HomeMy WebLinkAboutAgenda Packet - July 25, 2005 - CC SpecialAGENDA
ADJOURNED/SPECIAL MEETING
OF THE AZUSA CITY COUNCIL
AZUSA LIGHT AND WATER
729 NORTH AZUSA AVENUE
PRELIMINARY BUSINESS
• Call to Order
• Roll Call
MONDAY, JULY 25, 2005
(TO START IMMEDIATELY
FOLLOWING UTILITY BOARD
MEETING WHICH BEGINS AT
6:30 PM)
A. PUBLIC PARTICIPATION - Please note that public comments are welcomed by recognition of the
Mayor.
B. WORKSHOP -AZUSA PACIFIC UNIVERSITY SPECIFIC PLAN & PROPOSED DEVELOPMENTAGREEMENT
1. Introduction and Background by City Manager - Fran Delach
2. Review of Fiscal Impact Study by Mr. Ross Selvidge, Kosmont and Associates (City Consultants)
3. Comments from Azusa Pacific University
4. Discussion regarding Proposed Development Agreement content between the City of Azusa and Azusa
Pacific University
5. Concluding Remarks
C. CLOSED SESSION
1. PUBLIC EMPLOYEE DISCIPLINE/DISMISSAL/RELEASE (Gov. Code Sec. 54957)
2. PUBLIC EMPLOYMENT (Gov. Code Sec. 54957)
Title: Administrative Services Director - Chief Financial Officer
D.
1. Adjourn
%n compliance with the Americans with Disabilities Act, if you need special assistance to
participate in a city meeting, please contact the City Clerk at 626-812-5229. Notification three (3)
working days prior to the meeting or time when special services are needed, will assist staff In
assuring that reasonable arrangements can be made to provide access to the meeting "
7/25/05 PAGE TWO
FISCAL, ECONOMIC AND COMMUNITY IMPACT ANALYSIS
AZUSA PACIFIC UNIVERSITY
PREPARED FOR
CITY OF AZUSA
PREPARED BY
LEE-KOSMONT ADVISORY SERVICES
OCTOBER 2003
(REVISED JUNE 2005)
AZUSA PACIFIC UNIVERSITY
FISCAL, ECONOMIC AND COMMUNITY
IMPACT ANALYSIS
PREPARED FOR:
CITY OF AZUSA
October 2003
(Revised June 2005)
►mont
VISORY SERVICES
Prepared by:
Lee Kosmont Advisory Services
601 S. Figueroa Street, Suite
3550
Los Angeles, CA 90017
ph 213.623.8484 fax
213.623.8288
www.kosmont.com
TABLE OF CONTENTS
I. INTRODUCTION........................................................................................................................1
Purpose............................................................................................................................
1
Sources of Data and Information....................................................................................
1
Organization of Report ...................................................................................................
1
II. SUMMARY FINDINGS AND RESULTS...................................................................:..........2
FiscalImpact...................................................................................................................
2
Indirect Fiscal Revenues.................................................................................................
2
EconomicImpact............................................................................................................
3
CommunityActivities.....................................................................................................
4
III. PROJECT DESCRIPTION... ...................................................................................................
6
IV. METHODOLOGY....................................................................................................................7
Generic Approaches to Fiscal Impact Analysis..............................................................
7
Approach Used for Azusa Pacific University Fiscal Analysis .......................................
7
Scopeand Limitations....................................................................................................
9
V. FISCAL ANALYSIS...................................................................................................................10
Revenues.......................................:.........................................................................:.....
10
Taxesand Fees....................................................................................................................................
10
Per Capita Related Revenues..............................................................................................................
11
Useof Money......................................................................................................................................
13
Expenditures.................................................................................................................
13
PoliceServices....................................................................................................................................
13
CityFire and Safety ............................................................................................................................
14
PublicWorks.......................................................................................................................................
15
Recreation and Family Services..........................................................................................................
16
Library................................................................................................................................................
16
General Government Services............................................................................................................
16
VI. APU-INDUCED INDIRECT OFF -CAMPUS FISCAL IMPACT..................................17
Student Off -Campus Spending in Azusa......................................................................
17
Faculty and Staff Off -Campus Spending in Azusa .......................................................
18
Spending in Azusa by APU Conference Attendees......................................................
18
BusinessLicense Tax....................................................................................................
19
VII. ECONOMIC IMPACT...........................................................................................................20
ResidentStudents..........................................................................................................
20
Employment..................................................................................................................
20
Payroll...........................................................................................................................
20
Expenditures.................................................................................................................
21
ConstructionImpact......................................................................................................
21
IndirectImpacts............................................................................................................
22
VII. COMMUNITY ACTIVITIES................................................................................................23
Office of Service Learning and City Links...................................................................
23
Child and Family Development Center........................................................................
24
Neighborhood Wellness Center....................................................................................
24
Other.............................................................................................................................
25
LIST OF EXHIBITS
Exhibit 1 — Summary Fiscal Impact
Exhibit 2 — Expansion Program Factors
Exhibit 3 — Azusa Residents and Equivalents Calculation
Exhibit 4 — Utility Franchise Fee and In -Lieu Payments
Exhibit 5 — University Expenditures and Sales Tax
Exhibit 6 — Current Residents and Equivalent Residents
Exhibit 7 — General Fund Revenues — Per Capita Related
Exhibit 8 — Police Expenditure and Scaling Factor
Exhibit 9 — General Fund Expenditures — Per Capita Related
Exhibit 10 — City Fire and Safety
Exhibit 11 — Public Works Expenditures
Exhibit 12 — Off -Campus Azusa Sales Tax Revenue - Student, Faculty and Staff
Exhibit 13 — Off -Campus Tax Revenues from Conference Attendees
Exhibit 14 — Business License Tax
Exhibit 15 — Economic Impact
Fiscal, Economic and Community Impact Anatyris.. AZasa Pacific University
Ile-Kosmont Advisory Services
October 2003 (Revised June, 2005)
Page I of 25
I. INTRODUCTION
PURPOSE
This fiscal, economic and community impact analysis was undertaken in conjunction with a
separate Specific Plan application by Azusa Pacific University (APU) focusing on a multi-
phase expansion of the current APU campus facilities. The findings and results of this
impact analysis will provide valuable background for the City of Azusa as it considers the
Specific Plan application. This analysis is a June 2005 revision of an original analysis that was
completed in October 2003.
SOURCES OF DATA AND INFORMATION
The data used in this analysis comes from several primary sources. Specifications of the
current APU facilities and operations as well as the timing and scale of the planned
expansion were provided by various APU offices. Current municipal revenue and expense
parameters were obtained from the FY 2002/2003 City Budget, the Azusa Finance
Department and a variety of other City offices. Other information was derived from
Kosmont Partner's own research and reference materials.
In those instances in which the analysis required subjective information, conservative
assumptions were utilized so as not to overstate the fiscal conclusions regarding revenues
not to understate the conclusions regarding expenditures presented in this report.
All financial figures are in terms of year 2003 dollars.
ORGANIZATION OF REPORT
An executive summary of the findings of the analysis in terms of the net fiscal impact,
economic impact and community impact is presented in Section II. A description of the
APU's existing operations and facilities as well as the expansion plans is presented in Section
III. A discussion of the approach to conducting the impact analysis is presented in Section
IV. Detailed results of the fiscal analysis are presented in Section V. An estimate of the
indirect fiscal revenues that may be generated by APU-induced activities off -campus are
presented in Section VI. Details of the economic impact analysis are presented in Section
VII. Details of the community impact are presented in Section VIII:
Fiscal, Economic and Community Impact Am6sts. Azusa Pacific University
Lee-KosmoutAdvirog Seniices
October 2003 (Revised June, 2005)
Page 2 of 25
II. SUMMARY FINDINGS AND RESULTS
FISCAL IMPACT
A summary of the projected direct on -campus annual fiscal revenue and expenses by major
category for four stages of development is presented in Exhibit 1. APU is currently
estimated to produce annual fiscal revenues of approximately $327,000 for the City of
Azusa. The City is also estimated to incur annual fiscal expenditure obligations of
approximately $416,900 to provide required municipal services to the APU community.
These produce an annual negative net fiscal impact of approximately $89,900.
Upon completion of the expansion program, annual fiscal revenues are expected to increase
to approximately $831,400 while annual fiscal expenditures are expected to increase to
approximately $997,900. This will produce an annual negative net fiscal impact of
approximately $166,500.
Current Full Build -Out
Revenues $327,000 $831,400
Expenditures 416,900 997,900
Net Impact ($89,900) ($166,500)
The largest revenue category currently is utility in -lieu payments followed by motor vehicle
in -lieu fees, utility franchise fees, sales tax and gasoline tax fund transfers. Those five
categories currently account for approximately 95% of total revenues. The remaining
revenues are distributed among twelve other revenue categories. It should be noted that
APU is exempt from property taxes and utility taxes.
Currently, the largest expenditure category is police services followed by fire and safety
services. Those two categories account for approximately 72% of total expenditures. The
remaining expenditures are spread among six other categories. It should be noted that APU
operates its own campus safety program that deals with most routine law enforcement
matters associated with the APU community. It also operates and maintains its own
extensive recreational and library facilities.
INDIRECT FISCAL REVENUES
APU students, faculty and staff as well as summer conference attendees will make some
purchases of goods and services from off -campus vendors. The amount of those purchases
cannot be determined with precision. However, estimates of high and low rates of off -
campus spending by students, faculty and staff were made along with estimates of off -
campus spending by attendees at summer conferences. The fiscal revenues generated for the
City from that activity would consist principally of sales tax, transient occupancy tax and
business license tax. It is estimated that current combined indirect off -campus fiscal
revenues range from $39,200 to $57,900. Upon completion of the expansion program it is
estimated that the indirect off -campus fiscal revenues will range from $66,300 to $97,000.
