HomeMy WebLinkAboutMinutes - May 16, 2006 SSCITY OF LODI
INFORMAL INFORMATIONAL MEETING
"SHIRTSLEEVE" SESSION
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, MAY 16,2006
An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday,
May 16, 2006, commencing at 7:04 a.m.
A. ROLL CALL
Present: Council Members — Beckman, Hansen, Johnson, and Mayor Hitchcock
Absent: Council Members — Mounce
Also Present: City Manager King, City Attorney Schwabauer, and Deputy City Clerk Perrin
B. TOPIC(S)
B-1 "Receive presentation on an option to close the gap between revenue and expenses
resulting from new annexations and residential development and report prepared by the
consulting firm of Economic & Planning Systems (EPS)"
City Manager King stated that this presentation is on the concept of a Community Facilities
District (CFD) for maintenance related to cost of new development. This is a technique that
cities are using to close the gap that exists between the taxes that are generated in new
development and the cost to provide services. This does not apply to commercial or retail
development; only to new residential development.
Community Development Director, Randy Hatch, reported that there are three types of
costs associated with new residential development for the City: 1) one-time costs for
processing (i.e. environmental documents, review of permits, annexations, etc.); 2) one-
time costs for City services for capital projects (i.e. extension of and capacity to treat sewer
and water, drainage, roads, fire stations, etc.); and 3) on-going costs for fire personnel to
staff the new fire station, police officers to patrol the new residential area, and park
maintenance workers to maintain the new neighborhood park and median landscaping, as
well as the additional patrons for cultural and recreational activities, library services, etc.
Council recently approved the update to application fees and charges to address costs
associated to process development, and the capital costs are now on a regularly updating
schedule. The on-going costs for operation are more problematic to recapture. In the past,
those costs have been provided by property taxes, but over the last several decades, that
mechanism has undergone significant change and has become a challenge for cities.
Lighting end landscaping districts have been utilized as a way to deal with maintenance of
the parks, streetlights, and median strips; however, it only provides for lighting and
landscaping and not for new firefighters, police officers, roads, and maintenance workers.
CFDs were derived from the Mello -Roos Community Facility Act of 1982, which is mainly
used to cover capital costs, but it also allows for on-going maintenance costs. The goal is
for new residential development to pay its fair share and not receive a subsidy from other
sectors of the city. California communities are dealing with Proposition 13 and the
Educational Revenue Augmentation Fund (ERAF) shift, as well as master tlx sharing
agreements with the oDunty. Master tax sharing agreements set forth how much of the
property tax stays within the county and how much goes into the city for newly annexed
areas. The City retained the services of the consulting firm, Economic and Planning
Systems (EPS), which specializes in revenue and expense studies.
Russ Powell, Vice President of EPS, presented its analysis on the fiscal impact of new
growth in Lodi (filed). The purpose of the analysis was to look at the specific impacts on
City services, particularly on general fund supported services, as well as street
maintenance, in order to plan for long-term fiscal stability. Annexations of new development
have an initial impact on services as the property tax increases; however, long-term
analyses show that this base is not strong enough to support the level of services.
Continued May 16, 2006
The fiscal analysis input included the land use plans for the Reynolds Ranch, Southwest -
Gateway, and Westside annexations, and the budget input was Lodi's adopted budget for
fiscal year 2005-06. EPS quantified the general fund and street fund revenues into a per
capita (or per person served) basis for projecting what the costs and revenue sources might
be for new development. Per capita considers those services that primarily serve only the
residents of the city; per person served also analyzes the employee population of the city.
Revenues that were analyzed included property and sales taxes and the Vehicle License
Fee transfer tax. The methodology looked at the projection of trends long term by using
either the estimation of per capita service level cost or revenue generation by each of these
categories. In some instances, it is necessary to perform a separate analysis of a service
area, and EPS looked at park maintenance to determine if the current per capita derivation
from the budget is truly funding park maintenance at this level, and it was determined that it
was not. In analyzing the revenues and expenditures, EPS backed out the revenues for
services to determine the true cost per unit that is attributable to the sales tax base. The
analysis also looked at current trends in the source or stability of each financing
mechanism and evaluated ERAF to ensure the analysis accounted for any shifts of revenue
that are destined for sources other than the City. In Lodi's master tax sharing agreement
with the County, it is estimated that 7.5% of the property tax will come from new
annexation areas. The bottom line is a $381 per dwelling unit shortfall once these areas
are annexed into the City and built out. The alternative methodology would be to look at the
expected absorption of all of those units over a period of time, which shows an eroding tax
base.
In response to Council Member Hansen regarding the time period for the master tax sharing
agreement, Mr. King stated that he was unsure if there was an automatic sunset on the
agreement but anticipated that it would carry forward until it was renegotiated. Tax sharing
agreements can be unilaterally canceled by either party. A city is typically not going to
cancel since an agreement must be in place in order to annex property; therefore, the
county has the stronger hand in negotiations. Additionally, there is a county facilities
impact fee that is imposed upon developers to pay for the capital costs of new county
facilities.
Council Member Hansen expressed concern that the City ought to have a contingency plan
should the County change its formula with the tax sharing agreement or the State does not
live up to its obligation regarding the ERAF shift, as this would alter the data in the analysis
performed by EPS.
Mr. King stated that one of the reasons municipal entities are considering CFDs is that it is
a locally controlled tax. Once it is imposed, it is not subject to an ERAF shift and it cannot
be taken away by other entities. Other than an inflation index, the tax typically does not
change. The development applicant controls the property, as the property owner, with
voting rights to impose the tax. Prior to the sale of the property, the developer discloses
the annual tax; cnce the homebuyer owns the property, it then becomes more difficult to
change the tax.
Mr. Powell stated that there are a number of factors included in the analysis and any
change would shift the numbers, which is why many municipalities revisit the analysis
periodically as new developments come in to see if it still stands or if it needs to change.
The analysis considered only the residential shortfall; however, when considering the
commercial components to the proposed annexation areas, the difference drops to $280
per unit. This may lead to a policy decision on how to handle the non-residential
component and whether or not to impose a special tax or assessment for retail services.
Another component that was not considered, but should be evaluated as a separate case
study, was that new annexation areas have a higher level of landscaping amenities along
the major roads. It was estimated that this would add an additional $100 per unit to
maintain.
Continued May 16, 2006
Mayor Hitchcock questioned if the City would implement both a CFD and a lighting and
landscaping district, or if it would be included as one, to which Mr. King responded that this
would be a policy decision for the Council to make; however, he recommended having one
for simplicity and ease of administration.
Council Member Beckman stated that a lighting and landscaping district is a direct benefit
to the residents that live there; however, a CIFD tax is passed onto a specific class of
citizen that is not realizing a direct benefit, since this is an additional tax for police, fire, and
other services for which no one else is paying.
Mr. King responded that the CFD is a benefit to both new and existing residents because,
without it, the service levels would deteriorate.
Mayor Hitchcock added that, whatever the mechanism, the need to increase police and fire
services would not exist if it were not for new residents and, therefore, it is a direct benefit.
City Attorney Schwabauer commented that the City's master tax sharing agreement with
the County provides Lodi with 6to 7 cents on the dollar of new property taxes; whereas,
existing homes pay 17 cents.
Council Member Beckman countered that there is a wide variation in percentages that the
City receives from property taxes, to which Deputy City Manager Krueger responded that
there are areas that were not subject to the property tax sharing agreement, and the
variance has to do with whether the properties have been annexed or not.
Council Member Hansen stated that, if cities want to grow, there needs to be a system in
place to close the gap and the responsibility is on policymakers to find ways to keep cities
vibrant and financially healthy. Implementing a CIFD would provide a greater chance for new
homes to be built and would address growth. There are communities that have had
exponential growth and they outgrew their ability to provide services; now they do not have
enough parks, fire stations, or recreational programs because of the inability to provide
funding.
Mr. Powell reviewed the base assumptions EPS used to calculate persons served, land
uses, and other data such as the cost of a typical house in each zoning category and what
amount of tax will be generated. The numbers were input into the model to derive the
estimated primary tax revenue sources. EPS estimated that there are 40 commercial
acres proposed for the area; however, it only reduced the shortfall by $100. It was
estimated that 20% of sales tax from new residents would stay in the City; the remainder
would be spent elsewhere.
