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ThurstonHighlandsFiscal3 Thurston Highlands Fiscal Analysis of development Alternatives Prepared for: City of Yelm and Thurston Highlands, L.L.C. Prepared by: Property Counselors April July 2007 Table of Contents Table of Contents i Introduction and Summary 1 Introduction 1 Summary 2 Development Alternatives 2 Operating Impacts 3 Capital Impacts 4 Development Alternatives 6 Current Fiscal Conditions 9 Taxing Districts 9 Service Providers 9 City of Yelm 10 Thurston County 15 School Districts 15 Southeast Thurston Fire EMS 16 Timberland Library System 17 Comparison of Operating Impacts 18 Overview of Operating Impacts 18 Revenue Assumptions 18 Operating Expense Assumptions 21 City of Yelm 21 School Districts 22 Southeast Thurston Fire EMS 22 Comparison of Operating Impact 22 City of Yelm 22 School Districts 24 Southeast Thurston Fire EMS 25 Other Service Providers 26 Comparison of Capital Impacts and Possible Funding Sources 28 Overview of Capital Impacts 28 City of Yelm 28 School Districts 30 Southeast Thurston Fire EMS 35 References 37 Table of Contents i Introduction and Summary 1 Introduction 1 Summary 2 Development Alternatives 2 Operating Impacts 3 Capital Impacts 4 Development Alternatives 6 Current Fiscal Conditions 9 Taxing Districts 9 Service Providers 9 City of Yelm 10 Thurston County 15 School Districts 15 Southeast Thurston Fire EMS 16 Timberland Library System 17 Comparison of Operating Impacts 18 Overview of Operating Impacts 18 Revenue Assumptions 18 Operating Expense Assumptions 21 City of Yelm 21 School Districts 22 Southeast Thurston Fire EMS 22 Comparison of Operating Impact 22 City of Yelm 22 School Districts 24 Southeast Thurston Fire EMS 25 Other Service Providers 26 Comparison of Capital Impacts and Possible Funding Sources 28 Overview of Capital Impacts 28 City of Yelm 28 School Districts 30 Southeast Thurston Fire EMS 35 References 37 Thurston Highlands Fiscal Analysis of Development Alternatives Property Counselors April 2007 Introduction and Summary Introduction Thurston Highlands L.L.C. has applied to the City of Yelm for Conceptual Master Site Plan approval for a 1,251-acre mixed-use development known as Thurston Highlands. The objectives of the proposal are to develop the southwest area of Yelm in a manner that would: Be consistent with the Washington State Growth Management Act and the City of Yelm Comprehensive Plan to provide for anticipated growth in the community. Implement sustainable development to the maximum extent practicable within an urban area: Develop a community that thoughtfully provides for the needs of its residents with efficiency and stewardship for the future. Implement characteristics the citizens of Yelm would like to see in their community. Minimize impacts to environmentally sensitive areas and preserve natural areas for public enjoyment. Provide for efficient growth in public services and utilities required to serve phased development of the master planned community. The City of Yelm, through the Environmental Impact Statement (EIS) Scoping process, has provided the applicant with direction regarding environmental review and community input to the Conceptual Master Site Plan. This direction has been to hold true to the basic tenets of the Washington State Growth Management Act, the goals of which are to implement “smart growth.” Many of these principles attempt to lower the cost and optimize the efficiency of providing public services concurrent with new development. The fiscal impact analysis for the EIS addresses the financial impacts to local governmental entities of providing the public services and capital facilities necessary to serve the master planned development. This technical report documents the results of the fiscal analysis. The report is prepared by Property Counselors, an economic consulting firm that specializes in addressing issues related to land use and facilities development. The scope of the analysis includes an evaluation of the on-going operating impacts of the Thurston Highlands Master Planned Community as well as the impacts on required capital facilities. The analysis addresses initial and ongoing costs, available sources of funds to address these costs, and methods to fund any identified shortfalls. The fiscal impact report is organized in six sections: Introduction and Summary Development Alternatives Current Fiscal Conditions Comparison of Operating Impacts Comparison of Capital Impacts and Possible Funding Sources References The key findings are summarized in the remainder of this section. Summary Development Alternatives Three development alternatives have been identified for evaluation in the EIS. The three alternatives are intended to provide a range of potential configurations for the project. The Traditional Development Alternative includes predominately single-family residential uses in a typical subdivision layout. The Urban Village Alternative includes predominately multi-family residential uses in more dense clusters within the development. The Preferred Alternative includes a broader mix of residential development types. In each of the alternatives, the total number of dwelling units would be 5,000. The alternatives vary in the amount and type of commercial uses. Any of the three alternatives would have a neighborhood shopping center, farmers market, regional sports complex, hotel, strip retail and professional office. The size of the regional sports complex, strip retail, and professional office would be smaller in the Traditional Development Alternative, and the amount of professional office space would be much greater in the Urban Village Alternative. The first phase would include 1,008 housing units with a mix of multi-family and single-family dwelling unit types. Summary of Conceptual Land Use Alternatives  Equivalent dwelling units (EDU's) are estimated as a measure of service requirements for each alternative. One EDU represents one single-family detached dwelling unit, while the other dwelling unit types have proportionately fewer EDU’s. Commercial uses are assigned EDU factors based on the amount of activity occurring over the course of a day in each use. Operating Impacts The fiscal impact analysis considers the impact of each of the prospective Thurston Highlands development alternatives at full build-out, and Phase 1. The