Fiscal Impact Assessment: Service Standard Method


There are two service standard methods spreadsheets. One, labeled “Impaserv,” provides space to compare four projects, or four alternate versions of the same project. Another, labeled “Impashrt,” is a short form which calculates the impacts of a single project. The tables will illustrate the full service standard spreadsheet; the short form follows the same format but omits the calculations of alternatives.

The first worksheet (Figure 1) requests information about the proposed development: number of units, projected household size, and value per unit. "Unit" means "housing units," not the number of structures; an apartment building may have many units, a single-family home will have only one. Unit value is the sales price, even if the units are rentals. The worksheet also includes an entry for "unit type." This information is not used elsewhere in the program, but is included so you can document the spreadsheet by labeling each alternative for the type of development it contains. The spreadsheet will automatically calculate the projected total residents and the projected total value for each alternative. In addition to information about the projects, the worksheet asks for information about the city: size (number of people) and total real value.

 
 Project Description (Service Standard Method)
 
NUMBER TYPE
ALT'NTIVE OF OF HOUSEHOLD TOTAL UNIT TOTAL
NUMBER UNITS UNITS SIZE RESIDENTS VALUE VALUE
 1 ...... ...... ....... xxxxx ...... xxxxx
 2 ...... ...... ....... xxxxx ...... xxxxx
 3 ...... ...... ....... xxxxx ...... xxxxx
 4 ...... ...... ....... xxxxx ...... xxxxx
 
SIZE OF CITY: ........
TOTAL REAL VALUE IN CITY: ........
 
 Figure 1
 
 
 
 
 
 

The next worksheet (Figure 2) provides information about the operating costs of the local jurisdiction. The information should be readily available from the city budget. Operating costs are divided into four functions (public safety, public works, recreation, and general government), with subdivisions under each heading. You are asked to enter the operating budget for each category, and the number of employees. If some of the services are not operated by the local jurisdiction (say, libraries), do not enter the cost of that service to some other jurisdiction (say, the County). You are only concerned with the costs to a specified local government. The worksheet will calculate the average cost per employee. Although Burchell & Listokin's models are built on the assumption that the local jurisdiction is a municipality, they present a combined analysis for the municipality and school district. In this chapter, the local jurisdiction is assumed to be a municipality, and school district impacts are ignored. If you are calculating impacts for a local jurisdiction which is not a municipality, adjust the categories for expenses and revenues as appropriate (keeping in mind that you may have to construct your own table of multipliers).

 
 OPERATING COSTS 
AVERAGE
 OPERATING NUMBER COST PER EMPLOYEE CAP/OPS
FUNCTION COST EMPLOYED EMPLOYEE MLTPLIER MLTPLIER
GENERAL GOVT
 FINANCE ...... ...... xxxxx xxxxx xxxxx
 CONTROL ...... ...... xxxxx xxxxx xxxxx
 
PUBLIC SAFETY
 POLICE ...... ...... xxxxx xxxxx xxxxx
 FIRE ...... ...... xxxxx xxxxx xxxxx
 
PUBLIC WORKS
 HIGHWAYS ...... ...... xxxxx xxxxx xxxxx
 SEWERS ...... ...... xxxxx xxxxx xxxxx
 SANITATION ...... ...... xxxxx xxxxx xxxxx
 WATER ...... ...... xxxxx xxxxx xxxxx
 
RECREATION
 PARKS ...... ...... xxxxx xxxxx xxxxx
 LIBRARIES ...... ...... xxxxx xxxxx xxxxx
 
 Figure 2
 
 
 
 
 
 

Based on the information you provided on the size of the city, the worksheet will also consult two tables and enter the appropriate multipliers for new capital and operating costs (see Figure 3 for a partial illustration of one table). The multipliers are based on information from the 1972 Census of Governments for the North Central Region of the United States, and expresses the number of new employees needed per 1,000 new population (for operating expenses) and the ratio of new capital expenses to the increased operating expenses. The tables group cities by size, from less than 2500 to more than 1,000,000. Only a portion of the EMPLOYEES table is illustrated in Figure 3 (you can consult the template for the full table, if you wish). You will notice that there are index numbers ("0," "2500," etc.) above each multiplier. Those numbers are used by the spreadsheet to determine which multiplier should be carried onto the OPERATING COSTS worksheet. Each function under operating costs has a command which refers it to the appropriate table, where it searches the appropriate row for the index number of city size. The value immediately below that index number is then carried to the appropriate cell in the Operating Costs table. All three models use tables which are constructed in this format, although the information is slightly different for each model.

 
 SAMPLE MULTIPLIER TABLE 
EMPLOYEES PER 1,000 POPULATION (NORTH CENTRAL REGION)
 <2500 2500- 5000- 10,000- 25,000- 50,000-
FUNCTION 4999 9999 24,999 49,999 99,999
 
 
 
 

 
GENL GOVT 0 2500 5000 10000 25000 50000
 FINANCE .22 .35 .34 .3 .29 .29
 0 2500 5000 10000 25000 50000
 CONTROL .83 .74 .74 .57 .49 .48
PUBLIC SAFETY 0 2500 5000 10000 25000 50000
 POLICE 1.16 1.83 1.88 1.72 NA 1.72
 0 2500 5000 10000 25000 50000 
FIRE .89 .49 .61 .93 1.26 1.32
PUBLIC WORKS 0 2500 5000 10000 25000 50000
 HIGHWAYS 1.06 1.07 .98 .81 .74 .74
 0 2500 5000 10000 25000 50000
 SEWERS .01 .45 .39 .4 .36 .31
 0 2500 5000 10000 25000 50000 
SANITATION .01 .33 .38 .42 .55 .47
 0 2500 5000 10000 25000 50000 
WATER .01 .62 .63 .56 .48 .5
RECREATION 0 2500 5000 10000 25000 50000
 PARKS .01 .22 .31 .31 .44 .59
 0 2500 5000 10000 25000 50000 
LIBRARIES 0 .14 .17 .15 .26 .22 
 
