consult with the County's developer liaison committee to gain input
on the structure of the potential fee;
6. Refer implementation of these recommendations to the Transportation, Water and
Inti'astructure Committee.
On December 9, 2003, the Board of Supervisors approved all of the above
recommendati ons.
Park Impact Fees Nexus Study - Summary Rec.ommendations
The attached Park Impact Fees Nexus Study ("Study") was prepared pursuant to the
"Mitigation Fee Act" as tound in Government Code Section 66001 et. seq. and the
"Quimby Act" as codified in Government Code Section 66477. The purpose of the Study
is to establish the legal and policy basis for calculating the imposition of park fees on new
residential development within the unincorporated areas of the County. Based on the
findings presented in the Study, the following recommendations are presented (see pages
4 and 5 ofthe Study) for consideration by the TWIC:
1. The County should establish new park dedication fees to fairly allocate the costs
of new parkland acquisition and development to new residential development.
2. This new fee structure should be allocated to four housing types and second units.
2
6.2
4, Each should an
to the park fees to reflect changes in constmction costs.
5. The County should periodically conduct a review of facility costs, land costs and
building trends within the County and adjust the park fees accordingly,
3
6-3
DRAFT
COUNTY OF CONTRA COSTA
PARK IMPACT FEES NEXUS STUDY
July 2004
Prepared for:
Board of Supervisors
Contra Costa County
Prepared by:
Shilts Consultants, Inc.
2300 Boynton Avenue, Suite 201
Fairfield, CA 94533
PH: 101.426.5016
FAX: 101.426.0109
www.shilts.com
6-4
Acknowledgements
This report was prepared by Shilts Consultants, Inc. under contract with the County of
Contra Costa.
The work was accomplished under the general direction of Robert Calkins, CDBG Program
Manager with the Contra Costa County Community Development Department.
We would also like to acknowledge special efforts made by particular County staff:
Dante Morabe, Public Works Department
Lisa Carnahan, Public Works Department
John Kopchik, Community Development Department
Wick Smith, Land Information Systems
Hillary Heard, Community Development Department
Dave Edmonds, Public Works Department
Abigail Fateman, Community Development Department
Jim Kennedy, Community Development Department
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Pagei
DRAFT REPORT
6-5
Table of Contents
SECTION 1. EXECUTIVE SUMMARY ..........................................................................................1
1.1 Summary of General Findings ....................................,...................................,.............., 2
1.2 Summary of Recommendations..,....,.........,................................,...."".."............".....,,,.4
1.3 Organization of the Study "..."....."...............,..,..,..,....,.......,,,....,............,,...........,,,........ 6
SECTION 2. LEVEL OF SERVICE AND PER CAPITA COSTS ...................................................1
2,1 Parkland Acquisition .........,...........................,.."....,.,..,.............,......"............,..,,,,,...."...7
2.2 Parkland Development .......".....,.........".......................,......,....,.........,..,.............,..,..."..9
2,3 Community Use Facilities ,...........""...........................".....".....,...,...".....,.............,....,..10
2.4 Support Facilities ",..,..".........."...".........""................"..,..."..... ......"..,..."".............,....11
SECTION 3. PARK FEES CALCULATION ................................................................................12
3.1 Parkland Dedication Requirement (Quimby)...............................".................................13
3.2 In-Lieu Fees I Impact Fees for Parkland Acquisition..........".............."..........................14
3.3 Impact Fees for Park Improvements................................................"............................16
3.4 Total Park Fees ,...,.,..."..,.".,...".,......."..,..........",......,.,........""..,.......,..,.,..""..,...""". ,17
SECTION 4. PARKS AND TRAILS MASTER PLANNING FEE CALCULATION (AB 2936).....18
SECTION 5. NEXUS FINDINGS....... ........... .............. ...................... ................................ ........... 20
SECTION 6. IMPLEMENTATION ........................................................... ....................... ............. 22
SECTION 1. APPENDiCES...... ................ ..... ........... .............. ..................... ...............................23
Appendix A. Population Projections through 2019..................................,..".........................24
Appendix B. Contra Costa County Owned Park Inventory ...................................."..............25
Appendix C. Recent Vacant Land Sales (Contra Costa County)..........................................,25
Appendix D. Typical Neighborhood Park Pro Forma...............,....."....................".".............30
Appendix E, Cost Components of the Parks and Trails Master Planning Fee ........."...........31
Appendix F. Park Development Fees by Jurisdiction (SFR Fees Only) ................................32
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Pageii
DRAFT REPORT
6-6
Table 1 - Recommended Park Fees..........,......................................"...,..,.........."...............,....,.....4
Table 2 - Recommended Parks and Trails Master Planning Fees .........,...."..........,...............,....... 5
Table 3 - Parkland Acquisition Cost per Capita 0Nestl Central County).."......................".".....,.... 8
Table4 - Parkland Acquisition Cost per Capita (East County) "..""."""......."................................ 8
Table 5 - Parkland Development Cost per Capita ........"...",,,,...,,...,,.........,,..,,.................,..........,,.9
Table 6 - Community Use Facilities Per Capita Standard................."................"."""...................10
Table 7 - Community Use Facilities Cost per Capita .................""...."......."..........."..............."....10
Table 8 - Support Facilities Per Capita Standard .....................".........".........................."...."..."..11
Table 9 - Support Facilities Cost Per Capita"......."...."..........,,,,,...........,,.....,,..,,....,,.....................11
Table 10 _ Average Household Size by Housing Type ...........,,,,,,,,,.......,,..,,..........,.......................12
Table 11 - Parkland Dedication Requirement..............................""",,,...,,.....................................13
Table 12 -In Lieu Fees !Impact Fees 0Nestl Central County)""..."."""....".........""...................14
Table 13 -In-Lieu Fees !Impact Fees (East County) ".............."..."""......................"..................15
Table 14 -Impact Fees for Park Improvements (County-Wide) .....................................................16
Table 15 -Impact Fees for Park Improvements Cost Components....".................,........................16
Table 16 - Total In-Lieu Fees !Impact Fees................,.........."...............................................".....l1
Table 17 _ Parks and Trails Master Planning Costs Allocated to New Development Per Capita,.. ,18
Table 18 - Parks and Trails Master Planning Fee ".................,...............................""...................19
Table 19 - Population Projections through 2019 (County Unincorporated Area) ............................24
Table 20 - Contra Costa County Owned Park Inventory.................................................................25
Table 21 - Recent Vacant Land Sales.............."........................"......"..."..................".................26
Table 22 - Typical Neighborhood Park Pro Forma ......."....."..........".."..............."........................30
Table 23 - Cost Components ofthe Parks and Trails Master Planning Fee "............"...................31
Table 24 - Park Development Fees for Jurisdiction......"."........"......."..".....".".........".................32
Park Impact Fee Nexus Study. 2004
County of Contra Costa
Pageiii
DRAFT REPORT
6-7
Section 1. Executive Summary
This Park Impact Fees Nexus Study ("Study) was prepared pursuant to the "Mitigation Fee Act" as
found in Government Code Section 66001 et. seq. and the "Quimby Act" as codified in Government
Code Section 66477. The purpose of this Study is to establish the legal and policy basis for
calculating the imposition of park fees on new residential development within the unincorporated
areas of Contra Costa County ("County").
The County is currently in the process of preparing a Parks and Trails Master Plan ("Master Plan")
to provide a "comprehensive and feasible vision" of the park and recreational facility needs of the
current and future residents of the unincorporated areas of the County. In order to provide
adequate funding to achieve these long-term objectives, this Study proposes three types of park
fees,
First, the County's parkland dedication requirement and in-lieu fees are updated to reflect current
land values and the County's maximum allowable park acreage per capita standard under the
Quimby Act. The land and/or fees are required as a condition of subdivision map approval and
may be used to develop new or rehabilitate existing parks or recreational facilities.
Secondly, a park development impact fee is proposed to finance the costs of park improvements to
serve new development. In general, these fees may only be used to develop new park or
recreational facilities. They are justified as an offset to the future impact of residential development
on the County's existing park and recreational facilities.