operating impact is expressed as the difference between annual operating revenues and operating expenses on an ongoing basis, expressed in constant 2006 dollars. One-time revenues associated with construction are also expressed in 2006 dollars  The City is projected to collect revenues in excess of expenses for any of the build alternatives. The largest surplus is estimated for the Traditional Development Alternative. The tax base would be relatively high with this alternative because of the higher-valued single-family homes; however, the demand for services as measured by EDU’s would be somewhat lower compared to the other conceptual land use alternatives. The Rainier School District would experience an annual shortfall equivalent to approximately 3% to 5% of its incremental annual expenditures. Yelm Community Schools would experience smaller shortfalls under the Preferred Alternative or Traditional Development Alternative, but could experience a surplus under the Urban Village Alternative. In the latter case, the enrollment impact would be relatively low compared to the increased tax base contributed by the commercial uses. The Phase 1 shortfall for Yelm Community Schools would be approximately $180,000 annually. A new fire station sized to serve the Thurston Highlands Master Planned Community could be operated at a level of cost similar to other cities. There would be a significant shortfall for Phase 1, even without 24-hour staffing. Provision of services during this phase would require a different mode of service delivery or operations funding by the developer or City at higher levels than those assumed in this analysis. Other taxing districts and service providers, including Thurston County, Timberland Library, Port of Olympia, a cemetery district, and the Public Utility District (PUD) will receive increased tax revenues without significant increases in requirements for service. Many of these jurisdictions do not provide services directly in the local area. In the case of Thurston County, additional requirements would be very small compared to total service requirements. Capital Impacts The comparison of capital impacts is based on estimates of facility needs, the associated cost of meeting those needs, available funding sources, and any funding gaps. The capital impacts are identified for general government facilities and special purpose facilities for the City, school districts, the Fire District, and other jurisdictions. The three conceptual land use alternatives vary in the amount of park land required based on the projected population. In addition to miniparks and neighborhood parks, any of the three alternatives would provide a Regional Sports Complex special use facility. Based on park development cost factors, the total estimated capital cost for the identified facilities varies from $10.9 million for the Urban Village Alternative to $12.8 million for the Traditional Development Alternative. These costs would be funded by the developer. Both Yelm Community Schools District and the Rainier School District would need to develop new elementary schools under all three conceptual land use alternatives. The need for middle and high school facilities would be met by expanding existing schools. Projected funds from the State and other sources are projected to fall short of development costs for both districts under all three conceptual land use alternatives. These shortfalls would have to be funded by either a future bond issue or increases in impact or mitigation fees. Future bond issues for expanded middle and high schools would be a logical response, as any expansion project will provide upgraded facilities and also serve district growth from projects other than Thurston Highlands. The shortfall for elementary facilities is directly related to the project, and could be funded by higher mitigation fees. The City is authorized to impose an impact fee for new fire protection facilities. While this current fee proposed by Southeast Thurston Fire EMS had not yet been adopted by the City at the time of this writing, a fee of the magnitude proposed would generate capital funds in excess of the master planned community’s full cost for fire protection and emergency medical services, and considerably greater than the Master Planned Community’s proportionate share of cost for the impacts of any of the three conceptual land use alternatives at build-out. Development Alternatives Three development alternatives have been identified for evaluation in the EIS. The three alternatives are intended to provide a range of potential configurations for the project. The Traditional Development Alternative includes predominately single-family residential uses in a typical subdivision layout. The Urban Village Alternative includes predominately multi-family residential uses in more dense clusters within the development. The Preferred Alternative includes a broader mix of residential development types. In each of the alternatives, the total number of dwelling units would be 5,000. The alternatives vary in the amount and type of commercial uses. Any of the three alternatives would have a neighborhood shopping center, farmers market, regional sports complex, hotel, strip retail and professional office. The size of the regional sports complex, strip retail, and professional office would be smaller in the Traditional Development Alternative, and the amount of professional office space would be much greater in the Urban Village Alternative. The characteristics of the three alternatives are compared in Table 1. [Greg: Please search and replace throughout: Traditional Neighborhood Alternative should be Traditional Development Alternative (it was inconsistent on the spreadsheets of land use and population projections). Also please check throughout: Urban Village Alternative is the naming convention we are using for the most intensive development alternative. Thank you.] The tTable 1 also describes the characteristics of a Phase 1 development. This development would is projected to occur over during the first five years of development following approval of the Master Planned Community. It would be approximately the same under any of the three build-out alternatives. The first phase would include 1,00897 housing units with a mix of multi-family and single-family dwelling units types. [Greg: I highlighted