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Home My WebLink AboutNB 8 BUDGET PROJECT 10-20-80DATE: October 14, 1980 NEW BUSINESS NO. 8 10-20-80 Inter- Corn TO: Honorable Mayor and City Council Members FROM: Community Development Department SUBJECT: 6-year/Ultimate Budget Projection DISCUSSION Pursuant fo a request from the City Council, this report projects the future population, area, and assessed valuation for the city, in order that each de- partment can estimate additional personnel needs, vehicles, etc. The following methvdoiogy was utilized fo generate the projected figures for the three areas of concern. Populafioo projecflons are based on current standards generated by local, s;ate, and nafion-wide trends. These trends include on fha average: due fo the age of the baby boom population, the formation of newer family units with less peoole per family; down from 3.5 ~o 2.5 per housin9 un f. In addition to.this factor, there are more mature families within the cify~ that is reflected in fha reduced school enrollments. Projeci'ed increase~ in the area of the city combine the incorporation of fha County islands, the incorpor'afion of vacant properties within the Tustin Sphere ~f Influence, exchanges with fha City of Irvlne, and contiguous area annexations. If is assumed that all the County islands, with the exception of the San Juan- Browning, Laguna Road island, will be incorporated within two years. Af this time the City is seekin9 to annex these islands, with the exception }f fha Medford annexation. Still, this island is expected fo be incorporated within a t,~-year period. Also incorporated is the three phase project involving areas within the Czunty of Orange and city of Irvine. All of the property is vacant and includes: Phase 1, a 955-acre (1.49 sq£ mile), Phase 2, 630-acre (.98 sq. mile) brought into fha city's sphere of influence and annexed fr~m the county, and Phase 3, which is an exchange of areas with fha City of Irvine, resulfin9 in a 78 acre (.10 sq. mile) reduction in the size of the city. In addition, city growth will occur from contiguous area annexations. Since the City cannot instigate annexation proceedin9 without a petition, or clearly define ,he extent of any single annexation, this is an area =f pure speculation. One of the specific goals of LAFCO is to encourage the orderly growth of cities. In keeping with this gfal, fha City has documented.areas contiguous fo its boundaries and surrofnded by three sides. It was then assumed that these areas will be annexed fo the city within fha next five years, this assumption was done to create a base fo work from and does not represent areas where fha City City Council October 14, 1980 Budget ProJection page 2. will actively pursue annexation. Generally speaking, the extent of these pro- posed annexations is somewhat conservative. Conceivably, these could be much larger annexations, but past experience does not support this premise. The final set of estimates encompasses the assessed vauafion (A.V.) for fha com- munity. Due fo fha impact of Proposition 13, past data basis are no longer valid. Prior fo Proposition 13, the assessed valuation for a piece of proeerfy was a reflection of the actual market value rate. Generally, four fi~es the assessed valuation gave a closer'approximation cf the market value. Also, assessed valu- ations climbed at approximately 20-25 percent, reflecting fha rise in annual inflation in the market place. These assumptions are no longer valid. Several new factors need fo be generated. For example, those individuals that have lived in their homes since 1975 pay property taxes from Base Year 1975 (B.Y.75). This assessed valuation can sometimes be thousands of dollars less than someone whg purchased their residence in Base Year !980 (B.Y.80). Because of this, the turn-around in housing has been drastically reduced. People are remaining in the same hDuse fo avoid the higher property taxes they w~uld occur from moving. In some areas within fh2 city, fha assessed valuation from 1978 to 1990 has acufally dropped, Realistically, the cost fo purchase these .h~mes nas not gone d,wn. Based or: samplings from different areas within fha city, some new a~sum~fions can be dra.,.n. Approximate turn-around in an average neighborhood has ~ne from ~-d years TO 6--12 years. Combine this factor with fha actual rate of inflation pr~- duces an approximate rate of inflation of 14 percent per year. In the preceding years the city has experienced a favorable rise in the assessed valuation for commercial and industrial properties. This is due to annexation and development of unimproved parcels. Depending on ~he turn-around of these developments, those assessed valuations will rise slower than in the past, with a substantial rise when the Phase 3 area is dmveloped and the Peters Canyon Area annexations are removed from the Agricultural Preserve status. The Peters Canyon Area encompasses approximately 1,900 acres of undeveloped land. Due to the Ag. Preserve status, the assessed valuation reflects just a fraction of the lands' true worth, l rrrnediafely upon the preserve's removal, the assessed valuation will rise dramically with no increase in services until development. The ultimate development of the land was assumed to reflect a balance of residential with support corm~ercial, with a completion date somewhere in the 1990s. The ultimate population and area assumptions are based on a combination of past data and current annexations and their development potential. The ultimate assessed valuation is based on the City annexing and developing fo ifs ultimate Sphere of Influence by the year 2000, EMK: rnm 0 o o z 0 0 -- -- ~ I.- ~ ¢_) LU "'~0 0 ~ C~ r~ C~ LU ~. ~ <~ Ld I Z "~ O~ ~h 0 'l //