HomeMy WebLinkAbout2025-020 Hunter and Cole Ranch Financial Impact AnalysisJan. 10, 2025 Report No. 2025-020
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Provide information regarding a recently completed update to the original Hunter and Cole Ranch
developments Fiscal Impact Analysis (FIA).
EXECUTIVE SUMMARY:
City staff worked with a consultant to update the Fiscal Impact Analysis (FIA) for the Hunter and Cole
Ranch developments. The updated study shows that the developments still have an overall net positive
fiscal impact for the City of Denton. However, there are some changes compared to the original study
(Attachments 1 & 2). Overall, the net impact to the City is positive.
BACKGROUND:
During the initial assessment of the Hunter and Cole Ranch Developments, City staff hired TischlerBise to
conduct a FIA to determine the long-term financial impacts of the developments and ensure an equitable
arrangement in the future project and operating agreements with both developers. The original FIA was
conducted in 2020 to calculate the net fiscal impact of the proposed Hunter/Cole Ranch development to the
City’s General Operating and Debt Service Funds, the Roadway Impact Fee Fund, and the Street
Improvement Fund. Additionally, they examined the fiscal impact to the City’s Utility Funds to provide the
City with cost and revenue projections for use in its own rate analyses.
When the Hunter Ranch development came forward to requests amendments to the operating and project
agreements in 2024, staff took the opportunity to engage TischlerBise to update the study based on current
development assumptions, costs, and levels of service. This study was completed in September 2024.
METHODOLOGY:
The study used a case study-marginal methodology to forecast the future fiscal impact of the Hunter and
Cole Ranch developments. This process involved evaluating the City’s current costs per unit of service
(e.g., cost per resident for police services) and applying these rates to projected service demands from the
development. Similarly, current City revenues per unit (e.g., property tax revenue per $100 of assessed
value) were used to estimate future revenue generation. By comparing projected costs and revenues, the
study determined the net fiscal impact on the City's General Fund, Special Revenue Funds, and Utility
Funds. This analysis is based on current service levels and costs which does not account for any future
changes in costs, fees, or changes in level of service.
KEY FINDINGS:
City-Wide Impact
The updated fiscal impact study shows the Hunter and Cole Ranch developments still show to be a net
positive fiscal impact to the City of Denton.
The net impact to the City will vary with time, however, we are confident that this impact will be positive
over the 40 years of this study. It is important to keep in mind that individual funds listed in the study will
have varying impact over time. This is due to the timing of capital outlays, changes in impact fee rates and
utility rates, and inflationary factors. Capital outlays made in relationship to this study benefit the entirety
of the utility systems. These outlays are needed to continue the continuity of the utility systems and address
Jan. 10, 2025 Report No. 2025-020
growth and increased demand City-wide. In this study, these impacts are reviewed as a part of these projects
only, however, they benefit the entire system.
The table below describes the overall impact city-wide over a 40-year study timeframe.
Key Differences
It should be noted that this evaluation considers the follow factors:
• No inflationary factors are included. As mentioned by TishlerBise, “The rate of inflation is assumed
to be zero throughout the projection period, and cost and revenue projections are in constant 2024
dollars. This assumption is in accord with current budget data and avoids the difficulty of
forecasting as well as interpreting results expressed in inflated dollars. In general, including
inflation is complicated and unpredictable. This is particularly the case given that some costs,
such as salaries, increase at different rates than other operating and capital costs such as
contractual and building construction costs. These costs, in turn, almost always increase in
variation to the appreciation of real estate. Using constant 2024 dollars reinforces the snapshot
approach and avoids these problems.”
• No Retail or Commercial Utility Rate increases to align with no inflationary increases.
o As noted by TishlerBise,
“In practice, utility funds are self-sufficient; the City of Denton adjusts rates in
order to cover the actual cost of service while also generating a Return on
Investment (“ROI”) as identified from time to time in targeted municipal policies.
The City of Denton is in the process of conducting rate analyses in order to forecast
the timing and extent to which utility rates may need to be adjusted to fund
potential growth-related capacity expansion projects.
Jan. 10, 2025 Report No. 2025-020
The Utility Fund analysis included in this report presents the fiscal impact of
the development to the City’s utility funds, assuming no rate adjustments, per
direction from the City’s Finance Department. Costs are therefore projected
based solely on the increase in customers and usage for each utility; revenues are
projected based on the current cost of water, wastewater, solid waste, and electric
service per the appropriate demand factor (e.g., water produced).”
City utility and impact fee rates will be evaluated over the projected 40-year time span and adjusted as
necessary and within policy limitations.
CONCLUSION:
The updated study offers valuable insight, showing that the Hunter and Cole Ranch developments continue
to provide a net positive impact to the City. It is important to remember that this study reflects a specific
point in time and there are opportunities to shape the net fiscal impact in the future (i.e. the current Water
and Wastewater Impact Fee Study). City staff will be proactive in monitoring these funds to ensure costs
are covered and guarantee the long-term financial stability and health of these resources.
ATTACHMENTS:
1. Update FIA Report
2. Original FIA Report
STAFF CONTACT:
Charlie Rosendahl
Business Services Manager
Charlie.Rosendahl@cityofdenton.com
(940) 349-8452
REQUESTOR: Staff Initiated
STAFF TIME TO COMPLETE REPORT: 2 hours
PARTICIPATING DEPARTMENTS: Finance and Development Services Departments
Fiscal Impact Analysis of
Hunter and Cole Ranch Development s
Fiscal Impact Analysis Report
City of Denton, Texas
Prepared for:
The City of Denton
September 23, 2024
4701 Sangamore Road, Suite S240
Bethesda, MD
301.320.6900
www.tischlerbise.com
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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TABLE OF CONTENTS
I. Executive Summary ....................................................................................................................... 1
Development Program .................................................................................................................. 2
Summary of Fiscal Impact Results ................................................................................................. 3
General Fund and Special Revenue Funds .................................................................................. 3
Utility Funds .............................................................................................................................. 7
Overall Results .........................................................................................................................14
Key Findings & Conclusions ..........................................................................................................15
General, Debt Service, and Special Revenue Funds ...................................................................15
Utility Funds .............................................................................................................................16
II. Major Assumptions & Methodologies ..........................................................................................17
Overview of Methodology ...........................................................................................................17
General Approach ....................................................................................................................17
Key Assumptions ..........................................................................................................................19
Fiscal Year 2024 Budget ............................................................................................................19
Variable versus Fixed Costs and Revenues ................................................................................20
Levels of Service .......................................................................................................................20
Inflation Rate ...........................................................................................................................20
Enterprise Funds ......................................................................................................................21
Non-Fiscal Evaluations ..............................................................................................................21
Development Program .................................................................................................................22
III. Fiscal I mpact Analysis Results .....................................................................................................24
General and Special Revenue Funds .............................................................................................25
Annual Net Fiscal Impacts ........................................................................................................25
Capital Impacts ........................................................................................................................28
Cumulative Net Fiscal Impacts ..................................................................................................30
Utility Funds ................................................................................................................................31
Cumulative Fiscal Impact for Utility Funds ................................................................................31
Net Annual Fiscal Impact for Utility Funds ................................................................................33
Key Findings & Conclusions ..........................................................................................................37
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
iii
General, Debt Service, and Special Revenue Funds ...................................................................37
Utility Funds .............................................................................................................................38
Overall Results .........................................................................................................................38
IV. Revenue and Expenditure Detail .................................................................................................39
Revenue Methodologies ..............................................................................................................39
General Fund Revenues ............................................................................................................39
General Debt Service Fund .......................................................................................................45
Special Revenue Funds .............................................................................................................45
Utility Funds .............................................................................................................................47
Revenue Outputs .........................................................................................................................51
Revenue Projections .................................................................................................................51
Operating Expenditure Methodologies ........................................................................................53
General and Special Revenue Funds .........................................................................................53
Utility Fund Operating Expenditures .........................................................................................56
Capital Expenditure Methodologies .............................................................................................57
General Government Facilities .................................................................................................57
Parks and Recreation ................................................................................................................58
Transportation .........................................................................................................................58
Police .......................................................................................................................................58
Fire and EMS ............................................................................................................................59
Library......................................................................................................................................59
Public Works ............................................................................................................................59
Expenditure Outputs ....................................................................................................................60
Operating and Capital Expenditure Projections ........................................................................60
Appendix A. Demographic & Data Assumptions ...............................................................................62
Base Year Demographic Estimates ................................................................................................62
Population and Job Factors .......................................................................................................63
Vehicle Trips ................................................................................................................................63
Residential Vehicle Trips ...........................................................................................................63
Nonresidential Vehicle Trips .....................................................................................................64
Base Year Vehicle Trip Totals .....................................................................................................65
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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Functional Population ..................................................................................................................66
Police Calls for Service .................................................................................................................67
Fire Calls for Service.....................................................................................................................68
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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Table of Figures
Figure 1. Development Scenario ....................................................................................................... 2
Figure 2. Annual Net Fiscal Impact 2024 -2064 (Non-Utility) .............................................................. 3
Figure 3. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton ....................................... 4
Figure 4. Annual Operating & Capital Expenditures Compared to Revenues (Non -Utility) .................. 4
Figure 5. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds) ..... 6
Figure 6. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s) ............................................ 8
Figure 7. Capital Facilities and Expenditure Inventory (Utility Funds) ................................................ 9
Figure 8. Water Fund Operating & Capital Expenses Compared to Revenues ....................................10
Figure 9. Wastewater Fund Operating & Capital Expenses Compared to Revenues ...........................11
Figure 10. Solid Waste Fund Operating & Capital Expenses Compared to Revenues .........................12
Figure 11. Electric Fund Operating & Capital Expenses Compared to Revenue .................................13
Figure 12. Operating and Capital Expenditures Compared to Revenues for All Funds Combined .......14
Figure 13. Development Scenario ....................................................................................................22
Figure 14. Annual Net Fiscal Impact 2 024-2064 (Non-Utility) ...........................................................26
Figure 15. Annual Operating & Capital Expenditures Compared to Revenues (Non-Utility) ...............27
Figure 16. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds) ..29
Figure 17. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton ....................................30
Figure 18. Cumulative Revenues and Expenditures: General and Debt Service Funds .......................30
Figure 19. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s) .........................................31
Figure 20. Capital Facilities and Expenditure Inventory (Utility Funds) .............................................32
Figure 21. Water Fund Operating & Capital Expenses Compared to Revenues ..................................33
Figure 22. Wastewater Fund Operating & Capital Expenses Compared to Revenues .........................34
Figure 23. Solid Waste Fund Operating & Capital Expenses Compared to Revenues .........................35
Figure 24. Electric Fund Operating & Capital Expenses Compared to Revenue .................................36
Figure 25. Operating and Capital Expenditures Compared to Revenues for All Funds Combined .......38
Figure 26. General Fund Revenues ...................................................................................................40
Figure 27. Sales Tax per Square Foot ................................................................................................42
Figure 28. Assessed Value by Land Use Type ....................................................................................43
Figure 29. General Debt Service Fund ..............................................................................................45
Figure 30. Street Improvement Fund ...............................................................................................46
Figure 31. Roadway Impact Fee Assumptions ...................................................................................46
Figure 32. Utility Fund Revenue Projection Methodology ................................................................47
Figure 33. Water and Wastewater Billing Assumptions .....................................................................48
Figure 34. Water and Wastewater Impact Fee Assumptions .............................................................49
Figure 35. Utility Fund Revenue Projection Methodology ................................................................50
Figure 36. Solid Waste Fund Revenue Projection Methodology ........................................................50
Figure 37. 40-Year Revenue Totals for all Non -Utility Funds ..............................................................51
Figure 38. 40-Year Revenue Totals and Annual Averages for Utility Funds (x$1,000s) .......................52
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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Figure 39. General and Special Revenue Operating Expenditures Approach .....................................54
Figure 40. City Maintained Parks and Recreation Facilities for Operating Expense Projections .........55
Figure 41. Utility Funds Operating Expenditures Approach ..............................................................56
Figure 42. Operating Expenditure Projections ..................................................................................60
Figure 43. Summary of Non -Utility Capital Costs ..............................................................................61
Figure 44. Summary of Utility Fund Capital Costs .............................................................................61
Figure 45. Base Year Input Data .......................................................................................................62
Figure 46. Trip Adjustment Factor for C ommuters ............................................................................64
Figure 47. Trip Generation Factors ...................................................................................................64
Figure 48. Vehicle Trips ....................................................................................................................65
Figure 49. City of Denton Functional Population ..............................................................................66
Figure 50. Police Service Call Demand Factors .................................................................................67
Figure 51. Fire Department Demand Factors ....................................................................................68
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
1
I . EXECUTIVE SUMMARY
The purpose of this Fiscal Impact Analysis (“FIA”) is to provide information to the City of Denton
related to the fiscal impact of the proposed Hunter Ranch and Cole Ranch Municipal Management
Districts (“Hunter/Cole MMD” or “Hunter/Cole Ranch”). An FIA determines whether revenues
generated by development are sufficient to cover the costs resulting from that development —
specifically, those costs associated with maintaining current levels of service given the additional
service and facility demands that growth places on a jurisdiction .
The City of Denton has been in discussions with Hillwood and Stratford Land (“the developers” or
“development team”) regarding the development of Hunter Ranch and Cole Ranch on a 6,340-acre
area to the Southwest of the city’s downtown since 2008. In February 2019 the City passed a
resolution of support for the formation and operation of the Hunter Ranch and Cole Ranch Municipal
Management Districts. Municipal Management Districts (“MMDs”) are special tax assessment districts
and political subdivisions of the State of Texas. MMDs may levy taxes and issue bonds in order to
provide the infra structure needed to serve raw land development. As development progresses, the
Management District can then provide supplemental services and improvements . As an MMD, it also
has the authority and revenue raising tools to self -fund a portion of the improve ment projects needed
to serve the development proposed as well as some of the ongoing expenses associated with
maintaining those improvements.
TischlerBise conducted an FIA in 2020 for the Hunter/Cole Ranch development. TischlerBise’s
assignment in 2020 was to calculate the net fiscal impact of the proposed Hunter/Cole Ranch
development to the City ’s general operating and debt service funds , the Roadway Impact Fee Fund,
and the Street Improvement Fund. Additionally, we examined the fiscal impact to the Ci ty’s Utility
Funds to provide the City with cost and revenue projections for use in its own rate analys es.
Updates to the operating agreement and costs have occurred since the original study and the City of
Denton has requested an update to the FIA. This document reflects the updated FIA for 2024 and
describes the approach and methodology, presents findings from the analysis , and discusses their
significance.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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D EVELOPMENT P ROGRAM
The Hunter Ranch and Cole Ranch developments propose a mix of uses and industries across 6,340
acres of undeveloped land. The City of Denton provided TischlerBise with the developers’ baseline
build-out scenario for residential units and commercial and ind ustrial acreage. Estimates were derived
for the other key indicators from federal and local governmental sources.
Figure 1 below presents the development scenario for Hu nter/Cole Ranch in cumulative 10 -year
increments.
Figure 1 . Development Scenario
De ve lopment Scenario Summary
Cumulative Growth: 2 0 2 4 -2064, 10-year Increme nts
City of Denton, Texas - Hunte r/Cole Ranch FIA
EXISTING Year 10 Ye ar 20 Ye ar 30 Year 4 0 BUILDOUT
2 0 2 4 2034 2044 2 0 5 4 2064 at 2064
POPULATION 154 ,3 8 9 11,6 0 0 40,800 5 5,805 5 5 ,8 0 5 210,194
% g rowth from existing 8%26%3 6%3 6 %36%
RESIDENTIAL LOTS NA 3,6 0 0 9,600 1 3,000 1 3 ,0 0 0
SINGLE FAMILY 40 ,0 7 4 3,0 0 0 9,000 1 2,400 1 2 ,4 0 0 52,474
MULTIFAMILY 25 ,3 4 5 8 0 0 4,800 6,450 6 ,4 5 0 31,795
TOTAL UNITS 65 ,4 1 9 3,8 0 0 13,800 1 8,850 1 8 ,8 5 0 84,269
% g rowth from existing 6%21%2 9%2 9 %29%
NONRESIDENTIAL ACRES NA 7 1 486 741 7 4 1
RETAIL SF 8,283 ,9 4 8 137,2 1 4 1,692,306 2 ,9 5 7,724 2,95 7 ,7 2 4 11,241,672
OFFICE SF 4,179 ,5 0 0 137,2 1 4 1,692,306 2 ,9 5 7,724 2,95 7 ,7 2 4 7,137,224
INDUSTRIAL SF 9,533 ,3 7 6 585,4 4 6 2,536,934 3 ,1 2 2,381 3,12 2 ,3 8 1 12,655,757
INSTIT SF 7,037 ,9 7 5 0 0 0 0 7,037,975
TOTAL NR DEVELOPM ENT (SF)29,034 ,7 9 9 859,8 7 4 5,921,546 9 ,0 3 7,829 9,03 7 ,8 2 9 38,072,628
% g rowth from existing 3%20%3 1%3 1 %31%
RETAIL JOBS 17 ,5 8 8 2 9 1 3,593 6,280 6 ,2 8 0 23,868
OFFICE/INSTITUTIONAL J OBS 35 ,7 8 5 4 2 2 4,160 6,978 6 ,9 7 8 42,763
INDUSTRIAL JOBS 11 ,0 3 4 6 7 8 2,936 3,614 3 ,6 1 4 14,648
TOTAL JOBS 64 ,4 0 7 1,3 9 1 10,689 1 6,871 1 6 ,8 7 1 81,278
% g rowth from existing 2%17%2 6%2 6 %26%
S ource: City of Denton; Hillwood Communities; U.S . Census 2018-2022 American Community Survey; I nstitute of Transportation Engineers; TischlerBise
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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S UMMARY OF F ISCAL I MPACT R ESULTS
GENERAL FUND AND SPECIAL REVENUE FUNDS
The fiscal impacts of growth are shown below in the following figures. Net fiscal results are revenues
minus costs in each year , reflecting operating and capital costs for all services modeled . Data points
above the $0 line represent annual surpluses; poin ts below the $0 line represent annual deficits.
Surpluses in any one year are not carried forward to the next year.
Figure 2 . Annual Net Fiscal Impact 2024-2064 (Non-Utility)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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The cumulative totals shown below reflect total rev enues and expenditures over the 40 -year time
frame. As shown, there is a cumulative positive fiscal impact for the funds analyzed , with the
exception of the Roadway Impact Fee Fun d where deficits are generated . The analysis projects
roadway impact fee revenues based on current i mpact fee rates; costs are projected separately based
on the projected increase in transportation demand .
Figure 3 . Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton
For further detail, operating and capital impacts are separated in the following figure.
Figure 4 . Annual Operating & Capital Expenditures Compared to Revenues (Non-Utility)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
5
As a development-finance tool, Municipal Management Districts allow private property owners to access
low-interest financing for public infrastructure projects. The development team and the City of Denton
have identified improvement projects required to serve the Hunter/Cole Ranch Master Planned
Community that will be financed by the MMD or the developer.
The table below inventories the infrastructure projects and other capital investments triggered by the
proposed development of Hunter/Cole Ranch. Capital costs are categorized as either “City Funded”
or “MMD/Developer Funded.” Only those projects required to maintain current levels of service are
identified here —planned investments in private amenities for the exclusive use of Hunter/Cole
Ranch MMD residents are excluded from this analysis and from the list below.
Non-utility capital projects and costs are allocated to the City of Denton and the MMD/Developer in
the detailed capital project inventory depicted in Figure 5 on the following page. The methodology
underlying these projections and cost assumptions is discussed in detail in the Revenue and
Expenditure Methodology Chapter of the report.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
6
Figure 5 . Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds)
Non-Utility Capital Facilitie s and Allocation of Costs ($1,000 s)
Fiscal Impact Analysis - De nton, TX
DEPARTMENT - Facility
Quantity
Total Square
Footage, Acres,
Lane Miles
Total City of De nton MMD /
De veloper
Parks and Recreation1
Recreati on Center Buildi ng [Sq. Ft.]1 32 ,00 0 $17,855 $17,855 $0
Ci ty Park: Developer Provided (104 acres ttl) [Ac res]2 10 4 $9,459 $0 $9,459
Nei ghborhood Parks (5 acres ea.) [Ac res]4 2 0 $3,650 $0 $3,650
Poc ket Parks (.5 acres ea) / Dog Parks (2 acres ea)32 1 9 $6,675 $0 $6,675
Regional Trai ls [Miles]na 23.0 $16,391 $0 $16,391
Communi ty Trai ls [Mi les]na 35.0 $13,841 $0 $13,841
Amenity Centers//DEVELOPER 4 na $40,000 $0 $40,000
Other Amenities//DEVELOPER [porti on rei mb.]na na $80,818 $0 $80,818
Parks & Rec Department - Vehic les 22 na $2,221 $2,221 $0
Total Parks & Re cre ation $190,910 $20,076 $170,835
Fle et & Facilitie s M anagement
West Side Service Center2 1 18 ,77 4 $6,383 $5,858 $525
Facili ti es Management-Storage 1 109 ,93 7 $27,484 $27,484 $0
Total Fle e t and Facilities Management $33,867 $33,342 $525
General Government - Admi nistrative Space na 30 ,18 1 $13,582 $13,582 $0
General Government - Vehicles 38 na $1,330 $1,330 $0
Total Ge neral Gove rnment $14,912 $14,912 $0
On-Si te Roadway Proj ects3 na 14 9 $241,158 $0 $241,158
Off-Si te Roadway Proj ects4 na 8 4 $100,024 $89,363 $10,661
Streets - Vehi cl es 136 na $8,116 $8,116 $0
Total Transportation $349,298 $97,478 $251,819
Pol ice - Substation 1 44 ,70 0 $20,115 $20,115 $0
Pol ice - Patrol Vehic les 99 na $5,268 $5,268 $0
Pol ice - Other Vehicles and Equi pment 36 na $241 $241 $0
Total Police $25,625 $25,625 $0
Fi re - Fire Station5 2 18 ,37 6 $10,180 $0 $10,180
Fi re - Fire Engines / Trucks 27 na $17,450 $17,450 $0
Fi re - Vehi cl es / Equi pment 19 na $1,035 $1,035 $0
Total Fire $28,665 $18,485 $10,180
Li brary 1 28 ,30 0 $17,095 $17,095 $0
Total Library $17,095 $17,095 $0
345 ve hic les /
24 lane mile s TOTAL 6 $660,372 $2 27,012 $433,359
^ Reflects the direct capital cost and not debt serv ice costs.
1. Dev eloper contributions updated June 2024 per revised estimates prov ided by City of Denton; City contributions projected per F iscal I mpact Analy sis.
No additional park acres bey ond those identified as being prov ided by Hunter and Cole Developments per the City of Denton are modeled or assumed.
3. City of Denton, Hunter and Cole Developments projected on-site road improv ements.
4. City of Denton, Hunter and Cole Developments projected off-site road improvements, City and developer/M M D cost share.
6. Cost estimates represent the initial purchase and, for v ehicles and equipment, replacement costs.
5. Two Fire Stations for Hunter and Cole Developments are assumed to be built by dev eloper (contribution estimated at $10.0 million plus $180,000 for land
total). Square footage is estimated based on current City average cost per square foot for fire stations ($554).
General Government
Library
Police
Transportation
Fire and EMS
2. Square footage derived by the fiscal model based on demand from Hunter and Cole dev elopments; cost based on current cost from City of Denton; dev eloper
contribution information provided by City of Denton.
Capital Costs ($1,000s)^
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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UTILITY FUNDS
Utility Funds were included in our analysis at the request of the City of Denton to evaluate whether
the income generated from new customers and users would cover the costs required to provide
service to the MMD while maintaining existing levels of service throughout the city.
CUMULATIVE FISCAL IMPACT FOR UTILITY FUNDS
As depicted in the figure below, the net fiscal impact of the MMD is negative for all utility funds except
the Electric Fund as shown in Figure 6. All City utility costs (operating and capital) and revenues (based
on current rates and fees) are reflected.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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Figure 6 . Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
9
Figure 7 summarizes the water, wastewater, and drainage utility infrastructure investment triggered
by Hunter/Cole Ranch. Capital costs are categorized as City of Denton (COD) Cost, Developer Cost, or
Developer Reimbursement. COD Cost is included throughout this analysis under City costs. Developer
Cost and Developer Reimbursement are excluded from the findings as they are assumed to
implemented by the developer or reimbursed from MMD funds.
Figure 7 . Capital Facilities and Expenditure Inventory (Utility Funds)
The methodology and approach utilized to arrive at the capital cost projections is detailed in the Revenue
and Expenditure Detail chapter of this report.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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NET ANNUAL FISCAL IMPACT FOR UTILITY FUNDS
The annual net fiscal impact on the utility funds is presented in the figures that follow.
Water Fund
Water Fund expenditures are expected to exceed revenues throughout the study-period, specifically
for capital improvements, as depicted in Figure 8 below. Note that the spikes depicted in Water Fund
revenues are the result of impact fees. The analysis reflects City utility collections and expenditures
and does not include developer contributions or expenditures.
Figure 8 . Water Fund Operating & Capital Expenses Compared to Re venues
The capital expenditures included in this analysis are City expenditures directly attributable to
demand from Hunter/Cole. These projects are debt financed. Water impact fee revenue is assumed
over the projection period, which is generally insuff icient to cover the capital expenditures projected.
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsWATER FUND
ANNUAL OPERATING & CAPITAL EXPENDITURE SUMMARY
HUNTER/COLE RANCH FISCAL IMPACT ANALYSIS
Operati ng Expen dit ures Capi tal Ex pendi tures Revenues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
11
Wastewater Fund
Wastewater Fund revenues are not expected to meet or exceed operating and capital expenditures
over the course of the development, as depicted in Figure 9 below.
Figure 9 . Wastewater Fund Operating & Capital Expenses Compared to Revenues
The spikes in the revenue line represent impact fee payments. New development in the MMD is
modeled to be completed by year 29 , at which point impact fee revenues cease. Although the timing
of impact fee payments does not directly correspond with capital costs, revenues accrued in year s
where impact fees exceed capital expenses do not cover deficits in other years. The capital
expenditures included in this analysis represent planned Wastewater Fund capital infrastructure
projects required to serve Hunter/Cole Ranch and reflect City reve nues and expenditures only.
($10,000)
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsWASTEWATER FUND
ANNUAL OPERATING & CAPITAL EXPENDITURE SUMMARY
HUNTER/COLE RANCH FISCAL IMPACT ANALYSIS
Operati ng Expen dit ures Capi tal Ex pendi tures Rev enues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
12
Solid Waste Fund
As depicted in the figure below, Hunter/Cole Ranch is projected to generate net deficits to the City of
Denton’s Solid Waste Fund. Operating Capital expenses reflect average costs based on City CIP
projects ap plied to demand from Hunter/Cole Ranch. Results reflect City revenues and expenditures
only.
Figure 10. Solid Waste Fund Operating & Capital Expenses Compared to Revenues
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsSOLID WASTE FUND
ANNUAL OPERATING & CAPITAL EXPENDITURE SUMMARY
HUNTER/COLE RANCH FISCAL IMPACT ANALYSIS
Operati ng Expen dit ures Capi tal Ex pendi tur es Revenues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
13
Electric Fund
Electric revenues and expenses associated with Hunter Cole were provided by the City of Denton and
are illustrated in terms of revenues relative to capital and operating expenditures in the figure below.
Revenues are projected to exceed expenditures for ea ch year of the study period.
Figure 11. Electric Fund Operating & Capital Expenses Compared to Revenue
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsELECTRIC FUND
ANNUAL OPERATING & CAPITAL EXPENDITURE SUMMARY
HUNTER/COLE RANCH FISCAL IMPACT ANALYSIS
Operati ng Expen dit ures Capi tal Ex pendi tur es Rev enues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
14
OVERALL RESULTS
Per direction from City of Denton staff, the figure below compares annual revenues to annual
operating and capital expenditures for the funds analyzed, including utility funds. Note that under
current City policy, utility fund revenues are restricted and cannot be used toward any other fund’s
activities.
