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Cost of Huntfield to Taxpayers

Click for City's requirement to consider taxpayers' cost

Click for Huntfield's study of the taxpayers' cost Charles Town released this cost analysis, prepared by Huntfield, in response to a court subpoena 12/17/01.

Summary of Huntfield's study by P. Burke: All the following estimates are after Huntfield is fully built, but in today's costs.

SCHOOLS

Huntfield's analysis shows that schools will cost nine million dollars more to operate, each year, than what Huntfield residents and Huntfield businesses will pay in school taxes. They show Huntfield will pay taxes to the Schools of $4,255,403 and Huntfield students will cost the Schools $13,519,673 per year in operating expenses. This is a shortfall of nine million dollars per year just for school operations.

These school operating costs are based on an estimate of 1,877 students from Huntfield, a 27% increase over the students we have now.

Huntfield's cost analysis ignores the cost of building schools, new fire and police stations, new city hall, libraries, parks, etc. School buildings alone cost about $18,000 per seat, or $34,000,000. This $18,000 figure is based on state estimates of cost per square foot and square feet per student.

Furthermore Huntfield's summary does not show this low figure of $4 million in school taxes from Huntfield. They show nearly $13 million in school revenue, and we don't know where that money will come from (guess who?). They got the $13 million figure by assuming that federal money, state money, private money, business property taxes and other income will all go up in proportion to the number of new children arriving.

However other sources of money will NOT go up that much. Federal, state, and private money come from grants and formulas that will not necessarily go up in line with students.

Furthermore business property taxes will not go up as fast as children will arrive. We currently have a moderate amount of business and many retired people and childless couples. Huntfield expects to market to families with children. They expect the number of public school students to be 58% as large as the number of housing units in Huntfield: 1,877 students in 3,200 homes. They expect this average for the foreseeable future. The county now has only 40% as many public school students as housing units. Therefore there will be relatively more children needing tax support from relatively fewer childless families and businesses, when Huntfield is built.

Greenvest committed to pay for their impact on schools: "To offset its proportionate share of capital improvements and operating costs..." (Proffer)

This agreement parallels what Greenvest had already promised to the county, "These fees would represent the reasonable costs associated with capital improvements and annual education costs for a student at Hunt Field. We are committed to ascertaining these costs and paying these fees... we have hired a consultant to help us to ascertain the economic impact of the project..." (transcript of 5/8/01 hearing at the County Planning Commission, page 44).

Commissioner Hammer asked if Greenvest would accept binding arbitration if needed to set the fee. Greenvest answered, "I will say the answer is yes" (transcript pages 164-5).

JOBS & TRAFFIC

If you read the Huntfield cost analysis, you will see it does not cover the impact on County government, other than schools.

The study says a couple of times that Charles Town needs new jobs, and that Huntfield will have 555 jobs (but 8,275 residents). It gives no evidence whether their businesses will move out of downtown Charles Town, or be an addition to the tax base, but assumes they will all be additions.

Huntfield includes $4,800,000 of payments for water and sewer capital expenses. They do not show any actual or estimated cost of expanding water and sewer systems, so we cannot see what that shortfall will be.

When I was formatting the tables for the web, I noticed they assume every household at Huntfield will have two cars. Is that their idea of a new urban neighborhood? They assume that the first car at each single family house will average $20,000 in value, and the second car $15,000. All these cars at high values raise the amount of personal property tax that they say will be paid to the city and county.

They also say their houses will have high taxable values: single family houses averaging $200,000, and townhouses averaging $140,000.

Many Jefferson County and Charles Town citizens cannot afford to pay for Huntfield. Huntfield can well afford to pay for its own needs.

SOURCES:

The $4,255,403 figure on taxes comes from their tax tables A-5 through A-8, by adding up the lines titled "Total - Public Schools". The alternative figure for school revenue, $13,113,189, is in their table 1, and comes from their revenue tables B-1, B-3, B-5, B-7, B-8, by adding up the lines titled "Board of Education (BOE) ... Total". The expenditure figure of $13,519,673 is in their table 1, and comes from their expenditure tables B-2, B-4, B-6, by adding up the lines titled "Board of Education (BOE) ... Total".

LAW AVAILABLE

Senator Snyder of Jefferson County, sponsored a change in the annexation law last spring, so that in any group of lots, owners of a majority of the lots can ask a City Council to bring the whole group of lots into the City. Minority owners, city voters, and county government have no say.

