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Zapata County Independent School District Board Informational Session :

Economic & Fiscal Impact Summary Report

May 22, 2012


OVERVIEW 1. Zapata County Economic Analysis  Local Economic Profile  Land Values & Housing  Population & Labor Force

2. Trends  Where are we heading & What can we expect if nothing changes 3. Call to Action 

Implications

Addressing growth prospects


ECONOMIC ANALYSIS - SUMMARY  Employment  Increased 20% over the past year  Increased 28% over the past 5 years  Construction and Mining Sectors with greatest growth

 Unemployment  2011 – 8.5% / State Average – 7.9%  Increased 5.6% from 2007 to 2010  Began to drop in 2011 12.00% R² = 0.4597 10.00% 8.00%

6.00% 4.00% 2.00% 0.00% 2006

2007

2008

2009

2010

2011

2012


ECONOMIC ANALYSIS - SUMMARY Area Income 

Incomes fall substantially below TX averages

Per Capita Income 2010 $12,518 (48% less than TX)

Income levels increased around 20% in last 10 years

Of 2010 population, 38% below poverty level


ECONOMIC ANALYSIS - SUMMARY • # of Firms / Size  Decreased 1% over past 5 years  Mining Sector greatest in importance Natural Resources and Mining Education and Health Services

3% 0% 1%

2%

6% 1%

Trade, Transportation and Utilities 23%

Construction Public Administration

11%

Manufacturing

Information Financial Activities 15% 20%

Professional and Business Services Leisure and Hospitality

18%

Other Services


RETAIL LEAKAGE ANALYSIS  Total Retail Opportunity Gap of $93.5 million dollars!  Indicates Zapata not capturing full market share, and opportunities for expansion or improvement exist

 High Potential for New Establishments include:    

Building Material and Supply Dealers Pharmacies & Drug Stores Specialty Food Stores Women’s Clothing Stores


LAND VALUES

 

Property values quite low and varied Existing home appraised values steadily increasing  Past 5 years increased by 71% to average of $68K in 2011

   

Great degree of value difference reflects the varying age, housing condition, and presence of unimproved lots Greater density and better living standards is needed Further market analysis needed as well.


HOUSING        

New housing leveled off in 2010, but expected to increase 31% by 2015 Owner occupied housing will continue to be majority Within Zapata, TX, Siesta Shores most dense subdivision Median home values increased 71% to $63K in 2011 Houses valued over $90K had greatest % change overall in 2010 Houses valued between $175K - $200K increased by 1300% Greatest volume of new units were in the range of $125K - $150K Cash rent also increasing (51%) – median $317


DEMOGRAPHIC ANALYSIS  Population  Increasing – More Slowly, 9% future growth

 Age  Median Age – 28.4, predicted to increase

 Race  Hispanic – 93%, White – 6% 16,500 15,500

15,262

14,500

Population

14,018 13,500 12,500

12,182

11,500 10,500 9,500

9,279

8,500 7,500 1990

1995

2000

2005 Year

2010

2015

2020


LABOR FORCE CHARACTERISTICS  Participation Rates  Steadily increased in past 5 years (3.7%)

 Occupations  Mining – largest sector – 23% of total

 Education Attainment    

Falls substantially below TX average 28% population less than 9th Grade education 31% at least H.S. Graduates (increased 13% from 2000) Greatest change in Associate Degreed (39% increase)

 Location  Greater % of educational attainment  within 30 minutes of Zapata, TX.  (as compared to 45 and 60 min)


TRENDS – WHERE ARE WE HEADING  Taxable Property Values are Declining  Project 22% decline from 2011 Annual Appraised Values, Tax Rates, and Property Values – Zapata County 2007 2,711,263,117

2008 2,892,885,790

2009 2,487,326,344

2010 2,161,294,884

2011 1,505,884,734

2012 Forecast 1,053,327,212

86%

84%

81%

80%

72%

64%

All other Taxable Property Values (with exemptions)