Figure 12. Operating and Capit al Expenditures Compared to Revenues for All Funds Combined
($50,000)
$0
$50,000
$100,000
$150,000
$200,000
$250,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsANNUAL OPERATING & CAPITAL EXPENDITURES COMPARED TO REVENUES
(UTILITIES INCLUDED)
HUNTER/COLE RANCH FISCAL IMPACT SUMMARY
Operati ng Expen dit ures Capi tal Ex pendi tur es Rev enues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
15
K EY F INDINGS & C ONCLUSIONS
The following conclusions can be drawn from the FIA results presented in this report:
GENERAL , DEBT SERVICE , AND SPECIAL REVENUE FUND S
• The proposed Hunter/Cole Ranch development is projected to have a net cumulative positive
fiscal impact on the City over the 40-year study period. The net positive impacts are driven
primarily by sales and property tax revenue from development.
• It should be noted that, on average, the resulting annual net positive impact to the General Fund
and Debt Service Fund is approximately $18.0 million, which reflects 5.6 percent of the City of
Denton’s Fiscal Year 2024 operating budget.
• The Street Improvement Fund is funded through franchise fees from utility fund revenue
surpluses (as well as non -growth-related revenues). The Street Improvement Fund’s projected
cumulative surplus is partially attributable to the fact that utility fund revenues will increase
as a result of Hunter/Cole Ranch. Another reason for the surplus is that although the
additional roadways added to the City of Denton’s lane mile inventory increase Street
Improvement Fund operating and capital outlay costs, major capital expenditures are
generally accounted for in other funds.
o Note that the increases in franchise fee revenue could be allocated to another fund at
the City’s discretion. As discussed previously, this analysis assumed that the 10 -year
policy of transferring excess franchise fee rev enue to the Street Improvement Fund
would continue throughout the 40 -year study period.
• Demand for fire services will trigger the need to expand two fire stations, which is assumed
to be funded by the developer/MMD. The estimated contribution from the dev eloper is used
to derive a fire station size, at the latest City cost per square feet for fire station construction.
The resulting size per station may be smaller than the City desires, therefore additional costs
may be incurred by the City.
• Although the projected growth in revenue is relatively significant, the City should continue to
plan and be prepared to expand both its facilities and operational capacity —the Hunter/Cole
Ranch development is projected to be fiscally balanced in the sense that it is p rojected to
produce enough revenue to cover its costs, but it will not be self -contained. Growth in
population, vehicle trips, and police and fire calls, for instance, is projected to increase
average annual operating expenditures to the City by approximat ely $26 million per year.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
16
• Overall, Hunter/Cole Ranch is projected to generate sufficient revenue to cover both the
capital and operating costs associated with meeting the additional demand it will place on
City services.
UTILITY FUNDS
• Water and Wastewater Fund revenues are insufficient to cover operating and capital
expenditures throughout the 40 -year study period. Water and Wastewater impact fee revenue
is insufficient to cover the development’s share of water and wastewater capital co sts.
• Impact fee revenue is a function of the City of Denton’s current fee schedule and projected
development—current rates are insufficient to cover City Water and Wastewater capital
needs.
• Overall, the cumulative fiscal impact on all utility funds is pr ojected to be negative.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
17
II. MAJOR ASSUMPTIONS &
METHODOLOGIES
O VERVIEW OF M ETHODOLOGY
An FIA determines whether revenues generated by new development are sufficient to cover the costs
resulting from that development—specifically, those costs associated with maintaining current levels of
service given the additional service and facility demands that growth places on a jurisdiction.
Levels of Service (“LOS”) reflect public services and infrastructure as currently funded and are typically
expressed as a cost per demand unit. For example, maintenance of parks would be expressed as a cost
per acre of parks to maintain. For the City of Denton, we analyzed the fiscal impact of the proposed
Hunter/Cole Ranch development based on current citywide levels of service and any known infrastructure
or service needs.
GENERAL APPROACH
The Fiscal Impact Analysis for the City of Denton incorporates the case study-marginal cost approach
wherever possible. The case study-marginal methodology is the most realistic method for evaluating
fiscal impacts. Unique demographic or other characteristics of new development are accounted for, as
well as the extent to which a particular infrastructure or service operates under, over, or close to capacity.
Available facility capacity determines the need for additional capital facilities and associated operating
costs.
Certain costs are impacted by general growth, regardless of location; these are projected using a
marginal/average cost hybrid methodology that incorporates capacity and thresholds for staffing, but
projects non-salary operating costs using an average cost approach. Some costs and revenues are not
expected to be impacted by growth and are therefore considered fixed in this analysis.
The levels of service and cost assumptions used in this analysis are based on TischlerBise’s previous FIA
for Hunter/Cole along with discussions with City of Denton staff, input from the development team, and
a detailed analysis of the City of Denton FY23-24 Adopted Budget and Capital Improvements Programs;
staff reports, other relevant financial and planning documents. Additionally, our national experience
conducting over 1,000 fiscal impact analyses was beneficial.
The assumptions outlined in this report are utilized along with the growth projections to calculate the
potential fiscal impacts to the City of Denton of the Hunter/Cole Ranch Development over a 40-year time
frame. Only citywide impacts are included in this report—for instance, onsite private amenities are
excluded from the analysis.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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To summarize, our methodological approach included the following steps.
1. Existing demand base and cost and revenue factors such as current population, housing units,
employment, and nonresidential square footage were established.1
2. Current Levels of Service were identified.
3. The growth scenario to be analyzed was defined.
4. General assumptions regarding the allocation of capital projects and maintenance responsibilities
to the developer versus the City of Denton were established.2
5. The fiscal impact model was designed to account the assumptions established in Steps 1-4.
The results presented in this report were calculated using a customized fiscal impact model designed
specifically by TischlerBise for this assignment.
1 These are detailed in Appendix A.
2 Through the MMD structure, the development team will finance a portion of the infrastructure required to maintain
current levels of service; the MMD will also be responsible for the operations and maintenance of some facilities that
would otherwise be publicly owned and maintained. Likewise, certain infrastructure projects funded by Hunter/Cole MMD
will, upon completion, transfer to the City of Denton; for instance, with the exception of private roads, the City will
ultimately be responsible f or roadway maintenance (excluding right -of-way landscaping) for the majority of MMD funded
lane miles.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
19
K EY A SSUMPTIONS
FISCAL YEAR 2024 BUDGET
The Fiscal Year 2024 Budget is used to represent a “snapshot” of the City’s current costs and levels of
service. The “snapshot” approach does not attempt to speculate about how services or costs will change
over time or whether current levels of service are sufficient or insufficient. Instead, it evaluates the cost
implications to the City as it conducts business under the FY2024 budget. The following exceptions and
assumptions should be noted:
▪ Ad Valorem Property Tax Rate: The FY2024 tax rate of 0.560682 was utilized to project tax
revenues. The General Fund portion is 0.354780, and the General Debt Service Obligation
Fund portion is 0.205902 .
▪ Franchise Fees : The City collects franchise fees from utility funds —specifically, the Water
Fund, Wastewater Fund , Solid Waste Fund, and Electric Fund —among other smaller funds
such as gas and cable, in an amount equal to 5 percent of gross annual revenues. FY 2024 was
the third year of a 10-year policy to transfer all franchise fee revenue in excess of the FY2016
dollar amount to the Streets Improvement Fund, rather than directly to the General Fund. This
analysis assumes that this policy remains intact throughout the study period.
▪ Revenue Surpluses and Tax Rates : Positive fiscal impacts are represented as revenue
surpluses; as a Fiscal Impact Study, this analysis holds all tax rates constant throughout the
40-year term. In reality, the City of Denton will budget based according to its priorities and
policies, and surpluses could translate into a potential decrease in the applicable tax rate,
whereas deficits may lead to an increase in that rate.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
20
VARIABLE VERSUS FIXED COSTS AND REVENUES
Costs and revenues that are directly attributable to Hunter/Cole Ranch are included in the fiscal analysis
of the development. In all cases, some costs and revenues are not impacted by demographic changes and
are assumed to be “fixed.” To determine fixed variables, TischlerBise interviewed City staff and reviewed
the FY2024 budget and available supporting documentation. Examples of budget items modeled as
“fixed,” or non-growth related, include:
▪ Staffing for certain leadership positions; this varies by department, but in many cases, the
position of Director is held fixed as the staffing structure does not require or support multiple
department heads.
▪ One -time costs for services unrelated to growth and development.
▪ Revenue sources that are not growth -related.
LEVELS OF SERVICE
The cost projections are based on a “snapshot approach” in which it is assumed the current level of
service, as funded in the City budget and as provided in current capital facilities, will continue through
the 40 -year analysis period. The 2024 existing demand base data was used to calculate unit costs and
service level thresholds. Examples of demand base data inc lude population, dwelling units,
employment by industry, vehicle trips, etc . The “snapshot” approach does not attempt to speculate
about how levels of service or cost factors will change over time. Instead, it evaluates the implications
of development to t he City as conducted under the FY 2024 budget and informed by discussions with
staff.
INFLATION RATE
The rate of inflation is assumed to be zero throughout the projection period, and cost and revenue
projections are in constant 2024 dollars. This assumpti on is in accord with current budget data and
avoids the difficulty of forecasting as well as interpreting results expressed in inflated dollars. In
general, including inflation is complicated and unpredictable. This is particularly the case given that
som e costs, such as salaries, increase at different rates than other operating and capital costs such
as contractual and building construction costs. These costs, in turn, almost always increase in
variation to the appreciation of real estate. Using constant 2024 dollars reinforces the snapshot
approach and avoids these problems.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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ENTERPRISE FUNDS
In practice, utility funds are self-sufficient; the City of Denton adjusts rates in order to cover the actual
cost of service while also generating a Return on Investment (“ROI”) as identified from time to time
in targeted municipal policies. The City of D enton is in the process of conducting rate analyses in order
to forecast the timing and extent to which utility rates may need to be adjusted to fund potential
growth-related capacity expansion projects.
The Utility Fund analysis included in this report p resents the fiscal impact of the development to
the City’s utility funds, assuming no rate adjustments , per direction from the City ’s Finance
Department. Costs are therefore projected based solely on the increase in customers and usage for
each utility; revenues are projected based on the current cost of water, wastewater, solid waste, and
electric service per the appropriate demand factor (e.g., water produced).
NON-FISCAL EVALUATIONS
It should be noted that while a Fiscal Impact Analysis is an important consideration in planning decisions,
it is only one of several issues that should be considered. Environmental and social issues, for example,
should also be considered when making planning and policy decisions. The above notwithstanding, this
analysis will enable interested parties to understand the fiscal implications of development in the
Hunter/Cole Ranch MMD.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
22
D EVELOPMENT P ROGRAM
The Hunter Ranch and Cole Ranch developments propose a mix of uses and industries across 6,340
acres of undeve loped or “raw” land. The City of Denton provided us with the developers’ baseline
build-out scenario for residential units and commercial and industrial acreage. We derived estimates
for the other key indicators from federal and local governmental sources.
Figure 13 below presents the development scenario for Hunter/Cole Ranch in cumulative 10-year
increments.3
Figure 13. Development Scenario
3 No change has been made to the development program from the 2020 Fiscal Impact Analysis study.
De ve lopment Scenario Summary
Cumulative Growth: 2 0 2 4 -2064, 10-year Increme nts
City of Denton, Texas - Hunte r/Cole Ranch FIA
EXISTING Year 10 Ye ar 20 Ye ar 30 Year 4 0 BUILDOUT
2 0 2 4 2034 2044 2 0 5 4 2064 at 2064
POPULATION 154 ,3 8 9 11,6 0 0 40,800 5 5,805 5 5 ,8 0 5 210,194
% g rowth from existing 8%26%3 6%3 6 %36%
RESIDENTIAL LOTS NA 3,6 0 0 9,600 1 3,000 1 3 ,0 0 0
SINGLE FAMILY 40 ,0 7 4 3,0 0 0 9,000 1 2,400 1 2 ,4 0 0 52,474
MULTIFAMILY 25 ,3 4 5 8 0 0 4,800 6,450 6 ,4 5 0 31,795
TOTAL UNITS 65 ,4 1 9 3,8 0 0 13,800 1 8,850 1 8 ,8 5 0 84,269
% g rowth from existing 6%21%2 9%2 9 %29%
NONRESIDENTIAL ACRES NA 7 1 486 741 7 4 1
RETAIL SF 8,283 ,9 4 8 137,2 1 4 1,692,306 2 ,9 5 7,724 2,95 7 ,7 2 4 11,241,672
OFFICE SF 4,179 ,5 0 0 137,2 1 4 1,692,306 2 ,9 5 7,724 2,95 7 ,7 2 4 7,137,224
INDUSTRIAL SF 9,533 ,3 7 6 585,4 4 6 2,536,934 3 ,1 2 2,381 3,12 2 ,3 8 1 12,655,757
INSTIT SF 7,037 ,9 7 5 0 0 0 0 7,037,975
TOTAL NR DEVELOPM ENT (SF)29,034 ,7 9 9 859,8 7 4 5,921,546 9 ,0 3 7,829 9,03 7 ,8 2 9 38,072,628
% g rowth from existing 3%20%3 1%3 1 %31%
RETAIL JOBS 17 ,5 8 8 2 9 1 3,593 6,280 6 ,2 8 0 23,868
OFFICE/INSTITUTIONAL J OBS 35 ,7 8 5 4 2 2 4,160 6,978 6 ,9 7 8 42,763
INDUSTRIAL JOBS 11 ,0 3 4 6 7 8 2,936 3,614 3 ,6 1 4 14,648
TOTAL JOBS 64 ,4 0 7 1,3 9 1 10,689 1 6,871 1 6 ,8 7 1 81,278
% g rowth from existing 2%17%2 6%2 6 %26%
S ource: City of Denton; Hillwood Communities; U.S . Census 2018-2022 American Community Survey; I nstitute of Transportation Engineers; TischlerBise
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
23
The development team’s concept plan categorizes nonresidential acreage as either commercial or
industrial. We applied the following assumptions to the Developers’ acreage projections in order to
estimate the Retail square footage, Office square footage and Industrial square foo tage displayed in
Figure 13.
• To extrapolate square footage from acreage projections, we assumed an average floor -to-area
ratio (“FAR”) of 0.28, per input from the development team and based on permitted FAR per
zoning.4
• Commercial development is allocated equally between Retail space and Office space. This
conforms with the development team’s prototype projects, including the Alliance Town
Center, and generally aligns with the land use assumptions utilized in the Travel Demand
Model Report and the Hunter/Cole Water and Wastewater Impact studies completed
concurrently with this FIA as a part of the City’s decision -making process.5
4 This assumption generally conforms to existing lan d use patterns while accounting for higher intensity development
permitted under the December 2019 zoning amendment for the Hunter/Cole Ranch Master Planned Community. It also
aligns with the December 10 th, 2019 Draft of the Transportation Demand Managemen t’s average estimated FAR.
5 The development team and City staff instructed TischlerBise to refer to Alliance Town Center as a comparable
development in terms of land -use mix assumptions.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
24
III. FISCAL IMPACT ANALYSIS RESULTS
The fiscal impacts to the City of Denton of Hunter/Cole Ranch Municipal Management District are
analyzed and discussed in this section of the report. Fiscal impact results are presented in several
ways:
▪ Annual net fiscal results that include all r evenues and costs in the funds analyzed (General
Fund, Debt Service Obligation Fund, the Roadway Fee Impact Fund, and the Street
Improvement Fund) are shown—non-utility operating and capital impacts from growth
are combined.
▪ Annual net fiscal results are then shown for operating and capital separately and
compared to revenues.
▪ Cumulative net fiscal results are shown next (for non-utility funds).
▪ Cumulative net results convey the projected grand total revenues minus grand
total expenditures over the 40 -year period to determine the overall net surplus or
deficit.
▪ Utility Fund net fiscal results are show separately from other operating and capital
expenditures.
▪ The cumulative net results for each utility fund are depicted.
▪ Annual net fiscal results, shown separately for operating and capital, compared to
revenues are presented.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
25
G ENERAL AND S PECIAL R EVENUE F UNDS
ANNUAL N ET FISCAL IMPACTS
The chart below shows the annual net fiscal results to the City over each year of the 40-year development
period; the General Fund, Debt Service Obligation Fund, the Roadway Fee Impact Fund, and the Street
Improvement Fund are included. By showing the annual results, the magnitude, rate of change, and
timeline of deficits and revenues can be observed over time. The “bumpy” nature of the annual results
during particular years represents an initial capital impact being “front-loaded” and/or major operating
costs being incurred (further explained in the Capital Expenditure Methodologies section of the full
report).
Net fiscal results shown below are revenues minus costs in each year, including operating and capital costs
for all services modeled. Data points above the $0 line represent annual surpluses; points below the $0
line represent annual deficits. Surpluses in any one year are not carried forward to the next year. The scale
for the chart is in thousands ($1,000s).
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
26
Figure 14. Annual Net Fiscal Impact 2024-2064 (Non-Utility)
Development of Hunter/Cole Ranch begins with lot delivery as depicted in Figure 14. The first six years
of growth are expected to generate year-over-year growth in net surpluses to the City. Project build -
out during this time period results in a relatively steady uptick in property tax revenue. Equipment
and personnel, particularly within Public Safety, Public Works (i.e., Fleet Maintenance & Fuel and
Facilities Management) and the Street Department, are also added during the first six years of growth.
The downward “ticks” in net fiscal impact are the result of growth triggering the need for capital
investments simultaneously:
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
27
Annual net results are further analyzed in the figure below. Although the City will see an increase in
both operating and capital costs as a result of growth, our analysis shows that total revenues to the
City exceed total costs projected to be incurred to the City.
Figure 15. Annual Operating & Capital Expenditures Compared to Revenues (Non-Utility)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
28
CAPITAL IMPACTS
As a development-finance tool, Municipal Management Districts allow private property owners to access
low-interest financing for public infrastructure projects. The development team and the City of Denton
have identified improvement projects required to serve the Hunter/Cole Ranch Master Planned
Community that will be financed by the MMD or the developer.
The table below inventories the infrastructure projects and other capital investments triggered by the
proposed development of Hunter/Cole Ranch. Capital costs are categorized as either “City Funded”
or “MMD/Developer Funded.” Only those projects required to maintain current levels of service are
identified here —planned investments in private amenities for the exclusive use of Hunter/Cole
Ranch residents are excluded from this analysis and from the list below.
Non-utility capital projects and costs are al located to the City of Denton and the MMD/Developer in
the detailed capital project inventory depicted in the figure on the following page. The methodology
underlying these projections and cost assumptions is discussed in detail in the Revenue and
Expendit ure Methodology Chapter of the report.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
29
Figure 16. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds)
Non-Utility Capital Facilitie s and Allocation of Costs ($1,000 s)
Fiscal Impact Analysis - De nton, TX
DEPARTMENT - Facility
Quantity
Total Square
Footage, Acres,
Lane Miles
Total City of De nton MMD /
De veloper
Parks and Recreation1
Recreati on Center Buildi ng [Sq. Ft.]1 32 ,00 0 $17,855 $17,855 $0
Ci ty Park: Developer Provided (104 acres ttl) [Ac res]2 10 4 $9,459 $0 $9,459
Nei ghborhood Parks (5 acres ea.) [Ac res]4 2 0 $3,650 $0 $3,650
Poc ket Parks (.5 acres ea) / Dog Parks (2 acres ea)32 1 9 $6,675 $0 $6,675
Regional Trai ls [Miles]na 23.0 $16,391 $0 $16,391
Communi ty Trai ls [Mi les]na 35.0 $13,841 $0 $13,841
Amenity Centers//DEVELOPER 4 na $40,000 $0 $40,000
Other Amenities//DEVELOPER [porti on rei mb.]na na $80,818 $0 $80,818
Parks & Rec Department - Vehic les 22 na $2,221 $2,221 $0
Total Parks & Re cre ation $190,910 $20,076 $170,835
Fle et & Facilitie s M anagement
West Side Service Center2 1 18 ,77 4 $6,383 $5,858 $525
Facili ti es Management-Storage 1 109 ,93 7 $27,484 $27,484 $0
Total Fle e t and Facilities Management $33,867 $33,342 $525
General Government - Admi nistrative Space na 30 ,18 1 $13,582 $13,582 $0
General Government - Vehicles 38 na $1,330 $1,330 $0
Total Ge neral Gove rnment $14,912 $14,912 $0
On-Si te Roadway Proj ects3 na 14 9 $241,158 $0 $241,158
Off-Si te Roadway Proj ects4 na 8 4 $100,024 $89,363 $10,661
Streets - Vehi cl es 136 na $8,116 $8,116 $0
Total Transportation $349,298 $97,478 $251,819
Pol ice - Substation 1 44 ,70 0 $20,115 $20,115 $0
Pol ice - Patrol Vehic les 99 na $5,268 $5,268 $0
Pol ice - Other Vehicles and Equi pment 36 na $241 $241 $0
Total Police $25,625 $25,625 $0
Fi re - Fire Station5 2 18 ,37 6 $10,180 $0 $10,180
Fi re - Fire Engines / Trucks 27 na $17,450 $17,450 $0
Fi re - Vehi cl es / Equi pment 19 na $1,035 $1,035 $0
Total Fire $28,665 $18,485 $10,180
Li brary 1 28 ,30 0 $17,095 $17,095 $0
Total Library $17,095 $17,095 $0
345 ve hic les /
24 lane mile s TOTAL 6 $660,372 $2 27,012 $433,359
^ Reflects the direct capital cost and not debt serv ice costs.
1. Dev eloper contributions updated June 2024 per revised estimates prov ided by City of Denton; City contributions projected per F iscal I mpact Analy sis.
No additional park acres bey ond those identified as being prov ided by Hunter and Cole Developments per the City of Denton are modeled or assumed.
3. City of Denton, Hunter and Cole Developments projected on-site road improv ements.
4. City of Denton, Hunter and Cole Developments projected off-site road improvements, City and developer/M M D cost share.
6. Cost estimates represent the initial purchase and, for v ehicles and equipment, replacement costs.
5. Two Fire Stations for Hunter and Cole Developments are assumed to be built by dev eloper (contribution estimated at $10.0 million plus $180,000 for land
total). Square footage is estimated based on current City average cost per square foot for fire stations ($554).
General Government
Library
Police
Transportation
Fire and EMS
2. Square footage derived by the fiscal model based on demand from Hunter and Cole dev elopments; cost based on current cost from City of Denton; dev eloper
contribution information provided by City of Denton.
Capital Costs ($1,000s)^
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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CUMULATIVE N ET F ISCAL I MPACTS
Cumulative net fiscal impact results convey the projected grand total revenues minus grand total
expenditures over the 40 -year period from future growth/development. Figure 17 below shows the
cumulative fiscal impacts over the 40 -year study period for all major growth -related funds.
Figure 17. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton
The development yields net posit ive fiscal impacts for both the General Fund and Debt Service Fund
(i.e., operating and capital expenditures); and the Street Improvement Fund. The Roadway Impact
Fund is projected to incur a $40.4 million cumulative net deficit .6
Cumulative impacts are depicted graphically for the General Fund and Debt Service Fund in Figure 18.
Figure 18. Cumulative Revenues and Expenditure s: General and Debt Service Funds
6 Reflects current impact fee rates and current road improvement costs per the City.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
31
U TILITY F UNDS
Utility Funds were included in our analysis at the request of the City of Denton to evaluate whether
the income generated from new customers and users would cover the costs required to provide
service to the MMD while maintaining existing levels of service throughout the city.
CUMULATIVE FISCAL IMPACT FOR UTILITY FUNDS
As depicted in Figure 19, the net fiscal impact of the Hunter/Cole Ranch development is cumulatively
negative across all utility funds. Capital Expenditures include utility infrastructure projects, as well as
capital equipment and vehicles. A summary of capital expenditures is presented in Figure 20.
Figure 19. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
32
The table below summarizes the utility infrastructure investment triggered by Hunter/Cole Ranch.
Capital costs are categorized as City of Denton (COD) Cost, Developer Cost, or Developer
Reimbursement. COD Cost is included throughout this analysis under City costs. Developer Cost and
Developer Reimbursement are excluded from the findings as they are assumed to implemented by
the developer or reimbursed from MMD funds.
Figure 20. Capital Facilities and Expenditure Inventory (Utility Funds)
The methodology and approach utilized to arrive at the capital cost projections is detailed in the Revenue
and Expenditure Detail chapter of this report.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
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NET ANNUAL FISCAL IMPACT FOR UTILITY FUNDS
The annual net fiscal impact on the utility funds is presented in the figures that follow.
WATER FUND
Water Fund expenditures are expected to exceed revenues throughout the study-period, specifically
on the capital side, as depicted in Figure 21 below. Note that the spikes depicted in Water Fund
revenues are the result of impact fees. The analysis reflects City utility collections and expenditures
and does not include developer contri butions or expenditures.
Figure 21. Water Fund Operating & Capital Expenses Compared to Revenues
The capital expenditures included in this analysis are City expenditures directly attributable to
demand from Hunter/Cole. These projects are debt financed. Water impact fee revenue is assumed
over the projection period at current rates , which is generally insufficient to cover the capital
expenditures projected.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
34
WASTEWATER F UND
Wastewater Fund revenues are not expected to cover operating and capital expenditures over the
course of the development, as depicted in Figure 22 below.
Figure 22. Wastewater Fund Operating & Capital Expenses Compared to Revenues
The spikes in the revenue line represent impact fee payments. New development in the MMD is
modeled to be completed by year 29 , at which point impact fee revenues cease. Although the timing
of impact fee payments does not directly correspond with capital costs, revenues accrued in years
where impact fees exceed capital expenses do not cover deficits in other years. The capital
expenditures included in this analysis represent planned Wastewater Fund capital infrastructure
projects required to serve Hunter/Cole Ranch and reflect City revenues and expenditures only.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
35
SOLID WASTE FUND
As depicted in the figure below, Hunter/Cole Ranch is projected to generate net deficits to the City of
Denton’s Solid Waste Fund. Operating and capital expenses reflect average costs based on City CIP
projects applied to demand from Hunter/Cole Ranch. Results reflect City revenues and expenditures
only.
Figure 23. Solid Waste Fund Operating & Capital Expenses Compared to Revenues
($2,000)
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
202420262028203020322034203620382040204220442046204820502052205420562058206020622064ThousandsSOLID WASTE FUND
ANNUAL OPERATING & CAPITAL EXPENDITURE SUMMARY
HUNTER/COLE RANCH FISCAL IMPACT ANALYSIS
Operati ng Expen dit ures Capi tal Ex pendi tur es Revenues
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
36
ELECTRIC FUND
Electric revenues and expenses associated with Hunter Cole were provided by the Ci ty of Denton and
are illustrated in terms of revenues relative to capital and operating expenditures in the figure below.
Revenues are projected to exceed expenditures for each year of the study period.
Figure 24. Electric Fund Op erating & Capital Expenses Compared to Revenue
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
37
K EY F INDINGS & C ONCLUSIONS
The following conclusions can be drawn from the FIA results presented in this report:
GENERAL , DEBT SERVICE , AND SPECIAL REVENUE FUND S
• The proposed Hunter/Cole Ranch development is projected to have a net cumulative positive
fiscal impact on the City over the 40-year study period. The net positive impacts are driven
primarily by sales and property tax revenue from development.
• It should be noted that, on average, the resulting annual net positive impact to the General Fund
and Debt Service Fund is approximately $18 million, which reflects 5.6 percent of the City of
Denton’s Fiscal Year 2024 operating budget.
• The Street Improvement Fund i s funded through franchise fees from utility fund revenue
surpluses (as well as non -growth-related revenues). The Street Improvement Fund’s projected
cumulative surplus is partially attributable to the fact that utility fund revenues will increase
as a result of Hunter/Cole Ranch. Another reason for the surplus is that although the
additional roadways added to the City of Denton’s lane mile inventory increase Street
Improvement Fund operating and capital outlay costs, major capital expenditures are
generally accounted for in other funds.
o Note that the increases in franchise fee revenue could be allocated to another fund at
the City’s discretion. As discussed previously, this analysis assumed that the 10 -year
policy of transferring excess franchise fee reven ue to the Street Improvement Fund
would continue throughout the 40 -year study period.
