FoFC questions Keller Farm Development Fiscal Impact Assessment
September 7, 2012 by FofFC
Filed under Frederick, Keller Farm, Reading Material, Share your Opinion on Policy
The Fiscal Impact Analysis on this project vastly overestimates its potential revenue. After careful review, the city will not have a $500,000/year revenue source off the Keller Farm development, as presented by Ausherman Developers before the Planning Commission in June 2012. Instead the development will bring somewhere between a net loss of $43,000/year to a gain of $25,000/year. Getting the numbers right, and then weighing them together with the numerous other farm annexations for development in the works, is key to helping taxpayers know what we face down the road.
As citizens and residents of Frederick City and County we are concerned with what we know – and more importantly what we don’t know – about the costs associated with the Keller Farm development. The FIA prepared for the Keller Farm development shows the annexation to generate an annual net revenue to the City of about $500,000 upon build-out. This analysis is based upon sales of 500 single family homes priced at $410,000 each, 50 single family homes priced at $340,000 each and 200 town homes each priced at $285,000.
After review of the FIA for Keller we believe it provides to you an incorrect net revenue of $500,000/year, and believe instead the annexation would generate anywhere between a net loss of $43,000/year to a net gain of $25,000/year upon build out and before any monetary proffers are considered. [1]
We believe that the excessive net revenue presented in the FIA is attributable to the following three factors:
- the Keller FIA does not adjust the property’s residential “market rate” value to reflect its assessed taxable value in accordance with the County’s sales to assessed value ratio of .906[2];
- on the expenditure side, the Keller FIA does not include any general fund debt service costs (Keller, Exhibit 8). The City’s 2013 budget shows the residential share of its General Fund debt service to be approximately $195 per housing unit; and
- the Keller FIA includes a token amount of $6.44 as the operating revenue contribution for each of its residential units for the City’s future capital outlays (Keller Exhibit 8). A review of the City’s 2013-2018 CIP indicates the average residential share of pay-go funds to support the General Fund capital projects is about $200 (excluding the Carroll Creek project).
Throughout the public meetings and hearings there has been discussion of the impacts on infrastructure, principally schools and roads. What we haven’t heard – or seen in writing - is the cost to mitigate those impacts and who will pay. It seems fair and prudent to clarify to citizens the best assessment of costs to mitigate impacts - and who will pay for what - before making the commitment to spend the money, especially in light of the potential losses or minimal annual gains off this project development.
