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November 4, 2009 > Masonic Flatlands Project, fiscal impact analysis

Masonic Flatlands Project, fiscal impact analysis

By Shavon Walker

Steve Murphy, Senior Associate, Bay Area Economics presented an overview of the fiscal impact analysis for the Masonic Homes Flatlands Project to Union City Council on October 27. The Masonic Homes project team also wished to receive comments from Council on the consultant's approach to the analysis.

The fiscal impact analysis, or FIA, is a systematic examination of the impact of a new development on the City budget. It identifies new costs, such as public safety; identifies new revenues, such as property and sales taxes; and determines the net impact to the City budget. The FIA relates to other studies, such as the Environmental Impact Report (EIR) and the Economic Impact Analysis (EIA), but there are a few important distinctions. The EIR and FIA have a few overlapping topic areas but are separate studies. The EIA is a completely separate study that focuses on job creation and economic-activity generation, and is not related to the FIA in any way.

An FIA is essential and its scope broad. The analysis focuses on the net impact to the city budget, consideration of project and EIR alternatives, examination of ongoing and one-time costs and revenues and addresses relevant policies in the Hillside Area Plan. The FIA also reckons final costs and revenue flow (static cash flow analysis) and twenty-year estimates (multi-year cash flow analysis). Potential community-facility uses must be evaluated, too, and construction and ongoing operations and management costs must be estimated. It is important to identify any mechanisms to offset negative fiscal impacts. This project is not designed to cost the city anything but, if any part of the project incurs costs, Masonic Homes of California wishes to have a backup plan available to reduce the impact on the city.

The city budget must be reviewed and the average cost determined over the previous four to five years. Department heads must be interviewed to identify marginal and estimated costs of new services for the project. Public-safety departments, such as fire and police, will need actual cost figures while smaller departments can use estimates. Some of these costs include labor, equipment, overhead, and so on.

On the revenue side, the Finance Director must be consulted and the budget reviewed. Major revenues, such as sales and property taxes, will be taken into account and estimated using several years' historic data. Other revenues, such as fines and fees, will also be included. One-time revenues like impact fees and capital facilities charges will be added, too.

Bay Area Economics will produce a draft of the FIA report by December 2009. The City Council plans a study session in January 2010 and the final report is expected in February 2010.

Vice-Mayor Carol Dutra-Vernaci wished to know the financial impact of buying versus leasing the land. She was also curious as to how the number of people per housing unit were determined. Mr. Murphy replied that all the details had not yet been evaluated to make an informed hypothesis of the benefits of leasing versus buying but the matter would be discussed with city staff and the Masons. He also noted the city has regulations regarding parking ratios for developments; this information can be used to calculate the average number of people in the household.

For more information, visit www.unioncity.org or contact Nancy Hutar on (510) 675-5318 or by email at mhflatlands@unioncity.org. Comments may be sent to the same email address or mailed to Nancy Hutar, Project Planner, Planning Division - City Hall, 34009 Alvarado-Niles Road, Union City, California 94587. For more about the opposition to the Flatlands Project, visit www.saveunioncityhills.com

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