Lastly, a park and trails master planning fee is proposed, pursuant to AS 2936, to fund park and
trails master planning costs attributable to new development. The revenue generated from these
fees will fund only a portion of the total estimated costs. Therefore, the County will need to fund
the remaining portion from the general fund, grants or other funding sources,
In order to impose such fees, this Study will demonstrate that a reasonable relationship or "nexus"
exists between new development that occurs within the unincorporated areas of the County and
the need for additional developed parkland and recreational facilities as a result of new
development. More specifically, this Study will present findings in order to meet the procedural
requirements of the Mitigation Fee Act, also known as AS 1600, which are as follows:
1. Identify the purpose of the fee.
2. Identify the use to which the fee is to be put.
3. Determine how there is a reasonable relationship between the fee's use and the type
of development project on which the fee is imposed.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 1
DRAFT REPORT
6-8
4, there is a relationship
facility and the type of development project on which the fee is imposed.
5. Determine how there is a reasonable relationship between the amount of the fee and
the cost of the public facility or portion of the public facility attributable to the
development on which the fee is imposed.
Since the need for park and recreational services is inherently population-driven, the Study utilizes
a per capita standard-based methodology to calculate the park fees, Under this method, the
standard is based on the land acquisition and development cost per acre to be provided per capita
(or per 1,000 residents), The costs are defined on a cost per acre basis and applied to
development according to the County's maximum allowable standard that sets the acres of
developed parkland and facilities to be provided for a unit of new development.
1.1 Summary of General Findings
Based on a review of the County's 2002-2008 Parks Capital Improvement Plan, the General Plan
and applicable County ordinances, the following general findings are presented:
1, The County of Contra Costa currently owns about 0.5 acres of developed parkland
for every 1,000 people in the unincorporated areas of the County. The County's
General Plan states that the goal of the County is to provide 4.0 acres of developed
parkland for every 1,000 people, However, under the Quimby Act, the County is
allowed to charge new development based on the minimum standard of 3 acres of
"developed neighborhood and community parkland" for every 1,000 residents,
Therefore, the Quimby Act minimum standard of 3.0 park acres per 1,000 people will
be used in this Study.'
2, Based on a review of population projections provided by the Association of Bay Area
Governments, this Study projects that by 2019, the population in the unincorporated
areas of the County will grow from 157,350 to approximately 178,187 residents, an
increase of 20,837 people. 2
(Appendix A presents the population and housing projections by year for the
unincorporated area of Contra Costa County.)
I The developed parkland standard set by the Growth Management Element is 3 acres per 1,000 residents also,
2 The projection relies upon 2004 population figures from the Department of Finance and annualized 2003 population
growth assumptions from the Association of Bay Area Governments for the unincorporated areas of the County.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 2
DRAFT REPORT
6-9
3. not
updated since 1990, Pursuant to Ordinance 920-6, the County currently requires
350 square feet of land per new dwelling unit to be dedicated for park and
recreational purposes, In subdivisions containing fewer than 50 parcels, only the
payment of fees, rather than dedications of land, is required. Those fees are
currently $2,000 per dwelling unit, except for East County, where the fee is $1,350
per dwelling unit
4, The County's current park dedication requirement and in-lieu fees are based on 1990
U,S, Census figures for average household size; land values of $145,000 (West and
Central County) and $75,000 (East County); and include park development costs of
$85,000 per acre.
5. The County currently does not impose park impact fees on non-subdivision
residential projects.
6, In September 2002, Assembly Bill 2936 was passed, authorizing cities and counties
to impose impact fees to recover the costs of preparing and revising general and
master plans. The County currently does not impose such fees for the park and trails
planning process,
7. A reasonable relationship or "nexus" exists between new residential development
projected to occur in the unincorporated areas of the County and the need for
additional developed parkland and recreational facilities as a result of new residential
development The specific nexus findings required by the Mitigation Fee Act
(Government Code Section 66001 et seq.) are fully presented in Section 5 of this
Study.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 3
6-10
1.2 Summary of Recommendations
Based on the findings presented in the Study, the following recommendations are presented:
1. The County should establish new park fees to fairly allocate the costs of new parkland
acquisition and development to new residential development. The following park fees
for the County are recommended:
Table 1- Recommended Park Fees
Total Park Fees per Dwelling Unit
Categories
West I Central Contra
Costa County
East Contra
Costa County
Single-Family Attached
T ownhomes
Multi-f amily Unit
Mobile Home
Second Units
$6.788
$5.399
$4.889
$4.551
$2.268
$5,441
$4.328
$3.919
$3.653
$1.818
2. Since different residential land uses (or housing types) have significantly varying
household sizes, this Study recommends a new fee structure that allocates per capita
costs to four housing types and second units. The recommended housing types are
detached single-family homes, attached single-family homes (or townhomes), multi-
family residences and mobile homes. The calculation of the average household size
for the four housing types and second units, based upon 2000 U ,S. Census
information, are shown and further discussed in Section 3.
3. The County should establish a new parks and trails master planning fee to recover the
costs of preparing and updating a park master plan as enabled by passage of AB
2936. Based on cost estimates provided by the County, the recommended fee
structure for the parks and trails master planning fee is presented in the table on the
following page and further discussed in Section 4.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
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DRAFT REPORT
6-11
Table 2 - Recommended Parks and Trails Master
Housing Type
Single-Family Attached
T own homes
Multi-Family Unit
Mobile Home
Second Units
Park and Trails
Master Planning Fee
per Dwelling Unit
$152
$121
$109
$102
$51
4. The park fees should be adopted and implemented in accordance with the
Mitigation Fee Act (Govt. Code Section 66000 et. seq.) and the Quimby Act (Govt.
Code Section 66477,)
5, Each year the County should apply an appropriate inflationary adjustment factor,
such as the San Francisco - Oakland - San Jose Bay Area Consumer Price
Index, to the park fees to reflect changes in construction costs, The ordinance or
resolution establishing the fees should include provisions for annual escalations,
6. The County should periodically conduct a review of facility costs, land costs and
building trends within the County. If costs change significantly in either direction,
or if other funding becomes available, this Study should be updated and the park
fees adjusted accordingly.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 5
DRAFT REPORT
6-12
Organization of the
This Study has seven sections and is organized as follows:
. Section 1 provides a general summary of findings and recommendations.
. Section 2 presents the County's level of service standards and per capita costs for
parkland acquisition and improvement.
. Section 3 calculates the park dedication requirement, in lieu fee for parkland
acquisition and impact fees for park improvements.
. Section 4 calculates the parks and trails master planning fee based park master
planning costs attributable to new development.
. Section 5 presents the nexus requirements and findings necessary for the imposition
of the park fees.
. Section 6 presents the requirements for the adoption and implementation of the park
fees.
. Section 7 includes the appendixes to the Study.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 6
DRAFT REPORT
6-13
Section 2. level of Service and Per Capita Costs
This Section determines the per capita cost components of two kinds of park fees - impact fees for
park improvements and in-lieu fees for parkland acquisition as authorized by the Quimby Act The
impact fees for park improvements is based on the per capita cost of parkland development,
community facilities and support facilities needed to maintain the County's existing level of service,
The fees for parkland acquisition will serve as the Quimby in lieu fees and parkland acquisition
component ofthe impact fees for non-subdivision projects,
2.1 Parkland Acquisition
The Government Code contains specific enabling legislation for the acquisition and development of
community and neighborhood parks by a city or county, This legislation, codified as Section 66477
of the Government Code and known commonly as the "Quimby Act," establishes criteria for
charging new development for park facilities based on specific park standards.
Based on the County's current park inventory, the County currently owns approximately 81.1 acres
of developed parkland. This represents a ratio of 0,5 acres of County owned and developed
parkland for every 1,000 people in the unincorporated areas of the County.3 Under the Quimby
Act, "the dedication of land, or payment of fees, or both, cannot exceed the proportionate amount
necessary to provide three acres of park area per 1,000 persons residing within the subdivision,
unless the amount of existing neighborhood and community park area exceeds that limit" Though
not relevant to unincorporated Contra Costa County, if existing park area exceeds three acres per
1,000 persons, the legislative body may adopt the calculated amount as a higher standard not to
exceed five acres per 1,000 persons residing within a subdivision,4
Since the County's existing park area for the unincorporated areas is less than 3.0 acres per 1,000
residents; the. County's maximum dedication and/or fee allowed under the Quimby Act is three
acres of parkland for every 1,000 persons.
(Appendix B presents the County's owned park/and inventory.)
3 The County also owns 39,2 acres of undeveloped parkland, However, the Quimby Act allows for only developed
parkland to be included in the calculation of the existing park to 1,000 population ratio,
4 Government Code Section 66477(a)(2)
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 7
DRAFT REPORT
6-14
Table 3 below presents capita cost for parkland based on an assumed land
value of $500,000 per acre, However, in the eastern areas of the County, land values are relatively
lower than other areas of the County, Therefore, as shown in Table 4, the per capita cost for
parkland acquisition In East Contra Costa County assumes a land value of $350,000 per acre.
