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2011-02-21_Agenda Packet--Dossier de l'ordre du jour�" tLl�- City of Saint John Common Council Meeting Monday, February 21, 2011 Committee of the Whole Open Session 1. Call to Order — Prayer 5:00 p.m. Council Chamber 1.1 Heritage Awards 2011 1.2 a,b,c) Fiscal Impact Analysis Work to Support P1anSJ Growth Strategy Committee of the Whole Closed Session 1. Call to Order 6:15 p.m. 8 "' Floor Boardroom City Hall 1.1 Land Matter 10.2(4)(d) 1.2 Nominating Committee 10.2(4)(b) 1.3 Personal Information 10.2(4)(b) 1.4 Personal Information 10.2(4)(b) 2 c = C February 18, 2011 His Worship Mayor Ivan Court and Members of Common Council Your Worship and Councillors: Re: 2011 Heritage Awards The Heritage Development Board is pleased to request the assistance of His Worship and members of Common Council to present the 2011 Heritage Awards in the Council Chambers on Heritage Day, Monday February 21, 2011 at 5:00pm. The Board looks forward to celebrating the achievements of property owners and artisans who have demonstrated excellence in heritage conservation over the past year. We are pleased to invite you to attend a reception in the Ludlow Room on the 8`h floor at 4:00pm, prior to the awards presentation in the Council Chambers. We hope you will have the opportunity to join us to personally congratulate each of our award recipients. On Monday February 21, 2011, we are looking forward to recognizing with the assistance of Council, the achievements and dedication of these individuals who have completed exemplary heritage conservation projects over the past year. Sincerely, Leona Laracey, Chair Heritage Development Board n&4 r SAINT JOHN P.O. Box 1971 Saint John, NB Canada E2L 4L1 I www.saintjohn_ca I C.P. 1971 Saint John, N. -B. Canada E2L 4L1 r-- -ter 3 2 HE AWARDS + A � 1 M EI:tITAG E � Jill 4 � �II 2 1!tV All, a _ � r HERITAGE DEVELOPMENT BOARD DONNIE SNOOK -- COUNCILLOR LEONA LARACEY -- CHAIR COLW WALDSCHUTZ --VICE CHAIR RICHARD GRADON GRANT HECKMAN HEATHER URQUHART ALEX PESOLD ERITA d E 2 011 _ tV Ail 2011 HERITAGE AWARDS PRESENTED BY: CITY OF SAINT JOHN COMMON COUNCIL AND THE HERITAGE DEVELOPMENT BOARD n LJ P --� NO 0 Sel u 5 1 � *lm - . r. � :yam•' -� i i. � .. ` � !� �` _. �i 'LA'S E q '0 , I MAL -4, , -A 1: -- worrA"ll 9 Die, y. 0 NO -_ - r .S U r n'�i t ; �� it �' � Ir an � �► n it rt, m 111 �'IDr Fka_ � t I � yI Lill m 7z ;WIIL-�L�e OWNER: MCUALE & ASSOCIaz Tyr ;W L-L \e . 1 . 7)APTIVF I- 2E*4USE 8c HEHABILITATia 17 • 0 R 17 -I I I I i I r' 9 m • 71 lot 0 O1VRY HPSTORATIC A Aph : A—. -t lIm A r.-1:Z- %Idr.- 1N■ r-��: !: C•0, British Military Ordnance Building Since 1842 Saint John, New Brunswick _ �7ir lW f -W to a =� I {Mull X't4'LLfI mcnb.HI.M.B. -4 P r — Ordmnce Building u '101 L_ rill WTMM �111� fil I 111111 I.-J =TO-11,111 ll�!ll ff'', Ill 11 d "`akn r ERITAG E \. 2PI DS �' f1 "ul�aca" COMMERCIAL SIGNAGE 4a W, r lu. ir nn t�l , 1.1 •-_ OWNER: BOURBON QUARTER I MAGNOLIA CAFE CONTRACTOR: .10E RICHARD % CRAFTSMANSHIP IN IRON ,DE HESTORATIC �ffl m �%i � . ... .•:• „-.�• -ter: mows DE H WEIRIM '0, 7)E HFSTORATIC � � r a im 7)E HFSTORATIC �I 1 ' F — Now ONTRACTOR: C M WOODCRAFT m m --.W m 0 9 =fA ri =- DE REHARILITATIC I a Imp% --1 - - I.. Aw • l J 7)E HPHARIL-ITATIC _ U1- N 1 HEATER C.�Q Oki !I I ON I m 101 m I LN m 0 m I =V!.I-u I = ZALWKO 0 Oki IN ddiiA •l =l►�M■ =I=MLArr� =��(� ERITAG r d' 1ARN T m'_ HERITAGE AWARENESS 0-I, Randall F. M iller & Gary K. H uBhes New BrunswckMmeum 4 MuseeduNouveau- BrunswGk p tope f ca kdi e Terre Geology and the Stone Buildings Geologie et immeubles de pierre of Saint John, New Brunswick de SaintJohn, au Nouveau- Brunswick i 1I REBU /L T IN STONE NEW BRUNSWICK MUSEUM a "M obohmm-7 11=7- PM7 � I �u 3 0 ®0 2 HE AWARDS DE HPHARIL-ITATIC Sel- Qm m ILL, DAPTiVE h I 11 0117A117 I=:11elrAm J:l01U= rim 01M� ■r 0 . I ERITAGE ►� ALA AWARDS ii ' • �'a a ," - COMMERCIAL SIGNAGE I viva ia ko BRAD RICHARD & MIKE VERNER OF BOURBON QUARTER I MAGNOLIA CAFE SIGNS: DON MOORE OF SIGNS BY CAROLE BRACKETS: .10E RICHARD OF CRAFTSMANSHIP IN IRON ,DE HESTORATIO M a' NO m IMiXEWIS, �%i m Mrs si� IIL- �-IIIMIIW AAIP Oki In w IM-1.1 % 0 17 ,�� ,� co�e,��ro,dae��ry rk�p� ¢RA#(f�Q W(�Af�eerlP4tUbr4Nd81i5 _� ly r,y � 11, x'S, "R ^' �. M Semradakd Uemi¢f� fie��re�' eta Pierre a�� a�m� din wee �� r�y � j � � � � � ®, r,��e a,�rrEU ��r lerx&roxsdegmaremxrdm# 6xpahesd'edf�.vrgswxrd eaxfeE .cserbrAla� ;fmaiis�xlertta�.@ues deges&„iedupedre�7 s� .�rrlrnv pxkdi�S dtatdrr�aimxgazs Pd�mxds�uederrmlurm3 d r - -+i _ _ 7 J Rwf�orda�Exr Pieueilpnerrntbvk k� 2 HE AWARDS REPORT TO COMMON COUNCIL M &C- 2011 -33 February 17, 2011 His Worship Mayor Ivan Court & Members of Common Council Your Worship and Members of Council, SUBJECT: Presentation of Fiscal Impact Analysis Work to Support P1anSJ Growth Strategy BACKGROUND: City of Saito John In August 2010, Common Council awarded a consultant contract to Hemson Consulting for the preparation of a fiscal impact study as a key research input into the development of Saint John's Municipal Plan. This work is substantially complete and the attached report and presentation have been prepared as a summary of the analysis. Council has previously expressed an interest in receiving additional information on the study in preparation for its upcoming consideration of the P1anSJ Growth Strategy on March 14th, 2011. The Growth Strategy is an important deliverable for the P1anSJ process, setting the course for the Municipal Plan. PURPOSE AND ANALYSIS: The attached report and presentation highlight the findings of this research which support the direction of the P1anSJ Growth Strategy. The report highlights the relationship between the revenue gained from various forms of development and the City's resulting operating and capital expenditures. The work supported the evaluation of two options for growth explored as part of the P1anSJ process and shaped the direction for a new development pattern that is more fiscally sustainable for our citizens and tax payers. Staff and the P1anSJ Staff Steering Committee have reviewed the report and are recommending that Council receive and file the report. The results will be posted on the PlanSJ website and form an important component of the technical background research which supports the development of Saint John's Municipal Plan. 45 M& C-2011 — 33 - 2 - February 21, 2011 Over the course of the next month, Hemson will be assisting the City in developing quantitative and qualitative fiscal measures to assist in evaluating future development projects. Once developed, they will be incorporated in the final Municipal Plan for Council's consideration. RECOMMENDATION: It is recommended that Common Council receive and file the PlanSJ Fiscal Impact Analysis Study. Respectfully submitted, Ken Forrest, MCIP RPP Commissioner Planning and Development J. Patrick Woods, CGA City Manager EN FISCAL IMPACT ANALYSIS OF PLAN SJ City of Saint John OUR CITY- OUR FUTURE NOTRE MLLE • NOTRE AVENIR February 21 St, 2011 HEMSON Cons, In ng Ltd. El VA • What Hemson did 9 Analysis results • Conclusions &recommendations • Moving forward HEMSON CE: 2 Tool for measuring cost to City of development HEMSON •: • Determine effect of different patterns of residential development on City finances - Location (urban, suburban, rural) Built form (low, medium, high density) ® Analyze full cost of service - All services (General Fund and Utility Fund) - Capital and operating expenditures • Provide information to make choices on best option for growth HEMSON 61M Base Case Current development pattern Option 1 r--- Prioritize urban core Option 2 Distribute growth & redevelopment HEMSON 51 f) Aro— Hosp C."Idor muvei McXMnYf J' Mltlidgark ?C- q6. INV W. c Rdaff 0"mi bmft Amw. Rm Idenbal OpperturAy Aimmt: Lom"111* FaritwOwncsor. -125.000Pm Urban Araaa -4.725d*ellin� McAllolarOemra -245,000p-r Suburban Areas. -6,100dW14rigs TOTAL -360,000 gsm Rural /Von -175dwhogs TOTAL -11,000dwolings OffletAtwMWeed Gp0wtwftArv*g UNIM/HosptEd -95.W0 PM Wdmddo oppetwft Are": Uptown gsm 550 Hkof dweloprnent land TOTAL -Z-0.50083M I 52 Jkl Fr 9 LERETIG Area "arSeperawStudy � lndL,,tMI Opportunity Am ftpVWGWWLha.uWJMly — — SjbueS n Opporvurgty comm"al/Retxul 00 Area Oppom nivy Am 0 MdjcrinS5twon/DM. OpM-n,ty A— n • ♦ J _ f University Avenue Carridor Millldgevllle }n( �► ♦ ♦ Millidgevllle Centr e West RdLIOreI �.e Y � Rm,YwPOlPM ;� `�� i/ ♦ o '. Ilosplbl l i Option 1. at Prioritizing the urban _ vatley Waterloo - core The North 4, Iliage ° End �►� � ' - \`+,�~• ul v Urban Opportunity Areas: -1900 dwellings ( -55% of total) The Suburban Opportunity Areas: Ead a 1075 dwellings (30% of total) 4� n a a c Jf -525 dwellings (15 %of total . J r, development) through Infill In rural I opportunity areas, reoccupatlon of vacant buildings and minor SaIntJOhn lnfliling In other parts of the City ia6vilie Pla '. Waterfront 4 ,f _ . Lower 'r Westss tr Side �Q LEGEND Aealde"I opportunity Maw Area under Separate Study P_E� Urban Opportunity Area • � i l 1 f� "�, rV' ] Proposed Growth Boundary Suburban OpportungArea Areas of Stability a Minor Change �lJ il0 7 53 T 10 X University i Avenue Corridor A[varsity / T` RoristHllls /•, mlllldgeville venue Plateau t � "*�. Lakev�ioOQ � + Centre y/�� "� MillldgevlUe ♦ West asBG, 10 $ IRq i. -1 / [ =' j '�► I� 3. Option 2: Distributing ,`.. n�-t. redevelopment & Valley b growth The North _ End G, Urban Opportunity Areas: _ -^1050 dwellings ( ^30% of tote!) y+y - � `�'�� mss: �•; L The �_ Suburban Opportunity Areas: " t ' South --1925 dwellings ( -55% of total) tre End T 1 , 6 -525 dwellings (15% of total development) through Inflll In rural opportunity areas, reoccupation r of vacant buildings and minor r' - - "� Salnt john ,�' Infllling In other parts of the City Waterfront rfl _ 1/ Lower r� � .. tY.