A Simple Tool to Evaluate the True Cost of Growth

Software Article February 04, 2003
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One of the biggest concerns in Utah is the impact of
increased population growth. This concern is especially acute in the Greater
Wasatch Area (essentially Salt Lake, Provo and Ogden) where the population is
expected to increase nearly 70 percent (from 1.6 million to 2.7 million) by
2020. When a random sample of Utahans were asked in January 2000 what was the
most important issue facing Utah today, growth ranked at the top of the list.

Growth is inevitable. However, something can be done to
control development patterns to head off crowding, congestion, pollution and
lost open space.

Community master planning is becoming an increasingly
sophisticated discipline, but, unfortunately, many master plans are being
prepared without any consideration given to municipal infrastructure cost
implications. However, the decisions made at the planning stage in Utah
typically can embody a commitment of $20 million in new municipal
infrastructure for a population increment of just 10,000. Moreover, any
infrastructure will cost just as much over its lifetime to repair, maintain and
operate. There also is the issue of who pays. Both costs and their allocations
usually are not part of the picture when community plans are being prepared.

Eliminating the Mystery of Improvement Costs

In mid May 2002, the Utah Governor's Office of
Planning and Budget introduced a valuable new tool to help local governments
develop more cost efficient infrastructure systems. Known as MIPCOM, the
Municipal Infrastructure Planning and Cost Model is a simple model based on an
easy-to-use computer spreadsheet that allows planners to estimate a
municipality's cost to service a new development.

Using MIPCOM, municipal officials, planners, engineers and
others can estimate the municipal infrastructure quantities associated with
alternative community development scenarios. Important infrastructure quantity
and cost issues can be addressed right next to those of community size, complexion
and configuration. The end result is more informed decisions based on the true
costs of growth.

Developed by the state's Quality Growth Efficiency
Tools Committee (QGET), MIPCOM was prepared specifically for use at the
planning stage. Committee participants include the Governor's Office of
Planning and Budget, the Utah Division of Water Resources and Psomas.

"The point is to eliminate the mystery of what it
costs to service the improvements related to a development," said Tim
Watkins of the Governor's Office of Planning and Budget, "and to
make sure impact fees are what they ought to be."

Essentially a ruler to measure growth, MIPCOM adds
quantitative detail to a policy-making environment. Doing this kind of modeling
early in the process makes the issue of public improvements a factor in the
decision-making as opposed to a cost of decision-making.

Simplicity

QGET's objective was to make MIPCOM as accurate and as
user-friendly as possible. MIPCOM is unique because it is so simple. Since it
is a planning tool (not a budgeting tool) the data requirements are not
intensive. Unlike many cost models, MIPCOM is not a GIS-based program. GIS
expertise and GIS software are not needed.

The MIPCOM model is simply a Microsoft Excel Spreadsheet
that can be used by anyone with Microsoft Excel software. It can be sent as an
e-mail attachment to anyone interested, free of charge. The Governor's
Office sponsored several three-hour training sessions throughout the summer to
teach municipal staff how to use the MIPCOM computer spreadsheet.

The user simply enters data about the community and the
proposed new development project and MIPCOM crunches the numbers. The model
estimates the amount of materials and labor needed to provide basic services to
the new development. Estimated services include streets, water conveyance,
wastewater conveyance and storm drains.

Using water service as an example, the model plugs in lot
size, average family size, number of units, square feet per dwelling unit and
square footage/acreage for the rest of the proposed land uses. The model will
calculate size of pipes to deliver, size of storage needed and amount of water.
To use, simply plug in an assumed water source and a number value for cost of
pipes, storage supply, etc., to get cost projections for water service.

QGET has used MIPCOM in roughly a dozen communities,
achieving at least 75 percent accuracy in estimating physical infrastructure
costs.  Local governments typically
hire engineering consultants to estimate physical infrastructure costs with
this level of accuracy. 

In addition to estimating infrastructure costs, the model
can be used to forecast water use according to lot size. Ultimately, it will be
expanded beyond infrastructure costs to calculate municipal expenses associated
with providing police, fire and paramedic services; and recreation and park
facilities, to name just a few of the possibilities.

Compact Approach to Growth

The MIPCOM model originally was created to analyze the
physical infrastructure costs for Envision Utah's Greater Wasatch area
Growth Scenarios. It essentially showed that isolated cluster development with
more land in between costs more to service. It also projected that Utah growth
would cost $4 billion more in 20 to 25 years with the current growth trend of
three to four units per acres than with a more compact approach to development
of six units per acre.

The findings were used in a 2000 survey sent to residents
along Wasatch Front. The survey results revealed that people were in favor of a
more dense development when shown the infrastructure costs attached to
different growth scenarios.

Making more informed decisions about the true cost of growth
at the planning stage can result in substantial savings to municipalities. The
money saved could be used instead for schools, recreation facilities and other
public amenities to enhance a community's quality of life.

About the author: 
David Eckhoff, vice president and regional manager, headed up the four-year MIPCOM development effort for Psomas, a consulting engineering and information management firm providing services in land development, water resources transportation and informati
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