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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