• Demand for fire services will trigger the need to expand with the construction of two fire
stations, which is assumed to be funded by the developer/MMD . The estimated contribution
from the developer is used to derive a fire station size, at the latest City cost per square feet
for fire station construction. The resulting assumed size per station may be smaller than the
City desires, therefore additional co sts may be incurred by the City.
• Although the projected growth in revenue is relatively significant, the City should continue to
plan and be prepared to expand both its facilities and operational capacity —the Hunter/Cole
Ranch development is projected to be fiscally balanced in the sense that it is projected to
produce enough revenue to cover its costs, but it will not be self -contained. Growth in
population, vehicle trips, and police and fire calls, for instance, is projected to increase annual
operating expenditures to the City by approximately $42 million per year at buildout .
• Overall, Hunter/Cole Ranch is projected to generate sufficient revenue to cover non-utility
capital and operating costs associated with meeting the additional demand on City serv ices.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
38
UTILITY FUNDS
• Water and Wastewater Fund revenues are insufficient to cover operating and capital
expenditures throughout the 40 -year study period. Water and Wastewater impact fee revenue
is insufficient to cover the development’s share of water and wastewater capital costs.
• Impact fee revenue is a function of the City of Denton’s current fee schedule and projected
development—current rates are insufficient to cover City Water and Wastewater capital
needs.
• The Electric Fund is projected to generate sufficient revenues to cover anticipated operating
and capital costs over the projection period.
• Overall, the cumulative fiscal impact on all utility funds is projected to be negative.
OVERALL RESULTS
Per direction from City of Denton staff, the figure b elow compares annual revenues to annual
operating and capital expenditures for all funds analyzed, including utility funds. Note that under
current City policy, utility fund revenues are restricted and cannot be used toward any other fund’s
activities.
Figure 25. Operating and Capital Expenditures Compared to Revenues for All Funds Combined
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
39
I V. REVENUE AND E XPENDITURE D ETAIL
R EVENUE M ETHODOLOGIES
This chapter provides detail on projection methodologies for revenue included in the analysis.
Growth-related revenues are modeled in this analysis in the following funds:
▪ General Fund
▪ General Debt Service Fund
▪ Special Revenue Funds:
• Roadway Impact Fee Fund
• Street Improvement Fund
▪ Utility Funds
• Water Fund
• Wastewater Fund
• Electric Fund
• Solid Waste Fund
Other funds that are not included are Internal Service Funds or considered fixed (unaffected by
growth).
GENERAL FUND REVENUES
A snapshot of the City General Fund from the model is shown below by specific category and line item.
The table shows the specific revenue category and source, base year (FY2024) budget amount, projection
methodology, and the level of service (LOS) standard, or dollar per demand unit. For instance, for those
categories projected based on “POPULATION,” the current budget amount is divided by the estimated
population for base year 2024.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
40
Figure 26. General Fund Revenues
Fines and Fees Warrant Fees $69,817 FI XED $0.00
Juvenile Case Manager Fees $3,972 FI XED $0.00
Truancy Prevention Fees $666 FI XED $0.00
Library Fines & Fees $46,350 POPULATION $0.30
Animal Services Fees $197,431 POPULATION $1.28
Animal Services Fines $6,328 FI XED $0.00
Auto Pound Fees $4,589 FI XED $0.00
Police Escort & Guard Fees $11,615 FI XED $0.00
Civ il Fines $12,000 FI XED $0.00
Arrest Fees $44,155 TOTAL POLICE CALLS $0.34
Community I mprovement Fines $303 FI XED $0.00
Inspection Fines & Fees $2,827 FI XED $0.00
Fire Department Fines $950 FI XED $0.00
School Crossing Fines $2,166 FI XED $0.00
Denton Municipal Fines $676,636 VEHI CLE TRIPS $1.41
UNT Police Fines $69,152 FI XED $0.00
TWU Police Fines $8,080 FI XED $0.00
Park ing Fines $87,496 VEHI CLE TRIPS $0.18
Uniform Traffic Fees $14,645 VEHI CLE TRIPS $0.03
False Alarm Fees $7,010 FI XED $0.00
Court Security $133,447 FI XED $0.00
Court Cost Service Fees $50,746 POP AND JOBS $0.23
$1,893,586 Court Administration Fees $443,205 POP AND JOBS $2.03
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
41
Licenses and Permits Food Handler Permits $696 FI XED $0.00
Zoning Permits $968,140 POP AND JOBS $4.42
Moving Permits $11,810 FI XED $0.00
Demolition Permits $20,697 FI XED $0.00
Pool, Spa, Hot Tub Permits $29,628 FI XED $0.00
Building Permits $6,473,527 POP AND JOBS $29.59
Curb Cut Permits $1,106 FI XED $0.00
Mobile Home Park Licenses $43 FI XED $0.00
Sign Permits $87,855 FI XED $0.00
Fence Permits $121,904 SI NGLE FAMILY $3.04
Mechanical Permits $51,543 POP AND JOBS $0.24
Certificate of Occupancy Fees $77,003 POP AND JOBS $0.35
Variance Fees $0 FI XED $0.00
Landscape Fees $10,489 FI XED $0.00
Short-Term Rentals $1,133 FI XED $0.00
Miscellaneous Permits $9,766 FI XED $0.00
Park Vendor Fees $17,750 FI XED $0.00
Beer & Wine Permits $50,469 RETAI L SF $0.01
CPR Training $1,114 FI XED $0.00
$7,934,673 Future $0 FI XED $0.00
Miscellaneous RevenuesInterest Income $1,859,354 FI XED $0.00
County Vehicle Registration Fee $202,340 FI XED $0.00
County Contribution - Ambulance Service $128,489 FI XED $0.00
DISD Contribution-School Resource Officer $700,000 FI XED $0.00
State - Signal Reimbursement $16,062 FI XED $0.00
Non-Grant State Reimbursement $3,604 FI XED $0.00
Williams Square Parking Fees $1,756 FI XED $0.00
SAF ER Grant $1,701,228 FI XED $0.00
Little Elm Dispatch Serv ice $941,101 FI XED $0.00
Miscellaneous Revenues $28,907 FI XED $0.00
Recovery of Prior-Year Expenditures $1,000 FI XED $0.00
Mowing Admin Fees $16,716 FI XED $0.00
Property Liens $11,817 FI XED $0.00
Police Phone/Fire Training $10,100 FI XED $0.00
DISD Reimbursement - Water Park $859,001 FI XED $0.00
Sale of Surplus Supplies and Fixed Assets $352,719 FI XED $0.00
$6,900,114 Training Facility Burn Fee $65,920 FI XED $0.00
Return on Investment Return on Inv estment - Water $13,029,417 DIRECT ENTRY
Return on Inv estment - Wastewater $1,624,160 DIRECT ENTRY
$15,732,014 Return on Inv estment - Electric $1,078,437 DIRECT ENTRY
Cost of Service Transfer Electric Fund $5,989,845 DME REV $0.02
Water Fund $2,258,155 WATER REV $0.05
Wastewater Fund $1,841,838 WW REV $0.04
Solid Waste Fund $1,830,890 SOLID WASTE REV $0.04
Airport Fund $276,423 FI XED $0.00
Recreation Fund $0 FI XED $0.00
Materials M anagement F und $712,638 FI XED $0.00
Fleet Services Fund $400,936 FI XED $0.00
Technology Services Fund $783,793 FI XED $0.00
Facilities Fund $376,110 FI XED $0.00
Street Improv ement Fund $485,718 FI XED $0.00
Risk Retention F und $155,236 FI XED $0.00
Health Insurance Fund $78,644 FI XED $0.00
Engineering Services Fund $1,211,899 FI XED $0.00
Customer Service Fund $571,491 FI XED $0.00
$16,987,310 From Projects $13,694 FI XED $0.00
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
42
CUSTOMIZED/MARGINAL CALCULATIONS FOR GENERAL FUND
The following details the custom methodology used for certain revenue streams.
▪ City Sales Tax is attributed to nonresidential and residential development. To determine the
level of revenue for each nonresidential category, we annualized recent sales tax revenue data
allocated to nonreside ntial development (total sales tax revenue less 15 percent attributed to
residential/online purchases) by industry provided by the City of Denton. Dividing sales tax
revenue by the estimated floor area of current nonresidential development yields average
Sales Tax Revenue per square foot for the land use types projected. Shown in Figure 27, retail
development averages $3.42 in annual sales tax per square foot compared to $2.18 per square
foot for office and $1.20 per square foot for industrial development.
▪ Sales Tax Attributed to Residential is projected on a per capita basis and totals almost $56
dollars per person.
Figure 27. Sales Tax per Square Foot
▪ Property Tax is projected based on the respective cumulative assessed values (see below for
additional detail) of the property projected in the scenario. Cumulative assessed value s are
multiplied by th e FY2024 General Fund tax rate of $0.354780 per $100 valuation . As shown,
assessed values for residential real property and nonresidential real property were projected
separately to allow for comparison by type of development.
Sales Tax
Revenue / Capita
2024 Estimated S ales Tax Rev $57,545,000
Assume % Attribute to residentia l (online)^15.0%$8,631,750 $55.91
Assume remainder to nonresid $48,913,250
LAN D U SE
2024 Sales Tax
R ev enue Squar e F eet
Sales Tax
R ev enue / SF
RETAI L $28,337,255 8,283,948 $3.42
OF FICE $9,120,910 4,179,500 $2.18
IN DU STRI AL $11,455,085 9,533,376 $1.20
Source: City of Dento n Fin ance D epartment. Three Year Sales Tax by NAICS; Trip G eneration, Institute of
Trans portation Engineers , 1 1th Edition (2 02 1 ).
^ Retail Indicators Bran ch, U.S. Cens us Bu reau, "Es timated Quarterly U.S. Retail Sales : Bricks and Mo rtar and E-
Commerce," as of Q3 2 0 2 3 , Tis chlerBis e analys is .
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
43
Figure 28. Assessed Value by Land Use Type
▪ Return on Investment (“ROI”) revenues were calculated as 3.5 percent of gross revenues from
Water, Wastewater, and Electric 7 Funds, per the City’s ROI policy and discussions with staff.
▪ Licenses & Permits, Charges for Services, Fines & Fees: Based on discussions with City staff
and an analysis of relevant financial documents, several line items ’ revenues are likely to
increase with growth in Population, Jobs, or Population and Jobs . Certain revenues associated
with specific services such as Fire and Police are expected to increase based on Total Police
Calls , Total Fire Calls, and Vehicle Trips .
FIXED REVENUES
▪ Franchise Fee revenues to the General Fund are fixed; growth in Franchise Fee is instead
allocated to the Street Improvement Fund per the City of Denton’s current policy to transfer
franchise fee revenue in excess of FY2016 dollar amounts to the Street Improvement Fund.
7 ROI from the Electric Fund has recently increased to 6 percent. However, to be conservative in this update,
the ROI percentages have been held constant from the previous analysis at 3.5 percent. Additionally, because
the Electric Fund is an Enterprise Fund, any increase in ROI to the General Fund would need to be generated
from an increase in costs to Electric customers, therefore essentially reflecting a wash between funds.
Asse sse d V alue Summary
City of De nton, Te xas - Hunte r and Cole Ranc h De ve lopme nts FIA
LAND USE Asse sse d V alue
Re side nti al*Unit
Si ngl e Fami l y $5 3 5,0 0 0
Si ngl e Fami l y L ot $1 0 0,0 0 0
Mul t i fami l y $1 1 0,0 0 0
Nonre side nti al Square Foot
Retai l $1 5 0 .00
Offi c e $1 3 0 .00
Industri al $7 0.0 0
Source: Hillwood Communities
*S ingle F amily Values shown are prior to homestead exemption of $5,000.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
44
▪ Cost of Service Transfer revenues are transfers from other funds to the General Fund for
general government services; Utility Fund Costs of Service were first modeled on the
expenditure side. Cost of Service revenues to the General Fund are set to equal those
expenditures. Expenditure projection methodology including the approach to modeling Cost
of Service revenues is detailed in the following sections of this chapter.
▪ Miscellaneous revenues were conservatively assumed to be fixed per conversations with City
staff.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
45
GENERAL DEBT SERVICE FUND
The General Debt Service Fund receives unrestricted revenue from Ad Va lorem Property taxes; the
adopted FY2024 rate of 0 .205902 per $100 of assessed value is used to project property tax revenues
in the General Debt Service Fund resulting from Hunter/Cole Ranch.
“Transfers In” are fixed. These line items, seen below in Figure 29 reflect restricted revenue funds
making debt service payments , which are accounted for within the capital expense analysis presented
later in this chapter.
Figure 29. General Debt Service Fund
SPECIAL REVENUE FUNDS
The fiscal impact analysis also includes revenues from Special Revenue Funds, capturing revenues that are
anticipated to be generated from growth.
STREET IMPROVEMENT FUND
The Street Improvement Fund includes all Street Department activities; the Street Department is
responsible for street maintenance and repair and is funded primarily through franchise fee revenues.
The majority of these franchise fee revenues are paid by major utility funds. Franchise Fee revenue
resulting from the Hunter/Cole Ranch development is calculated as 5 percent of projected Water,
Wastewater, Electric, and Solid Waste revenue, per City policy. Other franchise fee revenue8 to the Street
Improvement Fund is not expected to be affected by the proposed development.
8 Other franchise fees are paid from private el ectric, cable, telephone, and gas utility providers.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
46
Figure 30. Street Improvement Fund
ROADWAY IMPACT FEE FUND
The Roadway Impact Fee Fund accounts for Roadway Impact Fees paid to the City of Denton by
developers and homebuilders. Development within the Hunter/Cole Ranch MMD is projected to
generate revenue to the Roadway Impact Fee Fund based on the impact fees currently in place per
Roadway Impact Fee schedule. The majority of the development is located in Roadway Impact Fee
Service Area A with the following impact fee rates , which are therefore applied to new development
projected in the Hunter/Cole Ranch. Note t hat the MMD will also contribute Contract Tax revenue per
the Operating Agreement to assist with funding impact fee eligible roadway projects.
Figure 31. Roadway Impact Fee Assumptions
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
47
UTILITY FUNDS
The methodology used to project utility fund revenues is summarized for the Water, Wastewater, Solid
Waste, and Electric Funds in this section of the report. Note that a customized methodology was used
for all growth-related revenues, as indicated by “DIRECT ENTRY”.
WATER AND WASTEWATER REVENUE PROJECTION ASSUMPTIONS
A customized methodology was used to project operating and impact fee revenues for water and
wastewater revenues, per the snapshot from the fiscal model below.
Figure 32. Utility Fund Revenue Projection Methodology
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Water Fund I nterest Operating $300,000 FIXED $0.00
Water Sales Residential $23,839,938 DIRECT ENTRY $0.00
Water Sales Commercial $19,858,347 DIRECT ENTRY $0.00
Water for Resale $2,706,299 FIXED $0.00
Other Water $620,908 FIXED $0.00
Cost of Service - GF $226,833 FIXED $0.00
Cost of Service - Electric $620,013 FIXED $0.00
Cost of Service - Wastewater $2,045,596 FIXED $0.00
Cost of Service - Solid Waste $680,241 FIXED $0.0000
I mpact F ee Rev enues $11,605,000 DIRECT ENTRY $0.00
Tap Fees $652,269 FIXED $0.00
$63,155,444 Use of Reserves $0 FIXED $0.00
Wastewater Fund I nterest Operating $399,514 FIXED $0.00
Wastewater Residential $13,726,979 DIRECT ENTRY $0.00
Wastewater Commercial $16,473,258 DIRECT ENTRY $0.00
Wastewater Effluent Irrigation $89,902 FIXED $0.00
Wastewater Wholesale $1,212,248 FIXED $0.00
Other Wastewater $2,032,729 FIXED $0.00
Drainage Fees $4,960,002 DIRECT ENTRY $0.00
Transfers In $631,561 FIXED $0.00
I mpact F ee Rev enues $4,270,000 FIXED $0.00
I mpact F ee Rev enues from Hunter/Cole SEE BELOW $0.00
$45,327,259 Use of Reserves $1,531,066 FIXED $0.00
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
48
Rate revenue and facility charge revenue w ere projected separately by land us e. Per conversations
with City staff, we utilized original data on demand/usage from the January 2020 Hunter-Cole
Development Analysis completed by Freese and Nichols (“the FNI report”) as well as current facility
charges and rates to project revenue per residential unit and nonresidential acre.9
Figure 33. Water and Wastewater Billing Assumptions
9 Per the FNI report, single -family and multifamily units will require water production of 170 GPD per capita (540 gallons per day per
unit, or 16,000 gallons per month per unit), with household sizes averag ing 3.2 persons and 2.5 persons respectively. Nonresidential
consumption is 120 GPD per employee, assuming 18 employees per acre. Monthly GPDs for each unit type are shown in the first r ow of
the figure. Per the FY23/24 City of Denton Utility Rate Booklet, the Facility Charge for a Single Family Unit is $15.84 per month, and
multifamily facility charges vary depending on the meter size. We thus applied the Single Family -to-Multifamily GPD ratio (16:13, or 79
percent), to the Single Family facility charge to estimate the average monthly multifamily facility char ge. The same methodology was
used to estimate the average nonresidential facility charge. The result of these calculation s is average annual water revenue of $951,
$748, and $4,182 per Single Family unit, Multifamily unit, and Nonresidential acre, respecti vely. Average annual wastewater revenue per
unit and per acre was calculated utilizing the per capita consumption/production (measured in GPD) from the FNI Report, and the FY23/24
booklet rates and formulas. The Drainage fees utilized are calculated on a per unit per acre basis for residential development and on a
per acre basis for nonresidential development, assuming an average impervious surface area of 60 percent for all land uses, w hich is
supported by the Master Planned Community’s zoning .
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
49
The average annual revenue per single family unit, multifamily unit, and nonresidential acre was
multiplied by the projected residential and nonresidential growth on a cumulative annual basis to
arrive at operating revenue projections.
Impact Fee Revenue Projections
The following impact fee schedule , based on the City of Denton’s 2018 Water and Wastewater Impact
Fee Study, was utilized to project Water and Wastewater impact fee revenue attributable to
Hunter/Cole Ranch. See footnotes to Figure 34 for detail regarding how the multifamily fee per unit
and nonresidential fee per acre were calculated.
Figure 34. Water and Wastewater Impact Fee Assumptions
By multiplying the fee amounts depicted in Figure 34 by projected growth in residential and
nonresidential development, annual water and wastewater impact fee revenue was calculated for
each year of the study period. Note that it is assumed that the MMD will contribute revenue from a
Contract Tax, as outlined in the Operating Agreement, to help finance impact fee eligible Water and
Wastewater capital projects.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
50
ELECTRIC FUND
The Electric Fund revenue assumptions depicted in Figure 35 were provided by the City of Denton for
the original FIA and applied to the development program to project rate revenues . For the 2024 FIA,
projected revenues (and expenditures) were increased by 20 percent, reflecting the increase in the
Electric Fund’s budget from the original FIA (FY2019 /20 to FY2023/24).
Figure 35. Utility Fund Revenue Projection Methodology
SOLID WASTE FUND
Solid Waste Fund revenue is projected using the revenue per Single Family unit derived as shown to
the Single Family units projected under the development plan. Nonreside ntial rates were projected
using nonresidential square footage [“TOTAL NR SF”] as the demand base , since nonresidential rates
vary depending on characteristics on nonresidential properties that are unknown at this conceptual
phase of the development progra m.
Figure 36. Solid Waste Fund Revenue Projection Methodology
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Electr ic Fund Base Rate Rev enues $104,394,786 FI XED $1.00
Rev enues are direct entry, see below ECA Revenues*$66,916,985 FI XED $0.00
Non-Operating Revenues $27,879,488 FI XED $1.00
Interest Income $650,000 FI XED $0.00
Data Center Revenues $49,786,722 FI XED $0.00
DEC Revenues $40,769,215 FI XED $0.00
$308,153,595 Use of Reserves $17,756,399 FI XED $0.00
Water Fund Interest Operating $300,000 FI XED $0.00
Water S ales Residential $23,839,938 DIRECT ENTRY $0.00
Water S ales Commercial $19,858,347 DIRECT ENTRY $0.00
Water for Resale $2,706,299 FI XED $0.00
Other Water $620,908 FI XED $0.00
Cost of Service - GF $226,833 FI XED $0.00
Cost of Service - Electric $620,013 FI XED $0.00
Cost of Service - Wastewater $2,045,596 FI XED $0.00
Cost of Service - Solid Waste $680,241 FI XED $0.0000
Impact Fee Revenues $11,605,000 DIRECT ENTRY $0.00
Tap Fees $652,269 FI XED $0.00
$63,155,444 Use of Reserves $0 FI XED $0.00
Wastewater Fund Interest Operating $399,514 FI XED $0.00
Wastewater Residential $13,726,979 DIRECT ENTRY $0.00
Wastewater Commercial $16,473,258 DIRECT ENTRY $0.00
Wastewater Effluent Irrigation $89,902 FI XED $0.00
Wastewater Wholesale $1,212,248 FI XED $0.00
Other Wastewater $2,032,729 FI XED $0.00
Drainage Fees $4,960,002 DIRECT ENTRY $0.00
Transfers I n $631,561 FI XED $0.00
Impact Fee Revenues $4,270,000 FI XED $0.00
Impact Fee Revenues from Hunter/Cole SEE BELOW $0.00
$45,327,259 Use of Reserves $1,531,066 FI XED $0.00
Solid Waste Fund Interest Operating $89,132 FI XED $0.00
Residential + Residential Recycling $10,481,450 SI NGLE FAMILY $261.55
Front /S ide Load $9,340,387 TOTAL NR SF $0.32
Roll Off Open Top $5,722,967 TOTAL NR SF $0.20
$41,370,835 Commercial Recycling $1,756,182 TOTAL NR SF $0.06
Landfill Gate + Landfill Wholesale $10,026,633 FI XED $0.00
Other Solid Waste $1,697,660 FI XED $0.00
Transfers I n $181,490 FI XED $0.00
$41,370,835 Use of Reserves $2,074,934 FI XED $0.00
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
51
R EVENUE O UTPUTS
This section details revenue outputs from the Fiscal Impact Analysis.
REVENUE PROJECTIONS
The following figures illustrate the projected revenues in the City’s General Fund and other non-utility
Funds modeled. Results are shown as a cumulative total over the 40-year projection period as well as
an average annual figure. As noted in the figures, the listed dollar amounts are in $1,000s.
Figure 37. 40-Year Revenue Totals for all Non -Utility Funds
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
52
Revenue total and average annual revenue over the 40 -year study period is shown for each Utility
Fund included in the analysis in Figure 38.
Figure 38. 40-Year Revenue Totals and Annual Average s for Utility Funds (x$1,000s)
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
53
O PERATING E XPENDITURE M ETHODOLOGIES
All variable operating expenditures are projected, including personnel and operating costs. Capital
Expenditures are discussed in a separate section.
GENERAL AND SPECIAL REVENUE FUNDS
For most City departments, operations and personnel costs are projected separately. A summary of the
approach is provided below. It should be noted that many departments have some portion of their budget
that is considered “fixed” and will not increase with growth. That is, existing operations will be able to
absorb a portion of additional impacts from growth in the City. In the figures below, “fixed” is only
indicated for those categories that are considered entirely “fixed.”
Fiscal Impa ct Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
54
Figure 39. General and Special Revenue Operating Expenditures Approach
Expenditure
Category
General Fund
City Manager x x
Economic Development x x
Facilities Management Facilities SF x
Finance/Accounting x x x
Human Resources x x
Internal Audit x x
Legal Administration x x x
Public Affairs x x
Non-Departmental x
Library x Library SF x
Parks And Recreation Parks SF x
Development Services x x
Public Safety Communications x x x
Municipal Court x x
Municipal Judge x x
Police x x x
Animal Services x x
Fire x x
Transportation Admin x x
Traffic Operations x x
Special Revenue Funds
Streets Improvement Fund NA x x
Roadway Impact Fee Fund NA x NA
FixedTotal Police
Calls
Administrative & Community
Services
Neighborhood Services
Department Population Population &
Jobs
Public Safety
Transportation
Staff
Modeled? Lane Miles Vehicle Trips Total Fire and
EMS Calls City FTEs Custom
Analysis
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
55
CUSTOM METHODOLOGIES
All growth-related departments except for Facilities Management, Library, and Parks and Recreation are
modeled using basic growth indicators derived from the development scenario (i.e., population, jobs, etc.)
as the basis for projecting demand. Further explanation of those metrics is found in Appendix A.
Descriptions of the customized methodology used for Facilities Management, Library, Parks and
Recreation, and the Roadway Impact Fee Fund are found below.
▪ Facilities Management: Facilities Management expenditures are expected to increase over base
year expenditures in accordance with the addition or expansion of City owned facilities. Facilities
Management is currently responsible for 1.1 million square feet of City-owned facilities.10 As
future development triggers the construction of new facilities (discussed below) the Facilities
Management department will need to increase its capacity in order to maintain levels of service.
Facilities Management expenditures are thus projected utilizing “FACILITIES SF.” The expansion of
capital facilities is discussed in detail in the next section of this chapter.
▪ Parks & Recreation: Parks and Recreation Operating Expenditures are projected based on demand
from population from Hunter/Cole Ranch. All parks and recreation improvements are assumed to
be the responsibility of the MMD or an HOA except for a future recreation center, assumed to be
built and maintained by the City.
Figure 40. City Maintained Parks and Recreation Facilities for Operating Expense Projections
10 Source: City of Denton Facilities Management .
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
56
• Library: Library operating expenditure projections are based, in part, on library square footage.
One additional library is triggered by growth, as detailed in the next section of this chapter. Using
current costs per Library square foot, the fiscal model projects increases in Library operating
expenditures.
UTILITY FUND OPERATING EXPENDITURES
As Enterprise Funds, Utility Funds are self-funding in the sense that rates are adjusted as needed to
cover operating and capital expenditures. As requested by the City of Denton, however, this FIA
examined the fiscal impact of the proposed de velopment on Utility Funds if utility rates were to be
held constant over time. Expenditures were projected utilizing the methodological approaches
summarized in Figure 41.
Figure 41. Utility Funds Operating Expenditures Approach
^Note: ROI from the Electric Fund has recently increased to 6 percent. However, to be conservative in this update, the ROI
percentages have been held constant from the previous analysis at 3.5 percent. Additionally, because the Electric Fund is
an Enterprise Fund, any increase in ROI to the General Fund would need to be generated from an increase in costs to
Electric customers, therefore essentially reflecting a wash between funds.
Expenditure
Category
Utility Funds
Personnel
Operations
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations x
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations
Franchise Fees
Cost of Service - Transf.x
Capital Outlay
*Production/consumption utilizes the following metrics: Water - thousands of gallons per year; Wastewater - thousands ofof gallons (discharge) per year; Solid Waste -
landfilled (tons); recyclin collections (tons)
Water Fund
Wastewater Fund
Electric Fund
Solid Waste Fund
Name
x
x
x
[5% of Gross Rev.]
[Single Family Units] /
[Nonresidential SF]
Estimates from DME
[3.5% of Gross Rev.]
Quorum Report Projections
Estimates from DME
[5% of Gross Rev.]
[5% of Gross Rev.]
[3.5% of Gross Rev.]
x
Custom Analysis
[5% of Gross Rev.]
[3.5% of Gross Rev.]
x
x
x
x
x
Revenue Production*Facilities Staff
Modeled?
^
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
57
C APITAL E XPENDITURE M ETHODOLOGIES
Capital costs and infrastructure improvements to serve new development are modeled based on demand
generated by the proposed development. Capital facilities, infrastructure, vehicles, and equipment are
projected for General Government, Parks and Recreation, Library, Fire, Police, Public Works, Facilities
Management, Fleet Management, Transportation, City of Denton Water Utilities (includes Water and
Wastewater), Denton Municipal Electric (DME), and Solid Waste & Recycling.
Many of the assumptions on which the analysis is based can be viewed as policy-making decision points,
which if modified would affect the overall results. For example, most of the capital expenditures assumed
in the analysis, and the resulting costs (assumed in most cases as debt financed), are projected
independent of the current capital improvement programs and debt capacity guidelines. Rather, the
capital costs projected in this analysis reflect the potential cost to serve new growth, regardless of
whether the resources are available to cover the costs. The City will continue to balance its annual budgets
considering financial guidelines and policies, applicable operating impacts, and available resources.
