People very rarely believe me when I point out that Albemarle County actually loses money on each new resident. “But,” they say repeatedly, followed by a mention of a revenue stream that a) has been accounted for and b) doesn’t add up to much. Charlottesville Tomorrow points to a great example of this: the cost of Biscuit Run. The county’s Fiscal Impact Analyst wrote a memo about the total costs of the development that considers the cost of all additional services and additional revenue via taxes and contains this alarming conclusion after looking at both an optimistic and a pessimistic scenario:
The numbers generated by the two scenarios that I ran indicate that, if the County approved [Biscuit Run], the differential net annual fiscal impact would be $4,399,000-$6,665,000 = -$-2,266,000. That number means that, annually, the County would be $2,266,000 worse off approving [Biscuit Run] than denying the proposal. [A twenty-year analysis] in the former reveals a deficit of $88,665,000 while, in the latter case, there exists a deficit of $134,578,000. The difference between those two numbers, $45,913,000, means that, over the course of the twenty year period, the County would be $45,913,000 worse off approving [Biscuit Run] than denying the proposal. […] After taking into account the [developer’s] cash proffers, the new differential would equal $25,213,000 so, over the course of the twenty year period, the County, according to CRIM, would be roughly $25,213,000 worse off approving [Biscuit Run] than denying it.
So this new development may well cost the county $134 million. All of that is on top of the $88M in improvements required to 20 South, Avon, and Old Lynchburg just to handle the additional traffic. For reference, the entire annual budget for the county is just north of $300M.
Even if we wanted to take a vote to see what percentage of Albemarle wants to pay more taxes in order to add 5,000 new residents to the county (and I guarantee you that wouldn’t pass), it wouldn’t matter: the county isn’t given the power to stop developments like this, and a majority of the BoS wouldn’t consider stopping Biscuit Run. How we deal with growth is broken. Totally and utterly broken.
I’m sympathetic to this cost analysis, but there are so many intangibles in play that I don’t think it can come down to a bottom line figure. One of those houses could be the future home of a Nobel Prize winner working at the soon-to-be-built cancer research center at UVa. We may profit in ways that I can’t enumerate on a spread sheet.
Then again, one of the houses could be the future home of a soon to be convict and contribute to the loss of innumerable historic and natural resources located on this property.
Subject to:
Oh, yeah, nobrainer, not only are there disclaimers, but the author devotes many paragraphs up front to explaining precisely what assumptions are being made in order to come to that conclusion. I hope that anybody who finds that nut graf interesting will go on to read the whole thing.
I’m impressed that the county posts this sort of memo online. It’s valuable information, the sort of valuable information that one normally only gets a copy of with a FOIA request.
This is interesting and to be honest I have yet to digest all the math. A couple of thoughts:
1. This can be built by right, as I understand, so isn’t the real calculation how this proposal stack up against by right?
2. No growth pays for itself based on property values alone. There is also sales tax and state and federal monies that are return from income tax.
3. If the by right model is used is it worth losing the the current proffers. Isn’t this the point a which the discussion will ultimately decided the issue
On page 5 of the PDF, the taxes and fees taken into consideration are listed, which include: residential property, commercial property, consumption, personal property, machine & tools, sales & use, utility, BPOL, utility company licenses, motor vehicle licenses, permits, fees, fines, forfeitures, service charges, state aid, federal aid, rooms tax, penalties, state aid to schools, and meals taxes.
Seems like they’ve covered it. :)
I believe to make the county’s fiscal impact model work, you would have to keep a running tally of each project, assuming one might be revenue positive and the other revenue negative. But each new project has to wrapped into the overall plus and minus. This way when a project comes up both the members of the board and the public will know exactly what tax load they’re adding to the public.
As to by right, that’s correct it is the standard at which point each a project should be evaluated, since that’s a value the county has to live with. Then the proffers have to evaluated against the long term operating cost of the development as well as what those proffers would add to the long term growth plan, that is to say a proffer for a road that adds to connectivity may in fact be worth more then the stated dollar amount since it would help to achieve a larger desired goal. It is here where the bos has to make a value judgement.
This is one area where Master Planning could help since there are some basic assumptions that could be made as to what the overall amount of commercial vs residental will be and then apply the fiscal impact model against those numbers and start to see what the bottom line for development will be. If you don’t like the numbers then start to change the make up of the plan to move toward the desired goal. The real trick is once you get to that point you have to hold both developer and community to the plan. This is one of the areas we fell short in Crozet.
A point of clarification based on my discussions with County staff today… the Albemarle County Fiscal Impact Analysis (FIA) used the VDOT estimate of costs attributable to the development for improvements to three roads (Avon, Old Lynchburg, Rt. 20) as the baseline for the Biscuit Run transportation costs in their model. So be careful not to add the $134 million (County FIA) the $88 million (VDOT). That would double-count some items.
That said, the FIA does NOT account for all the expected transportation needs, some of which the Biscuit Run developer has proffered as improvements. So for example, while the developer proffered up to $1.55 million for the Fontaine/Sunset Connector Road, a share of the cost of that road is NOT factored into the FIA, but it IS counted as part of the mitigation amount ($20.7 million in proffers as counted by the County). In other words, when it comes to transportation, think of the FIA as capturing only the VDOT estimate of the cost impacts. There are other transportation costs to be considered in the review of this rezoning.
The FIA also does not count the costs to upgrade water and sewer to support Biscuit Run, because the fiscal impact model assumes those costs will be incurred by the ratepayers using public water and sewer, not by the County of Albemarle.
Brian Wheeler, Charlottesville Tomorrow
I wondered about that last night, as I was writing this, but I just can’t find that anywhere in the spreadsheet of expenses on pages 5-8. I’m also a little puzzled by how that would fit in, given that the memo describes that “the County would be $X worse off,” and it wouldn’t be the county paying for those road improvements but, rather, the state. It’s essential to factor in transportation, but it would be wrong to say that’s coming out of the county’s budget.
I should point out this is not the first time the fiscal impact cost of a project has been brought up. When Old Trail was before the board the fiscal impact model showed Old Trail would cost, if my memory serves me, 1.8 to 2 million dollars per year. Interestingly, it was Mr. Boyd who pointed out the developer’s assessment showed Old Trail would bring in 2 million dollars more then its operating cost. I say interestingly because I found out later that Mr. Boyd sits on the committee that oversees the fiscal impact model, which means he was saying he didn’t believe his own data. The bottom line was the 4 million dollar spread from minus 2 million to plus 2 million was never resolved before the vote. This year with the recent uproar about increasing taxes, the cost for Biscuit Run will be an issue and those who vote for it may end up paying more for their vote then the average tax payer will pay to support it if approved.
Now if only they would convert and post the original computerized memo instead of posting a scanned copy…
[…] Jaquith this week reported on cvillenews.com on the potential for a high price tag of the project. Listen […]
Could somebody please explain to me how the water/sewer authority is obligated to add connections to Biscuit Run? It seems to me that the authority should just say that they will make no more connections unless the developers pay for all the new water/sewer extensions in addition to the corresponding costs for increasing the capacity (currently a 9-figure sum).
Why should existing ratepayers be responsible for paying for a water/sewer expansion that only benefits new development? This isn’t even the same as asking why taxpayers should subsidize new development; after all, any new houses could opt for individual well and septic systems without burdening the public water/sewer system. Of course, they’d be taking on their own risk that the ground water will run out, and the density would have to be lower, but why should anyone else be subsidizing that?
Or what if Biscuit Run had to build its own water/sewer treatment plant, a la Lake Monticello?
[…] Waldo said: How we deal with growth is broken. Totally and utterly […]