Page 192 - Littleton, CO Comprehensive Plan

Fiscal Impact Analysis
The City of Littleton, CO

Other general items to note are as follows:

▪ We generally projected operating costs on an average basis with demand factors specific to
the service being modeled. Personnel costs are modeled to reflect the fact that some types of
positions (e.g., department directors) are fixed and would not increase regardless of growth.
▪ Under the marginal cost approach, growth triggers facilities and other infrastructure needs
that are built, acquired, or improved once a capacity threshold is reached, resulting in
“lumpier” fiscal impact results. The following exception should be noted:

• The transportation capital costs projected in this analysis align with the Transportation
Master Plan component of the Envision Littleton Comprehensive Plan; it is assumed that
transportation infrastructure investments will be driven by growth in population and jobs.
Because population and jobs are projected to grow at a consistent rate, transportation
capital costs follow this same linear pattern.

▪ It is assumed that capital improvements projected to serve growth are financed on a pay-go
basis, meaning they are cash-funded at the time the infrastructure is developed or acquired.

LEVELS OF SERVICE

Cost projections are based on the “snapshot approach” in which it is assumed the current level of
service, as funded in the City’s FY2019 budget, will continue through the projection period. Current
demand base data was used to calculate unit costs and service level thresholds. Examples of demand
base data include population, dwelling units, employment by industry type, and jobs. Note that the
“snapshot” approach does not attempt to speculate about how levels of service, costs, revenues, and
other factors will change over the planning period. Instead, it evaluates the fiscal impact to the City
as it currently conducts business under the present budget.

REVENUE FUND STRUCTURE

Revenues are projected assuming that the City’s current revenue fund structure as defined by the
FY2019 budget will not change.

INFLATION RATE
The rate of inflation is assumed to be zero throughout the projection period, and cost and revenue
projections are in constant 2019 dollars. This assumption is in accord with current budget data and
avoids the difficulty of forecasting as well as interpreting results expressed in inflated dollars. In
general, including inflation is complicated and unpredictable. This is particularly the case given that
some costs, such as salaries, increase at different rates than other operating and capital costs such as
contractual and building construction costs. These costs, in turn, almost always increase in variation
to the appreciation of real estate. Using constant 2019 dollars reinforces the snapshot approach and
avoids these problems.

4