Finance Committee Agenda and Packet 2024 02 22

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sustainability may also influence land use decisions. Individual developments that promote these policies may be desirable to the city to meet policy goals as long as the city overall is planning for fiscal balance. Fiscal balance can also be achieved through budgeting, and fee and tax structure to meet desired outcomes. Attached for further background are two publications that provide a more in depth discussion of fiscal analysis: - ICMA IQ Report, Fiscal Impact Analysis: How Today's Decisions Affect Tomorrows Planning Advisory Service Report, Fiscal Impact Analysis: Methodologies for Planners CITY OF LOUISVILLE FISCAL IMPACT MODEL SUMMARY: In 2014, the City hired TischlerBise, a consulting firm specializing in fiscal and economic planning, tc develop a fiscal model for city staff to conduct in-house fiscal impact analysis. (Carson Bise, a Principal with TischlerBise, is the author of the two attached technical reports.) The fiscal model is a proprietary, Xcel-based programmed spreadsheet, and city staff are not permitted to share the model with the public as part of the agreement with the consultant. TischlerBise originally developed two models for the City, one based on a marginal -cost approach, and another that is average -cost based but has some hybrid marginal -cost assumptions. The attached Planning Advisory Service Report, Fiscal Impact Analysis: Methodologies for Planners provides the following descriptions for each methodology. Average -cost approaches assume a linear relationship and do not consider excess or deficient capacity of facilities or services over time. A per capita relationship —in which the current level of service per person in a community is considered to be the standard for future development —is an example of an average -cost approach (p. 23). Marginal -cost approaches describe the unique characteristics of a jurisdiction's capital facilities. Although over the long term, average - and marginal -cost techniques will produce similar results, the real value of fiscal analysis is in the two- to 10-year time period, when a community can incur costs. Marginal -cost analysis is most useful in this time frame (p. 24). The City's marginal -cost model was developed for use in area -wide planning efforts and the average -cost model was developed for site -specific development review. Following the adoption of the City's Program Based Budgeting methodology, TischlerBise was no longer able to support the marginal -cost model due to the complexity of this budgeting methodology. Currently the City only utilizes the average -cost hybrid model for development review. In 2018, the City updated its baseline assumptions for the model and created policies on what types of land use applications should trigger an analysis. This 7/ 132