the Phase 1 number of dwelling units because I think it is going to be reduced to closer to 1,000. I will let you know as soon as it is confirmed.] The estimates population estimates under for the three alternatives varyies with the mix of residential uses. The factors used to estimate population are: Single-Family 2.912938 per unit  Duplex 3.137255 per unit  Multi-family 3 to 4 Units 1.747368 per unit  Multi-family 5 or More Units 1.280193 per unit   The tTraditional neighborhoodTraditional Development Development Alternative, with the greater number of single-family units, has would have the highest estimated population, while the uUrban center Village Alternative has would have the lowest population of the three build alternatives. Table 1 Summary of Land Use Alternatives   [Greg: These school enrollment projections differ quite a bit from the ones I generated using the McCormick factors. Let’s discuss so I understand the assumptions behind yours.] The tTable 1 also compares equivalent dwelling units (EDU’s) as a measure of service requirements on the site. One EDU represents a one single-family detached dwelling unit, while the other dwelling unit types have proportionately fewer EDU’s. The number of EDU’s for non-residential uses is estimated using the following factors: Retail 4.16 per 1,000 sq. ft.  Office 2.49 per 1,000 sq. ft.  Lodging 0.53 per room  EDU’s are commonly used to size capital facilities, but can also be used to reflect the demand for public services. The factors shown above were identified in an analysis for the Town of Barnstable Massachusetts by Tischler and Associates in 2002. The factors are based on Institute of Transportation Engineers (ITE) trip generation rates, visitor hours, and average vehicle occupancy. The Thurston Highlands Urban Center Village aAlternative has would have the highest number of estimated EDU’s because of the large amount of professional office space. [Greg: This is probably on your list of things to do . . . please provide full citations in a References section for all reference documents and sources identified in the text.] Table 1 also summarizes projected school enrollment. The factors used to estimate enrollment are taken from factors developed for the Yelm Community Schools District (Michael J. McCormick, March 27, 2006): [Greg: Please search throughout: Yelm School District. Replace with Yelm Community Schools (unless you have had some communication with the District that indicates a preference for the nomenclature you use.)] Single Family Multifamily  Elementary School 0.3880 per unit 0.1610 per unit  Middle School 0.1480 per unit 0.3200 per unit  High School 0.1550 per unit 0.1610 per unit  The Thurston Highlands site straddles would be served by two school districts. The pProjected enrollments for in the Rainier School District and Yelm Community Schools District are shown in Table 2. Table 2 Projected Enrollment by School District for Thurston Highlands Land Use Alternatives   The Rainier School District would have higher enrollment than the Yelm Community Schools District under each any of the build alternatives. Current Fiscal Conditions Taxing Districts Nine taxing districts collect property taxes from the Thurston Highlands site. The nine districts and their tax rate per $1,000 valuation are summarized below. [Greg: I would like to request, on the Totals line of each table, if it doesn’t create a problem with your summing formulas, that units be indicated; e.g., $, %, etc. Disregard if this would be problematic.]  Service Providers Public Services in Yelm are provided by a combination of local providers. The City of Yelm has primary responsibility for providing municipal services within its boundaries. The City has established relationships with other jurisdictions for several of these services. General Government ( Provided directly Law Enforcement ( Provided directly Fire Protection ( Contract with Southeast Thurston Fire EMS Library Services ( Annexed to Timberland Library Planning and Development Review – Provided Directly Street Maintenance ( Provided Directly Parks ( Provided Directly. In addition, other local services are provided as follows: Rainier and Yelm SchoolYelm Community Schools Districts – Primary and Secondary Education Thurston County – General Government, Criminal Justice and Health Fiscal conditions for these jurisdictions are described below. City of Yelm City revenues and expenses are summarized in Table 3 for the period 2000 through 2005. The operating position of the cCity is reflected in a revenue and expense comparison for the General Fund and Special Revenue funds. (Special revenue funds are funds for operating functions, such as street maintenance, that are funded from sources other than general taxes.). The City’s operating revenues increased at an average annual rate of 15.3% between 2000 and 2005. The categories that grew the fastest are those related to development activity, particularly fees and charges for service. Overall operating expenses grew at a similar rate. . The major expense category with the highest rate of growth was Natural Resources (including development services and parks). The City’s of Yelm revenue and expenditure patterns can be compared to those cities with similar profiles. The Association of Washington Cities (AWC) has classified all cities in the state according to their size, rate of growth, personal income, and amount of commercial activity. The various categories are shown in Figure 1. Yelm is presently classified as a Small Commercial city. The revenue and expense patterns for cities in this category are shown on a per capita basis in Table 3. The revenue and expense data are derived from a data base called Local Government Financial Reporting System (LGFRS) compiled by the Washington State Auditors office. The data in the system is adjusted to exclude any double counting, and is are presented in a format that can be compared across jurisdictions. Table 3 City of Yelm Trends in Operating Revenues and Expenditures   Table 4 Comparison of Per Capita Revenues and Expenses Cities Classified by AWC as Small Commercial Centers (1)   [Greg: I suggest inserting the following at the beginning of the first footnote on Table 4: AWC = Association of Washington Cities. Information based on small population . . .] Figure 1 Yelm is similar on average to the other