The City requires applicants seeking certain land use entitlements to submit a fiscal impact analysis. This requirement applies to requests for Comprehensive Plan land use amendments for sites over five acres, annexations, sphere of influence expansions, and rezoning and administrative review requests for greenfield sites twenty or more acres in size. However, analyses are submitted in a variety of formats and using factors and assumptions derived by the applicant. City staff recognized the need for a model that could produce objective and consistent estimates of the cost and revenue impacts to the City’s General and Road Funds associated with new development.

In 2018, the City Council approved a contract with Economic and Planning Systems, Inc. (EPS). The scope of work included development of a fiscal impact analysis model, referred to as the “2019 Fiscal Impact Analysis Guidelines” (attached), an overview of which was presented to Mayor Smith, the City Council and the Sparks Planning Commission during a joint workshop on September 23, 2019. At that meeting, the City Council directed the City Manager to prepare a future agenda item for possible City Council adoption of the 2019 Fiscal Impact Analysis Guidelines.

Resolution No. 3354 adopts the 2019 Fiscal Impact Analysis Guidelines. Upon adoption, the 2019 Fiscal Impact Analysis Guidelines shall serve as the standard against which all fiscal impact analyses submitted to the City with a land use entitlement application are evaluated.

When reviewing fiscal impact analyses submitted for a land use entitlement, it is important for City staff, the Planning Commission and City Council to consider that:

• Some projects will generate a net negative impact, others a positive fiscal impact. Fiscal balance and health cannot be achieved on a project-by-project basis. Rather, the City’s long-term fiscal health will depend in part on the cumulative impact of land use decisions made over a period of years.
• Approval or denial of a development proposal solely based on fiscal impact is problematic. There may be valid reasons why a fiscally negative project should be approved or, conversely, why a fiscally positive project should perhaps be denied.

The 2019 Fiscal Impact Analysis Guidelines will be reviewed and, if necessary, updated at least every two years. Updating of the guidelines may be appropriate as a result of substantive changes in the cost of providing City services (e.g., due to inflation, the addition of a fire station, annexations) and/or changes in revenues received by the City’s General and Road Funds.

1. City Council could approve the Resolution to adopt the 2019 Fiscal Impact Analysis Guidelines.
2. City Council could reject the Resolution to adopt the 2019 Fiscal Impact Analysis Guidelines and provide direction to the City Manager.

I move to approve Resolution No. 3354, adopting the 2019 Fiscal Impact Analysis Guidelines as the standard for fiscal impact analyses submitted with land use entitlement requests.