Huntfield's petition to Charles Town comes from its two owners, Ahmad Abdul-Baki and Jeffrey Sneider. They own the two lots at Huntfield, totaling 1,000 acres, plus a 1.4 acre parcel, so they own three lots. Their petition for annexation also includes two more lots: a stretch of the Norfolk Southern Railway and a long ribbon down the middle of route 340, to make them contiguous to the present city boundary. Since they own three out of the five lots being annexed, the new law lets them ask for the City Council's approval. A comparison of the new and old versions of the law is at http://listener.homestead.com/files/annex.htm The old law used to require 100 people before the land could be annexed, and required a petition from a majority of those people. Now the population requirement is gone, and companies can sign the petition as if they were voters.

Click for Huntfield's study of the taxpayers' cost


City of Charles Town Resolution 01-06, Dated 10/1/01

A Resolution Recognizing Developer Contributions for Capital Needs as Part of the Consideration for Annexation of Territory into the Corporation of the City of Charles Town

WHEREAS, the City of Charles Town hereby recognizes that the Legislature has not granted municipalities the power by Ordinance to impose fees to offset the increased needs for services that annexation of new territories can impose upon the City and County resources; and

WHEREAS, the City of Charles Town recognizes that territories annexed into the City may have significant impacts upon the existing public facilities of the City and County and

WHEREAS, the City Council shall evaluate each territory requesting to be annexed to determine its impact on City and County resources; and

WHEREAS, the City Council shall make every effort to quantify the impact of each territory requesting annexation; and

WHEREAS, the City Council may, in reviewing any request to annex additional territory into the City, consider voluntary offers of contributions to offset the impact of the proposed annexation upon the existing City and County public facilities; and

NOW LET IT THEREFORE BE RESOLVED that the Mayor and the City Council of the City of Charles Town may recognize Contributions from those seeking to have property annexed into the City of Charles Town. West Virginia: and

LET IT FURTHER BE RESOLVED that the City Council authorizes the Finance Committee to conduct reviews and prepare recommendations to the City Council prior to the annexation of territory into the Corporation of the City of Charles Town, West Virginia. Adopted this 1st day of October, 2001

CITY OF CHARLES TOWN

J. Randolph Hilton, Mayor


Huntfield's Study of Fiscal Impact, November 2001

THE FISCAL IMPACT OF ANNEXING THE PROPOSED HUNT FIELD DEVELOPMENT TO THE CITY OF CHARLES TOWN, WEST VIRGINIA

Prepared for Greenvest, L.C. Vienna, Virginia

Prepared by

Dean D. Bellas President Urban Analytics, Inc. Alexandria, Virginia and

Stephen S. Fuller, Ph.D. Professor of Public Policy and Regional Development Center for Regional Analysis School of Public Policy George Mason University Fairfax, Virginia

November 2001

Summary of Findings

The proposed Hunt Field community will generate a net annual fiscal benefit to the budget of the City of Charles Town totaling $104,575 dollars reflecting revenues totaling $2,451,703 and expenditures of $2,347,128. On a dollar basis, Hunt Field will generate $1.04 in revenues for each $1 of added City expenditures. On the budget of the Jefferson County Board of Education, Hunt Field will generate a net annual fiscal burden of $406,484 based on estimated revenues totaling $13,113,189 and expenditures of $13,519,673. On a dollar basis, Hunt Field will generate $0.97 in revenues for each $1 of added City expenditures. The proposed Hunt Field community will generate an annual combined net fiscal burden of $301,909 dollars reflecting revenues totaling $15,564,892 and expenditures of $15,866,801. On a dollar basis, Hunt Field will generate $0.98 in revenues for each $1 of added City expenditures. In addition, Hunt Field will generate $22,791 annually in real estate and personal property taxes to the State of West Virginia, and $1,267,141 annually in real estate and personal property taxes to Jefferson County.

The small, negative annual dollar amount ($94 per residential unit) of this net fiscal burden indicates that the proposed Hunt Field community will not have a significant adverse effect on the combined budgets of the City and the Board of Education. When the net fiscal impact is $100 or less per unit, it can be argued that the proposed community (at full build-out and occupancy) is at a fiscal "break even" point. Slight changes in market conditions, such as the average value of housing units sold or the average value of automobiles in each household can affect the estimated amount of real estate and personal property taxes that will be received by the City. Slight differences in demographic assumptions, such as the actual number of school-age children per household compared to the projected number of school-age children can affect the estimated amount of education expenditures generated.