Arguments for higher land costs can be made; however, the presented amounts per acre appear
be the most appropriate conservative figures for the purposes of this Study.
(Appendix C presents recent vacant land sales in Contra Costa County by East,
West and Central areas,)
Table 3 - Parkland Acquisition Cost per Capita (West I Central County)
Fee Component
Acres per 1,000
Population '
Acres per
Capita'
Land
Cost Per Acre
Cost
per Capita
Parkland Acquisition
3.0
0,003
$500,000
$1,500
Notes:
1 Based on 3,0 acres per 1 ,000 population Quimby Standard.
Table 4 - Parkland Acquisition Cost per Capita (East County)
Fee Component
Acres per 1,000
Population '
Acres per
Capita
Land Cost Per
Acre (East
Contra Costa)
Cost
per Capita
Parkland Acquisition
3,0
0,003
$350,000
$1,050
Notes:
1 Based on 3,0 acres per 1,000 population Quimby Standard,
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 8
DRAFT REPORT
6-15
2.2 Parkland Development
Based on the allowable park acres per capita standard from Section 2.1, Table 5 calculates the per
capita cost of providing future park development in the unincorporated areas of the County. As
presented, the allowable 3.0 acre per 1,000 population standard is multiplied by the estimated per
acre cost for parkland development to arrive at a per capita cost. The average park development
cost per acre shown represents average estimated current dollar costs for typical neighborhood
park improvements similar to those in existing County parks, Any facilities other than restrooms,
such as community centers or support facilities, are included as separate cost components,
Table 5 - Parkland Development Cost per Capita
Acres per 1,000
Fee Component Population 1
Acres per
Capita 1
Average Park
Development
Cost per Acre 2
Cost
per Capita
Parkland Development 3.0
0,003
$250,000
$750,00
Notes:
1 Based on maximum alllowable 3.0 acres per 1.000 population Quimby Standard,
2 From the Typical Neighborhood Park Pro Forma (Appendix D).
(Appendix 0 presents a typical neighborhood park pro forma.)
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 9
DRAFT REPORT
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2.3 Community Use Facilities
The residents in the unincorporated areas of Contra Costa County currently have use of three
County.owned community use facilities.s As shown in Table 6, these facilities provide 7,200
square feet of useable space to the unincorporated area population served by the County.
Therefore, the existing level of service for community use facilities is 45.8 square feet per 1,000
people.
Table 6 - Community Use Facilities Per Capita Standard
Facility
Crockett Community Center
Lefty Gomez Recreation Building
Montara Bay Park Community Center
Total Community Use Facilities
Existing Space
per Sq. Ft.
4,000
aoo
2,400
7,200
Current
Population
157,350
157,350
157,350
Existing Sq. Ft.
per 1,000
Population
25.4
5,1
15.3
45.8
Source: Contra Costa County, Public Works Oepartment
Based on this existing level of service and using an average construction cost of $225 per square
foot, the total expansion cost per capita is $10.30 (or $10,300 per 1,000 new residents in the
County unincorporated areas). 6
Table 7 - Community Use Facilities Cost per Capita
Fee Component
Level of Service
Standard
$10.30
Community Use F acUities
45,a sq, ft per 1,000 population
Construction
Cost
per Sq. Ft.
$225
Notes:
1 Average construction cost per sq, ft. multiplied by the existing level of service per capita.
Cost Per
Capita 1
5 The facilities used to calculate the existing level of service per capita is limited to facilities owned by the County, The
County also has facility joint.use agreements with other public agencies,
6 Since all of the existing community use facilities are located in parks, the cost of land acquisition is included in the
park acquisition component of the park fees,
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 10
6-17
2.4 SupportF acilities
As the County's population grows, the County's administrative and maintenance facilities will be
impacted, requiring increased space to serve the new residents of the unincorporated areas of the
County. Tab!e 8 shows the approximate existing leve! of service per 1,000 residents for
administrative and maintenance park facilities,
Table 8 - Support Facilities Per Capita Standard
Total Support Facilities
Existing Space
per Sq. Ft. 1
2,700
2,800
5,500
Current
Population
Existing Sq. Ft.
per 1,000
Population
Park Administrative Facilities 1
Park Maintenance Facilities
157,350
157,350
17.2
17.8
35.0
Source: Contra Costa County, Public Works Department
Notes:
1 The estimated square footage of administrative facilities represents the total area occupied by
Special Districts in the Public Works Building and General Services Department offices,
As shown, the County will require an additional 35.0 square feet support facilities per 1,000 new
residents to maintain the existing level of service currently provided by the County. Based on an
average construction cost of $225 per square foot, the tota! cost per capita is $7.86 (or $7,860 per
1,000 new residents in the County unincorporated area).
Table 9 - Support Facilities Cost Per Capita
Fee Components
Level of Service Standard
Construction
Cost Per Sq. Ft.
Cost
per Capita 1
Park Administrative Facilities
Park Maintenance Facilities
17.2 sq, ft. per 1.000 population
17,8 sq, ft. per 1,000 population
$225
$225
$3.86
$4.00
$7.86
Total Other Costs
Notes:
1 Average construction cost per sq. ft. multiplied by the existing level of service per capita,
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 11
DRAFT REPORT
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Section 3. Park Fees Calculation
This Section presents the calculation of the park dedication requirement, in-lieu fees and park
impact fees based on the per capita cost components discussed in Section 2 for the different land
uses in the County.
Average Household Size by Housing Type
Since the park fees are based on per capita need and level of service, this Study recommends the
allocation of the park fees to the different residential land uses (or housing types), since different
housing types have different household sizes. Based on 2000 U,S. Census information, Table 10
presents the average household size calculation for four housing types: detached single-family
homes, attached single-family homes (or townhomes), multi-family residences and mobile homes.
Table 10 - Average Household Size by Housing Type
Contra Costa County
Total Vacant Occupied Total Average
Housing Housing Housing Number of Household
Housing Type Units Units Units Occupants Size
Single-Family Attached 232,050 4,732 227,318 680,276 2.993
Townhomes 29,976 963 29,013 69,064 2.380
Multi-Family Unit 84,994 4,170 80,824 174,213 2.155
Mobile Home 7,120 486 6,634 13,328 2.009
Average (2000 Census) 354,140 10,351 343,789 936,881 2.725
This Study also incorporates the addition of another residential unit to an existing property as a fifth
category (labeled as "Second Residential Units./I) Insufficient data exists to calculate the average
household occupancy of second residential units in the County; therefore, a conservative estimate
of 1.0 person per unit is utilized.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 12
6-19
3.1 Parkland Dedication Requirement (Quimby)
Based on the minimum per capita standard of 3 acres per 1,000 residents allowed by Quimby, the
formula for calculating the dedication of land for the County is as follows:
Proposed
Number of Units
by Housing Type
x
Average
Household Size
by Housing Type
x
,003
(3 Acres per 1,000
Population)
Table 11 presents the parkland dedication requirement on a square footage per housing type
basis. As previously discussed, the average number of persons per dwelling unit is determined on
the basis of the housing type and the average household size as ofthe 2000 U,S. Census.
Table 11 - Parkland Dedication Requirement
Allowable
Average Standard (3 Acres
Household Size per 1,000 Allowable Sq. Ft.
Categories per Dwelling Unit Population) per Dwelling Unit
Single-F amily Attached 2,993 0,003 391
T ownhomes 2,380 0,003 311
Multi-F amily Unit 2,155 0,003 282
Mobile Home 2.009 0,003 263
For example, a single-family subdivision of 500 detached units would require a 4.5 acre land
dedication for park and recreational facilities.