�' West `'F+ LEGEND Ate Cristo /. 4,' _ .� 1 Side Residential Oppnkueity Atom l iimutt R I Y - 2 Area under Separate Study urban Opportunitykea ;'•' $$ - .��'�� Proposed! Growth baundary w9 an Suburban Opportunity Area Areas of Stability or Minor Change 00 l 0 54 • Recommended Growth Strategy is closest to Option 1 • Option 1 produces fiscal benefits when compared with other scenarios - Slightly more assessment & property tax revenue Less linear infrastructure & associated operating cost Less water, sewer, road infrastructure in suburban areas HEMSON Oil Better use of existing facilities (schools, arenas) • Available system capacity in urban care (water, transit) • Leverage existing investment in urban core (storm /sewer separation, waterfront redevelopment) Economic development potential • More efficient use of land HEMSO►N 6110 • Current and future fiscal pressures unrelated to development - Provincial water /sewer standards - Infrastructure repair and replacement • Forecast development is - Small relative to current base (15% to 2031) - Projected to rise only after 2017 • Investment required to achieve intensification HEMSON 57 ® Fiscal analysis supports recommended Growth Strategy ® Recognize that fiscal benefits are neither immediate nor significant Think long term - intensification will result in greatest benefit at end of period to 2031 and likely beyond • Growth Strategy has other benefits (social; environmental; economic) that can have positive fiscal consequences HEMSON 671:1 Strategically phase targeted growth areas and focus investment to maximize fiscal benefits Discourage development in rural areas - higher cost of servicing - increasing demand for service from aging population - fiscal liability of system failure Include fiscal policies in Plan SJ and screen development proposals using fiscal criteria - decisions on individual development applications will determine whether fiscal benefits are realized HESON 64:: Quantitative • Assessment and property tax revenue • Utility rate revenue • capital infrastructure requirements • Operating cost impacts Qualitative • Economic development goals • Financial policies • Fiscal liabilities HEMSON 100 FISCAL IMPACT ANALYSIS OF PLAN SAINT JOHN City of Saint John OUR CITY• OUR FUTURE NOTRE VILLE • NOTRE AVENIR 61 HEMSON Consulting Ltd. February 2011 TABLE OF CONTENTS INTRODUCTION ................ ............................... 1 DEVELOPMENT IN SAINT JOHN .... ............................... 3 A. Households and Employment Have Increased in Saint John over the Past 25 Years While Population Has Declined ............... 3 B. Saint John Is Forecast to Grow in Population, Households and Employment to 2031 ....... ............................... 5 C. Three Scenarios for Housing Growth Are Tested ..................... 7 III PROPERTY TAX REVENUE FORECAST .............................. 11 A. Assessment Forecast Based on Average Assessment of Recent Homes ... 12 B. Option 1 Generates Most Property Tax Revenue for City ............. 14 IV COST ANALYSIS ................ ............................... 16 A. Modified Average Cost Approach Appropriate for Fiscal Impact of Development in Saint John ... ............................... 16 B. Operating Cost Impacts ....... ............................... 17 C. Capital Cost Impacts .......... ............................... 19 D. Some Variables Have Been Held Constant ........................ 23 V FISCAL IMPACT ANALYSIS RESULTS ............................... 24 A. Tax Levy Impact ............. ............................... 24 B. Utility Rate Impact ........... ............................... 25 C. Qualitative Fiscal Impacts ...... ............................... 27 VI CONCLUSIONS AND RECOMMENDATIONS ........................ 29 A. Current and Future Fiscal Pressures Are Unrelated to Development ..... 29 B. Fiscal Benefits of Growth Are Marginal and Will Not Be Experienced until 2020s ................. ............................... 29 C. Option 1 Produces Fiscal Benefits When Compared with Base Case and Option 2 ............... ............................... 30 D. Recommendations for Moving Forward .......................... 31 APPENDIX A Growth Scenario Maps APPENDIX B Summary of Assessment Estimates and Tax Revenue APPENDIX C Capital and Operating Cost Impacts HEMSON 62 I INTRODUCTION The City of Saint John is currently developing a new Municipal Plan. The new plan (Plan SJ) will guide future development in the City. As part of the work the City has decided to review the fiscal impact of different development scenarios so that the financial implications of development on municipal expenditures, tax revenues, and taxpayers can be understood. Fiscal impact analysis is a well established tool for quantifying the public cost of private development and is widely used in North America. The aim of the analysis for Saint John is to provide the City with the information it needs to make choices on the best option for growth. Hemson Consulting Limited was retained to conduct the fiscal impact analysis and this report summarizes the results. After this introductory chapter, the report is divided into the following sections: Section 2 discusses growth trends in Saint John. Recent and historical growth in the City, as well as the growth forecasts used for the analysis, are described. Section 3 provides details on the property tax revenue analysis. Section 4 provides details on the cost analysis. The analysis results are presented in Section 5. Section 6 summarizes the key findings of the analysis and provides recommendations for selecting a preferred growth option for the City. The report is based on a range of investigations, including: • a review of municipal documents, including operating and capital budgets, financial returns, master servicing plans, website materials, and consultants reports; • review of background documents prepared in connection with Plan SJ; HEMSON 63 consultations with the consulting team retained by the City to prepare Plan SJ; and, telephone, e -mail, and face -to -face interviews with municipal staff. It should be noted that fiscal impact analysis is a useful indicator only of the relative impact of growth on the City. Although the analysis can be used as an input to a capital budget it should not substitute the City's capital development planning. HEMSON .- 3 II DEVELOPMENT IN SAINT JOHN This section contains an analysis of recent and historical growth in Saint John. Growth forecasts and scenarios for testing the fiscal impact of different patterns of residential growth are also discussed. Growth forecasts used in the fiscal impact analysis are based on a planning period from 2010 to 2031. The forecasts have been provided by Strategic Projections Inc. and related growth scenarios have been prepared by Urban Strategies Inc. on behalf of the City as part of the Plan SJ process. A. HOUSEHOLDS AND EMPLOYMENT HAVE INCREASED IN SAINT JOHN OVER PAST 25 YEARS WHILE POPULATION HAS DECLINED The population of Saint John has fallen by 12% over the last 25 years, from 76,400 in 1986 to 67,500 in 2009 (see Figure 1). The decline is the combined result of sustained periods of negative natural increase and net migration. Population decline has been highest in the City's urban core. In recent years the population in suburban and rural areas of the City has remained stable. Notwithstanding the population decline, the number of households in the City has remained relatively stable over the last 25 years. The total number of private households currently in Saint John is estimated at 29,500, more or less the same number of households in the City in 1986 (see Figure 1). Periods of household growth include the late 1980s and, to a lesser extent, the late 1990s. The phenomenon of household growth occurring despite population