An important aspect of the capital expenditure methodology is that per direction from the City of Denton’s
Finance Department, it is assumed that the funding of new facilities will be debt financed. This is in keeping
with the City’s current practices and allows the City to fund necessary infrastructure investments for which
it has insufficient cash on hand. From a fiscal impact perspective, it should be noted that debt financing
can understate the full cost of a capital project; because the payments are made over a 20-year period,
the fiscal model’s 40-year projection period may not capture the full cost of capital facilities constructed
or paid for after year 40.
GENERAL GOVERNMENT FACILITIES
To serve residential and nonresidential development in the scenarios, the population and job growth
is multiplied by the current level of service of general government administrative offices. The level of
service is found by dividing the current floor area of City Hall (City Hall, City Hall East less Police
Department floor area, City Hall West, and Finance ) by population and job to tal in the City (90,863
square feet / 218,796 population and jobs = 0 .42 square feet per population and job). As residential
and nonresidential growth occurs in the scenarios, the demand factor of 0.42 square feet per
population or job is applied to project General Government capital needs.
General Government vehicles are also projected using this approach; the base year 2024 vehicle count
is 34 as provided by the City of Denton’s FY 2024 Fleet Inventory Asset List. Note that General
Government city vehicle s are assigned an average useful life of eight years , and replacement vehicles
are also included in this analysis.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
58
PARKS AND RECREATION
Parks and Recreation infrastructure improvement needs resulting from the development of
Hunter/Cole Ranch were provided by the City of Denton.
The analysis projects when Hunter/Cole Ranch development would trigger the need for the planned
capital facilities based on current levels of service for Recreation Facilities , City Parks, Neighborhood
Parks, Dog Parks, Pocket Parks, Regional Trails, Community Trails , and Amenity Centers. See Figure 40
for a summary of anticipated Parks & Recreation infrastructure improvements.
Cost estimates are from the City of Denton and allocated between the City and the Developer/MMD
as directed by the City of Denton . Summary outputs are provided in the next section.
TRANSPORTATION
To project the impact that growth will have on roadway infrastructure over the 40 -year study period ,
the current level of service was calculated by dividing base year 2024 lane miles (1,512 lane miles) by
estimated base year 20 24 vehicle trips (478,745 vehicle trips). As citywide vehicle trips increase due
to development, the construction of additional lane miles will be required. Vehicle trips are projected
utilizing trip generation rates from the Institute of Transportation Engineers (ITE) Trip Generation
Manual, 11th Edition (20 21). The demand factor of 0.0032 lane miles per vehicle trip is then applied
to total vehicle trips to calculate additional lane miles (combined for both residential and
arterial/collector streets).
Onsite (site access) and offsite (system -level) roadway infrastructure improvements required to
provide access to Hunter/Cole Ranch MMD are from the City of Denton and updated for the 2024
analysis. It is assumed that roadway impact fees and MMD Contract Tax revenue contributions will
help fund these costs . Vehicle and equipment for transportation and public works purposes are
modeled as well.
POLICE
Police capital facilities impacted by growth include police station square feet and patrol vehicles. The
current level of service for police facilities is 1.10 square feet per police call for service (police facility
square feet of 127,628 divided by police calls for service (116,296)). Police calls for service are
projected over the 40 -year study period based on the methodology in Appendix A . The level of service
is applied to Police calls for service to project additional police facilit y square feet needed to serve
growth.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
59
Per City staff, one vehicle is needed for every two patrol officers. Sworn Officers added to the force
as a result of additional demand for police services is projected based on police calls for service (which
will increase due to population and employment growth as described in Appendix B). Vehicle
acquisition is triggered by the addition of new sworn officers. The useful life for Police patrol vehicles
is an average of five years. The analysis includes the cost for replacement vehicles once the useful life
is reached. Average vehicle costs were provided by the City of Denton.
FIRE AND EMS
Fire and EMS services were projected utilizing an approach similar to that used for police facilities.
Current facility levels of service is calculated by dividing total Fire/EMS station square feet by Fire and
EMS Calls for Service : 97,888 square feet divided by 22,023 calls for service = 4.4 square feet per call
for service. Fire station facility prototype size is derived by dividing the total amount of anticipated
developer contribution ($10.18 million) by the recent cost for fire station construction in the City
($554), resulting in a total amount of station square footage of 18,375 square feet. Two stations are
needed and assumed at equal size (9,188 square feet each). As noted elsewhere, if a larger station
size is desired, additional funding will be necessary. Additional apparatus is projected based on
maintaining the city’s level of service and is assumed to be funded by the City.
LIBRARY
The City of Denton currently has three libraries; total square footage is 78,304 square feet, and
libraries range from 21,516 square feet to 33,708 square feet. Demand for additional libr ary capital
facilities is projected by applying the current library LOS of 0.51 square feet per population to
projected population growth. A library size of 28,300 square feet is used, which reflects the demand
for new library space from Hunter/Cole Ranch development.
PUBLIC WORKS
Public Works facilities are projected to maintain the City’s current level of service. Service Center
Facilities Management space are modeled.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
60
E XPENDIT URE O UTPUTS
This section details expenditure outputs from the Fiscal Impact Analysis .
Regarding capital expenditures, the analysis assumes that all City-funded capital projects will be debt
financed; the capital expenditure totals in the figures within th is section of the report reflect this
assumption. Note that they therefore differ slightly from the capital expenditures listed by item in the
inventory of capital costs presented elsewhere in this report, which identifies costs as if they were
cash-financed to allow for a straightforward comparison of City and Developer/MMD costs.
OPERATING AND CAPITAL EXPENDITURE PROJECTIONS
Operating and capital expenditure results are provided in this section based on the expenditure
methodologies discussed above.
For operating expenditure projections, 40-year cumulative totals are shown. Public Safety
expenditures account for the majority of costs. Shown in Figure 42, Transportation costs account for
just 1 percent of total General Fund expense s attributable to Hunter/Cole Ranch. The majority of
operating and major road maintenance costs resulting from the projected increase in City-maintained
lane miles are within the Street Improvement Fund.
Figure 42. Operating Expenditure Projections
Capital results for General Fund departments are shown below in Figure 43. Note that “Public Works ,”
as referenced in this FIA, includes Fleet Maintenance & Fuel and Facilities Management. Fleet and
Facilities expenditures represent a large share of General Fund-financed capital expenses, in part
because the City is responsible for funding these capital improvements , whereas capital expenditures
in other departments are at least partially funded by the developer or MMD .
Cumulative Ope rating Expe nditure s (x$1 ,0 0 0 )
Ci ty of De nton's Fisc al Impac t Mode l
Admi ni strat i ve & Communi t y Servi ces $2 4 9 ,5 2 5 2 4 %
Nei ghborhood Servi ces $1 6 7 ,2 7 5 1 6 %
Publ i c Safety $6 1 1 ,4 3 8 5 9 %
Transport at i on $1 4 ,4 7 0 1 %
SUBTOTAL GENERAL FUND EXPS $1 ,0 4 2 ,7 0 8 1 0 0 %
SUBTOTAL STREET IM PROV EM ENT FUND EXPS $9 2 ,3 5 3
GRA ND TOTA L OPERATING EXPS $1 ,1 3 5 ,0 6 1
AV ERA GE A NNUAL EXPS $2 8 ,3 7 7
Cumulative
Expe nditure s
Cate gory %
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
61
Another reason Fleet and Facilities expenditures are heavily impacted by growth is because these
departments are already near capacity in terms of both space and staffing . Moreover, Hunter/Cole
Ranch is not proximate to the existing service center, which houses Fleet Maintenance and Facilities
Management. It is therefore assumed the City will need to develop a service center to accommodate
the expansion of these two departments .
Figure 43. Summary of Non-Utility Capital Costs
Utility capital costs are shown below. Water and Wastewater City capital expenditures are provided
by the City through the enterprise fund and reflect system-level improvements necessary to serve
Hunter/Cole Ranch developments. Electric and Solid Waste City c apital expenditures are based on
short-term capital improvement plans for capacity improvements and projected based on growth
from Hunter/Cole Ranch.
Figure 44. Summary of Utility Fund Capital Costs
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
62
B ASE Y EAR D EMOGRAPHIC E STIMATES
The table below summarizes estimates of the base year population, housing units, employment,
nonresidential space, and facility factors in the City of Denton. These estimated values serve as t he
basis for the fiscal impact analysis and are used to determine the cost and revenue factors used in the
analysis.
Figure 45. Base Year Input Data
Base
Year->2024
Population[1]POPULATI ON 154,389
POP AND JOBS 218,796
Housing Units by Type [2]SI NGLE FAMI LY 40,074
MULTI FAM ILY 25,345
TOTAL UNI TS 65,419
Jobs by Type [1]RETAIL JO BS 17,588
OFFI CE JO BS 12,860
I NDUSTRI AL JOBS 11,034
I NSTI TUTI ONAL JO BS 22,925
TOTAL JO BS 64,407
NonR esidential Floor Ar ea RETAIL S F 8,283,948
(S F = Square F eet)OFFI CE S F 4,179,500
I NDUSTRI AL SF 9,533,376
I NSTI TUTI ONAL S F 7,037,975
TOTAL NR S F 29,034,799
Vehicle Tr ips [3]RES I DENTIAL TRI PS 300,708
NO NRES TRI PS 178,037
VEHI CLE TRI PS 478,745
APPENDIX A .
DEMOGRAPHIC & DATA ASSUMPTIONS
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
63
POPULATION AND JOB FACTORS
Household size is used to project population over th e planning horizon; e mployees per acre of
nonresidential space are used to project future employment. Per direction from City of Denton staff,
we utilized the following assumptions.
▪ Single Family : 3.2 Persons per Household
▪ Multifamily : 2.5 Persons per Hous ehold
▪ Nonresidential Employees per Acre: 18 Employees per Acre
V EHICLE T RIPS
Vehicle trips are used to project some operating and capital expenditures in the fiscal impact analysis.
Average Weekday Vehicle Trip Ends by type of development (or trip generation rates) are from the
reference manual , Trip Generation, 11TH Edition, published by the Institute of Transportation
Engineers (ITE), in 20 21. A “trip end” represents a vehicle either entering or exiting a development
(as if a traffic counter were placed across a driveway). Trip rates have been adjusted to avoid
overestimating the number of actual trips because one vehicle trip is counted in the trip rates of both
the origination and destination points.
RESIDENTIAL VEHICLE TRIPS
Vehicle trip generation for residential land uses are calculated by using ITE’s average daily trip end
rates and a trip adjustment factor customized for the City of Denton .
A vehicle trip end is the out-bound or in -bound leg of a vehicle trip. To not double count trips, a
standard 50 percent adjustment is applied to trip ends to calculate a vehicle trip. For example, the
out-bound trip from a person’s home to work is attributed to the housing unit and the trip from work
back home is attributed to the employer.
However, an additional adjustment is necessary to capture City residents’ work bound trips that are
outside of the City. The trip adjustment factor includes two components. According to the National
Household Travel Survey, home-based work trips are typically 31 percent of out-bound trips (which
are 50 percent of all trip ends). Also, utilizing the most recent data from the Census Bureau's web
application "OnTheMap ,” 73 percent of Denton workers travel outside the City for work. In
combination, these factors account for 11 percent of additional production trips (0.31 x 0.50 x 0.7 3 =
0.11 ). Shown in Figure 46 t he total adjustment factor for residential housing units includes attraction
trips (50 percent of trip ends) plus the journey -to -work commuting adjustment (11 percent of
production trips) for a total of 61 percent.
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
64
Figure 46. Trip Adjustment Factor for Commuters
NONRESIDENTIAL VEHICLE TRIPS
Vehicle trip generation for nonresidential land uses are calculated by using ITE’s average dai ly trip end
rates and adjustment factors found in their recently published 10 th edition of Trip Generation . To
estimate the trip generation in the City of Denton the weekday trip end per 1,000 square feet factors
highlighted in Figure 47 are used.
Figure 47. Trip Generation Factors
Employ ed Denton Residents (2021)67,613
Denton Residents Work ing in the City (2021)18,560
Denton Residents Commuting Outside of the City for Wor k 49,053
Percent Commuting out of the City 73%
Additional Pr oduction Tr ips 11%
S tandar d Tr ip Adjustment Factor 50%
Residential Tr ip Adjustment Factor 61%
S ource: U.S. Census, OnTheMap Application, 2021
ITE Demand Wkdy Trip Ends Wk dy Trip Ends Emp Per Sq F t
Code Unit Per Dmd Unit1 Per Employ ee1 Dmd Unit Per Emp
110 Light Industrial 1,000 S q Ft 4.87 3.10 1.57 637
130 Industrial Park 1,000 S q Ft 3.37 2.91 1.16 864
140 M anufacturing 1,000 S q Ft 4.75 2.51 1.89 528
150 Warehousing 1,000 S q Ft 1.71 5.05 0.34 2,953
254 Assisted Liv ing bed 2.60 4.24 0.61 na
254 Assisted Liv ing 1,000 S q Ft 4.19 4.24 0.99 1,012
310 Hotel room 7.99 14.34 0.56 na
320 M otel room 3.35 25.17 0.13 na
520 Elementary School student 2.27 22.50 0.10 na
525 High School student 1.94 21.95 0.09 na
540 Community College student 1.15 14.61 0.08 na
550 Univ ersity/College student 1.56 8.89 0.18 na
565 Day Care student 4.09 21.38 0.19 na
610 Hospital 1,000 S q Ft 10.77 3.77 2.86 350
620 Nursing Home bed 3.06 3.31 0.92 na
710 General Office (avg size)1,000 S q Ft 10.84 3.33 3.26 307
720 M edical-Dental Office 1,000 S q Ft 36.00 8.71 4.13 242
730 Gov ernment Office 1,000 S q Ft 22.59 7.45 3.03 330
750 O ffice Park 1,000 S q Ft 11.07 3.54 3.13 320
760 Research & Dev Center 1,000 S q Ft 11.08 3.37 3.29 304
770 Business Park 1,000 S q Ft 12.44 4.04 3.08 325
820 Shopping Center (avg size)1,000 S q Ft 37.01 17.42 2.12 471
1. Trip Generation, I nstitute of Transportation Engineers, 11th Edition (2021).
Land Use / Size
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
65
A simple factor of 50 percent is applied to the Office, Industrial , and Institutional land use s. The Retail
category has a trip factor of 33 percent because this type of development attracts vehicles as they
pass-by on arterial and collector roads. For example, when someone stops at a convenience store on
their way home from work, the convenience s tore is not their primary destination.
BASE YEAR VEHICLE TRIP TOTALS
Trip rates and adjustment factors are shown in the figure. Using trips generated from single family
units as an example, the formula is as follows: 40,074 units x 9.43 vehicle trips per unit x 61%
adjustment = 230,518. As shown in Figure 48, residential development accounts for an estimated 63
percent of total daily trips and nonresidential development accounts for an additional 37 percent.
Figure 48. Vehicle Trips
VEHICLE TRIPS DATA INPUT AREA
Vehicle Trips on an Average Weekday
Residential Units Assumptions
Single Family 40,074
M ultifamily 25,345
Average Week day Vehicles Trip Ends Per Unit**Wkdy Trip Ends Trip Factors
Single Family 9.43 61%
M ultifamily 4.54 61%
Residential Vehicle Trip Ends on an Average Weekday
Single Family 230,518
M ultifamily 70,190
TOTAL RESIDENTIAL TRIPS 300,708 63%
Nonresidential Vehicle Tr ips on an Aver age Weekday
Nonresidential Gross Floor Area (1,000 sq. ft.)*Assumptions
Retail 8,284
Office 4,180
Industrial 9,533
Institutional 7,038
Average Weekday Vehicle Trip Ends per 1,000 Sq. Ft.**Trip Factors
Retail 37.01 33%
Office 10.84 50%
Industrial 3.37 50%
Institutional***10.84 50%
Nonresidential Vehicle Tr ips on an Aver age Weekday
Retail 101,174
Office 22,653
Industrial 16,064
Institutional 38,146
TOTAL N ON RESIDEN TIAL TRIPS 178,037 37%
TOTAL TRIPS 478,745 100%
*Floor area estimates are derived from employ ment figures provided by the City of Denton.
**Trip rates are from the Institute of Transportation Engineers (ITE) Trip Generation M anual (2021)
***Assumes trip rate of the av erage office.
Wk dy Trip Ends
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
66
F UNCTIONAL P OPULATION
Both residential and nonresidential developments increase the demand on City services and facilities. To
calculate the proportional share between residential and nonresidential demand on service and facilities,
a functional population approach is used. The functional population approach allocates the cost of the
facilities to residential and nonresidential development based on the activity of residents and workers in
the City through the 24 hours in a day.
Residents that do not work are assigned 20 hours per day to residential development and 4 hours per day
to nonresidential development (annualized averages). Residents that work in the City of Denton are
assigned 14 hours to residential development and 10 hours to nonresidential development. Residents that
work outside the City are assigned 14 hours to residential development, the remaining hours in the day
are assumed to be spent outside of the City working. Inflow commuters are assigned 10 hours to
nonresidential development. Based on 2021 functional population data, residential development
accounts for 72 percent of the functional population, while nonresidential development accounts for 28
percent, see Figure 49.
Figure 49. City of Denton Functional Population
Demand Person Pr oportionate
Residential Hour s/Day Hours Shar e
Estimated Residents 140,758
Residents Not Work ing 73,145 20 1,462,900
Workers Liv ing in City 67,613
Residents Work ing in City 18,560 14 259,840
Residents Work ing outside of City 49,053 14 686,742
Residential Subtotal 2,409,482 72%
Nonr esidential
Residents Not Work ing 73,145
Jobs Located in City 65,709 4 262,836
Residents Work ing in City 18,560 10 185,600
Non-Resident Workers 47,149 10 471,490
Nonresidential Subtotal 919,926 28%
TOTAL 3,329,408 100%
Source: U.S . Census, O nTheM ap Application, 2021
Demand U nits in 2021
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
67
P OLICE C ALLS FOR S ERVICE
A custom methodology is used to allocate police costs based on an analysis of calls for service in the
City of Denton.
As shown in Figure 49, 72 percent of the functional population in the City is attributed to residential
land uses and 2 8 percent of the functional population is attributed to nonresidential land uses. These
factors are used to allocate costs to residential and nonresidential land uses. This percentage split is
used to allocate the total police calls .
To project future police calls for service from new development, the above data is used to determine
a call per perso n and call per nonresidential trip. This methodology seeks to capture demand for
services from both residential and nonresidential development. Since specific records on calls for
service by type of nonresidential land use is not available, vehicle trips b y type of nonresidential land
use are utilized as a realistic proxy. This methodology reflects that the greatest number of calls for
service on a per square foot basis. If calls for service were allocated on a per employee basis, office
uses would generate the greatest number of calls due to its high employment density, which is
contrary to actual experience.
Shown in Figure 50, to find the residential police demand factor, City population is applied to
residential calls for service to derive a level of service of 0.5424 calls per person. The number of
nonresidential vehicle trips is applied to nonresidential calls for service to derive a level of service of
0.1829 calls per nonresidential trip. These factors are then applied to projected population and
nonresidential vehicle trips from growth to project new police calls for service.
Figure 50. Police Service Call Demand Factors
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
68
F IRE C ALLS FOR S ERVICE
As shown in Figure 51, in 2023, the Fire Department received an estimated 22,023 calls for service.
Of the total, 72 percent are attributed to residential development and 28 percent are attributed to
nonresidential development using the functional population approach .
To project future Fire calls for service from new development, the data is used to determine a call per
person and call per nonresidential trip. This methodology seeks to capture demand for services fr om
both residential and nonresidential development. Since specific records on calls for service by type of
nonresidential land use is not available, vehicle trips by type of nonresidential land use are utilized as
a realistic proxy. This methodology reflec ts that the greatest number of calls for service on a per
square foot basis. If calls for service were allocated on a per employee basis, office uses would
generate the greatest number of calls due to its high employment density, which is contrary to actual
experience.
Residential level of service of .1027 calls per capita is derived by dividing FY2023 fire/rescue calls for
service allocated to residential development (15,857) by the City’s population estimate. The number
of nonresidential vehicle trips is applied to the total nonresidential calls for service to derive a level
of service of 0.0346 calls per nonresidential trip. These factors are then applied to projected
population and nonresidential vehicle trips in each growth scenario to project new fire calls for
service.
Figure 51. Fire Department Demand Factors
Fiscal Impact Analysis of Hunter and Cole Ranch Developments
The City of Denton, TX
69
Fiscal Impact Analysis of
Hunter/Cole Ranch Municipal
Management Districts
Fiscal Impact Analysis Report
City of Denton, Texas
Prepared for:
The City of Denton
Final Report
February 14th, 2020
4701 Sangamore Road, Suite S240
Bethesda, MD
301.320.6900
www.tischlerbise.com
Fiscal Impact Analysis Report
The City of Denton, TX
i
Fiscal Impact Analysis Report
The City of Denton, TX
ii
TABLE OF CONTENTS
I. Executive Summary ....................................................................................................................... 1
Development Program .................................................................................................................. 2
Summary of Fiscal Impact Results ................................................................................................. 3
Utility Funds .............................................................................................................................. 7
Overall Results .........................................................................................................................14
Key Findings & Conclusions ..........................................................................................................15
General, Debt Service, and Special Revenue Funds ...................................................................15
Utility Funds .............................................................................................................................16
II. Major Assumptions & Methodologies ..........................................................................................18
Overview of Methodology ...........................................................................................................18
General Approach ....................................................................................................................18
Key Assumptions ..........................................................................................................................20
Fiscal Year 2019 Budget ............................................................................................................20
Variable versus Fixed Costs and Revenues ................................................................................21
Levels of Service .......................................................................................................................21
Inflation Rate ...........................................................................................................................21
Enterprise Funds ......................................................................................................................22
Non-Fiscal Evaluations ..............................................................................................................22
Development Program .................................................................................................................23
III. Fiscal Impact Analysis Results .....................................................................................................25
Annual Net Fiscal Impacts ............................................................................................................26
Cumulative Net Fiscal Impacts ..................................................................................................30
Utility Funds .............................................................................................................................32
Key Findings & Conclusions ..........................................................................................................39
General, Debt Service, and Special Revenue Funds ...................................................................39
Utility Funds .............................................................................................................................40
Overall Results .........................................................................................................................41
IV. Revenue and Expenditure Detail .................................................................................................42
Fiscal Impact Analysis Report
The City of Denton, TX
iii
Revenue Methodologies ..............................................................................................................42
General Fund Revenues ............................................................................................................42
General Debt Service Fund .......................................................................................................47
Special Revenue Funds .............................................................................................................47
Utility Funds .............................................................................................................................49
Revenue Outputs .........................................................................................................................53
Revenue Projections .................................................................................................................53
Operating Expenditure Methodologies ........................................................................................55
General and Special Revenue Funds .........................................................................................55
Utility Fund Operating Expenditures .........................................................................................59
Capital Expenditure Methodologies .............................................................................................60
General Government Facilities .................................................................................................60
Parks and Recreation ................................................................................................................61
Transportation .........................................................................................................................61
Police .......................................................................................................................................62
Fire and EMS ............................................................................................................................62
Library......................................................................................................................................62
Service Station Annex ...............................................................................................................63
Expenditure Outputs ....................................................................................................................64
Operating and Capital Expenditure Projections ........................................................................64
Appendix A. Demographic & Data Assumptions ...............................................................................67
Base Year Demographic Estimates ................................................................................................67
Population and Job Factors .......................................................................................................69
Vehicle Trips ................................................................................................................................70
Residential Vehicle Trips ...........................................................................................................70
Nonresidential Vehicle Trips .....................................................................................................71
Base Year Vehicle Trip Totals .....................................................................................................72
Functional Population ..................................................................................................................73
Police Calls for Service .................................................................................................................74
Fire Calls for Service.....................................................................................................................75
Fiscal Impact Analysis Report
The City of Denton, TX
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Table of Figures
Figure 1. Development Scenario ....................................................................................................... 2
Figure 2. Annual Net Fiscal Impact 2019 -2059 .................................................................................. 3
Figure 3. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton ....................................... 4
Figure 4. Annual Operating & Capital Expenditures Compared to Revenues ...................................... 5
Figure 5. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds) ..... 6
Figure 6. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s) ............................................ 7
Figure 7. Capital Facilities and Expenditure Inventory (Utility Funds) ................................................ 9
Figure 8. Water Fund Operating & Capital Expenses Compared to Revenues ....................................10
Figure 9. Wastewater Fund Operating & Capital Expenses Compared to Revenues ...........................11
Figure 10. Solid Waste Fund Operating & Capital Expenses Compared to Revenues .........................12
Figure 11. Electric Fund Operating & Capital Expenses Compared to Re venue .................................13
Figure 12. Operating and Capital Expenditures Compared to Revenues for Funds Analyzed Combined
........................................................................................................................................................14
Figure 13. Development Scenario ....................................................................................................23
Figure 14. Annual Net Fiscal Impact 2019 -2059 ...............................................................................26
Figure 15. Annual Operating & Capital Expenditures Compa red to Revenues ...................................28
Figure 16. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds) ..29
Figure 17. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton ....................................30
Figure 18. 40-Year Cumulative Revenues and Expenditures: General and Debt Service Funds ..........31
Figure 19. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s) .........................................32
Figure 20. Capital Facilitie s and Expenditure Inventory (Utility Funds) .............................................34
Figure 21. Water Fund Operating & Capital Expenses Compared to Revenues ..................................35
Figure 22. Wastewater Fund Operating & Capital Expenses Compared to Revenues .........................36
Figure 23. Solid Waste Fund Operating & Capital Expenses Compared to Revenues .........................37
Figure 24. Electric Fund Operating & Capital Expenses Compared to Revenue .................................38
Figure 25. Operating and Capital Expenditures Compared to Revenues for Funds Analyzed Combined
........................................................................................................................................................41
Figure 26. General Fund Revenues ...................................................................................................43
Figure 27. Sales Tax per Square Foot ................................................................................................45
Figure 28. Assessed Value by Land Use Type ....................................................................................45
Figure 29. General Debt Service Fund ..............................................................................................47
Figure 30. Street Improvement Fund ...............................................................................................48
Figure 31. Roadway Impact Fee Assumptions ...................................................................................48
Figure 32. Utility Fund Revenue Projection Methodology ................................................................49
Figure 33. Water and Wastewater Billing Assumptions .....................................................................50
Figure 34. Water and Wastewater Impact Fee Assumptions .............................................................51
Figure 35. Utility Fund Revenue Projection Methodology ................................................................52
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The City of Denton, TX
v
Figure 36. Solid Waste Fund Revenue Projection Methodology ........................................................52
Figure 37. 40-Year Revenue Totals for all Non -Utility Funds ..............................................................53
Figure 38. Revenue Totals and Annual Average for Utility Funds ......................................................54
Figure 39. General and Special Revenue Operating Expenditures Approach .....................................56
Figure 40. City Maintained Parks and Recreation Facilities for Operating Expense Projections .........57
Figure 41. Utility Funds Operating Expenditures Approach ..............................................................59
Figure 42. O perating Expenditure Projections ..................................................................................64
Figure 43. Summary of Non -Utility Capital Costs ..............................................................................65
Figure 44. Summary of Utility Fund Capital Costs .............................................................................65
Figure 45. Base Year Input Data .......................................................................................................68
Figure 46. Trip Adjustment Factor for Commuters ............................................................................70
Figure 47. Trip Generation Factors ...................................................................................................71
Figure 48. Vehicle Trips ....................................................................................................................72
Figure 49. City of Denton Functional Population ..............................................................................73
Figure 50. Police Service Call Demand Factors .................................................................................74
Figure 51. Fire Department Demand Factors ....................................................................................75
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Fiscal Impact Analysis Report
The City of Denton, TX
1
I . EXECUTIVE SUMMARY
The purpose of this Fiscal Impact Analysis (“FIA”) is to provide information to the City of Denton
related to the fiscal impact of the proposed Hunter Ranch and Cole Ranch Municipal Management
Districts (“Hunter/Cole MMD” or “Hunter/Cole Ranch”). An FIA determines whether revenues
generated by development are sufficient to cover the costs resulting from that development —
specifically, those costs a ssociated with maintaining current levels of service given the additional
service and facility demands that growth places on a jurisdiction .