EXHIBIT 1
AZUSA PACIFIC UNIVERSITY
SUMMARY FISCAL IMPACT
APU Fis Imp Cb 05-2005 Ext 6/7/2005 4:16 PM
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
REVENUES
Taxes
Utility Franchise
$42,000
$47,000
$68,000
$114,000
Sales
46,000
57,000
68,000
78,000
Utility In -Lieu Payments
104,000
121,000
187,000
358,000
Intergovernmental Transfers
Motor Vehicle In -Lieu
89,500
139,700
168,300
187,300
Gasoline Tax Fund Transfer
30,500
47,500
57,300
63,700
Cost Reimbursements
1,700
2,300
2,800
3,200
Charges for Services
4,200
6,200
7,500
8,200
Property Use
200
400
400
400
Licenses & Permits
500
700
800
900
Fines
4,900
6,800
8,100
9,000
Miscellaneous
300
400
400
500
Use of Money
3,200
4,300
5,700
8,200
Total
$327,000
$433,300
$574,300
$831,400
EXPENDITURES
Police Services
$165,800
$230,800
$276,700
$310,200
City Fire and Safety
136,000
159,000
245,000
467,000
Public Works
38,000
47,000
55,000
63,000
Recreation & Parks
Recreation Programs
8,900
13,900
16,800
18,700
Parks Maintenance
11,100
17,300
20,900
23,200
Library
16,600
23,100
27,700
31,000
General Government Services
Council & Administration
33,200
51,900
62,500
69,500
City Clerk
7,300
11,400
13,700
15,300
Total
$416,900
$554,400
$718,300
$997,900
NET FISCAL IMPACT
($89,900)
($121,100)
($144,000)
($166,500)
INDIRECT REVENUES
Low Estimate
Sales Tax
$35,300
$43,300
$51,600
$59,000
Transient Occupancy Tax
3,300
4,100
4,800
6,300
Business License Tax
600
700
900
1,000
Total
$39,200
$48,100
$57,300
$66,300
High Estimate
Sales Tax
$53,700
$65,900
$78,600
$89,200
Transient Occupancy Tax
3,300
4,100
4,800
6,300
Business License Tax
900
1,100
1,300
1,500
Total
$57,900
$71,100
$84,700
$97,000
APU Fis Imp Cb 05-2005 Ext 6/7/2005 4:16 PM
Fiscal, Economic and Community Impact Analynr: Azura Pacific University
Lee-Kosmont Advisory Services
October 2003 (Retired June, 2005)
Page 3 of 25
ECONOMIC IMPACT
APU currently employs 824 full-time faculty and staff and 70 part-time faculty and staff. At
the completion of the expansion program, it is estimated that full-time employees will rise to
1,283 and part time employees to 108. Of those current employees, 121 or approximately
14% live in the City of Azusa.
Full -Time Employees
Part -Time Employees
Current Full Build -Out
824 1,283
70 108
The current payroll for APU faculty and staff is approximately $37.9 million. The payroll is
estimated to increase to approximately $59.3 million at full build -out. The current payroll for
APU employees who are Azusa residents is estimated to be approximately $5.0 million. The
APU payroll for employees who are Azusa residents is estimated to be approximately $7.8
million at full build -out.
Current annual expenditures by students, faculty, staff, campus visitors, conference attendees
and APU itself on goods and services are estimated at approximately $123.9 million. At full
build -out the total expenditures are estimated to rise to approximately $226.1 million.
Total Spending
Current
$123.9 Million
Full Build -Out
$226.1 Million
Over the course of its expansion plan, APU anticipates constructing approximately 2.6
trlbon square feet of new facilities. This is in addition to the approximately 1.1 million
square feet of facilities now in use. This expansion program could result in as much as $500
million in new construction spending in Azusa. APU estimates that, by value, approximately
7% of its recent expansion projects have been performed by Azusa contractors. If this ratio
is maintained, Azusa contractors may receive approximately $35 million of the new
construction work.
The jobs, payroll and spending associated with APU will have a significantly larger impact on
overall economic activity (a multiplier effect) primarily through re -spending in other sectors
of the regional economy. Because of Azusa's relative size in region and limitations on data
availability, it would be impractical to try to estimate the multiplier effect in Azusa alone.
Nevertheless, as a point of reference, economic multipliers in the range of 2.0 have been
Current
Full Build -Out
Total Payroll
$37.9 Million
$59.3 Million
Azusa Residents Portion
5.0 Million
7.8 Million
Current annual expenditures by students, faculty, staff, campus visitors, conference attendees
and APU itself on goods and services are estimated at approximately $123.9 million. At full
build -out the total expenditures are estimated to rise to approximately $226.1 million.
Total Spending
Current
$123.9 Million
Full Build -Out
$226.1 Million
Over the course of its expansion plan, APU anticipates constructing approximately 2.6
trlbon square feet of new facilities. This is in addition to the approximately 1.1 million
square feet of facilities now in use. This expansion program could result in as much as $500
million in new construction spending in Azusa. APU estimates that, by value, approximately
7% of its recent expansion projects have been performed by Azusa contractors. If this ratio
is maintained, Azusa contractors may receive approximately $35 million of the new
construction work.
The jobs, payroll and spending associated with APU will have a significantly larger impact on
overall economic activity (a multiplier effect) primarily through re -spending in other sectors
of the regional economy. Because of Azusa's relative size in region and limitations on data
availability, it would be impractical to try to estimate the multiplier effect in Azusa alone.
Nevertheless, as a point of reference, economic multipliers in the range of 2.0 have been
Fiscal, Economic and Community Impact Analysis: A7sa Pacific University
Ise-Kosmont Advisory Sevias
October2003 (Revised June, 2005)
Page 4 of 25
suggested for estimating the full regional economic impact of an educational institution such
as APU.
COMMUNITY ACTIVITIES
APU conducts an extremely broad range of service activities that both involve and benefit
members of the Azusa community. These service activities are staffed by APU students,
faculty and staff. They receive varying degrees of funding directly from APU. A very large
proportion of these activities fall within the Office of Service Learning, the Child and Family
Development Center and the Neighborhood Wellness Center.
The Office of Service Learning coordinates approximately 15 major programs under which
APU students annually provide assistance to a total of over 11,700 persons, including
students of the Azusa Unified School District (AUSD) and other members of the
community. These programs involve tutoring, classroom assistance and other activities
which are provided at no cost. Approximately 640 APU students provide in excess of 16,400
hours of service annually through those programs.
In addition to those ongoing programs, APU students, faculty and staff participate in the
annual City Links event in Azusa. Through that program they contribute over 4,000 hours of
service improving parks, schools and other public facilities.
The Child and Family Development Center is a counseling center which annually serves
approximately 10,000 non-APU clients in the region. Approximately 5,500 or 55% of those
clients are residents of Azusa. The remainder come from nearby communities. APU students
provide approximately 18,000 hours of service annually to operate the Center. In addition
there are several full -tune staff members. Because expenses exceed fees, the Center operates
at an annual deficit of approximately $175,000 which is funded by APU.
The Neighborhood Wellness Center is jointly operated by APU and the City of Azusa. It
offers primary prevention health services to the residents of Azusa with a significant amount
of its staffing coming from APU nursing students who provide approximately 2,500 hours
of service. The Center serves approximately 960 clients annually who are residents of Azusa.
Office of Service Learning
City Links
Child & Family Development
Neighborhood Wellness
Total
Azusa Residents Student Hours
Served Volunteered
11,700 16,400
-- 4,000
5,500 18,000
960 2,500
18,160 40,900
The dollar cost to APU of several APU sponsored programs that provide benefits to the
community are as follows:
Fiscal, Erono is and Community Impart Analysis: Azusa Pacific University
Ite-Kotmont Advisory Senices
Oaibe 2003 (Revised June, 2005)
Page 5 of 25
APU Scholarships for Azusa Students
Child & Family Development Center
Neighborhood Wellness Center
Total
Various APU recreational and public meeti:
basis to various groups and organizations in
Amount
$125,000
175,000
48,000
$348,000
icilities are also made available on a periodic
community.
Fiscal, Economic and Community Impact Anafysir. AZnsa Pacific University
I_ee-Kosmont Advisory Senna
October2003 (Revised June, 2005)
Page 6 of 25
III. PROJECT DESCRIPTION
APU currently occupies approximately 70 acres of land in the City of Azusa divided between
an east and west campus. The approximately 1.1 million square feet of existing
improvements include classrooms, offices, libraries, recreation facilities and student housing.
The expansion plan is divided into three phases. The rate at which the expansion will
proceed will be in part a function of the rate at which the necessary funds are raised. For
illustrative purposes, the expansion phases are indicated as being completed in years 2006,
2011 and 2022. Exhibit 2 presents a projection of the amount of square feet of new facilities
that are planned to be completed in each phase. The amount of square feet of new
improvements in Phases I, II and III are 180,000 square feet, 683,000 square feet and
1,773,000 square feet respectively.
APU currently has approximately 5,062 students enrolled at the Azusa campus.
Approximately two-thirds are undergraduate students and approximately 77% are full-time
students. Total enrolment is expected to increase by approximately 68% to 8,484 students by
the completion of Phase III. A detailed breakdown of student classifications by phase is
presented in Exhibit 2.
APU currently has approximately 304 faculty members and 590 non -instructional staff
members. By the completion of Phase III, the number of faculty members is expected to
increase by approximately 60% to 495 and the number of non -instructional staff by
approximately 52% to 896.
There is a very active summer conference program at APU. Currently, a total of
approximately 3,400 attendees attend 22 different conferences on campus. The conferences
average six days in duration. With the completion of the expansion, it is anticipated that the
number of conferences will increase to 42 per summer with the total number of attendees
increasing to nearly 6,500.
EXHIBIT 2
AZUSA PACIFIC UNIVERSITY
EXPANSION PROGRAM FACTORS
APU Fis Imp Cb 05-2005 Ex2 6/7/2005 4:17 PM
i
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
FACILITIES
Square Feet
Increase
180,000
683,750
1,772,910
Total
1,086,770
1,266,770
1,950,520
3,723,430
STUDENTS
Undergraduate
Full Time
3,055
3,795
4,573
5,118
Part Time
85
105
127
142
Graduate
Full Time
615
747
866
1,032
Part Time
1,062
1,291
1,496
1,781
Accelerated Degree
Full Time
245
296
344
411
Part Time
0
0
0
0
Total
5,062
6,234
7,406
8,484
FACULTY
Full Time
285
330
397
464
Part Time
19
22
26
31
304
1
352
423
495
STAFF
Full Time
539
661
785
819
Part Time
51
62
74
77
590
723
859
896
COMBINED
Students
5,062
6,234
7,406
8,484
Faculty
304
352
423
495
Staff
590
723
859
896
Total
5,956
7,309
8,688
9,875
SUMMER CONFERENCES
Number
22
27
32
42
Average Size
154
154
154
154
Average Duration (Days)
6
6
6
6
APU Fis Imp Cb 05-2005 Ex2 6/7/2005 4:17 PM
Final, Economia and Community ImpactAnalysir: A:�usa Pacific Unmrrity
Lee-KosmontAdoirory Servicer
October 2003 (Revised June, 2005)
Page 7 of25
IV. METHODOLOGY
GENERIC APPROACHES TO FISCAL IMPACT ANALYSIS
There are two primary approaches to estimating the fiscal revenue and expenditure impact of
new development in a jurisdiction. They are the per capita multiplier approach and the
marginal cost/revenue (or case study) approach. The per capita multiplier approach is a
classic average costing or revenue projection method for estimating the impact of population
change on a local municipality's fiscal revenues and expenditures. Because of its ease of
application, it is the most common (and when appropriate, the preferred) approach used in
fiscal impact projections. The marginal cost/revenue approach requires somewhat more data
than the average cost approach. It also usually requires more extensive analysis of the new
development for which it is being used. Consequently, the marginal cost approach tends to
be used only when the specific circumstances indicate that the per capita multiplier approach
is not appropriate.