cities in the State of Washington Small Commercial Center category in terms of revenue. Its expenditures are relatively low. Among direct public services, fire and emergency services is one category with a significantly lower expense factor than the category as a whole. The relationships between average per capita revenue and expense levels for selected city categories are shown in Table 5. The Small Commercial Center category has higher revenue and expense factors than the Residential category that is the next largest in terms of average size. The Small Commercial category is similar in its patterns to the Mixed Resource category. As the cCity of Yelm grows and moves from one category to a larger size category, the pattern of expenditures may not change significantly. Table 5 Comparison of Per Capita Operating Revenues and Expenses Averages for cities in Selected AWC Categories   Thurston County Thurston County provides a range of services to all County residents as well as municipal services in unincorporated areas. The major source of revenue is taxes, with the largest share being property taxes. The major expense category is law enforcement and justice. Table 56 Thurston County Revenue and Expense General Fund and Special Revenue Funds-2005   Source: Washington State Auditors Office, Local Government Financial Reporting System. [Greg: Please also cite in References section.] School Districts The City of Yelm is served by two school districts, providing K – 12 education services. The budgeted enrollment for 2006/07 for the Rainier School District is 878 full-time equivalent pupils, while the enrollment for the Yelm Community Schools District is 4.862 4,862 pupils. The key revenue and expense factors for the two districts are summarized below: Rainier School District Yelm Community Schools District  Expenditures per Pupil 2006/07 $8,239 $8,447  Local Revenues per Pupil 2006/07 $1,555 $1,611  Operating Levy $/$1,000 Valuation $2.664377 $2.930976  Bond Levy $/$1,000 Valuation $1.140000 $1.760000  The RaiierRainier School District passed a bond issue in May 2007 to improve existing facilities. The additional capital levy wilwill be approximately $.83 per $1000 valuation beginning in 2008. Southeast Thurston Fire and EMS Yelm contracts for fire and emergency services with Southeast Thurston Fire and Emergency Medical Services (Yelm Fire District 2).Yelm Fire District 2. Fire DistrictSoutheast Thurston Fire EMS 2 has operateeds jointly with Rainier Fire District 4, and Bald Hill Fire District 17. The dDistricts 2 and 4 intend to formally combine operations as Southeast Thurston Fire and EMS. The budget for the combined districts is shown in Table 6 7. The contract payment from the City of Yelm makes up 25% of the combined budget. Payments from Districts 4 and 17 make up another 23%, and property tax collections from unincorporated portions of District 2 make up 45% of revenues. Expenditures for fire suppression make up approximately 60% of the budget, and administration representsing approximately 33%. The combined district operates 8 eight stations. The main station in Yelm responded to over more than 2,700 calls in 2005. Approximately 900 of those calls were from within the City of Yelm. Table 57 Southeast Thurston Fire EMS Revenue and Expense PPreliminary Budget-2007   Source: Southeast Thurston Fire EMS Preliminary Budget. [Greg: Please also cite in the References section.] Timberland Library System Timberland Library System provides library services to Yelm. The City was annexed to the district, and the district collects property taxes directly from property owners. The Yelm Timberland Library serves the City of Yelm and surrounding unincorporated areas. The building was opened in 2002. The District is funded primarily by property taxes. Comparison of Fiscal Operating Impacts Overview of Operating Impacts The fiscal impact analysis considers the impact of each of the proposed prospective Thurston Highlands development alternatives at full build-out, and for Phase 1. The operating impact is expressed as the difference between annual operating revenues and operating expenses on an ongoing basis, expressed in constant 2006 dollars. One-time revenues associated with construction are also expressed in 2006 dollars. Revenue Assumptions The assumptions for all scenarios are summarized below. The average sales price is assumed to be $300,000 for single-family attached units, $250,000 for duplexes, $200,000 for the tri- and four-plex condominiums, and $160,000 for the larger-structure condominiums. These prices are at the upper end of the range for single-family homes in the immediate area, and at the upper end of the range for condominiums elsewhere in Thurston County. The average incremental assessed valuation beyond the existing value is assumed to be the full assessed value of the finished development. The incremental assessed value for the single-family, duplex rental, duplex owned, tri/four-plex rental, tri/four-plex owned, apartments and condominiums are assumed at $275,000, $205,000, $230,000, $165,000, $185,000, $135,000, and $145,000, respectively.. The incremental assessed value for neighborhood center, strip retail, and professional office are assumed at $130, $130, and $165 per square foot respectively, respectively based on comparable development in the Thurston County. The incremental assumed valuation for the a hotel is assumed to be $90,000 per room. The incremental assessed value for the farmers market is assumed at $30 per square foot, assuming the based on open-air buildings are open air. The regional sports complex is assumed at a value of $100 per square foot for indoor athletic facilities comparable to the YMCA at Briggs Village. Taxable retail sales are estimated at typical levels based on Dollars and Cents of Shopping Centers, 2006 by the Urban Land Institute (ULI) [Greg: Please add a date, and also cite in the References section], with an adjustment for exempt sales based on figures derived from state-wide sales data. Net sales are assumed at $200 per square foot for retail. The taxable receipts for the farmers market are estimated at the same aggregate level as the Olympia Farmer’s Market. The taxable receipts for the regional sports complex are based on average figures for health clubs derived from ULI. Taxable construction cost is estimated at approximately 