decline is the result of a steady decline in average household size in Saint John, itself the result of a number of social, demographic and economic changes that have taken place in recent decades. In this regard, Saint John is typical of most other metropolitan areas in Canada. HEMSON 65 4 Figure 1 POPULATION & HOUSEHOLDS BY CENSUS YEAR CITY OF SAINT JOHN 1986-2006 Population (000s) Households (000s) 80 Population — Households 35 75 30 70 65 25 1986 1991 1996 2001 2006 Source: Hemson Consulting Ltd. based on Statistics Canada As well as being the centre of a larger regional economy driven by the energy sector, the Saint John Census Metropolitan Area (CMA) exhibits a diverse economic base that contains jobs in mining, manufacturing, professional and other business services, and health care. Employment in the CMA has been volatile, with growth in the late 1980s offset by significant job losses in the early 1990s. Employment has, however, grown steadily since 1996 and in 2006 stood at about 62,000 jobs (see Figure 2). The City of Saint John currently accounts for about 75% of all employment in the CMA. HEMSON 5 Figure 2 EMPLOYMENT BY CENSUS YEAR SAINT JOHN CMA 1986 -2006 Employment (000s) 65 62.5 60 57.5 — 55 2006 Employment by Sector Education & Health Care 21% Professional Services 20% 52.5 Trade 17% Manufacturing & Construction 15% Other 15% Food, Accommodaton & Culture 12% 50 1986 1991 1996 2001 2006 Source: Hemson Consulting Ltd. based on Statistics Canada Labour Force Estimates B. SAINT JOHN IS FORECAST TO GROW IN POPULATION, HOUSEHOLDS AND EMPLOYMENT TO 2031 Forecasts prepared as part of Plan SJ project steady employment growth in the City throughout the planning period to 2031, from 49,200 jobs in 2009 to 61,800 jobs in 2031 (see Figure 3). The employment forecast is predicated on growth in local export -based industries (those that produce goods and services for export outside the City), especially in non - traditional sectors such as business services, tourism, and health care. The need to satisfy the resulting demand for labour will lead to increased in- migration of working age population (aged 25 to 64). The result is a forecast reversal of the long standing decline in the City's overall population in 2017. The total population of Saint John, after reaching a low of 66,000 in 2017, is forecast to rise to 77,500 by 2031 (see Figure 3). This represents growth of 10,000 from the 2009 population of 67,500. The number of additional households arising from the population growth is 4,500 between 2009 and 2031. HEMSON 67 M Figure 3 POPULATION & EMPLOYMENT FORECAST CITY OF SAINT JOHN 2006-2031 (0005) Population Employment 80 Historical Forecast 362,000 75 — — — — — — — — — — — — — — 316,000 70 719,000 65 60 55 50 — — — — — — — — — — — — — — 45 2006 2011 2016 2021 2026 2031 Source: Strategic Projections Inc. The fiscal impact analysis assumes that, regardless of how future housing growth is distributed in the City, the forecast total population, households and employment will be a constant under all growth scenarios. The analysis also assumes that the non- residential land and buildings required to accommodate the forecast employment will be the same regardless of where employment is located. Table 1 summarizes the non- residential forecast. Table 1 Growth in Non - Residential Space in Saint John 2010 -2031 Employment Type Gross Floor Area (m2) Commercial/Retail 362,000 Major Institution /Office 41,000 Industrial 316,000 Total 719,000 Source: Urban Strategies Inc. HEMSON .: C. THREE SCENARIOS FOR HOUSING GROWTH ARE TESTED The distribution of housing units required to accommodate the forecast population is the main variable being tested by the fiscal impact analysis. Three residential growth scenarios have been defined based on the location of housing units (urban, suburban, and rural) and the number of units by type (low, medium, and high density) in each location. Under the first scenario, the Base Case, housing growth is anticipated to follow historical patterns. Two other scenarios — Option 1- Prioritizing the Urban Core and Option 2 - Distributing Growth and Redevelopment — project higher rates of housing redevelopment and intensification than in the past. The urban, suburban, and rural areas that define the location of housing are shown in Map 1 of Appendix A. Housing unit types are categorized as: low density units, defined as single- detached, semi - detached, other single- attached, or movable dwellings by Statistics Canada for Census purposes. In Saint John, this category includes a number of mini home, mobile home, and garden home units with comparatively low assessment. medium density units, defined as rowhouses or duplexes by Statistics Canada.I high density units, defined as apartments by Statistics Canada. Of the total housing forecast of 4,500 new units, approximately 1,600 units have already been approved for development in Saint John. It is assumed that these "committed" units, of which 24% are in the urban core, 60% are in the suburban area, and 16% are in the rural area, will be constructed under Options 1 and 2. Under the Base Case the committed units are assumed to develop according to current patterns (see Table 2).z 'A duplex is distinct from a semi - detached unit which is defined by the Census as one of two dwellings attached side by side (or back to front) . Typically, duplexes contain either one or two renters. Semi - detached units are usually owner occupied. 'Data collected by City staff indicate that there are approximately 3,200 units currently approved for development of which 1,900 are approved for the suburban area, 780 for the urban core, and 540 for the rural area. For the fiscal analysis it is assumed that 50% of these units will be constructed to 2031. HEMSON .• M Table 2 Distribution of Forecast Committed Development in Saint John 2010 -2031 Unit Type Urban Suburban Rural Low Density - 414 272 Medium Density 63 259 - High Density 329 278 - Total 392 951 272 Source: City of Saint John and Urban Strategies Inc. The three growth scenarios are described as follows: 1. Base Case The Base Case scenario assumes future housing growth will follow historical patterns: approximately 78% of all units in low density forms and about 65% of all units to be constructed in the suburban area. Significant housing growth (20 %) will continue to occur in the City's rural areas. 2. Option 1 - Prioritizing the Urban Core This scenario directs significant housing growth to areas in the City's urban core and suburban university corridor where opportunities for redevelopment and intensification exist. These "opportunity areas" are identified in Map 2 of Appendix A. Housing growth will be distributed evenly between the three built forms (33% low density; 39% medium density; 29% high density) and about 52% of all units will be constructed in the urban area. Growth in rural areas will be restricted to about 9% of overall growth. 3. Option 2 - Distributing Growth and Redevelopment This scenario distributes housing growth to opportunity areas throughout the City's suburban area and urban core. The opportunity areas for this scenario are identified in Map 3 of Appendix A. As with Option 1 housing units will be evenly distributed between the three types of built form (37% low density; 36% medium density; 27% high density). However, the geographic distribution of units will be directed more towards the suburban area (56 %) rather than the urban core (35 %). Like Option 1, housing growth in rural areas will be restricted to about 9% of overall unit growth. The rate of growth by unit type for each scenario is displayed in Figure 4. HEMSON 70 Base Case Prioritizing the Urban Core Distributing Growth & Redevelopment Figure 4 - Cumulative Housing Growth in Saint John 2010 -2031 Source: Urban Strategies Inc. & Strategic Projections Inc. HEMSON 71 3,500 — Low — Mldlum — Hlgh 3,000 2,500 2,000 — — 1,500 1,000 500 0 .500 2011 2016 2021 2026 2031 3,500 3,000 2,500 2,000 1,500 1,000 500 0 -500 2011 2016 2021 2026 2031 3,500 3,000 2,500 2,000 1,500 1,000 500 0 500 2011 2016 2021 2026 2031 Source: Urban Strategies Inc. & Strategic Projections Inc. HEMSON 71 III] The distribution of housing units for each growth scenario is summarized in Table 3. Table 3 Forecast Distribution of Housing in Saint John 2010 -2031 Growth Scenario New Units ( #) Urban Suburban Rural Total Base Case Low Density 507 2,110 901 3,519 Medium Density 54 322 - 376 High Density 114 498 - 612 Total 676 2,929 901 4,507 Option 1 - Prioritizing the Urban Core Low Density 358 724 396 1,478 Medium Density 581 710 - 1,291 High Density 1,385 353 - 1,738 Total 2,323 1,787 396 4,507 Option 2 - Distributing Growth & Redevelopment Low Density 388 874 394 1,655 Medium Density 343 1,294 - 1,637 High Density 855 359 - 1,214 Total 