Does growth pay for itself? Finally, a planning tool can help cities answer the question

·7 min read

A new planning tool that calculates the cost of growth is a game changer for development in Boise and throughout the Treasure Valley.

The tool, with the unimaginative name “Fiscal Impact Tool,” or “FIT,” was unveiled in a webinar Tuesday by the Community Planning Association of Southwest Idaho, or Compass.

“This is a pretty unique tool,” Colin McAweeney, senior fiscal and economic analyst for TischlerBise, a planning firm hired to build this tool, said during Tuesday’s webinar. “We do fiscal impact analysis across the country, and we generally do it just for one community, say, a city or a county. There’s been a couple examples where a tool like this has been put together for a region, but really, currently, this is sort of groundbreaking, especially in Idaho.”

I’ve been watching development in the Treasure Valley for 15 years, and cities typically are given a binary decision: approve or not approve a development that comes before them.

For the most part, that decision has been somewhat of a shot in the dark.

It usually goes something like this: Farmer sells 80 acres of land to a developer. Developer proposes a single-family residential development of three houses per acre. Developer comes before Planning and Zoning and City Council with a proposal to build 240 houses on those 80 acres. There might be a pocket park and a little bit of open space. Usually, there’s a report from the Ada County Highway District talking about the current levels of service that the roads provide and how many vehicle trips this subdivision will produce once built out completely. There will be discussion about sewer hookups, irrigation water, sidewalks, curbs, gutters. The development gets approved.

A few years later, the police department then needs more police officers, the fire department wants to build a new fire station on the west side of town to serve those new subdivisions, and they need a new firetruck and ambulance, and also they need more people to staff the new fire station.

A nearby intersection with a two-way stop becomes the site of a growing number of serious crashes, but ACHD doesn’t have the money to improve that intersection.

Valley Regional Transit wants to build a park-and-ride lot to encourage drivers to take the bus into Boise to alleviate traffic on Interstate 84, so they ask for cities and the county to help pay for it. Cities don’t want to pay for it because, in their logic, “nobody takes the bus.”

The school district asks voters to approve a $15 million bond, paid for by property taxes, to build a new elementary school because of all the new subdivisions filled with children whose families have moved there.

Seemingly endless cycle of growth

Such is the seemingly endless cycle of growth and the associated costs in the Treasure Valley.

The problem is that planning commissioners and council members haven’t really been taking into account all those future costs that come with approving that 240-house subdivision.

That’s all about to change with the new fiscal impact tool that Compass is launching.

As demonstrated Tuesday, the tool will allow planners to plug in different types of a proposed development — such as a 240-house, single-family residential subdivision, a 20,000-square-foot grocery store or a 100,000-square-foot big box store — and tell planners when the city, county, school district or highway district would “break even.” In other words, when would the revenues from that project exceed all of those expenses associated with providing services to the project?

Or, the tool can tell them whether it would break even at all.

“Never before had Ada County or any of our six cities run what’s called a fiscal analysis to understand the true costs of growth,” former Ada County commissioner Diana Lachiondo told me in an interview earlier this year. “And that’s now being done through Compass so that all six cities and the county and ACHD can understand how some proposed new development will either cost a whole lot more to service — or not. And I think that’s critically important as we move forward if we’re going to figure out how we can grow in a way that doesn’t continue to burden existing homeowners.”

Lachiondo was one of the main proponents for bringing this tool to fruition. Her reward? Developers paid big bucks to run negative campaign ads against her and get her voted out of office. She lost the election in November to Republican Ryan Davidson.

“It’s not that I dislike development or saying growth isn’t going to happen,” Lachiondo said. “We’re just being honest about what the costs are. And I’ll tell you as it relates to my election, this is why I got hammered. ... But we’re just showing the data, we’re showing the dollars and cents of what it is going to cost. Now if those communities, say, ‘Well, we still think it’s really important and this is why,’ okay. But we need to go into it eyes wide open about what the costs are. And that’s sort of been my hill that I was willing to die on. Obviously.”

A tool like this has been a long time coming for the Treasure Valley and should help planners make smart, data-driven decisions when proposals come before them.

Proposed big-box store

In 2006, a developer proposed a big-box store in what was then a farm field at the southwest corner of Deer Flat and Meridian roads in Kuna. A lot of locals argued that a Walmart would destroy downtown. Proponents argued Kuna would benefit from sales taxes. But when I did some research, I learned that cities don’t collect sales tax from outlets at the point of sale. Instead, the state collects all sales taxes and then distributes that revenue based on a complicated formula that includes population.

I also looked at what the increased property taxes would be converting land from a farm field to a big-box store and found property taxes to the city of Kuna would increase something like $10,000 or $20,000, and I asked the question whether that would even be enough to support increased police services.

My rudimentary analysis at that time is just a sliver of the kind of fiscal analysis this tool will calculate. It will take into account not just police services, but fire protection, bus services, the roads and ambulance coverage as well as impacts on libraries and school districts.

In the Kuna big-box example, city council members ended up approving the proposal, and that corner now holds a Ridley’s, a Bi-Mart, a McDonald’s, a car wash, a KJ’s convenience store, an Idaho Central Credit Union branch and more. Other commercial development has sprung up around it.

So what happens when a proposal comes back with a report of “doesn’t break even”? What, then, does a city council member or county commissioner do?

“Fiscal results are one of many, many decision tools for decision makers,” McAweeney said. “There are going to be some (projects) that don’t pencil, if it’s helping to address another goal or initiative by the community. Maybe it’s a development that’s approved that doesn’t pencil, but it’s a decision that’s been made to address other needs.”

For example, a community may want to attract more restaurants, which might not generate the property tax revenue to support roads and police services, but the community is willing to accept that negative fiscal impact in order to have more restaurants.

In the Kuna example, having a big-box store simply as an amenity for residents was a driving factor perhaps above the fiscal impact on police services — a cost benefit the city was willing to make.

“On the other side, if (a project) doesn’t pencil, the developer and the community could come together to address that,” McAweeney said. “Is there a large capital infrastructure trigger that’s really not being offset by the development? And maybe there’s negotiations that can come into play to help offset and mitigate those costs.”

So, for example, a subdivision developer could donate land for a new school or a new fire station to bring that project’s net negative impact down a little bit.

Whatever the scenario, this tool brings the Treasure Valley into the modern age and should help decision makers finally answer that question: Does growth pay for itself?

And it will give cities and counties, those making land-use decisions, leverage when negotiating with developers.

Scott McIntosh is the opinion editor of the Idaho Statesman. You can email him at smcintosh@idahostatesman.com or call him at 208-377-6202. Follow him on Twitter @ScottMcIntosh12.