500
Single-F amily
Detached
Residential Units
x
391
Allowable Sq. Ft
per Single-Family
Detached Unit
=
195,500 Sq. Ft or 4,5
Acres of Dedication
Parkland for the
Subdivision
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 13
DRAFT REPORT
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3.2 In-Lieu Fees I Impact Fees for Parkland Acquisition
The following two tables present the calculation of the in-lieu fees I impact fees for parkland
acquisition based on the per capita land cost from Section 2.1.7 As previously mentioned, land
costs in the eastern areas of the County were found to be relatively lower than the rest of the
County, Therefore, separate in-lieu fees I impact fees for East Contra Costa County are
necessary. Furthermore, because the Quimby Act applies only to subdivisions, acquisition of
parkland from new residential development that does not involve a subdivision (e,g., apartment
projects or single units on existing parcels) must be handled though impact fees. Pursuant to
County Ordinance 920-4.004, impact fees for parkland acquisition for non-subdivision residential
projects should be the same as for subdivision residential projects, 8
Table 12 -In Lieu Fees I Impact Fees (West I Central County)
In-Lieu Fees I
Impact Fees for
Parkland
Acquisition per
Dwelling Unit
Categories
Average
Household Size Park Acquisition
per Dwelling Unit Cost per Capita 1
Single-Family Attached
T ownhomes
Multi-F amily Unit
Mobile Home
Second Units
2,993
2.380
2,155
2,009
1,000
$1,500
$1,500
$1.500
$1.500
$1,500
$4.489
$3,571
$3,233
$3.014
$1.500
7 Per capita land costs are based upon recent vacant land sales in Contra Costa County presented in Appendix C,
8 Contra Costa County Ordinance 92-04,004 (Single Parcel Development) states "As a condition of approval of any
permit to build a principal residential structure, including, but not limited to, a multi-family structure or trailer (mobile
home) park, an owner shall pay a fee for neighborhood community parks or recreational purposes in accordance with
the same standards as if a final map or parcel map were required: (Ords, 84.46 9 1 (part), 78-5).
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 14
6-21
Table 13 - In-lieu Fees I Impact Fees (East County)
In-Lieu Fees f
Impact Fees for
Parkland
Acquisition per
Dwelling Unit
Average
Household Size
per Dwelling Unit
Park Acquisition
Cost per Capita
Categories
Single-Family Attached
T ownhomes
Multi"F amily Unit
Mobile Home
Second Units
2.993
2.380
2.155
2.009
1,000
$1.050
$1.050
$1.050
$1.050
$1.050
$3.142
$2.499
$2.263
$2,109
$1.050
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 15
DRAFT REPORT
6-22
3.3 Impact Fees Park Improvements
Table 14 presents the calculation of the impact fees for parkland development; community uses
facilities and support facilities for subdivisions and non-subdivision projects. As shown. the
average household size for the five categories is multiplied by the per capita park improvement
cost to arrive at the impact fees for park improvements per dwelling unit.9 The impact fees for park
improvements detailing each cost component are summarized in Table 15,
Table 14 -Impact Fees for Park Improvements (County-Wide)
Categories
Average
Household Size Total Park
Per Dwelling Unit Improvement
(DU) Costs per Capita
Impact Fee for Park
Improvements per
Dwelling Unit 1
Single Family Detached
T ownhomes
Multi-F amily Unit
Mobile Home Unit
Second Units
2,993
2.380
2,155
2,009
1,000
$768,16
$768,16
$768,16
$768.16
$768,16
$2.299
$1.829
$1.656
$1.543
$768
Notes:
1 Fee is rounded to the nearest dollar. Includes park development, community use facilities and
support facilities cost components,
Table 15 -Impact Fees for Park Improvements Cost Components
Impact Fee for Park
Parkland Community Support Improvements per
Categories Development Use Facilities Facilities Dwelling Unit 1
Single Family Detached $2,244.46 $30,81 $23,54 $2.299
Townhomes $1,785,34 $24,51 $18,72 $1.829
Multi-Family Un~ $1,616,60 $22,19 $16,95 $1.656
Mobile Home Unit $1,506.78 $20,68 $15,80 $1.543
Second Units $750,00 $10.30 $7.86 $768
Notes:
1 Fee is rounded to the nearest dollar.
9 Per capita park improvement costs are based upon the County's typical neighborhood park pro forma presented in
Appendix D.
Park Impact Fee Nexus Study. 2004
County of Contra Costa
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DRAFT REPORT
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3.4 Total Park Fees
Based on the findings, cost estimates and method of calculation discussed in this Study. the total
park fees for West { Central County and East County are presented below.
Table 16 - Total In-Lieu Fees I Impact Fees
Total Park Fees per Dwelling Unit
Categories
West I Central Contra
Costa County
East Contra
Costa County
Single-Family Attached
T ownhomes
Multi-f amily Unit
Mobile Home
Second Units
$6,788
$5,399
$4,889
$4,557
$2,268
$5,441
$4,328
$3,919
$3,653
$1,818
Park Impact Fee Nexus Study. 2004
County of Contra Costa
Page 17
DRAFT REPORT
6-24
Section 4. Parks and Trails Master Planning Fee Calculation (AB 2936)
In September 2002, County-sponsored AS 2936 was passed, authorizing cities and counties to
coUect impact fees to recover the costs of preparing and revising general and master plans. As
previously discussed, the County is presently in the process of preparing a 15-year park master
plan. In order to fund the planning and associated costs attributable to new development, this
Study recommends a new parks and trails master planning fee ("Parks Planning Fee"), as
authorized by AS 2936. 10
Based on cost estimates provided by the Parks, Creeks and Trails Committee ("PCTe"), the
estimated total cost for preparing and revising the parks and trails master plan is $1.5 million over a
15-year planning horizon. Additionally, the costs of preparing and updating this Study, as well as
funding of the administrative and associated costs related to the park fee program, are included in
the park planning fee. However, since the park and trails master plan provides long range plans
for existing and future parks, trails and facilities, only 50% of the costs (or $762,500) are
attributable to new development.11
As previously discussed, the population in the unincorporated areas of the County is expected to
grow by 20,837 over the next 15 years. Therefore, as shown in Table 17, the per capita cost
aUocatedto new development is $50.75.
Table 17 - Parks and Trails Master Planning Costs Allocated to New Development Per Capita
Fee Components
Estimated
Costs
Future Allocation
% $
Cost Allocation
Per Capita 1
Parks and Trails Planning
Park Fee Program I Fee Study Updates
Total Costs
$1,525,000
$295,000
$1,820,000
50%
100%
$762,500
$295,000
$1,057,500
$36.59
$14.16
$50.75
Notes:
1 Per capita costs allocated to new residential development.
(Appendix E details the County's parks and trails master planning costs and park
fee program costs.)
10 The passage of Assembly Bill 2936 in 2002 amended Government Code Section 66014 of the Mitigation Fee Act.
II The County's PCTC estimates that 50% of the Parks and Trails Master Plan will focus on new park development and
50% on the rehabilitation of existing park facilities.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
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DRAFT REPORT
6-25
Table presents the calculation of the parks and trails master per
capita costs attributable to new development and the average household size for five categories.12
As shown, the proposed parks and trails master planning fee ranges from $152 for a new single-
family home to $51 for a second unit. It is recommended that the fee be charged at the time of a
building permit issuance.
Table 18 - Parks and Trails Master Planning Fee
Average Household Costs per Capita Park and Trails
Size per Dwelling Allocated to New Master Planning Fee
Housing Type Unit Development per Dwelling Unit
Single-Family Attached 2,993 $50.7 5 $152
Townhomes 2.380 $50.75 $121
Multi-F amily Unit 2.155 $50.75 $109
Mobile Home 2.009 $50.7 5 $102
Second Residential Unit 1 1.000 $50.75 $51
Notes:
1 Based on an assumption of one person per additional residential unit added to an existing property.
12 The fifth category represents the addiUon of another residential unit to an existing property. Insufficient data exists to
calculate the average household occupancy of second residential units in the County; therefore, a conservative
esUmate of 1.0 person per unit is utilized.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 19
DRAFT REPORT
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Section 5. Nexus Findings
This section frames the results of the Study in terms of the legislated requirements to demonstrate
the legal justification of the fees. As previously discussed, the justification of fees on new
development must provide information as set forth in Government Code Section, 66001, et seq.
These requirements are discussed below.
Purpose of Fees
The purpose of the park fees is to acquire and develop parkland and provide recreational and
community facilities (and associated support facilities) to meet the needs of the new residential
population within the unincorporated areas of Contra Costa County. The purpose of the parks and
trails master planning fee is to provide funding for the park master planning process.
Use of Fees
For each 1,000 additional residents the fees will be used to acquire and improve 3.0 acres of
parkland to include turf, landscape and recreational amenities. Parkland will be acquired for the
County through land dedications and payment of Quimby In-Lieu Fees. The fees will also be used
to plan, design, develop, and rehabilitate other facilities such as a community use facilities,
administrative space, and maintenance space needed to meet the recreational needs of the new
population. The fees may not be used for park maintenance or operation.
