Economic and Fiscal Impact Survey

Transcription

Economic and Fiscal Impact of
Arkansas
DIVISION OF AGRICULTURE
RESEARCH & EXTENSION
University of Arkansas System
Economic and Fiscal Contribution
of
Hot Springs Village
2010
This study was funded by the Hot Springs Village Property Owners Association
Wayne P. Miller
Professor
University of Arkansas
Cooperative Extension Service
September 2011
Economic and Fiscal Impact of Hot Springs Village, Arkansas –
3
Acknowledgments
The authors acknowledge and thank all those
who provided information and helped prepare this
publication. Harry Djunaidi, research assistant,
was instrumental in the undertaking of this study.
He collected and analyzed data and prepared
tables and graphs for the report. The assistance
of Ron Matlock, County Extension Staff Chair in
Saline County, is also greatly appreciated. He
obtained county information that was critical
to the study and provided helpful comments
and suggestions.
We wish to thank Linda Mayhood and Hot
Springs Village Property Owners Association staff
members Stacy Hoover and Mary Cotton, who
administered a survey of Hot Springs Village residents. The information they collected, entered into
a database and summarized provided some critical
demographic and economic information needed
for the completion of this study.
We also greatly appreciate the comments
and suggestions by members of the POA
Governance Committee. Jerry Yeric, Jim Zahnd,
Dick Breckon and Linda Mayhood provided initial suggestions for the study and provided comments and suggestions to improve the draft
report. The committee also provided critical
information on the Census Blocks that were not
included in the defined area of the Hot Springs
Village CDP.
Ron Matlock also opened doors with Saline
County officials, who provided information for
the study on very short notice. We wish to thank
Saline County officials Jim Crawford, Treasurer;
Joy Ballard, Collector; Sandra McPherson,
Treasurer; Gary Ballard, GIS Department and
others in the Saline County office who took
time to respond to our questions and provide
needed information.
Our thanks also go to Shannon Sharp in the
Garland County Assessor’s office, who provided
detailed information on assessments for the county,
school districts and Hot Springs Village in a
timely manner.
Fountain Lake and Jessieville school district
officials also provided information for this study in
a timely manner, as did staff of the Assessment
Coordination Department.
We are also grateful to Laura Goforth,
Associate Designer/Editor, who did the layout,
editing and design of this report and to Chris
Meux, Design Specialist, for designing the front
and back covers. Your contributions to the report
are greatly appreciated.
5
Executive Summary
The contribution of Hot Springs Village to the
local economy, school districts and county governments is substantial. This economic activity adds
$201 million of value to the local Garland and
Saline county economy. Hot Springs Village
generates employment opportunities and additional income for local residents and generates
additional revenue for county governments and
school districts. As Hot Springs Village grows, the
contributions will also grow. In 2010 some
3,684 jobs and nearly $119 million in income
were generated by the economic activities
associated with Hot Springs Village.
The population of Hot Springs Village
continues to grow, increasing from an estimated
11,895 in 2004 to 13,748 in 2010. As the population of Hot Springs Village grows, household
spending also increases and is the primary Hot
Springs Village contribution to economic growth
in the region. Household spending by Village
residents and visitors generated 2,774 jobs and
$156 million in value added in 2010.
New residential construction in Hot Springs
Village also increases the size of the local economy.
New home construction increased significantly during the 1990s and remained strong from 2000 to
2007. There were a total of 997 new housing units
built in the six-year period from 2004 to 2010. This
new home construction generates an average of
518 jobs per year and annual income of $16.7 million with about $24 million of value added to the
local economy. As new homes are built on previously purchased lots, residential construction will
continue to provide a substantial contribution to
employment and income of local residents.
Although substantial, investment in site and
infrastructure becomes a smaller share of Hot
Springs Village’s contribution to the local economy
as the population of Hot Springs Village increases.
Infrastructure development generated 66 jobs and
$2.2 million additional income in 2010. This adds
$2.8 million of value added to the local economy.
Although the population of Hot Springs
Village is less than seven percent of the total
population of Garland and Saline counties, Hot
6 – Economic and Fiscal Impact of Hot Springs Village, Arkansas
Springs Village property tax assessments account
for 13 percent of total assessments in the two
counties. Hot Springs Village property owners
paid an estimated $16.1 million in real and
personal property taxes in 2010. Of this,
$13.6 million went to the Jessieville and Fountain
Lake school districts and $2.5 million went to the
Garland and Saline county governments.
Both the county governments and the school
districts benefit from Hot Springs Village. Revenue
received from Hot Springs Village residents, visitors
and property owners more than pays for the cost of
services provided by county governments. It is estimated that Hot Springs Village residents paid a
total of nearly $3 million in property and sales taxes
to the Garland and Saline county governments in
FY2010. Cost of services provided to Hot Springs
Village residents is estimated to be nearly $900,000,
leaving a net benefit to the two county governments
of $2.1 million. Saline County receives a much
larger share of the net benefit from Hot Springs
Village residents primarily because the county relies
more heavily on the property tax to generate local
revenue. Both county governments will benefit from
future growth of Hot Springs Village because
residents pay county sales and property taxes that
generate revenue without significant cost to the
county governments.
Jessieville and Fountain Lake school districts are
major beneficiaries of Hot Springs Village. Net
benefits accruing to the two school districts are
estimated at nearly $11 million for FY2010. Nearly
80 percent of these net benefits accrue to the
Fountain Lake School District. Hot Springs Village
property owners paid approximately $13.6 million
in property taxes to the two school districts, with
only 467 students from Hot Springs Village
attending these two school districts.
Hot Springs Village contributes substantially
to the private and public sectors of Garland and
Saline counties. As Hot Springs Village grows,
Garland and Saline counties will reap substantial
benefits from the new jobs created, income
generated and local tax revenue paid by residents
and property owners.
revenue to the Fountain Lake and Jessieville
school districts.
Summary Highlights
Economic Contribution to
Garland/Saline County Economy
•
Hot Springs Village residents and visitors
generate 3,684 jobs and add $201 million to
the local economy. The contribution includes
the following activities:
 Infrastructure Development generates
66 jobs and $2.8 million in value added.
