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A C
A C
OST OF
C
OMMUNITY
S
ERVICES
S
TUDY OF
S
CIO
T
OWNSHIP
by
Laura Priedeman Crane
Michelle M. Manion
Karl F. Spiecker
July 1996
Published by:
Washtenaw Land Trust The Washtenaw Land Trust is a private, nonprofit organization that works to
preserve farmland, natural areas and open space in and around Washtenaw
County, Michigan, and to educate its members, local officials and the public on
land use issues. These goals are accomplished through acquisition of land in fee
simple; donations of interests in land through Conservation Easements;
management of preserves and easements; and publications, presentations and
community outreach activities. Basic annual membership in WLT is $35. For
more information, contact:
Washtenaw Land Trust
1100 N. Main Street, #203
Ann Arbor, MI 48104
Phone: (734) 302-LAND
FAX: (734) 302-1804
Email: BLonik13@aol.com
The research for and production of this study was made possible through a grant
from the Michigan Environmental Council with funds provided by the C.S. Mott
Foundation.
Additional copies of this study are available for $10.00 postpaid U.S. TABLE OF CONTENTS
__________________________________________________________________
ACKNOWLEDGEMENTS
i
EXECUTIVE SUMMARY
ii
INTRODUCTION
1
METHODOLOGY
3
REVENUES
7
EXPENDITURES
23
COST OF COMMUNITY SERVICES DISCUSSION
34
REFERENCES i
ACKNOWLEDGMENTS
The Cost of Community Services study would not have been possible without the support
and guidance of a number of interested and dedicated people. The authors would like to
sincerely thank the following groups and individuals for their assistance in making this
report a reality:
Barry Lonik
, Executive Director of the Washtenaw-Potawatomi Land Trust. Barry was
the initial catalyst behind the project and was instrumental in helping the project secure
funds as well as providing guidance and encouragement. We hope Barry finds our results
useful for his work in land preservation in Washtenaw County.
Michigan Environmental Council,
for their substantial support of our efforts.
Donna Erickson
, Professor of Landscape Architecture at the School of Natural
Resources and the Environment. Donna served as our Faculty Advisor. She was
extremely helpful in her advice and encouragement, enabling us to move this project
along.
Julia Freedgood
, American Farmland Trust, for her extensive knowledge with Cost of
Community Services studies and her insights on farmland preservation and agricultural
issues.
David Skjaerlund
, Michigan Department of Agriculture, for his insights on Michigan
agriculture and overall advice for our project.
Steve Solowczuk
, President of the Washtenaw County Farm Bureau, for taking the
initiative to build bridges between the agricultural and the environmental communities as
well his comprehensive knowledge of the agricultural community in Washtenaw County.
Tom Bloomer
, Livestock Producer and Chairman, Washtenaw County Agricultural
Lands Committee, for his insights on the state of agriculture in the County and his
participation in our study.
Scio Township Officials
, for having patience with our numerous requests and questions.
The Citizens Task Force for Farmland and Open Space Preservation
, for allowing us
to sit in on their formative meetings. We wish them luck in pursuing efforts to preserve
Washtenaw County agricultural land and open spaces.
Lastly, we would like to thank our friends and loved ones for their encouragement and
patience with our many long hours of work. ii
EXECUTIVE SUMMARY
This report evaluated the 1994/95 fiscal budget year of Scio Township, in
Washtenaw County. The purpose of the study is to determine whether the revenues
generated by residential, commercial, and agricultural land uses in the Township
outweigh the costs of providing services to each land use. In doing so, the study explores
the dilemma planners and local officials must address concerning the economic
development of the townships land base: Does development pay for itself? Has
developed land contributed enough to local government to cover costs that accompany
development? The Cost of Community Services Study is similar to several related
reports completed by the American Farmland Trust. However, this COCS Study is the
first be completed in the State of Michigan.
Because Michigan is a home-rule state, local policy makers will play a pivotal
role in determining the fate of agriculture in Washtenaw County. Local officials through
zoning, assessments, and local taxation policies determine how land is utilized.
Decisions to widen, extend or pave roads also influence the way in which land is used.
Choices to provide public drinking water and sewer services to a community are not
made independently of the current or projected land use patterns in an area. Decisions
affecting schools, and consequently the lands surrounding them, are also made at the local
level.
Since budgeting is a crucial component of government, it is important for local
officials to consider how their decisions will affect the revenues and expenditures for the
government. Proponents of development argue that developed land helps local
government. Their argument is simple and appeals to common intuition. Developed land
generally is appraised at a higher value than farmland or open space land. This higher
value leads to higher assessed values which in turn causes tax revenue to increase. Thus,
development, from a local perspective, could appear to have a positive impact on the
budget for a local government. However, there are many costs associated with
development that must be borne by the local government. To estimate whether the
increased revenue outweighs the costs associated with providing services to that
developed land, we conducted a COCS study. This methodology was developed, in part,
by the American Farmland Trust.
Our COCS study evaluated the budget of Scio Township, a community in
Washtenaw County, on a land use basis. The study estimated the revenues generated by
each land use and compared them with their respective costs. Ratios of revenue to
expenses were developed for the following land uses: agriculture, commercial/industrial,
and residential. To conduct the study, we reviewed the Scio Township budget for the
1994/95 fiscal year. We interviewed government officials in the Township, the County,
and the State of Michigan.
We identified the major sources of revenue and expenditures for Scio Township. iii
Summary of Revenue Sources
Categories
Source
Property Taxes
Scio Township properties
of all land use types
State Shared Revenue
Shared on the basis of
population
Local Revenue
Fees received for services
performed
DDA
Scio Township properties
of all land use types
Public Improvement Fund
Leases and donations from
commercial/industrial
sources
Expenditure Categories
Categories
Services
General Government
Township Operations
Assessor
Elections
Recycling
Public Safety
Sheriff
Fire
Infrastructure
Roads
Water and Sewer
Downtown Development
Authority
Commercial
Development
The Downtown Development Authority (DDA) played an important part of the
analysis. This entity was created to improve services to the primary commercial and
industrial district in the Township. It receives its revenue from property taxes on all land iv
uses. Before including the costs associated with schools, it is apparent that agricultural
land and residential land are contributing extensively to the DDA, yet the benefits from
this program go exclusively to commercial/industrial land.
Education has been an important component of previous COCS studies.
Consequently, our analysis included a discussion of the impact of Proposal A, a
referendum which was passed in 1994. Proposal A drastically changed the way in which
schools are funded in the State of Michigan. After the impact of schools is considered,
residential property generates substantially less revenue than it receives in services from
Scio Township.
Scio Township COCS Results for Fiscal Year 1994/95
Land Use
Revenue
Expenditure
Expenditure/
Revenue Ratio
Agricultural
$203,532
$126,520
0.62
Commercial / Industrial
4,995,636
1,297,031
0.26
Residential
9,067,355
12,690,333
1.40
Total
$14,266,522
$14,113,883
Ultimately, we concluded that residential land did not contribute enough revenue
to pay for the services that it received for the 1994/95 fiscal year. Both agricultural land
and commercial/industrial land contributed more in revenue than they received in services
for that same time period. High educational costs were the primary difference that caused
residential property to be so expensive relative to the other two land uses.
While agricultural land may not contribute a great deal of tax revenue to Scio
Township, the costs that it imposes are minimal. In light of development pressures on
existing f