The basic assumption underlying the per capita multiplier method is that over the long run,
current average operating costs and revenues per capita are the best indicators of future
costs and revenues that will accompany the new development. A second key assumption is
that current local service levels are the appropriate levels of services to be provided to the
increased population.
To the extent these assumptions are not warranted by the specific circumstances of a
particular project, it is appropriate to utilize the marginal cost/revenue approach. The
marginal cost/revenue approach recognizes that in some circumstances, for a variety of
reasons, it may not be reasonable to assume that current average costs or revenue
relationships based on the current population will prevail in the future for the new
population. This can be a result of the new population having distinctly different
characteristics than the current population or a reasonable expectation that the cost or
nature of services for the new population will be different than for the average for the
current population.
It is not necessary in any fiscal impact study to use only the per capita multiplier approach or
the marginal cost/revenue approach to the exclusion of the other. On the contrary, it is
common for the two different approaches to be used on different components of a single
analysis of a new development. This can be done by applying the per capita multiplier or
marginal cost/revenue approach to individual cost or revenue categories as the
characteristics of the different categories indicate. Care must be taken when the two
approaches are used on a single project to assure that no "overlap" or "double counting"
occurs and that no cost or revenue categories are excluded.
APPROACH USED FOR AZUSA PACIFIC UNIVERSITY FISCAL ANALYSIS
The City's various revenue and cost categories were analyzed to determine which would be
likely to have an impact attributable to the expansion of APU. This involved a detailed
review of the City's budget documents, consideration of the characteristics of the different
cost and revenue categories as well as interviews with the Finance Director and other City
Fisca4 Emnomit and Community Impact Anayar: A.Zura Paafic Uniterrity
Lee-Kasmont Admiory Snviar
Oaober 2003 (Retired June, 2005)
Page 8 of 25
officials familiar with the budgeting of City revenues and expenditures. Some revenue and
expenditure categories were eliminated from consideration outright because it was
determined that their future budget amounts (were entirely unrelated to the expansion of
APU or would not be materially affected. I
Based on this analysis, it was determined thatthe per capita multiplier approach would be
most appropriate for use in projecting the revenues associated with certain
intergovernmental transfers, cost reimbursements, charges for services, property use, licenses
and permits, fines and other miscellaneous sources. Utility in -lieu and utility franchise taxes
will be related to specific utility usage. Sales and business license tax revenues are based on
projections of new taxable sales taking place on -campus at APU.
The analysis of the expenditure categories detemiined that a modified per capita multiplier
approach would be most appropriate for estimating the potential cost to the City of
providing municipal services in the areas of recreation, library, community services and
general government. An examination of the project needs for police services, fire protection
and public works indicated that the marginal, cost approach was necessary to adequately
estimate the project's potential impact on City expenditures for those services.
The Southern California Association of Governments (SCAG) estimates that there are
currently approximately 14,700 jobs located in the City of Azusa. Those employees working
at jobs in Azusa have some impact on the fiscal costs and revenues in the City. In fiscal
analysis, for the purpose of computing some existing per capita fiscal cost and fiscal revenue
factors, it is common practice to consider each employee to be equivalent to approximately
one-third of a resident. This is because for some categories, employees as well as residents
will have a bearing on the changes in fiscal revenues and costs and also because employees
spend only a portion of their time in Azusa. This will apply to APU faculty and staff
employees.
Just as employees are equivalent to a proportion of an actual resident for the purposes of
estimating some fiscal revenues and expenses; APU students spending time on -campus and
in the City (irrespective of their place of residence) are equivalent to a proportion of an
actual resident. Because full-time and part-time students will spend different amounts of
time on campus, they would be equivalent to different proportions of an actual resident. It
was assumed that a full-time student would be, approximately equivalent to an employee and
that a part-time student would be equivalent to half of a full-time student. Exhibit 3 presents
a tabulation of the residents and equivalent residents in the different categories.
There are several important factors that affect the analysis of the fiscal impact of APU on
the City of Azusa. Those include the extent to which APU meets many of its own security
needs through the Campus Safety office, APU's extensive on -campus services to its students
(i.e., libraries, recreation facilities, etc.), and the profile of the APU student body.
Indirect fiscal revenues that will result from APU-induced spending off -campus were
estimated based on assumptions about the range of spending by APU students, faculty and
staff as well as attendees at summer conferences. Those indirect revenues were estimated
based on a range of assumptions for off -campus spending by APU students, faculty and
EXHIBIT 3
AZUSA PACIFIC UNIVERSITY
AZUSA RESIDENTS AND EQUIVALENTS
AZUSA RESIDENTS (APU Campus)
Full Time Students
Phase II
TOTAL STUDENTS
2002
Full Time
2011
Part Time
1,701
FACULTY AND STAFF
3,201
Full Time
3,915
Part Time
5,783
EQUIVALENT RESIDENTS
Factor
Students
1,623
Full Time
33%
Part Time
17%
Subtotal
70
Faculty and Staff
100
Full Time
33%
Part Time
17%
Subtotal
Combined
Total
AZUSA RESIDENTS AND EQUIVALENTS
Residents
APU Campus
Equivalent Residents
Students
Faculty and Staff
Total
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
1,701
2,656
3,201
3,562
3,915
4,838
5,783
6,561
1,147
1,396
1,623
1,923
824
991
1,182
1,283
70
84
100
108
1,292
1,597
1,908
2,165
189
230
268
317
1,481
1,827
2,176
2,482
275
330
394
428
12
14
17
18
286
344
411
446
1,768
2,171
2,587
2,928
1,701
2,656
3,201
3,562
1,481
1,827
2,176
2,482
286
344
411
446
3,469
4,827
5,788
6,490
APU Fis Imp Cb 05-2005 Ex3 6/7/2005 4:17 PM
Fiscal, Economic and Community lVact Ana[3vir. A.Zura Patifit University
I<e-Kosmont Advisory S"ces
October 2003 (Revised June, 2005)
Page 9 of 25
staff. The fiscal revenues from that spending were combined with estimate of fiscal revenues
generated by off -campus spending by attendees; at APU summer conferences.
Only those APU students who live in APU-owned housing on -campus were counted as
residents uniquely associated with APU. This' is because the APU students living in off -
campus housing and the APU faculty and staff members who live in Azusa reside in housing
that would be occupied by other households whether or not APU was present. To the extent
those persons spend time in Azusa (on the A'PU campus) as students or employees, their
fiscal impact is accounted for in the same way that an employee working in any particular
jurisdiction has an impact irrespective of his place of residence.
SCOPE AND LimiTATIONS
The fiscal impact that has been estimated is limited to the General Fund of the City at the
current level of development and at three future stages of the build -out. These represent the
estimated annual recurring net cost to the City of providing municipal services while taking
into
consideration the revenues that APU can reasonably be expected to generate. Because the
funding commitments that will pay for the expansion are not in place, the exact timing of the
three phases of the expansion may vary maternally from the years indicated in this analysis.
Nevertheless, the results for the three stages of expansion give a useful indication of the
fiscal and economic impacts that might reasonably be expected at those stages.
The analysis excludes any one-time revenues and expenses such as development period fees
and reimbursements. Charges such as building permit and plan check fees during the
development period are usually scaled to reimburse the City for actual costs incurred. As
such, they would result in no net fiscal impact (either positive or negative) in the period they
were paid and no impact on an ongoing basis. Consequently, they have been excluded from
this analysis.
All fiscal impact figures are in terms of 2003 dollars. The analysis assumes that the
prevailing parameters for the City's revenues and municipal service expenditures will remain
constant as the expansion reaches full build -out.
Enterprise activities such as electric power, water and refuse collection are excluded from
this analysis as they are assumed to be self-supporting.
Fiscal, Economic and Community Impact AnaE,sis: Azusa Pacific Univerrity
Lee-Kosmont Advisory Servicer
October 2003 (Revised June, 2005)
Page 10 of 25
V. FISCAL ANALYSIS
REVENUES
Taxes and Fees
The City of Azusa receives approximately 46% of its current General Fund revenues from a
variety of taxes. Those taxes will be affected to varying degrees by the expansion of APU.
The derivation of the estimated impact that each is expected to have on the City's General
Fund revenues is discussed in detail in the following sections.
Property Tax
Los Angeles County levies property taxes on the assessed value of all properties in the City
which do not qualify for exemption. The real estate which comprises the APU campus
qualifies for an exemption and is exempt from property tax.
Utility User Tax
Azusa levies a user tax on utility consumption in the City. However, City policy exempts
non-profit entities from the tax. Consequently, APU pays no utility user tax on its own utility
consumption.
Utility Franchise Fees and In -Lieu Payments
The City levies a franchise fee of 2% on electric and water gross receipts, 1% on natural gas
gross receipts, 5% on cable TV gross receipts and 10% on refuse collection gross receipts.
The Azusa public utility also makes in -lieu payments the City's General Fund equal to 8% of
gross receipts of electric and water changes. The individual amounts for these fees and the
combined totals are also derived and presented in Exhibit 4. Utility usage- by APU is
presented in Exhibit 5. The current total annual combined utility franchise fee is estimated at
$42,000. At the completion of the expansion it is estimated that approximately $114,000
would be generated. The current total annual combined utility in -lieu payments are estimated
at $104,000. At the completion of the expansion it is estimated that approximately $358,000
would be generated.
Sales Tax
The City of Azusa receives sales tax revenues directly from activities on the APU campus
from two principal sources. Those sources are a) taxable sales by APU from its on -campus
retail operations, and b) purchases by APU of taxable goods from Azusa based vendors.
APU has provided data on its recent and projected expenditures on taxable purchases from
vendors located in Azusa. These expenditure projections are presented on Exhibit 5. In
2002, APU estimates that it purchased $433,000 in taxable goods from Azusa based vendors.