•
The pro-rated expenses for the 467 students
from Hot Springs Village attending Fountain
Lake and Jessieville school districts are
$2.6 million.
•
The net benefit to the Fountain Lake and
Jessieville school districts is $10.9 million.
Fiscal Contribution to County
Governments
 New Home Construction generates
518 jobs and $24 million in value added.
•
Hot Springs Village property owners,
residents and visitors pay an estimated $2.96
million in property and sales taxes that go to
the Garland and Saline county governments.
•
The pro-rated expenses for county
government services provided to Hot
Springs Village residents are estimated to be
$0.9 million.
•
The net benefit to the Garland and Saline
county governments is $2 million.
 Hot Springs Village resident spending
generates 2,774 jobs and $156 million in
value added.
 Medicare spending generates 326 jobs
and $18 million in value added.
Fiscal Contribution to School Districts
•
Hot Springs Village property owners
contribute $13.5 million in property tax
Economic Contribution to Garland/Saline County Economy
Activity
Initial
Expenditure
(Million $)
Infrastructure Development
Total Jobs
Created
4.6
New Home Construction
HSV Resident Expenditures
Medicare Reimbursement
Total Effect
Labor Income
(Million $)
66
2.2
Total Value
Added
(Million $)
2.8
43.1
518
16.7
24.0
324.0
2,774
85.7
156.6
24.6
326
14.3
18.3
396.3
3,684
118.8
201.7
Copyright 2011 Minnesota IMPLAN Group, Inc.
Fiscal Contribution to School Districts
Region
Property Tax Revenue (HSV)
Fountain Lake
Jessieville
Total
$10,091,771
$3,473,308
$13,565,079
HSV Residents’ Share of Expenses
$1,393,680
$1,278,029
$2,671,709
Net Benefits From HSV
$8,698,091
$2,195,279
$10,893,370
Fiscal Contribution to County Governments
Region
Garland
Saline
Total
$516,422
$2,014,818
$2,532,240
Sales Tax Revenue (HSV)
$430,777
--
$430,777
HSV Residents’ Share of Expenses
$380,602
$496,505
$877,108
$566,597
$1,518,313
$2,084,909
7
Profile of Hot Springs Village
Hot Springs Village is a planned recreation/
retirement community nestled in the Ouachita
Mountain Foothills of central Arkansas, straddling
Garland and Saline counties. Hot Springs Village
lies 50 miles southwest of Little Rock where urban
amenities are readily available. Hot Springs, a resort
community 15 miles to the south, offers a wide
array of entertainment opportunities, state-of-theart health facilities and the nation’s only urban
national park. Hot Springs Village’s 11 recreation
Figure 1. Map of Central Arkansas
lakes and forested foothills provide scenic vistas and
abundant outdoor recreational opportunities.
A large majority of Hot Springs Village
residents moved to the community from states other
than Arkansas and bring financial resources, expertise and experience with them. In this study we estimate the economic and fiscal impact that Hot
Springs Village and its residents have on Garland
and Saline counties.
Past and Current Development
Development of Hot Springs Village was
begun in 1970. Cooper Communities, Inc., based
in Bella Vista, Arkansas, developed Hot Springs
Village as a planned recreation/retirement
community. Many residential areas have been
developed and facilities built to provide a unique
living environment for residents and wide-ranging
recreational opportunities for property owners.
Facilities
Cooper Communities, Inc. built most of the
facilities and developed most of the infrastructure
of Hot Springs Village. Once built, the facilities
were turned over to the Hot Springs Village
Property Owners Association (HSVPOA), Inc. to
maintain and manage. However, the HSVPOA
also invests in the public infrastructure to provide
needed services to Hot Springs Village residents.
Cooper Communities, Inc. and the Property
Owners Association have invested nearly $185
million to develop the land and build recreational
facilities, utilities and roads. The infrastructure
includes numerous recreational facilities which
are an integral part of Hot Springs Village.
These facilities, and a scenic environment, have
attracted a growing population wanting the
lifestyle these facilities make possible.
Cooper Communities, Inc. and the Hot
Springs Village Property Owners Association
have also constructed other public facilities, roads
and utilities to provide residents with the infrastructure, public safety and utilities needed for a
community of 13,748 people in 2010. These
include public safety facilities, fire trucks and
approximately 499 miles of roads, 476 of which
are paved.
The Property Owners Association is
responsible for maintaining and operating
facilities and infrastructure. Funds to maintain
these facilities come from a monthly assessment
fee paid by property owners and user fees for
such things as recreational facilities, ambulance
service and utilities. User fees are charged for golf
courses and other recreational facilities, with nonproperty owners paying substantially more than
property owners.
Capital Improvements
The Hot Springs Village Property Owners
Association spent $22.6 million on the expansion
and maintenance of utilities and another $5 million on street maintenance from 2005 through
2010. Some of the major investments include a
water plant (wastewater) expansion, pump stations,
upgrades of water treatment plants and sewer lift
stations. Other infrastructure improvements
include such things as water and sewer extensions,
dam maintenance and improvement of electrical
and other utilities.
Commercial Development
In addition to the investment in public
infrastructure in Hot Springs Village, there has
been substantial commercial development in
response to increased demand for goods and
services by Hot Springs Village residents. The Hot
Springs Village Property Owners Association has
issued 52 building permits for commercial buildings since 1998. Sixteen of these building permits
were issued between 2005 and 2010.
Land Use
Hot Springs Village covers 26,014 acres
(Figure 2). While a substantial proportion of the
land area is devoted to residential lots, a significant
proportion is common or reserve property, covered
by lakes or used for golf courses. Approximately
42 percent of the land area is devoted to residential housing, while 36 percent is common and
reserve property and another 13 percent is covered
by lakes and used for golf courses.
Figure 2. Land Use in Hot Springs Village
Source: Graph constructed using data provided by the
Hot Springs Village Property Owners Association.
9
Common property, which includes recreational
facilities, permanent parks and green belts, uses
29 percent of the land area. Reserve property,
which is owned by the developer and given or
sold to enhance the value of Hot Springs
Village, accounts for seven percent of the land
area. Common and reserve property, lakes and
golf courses combined utilize nearly one-half
of the land area in the Village.