445,193,536

545,697,085

595,803,643

544,968,413

596,584,967

1,199,178,420

Total Taxable Property Values

3,156,456,653

3,438,582,875

3,083,129,987

2,706,263,297

2,102,469,701

1,644,280,893

---

8.9%

-10.3%

-12.2%

-22.3%

-21.8%

Oil, Gas, and Mineral Values % of Total Taxable Values

Percent Change Tax Rate per $100 (County) Total County Tax Levy

0.7361

0.7361

0.7361

0.7761

0.7988

$23,234,677

$25,311,409

$22,694,920

$21,003,309

$16,794,528


TRENDS – WHERE ARE WE HEADING  Mineral Tax Collection is Declining Mining, Gas and Oil Tax Collection Date

Amount

Percentage Change

10/01/2002 to 09/30/2003

$39,266,822.47

10/01/2003 to 09/30/2004

$36,331,386.08

-7%

10/01/2004 to 09/30/2005

$48,484,991.58

33%

10/01/2006 to 09/30/2007

$73,537,697.38

52%

10/01/2007 to 09/30/2008

$60,817,264.68

-17%

10/01/2008 to 09/30/2009

$63,422,490.08

4%

10/01/2009 to 09/30/2010

$55,773,146.60

-12%


TRENDS – WHERE ARE WE HEADING  2012 Taxable Value Scenarios 2012 Forecast Total Taxable Values

$1,644,280,893

Tax Rate

0% Increase

Total County Tax Levy Percent Change from 2011

$

13,134,516 -21.8%

3% Increase $

13,518,685 -19.5%

5% Increase $

13,848,251 -17.5%

 2017 Forecast is $1,493,922,066 assuming County continues on same trend  Represents a 5-Year decline of 9% from 2012


CALL TO ACTION: IMPLICATIONS  Zapata County is sparsely populated reducing its attractiveness for businesses looking to locate in relatively affluent markets.  Falcon Lake, the county’s main recreational asset is endangered by consistently low water levels.  The county’s primary industry, oil/gas, will likely face severe resource depletion within 15 years.

 While water resources are adequate today, they will become strained as the population grows.


RECAP – ECONOMIC vs. FISCAL

ECONOMIC IMPACT STUDIES 

Area: regional, state or national economy

Measures: changes in jobs, output and earnings

FISCAL IMPACT STUDIES 

Governments: City, County, Town or School District

Measures: changes in revenues and expenditures


CALL TO ACTION: IMPLICATIONS HOW DO COMMUNITY’S IMPACT THEIR OWN FISCAL CONDITIONS? 

Leadership – creating positive attitude toward business development

Through taxation – incentive policy

Land use

Infrastructure investments

Permitting processes – time is money

Quality of life amenities


SOLUTION: FISCAL IMPACT ANALYSIS

WHAT IS FISCAL IMPACT ANALYSIS? A financial planning tool that … 

Predicts the effects of development on municipal finances

Provides insight into how economic, demographic, public policy or regulatory changes can impact the revenue and expenses of state and local taxing jurisdictions


SOLUTION: FISCAL IMPACT ANALYSIS Why conduct a fiscal impact assessment? 

To predict the impact of a change in development, policy, regulation or public investment

To provide insight into more fiscally beneficial development alternatives

To insure sound long-term fiscal condition when designating land uses

Aid in negotiations with businesses/developers requesting incentives


SOLUTION: FISCAL IMPACT ANALYSIS EACH COMMUNITY IS UNIQUE 

Level of services provided

Geographic service boundaries

Capacity of existing facilities

Taxing Structure – income, property or sales tax revenue sources

End result → find information which is applicable to Zapata County community’s.


CALL TO ACTION: ADDRESSING GROWTH PROSPECTS  Natural Resources & Mining, Construction & Public Administration  Location quotients of greater than 1  A Destination Resort  Increase the relative importance of Leisure & Hospitality industry locally.  Integrated Community Marketing Plan  Increase investment (market local competitive advantages and incentives)  Infrastructure Projects  Build enterprise & community capacity (water/sewer, broadband, transportation, recreational, education/training, developable sites & building inventory)  Water Management Plan  Purchase water rights to Falcon Reservoir (to eliminate severe fluctuations & sustain population growth)


Q&A

QUESTIONS?


Presentation to ZCISD Board May 22, 2012