AGA fiscal impact studies identify the recurring net annual effect resulting from real estate development on the operating budget of the city or county agency responsible for providing those public services (police, fire, community services, etc.) likely to be demanded by project activities. A specialized form of cost-benefit analysis, fiscal impact studies determine if development and occupancy of real estate pursuant to a proposed project or land use policy represents a net benefit or burden for the operating service structure of the affected agency. Fiscal impact studies are not strictly limited to the effects on city or county governments but increasingly are being required to address the effects on other public service agencies (school districts, library districts, flood control districts, etc.).

AGA's analysis of fiscal impact involves a detailed review of the current year operating budget of the affected agency in order to identify relevant operating revenue and expense factors and the fixed and variable costs dictated by the delivery structure of the agency's service scope. Our fiscal impact studies often involve considerable contact and communication with representatives of the affected agency to properly identify incremental revenue and cost components. Proper characterization of the agency's fiscal service structure requires close scrutiny of operating practices not generally disclosed in normal budget reporting detail.

In most instances, our fiscal impact studies rely on a per acre increment approach rather than per capita multipliers in order to distinguish among the many forms of land use activity that drive fiscal revenue and cost components. This approach is more accurate in determining how different types and intensities of land use impact the service delivery structure of an affected city or agency. Fiscal analysis of urban in-fill projects is usually described in terms of per square foot increment by distinct land use activity since the impact of such projects is more affected by the intensity of development than the site's scale.

AGA's baseline analysis of fiscal effect reflects a static model that identifies the recurring annual effect at buildout. A more dynamic form of analysis is also provided whereby the incremental and cumulative effect of a proposed project is identified over a prescribed phasing period defined by an independent market analysis of the project concept. In all instances the fiscal effect of a real estate project or policy is described per increment unit of development (per acre or per square foot) and by distinct land use activity. This level of reporting is necessary to demonstrate how individual components of the overall development program contribute to projected fiscal performance. This detailed level of reporting also permits AGA to test alternative project scenarios in a cost-effective manner.

AGA strives to maintain current understanding of legislative events and local funding issues throughout the State of California that can significantly affect the net impact of real estate development on the service delivery structure of affected public agencies. All fiscal impact studies reflect significant legislative and tax appropriation issues affecting the local jurisdiction in which a prospective project or policy measure is being evaluated.

Clients who rely on our fiscal impact studies include private developers and public agencies alike. Some of the government agencies that have utilized our services to evaluate the merits of proposed land use and economic development policies include the Cities of Mission Viejo, San Juan Capistrano, Irvine, Arcadia, Big Bear Lake, along with Kern and Ventura Counties. Private development interests that have relied on our fiscal impact approach include Rancho Mission Viejo, Tejon Ranch, Santa Margarita Company, Triquest Development, Rose Hills Company, Pohl-Brown Associates, Polygon Homes, Greystone Homes, Instorage, ICI Development, Majestic Realty, and many others.

 

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