Some municipalities have dealt with the gap by collecting a one-time impact fee at the time
a building permit is issued; however, this only funds services for a finite period of time. Until
there are changes at the state level, there will be a continual drain of revenues from cities
and, if left unaddressed, a continual reduction in the amount of services a city can provide.
As new areas are annexed, the City will receive an increasingly smaller portion of the tax
dollar.
In response to Mayor Hitchcock, Mr. Powell stated that Lodi's percentage of the master tax
sharing agreement is on the high side, and many jurisdictions receive less. He believed
that Lodi would not be successful in negotiating a higher share as the County is in a worse
position than the City.
Mr. Hatch added that municipalities can update and recalculate the study and add
additional CFD districts (with a different tax amount) to address changes in city revenues
and expenditures, as well as changes in the demand for services for new residents.
Continued May 16, 2006
Mayor Hitchcock stated that she would prefer a fee with a built-in escalator so that all
districts are paying the same amount.
In response to Mayor Hitchcock, Council Member Beckman stated that there are
alternatives to consider, cne of which is the development agreement process that can bring
in revenue in a more equitable manner. Mayor Hitchcock countered that development
agreements are a one-time fee.
PUBLIC COMMENTS:
00 Myrna Wetzel questioned if money from developments could be put into a fund to gain
interest to pay fbr future needs.
Mayor Hitchcock responded that the one-time fee, which has been done in the past for
lighting and landscaping districts, is insufficient and it is a matter of predicting what the
future costs will be for the next 50 to 100 years.
Mr. King stated that staff will continue to discuss this matter with the development
community and return to Council with a rate method of apportionment and the necessary
documentation to implement the process.
C. COMMENTS BY THE PUBLIC ON NON -AGENDA ITEMS
None.
D. ADJOURNMENT
No action was taken by the City Council. The meeting was adjourned at 8:17 a.m.
ATTEST:
Jennifer M. Perrin
Deputy City Clerk
in
AGENDA ITEM B-01
CITY OF LODI
COUNCIL COMMUNICATION
im
AGENDA TITLE: Presentation: 1. An option to close the gap between revenue and expenses
resulting from new annexations and residential development
2. Fiscal Study prepared by the consulting firm Economic &
Planning Systems (EPS)
MEETING DATE: May 16, 2006
PREPARED BY: Randy Hatch, Community Development Director
RECOMMENDED ACTION: Receive attached report and associated presentation.
BACKGROUND INFORMATION: The vast majority of cities in California are experiencing a gap in the
tax revenue received versus the costs for service expected from
local government. This discussion will focus on the gap between tax revenue and city service costs as it
relates to new residential development. For several decades, cities have been examining the fiscal effect
of new development. Several academic studies have been done to document that new residential
development does not fully pay for required city services and that the existing city businesses and
residents are supporting, or subsidizing, new residential growth. As documented by several detailed
studies that staff has reviewed for various cities, retail development generally provides net revenue over
costs, industrial and office uses tend to be in fiscal balance with city revenue matching cost of city
services provided, while residential development is in a deficit position with the cost of services provided
exceeding tax revenue generated. There is some variation in the size of the residential "gap" with high
value housing creating a smaller gap than more moderately valued housing given an equal level of
services. A root cause of this fiscal gap is the State's property tax system as impacted by the limitations
of Proposition 13 and the ERAF shift. This situation has been made worse for cities by the more recent
establishment by counties of mandatory tax sharing agreements required of cities to annex property.
While these tax sharing agreements help counties address their fiscal gap by allocating more of the local
property tax portion of the total property tax bill to counties, this comes directly from city revenues from
new development.
Cities have responded to this fiscal gap by a variety of methods. One method has been to engage in
"fiscal zoning" where cities aggressively seek new retail development and discourage residential
development, especially residential development that is not very high priced. This practice can result in
an overbuilding of retail uses, sprawl, and a lack of renewing existing retail areas. Fiscal zoning also
contributes to the State housing affordable crisis.
Another response has been for cities to impose greater costs on new residential development in an effort
to close the revenue gap. Cities use impact fees and assessment districts to collect revenue from new
residential to pay for the capital costs of new residential (e.g. sewer, water, drainage, streets, parks, fire
stations). The State has intervened in this practice insuring that such capital fees only pay for the costs
of new development and not to upgrade or replace facilities servicing existing city residents. Further,
APPROVED:
Blair King, City Manager
Shirtsleeve Session
May 16, 2006
Page 2
impact fees for new schools have been effectively taken over by the State with a strict impact fee
schedule. Cities have responded with more thorough and detailed impact fees to cover the pro rata
share of new development for more general facilities such as city halls, community -wide centers and
parks, police equipment, public art, etc.
While these impact fees address cities' capital needs, operational costs are not addressed by impact
fees. A small list of techniques are available to cities to pay for operations. Perhaps the most used is
lighting and landscape districts to fund on-going street lighting and landscaping in neighborhood parks
and along trails and street medians. For the last eight years or so, cities have also used the Mello -Roos
Community Facilities Act of 1982 (best known for funding capital facilities via issuance of bonds) to pay
for yearly operational costs from new development. A Community Facilities District (CFD) operations tax
is an annual tax assed to pay for annual operating costs for specific purposes. The range of services that
can be paid with a CFD is broad.
A city using a CFD to fund operational costs must go through several steps. First, a city documents its
individual gap between taxes received from new development and the on-going costs of providing
services to that residential development. A city then establishes the fee that is sought to fill the gap; the
fee may be the full documented gap or a lesser amount as determined by Council. Third, the originating
Resolutions are prepared and adopted to authorize a community facilities district (CFD). Fourth, a district
is formed with the initiating area, and fifth, as new residential developments are approved, they are
annexed into the district. Formation and annexation of the district requires voter approval. Typically, the
property at time of tentative map approval is unoccupied (or has less than 12 registered voters) and
therefore property owners vote. Again, typically the property owners are proponents of the residential
development and have every reason to vote in the affirmative as this is a condition of the tentative map.
Finally, the establishment Resolutions for the district allow for automatic costs of living increases in the
fee.
COST / REVENUE STUDY: The submitted draft Fiscal Study for Annexation Territories is the first step
in the process to address the fiscal gap of residential development. One will note, that the study
documents that as a result of the newly adopted tax sharing agreement with San Joaquin County the
average property tax distribution for Lodi falls from 16.67% to 7.54% for newly annexed development.
This study determines that new residential development via annexation results in an annual shortfall of
$381.00 per unit ($481.00 per unit when including landscaping along major roadways in the annexation
area). Council should be comfortable with this study and its methodology as any further step to close the
funding gap rests upon this study. The consultant and staff are available to answer questions on this
topic.
This report will be used as the foundation for future recommendations with regard to closing the gap
between revenues and expenses related to new residential development.
Randy Hatch
Community Development Director
RH/kc
Aftachment
Planning Systems
Public Finance
Real E"ate Economics
Regional Economics
Land Use Policy
TECHNICAL MEMORANDUM
To: Blair King, City of Lodi
Randy Hatch, City of Lodi
From: Russ Powell and Tepa Banda
Subject: Fiscal Study for Annexation Territories; EPS #15539
Date: May 11, 2006
The City of Lodi (City) has requested Economic & Planning Systems, Inc., (EPS) to
evaluate the fiscal impacts of the three annexation areas as currently proposed. The
three proposed annexation areas are these:
Southwest Gateway
Westside
0 Reynolds Ranch
A fiscal study examines the costs of providing basic city services to a project and
compares those costs to operating revenues that would be generated by the project.
Such a study weighs a city's ongoing service costs and operating revenues and excludes
any consideration of capital funding for public infrastructure. Capital funding, because
it represents a one-time investment for the life of the infrastructure, usually is not
considered in a fiscal impact study.
The City should use the results of this fiscal study to determine whether the Project is
likely to reduce the level of citywide services because project -related contributions to
revenues in the City's General Fund and Road Fund do not fully cover the costs of
serving the Project. Conversely, it may be that the Project will enhance citywide services
because project -related revenues will be more than what will be required to fund
services provided to the Project. This memorandum briefly describes the preliminary
results of the fiscal study with the understanding that a full report characterizing the
study's assumptions, results, and interpretation will be forthcoming.