The City of Denton has been in discussions with Hillwood and Stratford Land (“the developers” or
“development team”) regarding the development of Hunter Ranch and Cole Ranch on a 6,340-acre
area to the Southwest of the city’s downtown since 2008. In February 2019 the City passed a
resolution of support for the formation and operation of the Hunter Ranch and Cole Ranch Municipal
Management Districts. Municipal Management Districts (“MMDs”) are special tax assessment districts
and political subdivisions of the State of Texas. MMDs may levy taxes and issue bonds in order to
provide the infrastructure needed to serve raw l and development. As development progresses, the
Management District can then provide supplemental services and improvements .
Hunter/Cole Ranch has the potential to significantly expand the City of Denton’s economic base and
municipal tax base. As an MMD, it also has the authority and revenue raising tools to self-fund a
portion of the improvement projects needed to serve the development proposed as well as some of
the ongoing expenses associated with maintaining those improvements.
The City of Denton is currently evaluating the impact of the proposed projec t and negotiating terms
of approval with the development team. TischlerBise is one of several consulting firms working with
the City to inform this decision-making process. TischlerBise’s role was to ca lculate the net fiscal
impact of the proposed Hunter/Cole Ranch development to the City ’s general operating and debt
service funds, the Roadway Impact Fee Fund, and the Street Improvement Fund. Additionally, we
examined the fiscal impact to the City’s Utility Funds to provide the City with cost and revenue
projections for use in its own rate analys es. The City of Denton owns and operates the electric, water,
wastewater, and solid waste utilities that would serve Hunter/Cole Ranch.
This report describes our approach and methodology, presents our findings, and discusses their
significance .
Fiscal Impact Analysis Report
The City of Denton, TX
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D EVELOPMENT P ROGRAM
The Hunter Ranch and Cole Ranch developments propose a mix of uses and industries across 6,340
acres of undeveloped land. The City of Denton provided us with the developers’ baseline build-out
scenario for residential units and commercial and industrial acreage. We derived estimat es for the
other key indicators from federal and local governmental sources.
Figure 1 below presents the development scenario for Hunter/Cole Ranch in cumulative 10 -year
increments.
Figure 1 . Development Scenario
Development Scenario Summary
Cumulative Growth: 2019 - 2059, 10 year increments
City of Denton, Texas - Hunter and Cole Ranch FIA
EXISTING Year 10 Year 20 Year 30 Year 40
2019 2029 2039 2049 2059
POPULATION 134,460 11,600 40,800 55,805 55,805
% growth from existing 9%30%42%42%
RESIDENTIAL LOTS NA 3,600 9,600 12,400 12,400
SINGLE FAMILY 30,450 3,000 9,000 12,400 12,400
MULTIFAMILY 19,190 800 4,800 6,450 6,450
TOTAL UNITS 49,640 3,800 13,800 18,850 18,850
% growth from existing 7.7%27.8%38.0%38.0%
NONRESIDENTIAL ACRES NA 71 486 741 741
RETAIL SF 5,470,258 137,214 1,692,306 2,957,724 2,957,724
OFFICE SF 6,429,066 137,214 1,692,306 2,957,724 2,957,724
INDUSTRIAL SF 13,619,179 585,446 2,536,934 3,122,381 3,122,381
INSTIT SF 4,529,955 0 0 0 0
TOTAL NR DEVELOPMENT (SF)30,048,460 859,874 5,921,546 9,037,829 9,037,829
% growth from existing 3%20%30%30%
RETAIL JOBS 12,818 203 2,498 4,365 4,365
OFFICE JOBS 19,782 203 2,498 4,365 4,365
INDUSTRIAL JOBS 15,772 864 3,744 4,608 4,608
TOTAL JOBS 48,372 1,269 8,739 13,338 13,338
% growth from existing 2.6%18.1%27.6%27.6%
Source: City of Denton; U.S. Census American Community Survey, 2015 - 2017 estimates; ITE 10th Edition (2017).
Fiscal Impact Analysis Report
The City of Denton, TX
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S UMMARY OF F ISCAL I MPACT R ESULTS
The fiscal impacts of growth are shown below in the following figures. Net fiscal results are revenues
minus costs in each year , reflecting operating and capital costs for all services modeled . Data points
above the $0 line represent annual surpluses; points below the $0 line represent annual deficits.
Surpluses in any one year are not carried forward to the next year.
Figure 2 . Annual Net Fiscal Impact 2019 -2059
Fiscal Impact Analysis Report
The City of Denton, TX
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The cumulative totals shown below reflect total revenues and expenditures over the 40-year time
frame. As shown, there is a cumulative positive fiscal impact for the funds analyzed, with the
exception of the Roadway Impact Fee Fun d for which the fiscal impact is essentially neutral . It should
be note d that this analysis projects roadway impact fee revenues based on the conceptual phase
development program and impact fee rates from the City of Denton’s 2015 Roadway Impact Fee Study ;
costs are projected separately based on the projected increase in transportation demand .1 In practice,
roadway impact fee rates are likely to be adjusted periodically to reflect changes to growth and the
Roadway Capital Improvement Plan . The MMD will also contribute revenue from a Contract Tax as
outlined in the Operating Agreement to assist in funding impact fee -eligible projects.
Figure 3 . Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton
For further detail, operating and capital impacts are separated in the following figure.
1 The 2015 City of Denton Impact Fee Schedule provides distinct impact fee rates to a detailed inventory of potential land
uses. The conceptual phase build -out projections have not yet identified land uses to the level of detail needed to assign
applicable impact fee rates to specific land uses. For example—supermarkets and department stores both fall into the
“Retail” land use category. Per the 2015 Roadway Impact Fee Schedule, impact fees for “Supermarket” (ITE Land Use Code
850) are collected at the rate of $5,204.04 per 1,000 SF, compared to a collection rate of $1,123 .46 per 1,000 SF for
“Department Store” (ITE Land Use Code 875). The difference in these rates is related to the level of demand each land use
is expected to place on roadway infrastructure. The FIA used the ITE Trip Generation Rate for Land Use Code 810 (“Shopping
Center”) for Retail, which reflects travel demand for an average Retail land use. “General Office Building” or ITE Land Use
Code 710 was utilized for Office, which is likewise the closest approximation to an average Office land use in terms of t rip
generation.
Cumulative Fiscal Impact (x$1,000s)
City of Denton - Fiscal Impact Analysis
General Fund $1,148,231 70%$867,704 77%$280,528
Debt Service Fund $335,073 21%$142,035 13%$193,038
Special Revenue: Street Improvement Fund $96,975 6%$69,372 6%$27,603
Special Revenue: Roadway Impact Fee Fund $49,008 3%$51,657 5%($2,648)
TOTAL $1,629,288 100%$1,130,768 100%$498,520
Net Fiscal
Impact
CATEGORY Cumulative
Revenues %Cumulative
Expenditures %
Fiscal Impact Analysis Report
The City of Denton, TX
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Figure 4 . Annual Operating & Capital Expenditures Compared to Revenues
As a development-finance tool, Municipal Management Districts allow private property owners to access
low-interest financing for public infrastructure projects. The development team and the City of Denton
have identified improvement projects required to serve the Hunter/Cole Ranch Master Planned
Community that will be financed by the MMD or the developer.
The table below inventories the infrastructure projects and other capital investments triggered by the
proposed development of Hunter/Cole Ranch. Capital costs are categorized as either “City Funded”
or “MMD/Developer Funded.” Only those projects required to maintain current levels of service are
identified here —planned investments in private amenities for the exclusive use of Hunter/Cole
Ranch MMD residents are excluded from this analysis and from the list below.
Non-utility capital projects and costs are allocated to the City of Denton and the MMD/Developer in
the detailed capital project inventory depicted in Figure 5 on the following page. The methodology
underlying these projections and cost assumptions is discussed in detail in the Revenue and
Expenditure Methodology Chapter of the report.
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The City of Denton, TX
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Figure 5 . Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds)
Non-Utility Capital Facilities and Allocation of Costs ($1,000s)
Fiscal Impact Analysis - Denton, TX
DEPARTMENT - Facility
Quantity Total Square
Footage Total City of
Denton
MMD /
Developer
Parks and Recreation*
Recreation Center Building 1 70,000 $11,900 $11,900 $0
Hunter Ranch City Park (54 acres)1 2,352,240 $12,493 $8,534 $3,959
Cole Ranch City Park (50 acres)1 2,178,000 $11,861 $7,902 $3,959
Neighborhood Parks (5 acres ea)4 653,400 $4,214 $0 $4,214
Pocket Parks / Dog Parks (2 acres ea)30 2,613,600 $3,000 $0 $3,000
Regional Trails 23 miles 1,212,275 $11,537 $0 $11,537
Community Trails 35 miles 1,112,958 $13,860 $0 $13,860
Parks & Rec Department - Vehicles 24 -$864 $864 $0
Parks & Rec Department - Service Station Annex 1 10,684 $1,537 $1,537 $41
Parks & Rec Department - Parking 1 10,667 $480 $480 $41
Facilities - Service Station Annex 1 45,652 $8,394 $8,394 $176
Facilities - Vehicles and Equipment 24 -$523 $523 $0
Fleet - Service Station Annex 1 186,474 $13,910 $13,193 $718
Fleet - Vehicles and Equipment 150 -$2,700 $2,700 $0
General Government - Administrative Space -67,913 $11,142 $11,142 $0
General Government - Vehicles 38 -$1,140 $1,140 $0
On-Site and Regional Roadway Projects 4 --$241,157 $0 $241,157
Systemwide Improvements 5 --$40,116 $40,116 $0
Streets - Vehicles 53 -$3,028 $3,028 $0
Streets - Service Station -61,765 $4,561 $4,324 $238
Lakes / Dams/ Spillways etc. TBD $37,800 $0 $37,800
Police - Substation 20,630 -$5,000 $0 $5,000
Police - Patrol Vehicles 109 -$4,711 $4,711 $0
Fire - Fire Substation*^^2 15,721 $9,670 $4,670 $5,000
Fire - Fire Engines / Ladder Trucks 8 -$6,975 $6,975 $0
Fire - Vehicles 32 -$7,360 $7,360 $0
Library^1 21,516 $4,564 $4,564 $0
345 vehicles /
24 lane miles TOTAL: $500,026 $168,866 $331,593
^ Library cost estimate includes opening day collection materials.
*Developer contribution towards City Parks of $3,950,000 provided by City of Denton 01/16/2020
General Notes:
[1] Cost estimates represent the initial purchase and, for vehicles and equipment, replacement costs.
[2] Debt financing expenses are not included.
[3] 50 percent of Service Station Annex costs identified in Quorum report are attributable to Hunter/Cole Ranch.
[4] Costs reflect the specific project cost estimates identified in February 12, 2020 version of Cole and Hunter Ranch Developments Travel
Demand Model Report submitted by HDR Engineering, Inc.
^^ Fire Substation is the second of two substations triggered by the development; the first will be funded by the developer.
Fleet & Facilities Management
General Government
Library
Police
Transportation
Fire and EMS
[5] Costs reflect projected growth in system-level transportation demand over the analysis' study period.
Capital Costs ($1,000s)
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The City of Denton, TX
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UTILITY FUNDS
Utility Funds were included in our analysis at the request of the City of Denton to evaluate whether
the income generated from new customers and users would cover the costs required to provide
service to the MMD while maintaining existing levels of service throughout the city.
CUMULATIVE FISCAL IMPACT FOR UTILITY FUNDS
As depicted in the figure below, the net fiscal impact of the MMD is positive across all utility funds.
Capital Expenditures include utility infrastructure projects, as well as capital equipment and vehicles.
A detailed inventory of capital expenditures is presented in Figure 7.
Figure 6 . Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000s)
40-Year Net Cumulative Impact - Utilty Funds
City of Denton - Fiscal Impact Analysis
Electric Fund*
Operating Revenues $966,695
Operating Expenditures $565,517
Capital Expenditures $115,077
NET CUMULATIVE IMPACT $286,102
Water Fund
Operating Revenues $389,015
Impact Fee Revenues $153,035
Operating Expenditures $238,853
Capital Expenditures $241,963
NET CUMULATIVE IMPACT $61,235
Wastewater Fund
Operating Revenues $279,736
Impact Fee Revenues $144,469
Operating Expenditures $196,973
Capital Expenditures $226,743
NET CUMULATIVE IMPACT $490
Solid Waste
Revenues $304,055
Operating Expenditures $246,914
Capital Expenditures $36,378
NET CUMULATIVE IMPACT $20,763
*Electric Fund projections provided by City of Denton.
Fiscal Impact Analysis Report
The City of Denton, TX
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The table below inventories the utility infrastructure projects and other capital investments triggered
by Hunter/Cole Ranch. Capital costs are categorized as either “City Funded” or “MMD/Developer
Funded.”
Note that replacement facilities and major maintenance are not included in the capital costs
presented below. Facilities needed to serve new growth are reflected. For capital improvements that
are purchased —vehicles, equipment, etc., the model and fiscal results include both the initial
purchase cost and the cost to replace the item after it reaches its use ful life.
Fiscal Impact Analysis Report
The City of Denton, TX
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Figure 7 . Capital Facilities and Expenditure Inventory (Utility Funds)
Utility Funds - Capital Facilities and Expense Allocation ($1,000s)
Fiscal Impact Analysis - Denton, TX
FUND - Facility
Quantity or
Square
Footage
Total City of
Denton
MMD /
Developer
Water Fund
CIP Projects per FNI Report**19 projects $224,641 $153,035 $71,607
Service Station Annex 17,902 $1,969 $1,900 $69
Vehicles 24 $987 $987 $0
Wastewater Fund
CIP Projects per FNI Report***15 projects $232,016 $144,469 $87,547
Service Station Annex 11,264 $1,282 $1,239 $43
Vehicles 21 $924 $924 $0
Solid Waste Fund
Materials Recovery Facility 37,500 $3,144 $3,000 $144
Transfer Station 25,000 $6,975 $6,075 $900
Bulk Drop Off Facilities & Weigh Station 4,159 $1,788 $1,772 $16
Administrative Space 2,900 $649 $638 $11
Solid Waste Haulers / Commercial Trucks 38 $5,510 $5,510 $0
Roadway to Transfer Station 25,725 $660 $561 $99
Vehicle Maneuvering 65,000 $705 $455 $250
Electric Fund*
Substation 1 $18,077 $18,077 $0
Distribution Lines (Cost to Serve)NA*$38,147 $38,147 $0
Main Feeder Circuits NA*$41,357 $41,357 $0
Vehicles 37 $2,250 $2,250 $0
Lighting NA*$12,177 $0 $12,177
Administrative / Shop Space 40,960 $10,350 $10,192 $158
TOTAL: $603,611 $430,589 $173,022
Source: Quorum; TischlerBise; City of Denton; FNI
*Cost estimates for total distribution lines and feeder circuits provided by DME.
General Notes:
[1] Cost estimates represent the initial purchase and, for vehicles and equipment, replacement costs.
[2] Debt financing expenses are not included.
[3] 50 percent of Service Station Annex square footage identified in Quorum Analysis (Jan 16, 2020) is attributable to Hunter/Cole Ranch.
[4] Per the Hunter-Cole Development Analysis submitted by FNI on Feb 7, 2020, total CIP Projects for Water and Wastewater Funds equal
$328,612,700 and $290,441,800 respectively (land excluded). Of these costs, $224,341,400 and $231,836,500, respectively, are a result of
projected demand from the Hunter/Cole Ranch developments. The remainder is attributable to projected use by the entire system.
**Developer contribution of 10 acres of land for Water Booster Pump Station, valued at $30,0000 per acre per draft Project Agreement
included in addition to CIP Costs identified in FNI's Hunter-Cole Development Analysis (Feb 7, 2020) per direction from City of Denton staff.
***Includes Developer contribution of 6 acres of land for Hickory Creek Wastewater Lift Station, valued at $30,000 per acre per draft Project
Agreement in addition to CIP Costs identified in FNI's Hunter-Cole Development Analysis (Feb 7, 2020) per direction from City of Denton staff.
Capital Costs ($1,000s)
Fiscal Impact Analysis Report
The City of Denton, TX
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The methodology and approach utilized to arrive at the capital cost projections is detailed in the Revenue
and Expenditure Detail chapter of this report.
NET ANNUAL FISCAL IMPACT FOR UTILITY FUNDS
The annual net fiscal impact on the utility funds is prese nted in the figures that follow.
Water Fund
Water Fund revenues are expected to exceed operating expenditures throughout the study -period.
Minor capital deficits in the amounts of approximately $172,000 and $345,000 are incurred in 2022
and 2023, respectively, as design and predevelopment expenditures for the first of three expansions
to the Lake Ray Roberts Water Treatment Plant are incurred prior to the delivery of revenue -
generating residential and nonresidential development. Revenues are then projected to exceed
capital expenditures until 2043, as depicted in the figure below. Note that the spikes depicted in Water
Fund revenues are the result of impact fees.
Figure 8 . Water Fund Operating & Capital Expenses Compared to Revenues
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The City of Denton, TX
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The capital expenditures included in this analysis are directly attributable to demand from Hunter
Cole.2 For the purposes of this analysis, t hese projects are projected to be debt financed and occur
between 2024 and 2039. New development, and thus imp act fee revenue begins to peak around 2039,
and from 2045 -2054 annual deficits are incurred as impact fee revenue declines and then stops while
debt payments for the major infrastructure projects projected in the FNI Report and developed from
2024-2039 continue. The impact fee revenue surplus accrued during the first half of the study period
is projected to be sufficient to compensate for the capital deficit projected in the second half of the
development period. Per conversations with City staff, the MMD will also contribute revenue fr om a
Contract Tax as outlined in the Operating Agreement to assist in funding impact fee eligible Water
projects.
Wastewater Fund
Wastewater Fund revenues are generally expected to meet or exceed operating and capital
expenditures over the course of the development, as depicted in Figure 9 below.
Figure 9 . Wastewater Fund Operating & Capi tal Expenses Compared to Revenues
2 The January 7 th, 2020 FNI report calculated the share of project costs attributable to Hunter Cole (based on projected
Hunter/Cole demand relative to demand from the broader service area); these cost estimates were used for the fiscal
impact analysis.
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The City of Denton, TX
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The spikes in the figure above represent impact fee payments. Although the timing of impact fee
payments does not directly correspond with capital costs, revenues accrued in years where impact
fees exceed capital expense s cover deficits in other years. Impact-fee eligible Wastewater projects will
also receive funding from the MMD’s Contract Tax as outlined in the Operating Agreement.
Solid Waste Fund
As depicted in the figure below, Hunter/Cole Ranch is projected to have a relatively neutral net annual
fiscal impact to the City of Denton’s Solid Waste Fund for most of the study period . Deficits occur,
however, from 202 5-2037. This analysis assumed that construction of the planned Mat erial Recovery
Facility and Transfer Station will occur in 20 27 (included in the Service Station Annex). The minor
deficits projected prior to the delivery of the Service Station Annex are due to projected capital
investments in Solid Waste vehicles includ ing haulers and commercial trucks, which are needed to
serve new customers.
Figure 10. Solid Waste Fund Operating & Capital Expenses Compared to Revenues
Fiscal Impact Analysis Report
The City of Denton, TX
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Electric Fund
Electric revenues and expenses associated with Hunter Cole were provided by the City of Denton and
are illustrated in terms of revenues relative to capital and operating expenditures in the figure below.
Revenues are projected to exceed expenditures for each year of the study period.
Figure 11. Electric Fund Operating & Capital Expenses Compared to Revenue
Fiscal Impact Analysis Report
The City of Denton, TX
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OVERALL RESULTS
Per direction from City of Denton staff, the figure below compares annual revenues to annual
operating and capital expenditures for the funds analyzed, including ut ility funds. Note that under
current City policy, utility fund revenues are restricted use and cannot be used toward any other fund’s
activities.
Figure 12. Operating and Capital Expenditures Compared to Revenues for Funds Analyze d
Combined
Fiscal Impact Analysis Report
The City of Denton, TX
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K EY F INDINGS & C ONCLUSIONS
The following conclusions can be drawn from the FIA results presented in this report:
GENERAL , DEBT SERVICE , AND SPECIAL REVENUE FUND S
• The proposed Hunter/Cole Ranch development is projected to have a net cumulative positive
fiscal impact on the City over the 40-year study period. The net positive impacts are driven
primarily by sales and property tax revenue from development. This allows for the City of Denton
to benefit fiscally from the development proposed.
• It should be noted that, on average, the resulting annual net positive impact to the General Fund
and Debt Service Fund is approximately $7.0 million, which reflects approximately 5.4 percent of
the City of Denton’s Fiscal Year 2019 operating budget.
• The Street Improvement Fund is funded through franchise fees including utility fund revenue
surpluses (as well as non -growth-related revenues). The Street Improvement Fund’s projected
cumulative surplus is partially attributable to the fact that utility fund revenues will increase
as a result of Hunter/Cole Ranch. Another reason for the surplus is that although the
additional roadways added to the City of Denton’s lane mile in ventory increase Street
Improvement Fund operating and capital outlay costs, major capital expenditures are
generally accounted for in other funds. Per conversations with City staff, this analysis assumes
that roadway construction is either funded by the MMD through adjustments to the District
tax rate or by future development through the Roadway Impact Fee Fund . Public works
equipment and the Service Station Annex are funded out of the General Debt Service Fund.
o Note that the increases in franchise fee re venue could be allocated to another fund at
the City’s discretion. As discussed previously, this analysis assumed that the 10 -year
policy of transferring excess franchise fee revenue to the Street Improvement Fund
would continue throughout the 40 -year study period.
• Demand for fire services will trigger the need to expand capital facilities during the second
half of the development’s growth period, beyond the developers’ initial land and financial
contributions as identified in the draft Operating Agreement . A new fire substation is triggered
in 2028—to be funded up to $5 million from the developer —and a second fire substation is
triggered in 2039, which is assumed as a City cost.
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The City of Denton, TX
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• Although the projected growth in revenue is relatively significant, the Cit y should continue to
plan and be prepared to expand both its facilities and operational capacity —the Hunter/Cole
Ranch development is projected to be fiscally balanced in the sense that it is projected to
produce enough revenue to cover its costs, but it w ill not be self-contained. Growth in
population, vehicle trips, and police and fire calls, for instance, is projected to increase
average annual operating expenditures to the City by approximately $21 million per year.
• Overall, Hunter/Cole Ranch is project ed to generate sufficient revenue to cover both the
capital and operating costs associated with meeting the additional demand it will place on
City services.
UTILITY FUNDS
• Water and Wastewater Fund revenues cover operating expenditures throughout the 40 -year
study period. Water and Wastewater impact fee revenue is sufficient to cover the
development’s share of water and wastewater capital costs.
• Impact fee revenue is a function of the City of Denton’s current fee schedule and projected
development—to the extent that development does not keep pace with projections, impact
fee revenue may fall short of projections. Because major Water and Wastewater infrastructure
must be constructed prior to full build -out in order to serve new residents and businesses, the
City may incur capital deficits for these funds if development does not proceed at the rate or
intensity presented in the baseline scenario. To mitigate this risk, the MMD will adjust District
tax rates as needed to fund the difference between impact fee revenue and the
Water/Wastewater Capital Improvement Plan project costs attributable to the development.
• This report assumed that the Solid Waste Service Station Annex including the Materials
Recovery Facility and Transfer Station would be “front-loaded” a nd completed in one phase in
2027 per the Public Facilities report completed by Quorum Architects as a party of this
analysis. This results in six years of capital deficits . To the extent possible, direct financing of
recurring capital costs such as solid waste haulers , would improve the fiscal results for the
Solid Waste fund.
• Given the current level of detail available regarding the number and service requirements of
commercial Solid Wa ste customers, however, additional analysis of the net fiscal impact of
Hunter/Cole Ranch on the Solid Waste Fund should be completed as property -specific details
of the development program are established.
• Overall, the cumulative fiscal impact on all uti lity funds is projected to be positive.
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II. MAJOR ASSUMPTIONS &
METHODOLOGIES
O VERVIEW OF M ETHODOLOGY
An FIA determines whether revenues generated by new development are sufficient to cover the costs
resulting from that development—specifically, those costs associated with maintaining current levels of
service given the additional service and facility demands that growth places on a jurisdiction.
Levels of Service (“LOS”) reflect public services and infrastructure as currently funded and are typically
expressed as a cost per demand unit. For example, maintenance of parks would be expressed as a cost
per acre of parks to maintain. For the City of Denton, we analyzed the fiscal impact of the proposed
Hunter/Cole Ranch development based on current citywide levels of service and any known infrastructure
or service needs.
GENERAL APPROACH
The Fiscal Impact Analysis for the City of Denton incorporates the case study-marginal cost approach
wherever possible. The case study-marginal methodology is the most realistic method for evaluating
fiscal impacts. Unique demographic or other characteristics of new development are accounted for, as
well as the extent to which a particular infrastructure or service operates under, over, or close to capacity.
Available facility capacity determines the need for additional capital facilities and associated operating
costs.
Certain costs are impacted by general growth, regardless of location; these are projected using a
marginal/average cost hybrid methodology that incorporates capacity and thresholds for staffing, but
projects non-salary operating costs using an average cost approach. Some costs and revenues are not
expected to be impacted by growth and are therefore considered fixed in this analysis.
The levels of service and cost assumptions used in this analysis are based on TischlerBise’s discussions
with City of Denton staff, input from the development team, and a detailed analysis of the City of Denton
FY18-19 Adopted Budget and Capital Improvements Programs; City of Denton’s Roadway Impact Fee
Study; the 2019 Water and Wastewater Impact Fee Study, the FY2018 Comprehensive Annual Financial
Report, the Parks and Trails Master Plan, staff reports, other relevant financial and planning documents.
Additionally, our national experience conducting over 800 fiscal impact analyses was beneficial.
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Our analysis also incorporated known roadway, water and wastewater utility, and public works
infrastructure needs, as identified in HDR’s Travel Demand Report (Dec 10, 2019), FNI’s Hunter-Cole
Water/Wastewater Impact Analysis (Feb 7, 2020), and Quorum Architects City Facility Needs Assessment
Report (Jan 16, 2020). We also completed a thorough evaluation of the draft Operating Agreements
between the City and the MMD, convened with City staff, and conducted background research regarding
legally reimbursable costs to apportion expenses triggered by growth between the City of Denton and the
MMD.
The assumptions outlined in this report are utilized along with the growth projections to calculate the
potential fiscal impacts to the City of Denton of the Hunter/Cole Ranch Development over a 40-year time
frame. Only citywide impacts are included in this report—for instance, onsite private amenities are
excluded from the analysis.
To summarize, our methodological approach included the following steps.
1. Existing demand base and cost and revenue factors such as current population, housing units,
employment, and nonresidential square footage were established.3
2. Current Levels of Service were identified.
3. The growth scenario to be analyzed was defined.
4. General assumptions regarding the allocation of capital projects and maintenance responsibilities
to the developer versus the City of Denton were established.4
5. The fiscal impact model was designed to account the assumptions established in Steps 1-4.
The results presented in this report were calculated using a customized fiscal impact model designed
specifically by TischlerBise for this assignment.
3 These are detailed in Appendix A.
4 Through the MMD structure, the development team will finance a portion of the infrastructure required to maintain
current levels of service; the MMD will also be responsible for the operations and maintenance of some facilities that
would o therwise be publicly owned and maintained. Likewise, certain infrastructure projects funded by Hunter/Cole MMD
will, upon completion, transfer to the City of Denton; for instance, with the exception of private roads, the City will
ultimately be responsible for roadway maintenance (excluding right -of-way landscaping) for the majority of MMD funded
lane miles.
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K EY A SSUMPTIONS
FISCAL YEAR 2019 BUDGET
The Fiscal Year 2019 Budget (Oct 1, 2018 – Sep 30, 2019) is used to represent a “snapshot” of the City’s
current costs and levels of service. The “snapshot” approach does not attempt to speculate about how
services or costs will change over time or whether current levels of service are sufficient or insufficient.