Table 1. Infrastructure and Facilities Constructed, Hot Springs Village
DeSoto Golf Course
DeSoto Club, Pro Shop & Fitness Center
1971-1995
1996-2004
604,271
1,367,456
1,971,727
1,154,202
1,032,617
2,186,819
24,090
24,090
386,000
386,000
DeSoto walking trail renovation
DeSoto Beach area, 17 acres
DeSoto Park
35,000
DeSoto Marina
35,000
Coronado Recreational Complex
2005-2010
35,000
24,880
59,880
1,961,927
Coronado Golf Course
800,466
Coronado Pro Shop
215,108
Total Cost
1,961,927
800,466
93,964
309,072
547,595
547,595
22,595
22,595
Coronado Library
303,297
303,297
Coronado Center parking lots
149,352
149,352
Coronado tennis courts
Coronado RV camping park
Cortez Pro Shop
Cortez Pavilion
300,000
300,000
35,000
35,000
Cortez golf maintenance bldg. addition
29,517
29,517
Cortez Fire House addition
78,340
78,340
Cortez Golf Course
702,843
702,843
Balboa Golf Course
1,814,478
1,814,478
Balboa Clubhouse & Pro Shop
2,084,200
2,084,200
Balboa Pavilion
505,442
505,442
Balboa Fire House
275,200
275,200
70,500
70,500
2,724,051
2,724,051
30,415
2,030,415
Balboa parking/boat ramp
Magellan Golf Course
Ponce Deleon Club & Golf Course
2,000,000
Diamante Golf Course
8,100,000
8,100,000
Granada Golf Course
6,931,657
6,931,657
Isabella Golf Course
5,618,400
5,618,400
522,119
2,722,119
284,180
284,180
Woodland Auditorium
2,200,000
Public safety
Fire trucks
Road construction & maintenance
Land development & other facilities
331,362
30,681,744
15,110,876
331,362
5,022,470
50,815,090
9,106,007
722,736
Utility construction & maintenance
29,655,513
29,025,510
22,602,535
81,283,558
9,828,743
Total Infrastructure Costs
91,485,759
66,212,151
27,625,005
185,322,915
Source: 1971-1995 data were provided by Cooper Communities, Inc. and 1996-2010 data were provided by the Hot
Springs Village Property Owners Association.
While 2,354 acres in Hot Springs Village
remains unplatted, there are no immediate
plans to plat this land for residential or
commercial development.
Lot Sales
34,146 lots have been sold in Hot Springs
Village since Cooper Communities, Inc., began
developing Hot Springs Village in 1970. Over the
24-year period from 1970 to 2004, an average of
nearly 1,000 lots per year were sold (Figure 3).
Most of the lot development and sales occurred in
the 1970s and 1980s. New lot sales declined
significantly in the 1990s, and very few new lots
have been sold from 2005 to 2010. According to
figures provided by Hot Springs Village, less than
100 new lots were sold for the six-year period
since 2005. While new lot sales will be minimal,
existing lots will continue to be purchased and
sold. These sales will provide jobs and income to
appraisers, realtors and others associated with the
housing industry but will not have the economic
impact associated with new lot sales.
Figure 3. Total Lots and New Lots Sold
In the 1970s and 1980s, new lot sales brought
in substantial revenue to the developer.
Residential Construction
While new lot sales have slowed considerably
since 1992, new home construction increased significantly during the 1990s and remained strong
from 2000 to 2007 (Figure 4). Since 2007 new
home construction has declined substantially.
According to the 2010 Census of Population,
there were 8,546 housing units in Hot Springs
Village compared to 6,297 housing units in 2000.
This is an increase of 2,249 housing units, or
36 percent over this 10-year period. This translates
to an average of 225 new housing units per year.
However, most of this new home construction
occurred from 2000 to 2007, as will be shown from
data on building permits issued by the Hot Springs
Village Property Owners Association.
Figure 4. New Home Construction,
1977-2010
Source: 1970-1995 data are from Cooper Communities, Inc.
and 1996 to 2010 data are from the Hot Springs Village
Property Owners Association. Figures are based on the net
new building permits issued.
The Property Owners Association building
permit records indicate that there have been
8,377 building permits issued in Hot Springs
Village since 1970. This is 169 fewer building permits issued than housing units, according to the
2010 Census of Population. This is to be expected,
since building permits are issued for townhouses as
well as single family homes. Since townhouses have
multiple housing units and the Census counts housing units, it is expected that there would be fewer
building permits issued than the number of housing units in Hot Springs Village. Since yearly data
are available for building permits issued and cost
data are available for buildings, the building permits data are used to estimate the economic
contribution of new home construction.
The building permits data indicate that 1,759
new housing units were constructed from 2000 to
2010, or an increase of approximately 26 percent.
The number of new housing construction permits
issued from 2005 to 2010 was 997, or 166 per year.
This is a 15 percent increase over a six-year period.
Most of the new homes constructed are in the
Saline County area of Hot Springs Village.
11
While the number of new homes constructed
has varied from year to year, an average of
211 housing units has been built per year since
construction began in 1971 (Figure 5). Just 81
houses were built in 1982 compared to a high of
453 houses in 1993. New home construction was
highest during the 1990s when an average of 296
new homes were constructed per year. Since 2000
there has been an annual average of 176 new
homes constructed. However, only 225 building
permits have been issued since 2007.
Figure 5. New Home Construction by Type,
1977-2010
Source: 1970-1995 data are from Cooper Communities, Inc.
and 1996 to 2010 data are from the Hot Springs Village
Property Owners Association. Figures are based on the net
new building permits issued.
More than 92 percent of these housing units
are free-standing single-family homes. The other
8 percent are townhouses. Since 2004 only 33
building permits were issued for townhouses and
none after 2006.
Population Growth
Hot Springs Village remains one of the fastest
growing communities in Arkansas. Although not
growing as fast as northwest Arkansas or Faulkner,
Lonoke and Saline counties in central Arkansas,
the population of Hot Springs Village grew by
29 percent from 2000 to 2010. While the population of Hot Springs Village grew at a faster rate
than Garland County and the state average of
9 percent, it grew slower than in Saline County.