 Figure 3
 
 
 
 
 

The next worksheet (Figure 4) projects revenues coming to the local jurisdiction from the new development. The Revenue Projection table requires that you enter a unit rate for each source of revenue. The easiest way to calculate these is by an average cost method: Divide the total revenue for last year (or the average revenue for several years) by the number of housing units in the city. Real property tax is an exception; enter the mill rate and the worksheet will multiply that by the value of the development. If the development project has special characteristics that will affect its revenue-generating properties, enter whatever is judged to be an appropriate unit cost. The spreadsheet will multiply the unit cost by the number of housing units in the project and enter it into the worksheet for each alternative. It will also calculate subtotals by category and a grand total.

 
 Revenue Projection
 REVENUE
 ALT (1) ALT (2) ALT (3) ALT (4) 
UNIT REVENUE REVENUE REVENUE REVENUE
REVENUE SOURCE RATE PER UNIT PER UNIT PER UNIT PER UNIT
 
 

 
OWN SOURCE REVENUE
TAXES
1. REAL PROP ...... xxxxx xxxxx xxxxx xxxxx
2. PRSNL PRO ...... xxxxx xxxxx xxxxx xxxxx
3. FRANCHISE ...... xxxxx xxxxx xxxxx xxxxx
4. OTHER ...... xxxxx xxxxx xxxxx xxxxx
SUBTOTAL xxxxx xxxxx xxxxx xxxxx
FEES, ETC.
1. INTEREST ...... xxxxx xxxxx xxxxx xxxxx
2. PERMITS ...... xxxxx xxxxx xxxxx xxxxx
3. FINES ...... xxxxx xxxxx xxxxx xxxxx
4. SPC SRVCS ...... xxxxx xxxxx xxxxx xxxxx
5. GARBAGE ...... xxxxx xxxxx xxxxx xxxxx
6. SEWER ...... xxxxx xxxxx xxxxx xxxxx
7. WATER ...... xxxxx xxxxx xxxxx xxxxx
8. OTHER ...... xxxxx xxxxx xxxxx xxxxx
SUBTOTAL xxxxx xxxxx xxxxx xxxxx
TRANSFER PAYMENTS
STATE
1. URBAN AID ...... xxxxx xxxxx xxxxx xxxxx
2. ROAD AID ...... xxxxx xxxxx xxxxx xxxxx
SUBTOTAL xxxxx xxxxx xxxxx xxxxx
 
FEDERAL
1. REV SHARE ...... xxxxx xxxxx xxxxx xxxxx
2. LEAA ...... xxxxx xxxxx xxxxx xxxxx
3. OTHER ...... xxxxx xxxxx xxxxx xxxxx
SUBTOTAL xxxxx xxxxx xxxxx xxxxx
TOTAL REVENUES xxxxx xxxxx xxxxx xxxxx
 
 Figure 4
 
 
 

Finally, we come to the object of the whole process--the table of impacts. The spreadsheet provides two ways of presenting the fiscal impacts of a project. The Summary of Fiscal Impacts (Figure 5) presents the heart of impact analysis: For each alternative, what are its costs, what revenues will it generate, and (the bottom line) what will be the net impact? The summary table also lists the number of housing units each project will provide (in case the various alternatives are not of comparable size). The Fiscal Impact table (Figure 6) presents the costs associated with each alternative. There is a separate table for each alternative (Figure 6 presents only one of them). For each service function, the table calculates the estimated number of future employees, the annual operating and capital costs associated with those new employees, and the total increase in annual costs. The summary table is useful for estimating the overall impact of projects; the fiscal impact table allows the city to predict where the new demands will hit hardest, and to prepare to meet them.

 
 SUMMARY OF FISCAL IMPACTS
 
 NUMBER TOTAL TOTAL NET 
DEVEL'MNT OF ANNUAL ANNUAL FISCAL
 ALT'NTIVE UNITS COSTS REVENUE IMPACT
 1 xxxxx xxxxx xxxxx xxxxx
 2 xxxxx xxxxx xxxxx xxxxx
 3 xxxxx xxxxx xxxxx xxxxx
 4 xxxxx xxxxx xxxxx xxxxx
 
 Figure 5
 
 

 

 
 FISCAL IMPACT--ALTERNATIVE 1
 
 ESTIMATED ANNUAL ANNUAL TOTAL
 NUMBER OPERATING CAPITAL INCREASED
 FUTURE COST COST ANNUAL
 FUNCTION EMPLOYEES INCREASE INCREASE COST

 
GENERAL GOVERNMENT
 FINANCE xxxxx xxxxx xxxxx xxxxx
 CONTROL xxxxx xxxxx xxxxx xxxxx
 
PUBLIC SAFETY
 POLICE xxxxx xxxxx xxxxx xxxxx
 FIRE xxxxx xxxxx xxxxx xxxxx
 
PUBLIC WORKS
 HIGHWAYS xxxxx xxxxx xxxxx xxxxx
 SEWERS xxxxx xxxxx xxxxx xxxxx
 SANITATION xxxxx xxxxx xxxxx xxxxx
 WATER xxxxx xxxxx xxxxx xxxxx
 
RECREATION
 PARKS xxxxx xxxxx xxxxx xxxxx
 LIBRARIES xxxxx xxxxx xxxxx xxxxx
TOTAL xxxxx xxxxx xxxxx xxxxx
 
 Figure 6

 
 

609

 

 

1996 A.J.Filipovitch
Revised 11 March 2005