S A C R A M E N T 0
2 150 River Plaza Drive. Suite 400
Sacramento, CA 95833
www.epsys.com
B E R K E L E Y D E N V E R
phone: 916-641)-1010 phone. 510-841-9190 phone. 303-623-3557
fax Q 16-649-2070 fax 510-841-9208 fax 303-623-9049
Memorandum Fiscal Studyfor Annexation Territories
May 11, 2006
Page 2
This fiscal study examines the impact of the proposed annexation areas (Project) under
one analysis. This fiscal study evaluates the impacts to the general fund and road funds,
based on two scenarios.
Scenario I—Residential Uses Development without Commercial Development
Scenario 2—Residential and Nonresidential Uses Development
PROJECT DESCRIPTION
The Project, consisting of 628 non-contiguous acres, is located in the southern area of the
City and contains residential, office, commercial, and various public uses. Residential
uses account for approximately 466 acres consisting of 1,692 low density single-family
units, 695 medium -density residential units, and 833 high-density residential units.
Commercial uses are proposed for 40 acres. Office uses are proposed for 20 acres. The
remaining 102 acres will be for public uses including schools and parks.
PURPOSE AND CONTEXT FOR THE FISCAL ANALYSIS
This analysis evaluates the fiscal impact of the Project on the annual operating budget of
the City. The objective of this fiscal study is to determine if, at build out of the Project,
the City has adequate revenue to provide City services, such as law enforcement and fire
protection, to the employees, customers, and other persons who visit the site. Part of the
City's administration costs also are assumed to increase after development of the Project.
The fiscal analysis takes into account the effects of the State budget crisis from 2002 and
2003 and is based on the assumption that local government revenue will be restored by
Fiscal Year (FY) 2007, the year in which construction is anticipated to begin.1 The
analysis is based on the adopted FY 2005-06 City budget, current tax regulations and
statutes, and the general assumptions discussed on the following pages.
The development schedule and land uses are based on information provided by the City
and combined with historical and projected demographic data from the California
Department of Finance (DOF), California Employment Development Department
(EDD), and Sacramento Area Council of Governments (SACOG). The results of the
1 Because the development of the Project does not begin before FY 2007, no decrease in property tax
allocations from the 2 -year shift in the Educational Revenue Augmentation Fund (ERAF) to the City's
General Fund or other Special Funds is assumed. In other words, when the Project is built out, it is assumed
that the State -mandated shifts of the City's property tax revenues will have been restored, and the fiscal
study assumes the City's current allocation of the 1 -percent property tax.
PA15000\15539 Lodi Fiscal Impact Analysis\ Corresponduncek15539 m02 Fiscal Study.doc
Memorandum Fiscal Studyfor Annexation Territories
May 11, 2006
Page 3
Analysis will vary if development plans change from those upon which this Analysis is
based.
The actual fiscal impacts of the development will vary from those presented in this
study, depending on changes in the City budget or actual construction costs and sales
prices in the development area. The variability of commercial construction prices
directly affects the amount of property tax revenue generated by the affected service
providers, as well as the levels of anticipated sales tax revenues.
Each revenue item is estimated based on current State legislation and current San
Joaquin County (County) resolution or ordinance. Future changes by either State
legislature or the County can affect the revenues estimated in this study.
GENERAL ASSUMPTIONS
The following list documents the key assumptions used in this analysis:
Expense and revenue multiplier basis for Project—As detailed in Table B-1 and
Table C-1, impacts to the City's operating budget are derived through either a
case study analysis or by estimating the impact of the Project relative to the
current persons served in the City. One "person served" is defined as a City
resident or one-fourth of an employee working in the City. The Project's
addition to most expense categories and to selected revenue categories is
estimated using the number of persons served, or one-fourth the total employee
count, located in the Project. The one-fourth employee standard was
recommended by City staff and based on staff estimations, in this case local
commercial retail activity, on the City's services. A case study was used to
determine the costs of maintaining parks (Table C-3).
Sales tax assumptions—The estimated increase in sales tax revenues (Table B-5)
was calculated through two methodologies. A Market Support Methodology
(Table B -5A) uses estimated household income levels for each category of
residential density to forecast retail sales that will be generated by the new
residential development. Retail sales generated by the new local commercial
development are estimated through an Adjusted Retail Space Methodology
(Table B-513).
Property tax assumptions —Property taxes are the largest source of new revenue
produced by the Project. Impact on the City's assessed property values was
determined through a market analysis of comparable residential and commercial
development in the City. The property tax sharing agreement between the City
and the County states that the City will receive 20 percent of the property tax
PA15000\15539 Udi Fiscal Impact Analysis\ Correspondence\ 15539 mO2 Fiscal Study.doc
Memorandum Fiscal Studyfor Annexation Territories
May 11, 2006
Page 4
revenue accruing to the County and detaching special districts before
annexation. Second, the City's property tax revenue will be reduced as a result
of the State -mandated ERAF shift. The ERAF shift is approximate and represents
the average for the County.
RESULTS OF THE FISCAL ANALYSIS
Table 1 shows that at buildout the development proposed for the Project will result in a
net fiscal deficit for the City (i.e., development -generated revenues will not be sufficient
to fund General Fund— and Road Fund—related expenditures for the Project). In the
Residential Only scenario, annual expenditures are projected to exceed revenues by
almost $1.2 million, or $381 per residential unit. The Commercial and Residential
scenario projects revenues will increase above the Residential Only scenario because of
the significant amount of commercial uses for the Project. The Residential and
Commercial scenario still projects an annual deficit of $894,842, or $278 per residential
unit.
The City has noted that the new annexation areas will have greater levels of landscaping
along major roadways. This analysis did not look at these costs. EPS assumes that these
costs would be offset by a revenue source, such as a Landscaping and Lighting District.
EPS estimates that these costs will be approximately $100 annually per residential unit in
2006 dollars. If this amount is added to the shortfall per residential unit shown in Table
1, then the Residential Only scenario shortfall becomes $481 per residential unit, and the
Residential and Commercial scenario shortfall becomes $378 per residential unit.
Table 2 shows that property taxes totaling $1,064,345 under the Residential Only
scenario and $1,124,799 under the Commercial and Residential scenario represent
approximately 24 percent of project -generated revenues that will accrue to the General
Fund. The annual Bradley -Bums 1 -percent and the Proposition 172 Public Safety sales
tax revenues generated by the Project are estimated to be $88,343 under the Residential
Only scenario and $384,061 in the Residential and Commercial scenario.
Table 2 also shows estimated Project -related General Fund expenditures by the City to
be $5.3 million for the Residential Only and $5.5 million for the Commercial and
Residential scenarios. The largest expenditure category in the City's General Fund is
police protection. The Project is projected to increase Police costs by $1.39 million and
for the Residential Only and by $1.45 million for the Commercial and Residential
scenarios. The Fire Department, at approximately $975,000 in both scenarios, is also a
significant General Fund cost factor. Street Fund expenditures are estimated to result in
almost $400,000, approximately, in additional costs to the City Budget.
PA150W\15539 Lodi Fiscal Impact Analysis \Correspondence\15539 mO2 Fiscal Study.doc
Memorandum Fiscal Studyfor Annexation Territories
May 11, 2006
Page 5
CONCLUSION
The General Fund and Street Fund shortfall shown in this report represents the
difference between the cost of providing existing levels of services to new annexation
areas and the amount of estimated revenue that will be generated in new taxes and other
revenues. Any increased service levels will increase the shortfall shown in Table 1.
PA15000\15539 Lodi Fiscal Impact Analysis\ Correspondence\ 15539 m02 Fiscal Stiody.dac
1 0 2 1
Table I
City of Lodi New Annexation Fiscal Impact Analysis
Fiscal Impact Summary
City Budget Fund [1] Per Dwelling
Scenario At Buildout General Fund Street Fund [2] TOTAL Unit [3]
Residential Only
Revenues $3,920,037 $145,872 $4,065,909
Expenditures $4,905,687 $387,939 $5,293,626
Surplus/(Deficit) ($1,227,717) ($381)
Commercial and Residential
Revenues $4,478,846 $159,050 $4,637,896
Expenditures $5,127,275 $405,463 $5,532,738
Surplus/(Deficit) ($894,842) ($278)
"sum -all"
[1] Annual impacts.
