AgdaPkt 2021.03.22 Study Session

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3.A. - Page 2 of 14 proposals. The study sessions are intended to provide background information for City Council discussion and consideration; they are not considerations of specific development proposals. The City entered into an agreement with Economic Planning Systems (EPS) in July 2020 to conduct a Citywide fiscal analysis of different land use types. The analysis provides a high-level comparison of the fiscal implications generated by new development, broken down by land use type, on the City's General Fund. The General Fund provides core City services such as public safety, library, parks recreation and community services, and City administration. The City also provides water and wastewater services; operating and capital costs for those enterprises are funded through charges to ratepayers and are not funded by the General Fund. Unlike an economic analysis, which would look more broadly at the impact of land development on the local economy including, for example, how land development patterns affect retail or transportation feasibility, this analysis examines the impact of land development on the City's budget, and the benefits of property and sales tax revenue in relation to City service costs. The analysis considers both costs and revenues to identify the net impact of each land use category under consideration, specifically Residential (Single -Family and Multi -Family) and Non -Residential (Office, Industrial/Warehouse and Retail). The result of the analysis is a net per unit (residential unit or per square foot) fiscal impact calculation for each land use category. For residential land uses, the net fiscal impact deducts the total per unit cost of providing City services to a particular land use from the per unit revenue that it generates On the cost side of the equation, the analysis evaluated potential expenditures for the City (e.g. Police, Fire, water, etc.) based on the approved General Fund budget for each category. In particular, the analysis defines a relevant service population for each City service category and estimates budgetary impacts based on assumptions related to fixed and variable costs. The analysis assumes that existing service levels, cost structures and management procedures are generally representative of long-term trends. The revenue side of the equation considers the unique tax generating components of each land use category, such as typical assessed property values, sales tax generation factors and other considerations such as the fiscal impacts from COVID-19. A detailed analysis for revenue generators such as property, sales and hotel taxes, is also included. The intent of the Study Session is to provide an overview of the analysis conducted, as well as the baseline assumptions that were used to determine the final outputs for each land use type. Use and Applicability The high level analysis and its findings are intended to be used for informational purposes only. It is intended to be a 'snapshot' of the impacts of these land uses on the City's budget and to help identify the costs and revenues associated, generally, which each land use type studied. Actual fiscal impacts can depend on a variety of variable factors including market and business cycle conditions, changes in local, state or federal funding and other economic and demographic trends. Decision -makers can use this analysis as a reference to better understand the fiscal implications of land use types to support overall analysis when considering mostly future General Plan, Zoning Ordinance and Precise Plan land use changes. The case studies that will be shown in the presentation are provided to give a general idea of the impact of these land use types. New development can often incur secondary impacts that cannot easily Page 2 of 8 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org