Relationship Between Use of Fees and Type of Development
New residential development in the unincorporated areas of the County will generate additional
need for new developed parks and recreational services and the associated need for various
facilities. The fees will be used to develop and expand neighborhood and community parkland,
community use facilities and expand administrative and maintenance space to serve new
development. The parks and trails master planning fee will used to provide a long term parks
master plan to serve the residents generated by new development over the next 15 years.
Relationship Between the Need and Type of Project
Each new residential development project will generate additional demand for park and
recreational services and the associated need for developed parkland, community centers and
support facilities. The County's allowable parkland standard is 3,0 improved park acres for every
1,000 residents. Per capita standards for other facilities are specifically outlined in Section 3. The
County and the unincorporated area residents will need a park master plan to address the
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 20
DRAFT REPORT
6-27
projected in areas
services the new population will demand. The County's estimated 15-year cost for preparing and
updating the park master plan is allocated to new development on a per capita basis.
Relationship Between the Amount of the Fees and the Costs Attributable to New Development
The amount of developed parkland, community facilities and support facilities needed by each
housing type has been estimated by applying the park acquisition and improvement costs per
capita to the various residential land uses (or "housing types"). One half of the funding needed for
the 15-year park master plan process has been allocated to new development and applied on a per
capita cost basis to five housing types.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 21
DRAFT REPORT
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Section 6. Implementation
Requirements for Adoption of the Park Fees
The following are the requirements for adoption of the Development Impact Fee Nexus Study and
proposed park fees.
1. At least 14 days before the regularly scheduled meeting, mail out notice to any
interested party who requests notice of the adoption of new or increased impact
fees. Government Code Section 66017
2. At least 10 days before the "open and public meeting" the local agency is to make
available to the public the Development Impact Fee Nexus Study. Government
Code Section 66016(a)
3. The local agency shall conduct at least "one open and public meeting" as part of
a regularly scheduled meeting. Government Code Section 66016(a)
4. Park fees take effect 60 days after adoption of the resolution or ordinance. 13
Government Code Section 66017(a)
Deposit and Accounting of Fee Revenue
The following are the requirements for depositing and accounting for the park fee revenue.
1. Revenue derived from park fees should be deposited, invested, accounted for and
expended in accordance to Government Code Section 66006.
2. Quimby in-lieu fee funds and impact fee funds should be deposited into separate
accounts so that there will be not commingling of fees with other revenue.14 The
park fees should be expended solely for the purpose for which they were
collected. Any interest earned by such account should be deposited in that
account and expended solely for the purpose for which originally collected,
3. Within 180 days after the last day of each fiscal year, the information specified in
Government Code Section 66006(b) shall be made available to the public.
13 Whether the park fees are adopted by ordinance or resolution should be determined by County Counsel. It is
desirable that the specific fee amounts be set by resolution to better facilitate annual inflationary adjustments.
14 This may be necessary because the Quimby Act is referenced in the subdivision codes. Thus, it is may be
necessary for the County to have two separate park fee funds to insure that impact fee revenue is not used for
rehabilitation purposes specifically authorized for Quimby in-lieu fee funds.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 22
DRAFT REPORT
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Section
Appendices
Appendix A. Population and Housing Projections through 2019
Appendix B. Contra Costa County Owned Park Inventory
Appendix e. Recent Vacant Land Sales (Contra Costa County)
Appendix D. Average Park Development Cost per Acre Calculation
Appendix E. Cost Components ofthe Parks and Trails Master Planning Fee
Appendix F, Park Development Fees by Jurisdiction (SFR Fees Only)
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 23
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Appendix A.
Population Projections through 2019
Table 19 - Population Projections through 2019
(County Unincorporated Area)
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Growth
Contra Costa County
Unincorporated Area
Population 1
157,350
159,510
161,379
163,271
165,185
167,121
169,080
170,203
171 ,334
172.472
173,618
174,771
175,619
176.471
177.327
178,187
20,837
Governments and Califomia Department of
Finance (DOF), ES Report
Notes:
1 Based on the assumed growth rates from the
2003 ABAG population projections and the
2004 DOF population projections for the
unincorporated area of Contra Costa County.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 24
DRAFT REPORT
6-31
Appendix B. Contra Costa County Owned Park Inventory
Table 20 - Contra Costa County Owned Park Inventory
Park Name
Alexander Park
Crockett Community Center
Lefty Gomez Recreation Building
Montalvin Park
Montara Bay Park Community Center
North Richmond Ball Field
Rodeo Creek Trail
Alamo Elementary School and Park
Clyde Park
Hap Magee Park
Livorna Park
Marie Porter Park
Cornell Park
Lynbrook Park
Slifer Park
Boeger Park
Hickory Meadows Park
Viewpoint Park
Total County Developed Parkland
Acreage Location
3.0 Crockett
3.0 Crockett
11.0 Rodeo
7.0 San Pablo
4.0 San Pablo
3.5 Richmond
2.5 Rodeo
2.5 Alamo
2.0 Clyde
16.3 Danvifle
4.4 Alamo
0.2 Clyde
10.0 Discovery Bay
4.1 Bay Point
6.4 Discovery Bay
0.5 Bay Point
OJ Bay Point
0.3 Bay Point
81.1
Source: County of Contra Costa, Public Works Department
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 25
6-32
Appendix C.
Recent Vacant land Sales (Contra Costa County)
Table 21 - Recent Vacant land Sales
Average
location Size Price per Price per
Sale Property Description City Quadrant Sales Date Sales Price (Acres) Acre Square Foot
1 Site for 87 SFR lots Hercules West Jan-03 $20,558,000 21.6 $950,044 $21.81
2 SFR Site Hercules West May-03 $5,153,425 8.4 $515,503 $14.13
3 20 Unit Subdivision Site San Pablo West Mar-OZ $1,500,000 2.7 $555,261 $1Z.77
4 25 SFR lot EI Sobrante West Jan..Q3 $2.783,000 5.2 $538,837 $12.37
1 Condominum Site Walnut Creek Central Mar-04 $1.950,000 0.7 $2,857,555 $55,83
2 Single Tenant low Rise Site Pleasant Hill Central Feb-04 $265,000 0.3 $1.01Z,770 $23.25
3 Site for 145 Multi Family Units Concord Central Jul-02 $4,400,000 4,8 $910,840 $20,91
4 M1 Zoned Lot Concord Central Apr..Q3 $250,000 0.3 $85Z,052 $19.79
5 33 lot Subdivsion Site Martinez Central Jan-02 $1,579,000 3.1 $514.444 $11.81
5 9 SFR lots Walnut Creek Central Jan.01 $1.440,000 3.5 $415,127 $9,53
7 SFR Site Walnut Creek Central Jan-04 $1.900,000 5.0 $379,843 $8.72
8 P1 P Zoned Res, Acreage Martinez Central May-OO $3,500,000 9.8 $355,321 $8.18
9 PD Zoned Acreage Concord Central Dee-OJ $899.000 2.7 $332,798 $7.54
10 Church and Preschool Site San Ramon Central Dec-03 $1,200,000 3.5 $332,353 $7,63
11 5 lot SFR Subdivision Site Walnut Creek Central Nov-OZ $1.700,000 5.2 $328,007 $7,53
1 R-B Zoned Site Antioch East May-03 $875,000 1.3 $683.456 $15,69
2 SFR Subdivision Site Brentwood East Dec-OZ $7.480,000 12.7 $590,674 $13.56
3 Public School Site Brentwood East May-03 $535,000 1.1 $466,963 $10.72
4 37 SFR lots Brentwood East Jan-03 $2,775,000 6.5 $419,918 $9.54
5 P-O-C Zoned Site Brentwood East Oct-03 $1,695,000 4.9 $347,173 $7,97
6 147 SFR lots Brentwood East Jun.02 $10,294.495 31.4 $327,571 $7.52
7 R-B Zoned Site Oakley East Jul..Q3 $400,000 1.2 $325.700 $7.50
8 SFR Site Antioch East F eb-04 $745,000 3.1 $236,531 $5.43
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 26
