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1.21 Fiscal & Economic Impact Report
Spring Valley Ranch Construction and subsequent operations of the proposed Spring Valley Ranch (SVR) development will generate significant benefits for the local economy and public service providers. The net fiscal benefit to Garfield County is estimated at $3,840,000 annually (at full buildout). Other benefits include: • Diversification of property tax base • Limited increase to service population • Local employment and income opportunities • New source of demand (sales) for local businesses • Financial resources to address community/housing needs • Expansion to affordable housing supply $2,298,000 Annual net fiscal benefit to fire services upon buildout < 1 % Increase to countywide service population upon buildout $75,800,000 Real estate transfer fee contributions over initial 15 years generated from mandatory 2% transfer fee on all real estate sales in perpetuity $10,277,000 Annual net fiscal benefit to Roaring Fork Schools upon buildout $48,624,000 Annual volume of local economic activity upon buildout Economic Impacts on Gareld County Economy One-time Economic Benefits One-time construction expenditures to develop the land/lots, housing units, and community amenities will support average annual impacts of: •1,213 jobs in Garfield County; •$74 million of annual labor income; and •$239 million of annual output (i.e., volume of economic activity). The seven phases of development and construction are anticipated to occur over about 13 years, directly and indirectly generating nearly 15,800 “job years” in Garfield County. About 40% of employment during the construction period will be in non-construction industries such as retail trade, healthcare, finance and real estate, and professional services. On-going Economic Benefits Once SVR is fully built and occupied, the recurring or “on-going” operations of the community amenities, household spending, and real estate transfer fee expenditures will support average annual impacts of: •417 permanent jobs in Garfield County; •$15 million of annual labor income; and •$49 million of annual output. About 47% of the on-going economic benefits within the county are forecast to occur off-site. Positive Fiscal Benets to Public Districts Total Revenues Upon full buildout, the SVR development is estimated to generate revenues including: •$4.3 million annually for Garfield County; •$11 million annually for the Roaring Fork School District; and •$3.3 million annually for a future Fire/EMS service provider. Property tax benefits to other taxing districts will also be significant, estimated at about $3 million annually upon full buildout. Revenues Annual During 15-Yr Buildout Annual Upon Full Buildout Garfield County (Property Tax, Sales Tax, Specific Ownership Tax, etc.) $1,867,000 $4,321,000 Roaring Fork Schools (Property Tax)$4,436,000 $10,997,000 Fire District (Property Tax)$1,348,000 $3,340,000 Other Districts (Property Tax)$1,227,000 $3,041,000 Total $8,878,000 $21,699,000 Net Fiscal Benefits The proposed SVR development is forecast to have a significant net positive effect on public districts including Garfield County, the Roaring Fork School District, and a future Fire service provider. The annual net fiscal impacts (i.e., revenues less additional service costs) are estimated to result in large operating surpluses at full buildout. •County: $3,840,000 annually •Schools: $10,277,000 annually •Fire: $2,298,000 annually In some cases, the surplus revenues could allow districts to pass savings on to other taxpayers, improve levels of service, or some combination of both.$2,848,000 One-time impact fees to Garfield County (road and school in-lieu fees) Source: Gruen Gruen + Associates, 2024 Projected Annual Property Tax Revenues Through Buildout $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 4 5 6 7 8 9 10 11 12 13 14 15 Roaring Fork Sc hools Garfield County Fire District*Other Districts** $3,840,000 Annual net fiscal benefit to Garfield County operations at buildout THE FISCAL AND ECONOMIC IMPACTS ASSOCIATED WITH THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT BY STORIED DEVELOPMENT To STORIED DEVELOPMENT From GRUEN GRUEN + ASSOCIATES Urban Economists, Market Strategists & Land Use/Public Policy Analysts May 2024 C1661 THE FISCAL AND ECONOMIC IMPACTS ASSOCIATED WITH THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT BY STORIED DEVELOPMENT To STORIED DEVELOPMENT From GRUEN GRUEN + ASSOCIATES Urban Economists, Market Strategists & Land Use/Public Policy Analysts May 2024 C1661 ©2024 Gruen Gruen + Associates. Do not reproduce without permission from Gruen Gruen + Associates. PAGE i TABLE OF CONTENTS Page CHAPTER I: INTRODUCTION AND KEY FINDINGS AND CONCLUSIONS ...................... 1 INTRODUCTION ....................................................................................................................................................... 1 METHODOLOGICAL APPROACH ...................................................................................................................... 1 2024 CONSTANT DOLLARS ................................................................................................................................... 2 KEY FINDINGS AND CONCLUSIONS .............................................................................................................. 3 Economic Impacts on Garfield County Economy ................................................................................................... 3 Net Fiscal Impact on Garfield County ....................................................................................................................... 4 Net Annual Fiscal Impact on School District ........................................................................................................... 5 Net Annual Fiscal Impact on Fire District ................................................................................................................ 6 One-Time Impact Fees ................................................................................................................................................. 7 Transfer Fee Contributions .......................................................................................................................................... 7 CHAPTER II: BASELINE ASSUMPTIONS AND PROJECT CHARACTERISTICS .................... 8 INTRODUCTION ....................................................................................................................................................... 8 DEMOGRAPHIC AND ECONOMIC PROFILE OF GARFIELD COUNTY ............................................ 8 PROJECT CHARACTERISTICS AND ASSUMPTIONS ................................................................................. 11 PROJECT POPULATION AT BUILDOUT........................................................................................................ 13 CHAPTER III: ECONOMIC IMPACTS OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY ................................................... 15 INTRODUCTION ..................................................................................................................................................... 15 TYPES OF ECONOMIC IMPACTS ESTIMATED ........................................................................................... 15 SUMMARY OF THE ECONOMIC IMPACTS OF THE SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY ............................................................... 17 SOURCES OF DIRECT ECONOMIC IMPACTS ............................................................................................. 18 ONE-TIME ECONOMIC IMPACTS OF CONSTRUCTION ........................................................................ 21 ON-GOING ECONOMIC IMPACTS OF HOUSEHOLD SPENDING .................................................... 23 ON-GOING ECONOMIC IMPACTS OF AMENITY OPERATIONS ....................................................... 23 ON-GOING ECONOMIC IMPACTS OF TRANSFER FEE EXPENDITURES ..................................... 24 TOTAL TAXABLE SALES ESTIMATE WITHIN GARFIELD COUNTY ................................................ 25 CHAPTER IV: NET FISCAL IMPACT OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON GARFIELD COUNTY ...................................................................................... 26 INTRODUCTION ..................................................................................................................................................... 26 GARFIELD COUNTY REVENUES ..................................................................................................................... 27 ESTIMATE OF COUNTY SALES TAX REVENUES ..................................................................................... 29 PAGE ii GARFIELD COUNTY SERVICE COSTS ........................................................................................................... 31 ANNUAL NET FISCAL IMPACT ON GARFIELD COUNTY ..................................................................... 35 CHAPTER V: NET FISCAL IMPACT OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON LOCAL SCHOOL AND FIRE DISTRICTS ................................................. 36 INTRODUCTION ..................................................................................................................................................... 36 NET FISCAL IMPACT ON ROARING FORK SCHOOL DISTRICT ........................................................ 36 NET FISCAL IMPACT ON A FUTURE FIRE SERVICE PROVIDER ....................................................... 41 APPENDIX A: ESTIMATE OF ROAD IMPACT AND SCHOOL LAND IN-LIEU FEES ....... 44 APPENDIX B: ESTIMATE OF TRANSFER FEE REVENUES ....................................................... 45 PAGE iii LIST OF TABLES Page TABLE I-1: TOTAL ECONOMIC IMPACT OF SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY ........................................................................... 3 TABLE I-2: NET FISCAL IMPACT ESTIMATES FOR GARFIELD COUNTY ...................................... 4 TABLE I-3: NET FISCAL IMPACT ESTIMATES FOR ROARING FORK SCHOOL DISTRICT ..... 5 TABLE I-4: NET FISCAL IMPACT ESTIMATES FOR FUTURE FIRE SERVICE PROVIDER ........ 6 TABLE II-1: BASELINE DEMOGRAPHIC AND EMPLOYMENT ESTIMATES FOR GARFIELD COUNTY (2022) ................................................................................................ 8 TABLE II-2: HISTORICAL POPULATION AND JOB GROWTH IN GARFIELD COUNTY, 2012-2022 ......................................................................................... 10 TABLE II-3: SPRING VALLEY RANCH DEVELOPMENT ASSUMPTIONS ........................................ 12 TABLE II-4: ESTIMATED SPRING VALLEY RANCH RESIDENT EQUIVALENT POPULATION AT BUILD-OUT .................................................................. 13 TABLE III-1: ESTIMATED ANNUAL ECONOMIC IMPACTS OF SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY ..................................... 17 TABLE III-2: ESTIMATED TOTAL AND AVERAGE ANNUAL HARD CONSTRUCTION COST EXPENDITURES............................................................................ 18 TABLE III-3: ANNUAL EXPENDITURES FOR TWO INCOME BRACKETS ....................................... 19 TABLE III-4: ANNUAL TRANSFER FEE EXPENDITURES AT BUILDOUT ....................................... 20 TABLE III-5: ESTIMATED AVERAGE ANNUAL IMPACTS OF CONSTRUCTION ACTIVITY ON THE GARFIELD COUNTY ECONOMY1.................................................. 21 TABLE III-6: ESTIMATED AVERAGE ANNUAL IMPACTS OF HOUSEHOLD SPENDING ON THE GARFIELD COUNTY ECONOMY1 ............................................... 23 TABLE III-7: ESTIMATED AVERAGE ANNUAL IMPACTS OF AMENITY OPERATIONS ON THE GARFIELD COUNTY ECONOMY ..................... 23 TABLE III-8: ESTIMATED AVERAGE ANNUAL IMPACTS OF TRANSFER FEE EXPENDITURES ON THE GARFIELD COUNTY ECONOMY1 .................................... 24 TABLE III-9: TOTAL ANNUAL SALES GENERATED BY CONSTRUCTION ACTIVITY AND ONGOING OPERATIONS UPON PROJECT BUILDOUT ............................................... 25 TABLE IV-1: GARFIELD COUNTY HISTORICAL TAX REVENUE BY SOURCE ($2024)1.............. 27 TABLE IV-1: PROJECTION OF ANNUAL COUNTY PROPERTY TAX REVENUES ........................ 28 TABLE IV-2: PROJECTION OF ANNUAL COUNTY SALES TAX REVENUES .................................. 29 TABLE IV-3: PROJECTION OF OTHER COUNTY REVENUES .............................................................. 30 TABLE IV-4: HISTORICAL GARFIELD COUNTY GOVERNMENTAL FUND REVENUES AND EXPENDITURES ($2024) ............................................................ 31 TABLE IV-5: HISTORICAL EXPENDITURES PER RESIDENT EQUIVALENT IN GARFIELD COUNTY ($2024) ................................................................. 32 PAGE iv TABLE IV-6: ESTIMATED PER-CAPITA COSTS OF GARFIELD COUNTY SERVICE PROVISION ............................................................................................... 