Summary
This analysis reflects the projected cash flow to the city. The forecast reveals annual net surpluses throughout the majority of the analysis periods. It is important to note that the citywide analysis is based on maintaining existing levels of service as defined by the FY2007 Budget. If the city is not be able to capture the office sector employment projected or if the residential base is greater than expected, there will be a reduced surplus or possibly net deficits.
Capital costs and employment are the major drivers of deficits and surpluses. If an area has a large residential base and a small employment base then it will most likely incur deficits due to demand for services by the residential component and a lack of income tax revenue from the employment base to cover this demand. The office sector will generate the most income tax revenue of the three sectors considered; the other two components are industrial (second highest) and retail (last). Uses can have a profound effect on creating surplus in a zone, and the cost to serve the retail sector alone with police and other services outweighs income taxes generated from this sector due to lower-wage service jobs. Target areas with a high proportion of retail jobs relative to the other two employment sectors will generate net deficits. Retail uses, however, should be viewed as a quality of life factor that surpasses defined geographies for fiscal analysis.
The fiscal study assumes that certain capital costs will be debt financed. This assumption enables policy makers and city staff to discuss financing options and trade-offs regarding “pay-as-you-go” versus debt financing as it relates to operating and capital needs. For instance, the timing and location of population increases will trigger certain capital facilities (such as parks) to be built at certain times. This creates the need to pay all the development costs for the parks at the time of construction and to debt finance the acquisition costs for community parks as necessary. Net deficits are larger in the first half of the analysis period for the Trend Scenario primarily due to the development cost incurred by the Southwest Zone for park facilities, the compounding nature of debt service payments for growth-related capital improvements, and a lack of employment to cover the costs. This same effect is not as drastic in the Mid-Range Scenario because the increase in income tax revenue from more employees helps to offset these capital improvement costs.
Transportation improvement projects represent the largest capital expense over the development periods for the scenarios. The projected addition of over 40,000 more employees will generate higher income tax revenue to help offset the major expenditures for road improvements.
Police, Street Maintenance, and Parks represent the largest growth-related operating expenses for the city. Economic Development is the fourth largest growth-related operating expense; however, this category is projected using jobs (as opposed to residential population) because it is directly related to the city’s ability to attract new businesses.
Conclusions
The following major conclusions can be drawn from the fiscal analysis:
- If the city is successful in its efforts to increase its presence as a regional employment center, the present revenue structure will be sufficient to provide current levels of service to new development.
- New growth generates net surpluses to the operating budget in the City of Dublin. This is because the city’s revenue structure is heavily reliant on income tax and the city is fortunate to have a high employee to resident ratio. This is important in Ohio because most municipal revenue is derived from income tax rather than property tax.
- The current city population and employment base generates revenue that exceeds costs in the current budget. This surplus generated by the city’s existing development base is due to economies of scale that exist with current infrastructure as well as staffing capacity. Expansion into areas outside the city’s present built environment creates the need to expand infrastructure and potentially to hire additional staff.
- Road construction is the primary source of all expenses generated by the city. It amounts to 30 percent for the Mid-Range Scenario (including both operating and capital costs). Many of the same road improvements are identified and projected under both scenarios in the 2007 analysis, but have different cost implications. Development according to the Land Use Plan will generate more employment, population, and housing units in addition to more vehicle trips per year due to increased employment, resulting in increased economies of scale to fund the improvements.
- The city will benefit by encouraging higher density residential and mixed use development in targeted planning areas. The Land Use Plan places greater emphasis on alternative housing units, as well as mixed use and clustered residential development patterns that will enable the city to lower residential road frontages required for new development. The lower road frontage means the city will have less street surface to maintain despite having a higher population and more housing units.
Summary
This analysis reflects the projected cash flow to the city. The forecast reveals annual net surpluses throughout the majority of the analysis periods. It is important to note that the citywide analysis is based on maintaining existing levels of service as defined by the FY2007 Budget. If the city is not be able to capture the office sector employment projected or if the residential base is greater than expected, there will be a reduced surplus or possibly net deficits.
Capital costs and employment are the major drivers of deficits and surpluses. If an area has a large residential base and a small employment base then it will most likely incur deficits due to demand for services by the residential component and a lack of income tax revenue from the employment base to cover this demand. The office sector will generate the most income tax revenue of the three sectors considered; the other two components are industrial (second highest) and retail (last). Uses can have a profound effect on creating surplus in a zone, and the cost to serve the retail sector alone with police and other services outweighs income taxes generated from this sector due to lower-wage service jobs. Target areas with a high proportion of retail jobs relative to the other two employment sectors will generate net deficits. Retail uses, however, should be viewed as a quality of life factor that surpasses defined geographies for fiscal analysis.
The fiscal study assumes that certain capital costs will be debt financed. This assumption enables policy makers and city staff to discuss financing options and trade-offs regarding “pay-as-you-go” versus debt financing as it relates to operating and capital needs. For instance, the timing and location of population increases will trigger certain capital facilities (such as parks) to be built at certain times. This creates the need to pay all the development costs for the parks at the time of construction and to debt finance the acquisition costs for community parks as necessary. Net deficits are larger in the first half of the analysis period for the Trend Scenario primarily due to the development cost incurred by the Southwest Zone for park facilities, the compounding nature of debt service payments for growth-related capital improvements, and a lack of employment to cover the costs. This same effect is not as drastic in the Mid-Range Scenario because the increase in income tax revenue from more employees helps to offset these capital improvement costs.
Transportation improvement projects represent the largest capital expense over the development periods for the scenarios. The projected addition of over 40,000 more employees will generate higher income tax revenue to help offset the major expenditures for road improvements.
Police, Street Maintenance, and Parks represent the largest growth-related operating expenses for the city. Economic Development is the fourth largest growth-related operating expense; however, this category is projected using jobs (as opposed to residential population) because it is directly related to the city’s ability to attract new businesses.
Conclusions
The following major conclusions can be drawn from the fiscal analysis:
- If the city is successful in its efforts to increase its presence as a regional employment center, the present revenue structure will be sufficient to provide current levels of service to new development.
- New growth generates net surpluses to the operating budget in the City of Dublin. This is because the city’s revenue structure is heavily reliant on income tax and the city is fortunate to have a high employee to resident ratio. This is important in Ohio because most municipal revenue is derived from income tax rather than property tax.
- The current city population and employment base generates revenue that exceeds costs in the current budget. This surplus generated by the city’s existing development base is due to economies of scale that exist with current infrastructure as well as staffing capacity. Expansion into areas outside the city’s present built environment creates the need to expand infrastructure and potentially to hire additional staff.
- Road construction is the primary source of all expenses generated by the city. It amounts to 30 percent for the Mid-Range Scenario (including both operating and capital costs). Many of the same road improvements are identified and projected under both scenarios in the 2007 analysis, but have different cost implications. Development according to the Land Use Plan will generate more employment, population, and housing units in addition to more vehicle trips per year due to increased employment, resulting in increased economies of scale to fund the improvements.
- The city will benefit by encouraging higher density residential and mixed use development in targeted planning areas. The Land Use Plan places greater emphasis on alternative housing units, as well as mixed use and clustered residential development patterns that will enable the city to lower residential road frontages required for new development. The lower road frontage means the city will have less street surface to maintain despite having a higher population and more housing units.
Community Plan