At full build-out and occupancy in 2022, the 3,200 residential units and 200,000 square feet of retail and office space will generate $2,451,703 (in 2000 dollars) or almost double the City s current operating revenues. The 200,000 square feet of retail and office space is estimated to support 555 new full-time-equivalent jobs in the City of Charles Town. The vitality of the City of Charles Town economy is determined by the extent that it attracts new investment that increases its capacity to grow. Payroll earnings from these local jobs at Hunt Field that are captured (spent) on local businesses in the City of Charles Town and in the County will support local firms and in turn generate additional jobs and payroll earnings throughout the City and the County.

In addition to generating $22,791 annually to the State and $1,267,141 annually to the County, a capital facilities contribution consisting of one 75-acre school site, and one 10-acre site for civic uses (such as churches, daycare, and police, fire & EMS) will be made to the City and the Board of Education. A capacity improvement capital cost fee of $750 per residential unit for water and $750 per residential unit for sewer for a total of $1,500 per unit will be made to the Public Service Commission (PSC) of West Virginia. This total contribution of $4,800,000 (paid in increments of $1,500 per unit as each unit is delivered to the market) will be used to improve existing water and sewer system treatment, storage, and pipeline facilities. This capacity improvement capital cost fee does not include an additional $1,120,000 ($350 per residential unit) in one-time service connection charges. The total value of these capital facilities contributions is estimated at $7.9 million. These fiscal impacts are summarized in Table 1.

Summary of the Fiscal Impact Analysis

The objective of this fiscal analysis is to measure the expenditure demand on the City of Charles Town and the City revenues that will be generated by the Hunt Field community. The fiscal impact of the Hunt Field community on the City of Charles Town reflects the increases in City revenues that will be generated by the new residents and real estate development associated with the community minus the expenditures required to provide public services to these new residents. These revenue and expenditure flows are different for each type of land use development in the City.

In order to accurately measure these distinct fiscal flows, a fiscal impact model has been developed that prorates the local revenues and expenditures by land use type including breakouts for different types of residential units and non-residential land uses. This model has been calibrated to reflect the level of services and costs of operations as well as the schedule of tax rates and revenue sources, as reflected in the City of Charles Towns 2000 Financial Statements with Supplemental Information, and the Jefferson County Board of Education 2000 Financial Statements and Supplementary Information.(1) This analysis reflects 2000 real dollar values, tax rates and levels of services and provides an accurate measurement of expenditures and revenues reflecting these rates. If tax rates or levels of services are changed in future years, then respective revenue and expenditure estimates would also change. Similarly, if assessments change at a rate exceeding the rate of inflation, then the value base for calculating revenues would also change. For the purposes of this analysis, all of these values are held constant and this provides an accurate portrayal of the fiscal impacts of Hunt Field as if it existed as part of the tax base in 2000.

In Table 2, a fiscal impact summary of residential land. uses proposed at Hunt field is presented. The net fiscal impact on the combined budgets of the City and the Board of Education of building 1,947 single family houses is ($258) per unit, ($193) per unit for 803 town houses, and ($116) per unit for 450 apartments. The net fiscal impact of building all 3,200 units is ($709,348) or ($222) per unit. Building all 3,200 units will generate $21,291 annually in real estate and personal property taxes to the State of West Virginia and $1,183,741 annually in real estate and personal property taxes to Jefferson County.

In Table 3, a fiscal impact summary of non-residential land uses proposed at Hunt Field is presented. The net fiscal impact on the combined budgets of the City and the Board of Education of 200,000 square feet of retail and office space is $407,439. In addition, building 200,000 square feet of retail and office space will generate $1,500 annually in real estate and personal property taxes to the State of West Virginia, and $83,000 annually in real estate and personal property taxes to Jefferson County.

Estimated Board of Education revenues generated by the proposed 200,000 square feet of retail and office uses consists of the school assessments portion of real estate tax revenue and personal property tax revenue.

These commercial uses generate tax revenues for the BOE but do not place an expenditure demand on the budget of the BOE. The 200,000 square feet of retail and office space is estimated to support 555 new full-time-equivalent jobs in the City of Charles Town. The vitality of the City of Charles Town economy is determined by the extent that it attracts new investment that increases its capacity to grow. Payroll earnings from these local jobs at Hunt Field that are captured (spent) on local businesses in the City of Charles Town and in the County will support local firms and in turn generate additional jobs and payroll earnings throughout the City and the County.