1,587 2,526 394 4,507 Source: Urban Strategies Inc., Strategic Projections Inc., and City of Saint John Note: Options 1 and 2 include 170 low density units as infill and 170 high density units as upper floor redevelopment in the urban core. Note: The fiscal impactanalysis examines the impactof the net increase in residential units that are private dwellings (4,507 units). Other Plan SJ documents show the number of new units to be approximately 5,000. This gross number, less the forecasted number of demolitions of existing units and residences in institutions (long term care facilities; seniors residences), results in the net increase of 4,507 units. HEMSON 72 11 The aim of the fiscal impact analysis is to provide the City with a comparison of the fiscal impact of the various patterns of residential development in each of the three growth scenarios. The analysis approach and methodology are described in Sections 3 and 4. HEMSON 73 12 III PROPERTY TAX REVENUE FORECAST Regardless of how residential development proceeds in Saint John, the major source of future City revenue will take the form of property taxes. This section discusses the method and assumptions used to forecast the property tax revenue generated under each growth scenario. A detailed summary of the tax revenue forecast is provided in Appendices B and C. A. ASSESSMENT FORECAST BASED ON AVERAGE ASSESSMENT OF RECENT HOMES To estimate future tax revenues, assessment levels for new residential units were estimated using current average assessments for residential units sold in recent years. Table 4 shows the average per unit assessment values used for each of the new residential unit types by location. The analysis used to determine the assessment estimates is summarized in Appendix B. Table 4 Average Assessment per Unit of New Housing Unit Type Urban Suburban Rural Low Density $165,000 $190,000 $210,000 Medium Density $235,000 $170,000 - High Density - Rental $75,000 $75,000 - High Density -Condo $215,000 $130,000 - Source: Hemson Consulting based on City of Saint John data For high density units, two unit types have been distinguished: rental units; and condominiums. In the last ten years growth in high density units in the City has mostly (in excess of 90 %) taken the form of rental units. These units attract a much lower assessment than condominiums (on average $61,000 per unit versus $200,000 per unit respectively). Two of the growth scenarios (Options 1 and 2) require that a significant amount of development that would otherwise be expected to occur in low density HEMSON 74 13 housing in the suburban and rural areas be shifted to high density housing in the urban and suburban areas. Given this situation, it is assumed that under these scenarios a much higher proportion of high density housing will take the form of condominiums than in the past. By contrast, rental units have been fixed to grow by 500 units under all scenarios. Non - residential assessments were determined using an estimated assessment value per additional square foot of floor space. The estimates were based on prevailing assessments, building sizes (gross floor area or gfa), and typical floor area needs per employee throughout the City. They are as follows: Commercial /Retail Land Uses $800 per mZ Major Institutional /Office Land Uses $1,500 per mZ Industrial Land Uses $750 per mZ Tax revenue reductions caused by the redevelopment of land within the City are assumed to be marginal and are not accounted for in the analysis. The total amount of new assessment generated under each growth scenario is provided in Table 5. The table shows that, of the three growth options, Option 1 results in the greatest amount of new assessment ($1.43 billion) in the City. Both the Base Case ($1.41 billion) and Option 2 ($1.40 billion) generate comparable new assessment overall. Table 5 New Assessment in Saint John 2010 -2031 ($000) Growth Scenario Residential Non - Residential Total Base Case $820,000 $589,000 $1,409,000 Option 1 - Prioritizing the Urban Core $844,000 $589,000 $1,433,000 Option 2 - Distributing Growth & Redevelopment $808,000 $589,000 $1,396,000 HEMSON 75 14 Table 6 provides a breakdown of the new residential assessment for each growth scenario. The table demonstrates that, notwithstanding higher assessments for lower density housing in the suburban and rural areas, Options 1 and 2 will generate significant assessment from the addition of medium and high density units in the urban core and suburban area. Table 6 New Residential Assessment in Saint John 2010 -2031 ($000) Growth Scenario Total New Assessment ($000) Base Case Low Density $674,000 Medium Density $67,000 High Density $79,000 Tota 1 $820,000 Option 1 - Prioritizing the Urban Core Low Density $280,000 Medium Density $257,000 High Density $307,000 Total $844,000 Option 2 - Distributing Growth & Redevelopment Low Density $313,000 Medium Density $301,000 High Density $194,000 Total $808,000 HEMSON 76 15 B. OPTION 1 GENERATES MOST PROPERTY TAX REVENUE FOR CITY City property tax revenues under each growth scenario are calculated by applying current (2010) municipal tax rates to the forecast new assessment (0.01785 residential; 0.26775 non - residential).' The total additional tax revenue for each scenario is summarized in Table 7. The table shows that Option 1 - Prioritizing the Urban Core results in the greatest amount of new property tax revenue for the City ($30.8 million). However, the fiscal benefit is marginal compared to the Base Case and Option 2 which generate $30.4 million and $30.2 million respectively. Table 7 New Property Tax Revenue in Saint John 2010 -2031 ($000) Growth Scenario Residential Non - Residential Total Base Case $14,600 $15,800 $30,400 Option 1 - Prioritizing the Urban Core $15,100 $15,800 $30,800 Option 2 - Distributing Growth & Redevelopment $14,400 $15,800 $30,200 Tax revenues have been calculated under the current property tax system and without considering the effects of any future potential property tax freeze. HEMSON 77 16 IV COST ANALYSIS This section describes the structure of the fiscal impact cost analysis model and the assumptions that underpin the model inputs. It also discusses the approach and methodology used in the analysis. A summary of the overall findings of the analysis is provided in Section V. Detailed results are provided in the appendices. A. MODIFIED AVERAGE COST APPROACH APPROPRIATE FOR FISCAL IMPACT OF DEVELOPMENT IN SAINT JOHN Municipal fiscal impact models are used to estimate the impact of new development on municipal expenditures and revenues. The most detailed type of model predicts, on a service by service basis, the capital and operating costs that are likely to result from the development of large planning areas and over long periods of time. The model developed to assess the impact of the three growth scenarios in Saint John employs a high level of detail. It allows for adjustments to be made to individual cost components (e.g. salaries, wages, and benefits) within individual municipal service functions (e.g. Fire, Public Transit). The modified average cost approach used in the model allocates revenues and expenditures on an average cost basis between residential and non - residential development. Average costs are the costs of providing services expressed on a per capita basis (for costs allocated to residential development) or a per employee basis (for costs allocated to non - residential development). Under this approach, average costs are estimated for municipal services for which development creates a need. The average costs are modified, on a service by service basis, to reflect the sensitivity of each service to new development. Operating cost impacts are then calculated for each service within the City. In addition, the analysis accounts for capital- induced operating costs. These are operating costs triggered when a new municipal facility is constructed or expanded or new infrastructure is acquired. HEMSON 17 The analysis also accounts for increases in non -tax revenues. Thus, user fees and charges as well as grants and subsidies have been examined on a service by service basis as well as by source, and have been adjusted to reflect each revenue stream's sensitivity to growth. The service - specific revenues are deducted from expenditures, on a service by service basis, to yield net expenditures. The City's largest source of non -tax revenue —an unconditional grant from the Province —has been held constant at its current level of $19.5 million. Capital expenditures in the City's capital budget and forecasts have also been incorporated into the analysis. Additional capital costs, over and above the capital expenditures identified in current forecasts, have been estimated for each service under each growth scenario based on consultation with City staff. City finances are organized into two funds: a Utility Fund, that deals with water and wastewater services of which the primary source of revenue is water and wastewater utility rates; and a General Fund, which deals with all other services and which is funded mainly through the property tax levy. The fiscal impact analysis treats each fund separately for modelling purposes. B. OPERATING COST IMPACTS In the fiscal impact model, City operating expenditures and revenues have been allocated between the residential and non - residential sectors based on estimated levels of use or benefit. Additional base operating expenditures were then calculated on an average cost basis. Capital induced operating costs were also determined. Details on cost allocation methods are provided below. 