Instead, it evaluates the cost implications to the City as it conducts business under the FY2019 budget.
The following exceptions and assumptions should be noted:
▪ Ad Valorem Property Tax Rate: Under advisement from City of Denton staff, the FY2020 tax
rate of 0.590454 was utilized to project tax reven ues. The General Fund portion is 0.385364,
and the General Debt Service Obligation Fund portion is 0.20509.
▪ Police Expenditures : Base year police expenditures were adjusted upwards from the FY2019
budget by 20 percent under direction from City staff. Since adopting the FY2019 budget the
City of Denton has increased appropriations for the Police Department; per the City Finance
Department, this increase in funding and police levels of service is a permanent shift in policy
that reflects the City’ 5 -year Strategic Plan. The upward adjustment to base year police
expenditures therefore yields projections that more accurately reflect the costs associated
with maintaining current levels of service under the proposed growth scenario.
▪ Franchise Fees : The City collects franchise fees from utility funds —specifically, the Water
Fund, Wastewater Fund, Solid Waste Fund, and Electric Fund —among other smaller funds
such as gas and cable, in an amount equal to 5 percent of gross annual revenues. FY2019 was
the third ye ar of a 10-year policy to transfer all franchise fee revenue in excess of the FY2016
dollar amount to the Streets Improvement Fund, rather than directly to the General Fund. This
analysis assumes that this policy remains intact throughout the study period.
▪ Revenue Surpluses and Tax Rates : Positive fiscal impacts are represented as revenue
surpluses; as a Fiscal Impact Study, this analysis holds all tax rates constant throughout the
40-year term. In reality, the City of Denton will budget based according to its priorities and
policies, and surpluses could translate into a potential decrease in the applicable tax rate,
whereas deficits may lead to an increase in that rate.
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VARIABLE VERSUS FIXED COSTS AND REVENUES
Costs and revenues that are directly attributable to Hunter/Cole Ranch are included in the fiscal analysis
of the development. In all cases, some costs and revenues are not impacted by demographic changes and
are assumed to be “fixed.” To determine fixed variables, TischlerBise interviewed City staff and reviewed
the FY2019 budget and available supporting documentation. Examples of budget items modeled as
“fixed,” or non-growth related, include:
▪ Staffing for certain leadership positions; this varies by depa rtment, but in many cases, the
position of Director is held fixed as the staffing structure does not require or support multiple
department heads.
▪ One -time costs for services unrelated to growth and development.
▪ Revenue sources that are not growth -related.
LEVELS OF SERVICE
The cost projections are based on a “snapshot approach” in which it is assumed the current level of
service, as funded in the City budget and as provided in current capital facilities, will continue through
the 40 -year analysis period. The 2019 existing demand base data was used to calculate unit costs and
service level thresholds. Examples of demand base data include population, dwelling units,
employment by industry, vehicle trips, etc . The “snapshot” approach does not attempt to spec ulate
about how levels of service or cost factors will change over time. Instead, it evaluates the implications
of development to the City as conducted under the FY2019 budget and informed by discussions with
staff.
INFLATION RATE
The rate of inflation is assumed to be zero throughout the projection period, and cost and revenue
projections are in constant 2019 dollars. This assumption is in accord with current budget data and
avoids the difficulty of forecasting as well as interpreting results expressed i n inflated dollars. In
general, including inflation is complicated and unpredictable. This is particularly the case given that
some costs, such as salaries, increase at different rates than other operating and capital costs such
as contractual and buildin g construction costs. These costs, in turn, almost always increase in
variation to the appreciation of real estate. Using constant 2019 dollars reinforces the snapshot
approach and avoids these problems.
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ENTERPRISE FUNDS
In practice, utility funds are self-sufficient; the City of Denton adjusts rates in order to cover the actual
cost of service while also generating a Return on Investment (“ROI”) as identified from time to time
in targeted municipal policies. The City of Denton is in the process of cond ucting rate analyses in order
to forecast the timing and extent to which utility rates may need to be adjusted to fund potential
growth-related capacity expansion projects.
The Utility Fund analysis included in this report presents the fiscal impact of th e development to
the City’s utility funds, assuming no rate adjustments , per direction from the City ’s Finance
Department. Costs are therefore projected based solely on the increase in customers and usage for
each utility; revenues are projected based on the current cost of water, wastewater, solid waste, and
electric service per the appropriate demand factor (e.g. water produced).
NON-FISCAL EVALUATIONS
It should be noted that while a Fiscal Impact Analysis is an important consideration in planning decisions,
it is only one of several issues that should be considered. Environmental and social issues, for example,
should also be considered when making planning and policy decisions. The above notwithstanding, this
analysis will enable interested parties to understand the fiscal implications of development in the
Hunter/Cole Ranch MMD.
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D EVELOPMENT P ROGRAM
The Hunter Ranch and Cole Ranch developments propose a mix of uses and industries across 6,340
acres of undeveloped or “raw” land. The City of Denton pr ovided us with the developers’ baseline
build-out scenario for residential units and commercial and industrial acreage. We derived estimates
for the other key indicators from federal and local governmental sources.
Figure 13 below presents the development scenario for Hunter/Cole Ranch in cumulative 10-year
increments.
Figure 13. Development Scenario
Development Scenario Summary
Cumulative Growth: 2019 - 2059, 10 year increments
City of Denton, Texas - Hunter and Cole Ranch FIA
EXISTING Year 10 Year 20 Year 30 Year 40
2019 2029 2039 2049 2059
POPULATION 134,460 11,600 40,800 55,805 55,805
% growth from existing 9%30%42%42%
RESIDENITAL LOTS NA 3,600 9,600 12,400 12,400
SINGLE FAMILY 30,450 3,000 9,000 12,400 12,400
MULTIFAMILY 19,190 800 4,800 6,450 6,450
TOTAL UNITS 49,640 3,800 13,800 18,850 18,850
% growth from existing 7.7%27.8%38.0%38.0%
NONRESIDENITAL ACRES NA 71 486 741 741
RETAIL SF 5,470,258 137,214 1,692,306 2,957,724 2,957,724
OFFICE SF 6,429,066 137,214 1,692,306 2,957,724 2,957,724
INDUSTRIAL SF 13,619,179 585,446 2,536,934 3,122,381 3,122,381
INSTIT SF 4,529,955 0 0 0 0
TOTAL NR DEVELOPMENT (SF)30,048,460 859,874 5,921,546 9,037,829 9,037,829
% growth from existing 3%20%30%30%
RETAIL JOBS 12,818 203 2,498 4,365 4,365
OFFICE JOBS 19,782 203 2,498 4,365 4,365
INDUSTRIAL JOBS 15,772 864 3,744 4,608 4,608
TOTAL JOBS 48,372 1,269 8,739 13,338 13,338
% growth from existing 2.6%18.1%27.6%27.6%
Source: City of Denton; U.S. Census American Community Survey, 2015 - 2017 estimates; ITE 10th Edition (2017).
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The development team’s concept plan categorizes nonresidential acreage as either commercial or
industrial. We applied the following assumptions to the Developers’ acreage projections in order to
estimate the Retail square footage, Office square footage and Industrial square foo tage displayed in
Figure 13.
• To extrapolate square footage from acreage projections, we assumed an average floor -to-area
ratio (“FAR”) of 0.28, per input from the development team and based on permitted FAR per
zoning.5
• Commercial development is allocated equally between Retail space and Office space. This
conforms with the development team’s prototype projects, including the Alliance Town
Center, and generally aligns with the land use assumptions utilized in the Travel Demand
Model Report and the Hunter/Cole Water and Wastewater Impact studies completed
concurrently with this FIA as a part of the City’s decision -making process.6
5 This assumption generally conforms to existing land use patterns while accounting for higher intensity development
permitted under the December 2019 zoning amendment for the Hunter/Cole Ranch Master Planned Community. It also
aligns with the December 10 th, 2019 Draft of the Transportation Demand Management’s average estimated FAR.
6 The development team and City staff instructed TischlerBise to refer to Alliance Town Center as a comparable
development in terms of land -use mix assumptions.
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III. FISCAL IMPACT ANALYSIS RESULTS
The fiscal impacts to the City of Denton of Hunter/Cole Ranch Municipal Management District are
analyzed and discussed in this section of the report. Fiscal impact results are presented in several
ways:
▪ Annual net fiscal results that include all revenues a nd costs in the funds analyzed (General
Fund, Debt Service Obligation Fund, the Roadway Fee Impact Fund, and the Street
Improvement Fund) are shown—non-utility operating and capital impacts from growth
are combined.
▪ Annual net fiscal results are then show n for operating and capital separately and
compared to revenues.
▪ Cumulative net fiscal results are shown next (for non-utility funds).
▪ Cumulative net results convey the projected grand total revenues minus grand
total expenditures over the 40 -year period to determine the overall net surplus or
deficit.
▪ Utility Fund net fiscal results are show separately from other operating and capital
expenditures.
▪ The cumulative net results for each utility fund are depicted.
▪ Annual net fiscal results, shown separately for operating and capital, compared to
revenues are presented.
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A NNUAL N ET F ISCAL I MPACTS
The chart below shows the annual net fiscal results to the City over each year of the 40-year development
period; the General Fund, Debt Service Obligation Fund, the Roadway Fee Impact Fund, and the Street
Improvement Fund were analyzed. By showing the annual results, the magnitude, rate of change, and
timeline of deficits and revenues can be observed over time. The “bumpy” nature of the annual results
during particular years represents an initial capital impact being “front-loaded” and/or major operating
costs being incurred (further explained in the Capital Expenditure Methodologies section of the full
report).
Net fiscal results shown below are revenues minus costs in each year, including operating and capital costs
for all services modeled. Data points above the $0 line represent annual surpluses; points below the $0
line represent annual deficits. Surpluses in any one year are not carried forward to the next year. The scale
for the chart is in thousands ($1,000s).
Figure 14. Annual Net Fiscal Impact 2019 -2059
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Development of Hunter/Cole Ranch begins with lot delivery in 2023 as depicted in Figure 14. The first
six years of growth are expected to generate year-over-year growth in net surpluses to the City. Project
build-out during this time period results in a relatively steady uptick in p roperty tax revenue.
Equipment and personnel, particularly within Public Safety, Public Works (i.e., Fleet Maintenance &
Fuel and Facilities Management) and the Street Department, are also added during the first six years
of growth.
The downward “ticks” in net fiscal impact observed in 2027, 2031, and 2035 are the result of growth
triggering the need for several significant capital investments simultaneously:
▪ In 2031, growth exceeds available capacity for park facilities and triggers the development of
one of two planned City Parks.
▪ Between 2027-2031 over 500,000 square feet of the Service Station Annex 7 are developed as
a result of the Hunter/Cole Ranch development to serve Fleet Services, Street Improvements
Fund, Solid Waste, and Facilities Management.
▪ The second of the two planned 50 -acre City Parks is also triggered in 2035.
Annual net results are further analyzed in the figure below. Although the City will see an increase in
both operating and capital costs as a result of growth, our analysis shows that total revenues to the
City exceed total costs projected to be incurred to the City.
7 Expansions of public works facilities will be required to provide space for public works emplo yees and equipment as a
result of the development; these were quantified by department in the Facilities Needs report dated December 10, 2019,
completed by Quorum. In the FIA, 50 percent of the Service Station Annex capital and operating costs are attribut able to
the proposed development, per direction from City of Denton staff.
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Figure 15. Annual Operating & Capital Expenditures Compared to Revenues
As a development-finance tool, Municipal Management Districts allow private property owners to access
low-interest financing for public infrastructure projects. The development team and the City of Denton
have identified improvement projects required to serve the Hunter/Cole Ranch Master Planned
Community that will be financed by the MMD or the developer.
The table below inventories the infrastructure projects and other capital investments triggered by the
proposed development of Hunter/Cole Ranch. Capital costs are categorized as either “City Funded”
or “MMD/Developer Funded.” Only those projects required to maintain current levels of service are
identified here —planned investments in private amenities for the exclusive use of Hunter/Cole
Ranch residents are excluded from this analysis and from the list bel ow.
Non-utility capital projects and costs are allocated to the City of Denton and the MMD/Developer in
the detailed capital project inventory depicted in the figure on the following page. The methodology
underlying these projections and cost assumptions is discussed in detail in the Revenue and
Expenditure Methodology Chapter of the report.
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Figure 16. Capital Facilities and Expenditure Inventory (General, Special, and Debt Service Funds)
Non-Utility Capital Facilities and Allocation of Costs ($1,000s)
Fiscal Impact Analysis - Denton, TX
DEPARTMENT - Facility
Quantity Total Square
Footage Total City of
Denton
MMD /
Developer
Parks and Recreation*
Recreation Center Building 1 70,000 $11,900 $11,900 $0
Hunter Ranch City Park (54 acres)1 2,352,240 $12,493 $8,534 $3,959
Cole Ranch City Park (50 acres)1 2,178,000 $11,861 $7,902 $3,959
Neighborhood Parks (5 acres ea)4 653,400 $4,214 $0 $4,214
Pocket Parks / Dog Parks (2 acres ea)30 2,613,600 $3,000 $0 $3,000
Regional Trails 23 miles 1,212,275 $11,537 $0 $11,537
Community Trails 35 miles 1,112,958 $13,860 $0 $13,860
Parks & Rec Department - Vehicles 24 -$864 $864 $0
Parks & Rec Department - Service Station Annex 1 10,684 $1,537 $1,537 $41
Parks & Rec Department - Parking 1 10,667 $480 $480 $41
Facilities - Service Station Annex 1 45,652 $8,394 $8,394 $176
Facilities - Vehicles and Equipment 24 -$523 $523 $0
Fleet - Service Station Annex 1 186,474 $13,910 $13,193 $718
Fleet - Vehicles and Equipment 150 -$2,700 $2,700 $0
General Government - Administrative Space -67,913 $11,142 $11,142 $0
General Government - Vehicles 38 -$1,140 $1,140 $0
On-Site and Regional Roadway Projects 4 --$241,157 $0 $241,157
Systemwide Improvements 5 --$40,116 $40,116 $0
Streets - Vehicles 53 -$3,028 $3,028 $0
Streets - Service Station -61,765 $4,561 $4,324 $238
Lakes / Dams/ Spillways etc. TBD $37,800 $0 $37,800
Police - Substation 20,630 -$5,000 $0 $5,000
Police - Patrol Vehicles 109 -$4,711 $4,711 $0
Fire - Fire Substation*^^2 15,721 $9,670 $4,670 $5,000
Fire - Fire Engines / Ladder Trucks 8 -$6,975 $6,975 $0
Fire - Vehicles 32 -$7,360 $7,360 $0
Library^1 21,516 $4,564 $4,564 $0
345 vehicles /
24 lane miles TOTAL: $500,026 $168,866 $331,593
^ Library cost estimate includes opening day collection materials.
*Developer contribution towards City Parks of $3,950,000 provided by City of Denton 01/16/2020
General Notes:
[1] Cost estimates represent the initial purchase and, for vehicles and equipment, replacement costs.
[2] Debt financing expenses are not included.
[3] 50 percent of Service Station Annex costs identified in Quorum report are attributable to Hunter/Cole Ranch.
[4] Costs reflect the specific project cost estimates identified in February 12, 2020 version of Cole and Hunter Ranch Developments Travel
Demand Model Report submitted by HDR Engineering, Inc.
^^ Fire Substation is the second of two substations triggered by the development; the first will be funded by the developer.
Fleet & Facilities Management
General Government
Library
Police
Transportation
Fire and EMS
[5] Costs reflect projected growth in system-level transportation demand over the analysis' study period.
Capital Costs ($1,000s)
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CUMULATIVE N ET F ISCAL I MPACTS
Cumulative net fiscal impact results convey the projected grand total revenues minus grand total
expenditures over the 40 -year period from future growth/development. Figure 17 below shows the
cumulative fiscal impacts over the 40 -year study period for all major growth -related funds.
Figure 17. Summary of 40 -Year Cumulative Fiscal Impacts to City of Denton
The development yields net positive fiscal impacts for both the General Fund and Debt Service Fund
(i.e., operating and capital expenditures); and the Street Improvement Fund. The Roadway Impact
Fund is projected to incur a $2.65 million cumulative net deficit, which is the equ ivalent of $66,206
per year over the 40 -year study timeframe.8
Cumulative impacts are depicted graphically for the General Fund and Debt Service Fund in Figure 18
below.
8 It should be noted that this analysis projects roadway impact fee revenues based on the conceptual phase
development program and impact fee rates from the City of Denton’s 2015 Ro adway Impact Fee Study. In
practice, roadway impact fee rates are likely to be adjusted periodically to reflect changes to growth and the
Roadway Capital Improvement Plan.8 The MMD will also contribute to revenue from a Contract Tax as outlined
in the Operating Agreement to assist in funding impact fee eligible projects, per conversations with City staff.
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Figure 18. 40-Year Cumulative Revenues and Expenditures: General and Debt Service Funds
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UTILITY FUNDS
Utility Funds were included in our analysis at the request of the City of Denton to evaluate whether
the income generated from new customers and users would cover the costs required to provide
service to the MMD while maintaining existing levels of service throughout the city.
CUMULATIVE FISCAL IMPACT FOR UTILITY FUNDS
As depicted in Figure 19 below, the net fiscal impact of the Hunter/Cole Ranch developm ent is positive
across all utility funds. Capital Expenditures include utility infrastructure projects, as well as capital
equipment and vehicles. A detailed inventory of capital expenditures is presented in Figure 20.
Figure 19. Cumulative 40 -Year Net Fiscal Impact by Utility Fund (1,000 s)
40-Year Net Cumulative Impact - Utilty Funds
City of Denton - Fiscal Impact Analysis
Electric Fund*
Operating Revenues $966,695
Operating Expenditures $565,517
Capital Expenditures $115,077
NET CUMULATIVE IMPACT $286,102
Water Fund
Operating Revenues $389,015
Impact Fee Revenues $153,035
Operating Expenditures $238,853
Capital Expenditures $241,963
NET CUMULATIVE IMPACT $61,235
Wastewater Fund
Operating Revenues $279,736
Impact Fee Revenues $144,469
Operating Expenditures $196,973
Capital Expenditures $226,743
NET CUMULATIVE IMPACT $490
Solid Waste
Revenues $304,055
Operating Expenditures $246,914
Capital Expenditures $36,378
NET CUMULATIVE IMPACT $20,763
*Electric Fund projections provided by City of Denton.
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The table below inventories the utility infrastructure projects and other capital investments triggered
by Hunter/Cole Ranch. Capital costs are categorized as either “City Funded” or “MMD/Developer
Funded.”
Note that replacement facilities and major maintenance are not included in the capital costs
presented below. Facilities needed to serve new growth are reflected. For capital improvements that
are purchased —vehicles, equipment, etc., the model and fiscal results include both the initial
purchase cost and the cost to replace the item after it reaches its useful life.
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Figure 2 0. Capital Facilities and Expenditure Inventory (Utility Funds)
Utility Funds - Capital Facilities and Expense Allocation ($1,000s)
Fiscal Impact Analysis - Denton, TX
FUND - Facility
Quantity or
Square
Footage
Total City of
Denton
MMD /
Developer
Water Fund
CIP Projects per FNI Report**19 projects $224,641 $153,035 $71,607
Service Station Annex 17,902 $1,969 $1,900 $69
Vehicles 24 $987 $987 $0
Wastewater Fund
CIP Projects per FNI Report***15 projects $232,016 $144,469 $87,547
Service Station Annex 11,264 $1,282 $1,239 $43
Vehicles 21 $924 $924 $0
Solid Waste Fund
Materials Recovery Facility 37,500 $3,144 $3,000 $144
Transfer Station 25,000 $6,975 $6,075 $900
Bulk Drop Off Facilities & Weigh Station 4,159 $1,788 $1,772 $16
Administrative Space 2,900 $649 $638 $11
Solid Waste Haulers / Commercial Trucks 38 $5,510 $5,510 $0
Roadway to Transfer Station 25,725 $660 $561 $99
Vehicle Maneuvering 65,000 $705 $455 $250
Electric Fund*
Substation 1 $18,077 $18,077 $0
Distribution Lines (Cost to Serve)NA*$38,147 $38,147 $0
Main Feeder Circuits NA*$41,357 $41,357 $0
Vehicles 37 $2,250 $2,250 $0
Lighting NA*$12,177 $0 $12,177
Administrative / Shop Space 40,960 $10,350 $10,192 $158
TOTAL: $603,611 $430,589 $173,022
Source: Quorum; TischlerBise; City of Denton; FNI
*Cost estimates for total distribution lines and feeder circuits provided by DME.
General Notes:
[1] Cost estimates represent the initial purchase and, for vehicles and equipment, replacement costs.
[2] Debt financing expenses are not included.
[3] 50 percent of Service Station Annex square footage identified in Quorum Analysis (Jan 16, 2020) is attributable to Hunter/Cole Ranch.
[4] Per the Hunter-Cole Development Analysis submitted by FNI on Feb 7, 2020, total CIP Projects for Water and Wastewater Funds equal
$328,612,700 and $290,441,800 respectively (land excluded). Of these costs, $224,341,400 and $231,836,500, respectively, are a result of
projected demand from the Hunter/Cole Ranch developments. The remainder is attributable to projected use by the entire system.
**Developer contribution of 10 acres of land for Water Booster Pump Station, valued at $30,0000 per acre per draft Project Agreement
included in addition to CIP Costs identified in FNI's Hunter-Cole Development Analysis (Feb 7, 2020) per direction from City of Denton staff.
***Includes Developer contribution of 6 acres of land for Hickory Creek Wastewater Lift Station, valued at $30,000 per acre per draft Project
Agreement in addition to CIP Costs identified in FNI's Hunter-Cole Development Analysis (Feb 7, 2020) per direction from City of Denton staff.
Capital Costs ($1,000s)
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The methodology and approach utilized to arrive at the capital cost projections is detailed in the Revenue
and Expenditure Detail chapter of this report.
NET ANNUAL FISCAL IMPACT FOR UTILITY FUNDS
The annual net fiscal impact on the utility funds is prese nted in the figures that follow.
Water Fund
Water Fund revenues are expected to exceed operating expenditures throughout the study -period.
Minor capital deficits in the amounts of approximately $172,000 and $345,000 are incurred in 2022
and 2023, respectively, as design and pre development expenditures for the first of three expansions
to the Lake Ray Roberts Water Treatment Plant are incurred prior to the delivery of revenue-
generating residential and nonresidential development . Revenues are then projected to exceed
capital expenditures until 2043, as depicted in Figure 21 below. Note that the spikes depicted in Water
Fund revenues are the result of impact fees. This analysis assumes that the MMD will also contribute
revenue from a Contract Tax as outlined in the Operating Agreement to assist in funding impact fee
eligible Water infrastructure projects.
Figure 21. Water Fund Operat ing & Capital Expenses Compared to Revenues
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The capital expenditures included in this analysis are directly attributable to demand from Hunter
Cole.9 These projects are debt financed and occur between 202 4 and 2039. New development, and
thus impact fee revenue begins to peak around 2039, and from 2045 -2054 annual deficits are incurred
as impact fee revenue declines and then stops while continued debt p ayments for the major
infrastructure projects projected in the FNI Report and developed from 202 4-2039 continue. The
impact fee revenue surplus accrued during the first half of the study period is sufficient to compensate
for the capital deficit projected in the second half of the development period.
A detailed breakdown of year over year water revenues and expenditures resulting from growth is
included in Appendix B.
Wastewater Fund
Wastewater Fund revenues are expected to generally meet or exceed operating and capital
expenditures over the course of the development, as depicted in Figure 22 below.
Figure 22. Wastewater Fund Ope rating & Capital Expenses Compared to Revenues
9 The February 7th, 2020 FNI report calculated the share of project costs attributable to Hunter Cole (based on projected
Hunter/Cole demand relative to demand from the broader service area); these cost estimates were used for the fiscal
impact analysis.
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The spikes in the figure above represent impact fee payments. Again, new development in the MMD
is assumed to be completed by 2049, at which point impact fee revenues cease. Although the timing
of impact fee payments does not directly correspond with capit al costs, revenues accrued in years
where impact fees exceed capital expenses cover deficits in other years. Note that per discussions
with City of Denton staff, impact-fee eligible Wastewater infrastructure projects will also receive
funding from MMD Cont ract Tax revenue as outlined in the Operating Agreement.
The capital expenditures included in this analysis represent all planned Wastewater Fund capital
infrastructure projects required to serve Hunter/Cole Ranch, as well as City facilities needed to hous e
staff and equipment.
Solid Waste Fund
As depicted in the figure below Hunter/Cole Ranch is projected to have a relatively neutral net annual
fiscal impact to the City of Denton’s Solid Waste Fund. Deficits occur, however, from 20 25-2037. This
analysis assumed that construction of the planned Material Recovery Facility and Transfer Station will
occur in 2027 (included in the Service Station Annex). Because the facility is debt financed, its costs
are spread out over time, but they are nevertheless project ed to result in deficits for the first ten years
following construction. The other capital cost contributing to these deficits are investments in Solid
Waste vehicles including haulers and commercial trucks, which are needed to serve new customers .
Figure 23. Solid Waste Fund Operating & Capital Expenses Compared to Revenues
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Electric Fund
Electric revenues and expenses associated with Hunter Cole were provided by the City of Denton and
are illustrated in terms of revenues relative to capital and operating expenditures in the figure below.
Revenues are projected to exceed expenditures for ea ch year of the study period.
Figure 24. Electric Fund Operating & Capital Expenses Compared to Revenue
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The City of Denton, TX
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K EY F INDINGS & C ONCLUSIONS
The following conclusions can be drawn from the FIA results presented in this report:
GENERAL , DEBT SERVICE , AND SPECIAL REVENUE FUND S
• The proposed Hunter/Cole Ranch development is projected to have a net cumulative positive
fiscal impact on the City over the 40-year study period. The net positive impacts are driven
primarily by sales and property tax revenue from development. This allows for the City of Denton
to benefit fiscally from the development proposed.
• It should be noted that, on average, the resulting annual net positive impact to the General Fund
and Debt Service Fund is approximately $7.0 million, which reflects 5.4 percent of the City of
Denton’s Fiscal Year 2019 operating budget.
• The Street Improvement Fund is funded through franchise fees from utility fund revenue
surpluses (as well as non -growth-related revenues). The Street Improvement Fund’s projected
cumulative surplus is partially attributable to the fact that utility fund revenues will increase
as a result of Hunter/Cole Ranch. Another reason for the surplus is that although the
additional roadways added to the City of De nton’s lane mile inventory increase Street
Improvement Fund operating and capital outlay costs, major capital expenditures are
generally accounted for in other funds. Per conversations with City staff, this analysis assumes
that roadway construction is either funded by future development through the Roadway
Impact Fee Fund or by the MMD through adjustments to the District tax rate as needed. Public
works equipment and the Service Station Annex are funded out of the General Debt Service
Fund.
o Note that the increases in franchise fee revenue could be allocated to another fund at
the City’s discretion. As discussed previously, this analysis assumed that the 10 -year
policy of transferring excess franchise fee revenue to the Street Improvement Fund
would continue throughout the 40 -year study period.
• Demand for fire services will trigger the need to expand capital facilities during the second
half of the development’s growth period, beyond the developers’ initial land and financial
contributions as identified in the draft Operating Agreement. A new fire substation is triggered
in 2028—to be funded up to $5 million from the developer —and a second fire substation is
triggered in 2039, which is assumed as a City cost.
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• Although the projected growth in revenue is re latively significant, the City should continue to
plan and be prepared to expand both its facilities and operational capacity —the Hunter/Cole
Ranch development is projected to be fiscally balanced in the sense that it is projected to
produce enough revenue to cover its costs, but it will not be self-contained. Growth in
population, vehicle trips, and police and fire calls, for instance, is projected to increase
average annual operating expenditures to the City by approximately $21 million per year.
• Overall, Hunter/Cole Ranch is projected to generate sufficient revenue to cover both the
capital and operating costs associated with meeting the additional demand it will place on
City services.
UTILITY FUNDS
• Water and Wastewater Fund revenues cover operating exp enditures throughout the 40 -year
study period. Water and Wastewater impact fee revenue is sufficient to cover the
development’s share of water and wastewater capital costs.