Real estate and personal property taxes at Hunt Field generate substantial revenues to the State, the County, the City, and the Board of Education. Revenues generated by real estate and personal property taxes at Hunt Field are shown in Table 4.

Table 4, Revenues Generated by Real Estate and Personal Property Taxes
Hunt Field, City of Charles Town, West Virginia

 

Residential

% Contribution

Non-Residential

% Contribution

Real Estate

 

 

 

 

State

$16,810

0.34

$1,200

0.34

County

$934,614

19.11

$66,720

19.11

City

$801,482

16.38

$57,216

16.38

Public Schools

$3.138.689

64.16

$224.064

64.16

Sub-Total

$4,891,594

100.00

$349,200

100.00

 

Personal Property

 

 

 

 

State

$4,481

0.34

$300

0.34

County

$249,126

19.11

$16,680

19.11

City

$213,639

16.38

$14,304

16.38

Public Schools

$836,634

64.16

$56.016

64.16

Sub-Total

$1,303,880

100.00

$87,300

100.00

Grand Total

$6,195,474

 

$436,500

 

Total real estate and personal property taxes generated by the proposed Hunt Field community to the State, the County, the City, and the Board of Education are $6,631,974 annually at full build-out and occupancy. Total annual real estate and personal property taxes generated annually at full build-out and occupancy are estimated to be $22,791 to the State, $1,267,140 to the County, $1,086,641 to the City, and $4,255,403 to the Board of Education. The underlying assumptions and calculations made to estimate real estate tax and personal property tax at Hunt Field are shown in Appendix Tables A-5 through A-8.

Hunt Field Development Program

The proposed Hunt Field community is planned for 1,947 single-family detached houses, 803 town houses, and 450 apartments for a total of 3,200 housing units. Non-residential land uses planned for Hunt Field include 100,000 square feet of retail space and 100,000 square feet of commercial office space. The development consists of 650 acres for single-family houses, 70 acres for town houses, 25 acres for apartments, 40 acres for retail and office space, 130 acres of natural and to be improved recreation areas, 10 acres for civic uses (such as churches, daycare, and police, fire & EMS services) and 75 acres for a school site to be donated to the City of Charles Town and the Board of Education for a total of 1,000 acres located one mile south of the City of Charles Town (prior to annexation). Planned on-site amenities include a 20-acre lake, a community recreation center with a 4,000-5,000 square foot community building and an Olympic-sized swimming pool.

In Table 5, residential and non-residential project specific data are presented. The estimated average assessed real estate value per unit for single-family houses is $200,000, $140,000 for town houses, and $65,000 for apartments. The apartments are projected to rent for $750 per month. The estimated market value of the retail space is $9,000,000 based on a total hard and soft construction cost of $90 per square foot and $11,000,000 for the office space at $110 per square foot. It is projected that 555 new full-time equivalent jobs can be supported by the development of 200,000 square feet of retail and office space at Hunt Field.

In Table 6, a comparison of household sizes and student generation factors for existing and proposed housing units at Hunt Field is presented. Single-family detached housing units are assumed to have an average occupancy rate of 2.75 people per unit with an average of 0.74 school-age children per unit. Town house units are assumed to have an average occupancy rate of 2.41 people per unit with an average of 0.42 school-age children per unit. Apartment units are assumed to have an average occupancy rate of 2.19 people per unit with an average of 0.22 school-age children per unit.

The student generation factors used in this analysis are higher for single-family houses and town houses and slightly lower for apartments than the County reported generation factors of 0.50 students per single-family house, 0.18 for town houses, and 0.67 for apartments. These adjusted student generation factors were used as it is assumed that families living in Hunt Field will have more school-age children living in single-family and town house units and fewer school-age children living in apartments than the average number of school-age children living in these types of units countywide. It is projected that, at full build-out and occupancy, 8,275 people and 1,877 school-age children will reside at Hunt Field. If the existing student generation factors were employed instead of the projected student generation factors, then 1,245 school-age children (or 632 fewer children) are estimated to reside at Hunt Field.