1. Allocation of Costs & Non -Tax Revenues: Residential and Non - Residential Most 2010 budgeted expenditure and non -tax revenue was allocated between the residential and non - residential sectors based on proportionate shares of population and employment (adjusted if actual usage was known). Services such as Leisure, Arts and Culture, and Recreation were allocated entirely to residential uses because the need for these services is driven by residential development. The Fire service was allocated more heavily towards non - residential uses given the extent to which industrial activities drive HEMSON 79 18 the need for fire services in the City. The cost allocation assumption are provided in Appendix C.1. 2. Determination of Operating Cost Impacts Expenditures and non -tax revenues were then translated into average operating costs per capita (for costs allocated to the residential sector) or per employee (for costs allocated to the non - residential sector). Average costs per unit were then modified, on a service by service basis, to reflect the sensitivity of each service to population and employment growth. Some City services, like Police, are highly sensitive to growth and their costs will increase in direct response to growth occurring. Services which have relatively fixed costs, like Council, are less sensitive to growth. As such, the rate of increase in expenditures for these services will be less than the prevailing average service delivery costs. In addition, the analysis provides for capital- induced operating costs that result from having to staff and operate facilities such as new police stations as well as having to maintain roads that are added as the City grows. The additional operating costs are summarized as follows: i. Additional Base Operating Net Tax Levy Supported Expenditures These increase in line with population and employment growth and are calculated using 2010 operating budget expenditures net of service - specific revenues: population growth: $466.34 per capita employment growth: $480.67 per employee Given the population and employment forecasts, additional base operating expenditures are the same under each growth scenario. ii. Capital Induced Operating Impacts These are operating costs related to new infrastructure constructed or acquired by the City and are triggered when the infrastructure becomes operational and the City's responsibility. Costs are based on a service by service examination of the capital needs under each growth scenario. HEMSON :E 19 For most services the type and location of residential development will not affect the level of additional capital induced operating costs. The exception is the operating cost of linear infrastructure, principally the cost of road and water and sewer pipe maintenance, which increases in direct proportion to the amount of developed land in the City. Table 8 summarizes the capital induced operating cost impact of this infrastructure under each growth scenario. Table 8 Summary of Capital Induced Operating Cost Impacts New Local Roads New Water and Sewer Pipes km 2031 Operating km 2031 Operating Growth Scenario Cost Cost Base Case 42.0 $726,000 63.0 $898,000 Option 1 - Prioritizing the Urban Core 19.1 $330,000 28.9 $411,000 Option 2 - Distributing Growth & Redevelopment 33.4 $578,000 54.4 $775,000 Note. Based on current operating cost of roads maintenance (e.g. snow removal; street cleaning) of $17,300 /km and pipes maintenance of $14,300/km. The table shows that the City would incur less operating cost to maintain additional local linear infrastructure under Option 1 ($741,000) than under the more land - extensive Option 2 ($1.4 million) or the Base Case ($1.6 million) by 2031. C. CAPITAL COST IMPACTS The determination of capital cost impacts on the City is based on the following assumptions: • that all infrastructure renewal projects either currently committed to by Common Council or identified in City capital forecast documents to 2015 will proceed (recognizing that forecasts are likely to change in response to the City's fiscal situation and Council priorities); HEMSON 20 that the scope and cost of infrastructure renewal projects will be unaffected by differences in housing growth under the growth scenarios (although project timing may be affected); and, that the City continues to rely on debt to finance major expenditures in the capital program assuming 20 year debt terms and interest at 5 %. The vast majority of infrastructure renewal projects in Saint John relate either to the repair and replacement of existing infrastructure or are required to satisfy new Provincial standards. They are therefore unlikely to be affected by the distribution of residential development. There will be additional capital costs, over and above the identified infrastructure renewal projects, that will be triggered by the location of future residential development. A service by service analysis of these growth - related capital costs has been conducted based on consultation with City staff and consultants. The results are summarized below. Fire Service — is unlikely to be greatly affected by the form of development. The need for fire services in Saint John is mostly driven by the size, complexity, and location of industrial development in the City. None of the growth scenarios trigger the need for a new fire station beyond the already planned for west station. Vehicle and staffing needs may vary somewhat according to the location of development but not to a degree that would affect the overall fiscal position of the City. Police Service — Though the need for police services is highly sensitive to population and employment growth it is less sensitive to the form and location of development. Moreover, the major capital expenditure for the police service —Peel Plaza —will proceed regardless of which growth scenario is eventually adopted. Transit — The need for transit is to some extent driven by the form and location of development. However, transit in Saint John already serves all of the City's redevelopment opportunity areas and the system, which has been expanded in recent years, has capacity for another 500,000 rides per year. It is unlikely therefore that current capital plans for fleet replacement, or any proposed expansion to the transit service, would be affected by any of the growth scenarios (though the timing and priority of capital works may have to be adjusted to suit the scenario eventually incorporated into the new Municipal Plan). HEMSON 21 Parks, Recreation and Related — the capital plans for parks, trails, indoor recreation facilities, and arts /cultural facilities, are not likely to be affected by the different growth scenarios as most additional infrastructure is planned for redevelopment opportunity areas already. In this way, Options 1 and 2 will capitalize on existing commitments to expand trail networks and parks in the suburban areas and, particularly, the urban core. Waterfront Development — It is assumed that current capital plans for waterfront development will be sufficient to support redevelopment of the urban core under Options 1 and 2. No additional capital projects are included in the analysis. Development Incentives — Subdividers will continue to pay for a large portion of the cost of installing infrastructure related to subdivision development (local water, wastewater, roads, and stormsewer infrastructure). It is anticipated that the City will continue to provide current levels of financial incentives to offset part of the cost of this local infrastructure (although the form of the incentives may change). General Government — As the demand for corporate and administrative services is largely driven by population (and to some extent employment) growth, and as the population and employment forecast remains constant under all three scenarios, it is assumed that any additional capital cost will be similar under each scenario. Transportation Services — will be affected by the type and location of