33 TABLE IV-7: PROJECTION OF ANNUAL COUNTY SERVICE COSTS ................................................. 34 TABLE IV-8: ANNUAL NET FISCAL IMPACTS ON GARFIELD COUNTY ......................................... 35 TABLE V-1: SPRING VALLEY RANCH STUDENT GENERATION ESTIMATE AT BUILDOUT ......................................................................................................... 37 TABLE V-2: PROJECTION OF SCHOOL DISTRICT PROPERTY TAX REVENUES ....................... 39 TABLE V-3: PROJECTION OF ANNUAL NET FISCAL IMPACT ON SCHOOL DISTRICT .......... 40 TABLE V-4: LOCAL FIRE DISTRICT CHARACTERISTICS ...................................................................... 41 TABLE V-5: ESTIMATED ANNUAL OPERATING COST OF PROVIDING FIRE SERVICE AT BUILDOUT (BASED ON PER-CAPITA ESTIMATE) .................... 42 TABLE V-6: PROJECTION OF ANNUAL NET FISCAL IMPACT ON FIRE DISTRICT .................. 43 TABLE A-1: ROAD AND SCHOOL IMPACT FEE ESTIMATES .............................................................. 44 TABLE B-1: PROJECTION OF 2% TRANSFER FEE REVENUES .......................................................... 45 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 1 CHAPTER I INTRODUCTION AND KEY FINDINGS AND CONCLUSIONS INTRODUCTION This report summarizes an evaluation by Gruen Gruen + Associates (GG+A) of the fiscal and economic impacts of the proposed Spring Valley Ranch (SVR) development on the local economy, Garfield County budget, and other public districts. The proposed SVR development is located east of Highway 82 between Glenwood Springs and Carbondale and is anticipated to remain in unincorporated Garfield County. The PUD amendment includes 502 single-family lots and at least 75 affordable housing units. For purposes of the fiscal and economic impact analysis described in this report, the proposed SVR “development program” is modeled to include 500 custom single-family homesites, 75 affordable housing units, and several hundred acres of private community amenities including golf courses, ski trails, and restaurants and clubhouses. All amenities and internal roadways will be privately maintained and operated. Additionally, more than one-half of the ranch is planned to remain as dedicated open space. The fiscal impact analysis summarizes estimates of the balance between revenues and costs or net fiscal effects (revenues less costs) of the proposed SVR development on public entities including Garfield County, the Roaring Fork School District, and a future provider of Fire and EMS services. The economic impact analysis summarizes the increases in jobs (employment) and incomes estimated to result in Garfield County from the one-time construction and subsequent ongoing operations and occupancy of the proposed SVR development. METHODOLOGICAL APPROACH This fiscal impact analysis is based on our review of annual budgets and publicly available financial reports, information obtained from Storied Development about the expected characteristics of the proposed development, interviews with county and school district representatives, and a review and analysis of secondary data sources related to population, economic, and enrollment characteristics of Garfield County and local education and fire service districts. The fiscal impact analysis quantifies the net effects on operational on ongoing service costs, not one- time costs recovered via building permits, plan review, or capital impact fees. These services are assumed to be set at adequate rates that will recoup public costs. We draw upon the specific characteristics of the proposed development to estimate revenues such as property taxes and sales taxes which are affected by the attributes and occupancy characteristics of different land uses. The specific methodologies used to estimate each service cost or revenue item are discussed in the appropriate sections of this report. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 2 The economic impact analysis is based on characteristics of the proposed SVR development program and secondary data obtained from the U.S. Bureau of Economic Analysis, a provider of custom input- output multipliers (RIMS II data) for local economies. The study area for the economic impact analysis is Garfield County, Colorado. Definition of Buildout The infrastructure, single-family lots, affordable housing units, and community amenities are expected to be developed and absorbed in seven phases over approximately 11 years. For purposes of the fiscal and economic impact analysis contained in this report, the vertical construction of single-family homes is assumed to occur over two-year periods following each phase of lot development. Thus, the SVR development and construction would be substantially completed by Year 13. Additionally, a two-year lag between the completion of housing units and amenities and full property assessment and property tax collection is assumed. Therefore, the full “buildout” condition is defined as Year 15 when the proposed SVR development is assumed to be fully constructed, occupied, and assessed (for tax purposes). Annual estimates of the economic benefits, public revenues, and public service costs are provided for this full buildout condition. Throughout the report, average annual estimates are provided during the initial development and absorption period which is commonly referred to as the “15-year buildout phase” or period. 2024 CONSTANT DOLLARS All cost and revenue projections in this report are expressed in constant 2024 dollars. That is, the possible effects of inflation or deflation on future revenues and costs are not quantified. All historical references to public district revenues or expenditures have also been adjusted to 2024 dollars based on the Consumer Price Index for urban consumers in the Western United States. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 3 KEY FINDINGS AND CONCLUSIONS Economic Impacts on Garfield County Economy The development and occupancy of residential and amenity space at the proposed SVR development will generate economic impacts on the local economy from two distinct sources. Initial one-time impacts will result from project construction activity and expenditures as the project is built over seven phases. Economic impacts associated with development and construction activity are temporary in nature, coinciding with the phases of development. Once improvements, lots, single-family homes, affordable housing units, and the private amenities are completed and occupied, the SVR project will begin to generate a separate “on-going” economic impact on the local economy. Private amenity memberships will pay wages to employees, project households will purchase off-site goods and services from other businesses in Garfield County, and so forth. Additionally, property owners will be subject to a two percent (2%) transfer fee on real estate transactions. This transfer fee revenue will generate its own recurring economic impact as philanthropic funds circulate throughout the local economy. Table I-1 summarizes the estimated overall economic impact of the SVR project on the Garfield County economy. TABLE I-1: Total Economic Impact of Spring Valley Ranch Development on the Garfield County Economy Average Annual Employment # Jobs Average Annual Income $ Average Annual Output $ One-Time Impacts of Construction Activity 1 1,213 74,169,000 238,614,000 On-Going Impacts of Households/Operations 2 417 14,514,000 48,624,000 1 Occurring over initial 13 years. 2 Recurring impacts upon full buildout and occupancy of the SVR development. Sources: Storied Development; RIMS II Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. The one-time construction and development activity is forecast to support average annual employment of 1,212 jobs and annual income of approximately $74 million within Garfield County over a 13-year construction period. Development activity is forecast to support a total of 15,767 job years within the local economy (one “job year” equals one job for a period of one year). Approximately 40 percent of all local employment resulting from construction and development expenditures are estimated to be in non-construction industries such as retail trade, healthcare, finance and real estate, and professional services. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 4 Upon the full buildout of the project, household spending and ongoing operations are forecast to generate a total employment impact of 417 permanent jobs, annual income of $14.5 million, and annual output (revenue) of $48.6 million within the Garfield County economy. Net Fiscal Benefit to Garfield County The proposed SVR development is forecast to have a significant net-positive effect on Garfield County funds. Table I-2 summarizes the additional annual county revenues and service costs estimated to result during and after buildout of the project. TABLE I-2: Net Fiscal Impact Estimates for Garfield County Average Annual During 15-Yr Buildout Period $ Annually Upon Full Buildout $ County Revenues 1,867,000 4,321,000 County Service Costs (281,000) (481,000) Annual Net Benefit 1,586,000 3,840,000 Source: Gruen Gruen + Associates County revenues, primarily including property tax, are forecast to average about $1,867,000 annually during an initial 15-year buildout period. Additional county service costs related to general government, public safety, health and welfare, and public works are estimated to average about $281,000 annually over the same period. The difference suggests an average annual “surplus” of approximately $1,586,000 during the buildout process of the SVR development. Once the project is fully built, occupied, and assessed, annual county revenues are forecast to be much higher at nearly $4.3 million. With estimated county service costs of $481,000 annually, the surplus or net revenue benefit to the county is forecast to increase to about $3.8 million annually upon the full buildout of the SVR development. Garfield County could use the large annual surplus to pass savings on to other taxpayers, improve its level of services, or some combination of both. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 5 Net Fiscal Benefit to School District Given the level of existing student enrollment, local schools have the capacity to serve additional students potentially generated by permanent residents of the SVR development. The development is projected to generate 53 additional students upon full buildout, which is a conservative estimate that assumes all permanent households of the SVR development would be “new” to the district. The net fiscal impact on the Roaring Fork school district is forecast to be significantly positive, as summarized below in Table I-3. TABLE I-3: Net Fiscal Impact Estimates for Roaring Fork School District Average Annual During 15-Yr Buildout Period $ Annually Upon Full Buildout $ School District Revenues 1 4,436,000 10,997,000 School District Service Costs (446,000) (720,000) Annual Net Benefit 3,990,000 10,277,000 1 Revenue based on a fixed property tax rate for program funding and voter-approved spending override (36.212 mills). Excludes bond redemption mill rate. Source: Gruen Gruen + Associates School district property tax revenues (excluding those collected to pay bond debt) are forecast to average about $4.4 million annually during an initial 15-year buildout period. School operating costs to serve additional students generated by the SVR development are estimated to average about $450,000 annually over the buildout period. The difference suggests an average annual “surplus” of approximately $4 million will be attributable to the SVR development during its buildout phase. Once the SVR project is fully built and assessed, school district property tax revenues are forecast to increase to nearly $11 million annually. With estimated operating costs of $720,000 annually (to serve 53 additional students), the annual surplus or net benefit to the Roaring Fork School District is forecast to increase to nearly $10.3 million upon the full buildout of the SVR development. Approximately 60 percent of local property tax revenues currently collected by the Roaring Fork School District are based on a fixed mill rate set under state law. This effectively means it cannot pass savings onto district taxpayers (by reducing its mill levy rate for general program funding) without a commensurate, offsetting loss in state equalization funding. However, about 40 percent of its current property tax rate is related to a voter-approved spending override and bond redemption. Both mill levies are essentially “fixed dollar” amounts. The value of the SVR development in relation to the total district assessed value could be substantial enough to support a reduction in these tax rates.1 1 Total net assessed value in the Roaring Fork School District is currently $1,850,728,588. The assessed value of the SVR development is projected to be $303,675,500 at buildout (this does not assume/account for any escalation in property values over time), which equates to a 16 percent increase in districtwide assessed value. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 6 Net Fiscal Benefit to Fire District The SVR property is not currently within the boundaries of the Glenwood Springs or Carbondale rural fire districts. Storied Development plans to annex the property into one of the districts and construct and equip an on-site fire station (at its cost). Table I-4 provides an annual order-of- magnitude comparison between local property tax revenues potentially generated by the SVR development and future costs to staff and operate a fire station. TABLE I-4: Net Fiscal Impact Estimates for Future Fire Service Provider Average Annual During 15-Yr Buildout Period $ Annually Upon Full Buildout $ Fire District Revenues 1 1,348,000 3,340,000 Fire District Service Costs (766,000) (1,042,000) Annual Net Benefit 582,000 2,298,000 1 Assumes property tax rate of 11.000 mills. Source: Gruen Gruen + Associates Fire district property tax revenues are forecast to average about $1,348,000 million annually during the buildout phase, based on a rate of assumption of 11.000 mills. Average costs to serve the SVR development and staff and operate a new fire station (by the fifth year of the buildout phase) are estimated to average about $770,000 annually. The difference suggests an average annual “surplus” of approximately $582,000 could be generated for a fire service provider during the initial years of the SVR development. Once the development is fully built and assessed, potential fire district property tax revenues are forecast to increase to approximately $3.3 million annually. With estimated annual operating costs of about $1,042,000 annually, the surplus or net revenue benefit could increase to about $2.3 million annually upon full buildout. Results of the analysis suggest that the SVR development could effectively pay to improve Fire and EMS service levels to other district residents in vicinity of the property and, once the project is fully developed and assessed, that current fire district property tax rates applied to the proposed SVR development would be more than adequate to cover these future costs. Property tax savings could potentially be passed on to other rural fire district residents.2 2 Total net assessed value in the Carbondale & Rural Fire Protection District is currently $647,979,370. Total net assessed value in the Glenwood Springs Rural Fire Protection District is currently $116,459,870. Upon its full completion and assessment, the SVR development would represent a 40 percent increase to the combined assessed values in the two fire districts. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 7 One-Time Impact Fees The fiscal impact analysis does not specifically consider the adequacy of initial one-time fees related to utility taps, building permits, plan review fees, and so forth. These are assumed to be set at rates that will fully recover one-time costs. However, as detailed in Appendix A, estimates of Garfield County Road Impact Fees and School In-Lieu Fees are provided for the proposed SVR development. The development is projected to generate approximately $1.7 million in road impact fees and approximately $1.1 million in school in-lieu (of land dedication) fees. Transfer Fee Contributions An annual two percent (2%) transfer fee on real estate sales within the SVR development will be collected and contributed to local organizations within Garfield County. Appendix B contains a detailed table of Transfer Fee revenue estimates. Sales of finished single-family lots during the buildout and absorption period are projected to generate total transfer fee revenues of $20 million, or approximately $1.8 million annually during buildout. The resales of finished homes during the initial buildout and absorption period are projected to generate additional transfer fee revenues of $47.8 million, or about $3.2 million annually during buildout. Collectively, the SVR development is projected to generate about $68 million in transfer fee contributions over the first 14 years of the project. Once the development is fully completed (with 500 single-family homes built), transfer fee contributions are expected to average $8.0 million annually. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 8 CHAPTER II BASELINE ASSUMPTIONS AND PROJECT CHARACTERISTICS INTRODUCTION This chapter summarizes the baseline demographic assumptions for Garfield County upon which some public expenditure and revenue estimates are based. It also describes the anticipated characteristics of the proposed SVR development program, including the make-up of planned residential uses, household size estimates, market values, and assumptions regarding the timing of future development and project population. DEMOGRAPHIC AND ECONOMIC PROFILE OF GARFIELD COUNTY Table II-1 shows the baseline demographic and employment estimates for Garfield County upon which some revenue and expenditure estimates are based. TABLE II-1: Baseline Demographic and Employment Estimates for Garfield County (2022)1 Unincorporated # Incorporated # County Total # Total Population 25,130 37,124 62,254 Household Population 24,557 36,664 61,221 Households 9,700 14,200 23,900 Average Household Size 2.5 2.6 2.6 Estimated Seasonal Residents 1 1,260 840 2,100 Total Employment (Jobs) 2 8,735 26,204 34,938 Resident Equivalent Population 3 29,812 50,436 80,248 Share 37% 63% 100% 1 GG+A estimate based on reported number of housing units considered vacant for “seasonal, recreational, or occasional use.” 2 Census Bureau LEHD estimates indicate that about 25 percent of wage and salary jobs are located in the unincorporated county. This share is applied to the 2022 estimate of total employment in the county. 3 Assumption is that four (4) seasonal residents generate public service demand equal to one permanent resident; and that two (2) jobs located in the county generate public service demand equal to one permanent resident. Sources: Colorado Department of Local Affairs, State Demography Office; U.S. Census Bureau, 2022 American Community Survey; Gruen Gruen + Associates. According to the Colorado Department of Local Affairs (DOLA), the Garfield County population was estimated at 62,254 in 2022. Approximately 40 percent of the countywide population lived in the unincorporated areas of Garfield County. The number of occupied housing units, or households, is estimated at about 24,000, again with roughly 40 percent of households being in the unincorporated county. The average household size is approximately 2.6 persons per household. Based on the number Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 9 of vacant housing units estimated to be occupied for “seasonal, recreational or occasional use,” we estimate the seasonal population (assuming similar household size as permanent residents) to be about 2,100 seasonal residents. According to DOLA estimates, total employment in Garfield County included an estimated 34,938 jobs as of 2022. Approximately 75 percent of jobs throughout the county are estimated to be located within the incorporated municipalities. Some of the equations used to estimate future public costs to provide services to the proposed development are based on a per-capita measure referred to as “resident equivalents.” This approach combines the resident population, seasonal population, and employment to form a single per-capita metric. For estimates summarized in this report, it is assumed that four (4) seasonal residents generate public service demand equal to one permanent resident; and that two (2) jobs located in the county generate public service demand equal to one permanent resident. As summarized above in Table II-1, based on these assumptions, Garfield County is estimated to contain a total “resident equivalent” population of approximately 80,250. Approximately 29,800 resident equivalents, or 37 percent, are estimated to be in the unincorporated county. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 10 Table II-2 describes how the resident equivalent population of Garfield County is estimated to have changed since 2012. TABLE II-2: Historical Population and Job Growth in Garfield County, 2012-2022 Resident Population # Seasonal Population1 # Employment # Jobs Resident Equivalents2 # 2012 56,415 2,541 31,928 73,014 2013 56,798 3,226 32,267 73,738 2014 57,131 2,805 32,917 74,291 2015 57,495 2,487 33,750 74,992 2016 58,161 2,611 33,396 75,512 2017 58,871 2,738 34,094 76,602 2018 59,769 2,406 34,682 77,711 2019 60,558 2,176 35,118 78,661 2020 61,791 2,268 33,489 79,103 2021 62,164 2,733 34,211 79,953 2022 62,254 2,100 34,938 80,248 Change (%) 10.4 (17.3) 9.4 9.9 1 GG+A estimate based on reported number of housing units considered vacant for “seasonal, recreational, or occasional use.” 2 Assumes that two jobs located in Garfield County generate the same service demand as one permanent resident. Assumes that four seasonal residents generate the same service demand as one permanent resident. Sources: Colorado Department of Local Affairs, State Demography Office; U.S. Census Bureau; Gruen Gruen + Associates. Between 2012 and 2022, the resident population grew by about 10.4 percent or about 5,800 residents. The seasonal population, based on U.S. Census Bureau data, has remained relatively small and stable over time, ranging from about 2,100 up to 3,200 seasonal residents between 2012 and 2022. Employment in Garfield County reportedly grew by about 3,000 jobs or 9.4 percent over the 2012- 2022 period. Employment has not yet recovered to its pre-pandemic peak of more than 35,100 jobs in 2019. The total number of resident equivalents in Garfield County grew by 7,200 or about 10 percent between 2012 and 2022. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 11 PROJECT CHARACTERISTICS AND ASSUMPTIONS Storied Development has provided GG+A information about the project characteristics including number and type of housing units, expected single-family lot and home prices, projected total development costs, and other variables such as the number of on-site workers anticipated to operate the community amenities including golf courses, ski trails, and clubhouses. Spring Valley Ranch is a 5,900-acre approved residential development, located east of Highway 82 between Glenwood Springs and Carbondale, with elevations ranging from about 6,900 feet up to 9,400 feet. More than one-half (about 55 percent) of the ranch is planned to remain as open space. The Spring Valley Ranch development is planned to include: • 500 single-family home sites; • 75 affordable housing units; • Fire station; • 3,250 acres of open space; • 18-hole golf course and short golf course; and • Other community amenities related to the golf course, ski trails and a ski lodge, a clubhouse and restaurant, family barn, and health/wellness facility. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 12 Table II-3 summarizes characteristics and assumptions about the planned residential and non- residential components. TABLE II-3: Spring Valley Ranch Development Assumptions Spring Valley Ranch Proposed Development Single-Family Residential: Number of Lots 500 Average Home Size (Square Feet) 6,500 Average Household Size (Persons)1 2.75 Permanent Residents 10% Average Sales Price Per Home $8,000,000 Affordable Housing: Number of Units 75 Unit Sizes (Square Feet) 500 – 1,400 Average Household Size (Persons)1 2.20 Permanent Residents 100% Average Monthly Rent Per Unit2 $1,800 Nonresidential Amenities: Amenity Building Space in Square Feet 62,000 Maintenance Building Space in Square Feet 25,000 Average Employment Density (Square Feet Per Worker) 435 Total Market Value at Buildout $60.9 million 1 Average household sizes in Garfield County for detached single-family homes and multi-family units, respectively. 