Table 6, Comparison of Household Sizes and Student Generation Factors
Existing versus Projected at Hunt Field, City of Charles Town, West Virginia

 

Average
Household Size Factor

Average
Student Generation Factor

 

Existing

Projected

Existing

Projected

Single Family

2.75

2.75

.50

.74

Town House

2.41

2.41

.18

.42

Apartments

2.19

2.19

.28

.22

Source:
Jefferson County Planning Commission for existing and projected average household size factor and for existing student generation factor.
Urban Analytics, Inc., for projected student generation factor.

The existing average household size factors by housing type and the existing student generation factors by housing type in the County were provided by the Jefferson County Planning Commission. The projected student generation factors were imputed based on an analysis of student generation factors used in neighboring northern Virginia communities with new residential construction similar to that proposed for Hunt Field. According to the U.S. Census, average household size in the City of Charles Town was 2.26 in 2000, and 2.95 for average family size. The higher average household size factors were used in this analysis as it is assumed that households living in Hunt Field will, on average, be larger than existing households living in the City.

The net fiscal impact on the combined budgets of the City and the Board of Education of building all 3,200 units and 200,000 square feet of office and retail space is ($301,909) or ($94) per residential unit. These net impacts were determined, in part, by using the projected student generation factors instead of the existing student generation factors reported by the County. When the net fiscal impact is $100 or less per unit, it can be argued that the proposed community (at full build-out and occupancy) is at a fiscal "break even" point. Slight changes in market conditions, such as the average value of housing units sold or the average value of automobiles in each household can affect the estimated amount of real estate and personal property taxes that will be received by the City. Slight differences in demographic assumptions, such as the actual number of school-age children per household compared to the projected number of school-age children can affect the estimated amount of education expenditures generated.

Calculating the estimated fiscal impact of Hunt Field at full build-out and occupancy utilizing the higher, projected student generation factor increases the net impact on the Board of Education budget by $265,525 ($420.13 per student times an additional 632 students). Thus, this fiscal impact analysis of the proposed Hunt Field community utilizes a more conservative approach to projecting the net impact of Hunt Field on the Board of Education s budget. In other words, had the existing student generation factors provided by the County been used, the fiscal impact of Hunt Field on the Board of Education budget would be $265,525 (or $82.98 per unit) less and the reported combined net burden would have decreased from ($301,909) to ($36,384).

Fiscal Impacts

The underlying assumptions and calculations made to estimate real estate tax and personal property tax at Hunt Field are shown in Appendix Tables A-5 through A-8. The annual fiscal flows associated with Hunt Field by land use type are presented in Appendix Tables B-1 through B-10. Based on an examination of all potential local revenue sources and associated City expenditures it is estimated that the proposed Hunt Field community, at full build-out and occupancy, will annually contribute a net fiscal surplus to the City. The proposed Hunt Field community will generate an annual combined net fiscal benefit of $104,575 dollars reflecting revenues totaling $2,451,703 and expenditures of $2,347,128. The small but positive annual dollar amount of this net fiscal benefit indicates that the proposed Hunt Field community will not have an adverse effect on the budget of the City.

It should be noted that the expenditure demands included in this analysis assign the same per unit (or per capita) costs to Hunt Field residents as for residents elsewhere in the City. This approach assumes that each person living and working in the City of Charles Town has access to the City s services and therefore potentially shares from the benefits of these services. This expenditure analysis is not based on the actual utilization of City services by specific individuals but rather reflects equal access to and availability of these services to all residents and people working in the City.

This analysis of fiscal revenues and expenditures is based on an analysis of average costs, not marginal costs. By using average costs in this analysis and not adjusting revenue sources (other than real estate and personal property) and expenditure demands to reflect the income structure of the future residents of Hunt Field or the actual utilization rate of specific services, the estimated revenues projected are likely to be conservative and the estimated demand for City services and programs are likely to be overstated.

City of Charles Town

A review of the City of Charles Town s Financial Statements with Supplemental Information for 2000 reveals that the City has benefited from a net fiscal surplus in 2000. In 2000, revenues from all non-BOE sources totaled $1,223,818 while expenditures totaled $1,156,292, resulting in a net fiscal surplus of $67,526 to the City. This reported surplus in the City of Charles Town is based on a review of the annual actual operating budget of the City; that is, the current level of services and operations net of capital projects (reserves). In 2000, the City received $51,084 in revenues to fund capital projects (reserves). Expenditures for capital projects (reserves) in the City (including special revenue capital projects) in 2000 totaled $1,895. The City reported an excess (surplus) of capital projects reserves over expenditures of $49,189 in 2000.