development. Given the level of growth anticipated for the suburban area under the Base Case and Option 2 it is assumed that the arterial Loch Lomond Road will have to be widened from two lanes to four lanes at a total cost of $5.2 million under these scenarios. It is also likely that there will be additional costs associated with improving roadways to create conditions for redevelopment (e.g. streetscaping of main streets in opportunity areas) under all scenarios. These costs are assumed to be $0.2 million under the Base Case, $2.6 million under Option 1, and $1.7 million under Option 2. Although the cost of most new local roads is likely to be borne by developers the City will incur additional operating costs once it takes over responsibility for these roads. Operating costs, particularly winter maintenance costs, are directly related to the number of lane km the City is responsible for. In this regard, Options 1 and 2 minimize the increase in operating costs (see Table 8 on previous page). Water and Wastewater — there are already significant commitments and plans to address existing deficiencies in water, sanitary sewer, and storm sewer infrastructure (for example the separation of sanitary and storm sewers). The expenditures associated with these commitments and plans are largely unrelated to growth: they would likely be incurred even if the City stopped growing altogether. However, given the level of HEMSON 22 growth anticipated for the suburban area under the Base Case and Option 2 it is assumed that two new lift stations will be required to service opportunity area(s) identified along Hickey Road in the Silver Falls neighbourhood under these scenarios. There are cost savings to be had as a result of a reduced need for linear infrastructure (pipes) under Options 1 and 2. These savings are associated with both capital and operating expenditures and are likely to be greater under Option 1 (see Table 8). The capital program to 2031 is summarized in Table 9 Table 9 Capital Program Summary by Service 2010 - 2031 Service Infrastructure Renewal Growth - Related Fire Station repair; vehicle None replacement; new west station Police Peel Plaza and associated None infrastructure; vehicle replacement Transit Fleet replacement None Parks, Recreation & Related Parks; squares; urban trees; None (e.g. Libraries) trails; arenas; ball fields; Aquatic Centre; maintenance; library Waterfront Development Reversing rapids; harbour None passage; seawall; land acquisition; pedway; Loyalist Plaza; Partridge Island; boardwalk Economic Development Development incentives None General Government Municipal facilities; None Harbour Station; Trade and Convention Centre; IT HEMSON 0 23 Transportation Storm system upgrades and $5.2 million (widening of road reconstruction Loch Lomond Road under Base Case and Option 2) Opportunity Area streetscapi ng: $0.2 million under Base Case $2.6 million under Option 1 $1.7 million under Option 2 Water & Wastewater Infrastructure repair and $2.0 million (construction of 2 replacement; safe drinking lift stations on Hickey Road water; watershed near Silver Falls under Base protection Case and Option 2) The calculation of tax supported capital and operating cost impacts by service, as well as detailed results for each growth scenario, are contained in Appendix C. D. SOME VARIABLES HAVE BEEN HELD CONSTANT So that a comparative analysis of the results can be made, the fiscal model holds constant several variables that are likely to change over the planning period: All values (expenditures, revenues, and assessment values) are held constant in 2010$ with no adjustment for inflation. Inflation will occur and will have a fiscal impact on the City. However, the impact would be the same under all growth scenarios. Not adjusting for inflation allows for easier comparison and evaluation of the results. Current service delivery responsibility and service levels are maintained. These service levels are consistent with the City's historic service levels and the analysis is not based on significant changes. Over time, the City may be required to provide a different mix of services than it does today or may choose, or be required, to provide services at a different level or quality. Service delivery and service level changes have a fiscal impact on the City but are not necessarily affected by the form or scale of growth. Non -tax revenues, such as building permit and planning fees and the unconditional grant received from the Province. It should also be noted that the fiscal impact of non - resident demand on City services has not been estimated as part of the analysis even though it is clear that the City plays a "central city" role by providing services to the surrounding metropolitan area. HEMSON 24 V FISCAL IMPACT ANALYSIS RESULTS In this section of the report, the results of the fiscal impact analysis are presented. The fiscal impact of Plan SJ under the three growth scenarios on the City is discussed in the context of: • the tax levy requirement of the City • the City's Utility Fund • qualitative fiscal impacts The results are shown annually for the period 2010 to 2031. Before discussing the results, it warrants restating that fiscal impact analysis should be used for comparative purposes and should not be viewed as an accurate prediction of what will occur in the future. The main objective of the assignment is to provide results that allow for the three growth scenarios to be compared. Detailed long -term financial plans for growth are not provided for any scenario nor should the results be used for City budgeting. A. TAX LEVY IMPACT Figure S shows the impact on the property tax levy (i.e. the General Fund) of each growth scenario. The impact is calculated by subtracting the total tax revenue in each year from total net expenditure. This yields the net increase in the tax levy requirement. The additional tax levy requirement is then divided by the total tax revenue to produce the percentage increase in the tax rate required to fully fund the net expenditures. The graph shows that the City will experience immediate pressure on its tax rate under all scenarios. The fiscal pressure is being driven by significant expenditures (in excess of $211 million in the Utility and General Funds) planned for capital repair and replacement over the next five years. In the analysis, these expenditures have been capitalized over the period to 2031 (and in some cases beyond). HEMSON 0 25 Figure 5 ANNUAL TAX LEVY IMPACT CITY OF SAINT JOHN 2010-2031 Increase on Tax Rate 25% —Base Case - Prioritizing the Urban Core — Distributing Growth & Redevelopment 20% — 15% 10% 5% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Hemson Consulting Ltd. based on City of Saint John financial data. In the first five years of the planning period, during a period of sustained population decline, the pressure on tax rates is almost the same under all three growth scenarios. As the rate of development begins to increase after 2017 the pressure on tax rates under Options 1 and 2 will be slightly greater than the Base Case as the additional assessment benefits brought about by these scenarios has not yet occurred. However, over the longer term Option 1 - Prioritizing the Urban Core, which eventually results in more assessment in the City that the other two options, will be of greatest fiscal benefit to the City. B. UTILITY RATE IMPACT The Utility Fund is fully funded through water and wastewater rates (as well as grants and other subsidies). Given that the amount of non - residential development is the same under each growth scenario, and that much of cost of operating the water and wastewater systems is fixed, the main fiscal impact of development is likely to be expenditures triggered by residential development under each scenario. These expenditures will include additional operating costs arising from pipe extensions as well HEMSON 26 as pumping stations and similar infrastructure required to allow development to proceed in greenfield areas of the City. Figure 6 shows these "growth- related" expenditures for each growth scenario to 2031. The graph demonstrates that in the first five years of the planning period, when the rate of development in the City is relatively slow, growth - related expenditures are marginal under all scenarios. As the rate of development increases expenditures rise in all scenarios though much more rapidly under the Base Case and Option 2. Option 1 remains of greatest fiscal benefit to the City throughout the planning period. Figure 6 GROWTH RELATED UTILITY FUND EXPENDITURES (RESIDENTIAL) CITY OF SAINT JOHN 2010-2031 Thousands 1,000 Case tBase Prioritizing the Urban 900 Distributing Growth &Redevelopment 800 700 — — — — — — — — — 600 — 500 400 300 200 100 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Hemson