75% of the incremental assessed valuation for each use. Utility charges are based on estimates from US Census consumer expenditure data of $2,500 per unit for single family attached, $2,000 for the multiplexes and $1,600 per unit for apartments and condominiums. Utility charges are assumed at $2.50 per square foot for retail and office based on Building Owners and Managers Association (BOMA) data. ([Greg: Please add a date, and also cite in the References sectionBuilding Owners and Managers Association, 2006 Experience Exchange Report).] Hotel utility charges are assumed at $1,000 per unit per year. Taxable hotel room revenues are assumed at levels equivalent to 70% occupancy and $75 average room rate. Per capita distributions (state shared revenues) are estimated at $36 per capita for cities as estimated by the Municipal Research Services Center. (Municipal Research and Services Center, Budget Suggestions for 2006). [Greg: Please add a date, and also cite in the References section.] The estimated increased tax base for Phase 1 and each of the conceptual land use scenarios alternatives is summarized in Table 8 6. Table 68 Comparison of Estimated Tax Base    The Traditional NeighborhoodTraditional Development Development aAlternative has would generate the highest assessed value, property sales, and construction value of the three build-out alternatives because of the predominance of higher-valued single-family homes. The Urban Village aAlternative has would generate the highest gross receipts because of the large amount of professional office space. The Urban Village and or Preferred Alternative have would generate similar amounts of taxable retail sales. The tTable 8 also shows the breakout of assessed valuation between the two school districts. All of the assessed value in Phase 1 would occurs in Tthe Yelm Community Schools Ddistrict. At build-out, The Rainier School District would have the greater assessed value under the Preferred Alternative and or the Traditional NeighborhoodTraditional Development Development Alternative. The Yelm Community Schools District would have greater value under the Urban Center Village aAlternative. The increased tax base under each scenario any conceptual land use alternative is assumed to be taxed at current rates. Nine different entities would collect property tax as described earlier in this section. In addition, the City, County, State, EMS and transit would collect retail sales tax. The 0.1% Criminal Justice portion is would be collected by the County but and distributed among cities and unincorporated areas on a per capita basis. Cities are authorized to levy a tax on gross business receipts. The City of Yelm imposes such a tax of 0.2%. The City also imposes a 6% tax on all utilities. The City and State collect an excise tax on real estate transactions. The City’s 0.5% is restricted to capital faculties facilities. Current tax rates are summarized in Table 79. Table 79 Assumed Tax Rates   Operating Expense Assumptions City of Yelm City expenditure levels were presented in Tables 32 and 43 in total and on a per capita basis. The figures can also be expressed in relation to equivalent dwelling units (EDU’s) in order to provide a basis for estimating service costs for non-residential uses. The estimated EDU’s for the City are shown in Table 810. [Greg: Please check all table numbers and in-text references to table numbers. For example, Table 2 is projected enrollment by school district.] Table 810 Equivalent Dwelling Units City of Yelm 2005  The City of Yelm’s expenditures can be expressed on a per EDU basis as shown in Table 911. Table 911 City of Yelm Operating Expenses per EDU   The 2006 adjusted expenditure per EDU includes two adjustments. The Fire and Emergency Services factor is increased by a factor of 50%. [Greg: Please refer to the discussion below for the explanation re: why the Fire/EMS factor was increased by 50%.] The City’s 2005 per capita rate of expenditures for these services as shown in Table 4 is considerably lower than the rate for several of the larger cities in the Small Commercial cities category, as shown in Table 4. Further, the City’s contract fee was approximately 33% higher for 2007 than 2006. The higher 50% factor is reconciled with cost of service requirements in the discussion of the fire district below. The other adjustment excludes development -related expenditures for development oversight. This expenditure will be funded directly by fees and charges for service. School Districts School District expenditures are assumed at the current per pupil rates of $8,239 and $8,447 for Rainier and Yelm, respectively. Southeast Thurston Fire /EMS The cost of fire protection and emergency medical aid services provided by the fire district areSoutheast Thurston Fire EMS aree estimated based on full staffing at build-out of a new station. . The existing station is currently at capacity. A new station could serve 2,000 calls per year. This is equivalent to a service area population of 10,000, approximately the population at build-out of each any of the three alternatives. TheAny of the three conceptual land use alternatives would generate between 2,200 and 2,700 calls annually at buildout based on factors provided by the fire district. This is approximately the call volume responded to atby Station 21 in the existing Yelm fire station which is operating at capacity. The cost of operating a station is based on a crew of three for four shifts over the course of a week. The cost for fire suppression activities is estimated at a rate of $75,000 per full-time equivalent officer, and $65,000 per full-time equivalent firefighter. Additional facility costs are estimated at 6% of suppression costs based on the current budget. [Greg: I am somewhat concerned about public reaction to the statement that 10,000 is approximately equivalent to the Thurston Highlands population under any of the three alternatives, given that the range we project is 10,998 to 13,859. A total resident population of 10,000 would only be two persons per household. Give it some thought; whatever you decide will be fine.] Comparison of Operating Impact City of Yelm The Table 10 12 summarizes the City of Yelm operating impact of the three conceptual land use alternatives and Phase 1 for the City of Yelm. As shown, the Ccity would collect revenues in excess of expenses