The population of Hot Springs Village grew at a
similar rate as the combined Garland and Saline
county populations. According to the 2010 Census,
all of this growth has occurred in the Saline
County area of Hot Springs Village. The Saline
County area of Hot Springs Village grew by
62 percent from 2000 to 2010, whereas the
Garland County population of Hot Springs Village
grew only 11 percent.
13,748 people called Hot Springs Village their
home in 2010 compared to 10,650 in 2000
(Figure 6). In addition to these residents, others
reside in Hot Springs Village for short periods of
time. Some people have a second home in Hot
Springs Village and may spend a few months there,
although not calling it their permanent residence.
Others visit Hot Springs Village using their timeshares or rent a home or condominium.
Figure 6. Hot Springs Village Population,
1970-2010
Source: Census of Population and Population Estimates,
U.S. Bureau of Census.
The population of Hot Springs Village is about
6.8 percent of the total population of Garland and
Saline counties. This is a slight increase from 2004
and a substantial increase from 1990 when Hot
Springs Village accounted for less than five percent
of the total population of Garland and Saline
counties (Figure 7).
Figure 7. Hot Springs Village Population as
Percent of Garland and Saline Counties
Source: Computed from Census of Population and Population
Estimates, U.S. Bureau of Census and population estimates of
Hot Springs Village.
Although the population of Hot Springs Village
is small compared to the population of Garland
and Saline counties as a whole, it accounted for
about 10 percent of population growth in the two
counties from 2000 to 2010.
Population Characteristics
The people living in Hot Springs Village are
older, have more formal education and have higher
home values than most people living in Garland
and Saline counties and in Arkansas. Median
household income in Hot Springs Village is somewhat higher than in Arkansas and Garland County
but slightly less in Saline County.
some college or technical education. In Saline and
Garland counties, only about 85 percent of the residents 25 years of age and older have a high school
education, and approximately one-half have some
college or technical education.
Figure 9. Share of Population 17 and
Younger
The median age of people living in Hot Springs
Village is 67 years compared to 44 in Garland
County and 39 in Saline County. Over half (57 percent) of the population in Hot Springs Village is
65 years of age or older compared to just 21 percent in Garland County and 15 percent in Saline
County (Figure 8).
Figure 8. Population 65 and Older
The older population means fewer school-age
children per household than the average for
Garland and Saline counties. In 2009, only 7 percent of the people living in Hot Springs Village
were younger than 18 years of age compared to
21 percent in Garland County and 24 percent in
Saline County (Figure 9). Of the 46,232 living in
Garland and Saline counties, only 867, or 2 percent, live in Hot Springs Village. In 2010, 652 children living in Hot Springs Village were enrolled in
kindergarten through high school. Most of these
children attended either the Jessieville or Fountain
Lake schools.
Ott (1987)1 estimated that retirees moving to
Garland County have an average net worth of
$215,000. While comparable figures for 2010 are
not available, anecdotal evidence suggests that the
average household net worth is higher than the
average for Arkansas. This wealth often translates
into more expensive homes and higher property
taxes paid to county governments and local school
districts. In 2010, the median value of homes in the
Hot Springs Village Census Designated Place
(CDP) was $166,600 compared to $122,300 in
Garland County and $123,100 in Saline County.
The median value of homes in Hot Springs Village
is approximately 1.4 times the value of homes in
Garland and Saline counties and 1.7 times the
median home value in Arkansas (Figure 10).
Figure 10. Median Value of Homes
More than 95 percent of Hot Springs Village
residents 25 years of age and older have at least a
high school education, and over two-thirds have
Source:American Community Survey, 2005-2009.
1
Ott, J.A. (1987) Economic Study of the Retirement Community. Arkadelphia, Arkansas: School of Business, Henderson
State University.
13
Hot Springs Village residents have higher
median household incomes than in the state of
Arkansas and Garland County), although less than
in Saline County. Much of this income comes from
outside the state, and when spent in Garland and
Saline counties, increases the size of the local
economies. In 2009, the median household income
of Hot Springs Village residents was $43,510 versus
$38,542 in Arkansas, $36,454 in Garland County
and $51,082 in Saline County (Figure 11).
Figure 11. Median Household Income, 2009
Source: American Community Survey, 2005-2009.
The average (mean) income of Hot Springs
Village households in 2009 was $53,628, which
is substantially higher than the median. This
means there are some households in Hot Springs
Village with substantially higher incomes than
the median.
The source of household income also varies
between Hot Springs Village and other Garland
and Saline county residents. Since the median age
of Hot Springs Village residents is much higher
than residents of Garland and Saline counties, it
is not surprising that 81 percent of adults responding to a Hot Springs Village Property Owners
Association survey indicated they considered
themselves retired, and 87 percent said retirement
income is their primary source of income. Retirement income accounts for an average of 82 percent of all household income of those responding
to this question on the questionnaire.
In addition to this retirement income,
953 households, or about 23 percent of the
households in the survey, reported receiving
income from interest, dividends or rental income.
These households indicate they receive from
1 percent to 100 percent of their income from
this source, or an average of 18 percent. Both
retirement income and earnings on investments
are received from outside the region.
Only 18 percent of the households in the survey
reported receiving wage and salary income. Less
than 9 percent of the households responding to this
question said that income from wages and salaries
was their primary source of income.
Even fewer households in Hot Springs Village
receive public assistance. Less than 1 percent of the
households in the survey said public assistance was
their primary income source, and only 66 households reported receiving some public assistance.
This is less than 2 percent of all households in
thesurvey.
Households in Hot Springs Village receive a
much larger share of their income from retirement
income and earnings on investments compared to
other households in Garland and Saline counties
and the state of Arkansas. Therefore, much of their
income comes from outside the state of Arkansas.
Income received from sources outside the
region and spent in Saline and Garland counties
stimulates the local economy, similar to spending by
employees of a manufacturing firm that sells goods
or services outside the local area.
