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Growth is perceived by some as having a net positive fiscal impact on the municipality involved. Growth based on sound planning can benefit the community and the overall economy of the municipality; however, it also creates demand for the construction of new infrastructure, expansion of local services and associated operating expenditures.
For the past 25 years, Watson & Associates has assisted municipalities in undertaking long range fiscal impact assessments of growth as part of either a secondary plan review, an individual official plan amendment or as input to economic development, growth management and/or tax policy studies. This evaluation provides valuable insights into anticipated future costs and benefits which may then be addressed through financial policies incorporated as part of the planning approval process or negotiations with specific developing landowners. Key considerations of a fiscal impact assessment include:
- evaluation of the amount, type and timing of land development;
- assessment of infrastructure needs (direct and indirect) associated with growth;
- assessment of potential capital revenues and policies regarding direct developer provision;
- operating expenditures associated with infrastructure construction and/or related to overall growth;
- operating revenues to be generated through taxation and non-tax sources;
- overall assessment of net financial impact of development;
- financial policy recommendations to mitigate any negative impacts on the municipality.
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