Saturday, January 06, 2007

Red Ledges Fiscal Impact Analysis - A Pig in a Poke???

It’s axiomatic that developers and promoters will use numbers to prove and promote their particular project. This appears to be the case with Red Ledges. Is it really the Cash Cow some in the Heber City Government expect??

Heber City Revenue

For the Heber City Tax revenue the study apparently uses a proposed SALE price as the assessed value. These sales prices are, at best, an estimate - probably optimistic at that. While tax value assessment is supposedly equal to "market" value, houses in the valley currently offered for sale at $600K often carry an assessment of about $300K. Therefore, it could be concluded that the tax revenues predicted by using the anticipated sales price may be inflated by a factor of TWO.

It is not clear whether the tax computation separates the land value from the house value. The general Fund revenue would then be $870K rather than $1,750K. The net benefit to the general fund would then be a negative $250K - rather than +$625.

School Costs

School Children are computed at 0.51 per household for a total of 699 students; the County uses 0.8 yielding 1096 students.

***To determine the number of school age children, wouldn't it be logical to divide the number of school children (~4300) by the number of primary homes (total minus the number of secondary homes) - for a school children per house ratio and then multiply by the number of houses in the development or use households: 4000/4743 = 0.84 (2000 enrollment guess and census households) or 4300/18974 * 3.18 = 0.72 (2005 pop.)
(A computation of Timp Meadows showed about 1.6 students/household a few years ago)

Red Ledges study uses 2005 figures and does NOT include the new High School bond which raises the per student cost by $150 (?)

NCES figures show local share of education costs at $3305/student.
1096 students @ $3305 = $3,620,000 Education Cost

Including the increase from the new bond cost 1096 @$3450 = $3,800,000

School Tax generated based on the factor of TWO overestimate would yield $4,500K

Net Results

The net benefit to Heber City indicated in the fiscal report ($625K city + $6,900K school ) appears to be overstated and the more conservative figures might be -$250K and $700K.

The report indicates that the School District is able "to accommodate this proposed increase" indicating that the current taxpayer have, or will be, paying for the current "excess" capacity. A more rational scenario would be for the development to pay for one additional high School (current $60 million for 1500 students = $40M) one Junior High, ($10M); one Middle school ($8M), and on elementary ($7M) to educate the 1000 children brought with the development. (total $65M or $4700 per unit).

The figures also represent amounts at build-out which may be 10 - 20 years and is base on current cost rather than the additional costs which will be created by service required by the development. It does not seem to include the increase in infrastructure cost to the County (e.g. new roads - widening Center St. or Bypass, which would be required to handle the increased traffic; police protection, etc.).

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