2 Represents monthly 2-bedroom rent affordable to 80 percent of Area Median Income in Garfield County. Sources: Storied Development; U.S. Census Bureau; Gruen Gruen + Associates. A total of 500 single-family lots are planned for development. Typical homes are expected to average approximately 6,500 square feet in size. According to Storied Development, based on its prior experience with similar lifestyle community developments, only 10 percent of home buyers are expected to be permanent residents of Garfield County. An average household size of 2.75 persons per household is applied to estimate future single-family housing populations, both permanent and seasonal. In current dollars, the average completed single-family home is anticipated to sell for a price of $8 million. According to Storied Development, all new roadway improvements resulting from the buildout of SVR will be privately maintained. A minimum of 75 affordable housing units will be developed within the community housing district. Unit prices will be affordable to income levels ranging from about 70 percent to 110 percent of Area Median Income (AMI), and potentially lower income levels if required for compliance with housing tax credits. The affordable units will contain at least 130 bedrooms and may range in size from approximately 500 to 1,400 square feet. Based on the characteristics of existing attached and multi- family housing units in Garfield County, an average household size of 2.2 persons is applied to the affordable housing units. All affordable housing unit occupants are treated as permanent residents for Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 13 purposes of the fiscal impact (service cost) analysis; all units are assumed to be exempt from property taxes. The nonresidential community amenities and support facilities are planned to include approximately 87,000 square feet of building space over several hundred acres. An on-site worker density of 435 square feet per worker is applied to this building space, consistent with input from Storied Development indicating that approximately 200 employees will staff and operate the community amenities upon full buildout of the project. The total market value of community amenities (for tax purposes) is estimated to be about $61 million upon full buildout. This estimate reflects our review of comparable golf and ski property land in the area (e.g., Ironbridge golf and Sunlight Mountain) and development cost estimates for amenity building spaces. To be conservative, valuations of $350 to $600 per square foot have applied which are roughly one-half of expected construction costs. PROJECT POPULATION AT BUILDOUT Table II-4 summarizes the expected project population upon full build-out. TABLE II-4: Estimated Spring Valley Ranch Resident Equivalent Population at Build-out Seasonal Residents # Permanent Resident # Workers # Resident Equivalents1 # % of Total Single-Family Homes 1,238 138 --- 448 62.8 Affordable Housing Units 0 165 --- 165 23.1 On-Site Workers --- --- 200 100 14.1 TOTAL 1,238 303 200 713 100.0 1 Assumption is that four (4) seasonal residents generate public service demand equal to one permanent resident; and that two (2) jobs located in the county generate public service demand equal to one permanent resident. Source: Gruen Gruen + Associates To be conservative with respect to public service cost and revenue estimates, this analysis assumes that all households (housing occupants) will be “net new” 3 to Garfield County. Furthermore, no overlap is assumed between the on-site workers required to operate community amenities and the occupants of on-site housing units. The planned single-family home lots are estimated to generate a resident equivalent population of 448 upon full buildout, representing about 63 percent of the overall project service population. This accounts for the likelihood that only 10 percent of single-family homes will be occupied on a permanent basis. The 75 units of affordable housing are estimated to generate a resident equivalent 3 At least 58 of the affordable housing units, for example, will be allocated to eligible households chosen by the Garfield County Housing Authority in accordance with its lottery process. These will be existing county residents. While a portion of future residents of the proposed SVR development may relocate from within Garfield County, the analysis in this report assumes all housing will result in incremental or “net new” growth. Even if most affordable housing occupants are existing county residents, the housing units they vacate are likely to be reoccupied quickly in Garfield County. Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 14 population of 165 or 23 percent of the project total upon build-out. The on-site amenities, with a projected 200 workers, are estimated to generate a resident equivalent population of 100 upon build- out or about 14 percent of the project total. It is anticipated that the SVR project will be developed and absorbed over seven phases. The single- family lots, community amenities, and affordable housing units are expected to be built over approximately 11 years. For purposes of the fiscal impact analysis, it is assumed that the on-site affordable housing units will be delivered and occupied in the fifth and sixth years of the development. On-site community amenities, and the workers required to operate them, are included in concert with an amenity development cost schedule provided by Storied Development. Figure II-1 summarizes the projected SVR project population (expressed in number of resident equivalents) over a 15-year buildout period that includes 13 years for development, delivery, and occupancy of improvements including homes and amenities plus a two-year lag to capture the full assessment and taxation of the final phase of development. FIGURE II-1: Project Population over Buildout Phase Sources: Storied Development; Gruen Gruen + Associates. 0 100 200 300 400 500 600 700 800 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 YEAR SVR Resident Equivalents C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 15 CHAPTER III ECONOMIC IMPACTS OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY INTRODUCTION This chapter presents the economic impacts the proposed Spring Valley Ranch development is estimated to generate for the Garfield County economy. The economic impacts estimated and presented in this chapter relate to three sources of activity: • Construction of the project; • On-going household spending; • On-going operations of the community amenities; and • On-going real estate transfer fee contributions. Impacts related to construction are considered "one-time" temporary impacts on the Garfield County economy. Economic impacts associated with household spending and the operations of the community amenities (e.g., golf courses, ski lodge, and clubhouse) are considered "on-going" or recurring in nature. TYPES OF ECONOMIC IMPACTS ESTIMATED The economic impacts quantified in this chapter are presented in terms of: • Employment (full- and part-time jobs); • Labor income (wages, salaries, and proprietor income); and • Output (the value of goods and services produced or sold). Development of Spring Valley Ranch will cause an economic impact beyond the direct expenditures associated with construction, the on-going operations, and household spending. Secondary or “multiplier” effects result from increased production in industries affected by direct changes in economic activity. These secondary impacts are referred to as indirect and induced effects. Direct Economic Impacts Direct impacts are the number of jobs, income, and output produced in industries directly affected by construction and commercial activity. For the one-time construction expenditures, the direct impact is measured by the number of jobs, income, and output in the economic sectors directly related to the development process such as Construction and Architects and Engineers. The direct impact can be quantified in terms of the total value or cost associated with developing the project. Direct impacts C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 16 attributable to on-going operations are related to household spending estimates, on-site employment to operate community amenities, and annual real estate transfer fee estimates. Indirect Economic Impacts Indirect impacts, sometimes referred to as “multiplier effects”, relate to changes in the number of jobs, income, and output produced within a local economy, based on interdependencies among economic sectors. Businesses buy products and services from each other, creating indirect impacts on other businesses. In other words, a change in one industry or business “ripples” through other industries or businesses. In addition to these indirect or spillover effects, indirect impacts also include what is sometimes referred to as induced impacts, or the impacts of increased household spending. The one-time construction expenditures and the on-going each generate different indirect impacts because of the specific interdependencies among industries within the differing economic sectors. For example, a portion of the wages paid to construction workers (direct employment) and a portion of the wages paid to suppliers (indirect employment) will then be spent locally to purchase goods and services (induced effect) in the Garfield County economy. Similarly, the operator of the community amenities will pay wages to employees, which, in turn, will spend some of their wages in Garfield County for the purchase of additional goods and services. To estimate the indirect or multiplier impacts, we used RIMS II input-output multipliers obtained from the Bureau of Economic Analysis, a provider of custom input-output local economies. Input- output analysis is used to quantify the interactions between or trace the linkages of inter-industry purchases and sales within a given geographic area such as a county or region. The magnitude of multipliers depends upon the extent to which businesses purchase their inputs from other businesses located in the same area, as contrasted with the purchase of inputs from businesses located outside the geographic area. Multipliers vary among industries and among regions. Larger and more diverse geographic areas will tend to have larger industry multipliers because of a greater likelihood of linkages within the area; in other words, an industry’s inputs will be provided by other businesses within the geographic area. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 17 SUMMARY OF THE ECONOMIC IMPACTS OF THE SPRING VALLEY RANCH DEVELOPMENT ON THE GARFIELD COUNTY ECONOMY Table III-1 summarizes the estimated economic impacts of the SVR development on the Garfield County economy. TABLE III-1: Estimated Annual Economic Impacts of Spring Valley Ranch Development on the Garfield County Economy1 Average Annual Employment2 # Jobs Average Annual Income3 $ Average Annual Output4 $ One-Time Impacts of Construction5 Direct 772.9 $53,034,958 $158,211,154 Indirect 440.0 $21,134,431 $80,402,908 Total 1,212.9 $74,169,389 $238,614,062 Multiplier 1.57 1.40 1.51 On-Going Impacts @ Buildout6 Direct 336.9 $10,577,801 $32,401,826 Indirect 79.7 $3,936,213 $16,222,463 Total 416.6 $14,514,015 $48,624,289 Multiplier 1.22 1.35 1.48 1 Figures have been rounded. 2 Full- and part-time employment (jobs). 3 Wages, salaries, benefits, and proprietor income. 4 Local value of goods and services produced or sold. 5 Average annual construction impacts over a 13-year period. 6 On-going economic impacts related to household spending, amenity operations, and transfer fee contributions. Sources: Storied Development; RIMS II Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. The one-time construction activity is forecast to support average annual employment of 1,213 jobs and annual income of approximately $74 million within Garfield County over a 13-year development and construction period. Construction activity is forecast to support a total of 15,767 job years within the local economy (one job year equals one job for a period of one year). Upon full buildout, the on-going operations of amenities, household spending, and real estate transfer fee expenditures are forecast to generate a total annual employment impact of 417 permanent jobs within Garfield County. Associated with the employment impacts are an estimated on-going annual income of $14.5 million and annual output (revenue) of $48.6 million within the Garfield economy. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 18 SOURCES OF DIRECT ECONOMIC IMPACTS One-Time Construction Expenditures Table III-2 presents an estimate of horizontal and vertical hard construction costs to build the single- family lots and homes, affordable housing units, and community amenities. The estimate does not include the cost of land acquisition or development-related soft costs and fees (e.g., permits and impact fees). TABLE III-2: Estimated Total and Average Annual Hard Construction Cost Expenditures Average Annual Expenditures $ Total Expenditures Over Buildout $ Horizontal and Sitework Costs1 17,621,500 229,080,000 Single-Family Homes2 123,076,900 1,600,000,000 Affordable Housing Units 3,115,400 40,500,000 Community Amenities 14,397,700 187,170,000 Total 158,211,200 2,056,745,000 1 Hard construction costs related to on- and off-site infrastructure improvements, single-family lots, etc. 2 Typical single-family home anticipated to sell for $8,000,000. Estimates assume vertical hard construction costs comprise 40% of the average home price (or about $500 per square foot). Sources: Storied Development; Gruen Gruen + Associates. Total hard construction costs over a 13-year buildout period are estimated at approximately $2.1 billion. Average annual hard construction costs accordingly are estimated at approximately $158 million. The vertical construction of 500 single-family homes is estimated to comprise about three- quarters of the total hard construction cost. Household Spending The SVR development is planned to contain 575 households upon full buildout. Approximately 90 percent of single-family homebuyers are expected to be seasonal (part-time) residents of Garfield County, while all affordable housing residents are modeled as permanent (full-time) households. Personal expenditures made by households on a variety of personal goods and services - from healthcare services to dining out - can be expected to support off-site jobs and income within Garfield County as these expenditures circulate through the local economy. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 19 The economic impacts of household spending are based on recent Consumer Expenditure Survey data for households in the western United States. Annual expenditures per household for the highest- income earners are applied to the single-family housing occupants, while expenditures associated with the $50,000-$69,999 income bracket (which closely aligns to the proposed income limits) are applied to the affordable housing occupants. Table III-3 summarizes the average annual household expenditures for goods and services that we estimate to be readily available in Garfield County. TABLE III-3: Annual Expenditures for Two Income Brackets Households > $200,000 Annual Income Households $50,000- $69,999 Annual Income 2022 Annual Expenditure per Household $ Prorated @ 8 Weeks per Year $ 2022 Annual Expenditure per Household $ Food at home 9,473 1,457 5,462 Food away from home 8,023 1,234 2,969 Alcoholic beverages 1,798 277 531 Personal services 1,731 266 136 Household expenses 3,438 529 1,263 Housekeeping supplies 1,253 193 712 Household furnishings and equip. 6,988 1,075 2,476 Apparel and services 4,360 671 1,558 Vehicle purchases 8,628 1,327 3,276 Medical services, drugs, supplies 3,344 514 1,682 Entertainment 10,223 1,573 3,203 Personal care products and services 1,644 253 739 Reading and misc. 2,899 446 1,023 Sources: Bureau of Labor Statistics, 2022 Consumer Expenditure Survey; Gruen Gruen + Associates. The largest expenditure categories for high-income households earning more than $200,000 are entertainment (16.0 percent), food at home (14.8 percent), vehicle purchases (13.5 percent), and food away from home (12.6 percent). On the other hand, the largest expenditure categories for households earning between $50,000 and $69,999 are food at home (21.8 percent), vehicle purchases (13.1 percent), food away from home (12.8 percent), and entertainment (11.9 percent). Due to 90 percent of single-family homebuyers being seasonal residents of Garfield County, a prorated expenditure column is included for the households earning more than $200,000 annually. Amenity Operations and Transfer Fee According to Storied Development, the operations of the on-site amenities including golf courses, ski trails, lodge, clubhouse, and health and wellness facility are expected to employ approximately 200 workers upon full buildout and operations. The 200 direct employees are used to model the total on- going economic impact within the county. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 20 An annual two percent (2%) transfer fee on real estate sales within the development will also support off-site economic activity within Garfield County. These annual transfer fee contributions are modeled as a philanthropic expenditure within the local “social assistance” industry sector. Table III-4 summarizes the estimate of annual transfer fee expenditures upon build-out of the 500 single-family homes. TABLE III-4: Annual Transfer Fee Expenditures at Buildout Average Annual Single-Family Home Turnover 10% (50 homes) Average Single-Family Home Resale Price $8,000,000 Annual Resale Volume $400,000,000 Annual Transfer Fees @ 2.0% $8,000,000 Sources: Storied Development; Gruen Gruen + Associates. Average annual real estate transfer fee revenues are estimated at $8,000,000 upon the full buildout of the 500 single-family homes. This reflects an annual turnover rate of 10 percent, an average single- family home resale price of $8,000,000, and a transfer fee equal to 2.0 percent of the transaction volume. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 21 ONE-TIME ECONOMIC IMPACTS OF CONSTRUCTION Table III-5 summarizes the forecast average annual economic impact of construction activity on the Garfield County economy. TABLE III-5: Estimated Average Annual Impacts of Construction Activity on the Garfield County Economy1 Employment # Jobs Income $ Output $ Direct 772.9 $53,034,958 $158,211,154 Indirect2 440.0 $21,134,431 $80,402,908 Total 1,212.9 $74,169,389 $238,614,062 Multiplier 1.57 1.40 1.51 1 Dollar figures are rounded. 2 Includes induced effects. Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. Throughout the buildout process, construction and development activity associated with the horizontal development of the site and infrastructure, and the vertical construction of single-family homes, affordable housing units, and community amenities, is forecast to support an average of 1,213 jobs per year in Garfield County. Construction activity is forecast to directly support 773 jobs per year. The employment multiplier of 1.57 indicates that, for every 10 jobs directly associated with the construction process (e.g., construction workers and tradesmen), an additional six jobs will be supported indirectly within Garfield County. Approximately 440 annual jobs are forecast to be supported indirectly by construction expenditures associated with the buildout of SVR. The industry sectors estimated to experience the largest annual indirect (i.e., off-site) employment impacts during construction include: • Retail Trade (143 indirect jobs) • Education and Healthcare Services (60 indirect jobs) • Finance, Insurance, and Real Estate (50 indirect jobs) • Professional and Business Services (43 indirect jobs) • Leisure and Hospitality (33 indirect jobs) The total annual labor income impact is estimated at approximately $74 million or approximately $61,100 per job. The income multiplier of 1.40 indicates that for every $1 in wages paid to workers directly associated with the construction process, an additional $0.40 in income will be generated elsewhere in the County. Total annual output is forecast to average $239 million throughout the 13- year buildout process. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 22 Construction activity is forecast to support a total of 12,126 job years within the Garfield County economy (one job year equals one job for a period of one year). Figure III-1 summarizes the annual employment impacts of the hard construction expenditures throughout the build-out period. FIGURE III-1: Construction-Related Employment Impacts by Year Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 1 2 3 4 5 6 7 8 9 10 11 12 13 EM P L O Y M E N T ( J O B S ) I N G A R F I E L D C O U N T Y YEAR Direct Indirect/Induced C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 23 ON-GOING ECONOMIC IMPACTS OF HOUSEHOLD SPENDING Table III-6 summarizes the forecast average annual economic impacts of household spending at build-out on the Garfield County economy. TABLE III-6: Estimated Average Annual Impacts of Household Spending on the Garfield County Economy1 Employment # Jobs Income $ Output $ Direct 48.9 $1,725,867 $5,476,822 Indirect2 12.8 $624,910 $2,582,391 Total 61.7 $2,350,777 $8,059,212 Multiplier 1.26 1.36 1.47 1 Dollar figures are rounded. 2 Includes induced effects. Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. The personal expenditures of project households upon buildout are estimated to support about 62 jobs and associated labor income of nearly $2.4 million ($38,000 per job on average) within the local economy. The direct spending of households occupying single-family residences and affordable housing units at the SVR community are estimated to generate approximately $8.1 million in economic output within the Garfield County economy. ON-GOING ECONOMIC IMPACTS OF AMENITY OPERATIONS Table III-7 summarizes the forecast average annual economic impacts of amenity operations at buildout on the Garfield County economy. TABLE III-7: Estimated Average Annual Impacts of Amenity Operations on the Garfield County Economy1 Employment # Jobs Income $ Output $ Direct 200.0 6,161,438 18,925,005 Indirect2 47.1 2,358,599 9,772,872 Total 247.1 8,520,037 28,697,877 Multiplier 1.24 1.38 1.52 1 Dollar figures are rounded. 2 Includes induced effects. Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. The operations of the SVR amenities are estimated to support a total of 247 permanent jobs within Garfield County. Two hundred (200) of these jobs are forecast to be supported directly, or, in other words, on site. The employment multiplier of 1.24 indicates that approximately two jobs are estimated to be indirectly created for every 10 direct jobs on site. The total annual labor income impact is estimated at approximately $8.5 million or approximately $34,500 per job. The income multiplier of C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 24 1.38 indicates that for every $1.00 in wages paid to workers directly associated with the retail space, an additional $0.38 in income will be generated elsewhere in Garfield County. Total annual output is forecast to average $28.7 million. ON-GOING ECONOMIC IMPACTS OF TRANSFER FEE EXPENDITURES Table III-8 summarizes the forecast average annual economic impacts of transfer fee expenditures (modeled as “social assistance” contributions) at buildout on the Garfield County economy. TABLE III-8: Estimated Average Annual Impacts of Transfer Fee Expenditures on the Garfield County Economy1 Employment # Jobs Income $ Output $ Direct 88.1 2,690,500 8,000,000 Indirect2 19.8 952,700 3,867,200 Total 107.9 3,643,200 11,867,200 Multiplier 1.22 1.35 1.48 1 Dollar figures are rounded. 2 Includes induced effects. Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. The transfer fees paid by SVR households annually upon project buildout are estimated to support approximately 108 jobs and associated labor income of $3.6 million, or about $33,800 per job on average, within the local economy. The employment multiplier of 1.22 indicates that approximately two jobs are estimated to be indirectly created for every 10 direct jobs on site. The income multiplier of 1.35 indicates that for every $1 in wages paid to workers directly associated with the retail space, an additional $0.35 in income will be generated elsewhere in Garfield County. The direct transfer fees of households occupying residences of the SVR community are estimated to generate approximately $11.9 million in annual economic output within the Garfield County economy. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 25 TOTAL TAXABLE SALES ESTIMATE WITHIN GARFIELD COUNTY Based on the results of the economic impact model and estimates, Table III-9 summarizes a projection of total annual sales within industry sectors representing primary sources of local sales tax. TABLE III-9: Total Annual Sales Generated by Construction Activity and Ongoing Operations Upon Project Buildout Annual Sales Generated by One-Time Construction Activity Annual Sales Generated by Project Households and Operations (Ongoing at Buildout) Retail Trade $50,364,000 $10,317,000 Food Services and Drinking Places $2,927,000 $2,166,000 Commercial Utilities $1,899,000 $702,000 Accommodation $1,060,000 $252,000 Entertainment and Recreation $601,000 $19,810,000 Total $56,851,000 $33,247,000 Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Gruen Gruen + Associates. Annual sales in Garfield County during the construction and buildout period are estimated to average $57 million across industry sectors including retail trade, food services, accommodations, entertainment and recreation, and commercial utilities (residential utilities are not subject to sales tax). Annual ongoing sales in are projected to average about $33 million upon the full buildout, occupancy, and operations of the SVR development. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 26 CHAPTER IV NET FISCAL IMPACT OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON GARFIELD COUNTY INTRODUCTION This chapter presents Garfield County operating revenues estimated to result from the buildout and occupancy of the SVR development. The following sources of revenue are estimated: • Property tax - the assessed value of new development will generate property tax revenue for the General Fund and other special funds related to retirement, human services, and road and bridges; • Sales tax – taxable sales generated directly and indirectly by construction activity, ongoing operations, and household spending will generate revenue for the General Fund via the county’s one-percent local sales tax rate; and • Specific ownership tax - revenues derived from the State formulated value levy on certain vehicles and mobile equipment. Charges for services and Highway Users Fund Tax revenue sharing are also quantified based on a per- capita approach and currently budgeted revenues. To be conservative, no change in other intergovernmental revenue is assumed to result from the proposed SVR development. The General Fund revenue estimates are presented over a 15-year period to account for the construction and absorption period (13 years) plus a two-year lag in property tax revenue collection. This chapter also presents estimates of additional operating costs that Garfield County may incur to provide public services to the SVR development and its residents and workers. Based on a review of historical expenditures, which have generally declined over time after adjusting for inflation, we employ a “per capita” approach to estimating the proportional increase in service costs. Potential costs associated with key functions including General Government, Public Safety, Health and Welfare, and Public Works are included. Note that the infrastructure associated with proposed SVR development will be privately maintained and operated so the inclusion of public works-related costs is simply to be conservative. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 27 GARFIELD COUNTY REVENUES Garfield County experienced a considerable decline in its tax revenue base over the 10-year period from 2012 through 2022, as summarized below in Table IV-1. TABLE IV-1: Garfield County Historical Tax Revenue by Source ($2024)1 2012 Actual 2017 Actual 2022 Actual Change 2012-2022 Property tax $74,247,615 $39,424,872 $31,269,757 ($42,977,858) Sales tax $12,876,206 $12,657,311 $19,355,987 $6,479,781 Specific ownership tax $3,526,451 $3,019,503 $2,329,476 ($1,196,975) Other Taxes $3,242,898 $1,006,907 $2,160,084 ($1,082,814) TOTAL TAX REVENUE $93,893,170 $56,108,592 $55,115,305 ($38,777,865) 1 Revenues adjusted to constant 2024 dollars based on the Consumer Price Index for the Western United States. Sources: Bureau of Labor Statistics; Garfield County Finance Department - Annual Comprehensive Financial Report; Gruen Gruen + Associates. Adjusted for inflation, actual county tax revenues totaled nearly $94 million in 2012 and declined to only $55 million in 2022. The decline related primarily to significantly reduced property tax revenues which reflect the county’s historical reliance upon oil and gas property assessments (Oil and gas production in Garfield County accounts for approximately 58 percent of total assessed values). As of 2022, property taxes still comprised the majority or 57 percent of all county tax revenue collections. Sales tax revenues have been a source of growth, increasing by about $6.5 million or 50 percent between 2012 and 2022. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 28 Estimate of County Property Tax Revenues Table IV-1 summarizes a projection of new assessed value and Garfield County property tax revenues resulting from absorption and buildout of the SVR development. The total county property tax rate of 13.655 mills is assumed to be constant over the projection period. TABLE IV-1: Projection of Annual County Property Tax Revenues Year Market Value of Completed Development $ Assessed Value1 2 $ County Property Tax Revenue2 $ 1 0 0 0 2 1,340,900 0 0 3 345,706,600 0 0 4 728,822,200 370,759 5,063 5 1,115,976,050 23,507,075 320,989 6 1,490,071,050 55,786,438 761,764 7 1,851,960,500 85,905,055 1,173,034 8 2,217,872,650 113,984,605 1,556,460 9 2,591,098,800 140,272,545 1,915,422 10 2,952,927,300 167,727,069 2,290,313 11 3,313,902,500 197,302,652 2,694,168 12 3,675,548,150 223,572,917 3,052,888 13 4,060,950,000 249,595,725 3,408,230 14 4,060,950,000 275,812,964 3,766,226 15 (Buildout) 4,060,950,000 303,675,500 4,146,689 15-Year Total 25,091,244 1 Per SB23-303 property tax reduction measures, reduced residential assessment ratio of 6.7% and reduced commercial assessment ratios of 26.9-27.85% are assumed through the first five years of development. Standard assessment ratios of 7.15% and 29% are applied thereafter. All affordable housing units assumed to be tax exempt and excluded from market value and assessed value projections. 2 Assumes a two-year lag between completion of homes/amenities and property assessment and tax collection. Total county property tax rate of 13.655 mills unchanged over time. Sources: Garfield County; Storied Development; Gruen Gruen + Associates. Upon full buildout and assessment in Year 15, annual county property tax revenue is estimated at approximately $4,147,000. This reflects a projected total market value of nearly $4.1 billion (in today’s dollars) and an associated assessed value of approximately $304 million. Annual property tax revenues are projected to grow incrementally throughout the absorption and development period, increasing from $762,000 in Year 6 to approximately $3.1 million by Year 12. Cumulative county property tax revenues over the 15-year period are estimated to total about $25.1 million. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 29 Estimate of County Sales Tax Revenues Garfield County imposes a 1.0 percent local sales tax rate. About 60 percent of current sales tax collections relate to retail trade, food services, or accommodations. Some sales tax collections also relate to non-retail activities such as commercial utilities, entertainment, wholesale trade, mining, and so forth. According to the Garfield County Finance Director, the county retains approximately 25 percent of its one-percent sales tax collections. The majority of collections are redistributed to municipalities, the Garfield County Public Library District, and the 911 emergency communications system. Table IV-2 presents a projection of annual county sales tax throughout the SVR development and absorption period, as well as an annual recurring estimate upon full buildout of the project. Estimates of taxable sales are drawn from the economic impact model which quantifies the direct and indirect activities generated by the initial construction spending as well as the on-going operations of the community amenities and local expenditures of SVR households. TABLE IV-2: Projection of Annual County Sales Tax Revenues Year Annual Taxable Sales1 $ Total County Sales Tax Collections (1.0%) $ Net Sales Tax Revenue2 $ 1 9,101,490 91,015 22,754 2 6,178,838 61,788 15,447 3 65,040,145 650,401 162,600 4 57,773,379 577,734 144,433 5 63,675,095 636,751 159,188 6 61,841,677 618,417 154,604 7 62,436,026 624,360 156,090 8 69,279,232 692,792 173,198 9 62,789,427 627,894 156,974 10 61,487,907 614,879 153,720 11 66,853,811 668,538 167,135 12 69,711,215 697,112 174,278 13 66,330,087 663,301 165,825 14 24,934,901 249,349 62,337 15 (Buildout) 24,934,901 249,349 62,337 15-Year Total 7,723,681 1,930,920 1 See estimates in Table III-9. Includes direct and indirect sales attributable to construction activity and on- going project operations (e.g., household spending). Annual estimates assume 75 percent of total sales are subject to sales tax. 2 According to Garfield County Finance Director, the General Fund retains about one-quarter of county sales tax collections. Sources: RIMS II, Regional Product Division, Bureau of Economic Analysis; Garfield County; Storied Development; Gruen Gruen + Associates. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 30 Over the buildout process, net sales tax revenues are estimated at over $1.9 million. At buildout annual net sales tax revenue are estimated at $62,300. Estimate of Other County Revenues Other county revenues that may increase over time with new growth and development include taxes and revenue sharing related to Specific Ownership Tax and Highway User Tax Fund distributions. Specific Ownership Tax is a state-formulated value levy on annual vehicle registrations. Garfield County is budgeted to collect about $2.3 million in 2024. Highway User Tax Fund revenue is distributed to counties based on several factors, but primarily vehicle registrations and maintained roadway miles. Information from the State Treasurer indicates that Garfield County is on pace to receive approximately $3.8 million for the current fiscal year. Additionally, the General Fund is budgeted in 2024 to collect approximately $6.5 million in charges for services (this excludes charges for special funds such as Airport user fees). Utilizing a per-capita approach, Table IV-3 presents an estimate of other county revenues to be induced by the SVR development. TABLE IV-3: Projection of Other County Revenues Year SVR Project Population1 # Other Revenue Per-Capita2 $ Other County Revenues $ 1 0.0 156.55 0 2 0.0 156.55 0 3 41.3 156.55 6,470 4 107.3 156.55 16,805 5 244.8 156.55 38,317 6 384.0 156.55 60,111 7 427.4 156.55 66,908 8 477.4 156.55 74,739 9 539.4 156.55 84,448 10 582.8 156.55 91,230 11 624.7 156.55 97,793 12 667.7 156.55 104,527 13 713.0 156.55 111,620 14 713.0 156.55 111,620 15 (Buildout) 713.0 156.55 111,620 15-Year Total 976,208 1 Projected number of resident equivalents. 2 Total 2024 revenue expected to be $12,563,000 which equates to $156.55 per resident equivalent in the county. Sources: Garfield County; Storied Development; Gruen Gruen + Associates C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 31 Over the buildout process other tax revenues associated with the project buildout are estimated to total over $976,200. The SVR development is estimated to generate other tax revenues at buildout of $111,600 per year. GARFIELD COUNTY SERVICE COSTS To provide perspective for the fiscal impact analysis, GG+A obtained and reviewed Comprehensive Annual Financial Reports for Garfield County covering actual expenditures for 2012 through 2022. Table IV-4 summarizes historical Garfield County governmental fund expenditures by function which have been adjusted for inflation to constant 2024 dollars. TABLE IV-4: Historical Garfield County Governmental Fund Revenues and Expenditures ($2024)1 2012 Actual 2017 Actual 2022 Actual Change 2012-2022 Change 2012-2022 % General government $37,245,023 $40,173,755 $35,258,627 ($1,986,396) (5.3) Public safety $30,597,643 $28,066,578 $25,440,979 ($5,156,664) (16.9) Public works $32,469,726 $19,094,011 $9,735,654 ($22,734,072) (70.0) Public health/welfare $30,585,726 $29,181,650 $35,886,191 $5,300,465 17.3 Culture and recreation $2,398,363 $5,496,864 $2,864,275 $465,912 19.4 TOTAL 2 $133,296,481 $122,012,858 $109,185,726 ($24,110,755) (18.1) 1 Adjusted to constant 2024 dollars based on the Consumer Price Index for the Western United States. 2 Excluding capital expenditures. Sources: Bureau of Labor Statistics; Garfield County Finance Department - Annual Comprehensive Financial Reports; Gruen Gruen + Associates. According to annual financial reports and adjusted for inflation, historical governmental fund expenditures of the county have declined over time. Total expenditures decreased from approximately $133.3 million in 2012 to $109.2 million in 2022, representing an 18 percent decline. As of 2022, three functions of the county government comprised almost 90 percent of all operating costs: General Government; Public Safety; and Public Health and Welfare. When adjusted for inflation, both General Government and Public Safety costs have declined over time. Costs for each function in 2022 were approximately five percent and 17 percent lower than 2012 expenditures. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 32 Table IV-5 summarizes the historical governmental expenditures on a per-capita basis. TABLE IV-5: Historical Expenditures per Resident Equivalent in Garfield County ($2024)1 Governmental Fund Operating Expenditures $ Resident Equivalents2 # Expenditure per Resident Equivalent $ 2012 133,296,481 73,014 1,826 2017 122,012,858 76,602 1,593 2022 109,185,726 80,248 1,361 Change (24,110,755) 7,234 (465) 1 Expenditures adjusted to constant 2024 dollars based on the Consumer Price Index for the Western United States. 2 See Table II-2. Sources: Colorado Department of Local Affairs, State Demography Office; Garfield County; Gruen Gruen + Associates. Governmental fund expenditures declined by $24 million or 18 percent between 2012 and 2022, while the estimated county service population grew by about 10 percent or 7,200 resident equivalents during this period. Overall expenditures per capita decreased from $1,826 in 2012 to $1,361 in 2022. While not necessarily indicative of the future, the historical trends do suggest that (a) the county’s provision of public services has a high degree of “fixed cost”; and (b) levels of service and associated operating costs may fluctuate with changes in available funding sources. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 33 Estimated Per-Capita Service Costs Table IV-6 presents an estimate of annual service costs attributed to the proposed SVR development at build-out utilizing a per capita approach. TABLE IV-6: Estimated Per-Capita Costs of Garfield County Service Provision Adjusted Budget Expenditures (2024) $ Variable Cost Share % Cost Per Resident Equivalent $ General Government 65,061,595 1 25% 203 Public Safety – Sherriff 26,838,687 75% 251 Public Safety – Other 7,719,523 50% 48 Health and Welfare 8,753,444 2 75% 82 Public Works 14,735,386 50% 92 Total 123,108,635 44% 675 1 Adjusted to exclude $9.1 million of “fund administration” expenditures which are primarily sales tax distributions to other jurisdictions; the county’s net share of sales tax revenue already accounted for in the estimate of sales tax revenue generated by the SVR development. 