Harford County
The Cost of Community Services
A Synopsis
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Background:
Last May a group of Harford County nonprofit organizations commissioned the American Farmland Trust to make a Cost of Community Services study of the county. The study was proposed as a tool for making informed land use decisions for the new Master Plan now in progress. The Trust has made similar studies in Maryland and across the nation.
The Harford Land Trust took responsibility as lead organization for the $15,000 study with support and contributions from The Harford County Farm Bureau, Deer Creek Watershed Association, Manor Conservancy, Exelon Generation, owner of the Conowingo Hydro-Electric plant, Friends of Harford, Inc., The New Harford Democratic Club, and individual contributions.
Briefly, the study amasses figures showing the cost to the county for services in each category of land use--residential, commercial and industrial, and farm and forest. It compares the cost of services with the revenues generated by each category.
Andy Andrews, an experienced staff member of the American Farmland Trust, researched and put together this study. He can be reached for further information at 410-827-4370 or aandrews@farmland.org. The complete study is available at the office of the Harford Land Trust for a $5 charge to cover shipping and handling, or can be downloaded directly using the link at the end.
The American Farmland Trust (AFT) is a nonprofit conservation organization founded in 1980 to help stop the loss of productive farmland and to promote farmland practices that lead to a healthy environment. AFT provides a variety of services to landowners, land trusts, public officials, planners, agricultural agencies and others. Services include Cost of Community Services studies, workshops on farmland protection and estate planning, farmland protection, program development and agricultural economic analysis.
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The Harford County COCS study has analyzed the financial demands of public services such as schools, road and bridge maintenance, public safety, personnel, courts, etc. and how much it cost for the county to provide these services in three categories of land use. It then compares the costs to revenues from each category. The results are described as "a snapshot in time of revenues and expenditures on a land use basis." The time frame is the county fiscal year 2002 which ran from July 2001 to June 2002 because it was the most recent year for which the books on actual revenue and expenditure were closed.
The study findings are compressed as follows:
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Totals include all funds except ag land preservation and grants
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Actual
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Residential
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Com/Ind
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Farm/Open
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Revenues
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$327,985,887
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$276,561,564
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$48,403,714
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$3,020,609
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Expenses
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$328,100,658
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$305,962,839
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$19,385,221
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$2,752,599
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Net surplus
or (shortfall)
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($114,771)
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($29,401,275)
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$29,018,494
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$268,010
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Final land use ratio
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$1:$1.11
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$1:$0.40
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$1:$0.91
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The final ratios in the last row show the average cost of services per dollar of revenue generated by that category.
According to the study the figures indicate that in planning the service needs for the rapid growth that is occurring in Harford County, "it is important to note that while farm and open lands generate low revenues, their annual service costs are even lower."
Here and throughout the study Harford's Agricultural Land Preservation program is singled out as "not only a measure that enjoys broad public support but is also fiscally responsible."
Harford County's population increased by 25 percent between 1980 and 1990 and by 20 percent between 1990 and 2000. By then it had reached 218,590.
In a move to protect its agricultural economy and rural character as housing developments spread through the countryside, the county established a development rights purchase program in 1993 which, in combination with the Maryland Agricultural Lands Preservation Foundation, has protected over 34,000 acres of Harford farmland.
The American Farmland Trust reported that Harford's Agricultural Land Preservation Program made this study unique among COCS studies it has conducted to date. It is financed by real estate transfer taxes which it splits with the Capital Projects Fund. Agricultural land preservation "benefits the county broadly and in a manner that the COCS methodology is not designed to estimate." This fund is therefore not included in the analysis.
The Grants Fund which comes from state and federal sources and cannot be linked to any particular land use is likewise not included in the analysis.
The study summation of the County's revenues and expenditures includes:
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· The General Fund, which comes from taxes, service charges, licenses and permits, fines and forfeitures and miscellaneous revenues. It finances most county-level services including sheriff, planning and zoning, public works, administration, Board of Education and Harford Community College.