• Impact fee revenue is a function of the City of Denton’s current fee schedule and projected
development—to the extent that development does not keep pace with projections, impact
fee revenue may fall short of projections. Because major Water and Wastewater infrastructure
must be constructed prior to full build -out in order to serve new residents and businesses, the
City may incur capital deficits for these funds if development does not proceed at the rate or
intensity presented in the baseline scenario. To mitigate this risk, the MMD will adjust District
tax rates as needed to fund the d ifference between impact fee revenue and the
Water/Wastewater Capital Improvement Plan project costs attributable to the development.
• This report assumed that the Solid Waste Service Station Annex including the Materials
Recovery Facility and Transfer Stat ion would be “front-loaded” and completed in one phase
in 2027. The result is six years of moderate fiscal deficits. To the extent possible, direct
financing of recurring capital costs such as solid waste haulers , would improve the fiscal
results for the S olid Waste fund. New solid waste customers are projected to trigger the
acquisition of 37 solid waste vehicles over the 40 -year time frame; with an estimated average
useful life of 10 years, this results in a total of 108 solid waste vehicles, including re placement
vehicles.
• Given the current level of detail available regarding the number and service requirements of
commercial Solid Waste customers, however, additional analysis of the net fiscal impact of
Hunter/Cole Ranch on the Solid Waste Fund should be completed as propert y-specific details
of the development program are established.
• Overall, the cumulative fiscal impact on all utility funds is projected to be positive.
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OVERALL RESULTS
Per direction from City of Denton staff, the figure below compares annual revenues to annual
operating and capital expenditures for the funds analyzed, including utility funds. Note that under
current City policy, utility fund revenues are restricted use and cannot be used toward any other fund’s
activities.
Figure 25. Operating and Capital Expenditures Compared to Revenues for Funds Analyzed
Combined
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I V. REVENUE AND E XPENDITURE D ETAIL
R EVENUE M ETHODOLOGIES
This chapter provides detail on projection methodologies for revenue included in the analysis.
Growth-related revenues are modeled in this analysis in the following funds:
▪ General Fund
▪ General Debt Service Fund
▪ Special Revenue Funds:
• Street Improvement Fund
• Roadway Impact Fee Fund
▪ Utility Funds
• Water Fund
• Wastewater Fund
• Electric Fund
• Solid Waste Fund
Other funds that are not included are Internal Service Funds or considered fixed (unaffected by
growth).
GENERAL FUND REVENUES
A snapshot of the City General Fund from the model is shown below by specific category and line item.
The table shows the specific revenue category and source, base year (FY2019) budget amount, projection
methodology, and the level of service (LOS) standard, or dollar per demand unit. For instance, for those
categories projected based on “POPULATION,” the current budget amount is divided by the estimated
population for base year 2019.
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Figure 26. General Fund Revenues
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Ad Valorem Taxes Current Year Ad Valorem $45,674,373 CUM AV $0.38536
Delinquent Ad Valorem $296,883 FIXED $0.00
Current Year - Penalties and Interest $161,424 FIXED $0.00
Prior Year - Penalties and Interest $96,290 FIXED $0.00
Rendition Penalties $31,013 FIXED $0.00
Sales Tax Sales Tax $41,425,582 DIRECT ENTRY $0.00
Franchise Agreements DMU Electric $2,162,610 FIXED $0.00
DMU Water $463,295 FIXED $0.00
DMU Wastewater $307,640 FIXED $0.00
Solid Waste Fund $413,356 FIXED $0.00
Gas $298,753 FIXED $0.00
Private Electric $105,949 FIXED $0.00
Cable $410,188 FIXED $0.00
Telephone $201,058 FIXED $0.00
Other Taxes Mixed Beverage Tax $484,924 POP AND JOBS $2.47
Bingo Tax $21,012 POP AND JOBS $0.11
Service Fees Community Building Rentals $240,705 FIXED $0.00
Ambulance Service Fees $3,700,000 POP AND JOBS $18.85
Hazardous Materials Billing $6,000 FIXED $0.00
Fire Inspections $200,000 FIXED $0.00
Restaurant Inspections $288,400 FIXED $0.00
Swimming Pool Inspections $32,571 TOTAL UNITS $0.66
Reinspection Fees $47,363 TOTAL UNITS $0.95
Electrical Inspections $57,000 TOTAL UNITS $1.15
Plumbing Inspections $163,838 TOTAL UNITS $3.30
Gas Well Inspections $329,665 FIXED $0.00
Library Non-Resident Fees $54,000 FIXED $0.00
Parks Identification Card Fees $37,000 POPULATION $0.28
Athletic Program Fees $54,000 POPULATION $0.40
Special Events - Parks $8,300 FIXED $0.00
Natatorium Fees $440,312 POPULATION $3.27
Water Works Parks Fees $1,124,640 POPULATION $8.36
Swimming Pool $70,034 POPULATION $0.52
Cemetery Fees $29,000 FIXED $0.00
Development Fees $120,408 POP AND JOBS $0.61
Police Academy Revenue $75,000 FIXED $0.00
Sale of Documents $275,400 FIXED $0.00
Plan Review Fees $600,000 POP AND JOBS $3.06
Parking Meter Receipts $14,171 VEHICLE TRIPS $0.04
Development Postage $13,484 FIXED $0.00
Traffic/Police Reports $38,000 POP AND JOBS $0.19
Copy Charges $94,760 FIXED $0.00
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Fines and Fees Warrant Fees $130,000 FIXED $0.00
Juvenile Case Manager $100,000 FIXED $0.00
Library Fines & Fees $150,000 POPULATION $1.12
Animal Services Fees $199,000 POPULATION $1.48
Animal Services Fines $5,000 FIXED $0.00
Auto Pound Fees $36,000 VEHICLE TRIPS $0.09
Mowing Recovery Fees $10,000 FIXED $0.00
Police Escort & Guard Fees $30,000 FIXED $0.00
Civil Fines $10,000 FIXED $0.00
Arrest Fees $100,000 TOTAL POLICE CALLS $1.18
Inspection Fines & Fees $7,000 FIXED $0.00
Fire Department Fees $6,000 TOTAL FIRE CALLS $0.40
School Crossing Fines $10,000 FIXED $0.00
Denton Municipal Fines $1,300,000 VEHICLE TRIPS $3.31
UNT Police Fines $140,000 FIXED $0.00
TWU Police Fines $22,000 FIXED $0.00
Parking Fines $260,000 VEHICLE TRIPS $0.66
Uniform Traffic Fees $43,000 VEHICLE TRIPS $0.11
False Alarm Fees $65,000 FIXED $0.00
Court Cost Service/Admin Fees $1,080,000 POP AND JOBS $5.50
Truancy Preventon Fees $20,000 FIXED $0.00
Licenses and Permits Food Handler Permits $500 FIXED $0.00
Zoning Permits $116,844 POP AND JOBS $0.60
Moving Permits $380 FIXED $0.00
Demolition Permits $6,500 FIXED $0.00
Pool, Spa, Hot Tub Permits $26,235 FIXED $0.00
Building Permits $3,377,335 POP AND JOBS $17.21
Electrical & Plumbing Licenses $0 POP AND JOBS $0.00
Curb Cut Permits $579 FIXED $0.00
Mobile Home Park Licenses $15,909 FIXED $0.00
Sign Permits $55,335 FIXED $0.00
Fence Permits $45,000 SINGLE FAMILY $1.48
Mechanical Permits $57,915 POP AND JOBS $0.30
Certificate of Occupancy Fees $80,000 POP AND JOBS $0.41
Variance Fees $500 FIXED $0.00
Landscape Fees $2,200 FIXED $0.00
Miscellaneous Permits $5,882 FIXED $0.00
Gas Well Permits $7,800 FIXED $0.00
Park Vendor Fees $23,000 FIXED $0.00
Beer & Wine Permits $36,110 RETAIL SF $0.01
CPR Training $5,500 FIXED $0.00
Misc. Revenues Misc. Revenues $2,286,026 FIXED $0.00
Return on Investment Return on Investment - Water $1,339,555 DIRECT ENTRY $0.00
Return on Investment - Wastewater $882,684 DIRECT ENTRY $0.00
Return on Investment - Electric $6,204,970 DIRECT ENTRY $0.00
Return on Investment - Airport $0 FIXED $0.00
Admin Transfer - Bond Sale $0 FIXED $0.00
Cost of Service Trans.Cost of Service Transfers $8,733,146 FIXED $0.00
Other Use of Fund Balance 1,483,131 FIXED $0.00
TOTAL $129,184,437
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CUSTOMIZED/MARGINAL CALCULATIONS FOR GENERAL FUND
The following details the custom methodology used for certain revenue streams.
▪ City Sales Tax is attributed to nonresidential development. To determine the level of revenue
for each nonresidential category, we annualized recent sales tax revenue data by industry
provided by the City of Denton. Dividing sales tax reve nue by the estimated floor area of
current nonresidential development yields average Sales Tax Revenue per square foot for the
land use types projected. Shown in Figure 27, retail development averages $4.26 in annual
sales tax per square foot compared to $1.51 per square foot for office and $0.83 per square
foot for industrial development.
Figure 27. Sales Tax per Square Foot
▪ Property Tax is projected based on the respective cumulative assessed values (see below for
additional detail) of the property projected in the scenario. Cumulative assessed value s are
multiplied by the FY2020 General Fund tax rate of $0.38536 per $100 val uation. The FY2020
tax rate was utilized per direction from the City of Denton Finance Department. As shown,
assessed values for residential real property and nonresidential real property were projected
separately to allow for comparison by type of develop ment.
Figure 28. Assessed Value by Land Use Type
LAND USE
2019 Sales Tax
Revenue Square Feet
Sales Tax
Revenue / SF
RETAIL $21,068,738 4,950,150 $4.26
OFFICE $6,781,393 4,493,658 $1.51
INDUSTRIAL $8,516,851 10,248,796 $0.83
Source: City of Denton Finance Department. Three Year Sales Tax by NAICS; Trip
Generation, Institute of Transportation Engineers, 10th Edition (2017).
LAND USE Assessed Value
Residential*Unit
Single Family $350,000
Single Family Lot $70,000
Multifamily $90,000
Nonresidential Square Foot
Retail $120.17
Office $120.17
Industrial $70.71
Source: City of Denton
*Single Family Values shown are prior to homestead exemption of
$5,000.
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▪ Return on Investment (“ROI”) revenues were calculated as 3.5 percent of gross revenues from
the Water, Wastewater, and Electric Fund , per the City’s ROI policy and discussions with staff.
▪ Licenses & Permits, Charges for Services, Fines & Fees: Based on discussions with City staff
and an analysis of relevant financial documents, several line items ’ revenues are likely to
increase with growth in Population, Jobs, or Population and Jobs . Certain revenues associated
with specific services such as Fire and Police are expected to increase based on Total Police
Calls , Total Fire Calls, and Vehicle Trips .
FIXED REVENUES
▪ Franchise Fee revenues to the General Fund are fixed; growth in Franchise Fee is instead
allocated to the Street Improvement Fund per the City of Denton’s current policy to transfer
franchise fee revenue in excess of FY2016 dollar amounts to the Street Improvement Fund.
▪ Cost of Service Transfer revenues are transfers from other funds to the General Fund for
general government services; Utility Fund Costs of Service were first modeled on the
expenditure side. Cost of Service revenues to the General Fund are set to equal those
expenditures. Expenditure projection methodology including the approach to modeling Cost
of Service revenues is detailed in the following sections of this chapter.
▪ Miscellaneous revenues were conservatively assumed to be fixed per conversations with City
staff.
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GENERAL DEBT SERVICE FUND
The General Debt Service Fund receives unrestricted revenue from Ad Va lorem Property taxes; the
FY2020 rate of 0.20509 per $100 of assessed value was used to project property tax revenues resulting
from Hunter/Cole Ranch.
“Transfers In” are fixed. These line items, seen below in Figure 29 reflect restricted revenue funds
making debt service payments , which are accounted for within the capital expense analysis presented
later in this chapter.
Figure 29. General Debt Service Fund
SPECIAL REVENUE FUNDS
The fiscal impact analysis also includes revenues from Special Revenue Funds, capturing revenues that are
anticipated to be generated from growth.
STREET IMPROVEMENT FUND
The Street Improvement Fund includes all Street Department activities; the Street Department is
responsible for street maintenance and repair and is funded primarily through franchise fee revenues.
The majority of these franchise fee revenues are paid by major utility funds. Franchise Fee revenue
resulting from the Hunter/Cole Ranch development is calculated as 5 percent of projected Water,
Wastewater, Electric, and Solid Waste revenue, per City policy. Other franchise fee revenue10 to the Street
Improvement Fund is not expected to be affected by the proposed development.
10 Other franchise fees are paid from private electric, cable, telephone, and gas utility providers.
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
General Debt Service Fund Current Year Ad Valorem $24,293,126 CUM AV $0.20509
Interest Income $200,000 FIXED $0.00
Transfer in - Drainage $0 FIXED $0.00
Transfer in - Solid Waste $8,995,034 FIXED $0.00
Transfer in - Fleet $245,027 FIXED $0.00
Transfer in - Street Improvements $129,250 FIXED $0.00
Transfer in - Materials Mgmt $0 FIXED $0.00
Transfer in - Communication $10,150 FIXED $0.00
Transfer in - Electric $36,314,570 FIXED $0.00
Transfer in - Water $12,700,195 FIXED $0.00
Transfer in - Wastewater $6,858,067 FIXED $0.00
Use of Reserves $533,272 FIXED $0.00
TOTAL $90,278,691
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Figure 30. Street Improvement Fund
ROADWAY IMPACT FEE FUND
The Roadway Impact Fee Fund accounts for Roadway Impact Fees paid to the City of Denton by
developers and homebuilders. Development within the Hunter/Cole Ranch MMD is projected to
generate revenue to the Roadway Impact Fee Fund based on the impact fees currently in place per
the 2015 Roadway Impact Fee Study. The majority of the development is located in Roadway Impact
Fee Service Area A with the following impact fee rates, which are t herefore applied to new
development projected in the Hunter/Cole Ranch. The City is currently in the process of updating its
Roadway Impact Fee Study and potentially adjusting its fee schedule, but per conversations with City
staff, the 2015 fees were appropriate for use in this analysis. Note that the MMD will also contribute
Contract Tax revenue per the Operating Agreement to assist with funding impact fee eligible roadway
projects.
Figure 31. Roadway Impact Fee Assumptions
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Street Improvement Fund Street Cut Reimbursements $364,140 FIXED $0.00
Bond Sale Savings $1,196,404 FIXED $0.00
Check^Misc. Income $10,000 FIXED $0.00
$6,701,633 Franchise Fee - DMU Electric $6,701,633 DIRECT ENTRY $0.00
$1,898,986 Franchise Fee - DMU Water $1,898,986 DIRECT ENTRY $0.00
$1,260,978 Franchise Fee - DMU Wastewater $1,260,978 DIRECT ENTRY $0.00
$1,755,737 Franchise Fee - Solid Waste Fund $1,755,737 DIRECT ENTRY $0.00
$298,753 Other Franchise Fees $1,902,577 FIXED $0.00
$105,949 TOTAL $15,090,455
Development Type
Impact Fee (per Unit /
1,000 SF of Nonres.
Floor Area)
Single-Family Detached $2,000
Multifamily $1,251
Retail*$2,100
Office** $2,737
Industrial $588
*Impact Fee for Shopping Center, ITE Land Use Code 820.
**Impact Fee for General Office Building, ITE Land Use Code 710.
Source: City of Denton 2015 Roadway Impact Fee Study. Service Area
A, Current Collection Rates.
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UTILITY FUNDS
The methodology used to project utility fund revenues is summarized for the Water, Wastewater, Solid
Waste, and Electric Funds in this section of the report. Note that a customized methodology was used
for all growth-related revenues, as indicated by “DIRECT ENTRY”.
WATER AND WASTEWATER REVENUE PROJECTION ASSUMPTIONS
A customized methodology was used to project operating and impact fee revenues for water and
wastewater revenues, per the snapshot from the fiscal model below.
Figure 32. Utility Fund Revenue Projection Methodology
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Water Fund Interest Operating $251,000 FIXED $0.00
Water Sales Residential $19,496,211 DIRECT ENTRY $0.00
Water Sales Commercial $16,841,145 DIRECT ENTRY $0.00
Water for Resale $1,168,296 FIXED $0.00
Other Water $767,349 FIXED $0.00
Cost of Service - GF $436,024 FIXED $0.00
Cost of Service - Electric $474,839 FIXED $0.00
$50,192,034 Cost of Service - Wastewater $447,929 FIXED $0.00
Cost of Service - Solid Waste $128,970 FIXED $0.00
Impact Fee Revenues $5,700,000 DIRECT ENTRY $0.00
Use of Reserves $4,480,271 FIXED $0.00
Wastewater Fund Interest Operating $208,000 FIXED $0.00
Wastewater Residential $10,657,173 DIRECT ENTRY $0.00
Wastewater Commercial $12,168,689 DIRECT ENTRY $0.00
Wastewater Effluent Irrigation $68,576 FIXED $0.00
Wastewater Wholesale $694,234 FIXED $0.00
Other Wastewater $1,674,678 FIXED $0.00
Drainage Fees $4,727,006 DIRECT ENTRY $0.00
Transfers In $551,795 FIXED $0.00
Impact Fee Revenues $2,000,000 DIRECT ENTRY $0.00
Use of Reserves $4,721,103 FIXED $0.00
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Rate revenue and facility charge revenue w ere projected separately by land us e. Per conversations
with City staff, we utilized data from the January 2020 Hunter-Cole Development Analysis completed
by Freese and Nichols (“the FNI report”) as well as current facility charges and rates to project revenue
per residential unit and nonresidential acre.11
Figure 33. Water and Wastewater Billing Assumptions
The average annual revenue per single family unit, multifamily unit, and nonresidential acre was
multiplied by the projected residential and nonresidential growth on a cumulative annual basis to
arrive at operating revenue projections .
11 Per the FNI report, single -family and multifamily units will require water production of 170 GPD per capita, with household sizes
averaging 3.2 persons and 2.5 persons respectively. Nonresidential consumption is 120 GPD per employee, assuming 18 employees per
acre. Monthly GPDs for each unit type are shown in the first r ow of the figure.. Per the FY2020 City of Denton Utility Rate Booklet, the
Facility Charge for a Single Family Unit is $16.00 per month, and multifamily facility charges vary depending on th e meter size. We thus
applied the Single Family-to-Multifamily GPD ratio (16:13, or 79 percent), to the Single Family facility charge to estimate the average
monthly multifamily facility charge. The same methodology was used to estimate the average nonresi dential facility charge. The result
of these calculations is average annual water revenue of $1,000, $841, and $4,276 per Single Family unit, Multifamily unit, and
Nonresidential acre, respectively . Average annual wastewater revenue per unit and per acre was calculated utilizing the per capita
consumption/production (measured in GPD) from the FNI Report, and the 2020 Booklet rates and formulas. The Drainage fees utilized
are calculated on a per unit per acre basis for residential development and on a per ac re basis for nonresidential development, assuming
an average impervious surface area of 60 percent for all land uses, which is supported by the Master Planned Community’s zoning .
Water & Wastewater Revenue - Billing & Consumption Assumptions by Land Use
City of Denton, Texas - Hunter and Cole Ranch FIA
SINGLE FAMILY
(PER UNIT)
MULTIFAMILY
(PER UNIT)
NONRESIDENITAL
(PER ACRE)
WATER
Monthly GPD (1,000s)*16 13 66
Facility Charge**$16.00 $12.59 $64.00
Rate per 1,000 gallons**$4.15 $4.45 $4.45
AVERAGE ANNUAL REVENUE $1,010 $841 $4,276
WASTEWATER
Facility Charge**$11.00 $26.50 $26.50
Rate per 1,000 gallons***$3.80 $4.85 $4.85
AVERAGE ANNUAL REVENUE $420 $406 $1,839
DRAINAGE FEE
Monthly Fee Estimate****$12.00 $1.15 $27.62
AVERAGE ANNUAL REVENUE $144 $14 $331
* Derived from average GPD per City of Denton's Design Criteria and FNI Hunter Cole Development Analysis (Feb 7, 2020).
** City of Denton Utility Brochure and Rate Booklet (FY19/20)
*** Billing based on FY2019 Rate Booklet formulas and average GPD per FNI Hunter Cole Development Analysis, (Feb 7, 2020).
**** Assumes 24 multifamily dwelling units per acre per HDR's TDM Report Feb 12, 2020).
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Impact Fee Revenue Projections
The following impact fee schedule , based on the City of Denton’s 2018 Water and Wastewater Impact
Fee Study, was utilized to project Water and Wastewater impact fee revenue attributable to
Hunter/Cole Ranch. See the footnote in Figure 34 for detail regarding how the multifamily fee per unit
and nonresidential fee per acr e were calculated.
Figure 34. Water and Wastewater Impact Fee Assumptions
By multiplying the fee amounts depicted in Figure 34 by projected growth in residential and
nonresidential development, annual water and wastewater impact fee revenue was calculated for
each year of the study period. Note that the MMD will contribute revenue from a Contract Tax, as
outlined in the Operating Agreement, to help finance impact fee eligible Water and Wastewater
capital projects.
FUND Single Family (SFE)Multifamily (Unit)*Nonresidential
(Acre)**
Water $7,638 $6,011 $26,383
Wastewater $4,716 $3,712 $83,739
*Applies 73% W/WW Consuption/Production Rate to SFE Impact Fees.
City of Denton - Fiscal Impact Analysis
**Calculated by subtracting the total estimated SFE and Multifamily Water/Wastewater from the Impact Fee Revenue
projected in the FNI Report, and dividing the result by the total nonresidential acreage projected.
Impact Fee Assumptions
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ELECTRIC FUND
The Electric Fund revenue assumptions depicted in Figure 35 were provided by the City of Denton.
The per unit and per acre annual electric revenues were applied to the development program to
project rate revenues . This FIA utili zed the City of Denton ’s estimated annual lighting revenue per
year; the City’s revenue assumptions for lighting are shown in the figure below on a per lot and per
mile basis.
Figure 35. Utility Fund Revenue Projection Methodology
SOLID WASTE FUND
Solid Waste Fund revenue was projected by multiplying the annualized FY2020 rate for Single Family
refuse and recycling collection (standard cart size) to the Single Family units projected under the
development plan on a cumulative annual basis . Rates were confirmed with City of Denton staff.
Nonresidential rates were projected using nonresidential square footage [“TOTAL NR SF”] as the
demand base , since nonresidential rates vary depending on characteristics on nonresidential
properties that are unknown at this conceptual phase of the development program.
Figure 36. Solid Waste Fund Revenue Projection Methodology
Land Use Category Per Unit / Per Acre
Annual Revenue
Multi Family Annual Revenue / Unit 775kWH $1,024
Single Family Annual Revenue / Unit /1875 kWH $2,091
Commercial Annual Revenue / Acres $46,395
Industrial Annual Revenue / Acres $26,182
Lighting Category Per Lot / Per Mile
Residential Lighting 6.6 Lots /100W $129
Arterial Lighting 250W 21.12 lights per mile $226
Source: City of Denton (DME) - Dec 12, 2019.
LOS Std
Revenue Revenue Base Year Project Using $ per
Category Name Budget Amount Which Demand Base?Demand Unit
Solid Waste Fund Refuse & Recycling Fees - Residential $11,125,873 SINGLE FAMILY $256.92
Refuse Fees - Commercial $14,533,461 TOTAL NR SF $0.48
Commercial Recycling $1,505,187 TOTAL NR SF $0.05
$40,208,780 Landfill Gate and Material Sales $5,967,459 FIXED $0.00
Recycled Materials Sales $60,590 FIXED $0.00
Asset Sales & Interest Income $459,217 FIXED $0.00
Other Revenues $871,268 FIXED $0.00
Use of Reserves $348,606 FIXED $0.00
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R EVENUE O UTPUTS
This section details revenue outputs from the Fiscal Impact Analysis.
REVENUE PROJECTIONS
The following figures illustrate the projected revenues in the City’s General Fund and other non-utility
Funds modeled. Results are shown as a cumulative total over the 40-year projection period as well as
an average annual figure. As noted in the figures, the listed dollar amounts are in $1,000s.
Figure 37. 40-Year Revenue Totals for all Non -Utility Funds
Revenue total and average annual revenue over the 40 -year study period is shown for each Utili ty
Fund included in the analysis in Figure 38.
40-Year Total Revenues (x$1,000)
City of Denton's Fiscal Impact Model
General Fund Revenues
Ad Valorem Taxes $627,009 55%0.00
Sales Tax $374,893 33%0.00
Franchise Agreements $0 0%0.00
Other Taxes $5,981 1%0.00
Service Fees $51,509 4%0.00
Fines and Fees $29,384 3%0.00
Licenses and Permits $2,170 0%0.00
Miscellaneous Revenues $0 0%0.00
Return on Investment $57,241 5%0.00
Cost of Service Transfer $45 0%0.00
Subtotal General Fund Revenues $1,148,231 100%0.00
Subtotal General Debt Service Fund Revenues $335,073
Subtotal Street Improvement Fund Revenues $96,975
Subtotal Roadway Improvement Fund Revenues $49,008
GRAND TOTAL REVENUES $1,629,288
AVERAGE ANNUAL REVENUES $40,732
Category Cumulative
Revenues
%FTEs
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Figure 38. Revenue Totals and Annual Average for Utility Funds
40-Year Net Cumulative Impact - Utilty Funds
City of Denton - Fiscal Impact Analysis
Electric Fund*
Cumulative Total $966,695
Average Annual Revenue $24,167
Water Fund
Operating Revenues $389,015
Impact Fee Revenues $153,035
Cumulative Total $542,050
Average Annual Revenue $13,551
Wastewater Fund
Operating Revenues $279,736
Impact Fee Revenues $144,469
Cumulative Total $424,205
Average Annual Revenue $10,605
Solid Waste
Cumulative Total $304,055
Average Annual Revenue $7,601
*Electric Fund projections provided by City of Denton.
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O PERATING E XPENDITURE M ETHODOLOGIES
All variable operating expenditures are projected, including personnel and operating costs. Capital
Expenditures are discussed in a separate section.
GENERAL AND SPECIAL REVENUE FUNDS
For most City departments, operations and personnel costs are projected separately. A summary of the
approach is provided below. It should be noted that many departments have some portion of their budget
that is considered “fixed” and will not increase with growth. That is, existing operations will be able to
absorb a portion of additional impacts from growth in the City. In the figures below, “fixed” is only
indicated for those categories that are considered entirely “fixed.”
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Figure 39. General and Special Revenue Operating Expenditures Approach
Expenditure
Category
General Fund
City Manager x x
Economic Development x x
Facilities Management Facilities SF x
Finance/Accounting x x x
Human Resources x x
Internal Audit x x
Legal Administration x x x
Public Affairs x x
Non-Departmental x
Library x Library SF x
Parks And Recreation Parks SF x
Development Services x x
Public Safety Communications x x x
Municipal Court x x
Municipal Judge x x
Police x x x
Animal Services x x
Fire x x
Transportation Admin x x
Traffic Operations x x
Special Revenue Funds
Streets Improvement Fund NA x x
Roadway Impact Fee Fund NA x NA
FixedTotal Police
Calls
Administrative & Community
Services
Neighborhood Services
Department Population Population &
Jobs
Public Safety
Transportation
Staff
Modeled? Lane Miles Vehicle Trips Total Fire and
EMS Calls City FTEs Custom
Analysis
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CUSTOM METHODOLOGIES
All growth-related departments except for Facilities Management, Library, and Parks and Recreation are
modeled using basic growth indicators derived from the development scenario (i.e., population, jobs, etc.)
as the basis for projecting demand. Further explanation of those metrics is found in Appendix A.
Descriptions of the customized methodology used for Facilities Management, Library, Parks and
Recreation, and the Roadway Impact Fee Fund are found below.