That produced $4,330 in sales tax revenue for the City. APU estimates that upon completion
EXHIBIT 4
AZUSA PACIFIC UNIVERSITY
UTILITY FRANCHISE FEEIAND IN -LIEU PAYMENT
APU Fis Imp Cb 05-2005 Ex4 6/7/2005
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
FRANCHISE FEE
Annual Consumption
Electric
$1,089,000
$1,267,000
$1,951,000
$3,723,000
Water
215,000
253,000
390,000
745,000
Natural Gas
145,000
165,000
254,000
484,000
Refuse Disposal
145,000
148,000
175,000
201,000
Combined Total
$1,594,00 0
$1,833,000
$2,770,000
$5,153,000
Tax
Rate
,
Electric
2%
$22,000
$25,000
$39,000
$74,000
Water
2%
4,000
5,000
8,000
15,000
Natural Gas
1%
1,000
2,000
3,000
5,000
Refuse Disposal
10%
15,00,0
15,000
18,000
20,000
Combined Total
$42,000
$47,000
$68,000
$114,000
IN -LIEU PAYMENT
Annual Consumption
Electric
$1,089,000
$1,267,000
$1,951,000
$3,723,000
Water
215,000
253,000
390,000
745,000
Combined Total
$1,304,000
_
$1,520,000
$2,341,000
$4,468,000
Payment
Rate
Electric
8%
$87,000
$101,000
$156,000
$298,000
Water
8%
17,000
20,000
31,000
60,000
Combined Total
$104,000
$121,000
$187,000
$358,000
APU Fis Imp Cb 05-2005 Ex4 6/7/2005
EXHIBIT 5
AZUSA PACIFIC UNIVERSITY
UNIVERSITY EXPENDITURES AND SALES TAX
COMBINED TAXABLE TRANSACTIONS
Total $4,642,000 $5,719,000 $6,795,000 $7,785,000
SALES TAX
Tax Rate @ 1%
Amount $46,000 $57,000 $68,000 $78,000
APU UTILITY EXPENDITURES
Current
Phase I
Phase II
Phase III
Rate Per Square Foot
2002
2006
2011
2022
APU PURCHASES FROM VENDORS
$1.00
Total
$52,000,000
$63,013,000
$80,221,000
$109,202,000
Located in Azusa
0.13
Total
$466,000
$549,000
$652,000
$747,000
Taxable
433,000
533,000
633,000
725,000
APU ANNUAL SALES (Taxable)
215,000
253,000
390,000
745,000
Bookstore
$3,551,000
$4,376,000
$5,199,000
$5,956,000
Cafeterias
62,000
76,000
91,000
104,000
Food
472,000
581,000
690,000
791,000
Music/Athletics
124,000
153,000
182,000
209,000
Total
$4,209,000
$5,186,000
$6,162,000
$7,060,000
COMBINED TAXABLE TRANSACTIONS
Total $4,642,000 $5,719,000 $6,795,000 $7,785,000
SALES TAX
Tax Rate @ 1%
Amount $46,000 $57,000 $68,000 $78,000
APU UTILITY EXPENDITURES
Rate Per Square Foot
Electric
$1.00
Water
0.20
Natural Gas
0.13
Annual Amount
Electric
$1,089,000
$1,267,000
$1,951,000
$3,723,000
Water
215,000
253,000
390,000
745,000
Natural Gas
145,000
165,000
254,000
484,000
Trash Collection
145,000
148,000
175,000
201,000
APU Fis Imp Cb 05-2005 Ex5 6/7/2005 4:18 PM
Fiscal, Emnomic and Community ImpactAnalysis: Azusa Pacific University
1. e-Kormont Advisory Servicer
Oclober2003 (Retired June, 2005)
Page 11 of 25
of the expansion, it will purchase approximately $725,000 in taxable goods from Azusa
based vendors. That would produce $7,250 in sales tax revenue for the City.
APU engages in taxable sales from a number of operations on -campus. Those include the
campus bookstore, cafeteria/food and music/athletics. Exhibit 5 presents a tabulation of the
taxable sales from those operations in 2002 and APU's projection of the level of those sales
when the expansion is completed. In 2002, APU sold approximately $4.2 million in taxable
goods on campus. Those sales generated approximately $42,000 in sales tax revenue for the
City of Azusa. Upon completion of the expansion, APU expects to sell approximately $7.1
Million in taxable goods on campus. Those ;taxable sales would generate approximately
$71,000 in sales tax revenue for the City.
Per Capita Related Revenues
Based on an examination of City budget documents and interviews with various City
officials familiar with the budgeting process,) it was determined that a number of City
revenue categories are affected approximately in proportion to the number of residents in
the City or the number of residents plus a proportion of new employees and students (i.e.,
equivalent residents). Therefore, estimates of the current and future revenues in those
categories can be estimated as a function of the residents and equivalent residents associated
with APU operations. Exhibit 6 presents a computation of the current residents and
equivalent residents in Azusa.
The revenue categories fall into four different operating departments. Exhibit 7 presents a
tabulation of the departments and the revenue categories within each that are expected to be
affected. For each revenue category in each Idepartment, the current 2002/2003 budget
amount is given along with an estimate of the extent to which the current resident
population or equivalent residents of Azusa', are the determining factor in the revenue
budgeted. The revenue categories that are 'iaffected by the presence of APU include
intergovernmental transfers, cost reimbursements, charges for services, property use, fines,
licenses and permits, fines and miscellaneous. Upon consultation with the City staff, it was
determined that the presence of APU would not have a material impact on the revenues of
the Community Services Department (providing senior services and the operations of the
Woman's Club).
Intergovernmental Transfers
These revenues consist principally of the City's allocated share of motor vehicle in -lieu and
gasoline taxes collected by the State of California. These taxes are distributed to cities
throughout the State on the basis of population. Based on the current allocation ratios, the
APU students, faculty and staff who are resident in Azusa are currently generating
approximately $89,500 in motor vehicle in -lieu revenue and approximately $30,500 in
gasoline tax revenues. Upon completion of the expansion, those are estimated to rise to
approximately $187,300 in motor vehicle in (lieu revenue and approximately $63,700 in
gasoline tax revenues. I
EXHIBIT 6
AZUSA PACIFIC UNIVERSITY
CURRENT RESIDENTS AND EQUIVALENT RESIDENTS
RESIDENTS
Total
46,116
EMPLOYEES IN AZUSA
Total
14,700
STUDENTS
Full Time
3,915
Part Time
1,147
EQUIVALENT RESIDENTS
Factor
Number
Employees 33%
4,900
Students
Full Time 33%
1,292
Part Time 17%
189
Total
6,381
APU Fis Imp Cb 05-2005 EA 6/7/2005 4:18 PM
EXHIBIT 7
AZUSA PACIFIC UNIVERSITY
GENERAL FUND REVENUES - PER CAPITA RELATED
Notes:
1. Tolalrevemmsroundsd1onearesl$100
2. Percent of revenue based an City population and scaling factor based an estimate by relevant City department
8/72005 4:19 PM
APU Fla Imp Cb 05-2005 Px7
FY -02103
Budget
Based on City
ResidentPo ulatlon
Per Resident
Based on City
E uivalent Residents
Per
Equivalent
Resident
APU
Scaling
Factor
Current Phase I Phase II Phase III
2002 2006 2011 2022
Percent
Amount
Percent
Amount
Intergovernmental
Motor Vehble In -Lieu
$2,424,500
100%
$2,424,500
$52.57
100%
$89.500 $139,700 $168,300 $187,300
Gasoline Tax
824,500
100%
824,500
17.88
100%
30,500 47,500 57,300 63,700
$3.249,000
$3,249,000
Total
$70.45
$120,000 $187,200 $225,600 $251,000
Police Services
Cost Reimbursement
$106,705
85%
$90,699
$1.73
26%
$1,600 $2.200 $2,600 $3,000
Fines
Chargee for Services
Licenses B Permits
310,150
70,000
30,000
85%
85%
85%
263,628
59,500
25,500
5.02
1.13
0.49
26%
26%
26%
4,600 6,400 7.600 8,500
1,100 1,500 1,800 2,000
500 700 800 900
$516,855
$439,327
Total
$8.37
$7.800 $10,800 $12,800 $14.400
Recreation & Parks
Charges for Services
Money 8 Property Use
Miscellaneous
$243,000
10,000
17,000
100%
100%
100%
$243,000
10,000
17,000
$5.27
0.22
0.37
25%
25%
25%
$2,300 $3,500 $4,300 $4,700
100 200 200 200
200 300 300 400
$270,000
$270,000
Total
$5.85
1
1 $2,600 $4,000 $4,800 $5,300
Library
Cost Reimbursement
Fines
Money B Property Use
Charges for Services
Miscellaneous
$4,400
17,000
6,000
53,800
3,000
90%
90%
90%
90%
90%
$3,960
15,300
5,400
48,420
2,700
$0.08
0.29
0.10
0.92
0.05
25%
25%
25%
25%
25%
$100 $100 $200 $200
300 400 500 500
100 200 200 200
800 1,200 1,400 1,500
100 100 100 100
$84,200
$75,780
Total
$1.44
$1,400 $2,000 $2,400 $2,500
Notes:
1. Tolalrevemmsroundsd1onearesl$100
2. Percent of revenue based an City population and scaling factor based an estimate by relevant City department
8/72005 4:19 PM
APU Fla Imp Cb 05-2005 Px7
Fiscal, Ecanomic and Communidy Impact Analysis: AZuia Paafic University
Ise-KosmowAdvisory Serums
October 2003 (RevisedJune, 2005)
Page 12 of 25
Other Departments and Categories
The Recreation and Family Services' Department estimates that essentially 100% of its
recreation related revenues are generated by the City's resident population. Consequently,
total revenues budgeted for this Department were divided by the City's current population
to compute a factor that would be applied to the residents associated with APU. The
Recreation and Family Services Department also indicated that because of the amount of
recreational facilities at APU which are available to APU students, faculty and staff (and their
families) they as a group constitute only a small fraction of the burden on a per capita basis
compared to other residents of the City in use of the City's parks and recreation programs.
After discussions with the Recreation and Family Services department, the per capita usage
(and thus revenue generation) by members of the APU community was reduced to 25% of
that of a resident unrelated to APU. This recognizes that most of their recreational needs are
met by the facilities on the APU campus. Total current annual revenues for the Parks and
Recreation Department of approximately $2,600 were estimated. Upon completion of the
expansion it is estimated that the Recreation and Parks Department revenues associated with
APU will be approximately $5,300.
The Library estimates that approximately 90% of its patronage and revenue generation is
related to the City's resident population and persons employed in the City. This being the
case, 90% of the current budgeted revenues were divided by the current equivalent resident
population to obtain a per capita factor. The Library indicated that because of the library
facilities available on campus to APU students, faculty and staff, they as a group constitute
only a small fraction of the burden on a per capita basis compared to the other residents of
the City in the use of the City library facilities. To account for this much lower usage rate
and after discussions with the Library staff, the usage of the library (and thus revenue
generation) by the APU community was reduced to 25% of that of residents unrelated to
APU. This recognizes that most of their library needs are met by library facilities on the
APU campus. The total current annual revenues for the Library of approximately $1,400 ate
estimated. Upon completion of the expansion program it is estimated that the library
revenues and will be approximately $2,500.