2 About 85 percent of costs are covered via intergovernmental social service funds. These expenditures are excluded as the impact analysis does not consider intergovernmental funds to the county. Sources: Garfield County, 2024 Budget; Gruen Gruen + Associates. The cost of providing general government services to the proposed development is a function of the increased burden placed on the county’s administrative and support services. Typically, general government services contain a significant fixed cost that does not change as the result of new development or growth. This is borne out by historical expenditure patterns reviewed previously. Conservatively, the projection of general government service costs assumes that 25 percent of costs are variable and will change as the result of new growth and development. The variable per-capita cost is estimated at $203 per resident equivalent. Public Safety-Sheriff service provision costs, unlike general government costs, tend to be more variable as demand for personnel and equipment generally tends to grow more proportionately to patrol area coverage and population. The estimated annual operating cost of providing County Sheriff service to the proposed development assumes that most current service costs are likely to be “variable” with respect new development, especially given the geographic size of the county. The projection of public safety services related to the County Sherriff assumes that 75 percent of costs are variable and will change as the result of new growth and development. The variable per-capita cost is estimated at $251 per resident equivalent. All other service provision costs are conservatively assumed to have variable components ranging from 50 to 75 percent of current operating costs. Expenditures and services funded primarily by intergovernmental (e.g., federal and state) social service programs and grants have been adjusted out of current expenditures. Although the proposed SVR development is not likely to directly result in C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 34 additional public works-related expenditures, hypothetical costs are accounted for because the “road and bridge” fund mill levy has been included in the estimates of future property tax revenues generated for Garfield County. The variable per-capita cost for all other public safety, health and welfare, and public works services is estimated at $222 per resident equivalent. Projected Annual County Service Costs Table IV-7 presents an estimate of the annual county service costs attributed to the proposed SVR development throughout buildout. TABLE IV-7: Projection of Annual County Service Costs Year SVR Project Population # Resident Equivalents General Government Costs $ County Sherriff Costs $ Other Service Costs $ Total County Costs $ 1 0 0 0 0 0 2 0 0 0 0 0 3 41 8,377 10,366 9,163 27,906 4 107 21,757 26,925 23,800 72,482 5 245 49,609 61,393 54,266 165,268 6 384 77,826 96,312 85,133 259,271 7 427 86,627 107,204 94,760 288,590 8 477 96,765 119,750 105,850 322,365 9 539 109,336 135,307 119,601 364,243 10 583 118,116 146,173 129,206 393,495 11 625 126,613 156,688 138,500 421,801 12 668 135,332 167,479 148,038 450,849 13 713 144,516 178,843 158,084 481,443 14 713 144,516 178,843 158,084 481,443 15 (Buildout) 713 144,516 178,843 158,084 481,443 15-Year Total 1,263,904 1,564,126 1,382,570 4,210,599 Sources: Storied Development; Garfield County, 2024 Budget; Gruen Gruen + Associates. Annual county service costs are projected to increase from less than $100,000 during the first few years of the SVR development to approximately $289,000 by Year 7, at which point approximately 427 resident equivalents are expected to result from the development. By Year 11, with 625 projected resident equivalents, annual county service costs are estimated at nearly $422,000. Total annual county service costs are estimated at $481,000 in a fully built-out condition. Cumulative county service costs over the 15-year absorption and buildout period are estimated to be approximately $4,211,000. General Government costs of an estimated nearly $1,264,000 are forecast to account for about 30 percent of total costs of county services. Sherriff costs of an estimated $1,564,000 are forecast to account for about 37 percent of total costs. Other service costs of an estimated $1,382,600 are forecast to account for 33 percent of estimated total service costs. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 35 ANNUAL NET FISCAL IMPACT ON GARFIELD COUNTY Table IV-8 provides an annual comparison between additional county service costs and revenue generated by the SVR development. TABLE IV-8: Annual Net Fiscal Impacts on Garfield County Year Annual Revenues $ Annual Service Costs $ Annual Revenue Surplus (Deficit) $ 1 22,754 0 22,754 2 15,447 0 15,447 3 169,070 (27,906) 141,164 4 166,301 (72,482) 93,818 5 518,493 (165,268) 353,226 6 976,479 (259,271) 717,207 7 1,396,032 (288,590) 1,107,442 8 1,804,397 (322,365) 1,482,031 9 2,156,843 (364,243) 1,792,600 10 2,535,263 (393,495) 2,141,768 11 2,959,095 (421,801) 2,537,294 12 3,331,694 (450,849) 2,880,844 13 3,685,675 (481,443) 3,204,232 14 3,940,184 (481,443) 3,458,741 15 (Buildout) 4,320,647 (481,443) 3,839,204 15-Year Total 27,998,373 (4,210,599) 23,787,774 Sources: Garfield County; Storied Development; Gruen Gruen + Associates. County revenues, primarily including property tax, are forecast to average about $1.9 million annually during an initial 15-year buildout period. Additional county service costs related to general government, public safety, health and welfare, and public works are estimated to average about $281,000 annually over the same period. The difference suggests an average annual “surplus” of approximately $1.6 million during the initial buildout phase of the SVR development. Once the project is fully built, occupied, and assessed, annual county revenues are forecast to be much higher at approximately $4.3 million. With estimated county service costs of $481,000 annually, the surplus or net revenue benefit to the county is forecast to increase to $3.8 million annually upon the full buildout of the SVR development. Garfield County could use the large annual surplus to pass savings on to other taxpayers, improve its level of services, or some combination of both. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 36 CHAPTER V NET FISCAL IMPACT OF THE PROPOSED SPRING VALLEY RANCH DEVELOPMENT ON LOCAL SCHOOL AND FIRE DISTRICTS INTRODUCTION This chapter presents a forecast of property tax revenue that the SVR development will generate for the Roaring Fork School District and local fire district(s) throughout the initial development and absorption period, and annually thereafter upon full buildout of the project. Estimates of future service or operating costs to provide education and fire protection services to the SVR development are also summarized in this chapter. The service cost estimates reflect GG+A’s review of current service populations and student enrollments, adopted 2024 budgets and historical operating expenditures, and a discussion with the Chief Operating Officer of the Roaring Fork School District. The SVR property is located within the current attendance boundary of the Riverview K-8 school and the Glenwood Springs High School. Because the Roaring Fork School District has an “open enrollment” policy, meaning future K-12 students are not necessarily required to attend their local school, the net fiscal impact estimates are made at the district level. The SVR property is not located within the current service boundaries of either the Glenwood Springs and Rural Fire Protection District or the Carbondale and Rural Fire Protection District. Storied Development plans to complete an annexation agreement with one of the districts to provide Fire and EMS services to the property. At its cost, Storied Development also plans to fully construct and equip a new fire station from which future services could be provided. NET FISCAL IMPACT ON ROARING FORK SCHOOL DISTRICT Student Generation Estimates Overall student enrollment of the Roaring Fork School District has been essentially stable over recent school years. Districtwide enrollments totaled 5,455 students in 2018-19 and declined to 5,127 students during the 2020-21 school year. Since then, enrollment rebounded to approximately 5,650 students in the current 2023-24 school year. The Riverview K-8 school is the closest school to the SVR property and is reported to have a current enrollment of 351 students. The designed capacity of the school is for approximately 410 students. Local schools have the capacity to serve additional students potentially generated by permanent residents of the SVR development. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 37 Table V-1 summarizes a student generation estimate for the proposed SVR development at full buildout. TABLE V-1: Spring Valley Ranch Student Generation Estimate at Buildout Single-Family Homes Affordable Housing Units Total at Buildout Number of Dwelling Units 500 75 575 Permanent Households 10% (50) 100% (75) 125 K-12 Students per Permanent Household1 0.49 0.38 0.42 K-12 Student Generation 24.5 28.5 53.0 1 Student generation rates per Section 7-404 of the Garfield County Land Use and Development Code. Multi-family housing student generation rate of 0.38 students per unit applied to Affordable Housing units included in the SVR development program. Sources: Garfield County; Storied Development; Gruen Gruen + Associates. Discussion with the Roaring Fork School District indicated that student generation rates from the Garfield County Land Use and Development Code would be appropriate to use for purposes of estimating additional students likely to result from permanent households at the SVR development. The code requires 0.49 students per single-family housing unit and 0.38 students per multi-family housing unit. These student generation ratios are applied to households anticipated to occupy dwelling units in the SVR development on a permanent (resident) basis, resulting in a total of 53 additional students upon full buildout and occupancy of the project. Figure V-1 summarizes the projected number of students generated annually during the initial development and absorption period. FIGURE V-1: Cumulative K-12 Student Generation by Year Sources: Roaring Fork School District; Gruen Gruen + Associates. 0 0 2 4 20 37 40 42 44 46 48 51 53 0 10 20 30 40 50 60 0 1 2 3 4 5 6 7 8 9 10 11 12 13 YEAR C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 38 School District Property Tax Revenues School district program costs are primarily funded by a combination of local property taxes and state equalization funding. For the upcoming fiscal year, local property taxes are projected to contribute 75.7 percent of program funding and state equalization funding is projected to contribute 24.3 percent.4 The Roaring Fork School District currently has three separate mill levies: • Program mill levy (27.000 mills); • Voter-approved mill levy overrides (9.212 mills); and • Bond redemption mill levy (7.670 mills). The target program mill levy for district operations of 27 mills is essentially a fixed property tax rate under state law (HB21-1164). As local property values and taxing capacity increase, the amount of state equalization funding will decline, all else being equal. The mill levies related to voter-approved overrides and bond redemption are essentially fixed dollar amounts; meaning that significant increases in assessed property values within the district could cause these mill levy rates to decline over time. To make a comparison between future school district revenues and service costs attributable to the proposed SVR development, Table V-2 presents a projection of future school district property tax revenues based on the current mill levy rates for district operations (excluding taxes levied to pay existing bond debt). 4 See for example: https://drive.google.com/file/d/1elbylcgl1fszTjyx2hdBVzXTehBgx9MS/view C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 39 TABLE V-2: Projection of School District Property Tax Revenues Year Cumulative Assessed Value1 $ Annual Property Tax2 $ 1 0 0 2 0 0 3 0 0 4 370,759 13,426 5 23,507,075 851,238 6 55,786,438 2,020,138 7 85,905,055 3,110,794 8 113,984,605 4,127,610 9 140,272,545 5,079,549 10 167,727,069 6,073,733 11 197,302,652 7,144,724 12 223,572,917 8,096,022 13 249,595,725 9,038,360 14 275,812,964 9,987,739 15 (Buildout) 303,675,500 10,996,697 15-Year Total 66,540,032 1 Assumes a two-year lag between completion of improvements and property tax collections. No escalation is applied to future development values. 