for any of the buildeach alternatives. The largest surplus is estimated for the Traditional NeighborhoodTraditional Development Development Alternative. The tax base is would be relatively high with this alternative because of the higher-valued single-family homes; however, but the demand for services as measured by EDU’s is would be somewhat lower compared to the other conceptual land use alternatives. It is important to note that the results of the operating impact analysis may vary over time. Property tax revenues are subject to a limit on annual increases. Voter-approved Initiative 747 limited annual increases to one percent plus taxes on new construction. That initiative has been challenged in court. While the outcome in unknown at this time, there will likely be some limit in effect, whether it is the previous 6% limit, a newly- imposed 1% limit, or a voluntary limit by legislative bodies. In any case, the property tax collections are likely to grow at a lower rate than expenses;, thus,and the fiscal balance may change over time. [Greg: Suggested edits to table headings in left column: Recurring Tax Revenues, Estimated Net Annual Surplus, One-Time Revenues (hyphenated).] Table 1012 Comparison of Operating Impact City of Yelm (in 2006 $)   School Districts The Tables 11 13 and 12 14 summarizes the operating impact of the conceptual land use alternatives for on the Rainier School District and Yelm Community Schools Districts, respectively. Table 1113 Comparison of Operating Impact: Rainier School District (2006 $)   The Rainier School District would experience an annual shortfall equivalent to approximately 36% to 5% of its incremental annual expenditures. The Yelm Community Schools District would experience smaller shortfalls under the Preferred Alternative and or Traditional NeighborhoodTraditional Development Development Alternative, but actually could experience a surplus under the Urban Center Village aAlternative. In the latter case, the enrollment impact is would be relatively low compared to the increased tax base contributed by the commercial uses. The Phase 1 shortfall for the Yelm Community Schools district is would be approximately as great as the impact at full build-out$1080,000 annually.. Table 1214 Comparison of Operating Impact: Yelm Community Schools (2006 $) District   Southeast Thurston Fire EMS [Greg: The Phase 1 assessed valuation seems high in relation to full build-out of the conceptual land use alternatives. Have you included the assessed value of the Regional Sports Complex in Phase 1? It won’t be constructed until later.] The impact on the fire districtSoutheast Thurston Fire EMS is shown in Table 153. The increased revenue is assumed at the level of expenditures by the City presented earlier. The increased expenditures are based on the incremental resources needed to operate a new station. As shown in Tthe table 15, the incremental costs of operating a new station are comparable to the estimated current contract payment based onwith an increase to more closely match other cities’ expenditures for fire protection and emergency medical services. This confirms that a new station sized to serve the development Thurston Highlands Master Planned Community could be operated at a level of cost similar to other cities. There is would be a significant shortfall for Phase 1, even without 24 -hour staffing. Provision of services during this phase would require a different mode of service delivery or operations funding by the developer or City at higher levels than those assumed in thise analysis. Table 1315 Comparison of Operating Impact: Southeast Thurston Fire EMS (2006 $)    Other Service Providers The other tTaxing districts and service providers other than the City of Yelm, school districts, and Southeast Thurston Fire/EMS will receive increased tax revenues without significant increases in requirements for service. Most of these jurisdictions do not provide services directly in the local area. In the case of Thurston County, any additional requirements are would be very small compared to total service requirements. Many County services are administrative services. Direct services such as health are not, except for some social services, provided directly in the local area. Estimated revenue increases for the other taxing districts increases are shown in Table 14 16. [Greg: Please briefly explain why.] Table 1416 Comparison of Operating Impact: Other Taxing Jurisdictions (2006 $)   [Greg: Column headings need to be added to the table above: Phase 1, Preferred Alternative, Urban Village, Traditional Development. Also, can the first column width be increased so the “Cemetery District Operating” heading does not get cut off?] Comparison of Capital Impacts and Possible Funding Sources Overview of Capital Impacts The comparison of capital impacts is based on estimates of facility needs, the associated cost of meeting those needs, available funding sources, and any funding gaps. The capital impacts are identified for general government facilities and special purpose facilities for the city, school districts, the Fire District, and other jurisdictions. The analysis is presented for each jurisdiction in the remainder of this section. City of Yelm The City of Yelm will require additional governmental, utility, and parks and recreational facilities to serve the Thurston Highlands Master Planned Community. The capital facility needs are described in the capital facilities section of the EIS. This analysis focuses on parks and recreation facilities and wastewater facilities. Table 17 presents the analysis of park and recreation facility impacts for the City of Yelm. The facilities and cost factors are described in Thurston Highlands Master Planned Community Parks and Recreation Technical Report (R.W. Droll Landscape Architects, June 2007). The three conceptual land use alternatives vary in the amount of park land required based on the projected population. In addition to miniparks and neighborhood parks, any of the three alternatives would provide a Regional Sports Complex special use facility. Based on park development cost factors, the total estimated capital cost for the identified facilities varies from $10.9 million for the Urban Village Alternative to $12.8 million for the Traditional Development Alternative. As described in the Parks and Recreation Technical