The extent to which APU students, faculty and staff generate revenues for the Police
Department is likely to be closely associated with its expense burden. A more detailed
discussion of the Police burden constituted by APU is described in detail in the fiscal
expense section. The Police Department estimates that approximately 80% to 90% of its
activity and revenues are generated by the demands of the City's resident population and
persons with jobs in the City. Consequently, Kosmont Partners has utilized an 85% factor
for certain of the Police Department's revenue categories (cost reimbursements, fines,
charges and licenses) to estimate the new revenues that would be generated.
Dividing 85% of the Police Department's current budgeted revenues by the current
equivalent resident population (total residents plus proportions of employees working at jobs
in the City and students) produces a per capita factor by which the revenue impact of APU
can be estimated. However, a further adjustment must be made to account for the lower
usage of Police services by APU students, faculty and staff. It is assumed that this translates
into proportionately lower revenues in addition to lower costs. The 26% factor which was
Fiscal, Economic and Community Impad Analytic Azusa Pacific Unitmify
Lee-KormontAdvisog Senicet
October 2003 (Revised June, 2005)
Page 13 of 25
derived for the fiscal expenses was utilized for the revenues as well. It was estimated that the
current annual revenue generated for the Police department is approximately $7,800. Upon
completion of the expansion program, it is estimated that the revenues generated for the
Police department will be approximately $14,400.
Use of Money
The City invests funds it has on hand until thley are expended. The most common way to
estimate this potential source of revenue is 'to determine the relationship between total
General Fund'revenues and the amount of investment earnings. That factor is then applied
to the total of the new fiscal revenues projected for all other categories.
I
Azusa currently generates in excess of $1.00 of investment earnings for each $100 of annual
General Fund revenues. In the case of APU, it is estimated that the new revenues from all
other sources currently totals approximately $320,000 per year. Applying a similar
investment earnings rate to those projected new revenues produces current estimated annual
earnings of approximately $3,200. Upon completion of the expansion program, it is
estimated that the investment earnings will equal approximately $8,200.
EXPENDITURES
Police Services
Approximately 45% of the City's General Fund expenditures are devoted to police services.
An estimate of the cost of law enforcement services to APU was prepared using factors that
were mainly derived from information provided by the Azusa Police Department and the
APU Campus Safety Office.
It is important to understand the nature of the APU Campus Safety Office in order to
estimate the law enforcement burden APU constitutes on the City. The mission of the
Campus Safety Office is to promote campus safety and security and to function as a liaison
with the Azusa Police Department on law enforcement matters when required. That office
has 18 full-time employees consisting of 14 patrol officers and four office personnel,
including the director who is a retired police officer. The office employs 25 part-time student
officers who work an average of 19 hours per week to provide additional campus safety
assistance.
In the most recent year for which data is available, the campus Safety Office answered
10,313 calls for service on and around the campus, filed 1,975 incident reports and made
eight arrests. The Office is the primary responder to non-violent crimes and provides the
Azusa Police Department with the information it needs to document most incidents of
crime on campus. In that same year, the Azusa Police Department dispatched officers to the
APU campus 112 times. This compares to approximately 51,000 dispatches in the whole
City for that year. The majority of the criminal activity associated with the presence of APU
is thefts from vehicles, thefts from other locations around campus, building burglaries and
vehicle theft. Violent crimes and crimes against persons are very rare.
Final, Emnomic and Community ImpartAnalysis: Azusa Pacifii University
L. e-Kosmont Advisory Services
October 2003 (Revised June, 2005)
Page 14 of 25
A representative of the Azusa Police Department who is familiar with the Department
budget process as well as the law enforcement needs at APU provided assistance with
estimating the burden that APU would constitute. The vast majority of Azusa law
enforcement activities fall into five categories. Those categories are a) Part 1 crimes (i.e.,
homicide, rape, robbery, assault, burglary, larceny and arson), b) traffic enforcement, c)
parking, d) community policing, and e) disturbances. For each of those five categories, the
Azusa Police Department provided an estimate of the burden that an APU student resident
in Azusa would represent a percent of the burden an average Azusa resident would
represent.
Some of the key reasons why an APU student resident in Azusa might constitute
significantly less of a law enforcement for the City burden than an average Azusa resident
are a) the extensive APU Campus Safety Office activities, b) the comparatively low usage of
automobiles by APU students who keep cars on campus compared to automobile usage by
automobile owners in the general Azusa population, c) APU's strict personal conduct
policies, and d) the demographic profile of the students, faculty and staff.
The extent to which an Azusa resident APU student, faculty or staff represents a proportion
of the law enforcement burden of an average Azusa resident is based on the shares of the
Azusa Police Department budget represented by each of the five major activity categories,
the Azusa Police Department's estimate of the extent to which an APU student resident in
Azusa would represent a burden in each category relative to an average Azusa resident and
the burden of Azusa resident faculty and staff members. Based on those considerations, for
an Azusa resident APU student, it is estimated that the burden on Azusa law enforcement is
equal to approximately 20% of the burden of an average Azusa resident. When the Azusa
resident faculty and staff are combined (at 100% of the burden of an average Azusa
resident), a scaling factor of approximately 26% is derived. This derivation is presented in
Exhibit 8. That scaling factor represents the percent of the law enforcement burden of an
average Azusa resident that a weighted average APU student, faculty or staff member
represents.
The total APU law enforcement burden can be estimated by multiplying the total number of
APU Azusa residents or equivalents (students, faculty and staff by 26% of the per capita
Azusa law enforcement cost. The derivation of this expense estimate is presented in Exhibit
9. It also incorporates the Azusa Police Department estimate that approximately 90% of its
annual expenses are related to resident population and employees. It is estimated that the
current total annual law enforcement burden of APU is approximately $165,800. This
amount is roughly equivalent to the annual cost of two full-time police officers. Upon
completion of the expansion program, it is estimated that the annual law enforcement
burden will be approximately $310,200.
City Fire and Safety
The Fire Protection District of Los Angeles County provides fire protection and emergency
medical response services in the City Azusa. These services are funded by a combination of a
special tax on real estate and an annual payment to the District from the City's General
Fund. The special tax component of the funding (known as Proposition E) was enacted by
EXHIBIT 8
AZUSA PACIFIC UNIVERSITY
POLICE EXPENDITURE SCALING FACTOR
Nnfac
1. Azusa Police Department Estimate
2. Lee- Kosmont Estimate
APU Fis Imp Cb 05-2005 Ex8 6/7/2005 4:19 PM
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
RESIDENTS & EQUIVALENTS
Number
Campus Residents
1,701
2,656
3,201
3,562
Equivalents
Students
1,481
1,827
2,176
2,482
Faculty and Staff
_286
344
411
_ 446
Total
3,469
4,827
5,788
6,490
Percent of Total
Campus Residents
49.0%
55.0%
55.3%
54.9%
Equivalents
Students
42.7%
37.8%
37.6%
38.2%
Faculty and Staff
8.3%
1 7.1%
7.1%
6.9%
Burden Percent of Regular Resident
Campus Residents
20%
20%
20%
20%
(1)
Equivalents
Students
20%
1 20%
20%
20%
(1)
Faculty and Staff
100%
100%
100%
100%
(2)
SCALING FACTOR
Campus Residents
9.8%
1 11.0%
11.1%
11.0%
Equivalents
Students
8.5%
7.6%
7.5%
7.6%
Non -Students
8.3%
7.1%
7.1%
6.9%
Total
26.6%
25.7%
25.7%
25.5%
Computed Average
26%
,
Nnfac
1. Azusa Police Department Estimate
2. Lee- Kosmont Estimate
APU Fis Imp Cb 05-2005 Ex8 6/7/2005 4:19 PM
EXHIBIT 9
AZUSA PACIFIC UNIVERSITY
GENERAL FUND EXPENDITURES - PER CAPITA RELATED
Notes:
1. Total expenditures rounded to nearest $100
2. Percent of revenue based an City population and scaling factor based on estimate by relevant City department
APU Fla Imp Cb 05-2005 5x9 8/712005 4:19 PM
Based on City
Based on City
Per
APU
FY -02103
Resident Population
E uivalent Residents
Equivalent
Scaling
Current Phase I Phase II Phase III
Percent
Amount
Percent
Amount
Budget
Per Resident
Resident
Factor
2002 2006 2011 2022
Police
Police Services
$10,722,000
90%
$9,649,800
$183.82
26%
$165,800 $230,800 $276,700 $310,200
Recreation & Parks
Recreation Programs
$963,400
100%
$963,400
$20.89
25%
$8,900 $13,900 $16,800 $18,700
Parks Maintenance
1,200,000
100%
1,200,000
26
25%
11,100 17,300 20,900 23,200
Library
Library Services
$1,113,500
90%
$1,002,150
$19.09
25%
$16,600 $23,100 $27,700 $31,000
General Government
Council B Administration
$1,798,900
50%
$899,450
$19.50
100%
$33,200 $51,900 $62.500 $69,500
City Clerk
394,000
60%
197,000
4.27
100%
7,300 11,400 13,700 15,300
$2,192,900
$1,096,450
Total
$23.78
$40,500 $63,300 $76,200 $84,800
Notes:
1. Total expenditures rounded to nearest $100
2. Percent of revenue based an City population and scaling factor based on estimate by relevant City department
APU Fla Imp Cb 05-2005 5x9 8/712005 4:19 PM
Fiscal, Emnamic and Community Impaa Anaiysis: Azusa PadJe University
Lee-KarmontAdvicog Senders
October 2003 (Revised June, 2005)
Page 15 of 25
voters in 1997. Even though APU is exempt from regular property tax, it pays the special tax
on its real estate holdings in Azusa. The amount of the City's General Fund payment that is
necessary to fully fund the service from the District is the difference between the District's
total cost and the total amount of the special tax receipts. The current annual General Fund
payment is approximately $2.6 million. This payment constitutes the City's net direct cost for
the District's fire protection and emergency medical response services.
The District does not have data on the specific number of calls made each year to the APU
campus or an estimate of the percent of the total service burden in the City that APU
constitutes. In the absence of any such precise data, it is necessary to estimate the
approximate relative service burdens through other means.
The breakdown of existing land uses in the City by acres and the total amount of non-
residential square feet of development is known. Allocating a share of the total fire service
costs first to all the non-residential land uses, and then per square foot of non-residential
improvement will yield a factor that represents fire service cost per square foot of non-
residential improvements in the City. That factor representing the average annual cost of fire
service per square foot of non-residential improvements can then be applied to specific non-
residential properties to approximate their pro 'rata share of total fire service costs.
Exhibit 10 presents a derivation of the per square foot annual fire service factor for non-
residential improvements in the City. Therel are currently approximately 2,956 acres of
existing non-residential land uses in the City. This is approximately 66.1% of the total 4,474
acres of existing land uses. On a pro rata basis, the annual fire service burden for that land
would be approximately $1,691,000.
