Fiscal Impact Assessment: Cases for Study

Use the following information to answer the questions below:

                           PLYMOUTH (1996)      BROOKLYN PARK (1996)

                     Operating    Number     Operating    Number

                     Costs        Employees  Costs        Employees

General Govt.

  Finance            2,563,500      8           592,900      11

  Control            3,165,600     12         1,015,800      25

Public Safety

   Police            7,495,693     50         2,086,600      50

   Fire              1,129,000     10           314,300       2

Public Works

   Highways          1,266,230     19         1,761,500      28

   Sewers            1,043,700      6         1,491,000      10

   Sanitation        0                           0

   Water               668,470      6           834,000      10

Recreation

   Parks             1,351,000      9         1,051,000      19

   Libraries         0                           0

Debt Service         6,112,500                  538,200

Real Value         204,785,200              262,770,460

Population              31,165                   43,332

Households              10,491                   15,268

Growth rate               3.0%                     3.5%

Revenue:

Taxes:

   Property              .0218                    .0228

Fees

   Interest             103,092                   6,000

   Sewer              1,224,432               1,700,600

   Water                870,000               1,209,300

Transfers

   Road Aid             568,363                 789,394

   Revenue Share        127,880                 177,612

1. According to planning projections, the city of Plymouth, MN, should experience a growth between 6,000 and 18,000 units of housing by the year 2000. Using 10,000 as a best estimate, and assuming that most of the units will be detached, single-family dwellings worth $110,000 each, and assuming an average household size of 3.6 persons, what would you project to be the ultimate fiscal impact of this growth on the city?

2. Assume that a mix of housing units will be built to meet the growth in Plymouth. The projected increase is 36,000 people, divided into equal numbers of single-family dwellings (worth $110,000 and averaging 3.6 people per household), duplexes (worth $85,000 and averaging 2.25 people), and apartments (worth $75,000 and averaging 1.75 people). What are the fiscal impacts of this growth strategy on the city?

3. Suppose a major industry approached the city of Brooklyn Park, a growing city, for an industrial expansion project. The expansion will increase employment by 500, and will generate the following revenue stream:

Property taxes -- $22,800
Water & sewer -- $19,132
CDBG transfer -- $10,000

What are the fiscal impacts of this project as proposed?

4. A developer has approached the city of Brooklyn Park with three proposals for a large parcel of land. Under one proposal, the land would be developed with 400 single-family units (averaging 3.6 persons) valued at $110,000 apiece. The second would develop the same land with a garden apartment complex of 6,000 units (averaging 1.75 persons) valued at $70,000 apiece. The third would combine both ideas, with 2,000 units (averaging 2.25 persons) and an average value of $85,000 per unit. Using the service standards method, which proposal is most desirable for its fiscal impacts on the city?

5. Recalculate problem #4 using the comparable city method. Assume the project will take 5 years to complete. What do the results tell you about the impact of choice of method on the conclusion eventually reached?

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