DRAFT REPORT
6-33
$1,000,000
$800,000
$600,000
$400,000
$200,000
West Contra Costa County
Vacant land Valuation
$0
Compariables
Page 27
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
6-34
$3,500,000
$3,000,000
$2,500,000 -
$2,000,000
$1,500,000
$1,000,000
$500,000
Central Contra Costa County
Vacant land Valuation
$0
Compariables
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 28
6-35
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
East Contra Costa County
Vacant Land Valuation
$0
Compariables
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 29
6-36
Appendix D. Typical Neighborhood Park Pro Forma
Table 22 - Typical Neighborhood Park Pro Forma
Unit Cost
Description (Installed) Unit Quantity Total Cost
Site Grading and Clearing $1.00 sJ. 217,800 $217,800
Site Utilities (storm, electrical, sanitary) $70,000 I.s, 1 $70,000
Automatic Irrigation $1.50 s1 174,240 $261.360
Tun Area $0.50 sJ. 130,680 $65,340
Landscaping (trees, scrubs, groundcover, etc.) $3.00 sJ. 43,560 $130,680
Concrete Pathways $5.00 sJ. 14,520 $72.600
Picnic Areas and Amenities $30,000 I.s. 1 $30,000
Children's Play Areas $90,000 I.s. 1 $90,000
Sports Court $45,000 I.s. 1 $45,000
Ughting $60,000 I.s. 1 $60,000
Subtotal $1,042,780
Architectural and Engineering Services 20% of Total $208,556
Total Cost (5 Acre Neighborhood Park) $1,251,336
Average Cost per Acre (Rounded) $250,000
Source: Reviewed by Gail Donaldson, Gates & Associates and Usa Carnahan and Dave Edmonds, Contra Costa
County Public Works Department
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 30
DRAFT REPORT
6-37
Appendix
Cost Components of the Parks and Trails Master Planning Fee
Table 23 - Cost Components of the Parks and Trails Master Planning Fee
#of Quantity Per Total
Cost Components 1 Unit Cost Unit Years Year Quantit Total Cost
Parks and Trails Master Plan Preparation $350,000 Plan 15 1/15 Years 1 $350,000
Parks and Trails Master Plan Updates $50,000 Update 15 2/15 Years 2 $100,000
Parks and Trails Capital Improvement
Plan (CIP) $15,000 Report 15 Biennial 7 $105,000
Park Policy Planning $125.00 Hour 15 480 7,200 $900,000
Park Fee Program (Administrative Costs) $125.00 Hour 15 120 1.800 $225,000
Park Fee Study (Preparation and
Periodic Updates) $10,000 Update 15 Biennial 7 $70,000
CEQA Compliance $10,000 Neg. Dec. 15 Biennial 7 $70,000
Total Costs $1,820,000
Source: Contra Costa County Parks, Creeks and Trails Committee
Notes:
1 Estimated cost components through 15-year planning horizon - 2019.
Park Impact Fee Nexus Study, 2004
County of Contra Costa
Page 31
DRAFT REPORT
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Appendix F.
Park Development Fees by Jurisdiction (SFR Fees Only)
Table 24 - Park Development Fees for Jurisdiction
Jurisdiction
T olal Park Fees
(SFR)
Park Fees per Single Family Residence
County of Contra Costa
(Current)
County of Contra Costa
(Proposed)
Town of Danville
City of Oakley
City of Walnut Creek
City of Brentwood
City of Martinez
City of Antioch
City of Orinda
City of Concord
City of Layafette
Town of Clayton
Town of Moraga
City of Plesant Hill
City of Pittsburg
City of San Ramon
City of San Pablo
Parkland Dedication In-Lieu Fee - $7,873 SFU
(Includes land value only, 5-acres per 1.000 pop. standard.)
Parkland Dedication Fee - $1,763 SFU (Quimby)
Parkland Dedication Fee - $2,115 SFU (Non-Quimby)
Park Facilities Improvement Fee - $3.881 SFU
Public Facilities Improvement Fee - $2,063 SFU
Parkland Dedication In-Lieu Fee - $7,000 SFU
(Includes land value only, $4ooK . 5-acres per 1.000 pop. standard.)
Capilallmprovement Fee, Parks & Trails - $6,776.66 SFU
peffi1it. )
Parkland In-Lieu Fee - $3,915 SFU
Park and Recreation Fees for Facilties $1.928 SFU
Parkland In-Lieu Fee - $1.050 SFU (Charged at time of building permit.) $1,050 - $5,180
Community Park Improvement Fee for the Sand Creek Subdivision. based
on square footage - $2.810 - $4.130 est. SFU
East County - $1.350 SFU
Balance of County - $2.000 SFU
Parkland In-Lieu Fee - $4.489 SFU (West/Central) f $3.142 SFU (East)
Park Impact Fee - $2.864 SFU
Parkland Dedication In-Lieu Fee - $5.033 SFU
(Includes land value + 20% for improvements. Charged at time of
tentative map.)
Parkland Fee -$3,446 SFU
(Includes land value only. Charged at time of final map or occupancy.)
Parkland In-Lieu Fee -$2,857 SFU
Parkland Dedication In-Lieu Fee - $1.250 SFU
Formula Only. FMV of land is determined at time of map approval.
Formula Only, FMV of land is determined at time of map approval.
Parkland Dedication Requirement x FMV land deteffi1ined by appraisal.
Currently landvalues up to $700.000 per acre,
Parkland In-Lieu Fee based on 3-acres per 1.000 population and FMV
Currently landvalues are $800,000 to $900,000 per acre,
No fee currenty. New ordinance is being proposed.
Yes
$6,006. $7.353
$7.873
$7.707
$7,000
$6,777
$5,843
$5.033
$3.446
$2.857
$1.250
FOffi1ula
Formula
Formula
Formula
Pending
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 32
6-39
City of Dublin Parkland In-lieu Fee - $8,903 SFU $14,040
Public Facilities Fee (Park Improvement Component) - $5,137 SFU
Community Buildings Fee - $2,356 SFU
City of Livermore Park Fee - $9,413 per Dwelling Unit $9,413
City of Pleasanton Parkland Dedication In-Lieu Fee - $4,911 SFU $8,286
Public Facilities Fee - $3,375 SFU
Other
City of Fremont Parkland Dedication In-Lieu Fee - $9,893 SFU $13,286
Park Facilities - $3,393 SFU
City of Hayward Parkland Dedication In-Lieu Fee - $11,953 SFU $11,953
Assumed landvalue is $697,000 per acre.
San Leandro Parkland Dedication In-Lieu Fee - $4,259 SFU $4,259
County of Aiameda Park Fee - $7,400 SFU thru July 1, 2005 $7,400
Park Impact Fee Nexus Study, 2004
County of Contra Costa
DRAFT REPORT
Page 33
6-40
creates
does not any of exaction This
report will calculate a park impact fee that will assessed at time of building permit or
certificate of occupancy. The funds collected by the City will be used for the acquisition of
future park land and development of existing and future parks.
SERVICE UNIT
Different types of development must be translated into a common unit of measurement that
reflects the impact of new development on the demand for park land and facilities. This unit
of measurement is called a "service unit." The most common service unit used in park impact
fee analysis is population. Population estimates are based on three factors: the number of
dwelling units, average household sizes for various types of units and occupancy rates. The
number of dwelling units can be estimated with some degree of precision, and average
household size has been declining somewhat predictably but has been stabilizing in recent
years. Occupancy rates, on the other hand, tend to vary significantly over time, and not in
predictable directions. Consequently, this report recommends the use of a service unit that
avoids the need to make assumptions about occupancy rates. This service unit is the
"equivalent dwelling unit" or EDU, which represents the impact of a typical single-family
dwelling. By definition, a typical single-family unit represents, on average, one EDU. Other
types of units each represent a fraction of an EDU, based on their relative average
household sizes. Under the proposed methodology, the park exactions will not be
determined by the magnitude of the average household size, but rather on the ratio of
household sizes between various types of housing units. An EDU is a unit that has an
average household size equivalent to a typical single-family unit in Conway. The EDUs
associated with each housing type and unit size category are shown in Table 22.
Conway\Road and Park Impact Fee Study April 15,2003 DRAFT, Page 22
Table 22
EQUIVALENT DWELLING UNIT MULTIPLIERS
Housing Type
Avg.
HH Size
eousl
Unit
Single-Family Detached 2.71 1.00
Multi-Family 1.89 0.70
Mobile Home 2.37 0.87
Single-Family, 2-Bedroom, 1,129 sq. ft. avg. 2.140.78
Single-Family, 3-Bedroom, 1,688 sq. ft. avg. 2.92 1.06
Single-Family, 4-Bedroom, 2,684 sq. ft. avg. 3.32 1.20
Single-Family, 5-Bedroom, 3,923 sq. ft. avg. 3.54 1.28
All Single-Family Detached Units 2.76 1.00
Source: Average household size for single-family detached, multi-family and mobile
home units from Table 4; average household size by bedroom categories for singlefamily
units from Table 5 and correspondence between bedroom and square feet
from Table 6.