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The Highway Fund which comes from property taxes, gas taxes and vehicle title charges and finances county road and bridge maintenance and construction.
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The Capital Projects Fund which comes from recordation tax accounts, the real estate transfer tax and federal aid and finances public schools, parks and recreation, libraries and community college, landfill and general projects.
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The non major Parks and Recreation Fund such as Swan Harbor, supported by user fees.
In determining revenues and expenditures by land use, farm houses are included in the residential category. All educational and parks and recreation expenditures are attributed to residential development. Expenditures of most county departments providing public services are split among the three land use categories. Line items without straightforward records by land use were broken down based on the activity of the associated department. For example, most of the services offered by the Department of Public Works were attributed to residential development (65 percent), with smaller portions going to commercial/industrial (30 percent) and farm and open lands (5 percent). (The details are broken down in 7 closely-spaced pages.)
A look at unmet needs
The sponsors of this COCS study expressed concern that rapid residential development has resulted in many unmet capital needs and that the county has not kept pace with adequate funding for these needs, especially for school construction. After reviewing the preliminary findings of this study they asked AFT to compile information on the six-year capital improvement budget to determine which projects would require local funding, how much debt service for capital bonds would be needed to pay for these projects, and how the prospective costs would affect the cost of community services in the three land use categories. Based on this data the sponsors determined that the Harford County 6-Year Capital Improvement Budget would need $675 million to complete various county projects and to keep up with the county's infrastructure needs through 2009. According to county personnel, $139,250,000 of this would be required from local revenues with the balance funded by enterprise accounts, and state and federal sources.
For the purpose of this exercise, the sponsors calculated the cost for 20 years at a 4.5 percent interest rate per annum to retire this $138 million obligation. Given these assumptions, the annual debt service payment would be $10,703,470.
Adding the additional $10,703,470 in annual debt service to annual expenditures and adapting AFT's methodology for calculating the cost of community services, the impact for each land use category would be as follows:
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Land Use
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Net Fiscal Impact
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Land Use Ratios
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Residential Development
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$398,338,376
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$1:$1.14
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Commercial/Industrial
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$28,350,597
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$1:$0.41
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Farm and Open Lands
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$169,538
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$1:$0.94
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Excerpts from AFT's discussion of its findings
The study credits Maryland with an impressive history of financial commitment to farmland preservation. It was the first state to offer Agricultural Land Use Assessment. It launched its agricultural preservation program in 1977, one of the earliest initiatives in the country to recognize the public benefit of farmland and provide incentives for its preservation ...
In the 10 years since the inception of its Agricultural Land Preservation Program, Harford County spent $48.9 million to purchase agricultural easements ...
It is also important to note that Harford County ... spent $4.6 million in fiscal year 2002 on purchasing development rights. This program benefits the entire county... Protected farmland has made Harford County an appealing place for people to move ... and real estate values tend to go up in urbanizing counties if there is the perception that the community will retain its "rural" values. And farm and open lands provide environmental services that are hard to account for economically. Such non-market services include wildlife habitat, groundwater recharge and floodwater control.
Needless to say, good planning will be required to fund and accommodate the growth that is occurring in Harford County. For people working on the planning process it is important to note that while farm and open lands generate low revenues, their annual service costs are even lower....
Harford County is a national leader in its local efforts to preserve agricultural land. The fact that it attracts so many new residents is an ironic testament to its success. Understanding the true costs of this success and the breadth of competing forces affecting the county's future, and the future of this exemplary program, would be of benefit to other Maryland counties and, in fact, to people all across the country who are working in their own communities to preserve agricultural land.
The complete study can be obtained from the Harford Land Trust, P. O. Box 385, Churchville, MD 21028-0385 for a cover charge of $5.00 for postage and handling, or can be downloaded directly using the link below.
Full COCS Study (pdf, 236kb download)
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