Jefferson County Board of Education

The Jefferson County Board of Education is a separate operating entity and its financial statements are reported separate from the financial statements of the City and the County. The Jefferson County Board of Education actual budget for 2000 reported revenues net of capital projects of $47,325,934 and expenditures of $49,668,838.(2) Based on an enrollment of 6,922 students in the Jefferson County school system,(3) the Jefferson County Board of Education received $6,837.03 per student in revenues and spent $7,175.21 per student in expenditures for the fiscal year ended 2000.

Enrollment in the Jefferson County public schools declined from 6,972 students in 1999 to 6,922 students in 2000, a decrease in enrollment of 50 students. According to the Jefferson County Sheriff s Settlement report for 2000, County contributions to the Board of Education (BOE) of $17,120,606 were offset by County disbursements of $16,936,242. This resulted in a net County contribution of $184,364 to the BOE. In 2000, federal, state and other contributions to the BOE of $30,205,328 were offset by non-County disbursements of $32,730,596. Thus, in 2000, non-County disbursements exceeded non-County contributions by $2,525,268.

In 1999, County contributions to the Board of Education (BOE) of $16,461,197 were offset by County disbursements of $16,261,634. This resulted in a net County contribution of $199,563 to the BOE. In 1999, federal, state and other contributions to the BOE of $28,985,079 were offset by non-County disbursements of $29,089,256. Thus, in 1999, non-County disbursements exceeded non-County contributions by $104,177. In summary, while net County contributions to the BOE were just under $200,000 in 1999 and again in 2000, non-County disbursements exceeded non-County contributions by slightly more than $104,000 in 1999 and by slightly more than $2.5 million in 2000.

This reported surplus in County contributions to the Jefferson County Board of Education and reported deficit in non-County contributions is based on a review of the annual operating budget of the Board of Education; that is, the current level of services and operations net of capital projects. In 2000, the BOE received $838,979 in revenues to fund capital projects. These revenues for capital projects came from the State of West Virginia. Expenditures for capital projects by the BOE in 2000 totaled $279,497. The BOE reported an excess (surplus) of capital projects revenues over expenditures of $559,482 in 2000. In 1999, the County received $90 in revenues to fund capital projects and incurred no expenditures for capital projects.

Fiscal Impact Phasing Schedule

An absorption schedule indicating the number and type of residential units and nonresidential square feet to be built and delivered to the market each year for twenty years is shown in Table 7. It is projected that 90 single family and town house units will be absorbed each year in years 1-3. In year 4, 243 units will be delivered including 150 apartment units. In years 5-6, 110 single family and town house units will be delivered each year. In year 7, 270 residential units including 150 apartments and 100,000 square feet of retail and office space will be delivered. In years 8-10, 140 single family and town house units will be absorbed each year. In year 11, 290 residential units including 150 apartments and 100,000 square feet of retail and office space will be delivered. During years 12 through 20, the remaining single family and town house units will be delivered.

A fiscal impact phasing schedule of net revenue surpluses (deficits) is shown in Table 8 based on the absorption schedule described and presented in Table 7. The proposed Hunt Field community will generate slight deficits on the budget of the City of Charles Town in years 1-6. In year 7, when 100,000 square feet of office and retail space is delivered, the combination of existing residential and non-residential uses occupied at Hunt Field will generate a net fiscal benefit of $49,373 to the City. From year 7 through full build-out and occupancy in year 20, the net fiscal benefit will fluctuate but Hunt Field will generate an annual positive net fiscal benefit.

This is an illustrative phasing schedule of net revenue surpluses (deficits) to the City of Charles Town over a twenty-year development period. It does not take into account the net fiscal burden generated by the Jefferson County Board of Education annual deficit. Estimated State of West Virginia and Jefferson County revenues generated by real estate and personal property taxes at the proposed Hunt Field community are not included in Table 8. The phasing (timing) of net revenue surpluses (deficits) is subject each year to actual market conditions, actual socioeconomic and demographic conditions, the actual number of residential starts, annual property assessments, and annual property tax rates. Additionally, the phasing schedule shown in Table 8 reflects constant 2000 dollars.