[2] Does not include the estimated costs of maintaining landscaped corridors and street lights in
the annexation areas. The City estimates that service standards for landscaping and lighting
maintenance will increase above levels found in other areas of the City.
[3] EPS estimates that the greater levels of landscaping along major roadways in the annexation
areas will add approximately $100 per unit in additional funding shortfall. EPS did not include an
estimate of these costs in the fiscal study under the assumption there would be an offsetting
revenue source to fund maintenance costs, such as a Landscaping and Lighting District.
Prepared by EPS 6 511112006 15539 fiscal model 1.x1s
DRAFT
Table 2
City of Lodi New Annexation Fiscal Impact Analysis
Revenue and Expenditure Summary, General and Street Funds
Revenue or Expenditure / Fund
At Buildout
Commercial and
Residential Only Residential
REVENUES
General Fund
General Fund
City Attorney
$47,076
Property Tax
$1,064,345
$1,124,799
Property Tax in Lieu of Sales Tax
$34,704
$150,870
Property Tax in Lieu of VLF
$1,231,315
$1,301,252
Real Property Transfer Tax
$28,188
$30,734
Sales Tax (Incl. Prop. 172 - Public Safety)
$88,343
$384,061
Business License Tax
$114,531
$124,878
Franchise Fees
$1,183,141
$1,183,141
Licenses [ 1
$0
$0
Fees [1]
$0
$0
Intergovernmental Revenue
$65,633
$65,633
Motor Vehicle in -Lieu
$69,523
$69,523
Fines and Forfeitures
$40,313
$43,955
Subtotal, General Fund Revenues
$3,920,037
$4,478,846
Street Fund
$145,872
$159,050
TOTAL ANNUAL REVENUES
$4,065,909
$4,637,896
EXPENDITURES
General Fund
City Attorney
$47,076
$49,202
City Manager
$284,425
$297,273
City Clerk
$60,085
$62,799
Finance
$263,790
$275,705
Community Events
$12,798
$13,376
Police
$1,386,866
$1,449,510
Fire Dept.
$946,944
$989,717
Public Works
$682,844
$713,688
Community Center
$74,856
$78,237
Non -Departmental
$626,358
$654,650
Parks & Recreation
$519,645
$543,117
Subtotal, General Fund Expenditures
$4,905,687
$5,127,275
Street Fund
$387,939
$405,463
TOTAL ANNUAL EXPENDITURES
$5,293,626
$5,532,738
SURPLUS / (DEFICIT)
($1,227,717)
($894,842)
"sum -detail"
[11 ] Adjusted for user fees and cost recovery amounts.
Prepared by EPS 7 511112006 15539 fiscal model 1.x1s
Planning Systems
Public finance
Real Estate Economics
Regional Economics
Land Use Policy
APPENDICES
APPENDIX A: FISCAL IMPACT SUMMARY AND
ASSUMPTION TABLES
APPENDIX B: REVENUE -ESTIMATING TABLES
APPENDIX C: EXPENDiTuRE-ESTIMATING TABLES
APPENDIX D: SUPPORTING TABLES FOR REVENUE
ESTIMATES
fl -V*"*"*'*"*'*
..... *"** .... ***** ..... —*—**--,****—** .... —'* ..... *A.102apD;3sfj PULI
Aq uoT4elndoj a@Xoldwg pue lo.quapisau palrtul4sa
YV-V alqui
E -V
.... ......... suoildtunssV asfl pulel
C -V alqui
Z -V-----*--*
"*"****" ... ,XimutunS asfl pu-e-I
Z -V alqel
IN—
..... ...... ............. suoild-LunssV leiauaE)
I-V alqLl
Sa-lqVJL NOIldWfISSV CINVkXVWWfIS IDVdWI -IVDSIJ
V XICINE[ddV
,0110d ds,'] Pflt)l
5.1!uiouo�q jollo!bg
V�)!IIIOUOJ3 aitpisj Im7?l
J-1vvu!J -I�Iqtld
sulals,kS 2u'uuuld
�q 31tuouo:)a
11 ho
Table A-1
City of Lodi New Annexation Fiscal Impact Analysis
General Assumptions
Item
Assumption
General Assumptions
Fiscal Year Development Starts
N/A
Fiscal Year of Analysis and Year Dollars Discounted to
2005-06
Cash Flow Base Year
2005
Inflation (Discount) Rate [1]
3.5%
Legislated Tax Escalation Rate
2.0%
Property Appreciation Rate [2]
4.5%
Property Turnover Rate (% per year)
Residential - Single -Family 10.0%
Residential - Multifamily 10.0%
Nonresidential 5.0%
General Demographic Characteristics
San Joaquin County Population - Jan. 1, 2005 [3] 653,333
City of Lodi
Population - Jan. 1, 2005 [3] 62,467
Employees - March, 2003 [4] 22,404
Persons Served [5] 68,068
"gen—assumps"
Source: California Department of Finance; U.S. Census Bureau; City of Lodi; and E
[1 ] The discount rate is the factor used to discount inflated dollars to present value.
[2] A real -market appreciation of 1 % above the base inflation rate is assumed.
[3] Population estimates based on California Department of Finance data.
[4] From the U.S. Census County Business Patterns Data.
[51 "Persons Served" is defined as Lodi's population plus 25% of employees.
Prepared by EPS A-1 15539 fiscal model 1.x1s 511112006
D Wk " ;i i
Table A-2
City of Lodi New Annexation Fiscal Impact Analysis
Land Use Summary
All Annexation Areas
Land
Use Buildout [1]
Dwelling
Building
Land Use
Assumptions
Acreage
Units
Square Feet
Residential Land Uses
UnitslAcre
Low Density
5
1,692
na
Medium Density
8
695
na
High Density
22
683
na
High Density
50
-
150
na
Total Residential
465.9
3,220
Nonresidential Land Uses
FAR
Commercial
0.20
40.0
na
350,000
Office
0.23
20.0
na
200,000
Total Nonresidential
60.0
na
550,000
Public Land Uses
School
na
34.0
na
na
Fire Station
na
1.0
na
na
Aquatic Center
na
4.7
na
na
Parks
na
56.4
na
na
Open Space
na
0.5
na
na
Detention Basins
na
5.5
na
na
Total Public
na
102.1
na
na
Total All Land Uses
628.0
3,220
550,000
"land use"
Source: City of Lodi.
[1] Residential acreage for the Westside and Southwest Gateway projects estimated as total site
acreage less public facilities and park acres.
Prepared by EPS A-2 15539 fiscal model I.xis, 511 D2006
I lu JUM
Table A-3
City of Lodi New Annexation Fiscal Impact Analysis
Land Use Assumptions (2006$)
Secured
Unsecured
Units/
Sq. Ft. per
Value per
Value per
Turnover
Persons
Sq. Ft. per
Land Use Acres
Description Acre [1]
Unit/Sq. Ft. [2]
Unit/Sq. Ft. [2]
Rate
per DU [3]
Employee [4]
Residential
Per Unit f2
Per Unit
Low Density 1,692
Dwelling Unit -
$551,000
$0
10%
2.79
-
Medium Density 695
Dwelling Unit -
$421,000
$0
10%
2.28
-
High Density 683
Dwelling Unit -
$157,000
$0
10%
2.03
-
High Density 150
Dwelling Unit -
$157,000
$0
10%
2.03
-
Nonresidential
Per So. Ft. r3l
Per Sq. Ft.
Commercial 40.0
Square Feet 8,750
$140
$20
5%
-
450
�hl Office 20.0
Square Feet 10,000
$140
$20
5%
300
6-1
"Iti-assumps"
Source: California DOF; City of Lodi General Plan 1991; LoopNet;
The Gregory Group; and EPS,
[1]AssumedFARs: Commercial -0.2; Office -0.23
[2] 4Q 2005 avg. base prices from The Gregory Group for low and medium density residential units.
[3] Weighted average prices for selected properties in Lodi from Loopnet, Inc. April 6, 2006.
