Arden Arcade Incorporation Study Comprehensive Fiscal AnalysisPublic Hearing

April 7, 2010Carlos Villarreal and Eric Nickell

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IntroductionPresentation Outline

• Introduction• Approach• Comprehensive Fiscal Analysis

–Boundary alternatives–Costs–Revenues–Net fiscal impact

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Introduction

• Key Dates and Time Frames– County cost and revenue data from FY2008-09 budget

actuals– All costs and revenues in constant 2009 dollars– Date of incorporation = July 1, 2011– Transition year = July 1, 2011 to June 30, 2012– Ten-year planning horizon for fiscal projection (through

FY2020-21)

• Methodology– Based on LAFCO guidelines– State Statue (Cortese-Knox-Hertzberg Act)

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Approach

• Focus on costs of providing services• Includes estimated revenue neutrality

calculations• Two boundary alternatives• Maintain current levels of service• Two Funds:

– General Fund– Road Fund

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Two Boundary Alternatives

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Land Use AssumptionsResidential

• Current trends–Arden Arcade is a relatively built out area–Most new construction is renovation or

replacement–Gradual increase in housing units

• Growth projection based on vacant parcel data available as of April 2009, from Sacramento County

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Land Use AssumptionsCommercial

•Current trends– Low demand for retail development in near

term– Gradual market recovery

•Growth projection based on vacant parcel data in Sacramento County– Retail: 177,000 SF to be developed– Office: 82,000 SF to be developed

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Providers of Municipal Services

Service Current Provider Future Provider

Animal Control Sacramento County City (contract with County)Electric and Gas Public and private utility companies No change

Fire and EMS Sacramento Metropolitan Fire District No changeFlood Control American River Flood Control District No change

General Government Sacramento County CityLibrary Sacramento County No change

Parks and Recreation

Arcade Creek Rec. and Park District; Arden Manor Rec. and Park District; Arden Park Rec. and Park District; Fulton-El Camino Rec. and Park District;

Mission Oaks Rec. and Park District

No change

Planning Sacramento County CityPolice Sacramento County City (contract with County)

Public Protection California State Highway Patrol City (contract with CHP)Public Works (incl. Road Maintenance) Sacramento County City (contract with County)

Solid Waste Collection Sacramento County No changeSolid Waste Disposal Sacramento County No changeTelecommunications Private utility companies No change

Water

Cal American Water Company; Carmichael Water District; City of Sacramento; Del Paso Manor Water

District; Sacramento County Water Agency; Sacramento Suburban Water District; Southern

California Water Company

No change

Wastewater Sacramento Area Sewer District; Sacramento Regional County Sanitation District

No change

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Costs Staffing & Other Costs (Excluding Police)

•Costs are based on maintaining the existing County service levels for new city

•Comparable city data used to develop: –Staffing levels–Salary levels–Benefit levels

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Comparable CitiesStaffing & Other Costs

•Comparable cities used in analysis:– Elk Grove– Folsom– Rancho Cordova– Roseville– Rocklin– Woodland– West Sacramento– Citrus Heights

– Davis– Auburn– Placerville

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Costs Law Enforcement Contract

• Costs maintain current level of service, per County data:– $14.0 million for Scenario 1 in Base Year– $14.5 million for Scenario 2 in Base Year

• Costs include sworn positions, non-sworn positions, vehicles, services and supplies.

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$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Roads

Police

Development ServicesCity Administration

(In $

1,00

0s)

CostsGeneral and Road Funds – Scenario 1

Other

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$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Roads

Police

Development ServicesCity Administration

(In $

1,00

0s)

CostsGeneral and Road Funds – Scenario 2

Other

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RevenuesGeneral and Road Funds• Property tax• Sales tax

– GIS maps / County development data– SBOE sales tax data by address– New sales tax based on assumption of $340 retail sales per square

foot, based on the Urban Land Institute’s Dollars and Cents of Shopping Centers 2008

• Vehicle license fees (AB 1602 and SB 301 apply)• Gas tax• Other

– Property transfer tax– Franchise fees– Business license fees– Fines and penalties– Interest

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$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

RevenuesGeneral and Road Funds – Scenario 1

Other Revenue

Vehicle License Fees

Sales Tax

Property Tax

(In $

1,00

0s)

Gas Tax

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$-

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

RevenuesGeneral and Road Funds – Scenario 2

Other Revenue

Vehicle License Fees

Sales Tax

Property Tax

(In $

1,00

0s)

Gas Tax

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(in $

1,00

0,00

0s)

Costs and Revenue SummaryAll Funds – Scenario 1

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Total Revenues

Total Costs

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(in $

1,00

0,00

0s)

Costs and Revenue SummaryAll Funds – Scenario 2

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Total Revenues

Total Costs

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Comprehensive Fiscal AnalysisEvaluating Results By Fund

• Conditions for determining feasibility:– Net revenues = greater than - 10% of total costs – Fund balance = greater than 10% of total revenues

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Net RevenueGeneral Fund – Scenario 1

-2%

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Net RevenueGeneral Fund – Scenario 2

-2%

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Net RevenueRoad Maintenance Fund – Scenario 1

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Net RevenueRoad Maintenance Fund – Scenario 2

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Fund BalanceGeneral Fund – Scenario 1

$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

(in $

1,00

0,00

0s)

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Fund BalanceGeneral Fund – Scenario 2

(in $

1,00

0,00

0s)

$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Fund BalanceRoad Fund – Scenario 1

(in $

1,00

0,00

0s)

$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Fund BalanceRoad Fund – Scenario 2

(in $

1,00

0,00

0s)

$-

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

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Questions, Answers, & Discussion