Profile Summary
Most of the residents of Hot Springs Village
moved to this recreation/retirement community
from other states and bring their wealth and income
with them. Hot Springs Village residents on average
have more wealth and income than the average
county resident. They also have more formal education and work experience, more expensive homes,
higher incomes and fewer school-age children than
the average county resident. To the extent that they
spend their wealth and income in Garland and
Saline counties, they generate additional jobs and
income for local residents and pay taxes which support local schools and county governments. In the
next section of this report, the economic impact of
Hot Springs Village on the Garland and Saline
County economies is estimated.
Administration and Services
Property Owners Association
The Hot Springs Village Property Owners
Association was formed to promote the health,
safety and welfare of the residents. To accomplish
these goals, the Property Owners Association:
•
owns, acquires, builds, operates and maintains
recreational facilities
•
provides municipal services
•
fixes, levies and collects all charges and
assessments of Hot Springs Village
The municipal services provided by the
Property Owners Association include police, fire,
water, sanitation, recycling and sewer. To provide
these services and to maintain facilities, the Hot
Springs Village Property Owners Association
employs about 500 people during the high season
(April to September) and about 400 people from
October to March.
The Property Owners Association also
maintains architectural control over new residential construction. Permits are required for the
construction of any building, fence, wall or other
structure erected in Hot Springs Village.
While Cooper Communities, Inc., built most
community facilities and turned them over to the
Property Owners Association (POA) to maintain,
the POA constructed utility infrastructure in subdivisions and added to recreational facilities.
Between 2005 and 2010, the Property Owners
Association spent $22.6 million to upgrade utilities and maintain facilities of Hot Springs Village
and $5 million on street maintenance. The total
investments made by Cooper Communities,
Inc., and the POA are presented in Table 1 on
page 10.
As Cooper Communities, Inc., decreases its
new investments in the Hot Springs Village infrastructure, the Hot Springs Village Property
Owners Association is taking more responsibility
for expanding and maintaining the Hot Springs
Village infrastructure to support residents. The
per-month lot assessment fee pays for some of
the cost of municipal services provided by the
Property Owners Association. The costs of
operating and maintaining recreational facilities
are offset as much as possible by user fees.
The Community Facilities maintained by the Property Owners Association include:
•
499 miles of roads
•
Tennis center with 13 courts
•
Water and sewer facilities
•
Pickleball courts
•
Eight 18-hole golf courses and one 27-hole
golf course
•
Game areas
•
Clubs and restaurants
•
Nine golf shops
•
Outdoor swimming pool
•
11 lakes
•
Fitness center with a 25-meter pool
•
Community center
•
Recreational vehicle park
•
Auditorium
•
36 miles of multipurpose trails
15
Planned Community Stimulates
Growth of Local Economy
Just as new manufacturing facilities or tourism
stimulate growth of the local economy, so do
planned recreation/retirement communities that
attract households that bring their wealth and
retirement incomes. Both the private and public
sectors benefit from an influx of residents who
receive income from sources outside the community. These residents pay taxes to local governments and school districts and purchase goods and
services from local merchants..
Private Sector Benefits
The private sector benefits from a planned
recreation/retirement community that attracts residents, visitors and tourists from outside Arkansas
in several ways.
•
The developer uses its resources to
develop the site, construct facilities and
bring people to visit the community.
•
New residents construct homes and
purchase goods and services from local
businesses. Temporary residents also
purchase goods and services from
local businesses.
In the above activities, dollars flow from
outside the community to local businesses. This
spending of dollars from outside the community
stimulates additional spending and economic
activity. Some of the money is used to hire additional workers to construct facilities and residences
or to provide goods and services demanded by
the developer, new residents and visitors. Thus
additional jobs are created and local residents’
incomes increase.
In the early stages of a planned recreation/
retirement community, the greatest economic
impact comes from land development and the
construction of Hot Springs Village infrastructure.
As the planned community matures, new home
construction and household spending provide
most of the economic impact. In a mature
community, household spending becomes the
largest source of the economic impact. Hot
Springs Village is a large and growing community where household spending and new
home construction provide the greatest
economic impact.
Public Sector Benefits
County governments and school districts are
major beneficiaries of tax revenue generated by
planned communities. Local governments receive
sales tax revenue from Hot Springs Village residents, visitors and developers who purchase goods
and services from local businesses. In addition, all
Hot Springs Village property owners pay property
taxes, which provide additional tax dollars for
county governments and school districts.
School districts, in particular, benefit from
Hot Springs Village. The primary source of local
revenue for financing elementary and secondary
schools is the property tax. An influx of people
who build homes, but have few school-age children, provides school districts with added revenue
without the cost of educating more students.
To the extent that services such as road
construction, maintenance and repair and police
are provided and paid for by the recreation/retirement community, the financial burden on the
county is not increased.
The public sector also benefits greatly from
the volunteer hours provided to community
organizations by Hot Springs Village residents.
Schools, hospitals, churches and civic organizations all benefit from the time, expertise and charitable contributions provided by Hot Springs
Village residents.
Economic Benefits
Direct, Indirect and Induced
Effects
Three types of economic effects (direct, indirect
and induced) are derived from a recreation/retirement community which attracts residents and visitors from outside the local area. Direct, indirect and
induced effects of retiree spending are shown in
Figure 12.
Direct effects result from spending dollars
earned outside the area to purchase goods and
services from local businesses. The developer, Hot
Springs Village residents and visitors all have direct
economic impacts on Saline and Garland counties
because they spend money to construct buildings
and facilities and purchase goods and services from
local businesses.
Indirect effects are production changes in
backward linked industries caused by an increase
in demand for their goods and services. For
example, new residents of Hot Springs Village
may hire a contractor to build them a new home.
The contractor purchases construction materials
from local businesses and may hire subcontractors
Figure 12. Direct, Indirect and Induced Effects of Retiree Spending
17
to complete some of the work. This spending by
contractors generates indirect effects (new jobs and
additional income) in the local businesses that
supply the contractor.