Consulting Ltd. It should be noted that growth- related expenditures in Figure 6 are only a very small component of overall expenditures to be incurred by the City. Figure 7 shows that the growth - related cost difference between each scenario is marginal when comparing total capital expenditures. Note moreover that Figure 7 shows only the capital expenditures attributable to residential development (48.3 %, based on the ratio of residential to non - residential water usage for 2010). When compared with total capital expenditures the differences in growth - related expenditures between each scenario are even more marginal. HEMSON 27 Figure 7 UTILITY FUND CAPITAL EXPENDITURES (RESIDENTIAL) CITY OF SAINT JOHN 2010-2031 Thousands 5,000 4,500 4,000 3,500 — — — — 3,000 — — 2,500 2,000 1,500 1,000 —Base Case 500 Prioritizing the Urban Core Distributing Growth & Redevelopment 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Source: Hemson Consulting Ltd. C. QUALITATIVE FISCAL IMPACTS There are sound fiscal arguments for pursuing redevelopment and intensification that can be made even if they cannot be quantified under the terms of this assignment. They include: That there likely exist facilities in core areas, particularly schools and recreation and cultural facilities, which are currently underutilized and require minimum additional expenditure in order to accommodate higher levels of use. That unused system capacity, especially water and transit system capacity, is currently available to accommodate new development in the urban core. That the City is already making significant investments in the urban core, through its commitments to separate storm sewer and sanitary sewer pipes and redevelop the waterfront for example, and that intensification and redevelopment therefore capitalize on that investment with little or no need for additional expenditure. HEMSON :• 28 That targeted investments in core areas can trigger much larger scale investment in those areas —these investments will likely be required in order for Option 1 to be fully realized. That the potential for more residents in the urban core and the associated concentration of disposable income brings with it the potential for substantial economic development in the City's central neighbourhoods. That Options 1 and 2 will result in less land being required for development and may, in certain cases, reduce not only City costs but also developer costs. There is a good fiscal case to be made for restricting the level of rural development in the City. Specifically: The average assessment of low density homes in rural areas exceeds the City average and the demand for some services (such as recreation) in these areas may be low. However, there are services, such as police, fire, ambulance, and road maintenance, for which the servicing cost per capita is higher in rural areas. Although the demand for City services is lower in rural areas this is likely to change for some services (such as transit) as the rural population ages over the planning period. The fiscal liability of widespread failure of well and septic systems in rural areas, particularly if the cost of such failure cannot realistically be recovered from local residents, will be exacerbated with increased development in those areas. HEMSON ., 29 VI CONCLUSIONS AND RECOMMENDATIONS This section summarizes the key findings of the analysis and makes recommendations for selecting a preferred growth option for the Municipal Plan. A. CURRENT AND FUTURE FISCAL PRESSURES ARE UNRELATED TO DEVELOPMENT The City will continue to experience fiscal pressures in the short term. In particular: The City is faced with significant fiscal challenges arising from an aggressive capital program that includes significant investment in water and sewer infrastructure to meet prevailing Provincial standards. The City has taken on long term debt to fund these infrastructure improvements and further debt financing will be required to complete the program. The need to fund the significant cost of the repair and replacement of municipal infrastructure will place additional fiscal pressures on the City over and above what is contemplated in the existing capital program. This issue is not unique to Saint John and is being faced by municipalities across the country. However, the City's age means that addressing the infrastructure "state of good repair" issue will be more challenging in Saint John. These fiscal issues are unrelated to growth and development in the City. The City will therefore face these expenses whether or not development occurs and regardless of the location, quantum, type and rate of development in the future. B. FISCAL BENEFITS OF GROWTH ARE MARGINAL AND WILL NOT BE EXPERIENCED UNTIL 2020s Under all development scenarios the City is forecast to grow to by approximately 10,000 people (15 %) and 4,400 households (15 %) to 2031. The amount of anticipated development is therefore relatively small when compared to the existing population and household base. The overall effect, positive or negative, of growth and development in this situation will therefore be marginal under any growth scenario. HEMSON 91 30 Growth and development in the short -term will be slow as the City's population is forecast to continue to decline until about 2018. Moreover, significant changes to the nature, type and form of housing contemplated under Options 1 and 2 are unlikely to take place in the short term. Any fiscal benefits arising from pursing these options will therefore not occur until the early 2020s. It is noted that though the fiscal benefits of Option 1 are at their greatest level only at the end of the planning period they are, assuming forecast development and expenditure trends continue, likely to increase in the period after 2031. C. OPTION 1 PRODUCES FISCAL BENEFITS WHEN COMPARED TO BASE CASE AND OPTION 2 The fiscal impact of development analysis indicates that if the City pursues policies and practices that successfully direct more development to the urban core, combined with less development in the suburban areas and very limited growth in the rural areas, the City will experience modest fiscal benefits. These fiscal benefits will arise from a number of factors, most notably: leveraging the sewer and water infrastructure investment in the urban core; reductions in sewer, water and road linear infrastructure in the suburban areas; marginally greater assessment increases overall. Some additional capital investment will be required by the City in order to achieve Options 1 and 2. This investment could take the form of additional streetscaping or boulevarding of main streets in opportunity areas. It could also take the form of more targeted development incentives for intensification and redevelopment. The fiscal impact analysis accounts for continued expenditures on incentive programs but is not specific about the form such programs might take. In the long term any additional investment of this type is likely to be recovered through cost savings and additional tax revenues arising from Option 1 and, to a lesser extent, Option 2. HEMSON 92 31 Overall, it can be demonstrated that Option 1 produces fiscal benefits to the City when compared with the Base Case and Option 2. The net fiscal benefit of Option 2 compared with the Base Case is marginal. D. RECOMMENDATIONS FOR MOVING FORWARD The following conclusions and recommendations are made: When considering a preferred growth strategy for Plan SJ, the City should consider the long term fiscal benefits provided by Option 1 - Prioritizing the Urban Core, recognizing that the benefits of such an option will be long -term and marginal and that some targeted short -term investments will be required in order to realize these benefits. The intensification of development under Options 1 and 2 offer other potential benefits (social; environmental; economic) that can have positive fiscal consequences for Saint John. The City should discourage development in the rural area as the cost per capita of providing some services, particularly fire and police protection and road maintenance, to an aging population in these areas is likely to be higher than the City average. The fiscal liability of widespread failure of well and septic systems will increase with continued high levels of development in rural areas. HEMSON 93 APPENDIX A GROWTH SCENARIO MAPS MAP 1 CITY OF SAINT JOHN SUBAREAS MAP 2 OPTION 1 - PRIORITIZING THE URBAN CORE MAP 3 OPTION 2 - REDISTRIBUTING GROWTH AND REDEVELOPMENT HEMSON 0 M. NNW-, - - u�.: -,... is r ' •!C'..., v E,1 � ` flY ddklni' ..r.i-�fat ✓, Lov-r .xr r _Lr• I r lu fucs.l+ sJ:i.. 