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Fiscal Impacts

Introduction

In addition to the build-out analysis, another important way to gauge the current status of the Town is to determine the cost of providing services to its residents. This is done by employing a cost of community services (COCS) study that essentially answers the question of whether new development pays for itself or not. In other words, it is useful for the Town to know how much is spent to provide services for every dollar received in revenue. The analysis done here compares revenues and expenses for residential, commercial/industrial, and open space land uses. Although there may be an empirical difference between commercial and industrial properties, it was not necessary to differentiate between the two because it would not have any material impact on the final outcome. Combined with the build-out data, Littleton can determine whether changes should be made in future land use policy that may provide greater fiscal benefit.

There are a couple of important points worth making here regarding a COCS study. First, it provides a current snapshot of revenues and expenditures based on different land uses as measured by the demand for services. Thus, it is a look backwards and is not designed to predict how future decision-making will impact fiscal resources. Second, by including open space uses such as farmland, forests, and recreational resources, the study compares them with the more intensively built environment from a fiscal perspective. However, such uses are not judged for their intrinsic values.

Methodology

The methodology used for this analysis was developed by the American Farmland Trust and has been used by communities across the country. As mentioned above, it provides a snapshot of the data for a given fiscal year. In this case, data from Fiscal Year 1999 was available, providing the most current assessment possible.

There are several basic steps for conducting a COCS study.

First, the land use categories must be defined. In Littleton, the categories were residential; commercial/industrial; and farmland, forest and open space.

Second, data was collected from the Town’s annual reports and information provided by Town departments, including the Assessor’s Office. Additional information was obtained regarding specific revenues and expenditures in order to clarify how they should be assigned.

Third, the revenues must be allocated by land use. This includes property tax and other local receipts such as excise taxes and fees, state aid, investment income, revenue generated specifically for departmental programs, and other miscellaneous sources.

Fourth, expenditures are allocated by land use. The major categories would include public safety, public works, education, human services, and government.

Finally, the data is evaluated and the ratios are calculated.

Revenues and expenses for each line item in the Town’s financial statements were assigned by land use based upon the type of service provided. Most municipal records do not allocate revenues and expenses by land use. There are a number of expenses that can only be attributed to one land use category, such as education, human services and recreation, which are assigned solely to residential properties.

Since many of the revenues and expenses should be attributed to all land uses, such as public safety and general administrative expenses, they were spread across each category on the basis of the fallback ratios, which are weighted ratios calculated using the assessed value for all parcels in accordance with each land use category. For example, if 75% of all assessments were attributed to residential development, 75% of the revenues and expenses were allocated to the residential category. When it was unclear as to how a revenue or expense should be allocated, these fallback ratios were utilized. These are shown in Table 10‑1 and Table 10‑2 below.

v v Revenues

Table 10 ‑ 1 Littleton Revenues by Land Use Type

v v Expenses

Table 10 ‑ 2 : Littleton Expenditures by Land Use Type

Cost of Community Services

The results of the Littleton analysis are consistent with the results found throughout the southern New England area. For every dollar raised in revenue from residential development, the Town must provide $1.16 in services. This is primarily due to the costs of education, even accounting for any state aid. However, both commercial/industrial development ($.37) and open space ($.34) bring in more in revenues than they cost in services, resulting in a net fiscal benefit to the Town from these land uses. The details are shown in Table 10‑3 below.

Table 10 ‑ 3 Littleton Cost of Community Services Ratios