Induced effects result from an increase in
spending by new employees who were hired
because of the increased demand for goods and
services by the Hot Springs Village developer, residents and visitors. For example, a contractor hired
to build a new home in Hot Springs Village would
hire workers to construct the home. The businesses
selling construction materials to the contractor may
also need to hire new workers to meet the increased
demand. The new construction workers and the
new employees of the businesses that supply the
contractor purchase goods and services from local
businesses. This increased spending, which creates
additional jobs and income for local residents, is
called the induced effect.
Direct effects are estimated using figures
provided by the Hot Springs Village Property
Owners Association and secondary sources of
household income and consumer and tourist
expenditure patterns. The IMPLAN economic
input-output model is used to estimate the indirect
and induced effects once the direct effects have
been identified. The direct, indirect and induced
effects are calculated and reported in terms of:
1. Employment
2. Wage, salary and proprietor income
3. Value added
Value added is the total contribution of a
business or industry to the economy. The sum of
value added for all businesses in the state is the
Gross State Product. Value added is the sum of
employee, owner and property income plus indirect
business taxes. Another method of calculating value
added is to subtract the purchase price of inputs
(excluding labor costs) from the selling price.
A summary of the total economic contribution
of Hot Springs Village to the local economy, including Garland and Saline counties, in 2010 is presented in Table 2. 3,684 jobs were created in
Garland and Saline counties as a result of economic activities related to Hot Springs Village.
The owners and employees of these benefiting
businesses receive nearly $119 million in wage,
salary and proprietor income, and $201 million
of value is added to the area economy by this
economic activity.
The economic impacts of site and
infrastructure development, new home construction, Medicare reimbursements and
resident spending are described in more detail
on the following pages.
Site and Infrastructure
Development
Site development and construction activities
have one-time impacts on the local economy and
are considered separately from resident spending,
which is a recurring expenditure.
Approximately $185 million in capital
expenditures have been invested in Hot Springs
Village since its inception in 1971. Of this
amount, $27.6 million has been spent on developing the infrastructure of Hot Springs Village from
2005 to 2010. This equates to $4.6 million in
capital expenditures per year. The infrastructure
investments during the past six years include the
Table 2. Economic Contribution of Hot Springs Village on Garland and Saline Counties - 2010
Initial Expenditure
(Million $)
Total Jobs
Created
Wage, Salary &
Proprietor Income
(Million $)
Total Value
Added
(Million $)
4.6
66
2.2
2.8
43.1
518
16.7
24.0
324.0
2,774
85.7
156.6
Medicare Reimbursement
24.6
326
14.3
18.3
Total Effect
396.3
3,648
118.8
201.7
Activity
New Home Construction
HSV Resident Expenditures
maintenance of golf courses, roads and other
facilities for common use as well as construction
and maintenance of utilities.
To compute the annual economic impact, we
use the average yearly infrastructure development
and construction costs of $4.6 million for the period
from 2005 to 2010 as the direct effect. Annualizing
the infrastructure costs over a six-year period permits us to estimate the yearly economic impacts on
the local economy. Using the IMPLAN model (see
appendix 6, page 34), we estimate that 47 workers
are required to complete the annual construction
activities (Table 3). These workers and the owners
received income of $1.5 million related to these
construction activities.
Table 3. Economic Contribution of
Infrastructure Development - 2010
Impact Type
Direct Effect
Employment
Labor
Income
Value
Added
47
1,517,746
1,724,948
Indirect Effect
9
335,322
487,801
Induced Effect
10
317,415
578,874
Total Effect
66
2,170,483
2,791,623
Another nine jobs are created in the firms
supplying materials and services for site development and construction, with additional wage,
salary and proprietor income of $0.3 million. As a
result of new employee spending for goods and
services, an additional 10 jobs and $0.3 million in
income are generated in the wholesale, retail and
service sectors. The total economic impact of site
development and infrastructure construction
results in 66 jobs for Garland and Saline counties
and an additional $2.2 million in wage, salary and
proprietor income to local residents. Total value
added to the two-county area as a result of this
infrastructure development is $2.8 million.
Hot Springs Village Residents
Residents of Hot Springs Village also have three
types of economic impacts on the Garland and
Saline county economy and a non-monetary contribution that improves the quality of life for residents
of Garland and Saline counties. The monetary
contributions include new home construction,
resident and visitor spending and Medicare funding
received by providers of health care for Hot Springs
Village residents.
Home Construction
There were 997 building permits issued for new
housing construction from 2005 to 2010, which is
an average of 166 housing units per year. To estimate the economic contribution of new home construction on the local economy in 2010, we use the
six-year average of 166 housing units constructed.
This is double the number of new housing units
constructed in 2010, but provides a more realistic
estimate of the annual contribution of housing over
this period.
New home construction costs are estimated to
average from a low of $234,272 in 2009 to a high of
$369,809 in 2008. Using $259,331 as the average
construction cost for a new home, the total construction cost for these 166 new homes is estimated
to be $43 million. This is the direct effect which is
used to estimate the indirect and induced effects of
new home construction.
The construction of these 166 new homes is
estimated to provide 287 construction jobs and
$9.3 million income to workers and proprietors of
the construction firms (Table 4). This new home
construction will generate additional jobs and
income in the industries which supply goods and
services to the construction industry and in local
businesses which sell goods and services to the
households receiving income from the constructionrelated activities. Including these multiplier effects,
the new home construction activities generate a
Table 4. Economic Contribution of New
Home Construction - 2010
Impact Type
Employment
Labor
Income
Value
Added
Direct Effect
287
9,335,761
12,219,450
Indirect Effect
153
4,907,912
7,340,356
Induced Effect
79
2,434,474
4,438,290
518
16,678,147
23,998,096
Total Effect
19
total of 518 jobs and $16.7 million in income to the
employees and owners of businesses affected by the
construction industry. The value added to the
Garland and Saline county economy from new
home construction is $24 million.
Residents’ Expenditures
To estimate the economic impact of Hot
Springs Village residents’ expenditures on the local
economy, we first estimate the number of occupied
housing units on average throughout the year. This
estimate includes permanent and temporary residents, including visitors to Hot Springs Village.