2 Estimates based on 36.212 mills (excluding bond redemption). Sources: Roaring Fork School District; Storied Development; Gruen Gruen + Associates. Total district property tax revenues through the first five years of the absorption and development period are estimated to total about $865,000. In Year 6, when approximately 90 single-family homes are assumed to be completed and assessed, annual school district property tax revenues are projected to increase to more than $2.0 million. Annual revenues thereafter are projected to grow from approximately $3.1 million (in Year 7) to nearly $11.0 million upon full buildout and assessment of the SVR development. The total cumulative property tax revenues to the Roaring Fork School District over the initial 15 years are estimated at $66.5 million before accounting for (a) any inflation or escalation in assessed property values over time; and (b) property tax revenues associated with the bond redemption mill levy.5 5 The 2015 bond mill expires in 2035 (i.e., existing debt will be paid down). New assessments at the SVR development will cause the bond redemption mill levy rate to decline over time, benefiting other taxpayers of the district. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 40 Net Fiscal Benefit to School District Total annual General Fund expenditures of the school district are budgeted at $82.1 million for the current fiscal year. Operating expenditures that tend to be mostly variable - including those related to Instruction, Instructional Support, Pupil Services, Operations and Maintenance, Pupil Transportation, and School Administration - are budgeted to total $77.4 million. A total of 5,128.8 students are funded by the current General Fund budget. The net fiscal impact comparison assumes a variable operating cost of $13,582 per student, reflecting an assumption that 90 percent of the above-mentioned school operating costs are variable with respect to student enrollment. Table V-3 provides an annual comparison between additional school district operating costs and local property tax revenue generated by the SVR development. To be conservative, the net fiscal impact comparison summarized below excludes state equalization funding received by the district.6 TABLE V-3: Projection of Annual Net Fiscal Impact on School District Year Annual Property Tax1 $ Student Generation # Students Additional School Operating Costs2 $ School Revenue Surplus (Deficit) $ 1 --- 0 --- --- 2 --- 0 --- --- 3 --- 2 (27,164) (27,164) 4 13,426 4 (54,328) (40,902) 5 851,238 20 (271,638) 579,600 6 2,020,138 37 (502,530) 1,517,608 7 3,110,794 40 (543,276) 2,567,518 8 4,127,610 42 (570,440) 3,557,171 9 5,079,549 44 (597,604) 4,481,946 10 6,073,733 46 (624,767) 5,448,965 11 7,144,724 48 (651,931) 6,492,792 12 8,096,022 51 (692,677) 7,403,346 13 9,038,360 53 (719,841) 8,318,520 14 9,987,739 53 (719,841) 9,267,898 15 (Buildout) 10,996,697 53 (719,841) 10,276,857 15-Year Total 66,540,032 (6,695,877) 59,844,155 1 See Table V-2. Excludes bond redemption property taxes. 2 Variable operating cost of $13,582 per additional student. Sources: Roaring Fork School District; Storied Development; Gruen Gruen + Associates. During initial years of the SVR development before a substantial number of improvements and homes are completed, fully assessed, and generating property tax revenues, a minimal “deficit” in school district revenues may exist (totaling less than $70,000 for the first four years of the development and absorption period). Beginning in Year 5 and Year 6, school district property tax revenues are projected 6 For Fiscal Year 2023-24, the General Fund received approximately $4,400 of state equalization funding per pupil. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 41 to exceed operating costs by approximately $580,000 and $1,518,000, respectively. The annual school district “surplus” is projected to be about $2.6 million by Year 7 and increase to nearly $10.3 million upon the full buildout and assessment of the SVR development. The cumulative net impact on the school district over the first 15 years is substantial, with property tax revenues projected to exceed additional school operating costs by nearly $60 million. NET FISCAL IMPACT ON A FUTURE FIRE SERVICE PROVIDER This section provides estimates of the potential net fiscal impacts on a Fire and EMS service provider for the proposed SVR development. Because an annexation agreement has not yet been proposed, the characteristics of both the Glenwood Springs and Carbondale fire protection districts are drawn upon to make an informed estimate of potential future service costs and district property tax revenues. Perspective about Fire District Characteristics in Relation to Proposed SVR Development The Glenwood Springs and Rural Fire Protection District has a current service area spanning approximately 72 square miles. Fire protection and EMS services to unincorporated areas beyond city limits (the “rural” protection district) are provided under intergovernmental agreement with the city of Glenwood Springs. The city and district operate three fire stations with a current staffing level of 29 regular paid employees serving an estimated service population of about 21,100 resident equivalents. The Carbondale and Rural Fire Protection District has a much larger service area spanning approximately 300 square miles. The Carbondale and Rural Fire Protection District is reported to operate five stations with a current staffing level of 34 regular paid employees (in addition to 35 volunteer firefighters and EMS professionals). The current service area is estimated to include a service population of about 17,500 resident equivalents. TABLE V-4: Local Fire District Characteristics Glenwood Springs & Rural Fire Protection District Carbondale & Rural Fire Protection District Combined Service Area (# Square Miles) 72 300 372 Number of Fire Stations 3 5 8 Regular Paid Employees 29 34 63 Service Area Population in Resident Equivalents1 21,100 17,500 38,600 2024 Budgeted Expenditures 2 $5,214,000 $7,003,000 $12,217,000 Annual Budget per Resident Equivalent $247 $400 $317 1 GG+A estimates based on reported residential population within each service area, plus U.S. Census Bureau estimates of employment and seasonal housing units. 2 Excludes capital funds/outlays. Sources: U.S. Census Bureau; City of Glenwood Springs; Carbondale and Rural Fire Protection District; Gruen Gruen + Associates. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 42 The combined service area of the two fire districts is reported to be 372 square miles. The 5,900-acre SVR property would expand the combined service area by approximately 2.5 percent. The combined service population of the two districts is estimated to be approximately 39,000 resident equivalents. At full buildout, the proposed SVR development would expand the combined service area population by approximately 1.8 percent. Annual Fire Service Cost Estimate Based on Per-Capita Approach Table V-5 presents an annual per-capita cost estimate of providing fire service to the SVR development upon full buildout. TABLE V-5: Estimated Annual Operating Cost of Providing Fire Service at Buildout (Based on Per-Capita Estimate) Annual at Buildout Fire District Budget Expenditures, Net of Ambulance Service Charges1 $11,116,700 Variable Operating Costs 75% / $8,337,525 Service Area Population (# Resident Equivalents) 38,600 Variable Cost Per Resident Equivalent $216 Future SVR Resident Equivalent Population 713 Additional Fire District Operating Costs $154,007 1 Fire districts are budgeted to collect $1,100,000 in ambulance service charges. Sources: City of Glenwood Springs; Carbondale and Rural Fire Protection District; Gruen Gruen + Associates. Variable Fire and EMS service costs, based on the existing service level, are estimated to be approximately $216 per capita. Based on this metric, the annual cost of providing Fire and EMS services to the SVR development would be about $154,000 annually upon buildout. Annual Fire Service Cost Estimate Assuming New Station Storied Development is proposing to construct and equip a new 6,000-square-foot fire station at the SVR development with an estimated capital cost of approximately $9 million. Again, assuming that approximately 75 percent of current fire district operational costs are “variable,” the current annual cost to staff and operate one fire station is estimated to average $1,042,200. The fire station would be delivered in the second phase of the SVR development and the net fiscal impact estimates assume the station would be fully operational and staffed by Year 5. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 43 Net Fiscal Benefit to Fire District Table V-6 provides a comparison between the future estimated annual costs to staff and operate a fire station and local property tax revenues potentially generated by the SVR development. The current property tax rate for the Carbondale and Glenwood Springs rural fire districts are 10.472 mills and 12.342 mills, respectively. The property tax projections below assume a future rate of 11.000 mills could apply to the SVR development if fire service is provided by one (or both) of the districts. TABLE V-6: Projection of Annual Net Fiscal Impact on Fire District Year Annual Property Tax1 $ Fire Station Operating Costs2 $ Fire District Revenue Surplus (Deficit) $ 1 0 0 0 2 0 0 0 3 0 (8,927) (8,927) 4 4,078 (23,186) (19,108) 5 258,578 (1,042,191) (783,613) 6 613,651 (1,042,191) (428,540) 7 944,956 (1,042,191) (97,235) 8 1,253,831 (1,042,191) 211,640 9 1,542,998 (1,042,191) 500,807 10 1,844,998 (1,042,191) 802,807 11 2,170,329 (1,042,191) 1,128,139 12 2,459,302 (1,042,191) 1,417,111 13 2,745,553 (1,042,191) 1,703,362 14 3,033,943 (1,042,191) 1,991,752 15 (Buildout) 3,340,431 (1,042,191) 2,298,240 15-Year Total 20,212,646 (11,496,210) 8,716,437 1 Assumes future tax rate of 11.000 mills. 2 Variable per-capita cost ($216 per resident equivalent) applied in initial years. New station assumed to be fully staffed and operational by Year 5. Sources: Roaring Fork School District; Storied Development; Gruen Gruen + Associates. During the initial seven years of the SVR development when less than one-half of improvements and homes are projected to be completed and fully assessed, temporary operating deficits may exist to fully staff and operate a new fire station at the property. In Year 8, when around one-half of the SVR development is projected to be completed, the potential property tax revenues at the rate of 11.000 mills are estimated at $1,254,000 which is roughly equivalent to the estimated costs of staffing and operating a fire station. Property tax revenues are forecast to significantly exceed operating costs in later years. The annual operating surplus is estimated at about $803,000 in Year 10 and projected to increase to nearly $2.3 million by full buildout (Year 15) of the SVR development. Over the 15-year forecast period, the surplus of revenue over service costs is estimated to total about $8.7 million. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 44 APPENDIX A: ESTIMATE OF ROAD IMPACT AND SCHOOL LAND IN-LIEU FEES Table A-1 presents an estimate of road impact fees and school in-lieu fees. TABLE A-1: Road and School Impact Fee Estimates Units Fee Per Unit Fee Estimate County Road Impact Fees 1 Residential (Single-Family), 2,401 SF and greater 500 $2,703 $1,351,500 Residential (Affordable Units), 901 to 1,400 SF 75 $1,474 $110,550 Amenity Buildings (Commercial) 62,000 sf $3.77/sf $233,492 Maintenance Buildings (Industrial) 25,000 sf $1.51/sf $37,625 Total $1,733,167 School In-Lieu Fees (of Land Dedication) Single-Family Homes, 0.49 students/unit 500 $1,998 2 $998,898 Affordable Units (Multi-Family), 0.38 students/unit 75 $1,549 2 $116,198 Total $1,115,096 1 East Benefit Area. 2 Per Garfield County land use code, land area per student equals 1,776 square feet. In-lieu fees per housing unit assume fair market value of unimproved land equal to $100,000 per acre. Sources: Garfield County; Gruen Gruen + Associates. County Road Impact Fees are estimated to total nearly $1,733,300 and school impact fees are estimated to total about $1,115,100. C1661 Spring Valley Ranch Fiscal and Economic Impact Analysis GRUEN GRUEN + ASSOCIATES PAGE 45 APPENDIX B: ESTIMATE OF TRANSFER FEE REVENUES Table B-1 presents an estimate of the transfer fee revenue. TABLE B-1: Projection of 2% Transfer Fee Revenues Year Transfer Fees Related to Lot Sales1 $ Transfer Fees Related to Home Resales2 $ 1 1,720,000 0 2 1,840,000 0 3 1,880,000 0 4 1,840,000 640,000 5 1,800,000 1,440,000 6 1,800,000 2,240,000 7 1,800,000 2,880,000 8 1,800,000 3,680,000 9 1,800,000 4,320,000 10 1,800,000 5,120,000 11 1,920,000 5,760,000 12 0 6,560,000 13 0 7,200,000 14 0 8,000,000 Total 20,000,000 47,840,000 1 Average finished lot price estimated to be $2,000,000. 2 Annual turnover of 10 percent is assumed with an average home resale price of $8,000,000. Sources: Storied Development; Gruen Gruen + Associates. Transfer fees related to lot sales are estimated to total $20,000,000 in years one through 11. Transfer fees related to the resale of housing units are estimated to total $47,840,000 and occur from year four through year 14. At full buildout, recurring transfer fees are estimated to average $8,000,000 annually.