Capital Facilities Contribution

Mitigation of all or some of the identified impacts that a development will have on the City s short- and long-term capital improvement needs may be made either by a monetary contribution, the proffering of land or the proffering of completed facilities. The impact of the proposed Hunt Field development on the City of Charles Town s capital improvement needs is mitigated by a site contribution to the City and a monetary contribution (in the form of Water and Sewer Tariffs) towards the improvement of existing water and sewer facilities. The 10 acre site to be donated is to be used for civic uses, such as churches, police, fire and EMS facilities. The impact of the proposed Hunt Field development on the Jefferson County Board of Education s capital improvement needs is mitigated by a site contribution to the Board of Education. The site to be donated is 75 acres and is currently proposed as a site for a future high school.

The estimated value of the 75 acre school site contribution is $3,000,000, and $100,000 for the 10 acre civic-use site. A capacity improvement capital cost fee of $750 per residential unit for water and $750 per residential unit for sewer for a total of $1,500 per unit will be made to the Public Service Commission (PSC) of West Virginia. This total contribution of $4,800,000 (paid in increments of $1,~00 per unit as each unit is delivered to the market) will be used to improve existing water and sewer system treatment, storage, and pipeline facilities. This capacity improvement capital cost fee does not include an additional $1,120,000 ($350 per residential unit) in one-time service connection charges. The total value of these capital facilities contributions is estimated at $7.9 million.

The fiscal impact analysis of Hunt Field in this Study is based on the projected revenues and expenditures associated with the annual operating costs to City of Charles Town and the Jefferson County Board of Education of residential ~and non-residential uses. If these capital facilities contributions were not made to offset the impact to City of Charles Town and the Board of Education s capital improvement budgets, then these costs would be charged against future debt service by the City and the BOE and paid by real estate taxes to City of Charles Town. If this occurred, the fiscal burden of the residential uses planned for Hunt Field would increase, reducing their projected net fiscal revenue surplus. Therefore, in addition to the annual net fiscal burden of $301,909 to the City and the BOE, there is an additional positive benefit of $7,900,000 in contributed capital facilities.

Conclusion

It is estimated that the proposed Hunt Field community will generate an annual combined net fiscal burden on the budgets of the City and the BOE of $301,909 dollars reflecting revenues totaling $15,564,892 and expenditures of $15,866,801. On a dollar basis, Hunt Field will generate $0.98 in revenues for each $1 of added City expenditures. On the budget of the City of Charles Town, the proposed Hunt Field community will generate an annual net fiscal benefit of $104,575 dollars reflecting revenues totaling $2,451,703 and expenditures of $2,347,128. On a dollar basis, Hunt Field will generate $1.04 in revenues to the City of Charles Town for each $1 of added City expenditures.

In addition, Hunt Field will generate $22,791 annually in real estate and personal property taxes to the State of West Virginia, and $1,267,141 annually in real estate and personal property taxes to Jefferson County.

It is projected that, at full build-out and occupancy in 2022, 8,275 people and 1,877 school-age children will reside at Hunt Field. The 200,000 square feet of retail and office space is estimated to support 555 new full-time-equivalent jobs in the City of Charles Town. The vitality of the City of Charles Town economy is determined by the extent that it attracts new investment that increases its capacity to grow. Payroll earnings from these local jobs at Hunt Field that are captured (spent) on local businesses in the City of Charles Town and in the County will support local firms and in turn generate additional jobs and payroll earnings throughout the County and the City.

Appendix

Methodology

The process of calculating the revenue and expenditure flows generated by the residential and non-residential land uses at Hunt Field involved formulating a fiscal model that allocates the City s revenues and expenditures to their direct sources. The basis for this analysis was the following documents:

1. Jefferson County Comprehensive Annual Financial Report FYE June 30, 2000.

2. Jefferson County Comprehensive Annual Financial Report FYE June 30, 1999.

3. Jefferson County Sheriff s Settlement FYE June 30, 2000.

4. Jefferson County Sheriff s Settlement FYE June 30, 1999.

5. Jefferson County Board of Education Financial Statements and Supplementary Information FYE June 30, 2000.

6. Jefferson County Board of Education Financial and Compliance Report FYE June 30, 1999.

7. Jefferson County Assessor s Office 2000 Rate Sheet.

8. Jefferson County Assessor s Office 1999 Rate Sheet.

9. Jefferson County Levy Estimate FYE June 30, 2000.

10. Jefferson County Levy Estimate FYE June 30, 1999.

11. City of Charles Town Financial Statements with Supplemental Information FYE June 30, 2000.

12.City of Charles Town Levy Order and Rate Sheet FYE June 30, 1999.

