Software helps town build for the future

Software helps town build for the future

Fiscal forecast supports construction of Waynesville, N.C., rec center

By Claire E. House

GCN Staff

When a small town in North Carolina decided it wanted to build a $6 million recreation center, it needed to make sure the center wouldn't be a financial drain. Local Impact software helped make the case.

Waynesville, N.C., recreational director Mike Smith commissioned the forecast using Local Impact software. The results led the town to break ground on a $6 million rec center.

Waynesville, N.C., recreational director Mike Smith hired Michael Kanters of North Carolina State University's Parks, Recreation and Tourism Management Department to conduct a forecast of the facility's fiscal impact on the town of 10,000.

Kanters used Local Impact (LOCI) software to calculate data about the community's revenues and expenditures, as well as information about the proposed facility. The board of aldermen gave the center the go-ahead.

It all adds up

'If you look at straight costs and revenues, it loses money. But when you factor in that they can hold swim tournaments or basketball tournaments, that filters through the economy and results in more money generated,' Kanters said.

Bill Riall and Robert Lann of Georgia Tech's Economic Development Institute co-developed LOCI five years ago.

Users first create a detailed community profile database by entering data such as population, business and resident tax revenues, and government spending numbers. They then enter data about the proposed business or economic development plan.

LOCI forecasts factors such as the number of new households that a new facility will bring to the community, the number of new children that will attend local schools and public-safety cost increases for the new population, Riall said.

It also forecasts tax and sales revenues from the new households and business.

Although the developers attempted to fill in as many default values as possible, the uniqueness of each locality demands a good deal of initial data entry, Riall said.

'It's one of those things that you do the first time and it's a real pain in the neck, and the next time it's a piece of cake,' he said.

LOCI can also calculate economic multipliers to determine the amount of money generated by every dollar spent in a particular community.

A multiplier of 1.5 would indicate that for every dollar a tourist or athlete spends at the new recreational facility, 50 more cents comes into the local economy as that person, say, buys food or stays at a hotel. The program similarly calculates revenue from jobs the center would create, Kanters said.

Although Kanters applies multipliers in his LOCI analyses, he uses University of Minnesota-developed Implan software to estimate them because it is less data-intensive than LOCI. But Implan is designed for statewide economic planning, while LOCI is more effective at the community level, he said.

Tech treat

The Georgia Tech duo created LOCI with local governments in mind, using funds from the Georgia state government's Economic Development Research Program. Companies had been asking for large incentives to build in Georgia municipalities, some of which lost money.

'We wanted to help Georgia communities before they went too far and were hurting the local economy rather than helping it,' Riall said.

Governments outside the state expressed interest, so the team developed a more general format for use elsewhere.

The program requires some interpretation as a result, said Kanters, who has performed forecasts for several governments. Every government structures its budget differently, so users have to interpret many factors to fit them into the model appropriately, he said.

User governments vary widely, Riall said. In Virginia, a city is completely separate from the county in which it's located, he said. New York has overlapping tax districts for 'everything you can imagine,' with school districts overlapping political districts that overlap fire districts, he said.

'We find that LOCI has been flexible enough to handle it,' he said.

A license for LOCI, which runs under Microsoft Windows, is $400 alone or $300 with enrollment in a $900 two-day training course at Georgia Tech. Riall suggests that first-time users attend the course to learn the program's complex data entry technique.

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