[3] Assumptions from 1991 City of Lodi General Plan adjusted to reflect 2005 DOF average persons per household for low density units.
[4] EPS assumptions based on data findings for the Sacramento region.
Prepared by EPS 15539 fiscal model 1.x1s 511012006
D
L
Table A-4
City of Lodi New Annexation Fiscal Impact Analysis
Estimated Residential and Employee Population by Land Use Category
At Buildout
Residential Only Commercial and Residential
Land Use Residents Employees Total Pop. Residents Employees Total Pop.
'empl-pop"
Source: EPS
[1] "Total Persons Served" is defined as 100% of residential population and 50% of employees.
Prepared by EPS A-4 15539 fiscal model 1.x1s 511012006
a
b
c = a + b
d
e
f=d+e
Residential Population
Low Density
4,719
n/a
4,719
4,719
n/a
4,719
Medium Density
1,586
n/a
1,586
1,586
n/a
1,586
High Density
1,385
n/a
1,385
1,385
n/a
1,385
High Density
304
n/a
304
304
n/a
304
Total Residential Population
7,995
-
7,995
7,995
-
7,995
Employee Population
Nonresidential
Commercial
n/a
-
-
n/a
778
778
Office
n/a
-
n/a
667
667
Subtotal Nonresidential
-
1,444
1,444
Total Employee Population
-
-
-
-
1,444
1,444
Total Residential and Employee Pop
7,995
7,995
7,995
1,444
9,439
Total Persons Served [1]
7,995
7,995
7,995
722
8,717
'empl-pop"
Source: EPS
[1] "Total Persons Served" is defined as 100% of residential population and 50% of employees.
Prepared by EPS A-4 15539 fiscal model 1.x1s 511012006
.................
Economic
Planning Systems
Public Finance
Real Estate Economics
Regional Economics
Land Use Policy
APPENDix B
REVENUE -ESTIMATING TABLES
Table B-1 Revenue -Estimating Procedures ................................................................... B-1
Table B-2 Estimated Annual Project Revenues ............................................................. B-2
Table B-3 Motor Vehicle In -Lieu Fee Revenue Replaced by
PropertyTax ..................................................................................................... B-3
Table B-4 Estimated Annual Property Tax Revenues .................................................. B-4
Table B-5 Estimated Annual Sales and Use Tax Revenues ......................................... B-5
Table B -5A Estimated Annual Taxable Sales,
Hybrid Market Support Method .................................................................. B-6
Table B -5B Estimated Annual Taxable Sales,
Adjusted Retail Space Method ...................................................................... B-7
Table B-1 DRAFT
City of Lodi New Annexation Fiscal Impact Analysis
Revenue -Estimating Procedures (2006$)
Revenues
Estimating
Procedure
Table/
Reference
FY 2005-06
Revenues
Revenue
Adjustments [1]
Adj. Net FY05-06
Revenues
Population or
Persons Served
Revenue
Multiplier
GENERAL FUND - Annual General Fund Revenues [2]
Property Tax
Case Study
Table B-4
$8,063,374
$8,063,374
N/A
N/A
Property Tax in Lieu of Sales Tax [3]
Case Study
Table B-5
N/A
N/A
N/A
N/A
Property Tax in Lieu of VLF [3]
Case Study
Table B-3 & Table B-4
N/A
N/A
N/A
NIA
Real Property Transfer Tax
Avg. Rev. per Person Served
Table B-2
$240,000
$240,000
73,669
$3.26
Sales Tax
Case Study
Table B-5
$9,038,120
$9,038,120
N/A
NIA
Sales Tax - Prop. 172 (Public Safety)
Case Study
Table B-5
$364,000
$364,000
N/A
N/A
Transient Occupancy Tax (TOT)
[4]
$348,480
$348,480
N/A
N/A
Business License Tax
Avg. Rev. per Person Served
Table B-2
$975,156
$975,156
73,669
$13.24
Franchise Fees
Avg. Rev. per Capita
Table B-2
$9,244,720
$9,244,720
62,467
$147.99
Licenses
Avg. Rev. per Employee
Table B-2
$28,710
($28,710)
$0
73,669
$0.00
Permits
[5]
$39,800
($39,800)
$0
NIA
N/A
Fees
Avg. Rev. per Person Served
Table B-2
$3,135,139
($3,135,139)
$0
73,669
$0.00
Investment/Property
[6]
$168,000
($168,000)
$0
N/A
N/A
Intergovernmental Revenue
Avg. Rev. per Capita
Table B-2
$512,838
$512,838
62,467
$8.21
Motor Vehicle in -Lieu
Case Study
Table B-2 & Table B-3
$3,706,100
$3,706,100
N/A
N/A
W Fines and Forfeitures
Avg. Rev. per Person Served
Table B-2
$343,237
$343,237
73,669
$4.66
Other Revenue
[6]
$474,850
($395,800)
$79,050
N/A
N/A
Transfers from Other Funds
[6]
$7,141,848
($7,141,848)
$0
N/A
N/A
Subtotal Annual Gen. Fund Revenues
$43,824,372
($10,909,297)
$32,915,075
$177.36
STREET FUNDS - Annual Street Fund Revenues [2]
State Gas Tax
Avg. Rev. per Person Served
Table B-2
$1,242,000
$1,242,000
73,669
$16.86
Development Impact Fees
Avg. Rev. per Person Served
Table B-2
$945,000
($945,000)
$0
73,669
$0.00
InvestmenttProperty
[6]
$10,000
($10,000)
$0
N/A
N/A
Measure K
[7]
$1,000,000
($1,000,000)
$0
N/A
N/A
Reimb. - Measure K
[7]
$4,380,000
($4,380,000)
$0
N/A
N/A
State STIP Reimbursement
[7]
$510,000
($510,000)
$0
N/A
N/A
Subtotal Street Funds Revenues
$8,087,000
($955,000)
$1,242,000
$16.86
TOTAL ANNUAL GENERAL AND STREET FUND REVENUES
$51,911,372
($11,864,297)
$34,157,075
$194.22
"rev_procedures"
Source: City of Lodi FY 2005-06 Adopted Budget; California Office of the Controller; California Department of Finance; and EPS.
(1] Revenues are adjusted by user fees and cost recovery amounts shown in the City's FY 2005-06 Budget. These deductions in ongoing revenues also are deducted from ongoing
costs, as shown in Table C-1.
(2] Annual fund revenues reflect City of Lodi budgeted revenues for FY 2005-06.
[3] Property Tax in Lieu of Sales Tax and Property Tax in Lieu of Motor Vehicle License Fees are authorized by SB 1096 as amended by AB 2115.
[41 This revenue source is not expected to be affected by the Project because the project does not increase available hotel stock.
[5] This revenue source is not included in the analysis because it is a one-time revenue generator and is not an ongoing source of revenue.
(6) This revenue source is not expected to be affected by the Project and is therefore not evaluated in this analysis.
[7] This revenue source is not included in the analysis because it is for capital projects and is not an ongoing source of revenue.
Prepared by EPS 15539 fiscal model I.xis &1012006
Table B-2
City of Lodi Now Annexation Fiscal Impact Analysis
Estimated Annual Project Revenues (2006$)
111 601,111"
Revenue
Residential
Development
At Buildout
Commercial
Development
Total
Development
GENERALFUND
Annual General Fund Revenues
Property Tax
$1,064,345
$60,453
$1,124,799
Property Tax in Lieu of Sales Tax
$34,704
$116,166
$150,870
Property Tax in Lieu of VLF
$1,231,315
$69,937
$1,301,252
Real Property Transfer Tax
$26,045
$2,353
$28,398
Sales Tax (Incl. Prop. 172 - Public Safety)
$88,343
$295,718
$384,061
Business License Tax
$105,824
$9,560
$115,384
Franchise Fees
$1,183,141
$0
$1,183,141
Licenses [1]
$0
$0
$0
Fees [1]
$0
$0
$0
Intergovernmental Revenue
$65,633
$0
$65,633
Motor Vehicle in -Lieu
$69,523
$0
$69,523
Fines and Forfeitures
$37,248
$3,365
$40,613
Subtotal Annual Gen. Fund Revenues
$3,906,121
$557,552
$4,463,673
STREET FUNDS -Annual Street Funds Revenues
State Gas Tax $134,782 $12,176 $146,958
Subtotal Street Funds Revenues $134,782 $12,176 $146,958
TOTAL ANNUAL GENERAL AND STREET FUND REVENUES $4,610,631
"rev summary"
Source: City of Lodi and EPS.