13.City of Charles Town Budget FYE June 30, 2002.

14.City of Charles Town Rates. Rules and Regulations for Furnishing Water filed with The Public Service Commission of West Virginia, Issued October 22, 2001.

15. City of Charles Town Water System Facility Plan March 2001. Prepared by Chester Engineers, Gaithersburg, Maryland

16.State of West Virginia Final Computations Public School Support Program for the 1999-2000 Year for all Counties.

17.Final Report of the Comprehensive Educational Facilities Plan. 2000-2010 for Jefferson County Schools, March 1999, revised May 2000.

Additional sources consulted in the preparation of this fiscal impact study included interviews with the following County, City and BOE staff members:

1. Acting Superintendent of Public Schools, Jefferson County Board of Education.

2. Treasurer, Jefferson County Board of Education.

3. Assessor, Jefferson County.

4. Bookkeeper, Jefferson County.

5. Tax Analyst, Jefferson County Sheriff s Office.

6. Planning Director, Jefferson County Planning Commission.

7. County Engineer, Jefferson County Planning Commission.

8. City Manager, City of Charles Town

The audited revenue and expenditure totals by source and agency reported in this document were divided between those generated by (assignable to) residential and nonresidential uses based on a thorough examination of each revenue and expenditure item as reported in the above documents. Percent distributions (allocation factors) were developed and revenues and expenditures were distributed among residential and non-residential land uses according to these percent distributions. In addition, these percent distributions were compared to detailed examinations of comparable County budgets in neighboring Northern Virginia jurisdictions. Where appropriate, these percent distributions of fiscal revenues and expenditures were scaled (calibrated) to the demographic and economic characteristics of the City of Charles Town. The residential share of each category of City revenue and expenditures (that is, the portions generated by local residents as opposed to local business activities, or which provide services to local residents as distinguished from local businesses) was converted to a per capita equivalent to facilitate the calculation of fiscal flows associated with each residential land use analyzed. The non-residential share of each category of City expenditures was converted to a per job equivalent to facilitate the calculation of non-residential fiscal flows from commercial development. The percent distributions (allocation factors) for the County budget and the Board of Education budget are shown in Appendix Tables A-1 and A-2. The percent distributions (allocation factors) for the City budget are shown in Appendix Tables A-3 and A-4.

This approach assumes that each person living or working in the City of Charles Town has access to the City s services and therefore potentially shares from the benefits of these services. This cost or expenditure allocation is not based on the actual utilization of City services by specific individuals but rather reflects equal access to and availability of these services to all City residents and persons working in the City. The findings derived in this study are based on an analysis of average costs, not marginal costs. By using average costs and revenue multipliers in this analysis and not adjusting revenue sources (other than real estate and personal property) and expenditure demands to reflect the income structure of the future residents of Hunt Field or the actual utilization rate of specific services, the actual revenue forecast is likely to be conservative and the actual demand for City services and programs may be overstated. However, where specific costs and revenues could be assigned based on actual use or values, these were calculated based on available data. For example, the real estate tax revenues and the personal property tax revenues associated with residential and non-residential land uses at Hunt Field were calculated based on 60 percent of the estimated average value of these assets.

The methodology employed in the fiscal impact model is land-use and price-point sensitive. The model is also sensitive to persons per unit and student generation factors per unit. Additionally, the model is subject to project-specific socioeconomic conditions.

Footnotes

1. Additional supporting documents reviewed are listed in the Methodology section.

2. Net of a $191,012 disbursement made by Jefferson County. See Appendix Tables A-1 and A-2 for a listing of Board of Education revenues and expenditures by source.

3. Includes students from the five municipal corporations in Jefferson County.

Click for text tables 1-3, summary of fiscal impacts

Click for text table 5, assumptions on market values, population, & children

Click for text tables 7-8, 20-year schedule

Click for appendix Tables A-1 through A-4: multipliers for various types of revenue and expense, in present budgets.

Click for appendix Tables A-5 through A-8: taxes hoped for from Hunt Field

Click for appendix Tables B-1 through B-9: revenue & expense from Huntfield, if it came at the same rate as current budget (including slot machines, federal grants for the poor, etc!)

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