Bastrop, Texas
Using fiscal analysis for community education, development planning and budgeting.
Project objective
Use fiscal analysis to reinforce fiscal sustainability as a priority outcome for the city and guide community-wide conversations and policy decisions on growth, development and budgeting.
1.
FROM APPRAISED VALUE TO REVENUE PER ACRE
The first step we always start with is to explain the difference between appraised value and revenue per acre. Here is what the revenue per acre mapping looks like for Bastrop:
Revenue per acre
When we map appraised value, bigger lots tend to have a higher value while smaller lots have a lower value. When we take the property tax levy revenue for a property and divide it by the area of the parcel, we get the actual amount of revenue the city collects per acre of land. This map shows the revenue per acre for each parcel in Bastrop.
Fiscal productivity of different development patterns
Certain lot and development patterns routinely produce more revenue per acre than others. In this view from Bastrop’s map, you can see the revenue production of a culdesac residential development in the foreground compared to the much higher production from the small lot, multi-story pattern in the city’s core downtown (in the background at the top center of this map).
2.
FACTORING IN COSTS
Then, we factor in the city’s budgeted costs along with projected service costs and unfunded infrastructure liabilities to get a clearer picture of their long-term fiscal situation.
Revenue minus current budget →
When cities budget, they set costs to match the revenue they expect to come in that year. When we allocate the costs down to the parcel level though, we can see which parcels are revenue positive, and which ones cost more to serve than they generate in revenue. We present this information two ways: a net revenue map that shows the net (revenue minus costs) for the parcels, and an ROI (return on investment) map, which shows the amount the city gets back in property tax revenue for each dollar it spends on services. This map shows the ROI map for Bastrop.
Unfunded liabilities →
Bastrop’s unfunded liabilities (projected general fund services and unfunded street replacement costs) were approximately $144M, which we spread out over 20 years. When we distributed the $7.2 M annual funding gap across the parcels to show the projected cost (or what we sometimes call the “true cost”) to serve development, some parcels and patterns continue to operate at a gain even with the additional costs. These are reflected in green on the ROI map. Note how many of the parcels that were green in the first map turn red.
This process and these two maps together were used to help city leaders think about how the development they build today impacts the future fiscal health of the city.
3.
PROJECTING DEVELOPMENT SCENARIOS
Once we have a baseline of how current development patterns are performing and what the city’s funding gap is, we can explore potential scenarios and solutions to see how they impact the city’s fiscal health.
Projecting future buildout
Our next step in Bastrop involved using context information to project how things might look if the city built out according to its future land use plan. The scenario shown in this map assumed that Bastrop made up its $144M gap by 2040 and was able to go forward from there without a deficit. In this scenario, the annual gap was reduced from $7.2M to $4.5M.
This information was presented to City Council, where the discussion then shifted into exploring opportunities to close the remaining gap. These include a mix of land use and growth management policy amendments, updating the city’s zoning and development ordinances, and modifying street and infrastructure design standards.
Here’s what this looks like with each step layered on top of one another:
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4.
ANALYSIS
Once the modeling is done, we can explore how different development patterns perform and use this data to inform land use, zoning, infrastructure and investment decisions.
Revenue/acre by lot size and structural value (residential and commercial)
Like many cities, Bastrop was asking the question “what home value is enough to pay for itself?” Charts like those shown here help us communicate why revenue per acre is a more useful metric for cities to think about, and how this number changes for different lot and structural value combinations. For both residential and commercial properties, we see the same trend: value per acre is highest for the smallest properties (left of chart), and trends down as the property size goes up.
This information was used to communicate the value of more dense, small scale development, especially in the context of maximizing the return on taxpayer investment. The bigger the lot, the lower this return is.
Performance by land use code and zoning districts
Data from the models was also reviewed to assess how different land use and zoning districts perform with the current budget and with projected/unfunded service costs and infrastructure liabilities. Tables like the one shown here helped explore how the different land use and zoning districts in Bastrop performed for the current budget (labeled as scenario A) and projected costs (scenario B).
5.
KEY OUTCOMES
Exploring the math, maps and money helps communities make more informed decisions and build transparency and trust with residents and developers.
To close the city’s funding gap and increase taxpayer ROI, we encouraged the city to invest in improving infrastructure in older areas with small lots that have the potential to generate much more revenue per acre, and to amend development policies to encourage more of the high ROI patterns and less of the patterns that are losing money for the city and its taxpayers.
The information is also being used to guide development of the city’s new zoning ordinance and evaluate the fiscal impact of proposed development projects.
“Verdunity’s modeling will help us make good decisions instead of good-ol’-boy decisions.”
Client contact information
Lynda Humble, City Manager
lhumble@cityofbastrop.org