[1] Adjusted for user fees and cost recovery amounts.
Prepared by EPS B-2 15539 fiscal model 1,x1s 511012006
Table B-3 DRAFT
City of Lodi New Annexation Fiscal Impact Analysis
Motor Vehicle in -Lieu Fee (MLVF) Revenue Replaced by Property Tax (2006$)
[1] From California State Controller, FY 2005-06 State of Califomia Shared Revenue Estimates.
[2] From California State Controller, Vehicle License Fee Adjustment Amounts, October 14, 2005.
[3] Amount used to calculate annual property tax in lieu of VLF revenue as shown on Table B-4.
Prepared by EPS B-3 15539 fiscal model 1. x1s 511012006
Citywide
FY 2005-06
Item
Formula
Total
Motor Vehicle in -Lieu Fee (MVLF) Revenue
Motor Vehicle in -Lieu Fee Revenue Multiplier [11
a
$8.70
Project Residents
b
7,995
Total MVLF Revenue
c =a *b
$69,523
Motor Vehicle In -Lieu Fee Revenue Replaced by Property Tax
Motor Vehicle in -Lieu Fee Revenue (Current State Statutes) [2]
d
$4,196,258
Less Motor Vehicle in -Lieu Fee Revenue [2]
e
$422,187
Total Citywide MVLF Revenue Replaced by Property Tax [3]
f=d-e
$3,774,071
TLF Rev"
Source: Senate Constitution Amendment 4 (SCA 4); Senate Bill 1096 as amended by Assembly Bill 2115;
California State Controller; City of Rancho Cordova; and EPS.
[1] From California State Controller, FY 2005-06 State of Califomia Shared Revenue Estimates.
[2] From California State Controller, Vehicle License Fee Adjustment Amounts, October 14, 2005.
[3] Amount used to calculate annual property tax in lieu of VLF revenue as shown on Table B-4.
Prepared by EPS B-3 15539 fiscal model 1. x1s 511012006
"prop_tax"
Source: State Controller's Office; and EPS.
(1] For assumptions and calculation of adjusted assessed value, see Table D-2.
[2] For assumptions and calculation of the estimated property tax allocation, refer to Table D-1.
[3) Total secured and unsecured assessed value for the City for 2005-2006, from State Controller's Office.
[4] Estimated impact of Senate Bill 1096 (SB 1096), as amended by Assembly Bill 2115 (AB 2115). Motor Vehicle in -Lieu Fee Revenue
assumption amount estimated in Table B-3.
Prepared by EPS B-4 15539 fiscal model I.xis &1012006
DFUFT
Table B-4
City of Lodi New Annexation Fiscal Impact Analysis
Estimated Annual Property Tax Revenues (2006$)
At Buildout
Land Use Assump.
Formula
Residential
Nonresidential
Total
Adjusted Assessed Value (2005$) [1]
a
$1,410,713,557
$80,126,509
$1,490,840,066
Property Tax (1 % of Assessed Value) 1.00%
b = a * 1.00%
$14,107,136
$801,265
$14,908,401
Estimated Property Tax Allocation [2]
Lodi General Fund 7.54%
c = b * 7.54%
$1,064,345
$60,453
$1,124,799
Other Agencies 92.46%
d = b * 92.46%
$13,042,790
$740,812
$13,783,602
Property Tax In -Lieu of MVLF Fee Revenue
Total Citywide Assessed Value [3]
J
$4,323,941,815
$4,323,941,815
$4,323,941,815
Total Assessed Value of Project
a
$1,410,713,557
$80,126,509
$1,490,840,066
Total Assessed Value
k=j+a
$5,734,655,372
$4,404,068,324
$5,814,781,881
Percent Change in AV
I klj - 1
32.63%
1.85%
34.48%
Property Tax In -Lieu of VLF [4] $3,774,071
m = 1 $3,774,071
$1,231,315
$69,937
$1,301,252
"prop_tax"
Source: State Controller's Office; and EPS.
(1] For assumptions and calculation of adjusted assessed value, see Table D-2.
[2] For assumptions and calculation of the estimated property tax allocation, refer to Table D-1.
[3) Total secured and unsecured assessed value for the City for 2005-2006, from State Controller's Office.
[4] Estimated impact of Senate Bill 1096 (SB 1096), as amended by Assembly Bill 2115 (AB 2115). Motor Vehicle in -Lieu Fee Revenue
assumption amount estimated in Table B-3.
Prepared by EPS B-4 15539 fiscal model I.xis &1012006
"sales-twc-sum"
Source: California State Board of Equalization, and EPS.
[1] Net of new resident market support.
[2] See Table D-5. Sales tax generated from unclassified, non -point-of-sale transactions are collected by the California State Board of
annually to jurisdictions in San Joaquin County. Lodi receives approximately 9.4% of total taxable countywide sales annually.
[3] See Table D-4. Based on the City's FY2005-06 budget, the City receives approximately $0.00194 of the $0.05 tax applied to each
dollar of taxable sales.
[4] Based on Senate Bill 1096 as amended by Assembly Bill 2115 which states 1/4 of the 1 percent sales tax revenue (0.25 percent) will
be exchanged for an equal dollar amount of property tax revenue.
Prepared by EPS B-5 15539 fiscal model 1.x1s 511012006
DM"
Table B-5
City of Lodi New Annexation Fiscal Impact Analysis
Estimated Annual Sales and Use Tax Revenues (2006$)
Source/
At BuIldout
Item
Assump.
Residential
Commercial
Total
Taxable Sales from Market Support and On -Site Retail
Taxable Sales from Market Support
Table B -SA
$13,881,477
$303,333
$14,184,810
Net Taxable Sales Captured from On -Site Retail Development [11
Table B -5B
$0
$46,163,038
$46,163,038
Total Taxable Sales from Market Support and On -Site Retail
$13,881,477
$46,466,371
$60,347,848
Annual Sales Tax Revenue
Bradley Burns Sales Tax Rate
0.7500%
$104,111
$348,498
Estimated Countywide and State Pool Sales Tax Factor [2]
0.0977%
$13,562
$45,397
Estimated Proposition 172 Sales Tax Factor [3]
0.0387%
$5.37
$17.98
Subtotal Estimated Local Sales Tax Rate
0.8864%
$123,047
$411,884
Less Property Tax in Lieu of Sales Tax Rate (SB 10961AB 2115)
-0.2500%
($34,704)
($116,166)
Total Annual Sales Tax Revenue
0.6364%
$88,343
$295,718
$384,061
Annual Property Tax In Lieu of Sales Tax (SB 1096/AB 2115) [4]
0.2500%
$34,704
$116,166
$150,870
"sales-twc-sum"
Source: California State Board of Equalization, and EPS.
[1] Net of new resident market support.
[2] See Table D-5. Sales tax generated from unclassified, non -point-of-sale transactions are collected by the California State Board of
annually to jurisdictions in San Joaquin County. Lodi receives approximately 9.4% of total taxable countywide sales annually.
[3] See Table D-4. Based on the City's FY2005-06 budget, the City receives approximately $0.00194 of the $0.05 tax applied to each
dollar of taxable sales.
[4] Based on Senate Bill 1096 as amended by Assembly Bill 2115 which states 1/4 of the 1 percent sales tax revenue (0.25 percent) will
be exchanged for an equal dollar amount of property tax revenue.