Second we estimate the percent of residents who
moved to Hot Springs Village from outside Garland
and Saline counties. The spending by households
who moved to Hot Springs Village from within the
two-county area is not new to the area and, therefore, is not included in computing the economic
impact. Next, we estimate annual household expenditures and the percent spent in Garland and Saline
counties. Finally we estimate the multiplier effects of
this spending on the local economy.
We estimate that there were 8,546 housing units
in Hot Springs Village in 2010 (see page 10 of this
report). The 2010 census reported that 83 percent
of the housing units were occupied in 2010. Using
this percent, it is estimated that 7,108 housing
units were occupied in 2010.
Information from the Property Owners
Association survey of new residents and the recent
Hot Springs Village survey of 4,125 households
suggests that 98 percent of the households in
Hot Springs Village came from outside Garland
and Saline counties. Approximately 90 percent of
Hot Springs Village residents are permanent
residents of Hot Springs Village. We assume the
temporary residents, including visitors, are not
from Garland or Saline counties, and their entire
spending is new to the region.
Using household income information obtained
from the American Community Survey and the
Hot Springs Village 2010 survey of residents, we
estimate the expenditure patterns of Hot Springs
Village households from the Consumer Expenditure Survey which is conducted by the Bureau of
Labor Statistics. The share of these expenditures
that are made in Garland and Saline counties is
estimated using information from the Hot Springs
Village 2010 survey and the IMPLAN economic
input-output model. The average household
income of the 7,108 households in Hot Springs
Village in 2010 was $53,628. Therefore, total
household income of these households is approximately $381 million. Of this total household
income it is estimated that disposable income is
$324 million, or 85 percent of total income.
It is estimated that temporary residents and
recreational and seasonal visitors spend another
$26 million in the local two-county economy.
Therefore, permanent and temporary residents of
Hot Springs Village spend $350 million per year.
The share of these expenditures spent in Garland
and Saline counties is estimated using information
obtained from the Hot Springs Village 2010
survey and the IMPLAN model.
The total resident and visitor spending in
Garland and Saline counties generates 2,774 jobs
for the region, provides income of nearly $86 million to workers and adds over $156 million of
value added to the combined Garland and Saline
county economy (Table 5).
Table 5. Economic Contribution of Hot
Springs Village Resident and Visitor
Spending - 2010
Impact
Type
Employment
Labor
Income
Value Added
Direct Effect
1,982
$62,537,170
$115,105,770
Indirect
Effect
387
$10,804,669
$18,955,247
Induced
Effect
405
$12,407,334
$22,583,989
2,774
$85,749,173
$156,645,007
Total Effect
Medicare Spending
In addition to the direct spending by Hot
Springs Village residents, some of their medical
expenses are paid by Medicare. Therefore, we
estimate the Medicare dollars that flow into
Garland and Saline County health care facilities
that can be attributed to Hot Springs Village
residents and add this to direct resident spending
before calculating the total economic impact.
Since we do not have information on the value
of Medicare spending for Hot Springs Village
residents in the two-county area, we must estimate
the Medicare spending in 2010 attributable to Hot
Springs Village residents. First, we estimate the
number of Hot Springs Village residents who are
enrolled in the Medicare program. Second, we
estimate the average Medicare expense per Hot
Springs Village resident enrolled in the Medicare
program. Finally, we estimate the percentage of
total Medicare expenditures given to Garland and
Saline County health care providers.
We estimate that 95 percent of people
65 years of age and older living in Hot Springs
Village are enrolled in the Medicare program.
The 2010 Population Census reports that 58 percent or 7,984 people living in Hot Springs Village
are in this age category.
It is estimated that the average Medicare
expense per enrollee in Arkansas was $7,624 in
2010. However, a large proportion of Medicare
expenditures occur to people in poor health and
during the last year of life. Since many Hot
Springs Village residents are healthier and more
physically active than the average person in the
65 years and older age group, we estimate that
Medicare expenditures per enrollee are about
one-half of the average for Arkansas. Using information from the Hot Springs 2010 survey, we estimate that 85 percent of Medicare expenses went
to providers in Garland and Saline counties.
Using these assumptions, we estimate that
approximately $24.6 million of Medicare funds
attributable to Hot Springs Village residents
were given to health care providers in Garland
and Saline counties in 2010. It is estimated
that this spending, including multiplier effects,
created 299 jobs, provided these workers with
approximately $14.3 million in income and
added over $18.2 million of value to the local
economy (Table 6).
As a result of this spending by Hot Springs
Village residents, we estimate a total of 2,458 jobs
are created either directly or indirectly in Garland
and Saline counties in the retail, wholesale and
service sectors. This spending generates additional
income of $61.4 million and a total value added
to the local economy of $113.3 million, a
substantial contribution (Table 7).
As the number of residents increases and as
more local shops open, the economic impact will
increase proportionally.
Table 6. Economic Contribution of Medicare
Spending - 2010
Impact
Type
Employment
Labor
Income
Value
Added
Direct Effect
207
$10,841,037
$11,966,635
Indirect
Effect
52
$1,369,038
$2,549,265
Induced
Effect
67
$2,054,484
$3,736,455
326
$14,264,559
$18,252,355
Total Effect
Table 7. Economic Contribution of Hot
Springs Village - 2010
Impact
Type
Direct
Effect
Employment
Labor
Income
Value Added
2,522
$84,231,715
$141,016,804
Indirect
Effect
600
$17,416,940
$29,332,669
Induced
Effect
562
$117,213,707
$31,337,608
3,684
$118,862,362
$201,687,081
Total
Effect
21
Current Fiscal Impacts
Hot Springs Village has significant impacts on
revenues and expenditures of:
•
Garland and Saline county governments
•
Jessieville and Fountain Lake School Districts
In the next section, the additional revenues
generated and expenses incurred as a result of having Hot Springs Village in the area are estimated.
County Governments
Garland and Saline County Revenues
Garland and Saline County governments
receive revenue from several sources to pay for
their operations, including tax revenue, fees for
services and intergovernmental revenues from
state and federal governments. The property and
local sales taxes are among the most important
sources of local revenue. Saline County relies on
the property tax to generate a substantial share of
its local revenue whereas Garland County relies
more heavily on the sales tax to generate local revenue. Together, the property and sales tax revenue
account for 36 percent of total revenue in Garland
County, and the property tax generates about
40 percent of total revenue of in Saline County.