▪ Facilities Management: Facilities Management expenditures are expected to increase over base
year expenditures in accordance with the addition or expansion of City owned facilities. Facilities
Management is currently responsible for 1,341,696 square feet of City-owned facilities.12 As
future development triggers the construction of new facilities (discussed in detail in the following
chapter) the Facilities Management department will need to increase its capacity in order to
maintain levels of service. Facilities Management expenditures are thus projected utilizing
“FACILITIES SF.” The expansion of capital facilities is discussed in detail in the next section of this
chapter.
▪ Parks & Recreation: Parks and Recreation Operating Expenditures are projected based on square
feet of City-maintained parks that will be developed as a result of Hunter/Cole Ranch. The table
below summarizes the public park facilities and amenities that will be developed and which
entity—the City or the MMD—will be responsible for their maintenance.
Figure 40. City Maintained Parks and Recreation Facilities for Operating Expense Projections
12 Source: City of Denton Facilities with Updated Property Values 2019. Prov ided by City of Denton Finance Department.
PARK CATEGORY
Number Prototype
Size
Total Area
Developed
City Maintained
Recreation Center 1 26,000 sf 26,000 sf
Hunter Ranch 54-acre City Park 1 54 acres 2,352,240 sf
Cole Ranch 50-acre City Park 1 50 acres 2,178,000 sf
TOTAL CITY MAINTAINED PARKS (SF): 4,382,000 sf
MMD or HOA Maintained
Neighborhood Parks 4 5 acres 20 acres
Pocket Parks / Dog Parks 30 2 acres 60 acres
Regional Trails 23 1 mile 23 miles
Community Trails 35 1 mile 35 miles
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• Library: Library operating expenditure projections are based, in part, on library square footage.
One additional library is triggered by growth, as detailed in the next section of this chapter. Using
current costs per Library SF, the fiscal model projects increases in Library operating expenditures.
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UTILITY FUND OPERATING EXPENDITURES
As Enterprise Funds, Utility Funds are self-funding in the sense that rates are adjusted as needed to
cover operating and capital expenditures. As requested by the City of Denton, however, this FIA
examined the fiscal impact of the proposed development on Utility Funds if utility rates were to be
held constant over time. Expenditures were projected utilizing the methodological approaches
summarized Figure 41.
Figure 41. Utility Funds Operating Expenditures Approach
Expenditure
Category
Utility Funds
Personnel
Operations
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations x
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations
Franchise Fees
Return on Investment
Cost of Service - Transf.x
Capital Outlay
Personnel
Operations
Franchise Fees
Cost of Service - Transf.x
Capital Outlay
*Production/consumption utilizes the following metrics: Water - thousands of gallons per year; Wastewater - thousands ofof gallons (discharge) per year; Solid Waste -
landfilled (tons); recyclin collections (tons)
Water Fund
Wastewater Fund
Electric Fund
Solid Waste Fund
Name
x
x
x
[5% of Gross Rev.]
[Single Family Units] /
[Nonresidential SF]
Estimates from DME
[3.5% of Gross Rev.]
Quorum Report Projections
Estimates from DME
[5% of Gross Rev.]
[5% of Gross Rev.]
[3.5% of Gross Rev.]
x
Custom Analysis
[5% of Gross Rev.]
[3.5% of Gross Rev.]
x
x
x
x
x
Revenue Production*Facilities Staff
Modeled?
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C APITAL E XPENDITURE M ETHODOLOGIES
Capital costs and infrastructure improvements to serve new development are modeled based on demand
generated by the proposed development. Capital facilities, infrastructure, vehicles, and equipment are
projected for General Government, Parks and Recreation, Library, Fire, Police, Public Works, Facilities
Management, Fleet Management, Transportation and Street Departments, DMU Water, DMU
Wastewater, DMU Electric, and Solid Waste.
Many of the assumptions on which the analysis is based can be viewed as policy-making decision points,
which if modified would affect the overall results. For example, most of the capital expenditures assumed
in the analysis, and the resulting costs (assumed in most cases as debt financed), are projected
independent of the current capital improvement programs and debt capacity guidelines. Rather, the
capital costs projected in this analysis reflect the potential cost to serve new growth, regardless of
whether the resources are available to cover the costs. The City will continue to balance its annual budgets
considering financial guidelines and policies, applicable operating impacts, and available resources.
An important aspect of the capital expenditure methodology is that per direction from the City of Denton’s
Finance Department, it is assumed that the funding of new facilities will be debt financed. This is in keeping
with the City’s current practices and allows the City to fund necessary infrastructure investments for which
it has insufficient cash on hand. From a fiscal impact perspective, it should be noted that debt financing
can understate the full cost of a capital project; because the payments are made over a 20-year period,
the fiscal model’s 40-year projection period may not capture the full cost of capital facilities constructed
or assets acquired after year 21.
GENERAL GOVERNMENT FACILITIES
To serve residential and nonresidential development in the scenarios, the population and job growth
is multiplied by the current level of service of general government administrati ve offices. The level of
service is found by dividing the current floor area of City Hall (City Hall, City Hall East less Police
Department floor area, City Hall West, and Finance ) by population and job total in the City (192,782
square feet / 196,274 popu lation and jobs = 0.98 square feet per population and job). As residential
and nonresidential growth occurs in the scenarios, the demand factor of 0.98 square feet per
population or job is applied to General Government capital costs.
General Government ve hicles are also projected using this approach; the base year 2019 vehicle count
is 33 as provided by the City of Denton’s FY2019 Fleet Inventory Asset List. Note that General
Government city vehicles are assigned an average useful life of eight years , and replacement vehicles
are also included in this analysis.
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PARKS AND RECREATION
Parks and Recreation infrastructure improvement needs resulting from the development of
Hunter/Cole Ranch were provided by the City of Denton and are documented in the draft Operating
Agreement between the City and the development team and the Developer’s Draft Parks Location
Plan.
We projected when development would trigger the need for the planned capital facilities based on
current levels of service for Recreation Facilities , City Parks, Neighborhood Parks, Pocket Parks,
Regional Trails, and Community Trails . See Figure 40 for a summary of anticipated Parks & Recreation
infrastructure improvements.
Costs were estimated based on recently completed or design -phase park project cost estimates,13
industry standards adjusted for regional cost factors,14 and replacement costs for the City of Denton’s
current parks and recreational facilities.15 Capital costs were then allocated between the City and the
Developer/MMD as directed by the City of Denton per the December 2019 Draft Operating Agreement
and input from City staff.
TRANSPORTATION
To project the impact growth will have on roadway infrastructure over the 40 -year study period on,
the current level of service was calculated by dividing base year 2019 lane miles (1,326 lane miles) by
estimated base yea r 2019 vehicle trips (392,167 vehicle trips). As citywide vehicle trips increase due
to development, the construction of additional lane miles will be required. Vehicle trips are projected
utilizing trip generation rates from the Institute of Transportation Engineers (ITE) Trip Generation
Manual 10th Edition (2017). The demand factor of 0.0034 lane miles per vehicle trip is then applied
to total vehicle trips to calculate additional lane miles .
Roadway infrastructure improvements required to provide access to Hunter/Cole Ranch MMD were
projected by HDR and are documented in the January 2020 Draft TDM Plan.16 The roadway
infrastructure costs presented in this repor t represent the difference between the total roadway
investment needed to meet the projected transportation demand from Hunter/Cole Ranch over the
analysis period and the capital costs associated with the specific projects identified in the Draft TDM
Plan. Based on input from City of Denton staff, it is assumed that roadway impact fees and MMD
Contract Tax revenue contributions will help fund these costs .
13 City Council Meeting Materials – Agenda ID# 191337, Exhibit 2. June 18 th, 2019. Carnegie Park aka Patrick Park
Construction Cost Estimates.
14 North Carolina State University. 2015. Cost Analysis for Improving Park Facilities to Promote Park Based Physical Activity.
Available:https://content.ces.ncsu.edu/cost -analysis-for-improving-park-facilities-to-promote-park-based-physical-
activity
15 City of Denton Facilities with Updated Property Values 2019. Provided by City of Denton Finance Department.
16 HDR. Dec 10, 2019. City of Denton Cole -Hunter 2040 Draft TDM Report.
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POLICE
Police capital facilities impacted by growth include patrol vehicles and police facilit y square feet. The
current level of service standard for police facilities is 2019 facility square feet (26,925 SF) per Police
Calls for Service (84,666) or 0.32 square feet per call for service . Police Calls for Service were
projected over the 40 -year study period based on the methodology in Appendix A. This 0.32 level of
service standard was applied to Police Calls for Service to project additional police facilit y square feet
needed to serve grow th. Square footage was then converted to facilities needed assuming an average
facility size of 20,630 square feet, per current substation design plans.17
Per conversations with City staff, one vehicle is needed for every two patrol officers. Sworn Office rs
added to the force as a result of additional demand for police services was projected based on police
calls for service (which will increase due to population and employment growth in the MMD , as
described in Appendix B). Vehicle acquisition is triggere d by the addition of new sworn officers. The
useful life for Police patrol vehicles is an average of five years. Average vehicle costs were provided by
the City of Denton.
FIRE AND EMS
Fire and EMS services were projected utilizing an approach similar to that used for Police services.
Current facility levels of service were calculated in terms of base year substation square feet per Fire
and EMS Calls for Service (94,500 square feet divided by 15,002 calls for service = 6.53 square feet
per call for service. The fire substation facility prototype is equal in square footage to the recently
constructed Fire Station #4 (15,721 square feet). Projected facility square feet were converted to
facilities, assuming the average new substation size will be 15,721 squa re feet.
LIBRARY
The City of Denton currently has three libraries; total square footage is 78,304 square feet, and
libraries range from 21,516 square feet to 33,708 square feet. Total collection materials, or library
items, equal 281,651. Demand for addit ional library capital facilities was projected by applying the
current library LOS of 0.58 square feet per population to projected population growth. The average
library size of 26,101 square feet was used to estimate the number of new facilities that will need to
be added to meet demand generated by growth resulting from the Hunter/Cole Ranch MMD.
17 Source: https://www.cityofdenton.com/CoD/files/17/172108de -784b-4c3b-b297-a7c6ef888e4f.pdf
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SERVICE STATION ANNEX
Per direction from City of Denton staff, we assumed that 50 percent of the planned “Service Station
Annex” detailed in the City of Denton Capital Facilities Needs Assessment completed by Quorum
Architects would be attributable to growth from Hunter/Cole Ranch.18
18 Quorum Architects. Jan 16, 2020. City of Denton Facility Needs Assessment.
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E XPENDITURE O UTPUTS
This section details expenditure outputs from the Fiscal Impact Analysis .
Regarding capital expenditures, the analysis assumes that all capital projects will be debt financed;
the capital expenditure totals in the figures within this section of the report reflect this assumption.
Note that they therefore differ slightly from the capital expenditures listed by item in the inventory
of capital costs presented in Chapter 2 of this report. The capital project and cost inventory presented
in Chapter 2 depicts project costs as if they were cash -financed to allow for a straightforward
comparison of City and Developer/MMD costs.
OPERATING AND CAPITAL EXPENDITURE PROJECTIONS
Operating and capital expenditure results are provided in this section based on the expenditure
methodologies discussed above.
For operating expenditure projections, the 40-year cumulative total is shown. Public Safety
expenditures account for the majority of costs. New staffing for the Police Department (89 FTEs) and
Fire Department (73 FTEs) are driving the operating expenses. Shown in Figure 42, Transportation
costs account for just 1 percent of the total expense increase attributable to Hunter/Cole Ranch. The
majority of operating and major road maintenance costs resulting from the projected increase in City-
Maintained Lane Miles are within the Street Improvement Fund.
Figure 42. Operating Expenditure Projections
The capital results for General Fund departments are shown below in Figure 43. Note that “Public
Works,” as referenced in this FIA, includes Fleet Maintenance & Fuel and Facilities Management. Fleet
and Facilities expenditures represent the majority of General Fund-financed capital expenses, in part
because the City is 100 pe rcent responsible for funding the Service Station Annex , whereas capital
expenditures in other departments are at least partially funded by the developer or MMD .
Cumulative Operating Expenditures (x$1,000)
City of Denton's Fiscal Impact Model
Administrative & Community Services $186,825 22%
Neighborhood Services $114,448 13%
Public Safety $554,534 64%
Transportation $11,897 1%
SUBTOTAL GENERAL FUND EXPS $867,704 100%
SUBTOTAL STREET IMPROVEMENT FUND EXPS $69,372
GRAND TOTAL OPERATING EXPS $937,076
AVERAGE ANNUAL EXPS $23,427
Cumulative
Expenditures
Category %
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Another reason Fleet and Facilities expenditures are heavily impacted by growth is because these
departments are already near capacity in terms of both space and staffing . Moreover, Hunter/Cole
Ranch is not proximate to the existing Service Station , which houses Fleet Maintenance and Facilities
Management. It is therefore necessary for the City to develop a Service Station Annex to
accommodate the expansion of these two departments . The Service Station Annex will also
accommodate the Streets Department and Parks and Recreation, as well as Solid Waste, Water,
Wastewater, and a portion of DMU Electric.
The capital costs presented in this analysis for the Service Station Annex reflect only those that are
the result of growth stemming from Hunter/Cole Ranch.
Figure 43. Summary of Non-Utility Capital Costs
Figure 44. Summary of Utility Fund Capital Costs
Cumulative Capital Expenditures (x$1,000)
City of Denton's Fiscal Impact Model
Streets $11,519 8%
Parks and Recreation $49,659 35%
Library $7,018 5%
Fire $11,459 8%
Police $5,633 4%
General Government $18,294 13%
Public Works $38,454 27%
SUBTOTAL GENERAL DEBT CAP EXPS $142,035 100%
SUBTOTAL ROADWAY IMPACT FEE EXPS $51,657
GRAND TOTAL CAPITAL EXPS $193,692
Cumulative
Expenditures
Category %
Cumulative Capital Expenditures (x$1,000) - Utility Funds
City of Denton's Fiscal Impact Model
Electric $115,077 23%
Water $241,963 48%
Wastewater $226,743 45%
Solid Waste $36,378 7%
TOTAL $505,084 100%
Category Cumulative
Expenditures
%
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B ASE Y EAR D EMOGRAPHIC E STIMATES
The table below summarizes estimates of the base year population, housing units, employment,
nonresidential space, and facility factors in the City of Denton. These estimated values serve as the
basis for the fiscal impact analysis and are used to determin e the cost and revenue factors used in the
analysis.
APPENDIX A .
DEMOGRAPHIC & DATA ASSUMPTIONS
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Figure 45. Base Year Input Data
Base
Year->2019
Population[1]POPULATION 134,460
POP AND JOBS 196,274
Housing Units by Type [1]SINGLE FAMILY 30,450
MULTIFAMILY 19,190
TOTAL UNITS 49,640
Jobs by Type [4]RETAIL JOBS 12,818
OFFICE JOBS 19,782
INDUSTRIAL JOBS 15,772
INSTITUTIONAL JOBS 13,442
TOTAL JOBS 61,814
Nonresidential Floor Area RETAIL SF 5,470,258
(SF = Square Feet)OFFICE SF 6,429,066
INDUSTRIAL SF 13,619,179
INSTITUTIONAL SF 4,529,955
TOTAL NR SF 30,048,460
Vehicle Trips [3]RESIDENTIAL TRIPS 239,023
NONRES TRIPS 153,144
VEHICLE TRIPS 392,167
Facility Factors [2][6][7]CITY MAINTAINED LN MILES 1,321
CUM PARK SF_CITY 41,033,520
REC FACILITIES SF 173,036
CITY PARK ACRES 587
CITY VEHICLES 1,225
FACILITY SF 1,341,696
LIBRARY ITEMS 281,651
LIBRARIES 3
RESIDENTIAL LN MILES 843
ARTERIAL LN MILES 225
COLLECTOR LN MILES 253
Police Factors [4][7]RES POLICE CALLS 62,706
NONRES POLICE CALLS 21,960
TOTAL POLICE CALLS 84,666
Fire Factors [4][7]RES FIRE CALLS 11,111
NONRES FIRE CALLS 3,891
TOTAL FIRE CALLS 15,002
Utility Factors [2][5][7]DME VEH 169
WATER VEH 110
WW VEH 105
SW UTILITY VEH 64
WATER PRODUCTION 7.14 Billion Gallons
WW DISCHARGE 4.455 Billion Gallons
SW LANDFILLED 276,537 Tons
RECYCLING COL 105,493 Tons
[1] City of Denton Staff (8/29/19 email)
[2] City ofDenton FY2018-19 Buget
[3] TischlerBise; ITE
[4] City of Denton Staff
[5] FY2019 Fleet Inventory provided by City of Denton
[6] FY2019 City Assets Updated Property Values provided by City of Denton
[7] Based on information from City of Denton CAFR
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POPULATION AND JOB FACTORS
Household size is used to project population over the planning horizon; e mployees per acre of
nonresidential space are used to project future employment. Per direction from City of Denton staff,
we utilized the following assumptions.
▪ Single Family : 3.2 Persons per Household
▪ Multifamily : 2.5 Persons per Household
▪ Nonresidential Employees per Acre: 18 Employees per Acre
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V EHICLE T RIPS
Vehicle trips are used to project some operating and capital expenditures in the fiscal impact analysis.
Average Weekday Vehicle Trip Ends by type of development (or trip generation rates) are from the
reference manual, Trip Generation, 10TH Edition, published by the Institute of Transportation
Engineers (ITE), in 201 7. A “trip end” represents a vehicle either entering or exiting a development
(as if a traffic counter were placed across a driveway). Trip rates have been adjusted to avoid
overestimating the number of actual trips because one vehicle trip is counted in the trip rates of both
the origination and destination points.
RESIDENTIAL VEHICLE TRIPS
Vehicle trip generation for residential land uses are calculate d by using ITE’s average daily trip end
rates and a trip adjustment factor customized for the City of Denton .
A vehicle trip end is the out-bound or in -bound leg of a vehicle trip. To not double count trips, a
standard 50 percent adjustment is applied to t rip ends to calculate a vehicle trip. For example, the
out-bound trip from a person’s home to work is attributed to the housing unit and the trip from work
back home is attributed to the employer.
However, an additional adjustment is necessary to capture C ity residents’ work bound trips that are
outside of the City. The trip adjustment factor includes two components. According to the National
Household Travel Survey (2009), home -based work trips are typically 31 percent of out-bound trips
(which are 50 perc ent of all trip ends). Also, utilizing the most recent data from the Census Bureau's
web application "OnTheMap ,” 72 percent of Denton workers travel outside the City for work. In
combination, these factors account for 11 percent of additional production tr ips (0.31 x 0.50 x 0.72 =
0.11 ). Shown in Figure 46 the total adjustment factor for residential housing units includes attraction
trips (50 percent of trip ends) plus t he journey-to-work commuting adjustment (11 percent of
production trips) for a total of 61 percent.
Figure 46. Trip Adjustment Factor for Commuters
Employed Denton Residents (2017)61,129
Denton Residents Working in the City (2017)17,162
Denton Residents Commuting Outside of the City for Work 43,967
Percent Commuting out of the City 72%
Additional Production Trips 11%
Standard Trip Adjustment Factor 50%
Residential Trip Adjustment Factor 61%
Source: U.S. Census, OnTheMap Application, 2017
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NONRESIDENTIAL VEHICLE TRIPS
Vehicle trip generation for nonresidential land uses are calculated by using ITE’s average daily trip end
rates and adjustment factors found in their recently published 10 th edition of Trip Generation. To
estimate the trip generation in the City of Denton the weekday trip end per 1,000 square feet factors
highlighted in Figure 47 are used.
Figure 47. Trip Generation Factors
A simple factor of 50 percent is applied to the Office, Industrial, and Institutional land use s. The Retail
category has a trip factor of less than 50 percent because this type of development attracts vehicles
as they pass -by on arterial and collector road s. For example, when someone stops at a convenience
store on their way home from work, the convenience store is not their primary destination.
ITE Demand Wkdy Trip Ends Wkdy Trip Ends Emp Per Sq Ft
Code Land Use Unit Per Dmd Unit Per Employee Dmd Unit Per Emp
110 Light Industrial 1,000 Sq Ft 4.96 3.05 1.63 615
130 Industrial Park 1,000 Sq Ft 3.37 2.91 1.16 864
140 Manufacturing 1,000 Sq Ft 3.93 2.47 1.59 628
150 Warehousing 1,000 Sq Ft 1.74 5.05 0.34 2,902
254 Assisted Living bed 2.60 4.24 0.61 na
530 High School 1,000 Sq Ft 14.07 22.25 0.63 1,581
540 Community College student 1.15 14.61 0.08 na
550 University/College student 1.56 8.89 0.18 na
565 Day Care student 4.09 21.38 0.19 na
610 Hospital 1,000 Sq Ft 10.72 3.79 2.83 354
620 Nursing Home 1,000 Sq Ft 6.64 2.91 2.28 438
710 General Office (avg size)1,000 Sq Ft 9.74 3.28 2.97 337
770 Business Park 1,000 Sq Ft 12.44 4.04 3.08 325
820 Shopping Center (avg size)1,000 Sq Ft 37.75 16.11 2.34 427
310 Hotel Room 8.36 14.34 0.58 1,715
932 Sit-Down Restaurant 1,000 Sq Ft 112.18 21.26 5.28 190
934 Fast-Food Restaurant 1,000 Sq Ft 470.95 45.49 10.35 97
840 Auto Sales (New)1,000 Sq Ft 27.84 11.20 2.49 402
Source: Trip Generation, Institute of Transportation Engineers, 10th Edition (2017).
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BASE YEAR VEHICLE TRIP TOTALS
Trip rates and adjustment factors are shown in the figure. Using trips generated from single family
units as an example, the formula is as follows: 30,450 units x 9.44 vehicle trips per unit x 61%
adjustment = 175,343. As shown in Figure 48, residential development accounts for an estimated 61
percent of total daily trips and nonresidential development accounts for an additional 39 percent.
Figure 48. Vehicle Trips
Vehicle Trips on an Average Weekday
Residential Units Assumptions
Single Family 30,450
Multifamily 19,190
Average Weekday Vehicles Trip Ends Per Unit**Wkdy Trip Ends Trip Factors
Single Family 9.44 61%
Multifamily 5.44 61%
Residential Vehicle Trip Ends on an Average Weekday
Single Family 175,343
Multifamily 63,680
TOTAL RESIDENTIAL TRIPS 239,023 61%
Nonresidential Vehicle Trips on an Average Weekday
Nonresidential Gross Floor Area (1,000 sq. ft.)*Assumptions
Retail 5,470
Office 6,429
Industrial 13,619
Institutional 4,530
Average Weekday Vehicle Trip Ends per 1,000 Sq. Ft.**Trip Factors
Retail 37.75 33%
Office 12.44 50%
Industrial 3.37 50%
Institutional***9.74 50%
Nonresidential Vehicle Trips on an Average Weekday
Retail 68,146
Office 39,989
Industrial 22,948
Institutional 22,061
TOTAL NONRESIDENTIAL TRIPS 153,144 39%
TOTAL TRIPS 392,167 100%
*Floor area estimates are derived from employment figures provided by the City of Denton.
**Trip rates are from the Institute of Transportation Engineers (ITE) Trip Generation Manual (2017)
***Assumes trip rate of the average office.
Wkdy Trip Ends
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73
F UNCTIONAL P OPULATION
Both residential and nonresidential developments increase the demand on City services and facilities. To
calculate the proportional share between residential and nonresidential demand on service and facilities,
a functional population approach is used. The functional population approach allocates the cost of the
facilities to residential and nonresidential development based on the activity of residents and workers in
the City through the 24 hours in a day.
Residents that do not work are assigned 20 hours per day to residential development and 4 hours per day
to nonresidential development (annualized averages). Residents that work in the City of Denton are
assigned 14 hours to residential development and 10 hours to nonresidential development. Residents that
work outside the City are assigned 14 hours to residential development, the remaining hours in the day
are assumed to be spent outside of the City working. Inflow commuters are assigned 10 hours to
nonresidential development. Based on 2017 functional population data, residential development
accounts for 74 percent of the functional population, while nonresidential development accounts for 26
percent, see Figure 49.
Figure 49. City of Denton Functional Population
Demand Person Proportionate
Residential Hours/Day Hours Share
Estimated Residents 131,097
Residents Not Working 69,968 20 1,399,360
Workers Living in City 61,129
Residents Working in City 17,162 14 240,268
Residents Working outside of City 43,967 14 615,538
Residential Subtotal 2,255,166 74%
Nonresidential
Residents Not Working 69,968
Jobs Located in City 56,412 4 225,648
Residents Working in City 17,162 10 171,620
Non-Resident Workers 39,250 10 392,500
Nonresidential Subtotal 789,768 26%
TOTAL 3,044,934 100%
Source: U.S. Census Bureau, OnTheMap 6.1.1 Application and LEHD Origin-Destination Employment Statistics
Demand Units in 2017
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74
P OLICE C ALLS FOR S ERVICE
A custom methodology is used to allocate police costs based on an analysis of calls for service in the
City of Denton.
As shown in Figure 49, 74 percent of the functional population in the City is attributed to residential
purposes and 26 percent of the functional population is attributed to nonresidential purpose s. These
factors are used to allocate costs to residential and nonresidential land uses. This percentage split is
used to allocate the total police calls .
To project future Police calls for service from new development, the above data is used to determine
a call per person and call per nonresidential trip. This methodology seeks to capture demand for
services from both residential and nonresidential development. Since specific records on calls for
service by type of nonresidential land use is not available, vehicle trips by type of nonres idential land
use are utilized as a realistic proxy. This methodology reflects that the greatest number of calls for
service on a per square foot basis. If calls for service were allocated on a per employee basis, office
uses would generate the greatest nu mber of calls due to its high employment density, which is
contrary to actual experience.
Shown in Figure 50, to find the residential police demand factor, the City’s population is applied to
the total residential calls for service to find a level of service of 0.4664 calls per person. The number
of nonresidential vehicle trips is applied to the total nonresidential calls for service to find a level of
service of 0.1434 calls per nonresidential trip. These factors are then applied to projected population
and nonresidential vehicle trips in each growth scenario to project new Police calls for service.
Figure 50. Police Service Call Demand Factors
POLICE CALLS FOR SERVICE DATA
Land Use FY 2019 Est.Percent
Residential 62,706 74.1%
Nonresidential 21,960 25.9%
TOTAL CALLS FOR SERVICE 84,666 100.0%
Calls for Service Projection Factors
Current Population 134,460
Current Nonresidential Vehicle Trips (Avg Daily)153,144
Current Vehicle Trips (Avg Daily)392,167
Calls per Capita 0.4664
Calls per Nonres. Trip 0.1434
Source: Based on information provided by FY18 CAFR
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75
F IRE C ALLS FOR S ERVICE
As shown in Figure 51, in 2019, the Fire Department received an estimated 15,003 calls for service.
Of the total, 74 percent were attributed to residential development and 26 percent were attributed
to nonresidential development.
To project future Fire calls for service from new development, the above data is used to determine a
call per person and call per nonresidential trip. This methodology seeks to capture demand for
services from both residential and nonreside ntial development. Since specific records on calls for
service by type of nonresidential land use is not available, vehicle trips by type of nonresidential land
use are utilized as a realistic proxy. This methodology reflects that the greatest number of ca lls for
service on a per square foot basis. If calls for service were allocated on a per employee basis, office
uses would generate the greatest number of calls due to its high employment density, which is
contrary to actual experience.
Shown in Figure 51, to find the residential fire demand factor, the City’s population is applied to the
total residential calls for service to find a level of service of 0.08 26 calls per person. The number of
nonresidential vehicle trips is applied to the total nonresidential calls for service to find a level of
service of 0.0254 calls per nonresidential trip. These factors are then applied to projected population
and nonresidential vehicle trips in each growth scenario to project new Fire calls for service.
Figure 51. Fire Department Demand Factors
FIRE/RESCUE DATA INPUT AREA
Land use FY2019 Est.Percent
Residential Land Uses 11,111 74%
Nonresidential Land Uses 3,891 26%
TOTAL CALLS FOR SERVICE 15,003 100.0%
Calls for Service Projection Factors
Current Population 134,460
Current Nonresidential Vehicle Trips 153,144
Calls per Capita 0.0826
Calls per Nonres. Trip 0.0254
Source: Based on information provided by FY18 CAFR