Report, the developer would fund initial park development. The miniparks would be owned and maintained by a homeowners association. Neighborhood parks and the Regional Sports Complex would be deeded to the City for future operation and maintenance. The City could contract with a non-profit entity for operation and maintenance of the Regional Sports Complex. Such an entity could be a partnership of various sports leagues and user groups. Table 17 Comparison of Capital Facility Impact City of Yelm Parks and Recreation  The conceptual land use alternatives would require differing levels of capital investment in streets and utilities. In general, the developer will fund capital facilities internal to the project. Off-site facilities, such as traffic system improvements, will be required for mitigation of project impacts. In addition, some off-site utility facilities will be required to provide the necessary levels of service. For example, the City’s wastewater collection and treatment facilities will need to be expanded to serve the Master Planned Community. System needs and alternatives evaluated for the wastewater utility are described in the Yelm Wastewater Technical Report (Parametrix, March 2007). Two system alternatives have been identified that could meet the needs of any of future growth and the Thurston Highlands conceptual land use alternatives. Gravity Feed Collection System with expanded treatment plant and discharge of treated water to groundwater. Septic Tank Effluent Pump (STEP) Collection System with expanded treatment plant and discharge of treated water to groundwater. Table 18 summarizes the capital cost impacts of the two wastewater system alternatives. The costs are similar in total. The STEP system would have a higher on-site cost due to the large number of the individual septic tank facilities required, but the cost of treatment would be lower because many of the solids would be captured in the septic tanks. The STEP system would be more suitable for phased implementation. The on-site cost to be borne by the developer would be higher, while the proportionate cost to be borne by the utility would be lower. In the Gravity Feed Collection System, all wastewater is directed to the wastewater treatment plant via gravity and/or pump stations. The utilities’ capital cost would be funded by revenue debt and the debt service funded through theutility rates. base. Table 18 Capital Facility Impact: City of Yelm Wastewater Collection and Treatment  School Districts Increased school enrollment in each of the two districts (Yelm Community Schools and Rainier) wouldill require additional school facilities. The new facilities would be funded from a combination of State matching funds, impact fees/mitigation payments, capital levies from existing bond issues, and future new bond issues. State matching funds are provided to districts based on match percentages and allowable cost factors assigned by the Office of the Superintendent of Public Instruction (OSPI) office. The match factor assigned to Yelm Ccommunity Schools is 68.9%. (Yelm Community Schools District No. 2, Capital Facilities Plan, May 2007) This factor is applied for both districts in this analysis. The allowable cost factor is calculated as $154 per square foot, with the square footage per pupil estimated as 90, 121, and 1204 square feet for elementary, middle and high school facilitesfacilities, respectively. The resultant cost estimates per school are significantly lower than the actual cost of developing schools, as shown in Table 198. Table 198 Schooll Capital Cost Factors  TAs shown the State cost factors are less than one-half the actual cost factors shown in the tableof construction for new school facilities. The cost factors shownin Table 19 are derived from the cost per student factors in the Yelm Community Schools Capital Facility Plan (2007). These factors are consistent with analysis of construction costs for elementary schools from data provided by the OSPI. The average cost per square foot for elementary schools increased by 2031% between 2005 and 2006 to a level of $2530 per square foot. (Greg Stack, sourceSeattle Daily Journal of Commerce, Schools Losing Out as Construction Costs Soar, August 31, 2006). Existing capital levies will generate revenues from new development. The formula for school facility impact fees allows for a credit of 10 years capital levy at current rates in determining impact fees. In the case of Yelm Community Schools, that is is the remaining term of the outstanding bonds. In the case of Rainier School district, the new 2007 bond issue will be funded over an additional 20 years. Developers currently contribute toward the cost of school facilities through impact fees or mitigation payments. Pierce County collects impact fees for development in unincorporated portions of the Ccounty in the amount of $2,780 for single family unit and $$1,220 for multifamily unit. (Yelm Community Schools, Capital Facilities Plan, 2007.). These fees apply to portions of the two school districts. The same amounts are collected in the form of mitigation payments in the balance of booth districts. Table 2019 summarizes the resultsestimates of the capital facilities requirements for the Yelm Community Schools to serve the Thurston Highlands Master Planned Community. The District would need to develop a new elementary school in the case of the Preferred Alternative orand the Urban Village Alternative,. If the Traditional Development Alternative were selected for implementation, and 1 1.7 elementary schools for the Traditional Development Alternativewould be required to serve . The need for middle and high school facilities would be met through the expansion of existing schools. There would be a capital shortfall under all of the buildout alternatives and Phase 1. Table 201986 Comparison of Capital Facility Impact: Yelm Community School District   Thurston Highlands. The need for middle and high school facilities within the Yelm Community Schools District would be met by expanding existing schools (personal communication with Dr. Alan Burke and Erling Birkland, May 24, 2007). There would be a capital shortfall under Phase 1 and any of the build alternatives. Table 21 summarizes the estimates of the capital facilities requirements for the Rainier School District to serve the Thurston Highlands Master