In order to determine the existing level of service, it is necessary to estimate the total number
of EDUs in the City of Conway. The first step is to compile an estimate of existing 2003
dwelling units, which is summarized in Table 23 below.
2000
Units
New Units Estimated
2003 Units Housing Type 2000 2001 2002
Single-Family Detached 10,670364409445 11,888
Multi-Family 5,299 66 307 335 6,007
Mobile Home* 1,317 na na na 1,317
All Housing Types 17,286 19,212
*no permit data available
Source: Existing 2000 units from 2000 U.S. Census; 2000 and 2001 new units based on the number of
building permits issued from the Conway Planning Department, "2001 Economic Report and 2002 Forecast;"
2002 new units based on number of buiiding permits issued for 2002 from Conway Planning Department,
February 18, 2003 memorandum.
The final step in determining total service units is to multiply the number of existing
residential units by the EDUs per unit calculated earlier based on relative average household
sizes. To determine total existing citywide EDUs for the purpose of the park impact fees, the
estimated number of existing dwelling units of each housing type is multiplied by the
appropriate EDUs per unit and the results for all housing types are summed. As shown in
Table 24, there are an estimated 17,239 park service units (EDUs) in Conway.
Table 24
EXISTING PARK SERVICE UNITS
Housing Type
2003
Units
EDUsl
Unit
Total
EDUs
Single-Family Detached 11,888 1.00 11,888
Multi-Family 6,007 0.70 4,205
Mobile Home 1,317 0.87 1,146
Total Park Service Units 17,239
Source: 2003 units from Table 23; EDUs per unit from Table 22.
Conway\Road and Park Impact Fee Study April 15, 2003 DFAFT, Page 23
COST PER SERVICE UNIT
Since the City has not purchased any park land in recent years, the City contacted a local
property appraiser, who estimated that the City's existing park land is currently worth
approximately $39,000 per acre, as shown in Table 25. To be conservative, the City has
decided to use a cost of $20,000 per acre in developing the impact fee.
Table 25
PARK LAND COST PER ACRE
Facility Acres
Estimated
Value
Cost!
Acre
Airport Park 6.0 $240,000 $40,000
Beaverfork Park 50.0 $2,500,000 $50,000
Bainbridge Park 6.0 $150,000 $25,000
Curtis Walker Park 15.0 $675,000 $45,000
Don Owen Park 125.0 $5,000,000 $40,000
5th Avenue Park 10.0 $500,000 $50,000
Gatlin Park 13.0 $325,000 $25,000
Laurel Park 19.0 $950,000 $50,000
McGee Sports Center 14.0 $700,000 $50,000
Pine Street Park 1.5 $59,000 $39,000
Tucker Creek Trail 30.0 $270,000 $9,000
An initial step in determining the existing level of service is to identify the replacement value
for all existing park facilities. To determine this cost, the consultant first determined the
replacement cost for the two sports centers: the Don Owen Sports Center and the McGee
Sports Center (including a skateboard park constructed in 2002). In order to calculate the
current replacement cost of these facilities, historic construction costs were adjusted to 2003
dollars, as shown in Table 26.
Table 26
SPORTS CENTER COST
Facility
Year
Built
Original
Cost
Cost
Factor
Current
Cost
Don Owen Sports Center 1994 $1,938,295 1.228 $2,380,226
McGee Sports Center 2000 $3,500,0001.067 $3,734,500
Skateboard Park 2002 $75,000 1.016 $76,200
Total, Sports Centers $6,190,926
Source: Original costs and year built from Conway Parks and Recreation Department, December 03,
2002 memorandum; cost factor based on Engineering News-Record Construction Cost Index for
February 2003 from www.enr.com.
The inventory of existing park improvements, other than the sports centers, is presented in
the Appendix. Multiplying the number of facilities by the current unit cost of each facility and
summing yields the estimated replacement cost for the City's existing park facilities, as
summarized in Table 27. The replacement cost of existing park land based on the
conservative cost assumption of $20,000 per acre is also included in Table 27.
Conway\Road and Park Impact Fee Study April 15,2003 DRAFT, Page 24
Table 27
PARK REPLACEMENT COST
Park System Component Units Cost/Unit Total Cost
Park Land (acres) 289.5 $20,000 $5,790,000
Sports Centers na na $6,190,926
Baseball Backstop 2 $10,000 $20,000
Baseball Field, Lighted 1 $132,500 $132,500
Basketball Goal 15 $1,200 $18,000
Basketball Goal, Lighted 2 $42,000 $84,000
Bench 39 $275 $10,725
Bleachers, 25 People 18 $1,304 $23,472
Bleachers, 50 People 3 $2,300 $6,900
Boat Dock 2 $2,000 $4,000
Boat Ramp 2 $2,000 $4,000
Caretakers House 1 $60,000 $60,000
Crawl Tunnel 2 $700 $1,400
Dumpster, Three Yard 8 $435 $3,480
Dumpster, Six Yard 4 $640 $2,560
Fishing Pier 1 $99,093 $99,093
Grill 19 $200 $3,800
Merry-Go-Round 1 $1,200 $1,200
Monkey Bars 3 $1,000 $3,000
Parking, Car 1,064 $460 $489,440
Parking, Boat & Trailer 65 $460 $29,900
Picnic Table 74 $475 $35,150
Play Center, Medium 2 $13,000 $26,000
Play Center, Large 2 $18,500 $37,000
Pump House 3 $2,500 $7,500
Restroom 7 $30,000 $210,000
Rocking AnimalS $450 $2,250
Sea-Saw 3 $460 $1,380
Slide, Small 6 $1,200 $7,200
Slide, Large 1 $2,000 $2,000
Softball Field 1 $46,000 $46,000
Softball Field, Lighted 5 $106,000 $530,000
Storage Building, Concrete 1 $2,000 $2,000
Storage, 5 Bay 1 $6,000 $6,000
Swing Set, Three Seat 1 $3,500 $3,500
Swing Set, Four Seat 9 $4,000 $36,000
Swing Set, Six Seat 3 $6,000 $18,000
T-Ball Field 6 $1,200 $7,200
Tennis Court, Lighted 8 $47,000 $376,000
Trash Can, 55 Gallon 127 $10 $1,270
VOlleyball Court, Sand 2 $1,500 $3,000
Volleyball Net 1 $300 $300
Walking Trail (miles) 3.8 $189,475 $720,005
Water Fountain 1 $800 $800
Total Replacement Cost $15,216,951
Source: Park facilities from Table 37 of the Appendix; sports center cost from Table 26; park facility
costs from Conway Parks and Recreation Department, December, 2002.
Conway\Road and Park Impact Fee Study April 15,2003 DRAFT, Page 25
Dividing the total replacement cost of existing park land and facilities by the number of
existing EDUs yields the cost per service unit to maintain the existing level of service, as
shown in Table 28.
Table 28
PARK COST PER SERVICE UNIT
Total Replacement Cost $15,216,951
Park Equivalent Dwelling Units, 2003 17,239
Park Cost per EDU $883
Source: Total replacement cost from Table 27; park EDUs from Table 24.
NET COST PER SERVICE UNIT
Some of the cost to provide new residents with park facilities will be paid by the new
residents themselves through future payments that will be used to retire outstanding debt. In
addition, some of the capital costs to serve growth will be paid by outside funding sources.
Consequently, the cost per service unit should be reduced to take account of these factors,
and the result is referred to as the net cost. Historically, the City's primary funding source for
park capital improvements has been Sales and Use Tax Capital Improvement Bonds. An
analysis of past bond issues indicates that currently the City's outstanding debt is
$21,635,000, of which $2,596,200 is attributable to park development. This amounts to $151
of outstanding park debt for every park service unit in Conway, as shown in Table 29 below.
Table 29
PARK DEBT CREDIT
Total Outstanding Debt Principal $21,635,000
Percent Attributable to Parks 12%
Total Outstanding Park Debt Principal $2,596,200
Existing Park EDUs, 2003 17,239
Park Debt Credit per EDU $151
Source: Total outstanding debt as of December 2002 and percent attributable to parkS from the City
of Conway Finance Department, December 10, 2002 memorandum; percent attributable to parks
derived from 1997 bond issue of $25,665,000, of which $3,080,000 was allocated for parks; 2003
~ fu~ ~
cover a of costs. The cost per unit be reduced to
account for the likelihood that some growth-related park costs can be paid for with Federal
and State grants. Over the last five years, the City has received an average of $126,000
annually in grants for park improvements, as summarized in Table 30.