On those 2,956 acres of existing non-residential land uses, there are approximately
13,484,000 square feet of improvements. Dividing the total non-residential share of fire
service costs by the total number of square feet of non-residential development yields an
annual cost factor of approximately $0.1254 per square foot. Applying that cost factor to the
current and projected square feet of improvements on the APU campus produces an
allocated share of fire service costs which ranges from $136,000 currently to $467,000 upon
completion of the expansion program.
Public Works
In the City of Azusa, Public Works encompasses annual maintenance of non -park public
spaces. This is commonly referred to as "public works" and includes the maintenance of
roadways and associated landscaping. The City Engineer has provided an estimate of the
extent to which APU currently constitutes a fiscal burden on the Department. This estimate
takes into consideration the fact that APU maintains all of its on -campus facilities and most
of its perimeter. It is estimated that the approximately 2% of the maintenance component of
the Department budget is attributable to the presence of APU. It was assumed that as APU
adds students and staff, the cost of public works maintenance will increase proportionately.
On this basis, it is estimated that the current annual Public Works burden is approximately
$38,000. Upon completion of the expansion program, it is estimated that the annual
EXHIBIT 10
AZUSA PACIFIC UNIVERSITY
CITY FIRE AND SAFETY
APU Fis Imp Cb 05-2005 Ex10 6/7/2005 4:20 PM
Percent
Annual
ALLOCATED COST
Acres
of Total
Cost
Residential
1,518
33.9%
$869,000
Non -Residential
2,956
66.1%
1,691,000
Total
4,474
$2,560,000
COST PER SQUARE FOOT OF IMPROVEMENTS
Non -Residential Square Feet
13,484,000
Allocated Cost
Total
$1,691,000
Per Square Foot
$0.1254
APU PRO RATA SHARE
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
Square Feet of Improvements
1,086,770
1,266,770
1,950,520
3,723,430
Fire and Safety Cost
$136,000
$159,000
$245,000
$467,000
APU Fis Imp Cb 05-2005 Ex10 6/7/2005 4:20 PM
EXHIBIT 11
AZUSA PACIFIC UNIVERSITY
PUBLIC WORKS EXPENDITURES
PUBLIC WORKS
Maintenance Component $1,900,000 (1)
Attributable to APU 2.00% I(1)
Current
Phase I
Phase II
Phase III
APU BURDEN 2002
2006
2011
2022
Amount $38,000
$47,000
$55,000
$63,000 (2)
Notes:
1. Azusa Public Works Department Estimate
2. Increases in proportion to growth in enrollment and staff
APU Fis Imp Cb 05-2005 Ex11 6/7/2005 4:20 PM
Rsca4 Economic and Community Impact Anafysis: Azusa Paeifu University
I.ee-KosmontAdvisog Seances
October 2003 (Revised June, 2005)
Page 16 of 25
Community Development will be approximately $63,000. This derivation is presented in
Exhibit 11.
Recreation and Family Services
It is estimated that the maintenance of parks and the demand for recreation programs and
services in the City is a direct function of the resident population. To estimate the burden
that APU constitutes, the current budgeted expenditures were divided by the current
resident population to derive per capita expenditure factors. As indicated in the analysis of
revenues, APU students, faculty and staff make very little use of the City parks and
recreation programs. Consequently, the per capita cost factor for an average Azusa resident
is multiplied by 25% to obtain the burden for an Azusa resident APU student, faculty or
staff. Using these factors, it is estimated that APU's current annual Recreation and Family
Services expense burden is approximately $8,900 for recreation programs and $11,100 for
maintenance. This computation is presented in Exhibit 9. Upon completion of the
expansion program, it is estimated that these annual costs will rise to $18,700 and $23,200
respectively.
Library
City staff members familiar with the Library programs consider their cost to be a function of
the resident population and persons employed in the City. It is also estimated that
approximately 90% of the Library services are provided to City residents and employees
working in the City. Because APU students, faculty and staff make little.use of the City
Library it is estimated that they represent approximately 25% of the burden that an average
Azusa resident would constituter. Using those factors, the current budgeted amounts for
those services and the number of Azusa resident APU students, faculty and staff, it was
estimated that the current library expense burden on the City is approximately $16,600.
Upon completion of the expansion program, it is estimated that the annual burden will
increase to approximately $31,000. These derivations are presented in Exhibit 9.
General Government Services
This expenditure category includes the cost of maintaining the offices of the City Council,
City Clerk as well as other general management and administrative activities necessary to
provide direction and support to the operating departments. These expenditures typically
have a substantial fixed component that does not vary with increases or decreases in the
resident population. The fiscal burden that APU currently constitutes was estimated by
utilizing a per capita factor based on the current cost of providing municipal services in
those categories less a 50% allowance for a fixed costs.
Based on the Azusa resident APU students, faculty and staff, it is estimated that APU's
current annual burden for the City Council/administration and the City Clerk is $33,200 and
$7,300 respectively. Upon completion of the expansion program, it is estimated that these
annual expenses will increase to $69,500 and $15,300 respectively. The derivation of these
figures is presented in Exhibit 9..
Fiscal, Emnolmie and Community Impact Awlysis: Azusa Panfic University
Lee-Kosmont Advisory Services
October2003 (Revised June, 2005)
Page 17 of 25
VI. APU-INDUCED INDIRECT FF -CAMPUS FISCAL IMPACT
The presence of APU in the City will result inl
not otherwise take place without the presence
revenues to the City which are indirect in the si
establishments. The amount and nature of that
as well as attendees at APU summer conferenI
Those will include the spending opportunities
spending opportunities outside of Azusa as we]
those different spenders are in Azusa.
STUDENT OFF -CAMPUS SPENDING IN AZUSA
spending at off -campus locations that would
of APU. That spending will generate fiscal
:rise that they occur off -campus at non-APU
spending by APU students, faculty and staff
es will be a function of a number of factors.
off -campus in Azusa and the presence of
1 as the amount of time and time of day that
The amount of spending off -campus by APU students is probably most highly correlated
with their status as either full-time or part-time. Approximately 80% of all full-time students
live in the City of Azusa either on -campus or very nearby. Many of those living near the
campus live in apartments APU owned by or master -leased by APU. Nearly 90% of the part-
time students are graduate students and the vast majority live outside of Azusa.
APU students will spend most of their budgets for academic books and supplies at the APU
retail store as opposed to off -campus in Azusa or elsewhere. They also have the opportunity
to purchase meals during their time at APU at: on -campus dining facilities. That spending is
accounted for in the known retail purchases that occur at APU.
The full-time students who live in Azusa will also spend on purchases for personal needs
off -campus in Azusa to the extent businesses offer spending opportunities that are not met
on campus or at locations beyond the City limits. In general, the City of Azusa has relatively
limited retailing opportunities to meet those needs that cannot be.met on campus. For the
most part, off -campus opportunities consist of meals at fast food outlets or restaurants and
the smaller variety of incidental purchases. It is likely that part-time students will limit their
off -campus spending to occasional purchases'such as for meals, gasoline or other items of
convenience.
There is no definitive data on the amount of'the spending off -campus in Azusa that these
groups will generate. However, APU recently conducted a survey by e-mail in which it asked
students to indicate the average amount they spent per week off -campus in Azusa. The
response rate was relatively low and the student's status as full or part-time was not
indicated. Approximately 40% of the respondents indicated that they made virtually no off -
campus purchases in Azusa. The average weekly off -campus spending in Azusa indicated
was approximately $15. Among those that did report spending off -campus in Azusa, the
average amount was approximately $25.
These relatively low reported amounts of spending are consistent with the fact that many
student needs are met on -campus, there is a relatively limited range of retailing opportunities
off -campus in Azusa, part-time students' trips to the campus are essentially single -purpose
trips from outside Azusa just to attend class, and a lack of evidence that the level of sales at
Fiscal, Economic and Community Impact Analysis: Azusa Pacific University
Lee-Kosmont Advisory Services
October 2003 (Revised)une, 2005)
Page 78 of 25
nearby retailers varies with the presence or absence of students on campus resulting from
the break between the spring and fall semesters.
Because of the lack of definitive data, a high and low range of potential indirect fiscal
revenues generated will be estimated. It is manifest that APU part-time students will spend
less off -campus in Azusa than the full-time students. It was decided to use a $5 per week
estimate for the amount that a part-time APU student might spend on average off -campus in
Azusa for such incidentals as an occasional meal or other purchase. For the full-time APU
students, it was decided to use a low of $15 per week and a high of $25 per week to
represent the potential range of spending at establishments off -campus in Azusa. It is
assumed that the students follow these spending patterns for approximately 37 weeks per
year which represents the length of a typical school year. These are roughly consistent with
the results of the survey of student spending conducted by APU. The results of these
estimates are presented in Exhibit 12 and suggest that APU students currently may account
for from $2.4 million to $3.8 million in spending off -campus in Azusa each year. This is
projected to increase to $4.0 million to $6.4 million upon completion of the expansion
program.
FACULTY AND STAFF OFF -CAMPUS SPENDING IN AZUSA
Spending by APU faculty and staff should follow the typical pattern for an employee at a
place of work. APU also conducted a survey of spending by faculty and staff via e-mail.
Nearly a quarter of the faculty and staff responded. Approximately 10% reported that they
made virtually no off -campus purchases in Azusa. The average spending reported was
approximately $29 per week. Because some of the responses were from Azusa residents, the
spending at the upper end of the responses should be discounted because a portion of that
spending would be associated with the person's status as a resident, not their status as an
employee working at a place of employment in Azusa.
Based on the survey data, it was decided to use a range of weekly purchases with a low of
$20 and a high of $30 for full-time faculty and staff. For part-time faculty and staff it was
decided to use a $5 per week figure. For faculty, the spending was projected over a 37 -week
academic year. For the staff it was projected over a full 52-week year. The results of these
estimates are presented in Exhibit 12 and suggest that APU faculty and staff currently may
account for from $790,000 to $1.2 million in off -campus spending each year. This is
projected to increase to $1.2 million to $1.8 million upon completion of the expansion
program.
