Key issue,  Incorporation:
Transferring local government from County to City,
fiscal analysis

The Citizens Alliance recognizes that incorporation as a city is receiving some degree of new public attention in 2008. At this time the Alliance is not taking an advocacy position for or against incorporation. We have undertaken sufficient research to review the major issue in the 2005 election campaign for city incorporation, the question of fiscal viability in circumstances of reduced growth. The basic finding is that city incorporation would have been very clearly viable at all growth rates down to 75% reduced growth, marginal at 100% reduced growth (zero growth).

It is important to note that any future incorporation process should be expected to be less fiscally advantageous than the 2005 incorporation process for about 25 years following incorporation. 

This is due to California's law for revenue neutrality:  As additional development increases major revenue sources such as property tax and sales tax the excess of this revenue over the amount spent by the County in El Dorado Hills is captured as a revenue stream for the County. That revenue stream continues until the end of a negotiated period, which was 25 years for the 2005 incorporation process.

This study is uses a small database application, using only SQL and producing results in a single log file. That log is postprocessed by a Perl script to produce the results presented here.  The SQL script, the Perl script, and all data are open for public inspection. Links follow below.

Technical description of incorporation fiscal analysis
This page includes links to all files used to generate the fiscal analysis. Those links include the computer scripts (SQL and Perl) used to produce this report, the corresponding log files, the template html script for generating top-level summary tables, and the resulting fiscal summary tables. It includes two sets of these files: One for current conditions with gasoline sales tax revenue updated to current actual revenue levels, and one using precisely the assumptions of the 2005 Comprehensive Fiscal Analysis (CFA). The version using strictly CFA assumptions was used to check the data and  SQL algorithms.

2005 Comprehensive Fiscal Analysis (CFA)
This is the original source of the data used in this analysis.

Summary
All Funds operating surplus (positive) or deficit (negative):

Growth Rate 2007 2008 2009 2010 2011 2012 2013 2014 2015
Nominal* $9,214,837
 $3,928,732
 $4,446,500
 $5,593,783
 $6,326,639 $6,456,699
 $7,475,530
 $6,956,332
 $7,439,106
25% reduced growth $8,432,071
 $3,224,864
 $3,632,794
 $4,703,741
 $5,176,491
 $5,299,958
 $6,237,965
 $5,403,270
 $5,764,811
50% reduced growth $7,649,305
 $2,520,996
 $2,819,088
 $3,813,699
 $4,026,343
 $4,143,217
 $5,000,400
 $3,850,208
 $4,090,516
75% reduced growth $6,866,539
 $1,817,128
 $2,005,382
 $2,923,657
 $2,876,195
 $2,986,476
 $3,762,835
 $2,297,146
 $2,416,221
Zero growth $6,083,773
  $1,113,260
 $1,191,676
 $2,033,615
 $1,726,047
 $1,829,735
 $2,525,270
 $744,084
 $741,926

All Funds Balance:

Growth Rate 2007 2008 2009 2010 2011 2012 2013 2014 2015
Nominal* $10,628,549
 $14,557,281
 $19,003,781
 $24,597,564
 $30,924,203
 $37,380,902
 $44,856,433
 $51,812,765
 $59,251,871
25% reduced growth $9,845,714
 $13,070,578
 $16,703,372
 $21,407,113
 $26,583,604
 $31,883,562
 $38,121,528
 $43,524,798
 $49,289,609
50% reduced growth $9,062,879
 $11,583,875
 $14,402,963
 $18,216,662
 $22,243,005
 $26,386,222
 $31,386,623
 $35,236,831
 $39,327,347
75% reduced growth $8,280,044
 $10,097,172
 $12,102,554
 $15,026,211
 $17,902,406
 $20,888,882
 $24,651,718
 $26,948,864
 $29,365,085
Zero growth $7,497,209
 $8,610,469
 $9,802,145
 $11,835,760
 $13,561,807
 $15,391,542
 $11,107,345
 $10,765,727
 $11,627,672

Detail for all growth alternatives in a single text file


Index to related pages and documents:

Comprehensive Fiscal Analysis (CFA) final draft from 2005 incorporation process

CFAFiscal summaries, updated to correspond to the two largest changes in economic conditions postdating the FY 2004 data used in the 2005 incorporation process. In the final decision incorporation (Measure P) failed by a vote of 43.6% in favor to 56.3% opposed.

--  Summary of fiscal projections, comparing growth rate sensitivity in steps of 25% reduced growth
     (New county projections correspond to 56% reduced housing growth for El Dorado Hills.)

--  Detail for CFA projected growth rate  (rate based on actual growth through FY 2004)
--  Detail for 25% reduced growth
--  Detail for 50% reduced growth
--  Detail for 75% reduced growth
--  Detail for zero growth