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APPENDIX B SUMMARY OF ASSESSMENT ESTIMATES AND TAX REVENUE HEMSON APPENDIX B CITY OF SAINT JOHN FISCAL IMPACT OF PLAN SAINT JOHN ASSESSMENT SUMMARIES FOR HOMES BUILT IN SAINT JOHN 2005 -2010 Location Unit Type Sample Size Average Assessed Value (2005 -2010) Average Maximum Minimum Median Urban Low 106 $ 167,000 $ 357,000 $ 62,000 $ 169,000 Medium 41 $ 238,000 $ 343,000 $ 93,000 $ 231,000 High 346 $ 74,000 $ 504,000 $ 35,000 $ 65,000 All 493 $ 108,000 $ 504,000 $ 35,000 $ 66,000 Suburban Low 644 $ 206,000 $ 4,532,000 $ 51,000 $ 182,000 Medium 3 $ 164,000 $ 165,000 $ 163,000 $ 165,000 High 390 $ 128,000 $ 191,000 $ 29,000 $ 140,000 All 1,037 $ 176,000 $4,532,000 $ 29,000 $ 161,000 Rural Low 281 $ 212,000 $ 1,050,000 $ 20,000 $ 198,000 Source: City of Saint John dataset of residential units constructed since 1985. Notes: Low density includes: single detached, semi - detached, split level entry, mini /mobile /garden homes Medium density includes: townhouse, rowhouse, duplexes High density includes: apartments Excluded: foundations with lots, seniors residences, small scale mixed use Because of the statistical difference between the average ($206,000) and median ($182,000) assessment of low density suburban units an assessment near the midpoint of these figures has been used. HEMSON UU APPENDIX C CAPITAL AND OPERATING COST IMPACTS HEMSON 100 APPENDIX CA CITY OF SAINT JOHN FISCAL IMPACT ANALYSIS OF PLAN SAINT JOHN OPERATING COST IMPACT ASSUMPTIONS Financial Data: Budget: 2010 1. Population and Employment Ratios 2010 1. Population 67,290 58% 2. Employment 48,366 42% Total 115,655 2. Residential and Non - Residential Cost Allocation HEMSON 101 Residential Non -Res 1. Legislative Service 58% 42% 2. General Administration Service 58% 42% 3. Administration Support Service 58% 42% 4. Fire Service 40% 60% 5. Emergency Management Service 58% 42% 6. Buildings and Inspection Service 58% 42% 7. Municipal Operations 58% 42% 8. Planning and Development Services 58% 42% 9. Leisure Service 100% 0% 10. Police Service 58% 42% 11. Economic Development Service 58% 42% 12. Arts and Culture 100% 0% 13. Recreation/ Leisure 100% 0% 14. Special Events 100% 0% 15. Social Development Support 100% 0% 16. Public Transit Support Service 58% 42% 17. Other 58% 42% 18. Funding of the Pension Fund 58% 42% 19. Fiscal Charges 58% 42% Sensitivity 3. Growth Sensitivity Rating Weighting Not Sensitive to New Growth 1 0% Little To No Sensitivity 2 25% Partial Sensitivity 3 50% High Sensitivity 4 75% Full Sensitivity 5 100% Increase Service Level & Costs 6 110% HEMSON 101 APPENDIX C.2 - PAGE 1 CITY OF SAINT JOHN FISCAL IMPACT ANALYSIS OF PLAN SAINT JOHN SUMMARY OF CURRENT OPERATING COST IMPACTS BY SERVICE LEGISLATIVE SERVICE Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Mayor Office $ 0.95 $ 0.95 2. Council $ 2.45 $ 2.45 3. Plebiscite Vote $ - $ - Total Legislative Service $ 3.40 $ 3.40 GENERAL ADMINISTRATION SERVICES Summary of Growth - Impact Expenditures HEMSON 102 Residential Non - Residential Per Capita Per Employee 1. City Manager $ 3.11 $ 3.11 2. Corporate Planning $ 2.32 $ 2.32 3. Communications $ 2.29 $ 2.29 4. Common Clerk $ 3.58 $ 3.58 5. Finance $ 7.32 $ 7.32 6. Legal $ 3.43 $ 3.43 Total General Administration Services $ 22.03 $ 22.03 ADMINISTRATION SUPPORT SERVICES Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Materials Management $ 5.35 $ 5.35 2. Human Resources $ 6.30 $ 6.30 3. Information Technology $ 8.47 $ 8.47 4. Fleet Services $ 4.99 $ 4.99 Total Administration Support Services $ 25.10 $ 25.10 FIRE SERVICE Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Operations $ 62.07 $ 129.52 EMERGENCY MANAGEMENT SERVICE Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Emergency Management Service $ (2.40) $ (2.40) BUILDINGS AND INSPECTION Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Buildings and Inspections Services $ 10.88 $ 10.88 2. Facility Management $ 3.22 $ 3.22 3. Carpentry Shop $ 2.94 $ 2.94 4. City Market $ 1.52 $ 1.52 5. City Hall Buildings $ 6.30 $ 6.30 Total Building and Inspection $ 24.86 $ 24.86 MUNICIPAL OPERATIONS Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Municipal Operations Admin $ (0.02) $ (0.02) 2. Infrastructure Management $ 1.02 $ 1.02 3. Engineering and Growth $ 5.18 $ 5.18 4. Traffic Eng and Systems $ 6.78 $ 6.78 5. Snow Control Streets $ 27.39 $ 27.39 6. Snow Control Sidewalks $ 5.96 $ 5.96 7. Sidewalk Maintenance $ 5.39 $ 5.39 8. Storm Drainage $ 14.36 $ 14.36 9. Street Cleaning $ 11.91 $ 11.91 10. Clean Saint John - Solid Waste $ 27.41 $ 27.41 11. Street Services $ 36.58 $ 36.58 Total Municipal Operations $ 141.96 $ 141.96 LEISURE SERVICE Summary of Growth- Impact Expenditures Residential Non - Residential Per Capita Per Employee 1. Facilities - Neighbourhood Improvement $ 14.80 $ - 2. Arenas $ 11.66 $ - 3. Sports Admin $ 1.77 $ - 4. Landscape $ 15.06 $ 5. Pro Kids $ 0.58 $ 6. Rockwood Park $ 1.33 $ - 7. Contracted Services $ 0.88 $ 8. Subsidies: Facilities Usage $ 1.43 $ 9. Recreation Community Groups $ 0.35 $ Total Leisure Services $ 47.85 $ - HEMSON 102 APPENDIX C.2 - PAGE 2 CITY OF SAINT JOHN FISCAL IMPACT ANALYSIS OF PLAN SAINT JOHN SUMMARY OF CURRENT OPERATING COST IMPACTS BY SERVICE PLANNING & DEVELOPMENT SERVICES Summary of Growth - Impact Expenditures HEMSON 103 Residential Non - Residential Per Capita Per Employee 1. Community Planning $ (5.84) $ (5.84) 2. Real Estate $ 1.76 $ 1.76 3. GIS $ 1.05 $ 1.05 4. Municipal Plan $ 6.19 $ 6.19 5. Heritage $ 0.98 $ 0.98 6. Planning Advisory Committee $ - $ - 7. Environment Committee $ 0.02 $ 0.02 Total Planning Services $ 4.14 $ 4.14 POLICE SERVICE Summary of Growth - Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Protective Service $ 97.37 $ 97.37 2. PSCC $ 9.62 $ 9.62 Total Police Services $ 106.99 $ 106.99 ECONOMIC DEVELOPMENT SERVICE Summary of Growth- Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Regional Economic Development $ 0.94 $ 0.94 2. Saint John Development Corporation/Waterfront Development Partnership $ 1.21 $ 1.21 1 Waterfront Development Partnership $ - $ - 4. Saint John Industrial Parks LTD $ 1.35 $ 1.35 5. Market Square $ (1.21) $ (1.21) 6. Saint John Trade and Convention Centre $ 2.45 $ 2.45 7. Harbour Station $ - $ - 8. Tourism Promotion Service $ 1.68 $ 1.68 Total Economic Development $ 6.41 $ 6.41 ARTS AND CULTURE Non - Residential Non - Residential Per Capita Per Employee 1. Imperial Theatre $ - $ - 2. Saint John Arts Centre $ 0.16 $ - 3. Arts and Culture Board $ - $ - 4. Symphony $ - $ - 5. NB Arts Board $ 0.15 $ - 6. Opera New Brunswick $ - $ - 7. Cultural Affiars Office $ 0.41 $ - 8. Commitment to Cultural Capitals $ - $ - 9. Imperial Theatre Capital Campaign $ - $ - 10. St. John Theatre Arts $ - $ - Total Arts and Culture $ 0.71 $ - RECREATION /LEISURE SERVICE Summary of Growth - Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Lord Beaverbrook $ - $ - 2. Aquatic Centre $ - $ - 3. Saint John Horticultural Association $ - $ - 4. Loch Lomond Community Centre $ - $ - 5. Cherry Brook Zoo $ - $ - Total Recreation /Leisure Service $ - $ - SPECIAL EVENTS Summary of Growth - Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Special Events $ 1.24 $ - SOCIAL DEVELOPMENT SUPPORT Summary of Growth- Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Social Development Support $ 3.33 $ - PUBLIC TRANSIT SERVICE Summary of Growth- Impact Expenditures Non - Residential Non - Residential Per Capita Per Employee 1. Saint John Transit Operating $ 28.67 $ 28.67 2. Saint John Transit Debt $ - $ - Total Public Transit Services $ 28.67 $ 28.67 OTHER SERVICE Summary of Growth- Impact Rxpenditures Non - Residential Non - Residential Per Capita Per Employee 1. Water Supply & Hydrants $ (3.99) $ (3.99) 2. Street Lighting $ 4.33 $ 433 3. Property Assessment $ 5.07 $ 5.07 4. Parking and Administration Support $ (12.83) $ (12.83) 5. Liability Insurance $ 1.59 $ 1.59 6. Animal and Pest Control $ 0.71 $ 0.71 Total Other Service $ (5.12) $ (5.12) FUNDING Summary of Growth - Impact Rxpenditures Non - Residential Non - Residential Per Capita Per Employee 1. Pension Liability $ (0.65) $ (0.65) FISCAL CHARGES Non - Residential Non - Residential Per Capita Per Employee 1. Debt Payments $ (4.24) $ (4.24) Total Cost per Capita /Employee $ 466.34 $ 480.67 HEMSON 103 3 C F 2 u 2 2 G x M O n U C x ? v E a v Z N > w u 04 a as r �C 4 a CC v u N O N N rrwrm.- M 43 ------ M N N tm W 0 n m W O M O O_ N M 43 19 43 fA 43 fA 43 O Q N N l�tmnNON ' M b9 43 dt M 64 43 43 O T M O N W N t0 N O co v M rMVrm.- 43 43 V3 43 f9 41 t9 M O N W O r M M O m N M 43 4i 43 d3 4i H 43 N ap N N N N nNMtp O�- M 43 43 43 43 43 E9 4i N r M 0 0 m N M N O N M rNrrco� ' 43 41 43 43 43 V3 43 M NON W O n n O M 0' M 43 fA d3 43 H 43 43 N W N N N rQtm tOO(O ' 43 lA l9 43 43 f9 43 M V M O N W V N N O tp M N o C 43 d3 43 d3 43 d3 43 N N N N O O] O Ol Q N W N n o Q 43 43 43 4f 43 t9 v3 N N. 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