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Fiscal Impact Analysis of Proposed Residential Development in Elgin, Illinois
Client: Ryland Homes
Ryland Homes retained Gruen Gruen + Associates (GG+A) to estimate the net fiscal impact to the City of Elgin General Fund of a proposed 75-unit single-family unit project located in Elgin (IL). GGA also estimated the fiscal impact on Illinois School District U-46 induced by the proposed home development.To evaluate the net fiscal impact on the City of Elgin, we estimated the annual revenue likely to be generated for the City from the project at build-out. We estimated municipal expenditures likely to be induced by the project at build-out. We then compared the projected annual operating costs and the annual revenues in order to estimate the net fiscal impact associated with the proposed project at build-out.
The fiscal impact study is based on an analysis of the fiscal year 2004 Budget and interviews with representatives of the City, including the Assistant Finance Director, and Assistant City Manager. Analysis of the budget for Elgin and interviews with municipal staff and other governmental representatives of affected service providers provided information and insight necessary to develop formulas to estimate the demand for municipal services from the residents and businesses of the proposed project and the costs to providing services to the new residents and businesses. For categories such as property taxes, and sales taxes that can be attributed to spending patterns, GG+A drew on specific characteristics of the proposed project such as housing values in making the cost or revenue estimate. Where the average costs and revenues to be generated by new residents are expected to be similar to those generated by existing residents such as licenses and permits, such items are estimated on an average per capita or per household basis. General Fund revenues estimated include property tax, sales tax, intergovernmental taxes, franchise fees, telecommunications tax, and fines. General Fund expenditures estimated include public safety, public works, general government, and sanitation.
The study concluded the proposed development would produce long-terms fiscal benefits to the City of Elgin. In approving the proposed development, the City of Elgin cited the importance of the fiscal study.