Finance Committee Agenda and Packet 2015 10 20 SP

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Cityot Louisville COLORADO • SINCE 1878 CITY COUNCIL COMMUNICATION AGENDA ITEM 8F SUBJECT: DATE: CITY -WIDE MARGINAL COST FISCAL MODEL OCTOBER 20, 2015 PRESENTED BY: SCOTT ROBINSON, AICP, PLANNING AND BUILDING SAFETY DEPARTMENT SUMMARY: The City contracted TischlerBise, Inc. to create a new marginal cost fiscal impact model to replace the City's current average cost model. The fiscal model is used to estimate the fiscal impacts of proposed development. The fiscal model takes proposed development by land use type (retail, office, residential, etc.) and other inputs and computes projected tax and other revenues and projected operational and capital expenditures. The proposed fiscal model will be used by City staff in three areas: 1. Estimating City -wide fiscal impacts associated with various land use scenarios developed as part of any Comprehensive Plan Update, or Small Area Planning process; 2. Evaluating the municipal fiscal impacts anticipated with various proposed individual land development applications; 3. Clarifying the City's levels of service during City Council goal setting, budgeting, and long -range staffing analysis. The consultant has agreed to create two models, one marginal cost model for City -wide planning and budgeting, and one average cost hybrid model for evaluating individual development proposals. The two models use the same assumptions of capacity and levels of service. The City -wide model was presented at the October 16 Finance Committee meeting, during which Committee members asked for some updates to be made to the model prior to being presented to the full City Council. NEW: The Committee asked for summaries of how outputs would change with different estimated available capacities for different capital facilities and operational units. The available capital facility capacity applies to the determined marginal unit. Using trails as an example, the marginal units are measured in mile segments. Changes in available facility capacity only impact how soon the next mile segment will be needed. Once the first mile segment is added, the model resets to 100 percent available trail capacity, and calculates however many years it takes to require the next mile segment based on the growth in the development scenario. So for any capital facility with relatively low unit cost, adjusting the available capacity will have negligible impact. CITY COUNCIL COMMUNICATION