SPENDING IN AZUSA BY APU CONFERENCE ATTENDEES
The substantial number of attendees at conferences at APU will also generate indirect sales
tax revenue for the City of Azusa. Exhibit 13 presents an estimate of the annual number of
attendees that are currently attending conferences at APU and a projection of the number
that APU expects will attend conferences in the future through the expansion program. For
the most part, those conferences are "package deals" in which the food and lodging are
provided on campus. Consequently, that spending is included in APU's sales figures. When
conference attendees leave the campus for diversions or other activities it is often for
EXHIBIT 12
AZUSA PACIFIC UNIVERSITY
OFF -CAMPUS AZUSA SALES TAX REVENUE
STUDENTS. FACULTY AND STAFF
APU Fis Imp Cb 05-2005 Exit i 6f7/2005 4:20 PM
SPENDING PER WEEK
Estimate
Number of
Low
High
Weeks
Students
-
Full Time
$15
$25
37
Part Time
5
5
37
Faculty
Full Time
20
30
37
Part Time
5
5
37
Staff
Full Time
20
I 30
52
Part Time
5
5
52
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
PERSONS SPENDING
Students
Full Time
3,915
4,838
5,783
6,561
Part Time
1,147
1,396
1,623
1,923
Total
5,062
6,234
7,406
8,484
Faculty
Full Time
285
330
397
464
Part Time
19
22
26
31
Total
304
352
423
495
Staff
Full Time
539
661
785
819
Part Time
51
62
74
77
Total
590
723
859
896
TOTAL SPENDING PER YEAR
Low Estimate
Students
Full Time
$2,173,000
$2,685,000
$3,210,000
$3,641,000
Part Time
212,000
258,000
300,000
356,000
Faculty
Full Time
211,000
244,000
294,000
343,000
Part Time
41000
1 4,000
5,000
6,000
Staff
Full Time
561,000
1 687,000
816,000
852,000
Part Time
13,000
16,000
19,000
20,000
Total
$3,174,000'i
$3,894,000
$4,644,000
$5,218,000
High Estimate',
Students
Full Time
$3,621,000
$4,475,000
$5,349,000
$6,069,000
Part Time
212,000
1 258,000
300,000
356,000
Faculty
Full Time
316,000
366,000
441,000
515,000
Part Time
4,000
4,000
5,000
6,000
Staff
Full Time
841,000
1,031,000
1,225,000
1,278,000
Part Time
13,000
16,000
19,000
20,000
Total
$5,007,000
$6,150,000
$7,339,000
$8,244,000
SALES TAX REVENUE
Law Estimate
$31,700
$38,900
$46,400
$52,200
High Estimate
50,100
61,500
73,400
82,400
APU Fis Imp Cb 05-2005 Exit i 6f7/2005 4:20 PM
EXHIBIT 13
AZUSA PACIFIC UNIVERSITY
OFF -CAMPUS TAX REVENUES FROM CONFERENCE ATTENDEES
APU Fis Imp Cb 05-2005 Ex13 6/7/2005 4:21 PM
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
ACTIVITY
Number of Conferences
22
27
32
42
Number of Attendees
Per Conference
154
154
154
154
Total
3,388
4,158
4,928
6,468
Length of Stay
Per Attendee
6
6
6
6
Total Attendee Days
20,328
24,948
29,568
38,808
SPENDING
Maximum
Spent Off -Campus
Per Attendee Per Day
Per Attendee
Percent
Amount
Lodging
$65
5%
$3
Food
15
50%
8
Other
10
100%
10
Total
$68
$21
Tax Rates
Sales
Food
1.0%
Other
1.0%
Transient Occupancy
5.0%
Current
Phasell
Phase II
Phase III
2002
2006
2011
2022
TOTAL SPENDING
Lodging
$66,000
$81,000
$96,000
$126,000
Food
152,000
187,000
222,000
291,000
Other
203,000
249,000
296,000
388,000
$421,000
$517,000
$614,000
$805,000
TOTAL TAXES
Transient Occupancy
$3,300
$4,100
$4,800
$6,300
Sales
3,600
4,400
5,200
6,800
APU Fis Imp Cb 05-2005 Ex13 6/7/2005 4:21 PM
Final, Economic and Community Impart Ana-ysis: A7sa Parific University
I..ee-Kosmonl Adxfog Servicer
October 2003 (Revised June, 2005)
Page 19 o(25
destinations or attractions outside Azusa. Nevertheless, the attendees will engage in some
spending off campus in Azusa. The categories of spending are lodging, food and other items.
Exhibit 13 presents a computation of the average spending for an attendee in each category
in Azusa. The estimates of the amounts for each category were provided by APU. They
reflect both attendees propensity to spend away from the conferences and the range of
opportunities in Azusa. The City levies a 5.0%I transient occupancy tax on lodging spending.
Only a small portion of conference attendees stays in commercial lodging off -campus. It is
estimated that conference attendees currently generate approximately $3,300 in annual
transient occupancy tax and $3,600 in annual sales tax for the City. At completion of the
expansion program, it is estimated that approximately $6,300 in transient occupancy tax and
$6,800 in sales tax will be generated by conference attendees.
BUSINESS LICENSE TAx
Azusa levies a business license tax on commercial activities in the City. It is essentially a
gross receipts tax. The rate varies with the amount of total annual gross receipts. For the
purposes of this analysis, it is assumed that an average business license tax rate of 0.015%
applies to the additional gross receipts generated by the presence of APU. Exhibit 14
presents a computation of the business license tax that would be generated for the City from
spending on purchases in Azusa by APU .and its students, faculty and staff as well as
conference attendees. It is estimated that theigross receipts of the businesses from which
those purchases are made are now producing between approximately $600 to $900 in annual
business license tax revenue for the City. Upon completion of the expansion program, it is
estimated that approximately $1,000 in to $11500 in annual business license tax would be
generated for the City.
EXHIBIT 14
AZUSA PACIFIC UNIVERSITY
BUSINESS LICENSE TAX
APU Fis Imp Cb 05-2005 Ex14 6/7/2005 4:21 PM
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
TAX RATE 0.0150%
SPENDING IN AZUSA
Low Estimate
Stu/Fac/Staff
$3,174,000
$3,894,000
$4,644,000
$5,218,000
Conference
421,000
517,000
614,000
805,000
APU
466,000
549,000
652,000
747,000
Total
$4,061,000
$4,960,000
$5,910,000
$6,770,000
High Estimate
Stu/Fac/Staff
$5,007,000
$6,150,000
$7,339,000
$8,244,000
Conference
421,000
517,000
614,000
805,000
APU
466,000
549,000
652,000
747,000
Total
$5,894,000
$7,216,000
$8,605,000
$9,796,000
TAX COLLECTED
Low Estimate
$600
$700
$900
$1,000
High Estimate
900
1,100
1,300
1,500
APU Fis Imp Cb 05-2005 Ex14 6/7/2005 4:21 PM
Fiscal, Economic and Community ImpactAnalysis: A7sa Pacific University
Ise-Kosmont Advisory Senires
October2003 (Revised June, 2005)
Page 20 a(25
VII. ECONOMIC IMPACT
RESIDENT STUDENTS
As indicated in Exhibit 15, there are currently 5,062 students attending classes at APU in
Azusa. Of those, 3,250 are full-time students' who are residents of Azusa, mainly in on -
campus or off -campus APU owned or controlled housing. The other 1,812 are either part-
time students or full-time students living outside Azusa. Upon completion of the expansion
program, it is anticipated that there will be approximately 5,295 full-time APU students
resident in Azusa and approximately 3,189 part-time students or full-time students resident
outside Azusa.
EMPLOYMENT
As indicated in Exhibit 2, APU currently employs a total of 304 full and part-time faculty
members. Of those, approximately 11% live in Azusa. Another 22% live in adjacent or
nearby cities and 67% live beyond. That total! 'is expected to increase to approximately 495
faculty members upon completion of the expansion program. APU also employs 590 full
and part-time teaching staff. Of those, approximately 15% five in Azusa. Another 27% live
in adjacent or nearby cities and 58% live beyond. That total is expected to increase to
approximately 896 non -teaching staff upon completion of the expansion program.
Combining these two basic categories produces a total APU workforce of 894 employees
l
(824 full-time employees and 70 part-time employees). Upon the completion of the
expansion program, it is estimated that the total APU workforce will increase to
approximately 1,391 employees (1,283 full-time employees and 108 part-time employees).
Current Full Build -Out
Full -Time Employees 824 1,283
Part -Time Employees 70 108
Total 1 894 1,391
A summary tabulation of APU employees by residence and full or part-time status is
provided in Exhibit 15.
PAYROLL
The average annual pay for a full-time APU faculty member is approximately $55,000. The
average annual pay for a part-time APU faculty member is approximately $8,000. The
average annual pay for a full-time non -teaching APU staff member is approximately $40,000.
The average annual pay for a part-time non -teaching APU staff member is approximately
$10,000.
These compensation levels produce a current payroll for all APU faculty and staff members
of approximately $37.9 million. Assuming the faculty and staff members residing in Azusa
EXHIBIT 15
AZUSA PACIFIC UNIVERSITY
ECONOMIC IMPACT
STUDENTS ENROLLED AT APU AZUSA
Full Time Resident in Azusa
Part Time or Resident Outside Azusa
Total
JOBS AT APU AZUSA
Residents of Azusa
Full Time
Part Time
Sub Total
Residents of Other Cities
Full Time
Part Time
Sub Total
Combined
Full Time
Part Time
Sub Total
APU PAYROLL IN AZUSA
Total
Faculty
Staff
Combined
Azusa Residents
Faculty
Staff
Combined
EXPENDITURES
Total
APU Students
Faculty and Staff
Conference Attendees
APU Purchases
Combined
Current
Phase I
Phase II
Phase III
2002
2006
2011
2022
3,250
3,980
4,770
5,295
1,812
2,254
2,636
3,189
5,062
6,234
7,406
8,484
111
134
160
172
10
--
12
15
15
121
147
175
188
713
857
1,022
1,111
60
72
85
93
773
928
1,107
1,203
824
991
1,182
1,283
70
84
100
108
894
1,075
1,282
1,391
$15,827,000
$18,326,000
$22,043,000
$25,768,000
22,070,000
27,060,000
32,140,000
33,530,000
$37,897,000
$45,386,000
$54,183,000
$59,298,000
$1,787,000
$2,069,000
$2,489,000
$2,909,000
3,250,000
3,984,000
4,732,000
4,937,000
$5,037,000
$6,053,000
$7,221,000
$7,846,000
$38,347,000
$47,248,000
$56,185,000
$64,278,000
33,137,000
39,687,000
47,379,000
51,847,000
422,000
518,000
614,000
805,000
52,000,000
63,013,000
80,221,000
109,202,000
$123,906,000 $150,466,000 $184,399,000 $226,132,000
APU Fis Imp Cb 05-2005 Ex15 6/7/2005 4:21 PM
Fiscal, Economic and Community Impact Analysis: A.Zzua Pacific University
Lee-KosmontAdvisory Semas
October 2003 (Revised June, 2005)
Page 21 of 25
receive the average compensation level, the current payroll for APU employees who are
Azusa residents would be approximately $5.0 million.
If approximately the same employee classification and pay structure continues through the
expansion program, the total annual APU payroll will increase to approximately $59.3
million. Again assuming that APU faculty and staff members who are Azusa residents
receive the average level of compensation, the APU payroll for employees who would be
Azusa residents upon completion of the expansion program is estimated to be approximately
$7.8 million.