Prepared by EPS B-5 15539 fiscal model 1.x1s 511012006
Table B -5A
City of Lodi New Annexation Fiscal Impact Analysis
Estimated Annual Taxable Sales, Hybrid Market Support Method (2006$)
At Buildout
Item Assumption Residential Commercial Total
Annual Taxable Sales from Market Support
Taxable Sales from New Households
Average Annual Household Income [1]
Single -Family Residential
Medium -Density Residential
High -Density Residential
Taxable Retail Expenditures as a % of HH Inc. [2]
Single -Family Residential
Medium -Density Residential
High -Density Residential
Taxable Retail Expenditures per Household
Single -Family Residential
Medium -Density Residential
High -Density Residential
New Single -Family Residential Households
New Medium -Density Residential Households
New High -Density Residential Households
Taxable Sales from Now Households [3]
Tax. Sales from New Single -Family Res HH
Tax. Sales from New Medium -Density Res HH
Tax. Sales from New High -Density Res HH
Subtotal Taxable Sales from New Households
Est. Retail Capture in Lodi from New Res. [4]
Total Taxable Sales from New HH in Ceres
Taxable Sales from New Employmen
Average Daily Taxable Sales per New Empl.
Work Days per Year
Estimated Capture in Lodi from New Empl.
New Employees
Taxable Sales from New Employees [5]
Total Annual Taxable Sales from Market Support
$99,000
$78,000
$32,970
27%
27%
36%
20%
$7.00
240
50%
$26,436
$21,214
$11,924
1,692
695
833
$44,730,493
$44,730,493
$14,743,797
$14,743,797
$9,933,095
$9,933,095
$69,407,385
$69,407,385
$13,881,477 $13,881,477
1,444
25% of total $0 $303,333
$13,881,477 $303,333 $14,184,810
"sales -tax -a"
Source: U.S, Department of Labor, Bureau of Labor Statistics, and EPS.
[1] See Table D-3. Household income based on mortgage qualification guidelines.
[2] Derived from Bureau of Labor Statistics (2003) data.
[3] "Taxable Sales from New Households" is calculated by multiplying taxable retail expenditures per household by
the cumulative number of new households.
[4] Estimated capture rate by EPS based on Google Local searches for large format retailers, auto dealers, and
sit-down dining establishments.
[5] "Taxable Sales from New Employees" is calculated by multiplying daily sales per new employee by the number of
work days per year,the estimated capture of sales within Ceres, and the cumulative number of new employees.
Discounted 75% to avoid double- counting of employees who also are residents.
Prepared by EPS B-6 15539 fiscal model I.xls 511012006
Table B -5B
City of Lodi Now Annexation Fiscal Impact Analysis
Estimated Annual Taxable Sales, Adjusted Retail Space Method (2006$)
DFUFT
At Buildout
Item
Formula
Assump.
Residential Commercial
Total
Annual Taxable Sales from On -Site Retail Development
Total Square Feet Built
a
350,000
Annual Sales per Square Foot [1]
Commercial
b
$210
Taxable Retail Sales Factor [2]
Commercial
c
65%
Annual Taxable Sales per Sq. Ft. (Rounded)
Commercial
d=b*c
$140
Annual Taxable Sales From On -Site Retail Dev.
Commercial
e=a*d
$0 $49,000,000
$49,000,000
Subtotal Taxable Sales from On -Site Retail Dev.
$0 $49,000,000
$49,000,000
Market Support from Annexation Area Residential Dev. [3]
Total Taxable Market Support
f
$13,881,477 $303,333
$14,184,810
Percent of Tax. Market Support Spent On -Site [4]
9
20%
Taxable Market Support Spent On -Site
h=f*g
$2,776,295 $60,667
$2,836,962
Net Now Taxable Sales from On -Site Retail Dev.
i=e-h
$46,163,038
'aales_taN__b"
Source: Urban Land Institute and EPS.
[1 ] Sales per square foot figures shown are an average of shopping centers in the Western U.S. from Urban Land Institute, Dollars &
Cents of Shopping Centers 2004.
[2] This figure represents the percentage of total sales subject to sales tax. These percentages are based on prior EPS studies.
[3] Market support subtracted to avoid double -counting on-site retail sales tax revenue. See Table B -SA for detailed information.
[4] Only a portion of total household taxable spending (20% in this study) is estimated to occur in the 350,000 square feet.
Prepared by EPS B-7 15539 fiscal model I.xis 511012006
Planning Systems
Public Finance
Real Estate Economics
Regional Exonotnics
Land U.se Policy
APPENDIX C
EXPENDITURE -ESTIMATING TABLES
Table C-1 Expenditure -Estimating Procedure, City of Ceres
FY 2005-06 Adopted Budget ......................................................................... C-1
Table C-2 Estimated Annual Annexation Area Expenditures ................................... C-2
Table C-3 Park Expenditures Case Study ..................................................................... C-3
Table C-1
City of Lodi New Annexation Fiscal Impact Analysis
Expenditure -Estimating Procedure based on City of Lodi FY 2005-06 Budget (2006$)
Category
Estimating
Procedure
Table/
Reference
City of. Lodi
FY 2005-06
Adopted Exp.
Offsetting
Revenues [11
Adjusted Net
FY 2005-06
Expenditures
11112005
Population
or Persons
Served
FY 2005-06
Weighted
Avg. Cost
Adjustment
Factor
Cost Multiplier per
Resident Employee
GENERALFUND
Annual General Fund
Expenditures
City Attorney
Avg. Cost per Person Served
Table C-2
$400,820
$400,820
68,068
$5.89
1.00
$5-89
$2.94
City Manager
Avg. Cost per Person Served
Table C-2
$2,421,686
$2,421,686
68,068
$35.58
1.00
$35.58
$17.79
City Clerk
Avg. Cost per Person Served
Table C-2
$511,585
$511,585
68,068
$7.52
1.00
$7.52
$3.76
Finance
Avg. Cost per Person Served
Table C-2
$2,245,987
$2,245,987
68,068
$33.00
1.00
$33.00
$16.50
Community Events
Avg. Cost per Capita
Table C-2
$100,000
$100,000
62,467
$1.60
1.00
$1.60
$0.80
Police
Avg. Cost per Person Served
Table C-2
$13,006,961
($1,198,755)
$11,808,206
68,068
$173.48
1.00
$173.48
$86.74
Fire Dept.
Avg. Cost per Person Served
Table C-2
$8,098,576
($36,000)
$8,062,576
68,068
$118.45
1.00
$118.45
$59.22
Public Works
Avg. Cost per Person Served
Table C-2
$6,745,037
($931,095)
$5,813,942
68,068
$85.41
1.00
$85.41
$42.71
Community Center
Avg. Cost per Capita
Table C-2
$1,282,700
($697,800)
$584,900
62,467
$9.36
1.00
$9.36
$4.68
Non -Departmental
Avg. Cost per Person Served
Table C-2
$5,333,002
$5,333,002
68,068
$78.35
1.00
$78.35
$39.17
Parks & Recreation
Case Study
Table C-3
$3,678,018
($1,359,994)
$2,318,024
62,467
$65.00
1.00
$65.00
$32.50
Subtotal Annual General
Fund Exp.
$43,824,372
($4,223,644)
$39,600,728
$613.63
$613.63
$306.81
STREETFUNDS
Annual Street Fund
Expenditures (Non
General Fund)
Avg. Cost per Person Served
Table C-2
$5,545,036
($2,242,000)
$3,303,036
68,068
$48.53
1.00
$48.53
$24.26
TOTAL ANNUAL GENERAL AND STREET FUNDS
$49,369,408
($6,465,644)
$42,903,764
$662.16
$662.16
$331.08
"exp_procedures"
Source: City of Lodi FY 2005-06 Financial Plan and Budget, and EPS.
[11 Revenues are adjusted
by user fees and cost recovery amounts shown in the City's
FY 2005-06 Budget. These deductions in ongoing expenditures also are deducted from ongoing revenues,
as shown in Table B-1.
Prepared by EPS 15539 fiscal model I.xis 5/11/2006
DRAFT
Table C-2
City of Lodi New Annexation Fiscal Impact Analysis
Estimated Annual Expenditures (2006$)
Expenditure Category
Residential
At Buildout
Commercial
Total
GENERALFUND
Annual General Fund Expenditures
City Attorney
$47,076
$2,126
$49,202
City Manager
$284,425
$12,847
$297,273
City Clerk
$60,085
$2,714
$62,799
Finance
$263,790
$11,915
$275,705
Community Events
$12,798
$578
$13,376
Police
$1,386,866
$62,644
$1,449,510
Fire Dept.