Conway\Road and Park Impact Fee Study Aprii 15,2003 DR2\FT, Page 26
Table 30
PARK GRANT FUNDING, 1998-2002
Grant Date Description Amount
Arkansas Dept. of Parks and Tourism 1998 Fishing Pier at Beaverfork Park $50,000
Federal Highway Enhancement Fund 1998 Bike Trail at Tucker Creek Park $200,000
A&P Commission 2000 Don Owen Sports Center $155,727
A&P Commission 2002 New Bike Trail at Tucker Creel Park $22,000
Federal Highway Enhancement Fund 2002 New Bike Trail at Tucker Creek Park $200,000
Total Grant Funding 1998-2002 $627,727
Average Annual Grant Funding $126,000
Source: Conway Parks and Recreation Department, December 2002.
It is reasonable to assume that the grant funding received per park service unit in the past
will continue in the future. Dividing the average annual grant funding by existing service units
yields annual funding per service unit. Multiplying that by the present value factor results in
the current lump sum amount that is the equivalent of the future stream of outside funding
the City will receive over the next 20 years to help fund park improvements. Based on these
assumptions, the appropriate credit for potential grant funding for parks is $93 for each new
single-family home, or park service unit equivalent, as shown in Table 31.
Table 31
PARK GRANT FUNDING CREDIT
Average Annual Grant Funding $126,000
Existing Park EDUs, 2003 17,239
Annual Funding per EDU $7.31
Present Value Factor (20 years @ 4.7%) 12.79
Grant Funding Credit per EDU $93
Source: Average annual grant funding from Table 30; existing
park EDUs from Table 24; discount rate for present value factor
from Table 11.
Reducing the cost per service unit by the debt credit and the anticipated grant funding per
service unit leaves a net cost of $639 per EDU to maintain the existing level of service.
Table 32
PARK NET COST PER SERVICE UNIT
Cost per EDU $883
Debt Credit per EDU $151
Grant Funding Credit per EDU $93
Net Cost per EDU $639
Source: Cost per EDU from Table 28; debt credit per EDU from Table 29; grant funding
credit per EDU from Table 31.
Conway\Road and Park Impact Fee Study April 15, 2003 DRAFT, Page 27
The maximum park impact fees that could be charged within the City limits, based on the
data, methodology and assumptions utilized in this report, are presented in Table 33. Two
alternative methods of assessing park impact fees for single-family detached housing units
are presented in the table: a flat fee per unit or a variable fee by number of bedrooms. A third
alternative is for the fees to be charged based on a cost per square foot. This last alternative
is recommended if a variable fee approach is used, as it avoids sharp jumps in the fee at
thresholds between the size categories, and it is described more fully below.
Table 33
PARK NET COST PER DWELLING UNIT
Housing Type
EDUsl
Unit
Net Cost!
EDU
Net Cost!
Unit
Single-Family, 2-Bedroom, 1,129 sq. ft. avg. 0.78 $639 $498
Single-Family, 3-Bedroom, 1,688 sq. ft. avg. 1.06 $639 $677
Single-Family, 4-Bedroom, 2,684 sq. ft. avg. 1.20 $639 $767
Single-Family, 5-Bedroom, 3,923 sq. ft. avg 1.28 $639 $818
All Single-Family Detached Units 1.00 $639 $639
Multi-Family 0.70 $639 $447
Mobile Home 0.87 $639 $556
Source: EDUs per unit from Table 22; net cost per EDU from Table 32.
As with the road impact fees, the park net cost schedule would allow several alternative
ways of charging single-family detached units: (1) all single-family units could be charged the
same fee, using the single-family average shown in the fee schedule; (2) the fees could vary
by the size of the dwelling unit. This last alternative is described more fully below. New
development could be assessed on the basis of unit size in several ways. One way would be
to create size categories that correspond to the number of bedrooms using the midpoints
between the averages. A problem with this approach is that as you cross the size threshold
between a two-bedroom and a threebedroom unit, for example, the fee would go up by
almost $200 for adding one additional square foot (see Figure 13).
3The equation is y = 250 * Ln(x) - 1,225, where y is the maximum impact fee for the dwelling unit and x is the floor area of
the unit in square
feet; the R2 is 0.930, the adjusted R2 is 0.896 and the T-statistics are -3.3 for the intercept and 5.2 for the coefficient.
Conway\Road and Park Impact Fee Study April 15, 2003 DRAFT, Page 28
Figure 14
PARK FEES BY UNIT SIZE
To avoid these kinds of threshold effects, park impact fees for single-family units could be
assessed using a sliding scale. Regression analysis was used to determine the curve that
best fits the four data points (shown as squares in Figure 14). The resulting semi-logarithmic
equation (shown as the dashed line in Figure 14) explains 93 percent of the variance.3 The
graphed relationship corresponds with common sense, which suggests that the number of
residents per square foot will begin to taper off with very large units. While permit clerks
cannot be expected to calculate fees at the counter using a logarithmic equation, it is a
simple matter to develop a fee schedule using 100 square foot or other intervals. An example
of such a schedule using 250 and 500 square foot intervals is shown in Table 34 below.
SAMPLE
Dwelling Sq. Ft Fee
750 - 1,000 $469
1,001 - 1,250 $531
1,251 - 1,500 $582
1,501 - 1,750 $623
1,751 - 2,000 $659
2,001 - 2,250 $690
2,251 - 2,500 $718
2,501 - 3,000 $755
3,001 - 3,500 $797
3,501 - 4,000 $832
4,001 - 4,500 $864
4,501 - 5,000 $891
5,001 - 5,500 $916
Source: Fees based on midpoints of categories and
formula on preceding page.
Conway\Road and Park Impact Fee Study April 15,2003 DRil.FT, Page 29
Figure 15
PARK FEES BY UNIT SIZE CATEGORIES
POTENTIAL REVENUES
If the proposed park impact fees are adopted, potential annual revenue could total close to
$400,000, as shown Table 35. Actual fee collections are likely to be lower, however, since in
some cases developers may get credit for park land dedicated to the City.
Table 35
POTENTIAL ANNUAL PARK FEE REVENUE
Housing Type
New
Units
Feel
Unit
Total
Revenue
Single-Family Detached 400 $639 $255,600
Multi-Family 300 $447 $134,100
Total 700 $389,700
Source: New unit estimates based on historical trends from Table 23; fees per unit
from Table 33.
Section 1: Requires a nexus between a fee and the municipality's cost of an
application for an amendment to the municipality's land use plamling official controls.
Requires the municipality to explain the basis of the fee upon request. Allows an appeal
from the imposition of a specific fee within 60 days of the approval of the application and
deposit of the fee into escrow. Prohibits a municipality from conditioning approval of any
subdivision or development on an agreement to waive the right to challenge the validity
of a fee. Declares that a municipality may condition approval of a subdivision or
development on an agreement not to challenge the costs of certain improvements
installed by the municipality.
Section 2: Prohibits the use of park dedication fees for ongoing operation or maintenance
by the municipality. Requires that the basis for calculation of the amount to be dedicated
or preserved be established by ordinance or be made pursuant to section 462.252,
subdivision 4a.
Section 3: Requires an essential nexus between park dedication fees and the municipal
purposes sought to be achieved by the fee or the dedication. Prohibits conditioning
municipal approval of a proposed subdivision on an agreement to waive the right to
challenge park dedication fees, if the municipality is given written notice of a dispute
over a proposed park dedication fee before the municipality's final decision on a
subdivision application. Allows an application to proceed as though the fee was paid
pending an appeal over a park dedication fee if: (1) the aggrieved person gave written
notice to the municipality, (2) the aggrieved person deposits the disputed fee
in escrow prior to the municipality's final decision on the application, and (3) the
aggrieved person appeals under section 462.361 within 60 days of final approval of the
application.
Declares that if the aggrieved person fails to appeal in a timely matter, or looses on
appeal, the escrowed fees must be transfelTed to the municipality.
Effective Date: Applies to ordinances related to fees, fee schedules and dedications
adopted or amended on or after August l, 2004. Generally effective August l, 2004.
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