Current Full Build -Out
I
Total Payroll $37.9 Million $59.3 Million
Azusa Residents Portion 5.0 Million 7.8 Million
A summary tabulation of APU payroll estimates by employee category and residence is
presented in Exhibit 15.
EXPENDITURES
The level of future expenditures will be a function of the extent to which APU increases
enrollment and expands its facilities. Based on discussions with APU staff, for the purpose
of estimating future expenditures, it will be assumed that 75% of any increases are based on
the percent increase in enrollment and 25% of any increases are based on the percent
increase in the size of the facilities. By this approach, expenditures would increase by
approximately 110% over the expansion program.
i
APU currently has a total annual operating budget of approximately $102 million for the
Azusa campus. If its annual operating budget increases by that 110% over the term of the
expansion program, it would reach approximately $214 million upon completion of the
program.
Current spending on goods and services by '!APU, students, faculty, staff and conference
attendees is estimated to total approximately $123.9 million. Upon completion of the
expansion program, total expenditures in !those categories are estimated to rise to
approximately $226.1 million.
A summary tabulation of these expenditure projections by source and location is presented
in Exhibit 15.
CONSTRUCTION IMPACT
Over the course of its expansion plan, APU anticipates constructing approximately 2.6
million square feet of new facilities. This is in addition to the approximately 1.1 million
square feet of facilities now in use. The timing of this construction is subject to APU's
success at fundraising to finance the expansion program.
Focal, Economic and Community Impact Analysis: Azusa Pacific University
Lee-Kosmont Advisory Services
October 2003 (Revised June, 2005)
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This expansion program could result in as much as $500 million in new construction
spending in Azusa. APU estimates that, by value, approximately 7% of its recent expansion
projects have been performed by Azusa contractors. If this ratio is maintained for the future
construction, contractors located in Azusa would receive in the range $35 million of the new
construction work.
INDIRECT IMPACTS
Employment, income and expenditures associated with a particular entity (such as APU)
have an impact on an overall regional economy that extends beyond the amount of the
direct job, payroll and spending figures. That additional impact, often referred to as a
multiplier effect, results as other sectors of the regional economy respond to the direct
activity as businesses enter into additional transactions with other businesses and their
employees spend the new income generated.
The numerical relationship between the initial direct impact (in terms of jobs, dollars of
spending or dollars of income) and the total impact in the entire economy is referred to as
the multiplier. Multipliers differ for different classifications of economic activity (e.g.,
agriculture, construction, education, etc.) as well as by geographic location and the size of the
area for which the indirect impact is being estimated. There are separate multipliers for jobs,
spending and income. A set of multipliers for a particular entity in a specific location will be
smaller for a limited geographic area than for a larger area. This is because the larger the
geographic area involved, the less will be the leakage of the total indirect impact beyond the
designated area.
Multiplier factors are computed by means of complex input-output econometric models
using exhaustive economic data for the relevant geographic area. Because of Azusa's
relatively small size in the region and limitations on data availability, trying to estimate the
multiplier effect in Azusa alone would be expensive, maybe impractical and subject to a wide
margin of error. Nevertheless, as a point of reference, economic multipliers in the range of
2.0 have been suggested (Ryan & Malgieri, 1992, National Council for Resource
Development Resource Paper No. 48) for estimating the full regional economic impact of
an educational institution such as APU. This suggests that the full economic impact of APU
on the region is likely to be in the range of twice the size of the direct impacts estimated.
Fiscal, Economi ic and Community Impact Analysis: Azusa Paafic Univemty
Lee-Kosmont Advisory Servicer
Oetober2003 (Revised June, 2005)
Page 23 of 25.
VII. COMMUNITY ACTIVITIES
As is common with many educational institutions in urban environments, APU operates a
broad range of service activities that provide benefits to many members of the Azusa
community. These numerous service activities are staffed by APU students, faculty members
and non -teaching staff. Most of the labor (particularly by students) is provided on a part-
time basis. However, some of the staff positions are filled by full-time APU employees. The
programs receive varying degrees of funding directly from APU and in some cases receive
revenues that partly offset the expenses.
The programs are managed by a number of different offices at APU. A very large proportion
of these activities and programs fall under the purview of the Office of Service Learning, the
Child and Family Development Center and the Neighborhood Wellness Center. The most
significant programs are described below.
Office of Service Learning
City Links
Child & Family Development
Neighborhood Wellness Center
Total
Azusa Residents Student Hours
Served Volunteered
11,700 16,400
4,000
5,500 18,000
960 2,500
18,160 40,900
The total amount of funding that APU provides to all of the service programs which it
sponsors is difficult to compile. Nevertheless, it is known that the out of pocket cost to APU
of funding three of the larger programs is as follows:
Amount
APU Scholarships for Azusa Students $125,000
Child & Family Development 175,000
Neighborhood Wellness Center 48,000
Total $348,000
OFFICE OF SERVICE LEARNING AND CITY LINKS
The Office of Service Learning (OSL) coordinates approximately 15 major programs under
which APU students annually provide assistance to a total of over 11,000 persons, including
students of the Azusa Unified School District (AUSD) and other members of the
community.
The two largest programs, which reach over 10,000 students of AUSD, are the Mini Course
program and Teacher Assistance Program. Those programs are conducted in AUSD
Fiscal, Economic and Community Impact Analysis: AZusa Paafic University
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October 2003 (Revised Jung 2005)
Page 24 n(25
classrooms by approximately 350 ASU student volunteers. The students who staff these
programs provide approximately 5,200 hours of volunteer service annually.
The Azusa Reads and the College Headed and Mighty Proud (CHAMPS) programs are
oriented toward tutoring and counseling for AUSD students. Approximately 920 AUSD
students are reached by these programs. The 105 ASU students who staff these programs
volunteer approximately 4,900 hours annually.
A number of smaller programs also serve AUSD students as well as elderly persons and "at
risk" youths. Those programs along with the OSL administrative office receive
approximately 5,600 hours of volunteer work from 185 additional ASU students. They
directly serve approximately 780 additional community members.
OSL also manages a special scholarship program funded by APU. It annually provides
scholarships to nine local students who have matriculated through the AUSD. The annual
cost to APU to fund this scholarship program is $125,000.
In addition to those ongoing programs, approximately 1,000 APU students, faculty and staff
participate in the annual City Links event in Azusa. This is a one -day event that is sponsored
by the City of Azusa, APU and AUSD. It draws participants from a wide range of
organizations from throughout the community. It focuses on accomplishing improvements
and enhancements to public facilities such as parks and schools as well as services through
non-profit organizations. Through this program those APU volunteers contribute over 4,000
hours of service.
CHILD AND FAMILY DEVELOPMENT CENTER
APU's Child and Family Development Center (CFDC) provides counseling and mental
health services at a low cost to Azusa and surrounding communities. A broad range of
treatment and assessment services are provided both at CFDC and at local schools. CFDC
was established in 1989 and is staffed in large part by students in APU's graduate clinical and
family psychology programs. The Center operates on a sliding fee scale. Each family's
income is considered in determining a treatment fee.
CFDC annually serves approximately 10,000 clients in the region. Approximately 5,500 or
55% of those clients are residents of Azusa. The remainder of those clients come from
nearby communities. APU students provide approximately 18,000 hours of service annually
to operate the Center. In addition there are several full-time staff members. Because
expenses exceed fees, the Center operates at an annual deficit of approximately $175,000
which is funded by APU.
NEIGHBORHOOD WELLNESS CENTER
The Neighborhood Wellness Center (NWC) was opened in 1998 and is jointly operated by
APU and the City of Azusa. It provides health education in such areas as stress reduction,
exercise, nutrition, weight -control and child safety. NWC also offers screening and
examinations as well as referrals to other health service providers. Future plans call for the
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Lee-Kormont Adveiory Serxaas
October 2003 (Revised June, 2005)
Page 25 of 25
addition of services such as vision care, physical therapy, mental health and social work.
These services are provided to residents of Azusa.
A significant amount of NWC's staffing comes from APU nursing students who provide
approximately 2,500 hours of service annually., The Center serves approximately 960 clients
annually who are residents of Azusa. APU incurs an annual net cost of approximately
$48,000 to operate NWC.
OTHER
Various APU recreational and public meeting facilities (e.g., Felix Event Center) are also
utilized on a periodic basis by a number of groups and organizations from the community.
There are also a very large number of small service programs which are run on a volunteer
by APU students. Those include programs such as coaching soccer and football teams, adult
education, senior assistance, etc. i
EXHIBIT 1
AZUSA PACIFIC UNIVERSITY
SUMMARY FISCAL IMPACT
APU Fis Imp Cb 05-2005 Ext 6/7/2005 4:16 PM
Current
Phase I
Phase II
Phase 111
2002
2006
2011
2022
REVENUES
Taxes
Utility Franchise
$42,000
$47,000
$68,000
$114,000
Sales
46,000
57,000
68,000
78,000
Utility In -Lieu Payments
104,000
121,000
187,000
358,000
Intergovernmental Transfers
Motor Vehicle In -Lieu
89,500
139,700
168,300
187,300
Gasoline Tax Fund Transfer
30,500
47,500
57,300
63,700
Cost Reimbursements
1,700
2,300
2,800
3,200
Charges for Services
4,200
6,200
7,500
8,200
Property Use
200
400
400
400
Licenses & Permits
500
700
800
900
Fines
4,900
6,800
8,100
9,000
Miscellaneous
300
400
400
500
Use of Money
3,200
4,300
5,700
8,200
Total
$327,000
$433,300
$574,300
$831,400
EXPENDITURES
Police Services
$165,800
$230,800
$276,700
$310,200
City Fire and Safety
136,000
159,000
245,000
467,000
Public Works
38,000
47,000
55,000
63,000
Recreation & Parks
Recreation Programs
8,900
13,900
16,800
18,700
Parks Maintenance
11,100
17,300
20,900
23,200
Library
16,600
23,100
27,700
31,000
General Government Services
Council & Administration
33,200
51,900
62,500
69,500
City Clerk
7,300
11,400
13,700
15,300
Total
$416,900
$554,400
$718,300
$997,900
NET FISCAL IMPACT
($89,900)
($121,100)
($144,000)
($166,500)
INDIRECT REVENUES
Low Estimate
Sales Tax
$35,300
$43,300
$51,600
$59,000
Transient Occupancy Tax
3,300
4,100
4,800
6,300
Business License Tax
600
700
900
1,000
Total
$39,200
$48,100
$57,300
$66,300
High Estimate
Sales Tax
$53,700
$65,900
$78,600
$89,200
Transient Occupancy Tax
3,300
4,100
4,800
6,300
Business License Tax
900
1,100
1,300
1,500
Total
$57,900
$71,100
$84,700
$97,000
APU Fis Imp Cb 05-2005 Ext 6/7/2005 4:16 PM