$946,944
$42,773
$989,717
Public Works
$682,844
$30,844
$713,688
Community Center
$74,856
$3,381
$78,237
Non -Departmental
$626,358
$28,292
$654,650
Parks & Recreation
$519,645
$23,472
$543,117
Subtotal Annual General Fund Exp.
$4,905,687
$221,588
$5,127,275
STREET FUND
Annual Street Fund Expenditures (Non
General Fund) $387,939 $17,523 $405,463
TOTAL ANNUAL EXPENDITURES $5,293,626 $239,112 $5,532,738
"exp_sum
Source: EPS.
Prepared by EPS C-2 15539 fiscal model 1.x1s 511112006
Table C-3
City of Lodi New Annexation Fiscal Impact Analysis
Park Expenditures Case Study
Item
Source
Value
Population in Annexation Areas
Table A-4
a
7,995
Park Acres Required Per 1,000 Population
City of Lodi
b
5
Park Acres Required for Annexation Area
c = (a 1000) * b
39.97
Park Maintenance Cost per Acre (2006 $s) [1
City of Lodi
d
$13,000
Total Park Maintenance Costs in Annexation Area (2006 $s)
e c * d
$519,645
Park Maintenance Costs Per Capita in Annexation Area (2006 $s)
e / a
$65.00
r) `pad�_costs"
Source: City of Lodi and EPS
[1] Includes costs of maintaining developed parks. Does not include costs of maintaining open space, trail systems, or other
such public facilities.
Prepared by EPS 15539 fiscal model 1.xis 511112006
Econoff , fic
Planning Systems
Public Finance
Real Fstate Economics
Regional Economics
Land Use Policy
APPENDix D
SUPPORTING TABLES FOR REVENUE ESTIMATES
Table D-1 Estimate of Post -Annexation Property Tax Allocations ........................... D-1
Table D-2 New Assessed Valuation ............................................................................... D-2
Table D-3 Average Income Calculation for
Residential Housing Units ............................................................................ D-3
Table D-4 City of Ceres Proposition 172 Sales Tax Rate Calculation ........................ D-4
Table D-5 Indirect Sales Tax Allocation to Lodi ........................................................... D-5
Prepared by EPS 511012006 15539 fiscal model I.xis
DRAFT
Table D-1
City of Lodi New Annexation Fiscal Impact Analysis
Estimate of Post -Annexation Property Tax Allocations
Tax Rate Area (TRA)
Subject to Prop.
Property Tax
Distribution
Average TRA
Tax Sharing
Tax Exchange on Annexation
Item / Fund Title TRA 099-024
TRA 099-021
Distribution
Agreement
City of Lodi San Joaquin County
Agreement For Property Tax Allocation Upon Annexation
20.0% 80.0%
Subject to Property Tax Sharing Agreement
Woodbridge Rural Fire 18.1387%
18.5825%
18.3606%
18.3606%
3.6721% 14.6885%
County General 19.1296%
19.5965%
19.3631%
19.3631%
3.8726% 15.4904%
Subtotal, Subject to Tax Sharing 37.2683%
38.1790%
37.7237%
37.7237%
7.5447% 30.1789%
Unaffected by Property Tax Sharing Agreement
Road District No. 4 3.5514%
3.6382%
3.5948%
County Library 1.5430%
1.5807%
1.5619%
Lodi Unified Schools 24.3862%
24.9827%
24.6845%
tZJ S.J Delta Comm College 3.4329%
3.5169%
3.4749%
1�4 SJC Office of Education 1.2145%
1.2452%
1.2299%
SJC Flood Control 0.1505%
0.1542%
0.1524%
SJC Mosquito Abatement 0.6757%
0.6923%
0.6840%
Woodbridge Irrigation 1.5352%
-
0.7676%
ERAF 26.2423%
26.0108%
26.1266%
Subtotal, Unaffected by Tax Sharing 62.7317%
61.8210%
62.27640/6
Total 100.0000%
100.0000%
100.0000%
"tra"
Source: City of Lodi; San Joaquin County Auditor -Controller; and EPS.
Prepared by EPS 511012006 15539 fiscal model I.xis
Table D-2
City of Lodi New Annexation Fiscal Impact Analysis
New Assessed Valuation
Item
Assessed Value (2006$
Residential Assessed Value
Single -Family Residential
Medium -Density Residential
High -Density Residential
High -Density Residential
Total Residential Assessed Value
Nonresidential Assessed Value
Commercial
Office
Total Nonresidential Assessed Value
Total Assessed Value (2006$)
Adiusted Assessed Value (Ai3oreciated 2006$) [1*
Residential Assessed Value
Single -Family Residential
Medium -Density Residential
High -Density Residential
High -Density Residential
Total Residential Assessed Value
Nonresidential Assessed Value
Commercial
Office
Total Nonresidential Assessed Value
Total Nonresidential Assessed Value
Total Adjusted Assessed Value (inflated$)
Source: EPS.
[1 ] Assumes project build out occurs in FY2009-1 0.
DRAFT
At Buildout
Residential Commercial Total
$932,292,000
- $932,292,000
$292,595,000
- $292,595,000
$107,231,000
- $107,231,000
$23,550,000
- $23,550,000
$1,355,668,000
$1,355,668,000
- $49,000,000
$49,000,000
- $28,000,000
$28,000,000
- $77,000,000
$77,000,000
$1,355,668,000 $77,000,000
$1,432,668,000
$970,146,794
$970,146,794
$304,475,530
$304,475,530
$111,585,009
$111,585,009
$24,506,224
$24,506,224
$1,410,713,557
$1,410,713,557
- $50,989,596 $50,989,596
- $29,136,912 $29,136,912
- $80,126,509 $80,126,509
- $80,126,509 $80,126,509
$1,410,713,557 $80,126,509 $1,490,840,066
"new av'
Prepared by EPS D-2 511012006 15539 fiscal model 1.xls
DRAFT
Table D-3
City of Lodi New Annexation Fiscal Impact Analysis
Average Income Calculation for Residential Housing Units (2006$)
Item
Amount
Averaue Income Calculation for Sinale-Family Housing Units
Estimated Average Single -Family Home Value
$551,000
Total Annual Mortgage Payments [1]
$33,000
Approximate Household Income [2]
$99,000
Average Income Calculation for Medium Density Housing Units
Estimated Average Medium Density Home Value $421,000
Total Annual Mortgage Payments [1] $26,000
Approximate Household Income [2] $78,000
Average Income Calculation for High Density Housing Units
Estimated Average High Density Home Value $157,000
Total Annual Rent Payments [3] 10,990
Approximate Household Income [2] $32,970
"income-calc"
Source: EPS
[I] Based on a 6.5 percent, 30 year fixed rate mortgage and a 20 percent down payment.
[2] Assumes mortgage lending guidelines allow no more than 33% of income dedicated to payments.
[3] Assumes no for -sale units. Assumes a property cap rate of 7 percent.
Prepared by EPS D-3 511012006 15539 fiscal model 1.x1s
01 0 A
Table D-4
City of Lodi Now Annexation Fiscal Impact Analysis
City of Lodi Proposition 172 Sales Tax Rate Calculation
Item Amount
Estimated Sales Tax Revenues - City of Lodi FY 2005-06 $9,402,120
Estimated Actual Taxable Sales (1 % Sales Tax Rate) $940,212,000
Estimated Proposition 172 Public Safety Sales Tax Distribution - FY 2005-06 $364,000
Estimated City of Lodi Proposition 172 - Public Safety Sales Tax Rate 0.03871%
"taxable—sales"
Source: City of Lodi and EPS.
Prepared by EPS D-4 511012006 15539 fiscal model 1.x1s
Table D-5
City of Lodi New Annexation Fiscal Impact Analysis
Indirect Sales Tax Allocation to Lodi
Item Formula Value
2004 Taxable Sales [1]
City of Lodi Direct Allocation a $813,878,000
San Joaquin County Direct Allocation b $8,703,241,000
County Indirect Taxable Sales [2] c $850,287,000
Indirect Allocation to City, estimate d=c*alb $79,514,043
City Indirect Allocation as a Percent of Total e=dla 9.76977%
"indirect sales"
[1] Retail sales subject to sales and use tax.
[2] Taxable sales unallocated to specific local jurisdictions.
Prepared by EPS D-5 511012006 15539 fiscal model 1.x1s