Planned Community. The District would need to develop 2.2 new elementary schools in the case of the Preferred Alternative or the Traditional Development Alternative, or 1.3 elementary schools to serve the Urban Village Alternative student population. Phase 1 development would occur entirely within the Yelm Community Schools District. The need for middle and high school facilities would be met by the expanding existing schools (personal communication with Dr. Dennis Friedrich, May 24, 2007). There would be a capital shortfall under all of the build alternatives. The capital shortfalls for each district would have to be funded by either a future bond issue or increases in impact or mitigation fees. Future bond issues for expanded middle and high schools would be a logical response, as any expansion project will provide upgraded facilities and also serve district growth from projects other than Thurston Highlands. The shortfall for elementary facilities is directly related to the project, and could be funded by higher mitigation fees. Table 20 summarizes the results of the capital facilities for the Rainier School District. The District would need to develop 2.2 new elementary schools in the case of the Preferred Alternative and the Traditional Development Alternative, and 1.3 elementary schools for the Urban Village. The need for middle and high school facilities would be met through the expansion of existing schools. There would be a capital shortfall under all of the buildout alternatives. The capital shortfalls for each district would have to be funded by either a future bond issue or increases impact or mitigation fees. Future bond issues for expanded middle and high schools would be a logical response as any expansion project will provide upgraded facilities and serve district growth from projects other than Thurston Highlands. The shortfall for elementary facilities is directly related to the project, and could be funded by higher mitigation fees. Table 2102017 Comparison of Capital Facility Impact Rainier School District     Southeast Thurston Fire EMS Table 22 summarizes the estimated capital impacts to the Fire District of the Thurston Highlands conceptual land use alternatives. Table 20 summarizes the comparison of capital impacts for the Fire District. Table 220198 Comparison of Capital Facility Impact Ssoutheast Thurston Fire EMS   The first phase of development of Thurston Highlands would generate approximately 505 calls for service assuming 200 calls per 1000 population. At build-out, the volume of calls would vary from approximately 2,200 calls with the Urban Village Alternative to approximately 2,772 calls with the Traditional Development Alternative. These volumes are approximately equal to or less than the current volume of calls served by Station 21 in Yelm. Southeast Thurston Fire EMS has identified the need for a new station to serve Thurston Highlands. The station would be built in two phases. The first phase would accommodate one engine company. Over time, the station would be expanded to accommodate a second engine and an aerial device, as well as additional administrative and support functions. The entire facility would require a 2.5 acre site. (Southeast Thurston Fire EMS, Impact Fee Rate Study for Fire Protection Facilities, January 2007). With two engine companies at the station, Thurston Highlands call volumes would require approximately 55% to 69% of the capacity of the station depending on which conceptual land use alternative is selected for implementation. The City is authorized to impose an impact fee for new fire protection facilities. Southeast Thurston Fire EMS has proposed an impact fee of $0.95 per square foot of building area. While this fee had not yet been adopted by the City at the time of this writing, the financial implications of such a fee are shown in Table 22. A fee of this magnitude would generate capital funds in excess of the Master Planned Community’s full cost for fire protection and emergency medical services, and considerably greater than the Master Planned Community’s proportionate share of cost for the impacts of any of the three conceptual land use alternatives at build-out. There would be a capital deficit for the Phase 1, however. An impact fee of approximately $1.09, together with a fire station site donation would fund the full cost of Phase 1 fire protection and emergency medical services. A fee ranging from $0.60 with the Traditional Development Alternative to $0.70 for the Urban Village Alternative would fund the full cost of the new station at build-out. A smaller fee of $.40 to $.43 would fund the Master Planned Community’s proportionate share of the cost of a new station. References Association of Washington Cities, State of the Cities Report 2007, Cluster Profiles. Categorization of cities by type. Building Owners and Management Association, 2006 Experience Report. Summary survey data for office buildings by type and geographic area. Burke, Dr. Alan and Birkland, Erling. Personal meeting to discuss potential fiscal impacts of Thurston Highlands Master Planned Community, May 24, 2007 Friedrich, Dr. Dennis. Personal meeting to discuss potential fiscal impacts of Thurston Highlands Master Planned Community, May 24, 2007 McCormick, Michael J, Memo to Yelm Community Schools District regarding student generation factors for Yelm Community Schools, March 27, 2006. Municipal Research and Services Center, Budget Suggestions for 2006. Factors for use in estimating municipal revenues and expenses. Parametrix, Yelm Wastewater Technical Report, March 2007 R.W. Droll Landscape Architects, Thurston Highlands Master Planned Community Parks and Recreation Technical Report, June 2007. Stack, Greg, Seattle Daily Journal of Commerce, Schools Losing Out as Construction Costs Soar, August 31, 2006. Southeast Thurston Fire EMS, Impact Fee Rate Study for Fire Protection Facilities, January 2007). Thurston Regional Planning Council, The Profile 2006. Estimates of local employment. Tischler and Associates, Fiscal Impact Analysis of Residential and Nonresidential Land Use Prototypes, Town of Barnstable Massachusetts, July 2002 Yelm Community Schools, Capital Facilities Plan, 2007. Washington State Auditors Office, Local Government Financial Reporting System, November 2006. Financial data base for all Washington cities and counties by year.