The local sales tax generates more revenue
than the property tax in Garland County while
Saline County has no sales tax. Garland County
has a 0.5 percent sales tax which generated
$7.8 million in 2010 for the Garland County
government. Because of the large tourism industry
in Garland County, nonresidents pay a substantial
share of the sales tax.
Saline County relies more heavily on the
property tax to generate local revenue for county
government operations than does Garland
County. Saline County has a millage of 9.7 compared to the Garland County millage of 3.6, of
which only 2.8 mills is collected by county government. The other 0.8 mills goes to Garland County
Community College. The property tax generates
only about 10 percent of total revenue for
Garland County as compared to 40 percent in
Saline County.
A third major source of revenue for counties is
intergovernmental transfer of funds from the state
of Arkansas and the federal government.
Other sources of revenue include user fees, commissions, fines and interest on investments. In
Garland and Saline counties, these sources provide
approximately half of the total revenues for
county governments. This revenue is generated
from users of a service or from interest on a previous investment. Therefore, we do not include the
expense of providing these services in this analysis.
To compute the net cost of county government
services to Hot Springs Village residents, we include
only those costs for services used by Hot Springs
Village residents (e.g., roads, public safety, health,
recreation and culture and general operations). We
do not include costs paid from user fees, interest,
commissions and fines.
Property Tax
Although Garland County has a slightly larger
property tax base from which to generate revenue,
Saline County generates three times more property
tax revenue. The reason is that the tax millage
going to the Garland County government is
2.8 mills compared to 9.7 mills in Saline County. As
a result, Hot Springs Village residents living in
Garland County pay less property tax than residents living in Saline County with a similar home
property value. Since the counties have a different
mix of taxes, we compute the revenue generated by
Hot Springs Village separately for the two counties.
In 2009, Hot Springs Village residents and
businesses had an assessed value of personal and
real property of over $392 million. This is more
than 1.4 times the assessed value in 2003. The
assessed value of property in Hot Springs
Village is 13 percent of the total assessed value
of property in the two counties (Table 8).
From 2003 to 2009, Saline County benefited
most from the growth of Hot Springs Village. The
assessed value of Hot Springs Village property in
Saline County grew from $136 million in 2003 to
nearly $208 million in 2009. This is a growth of
52 percent over this six-year period. The share of
the assessed value of property in Hot Springs
Village of the total assessed value in the county
grew slightly from 14 percent to 15 percent during
this period.
The assessed value of Hot Springs Village
property in Garland County grew by 30 percent
during this six-year period from $136 million in
2003 to over $184 million in 2009. The increase in
Hot Springs Village assessments greatly increases
the tax revenue going to the local school districts.
County governments benefit less from the increase
in property assessments as the millage going to
county government is only 3.6. The share of
property assessments in the Garland County area
of Hot Springs Village to total Garland County
assessments has declined slightly during this
period. Note that while Hot Springs Village
accounts for 13 percent of the total assessed value
of property in the two counties, the population of
Hot Springs Village is only about 7 percent of the
total population of Saline and Garland counties.
In 2010, approximately 14 percent of the
estimated property tax revenue of Garland and
Saline counties came from Hot Springs Village
property owners (Figure 13).
Sales Tax
The Garland County government generates
about 25 percent of its revenue from a one-half
cent county sales tax. Hot Springs Village residents
and visitors pay a substantial share of this tax. The
workers employed in Hot Springs Village-related
businesses also pay a portion of this sales tax.
Hot Springs Village residents probably pay at
least as much or more of the sales tax than the
average Garland County resident. Although the
exact amount of sales tax paid by Hot Springs
Village residents and employees of related
Figure 13. Percent of County Property Tax
Paid by Hot Springs Village Property Owners
The estimated property tax revenue going to
the Garland County government in 2010 is
$4.4 million as compared to $13.6 million
collected by the Saline County government.
(Table 9). Of this $18 million going to the two
county governments, an estimated $2.5 million
comes from property owners in Hot Springs
Village. The largest share of this ($2.0 million)
goes to Saline County, and Garland County
receives approximately $0.5 million.
Table 8. County Property Tax Assessments, 2009
Region
County – Total
Hot Springs Village (HSV)
Garland
Saline
Total
$1,568,482,791
$1,402,708,894
$2,971,191,685
$184,436,382
$207,713,156
$392,149.538
12%
15%
13%
HSV as Percent of Total
Table 9. Estimated Property Tax Revenue for County Governments
Region
County – Total
HSV as Percent of Total
Garland
Saline
Total
$4,391,752
$13,606,276
$17,998,028
$516,422
$2,014,818
$2,531,239
12%
15%
14%
23
businesses is not known, it is estimated Hot
Springs Village residents pay approximately
$431,000 in sales tax per year, or roughly 5 percent of the $7.8 million total county sales tax
revenue collected. There are several reasons for
this assumption.
Therefore, the additional highway turnback
revenue generated by Hot Springs Village residents is only $67,165 in Garland County and
$47,731 in Saline County in FY2010.
The income of Hot Springs Village residents is
higher than the average income of Garland
County residents (see page 14), so they spend more
than the average person. Studies indicate older
people spend more of their money in the local
area than younger people. A recent survey of Hot
Springs Village residents supports this finding. The
survey found that Hot Springs Village residents
make on average 76 percent of their purchases in
Garland County. This includes residents that live
in both Garland and Saline counties.
Garland County expenditures in 2010 are
estimated to be approximately $30 million or $312
per resident compared to expenditures of $25.6
million and $239 per resident in Saline County.
However, many of these expenses are paid from
revenue sources other than local taxes, including
state turnback funds, federal transfers, fees for
services and court fines and fees. In addition it is
estimated that visitors pay approximately 25 percent of the sales tax revenue collected. Therefore,
expenses paid from local tax revenue collected
from local residents is approximately $86 per
person in Garland County and $116 per person in
Saline County (see Appendix 5).
State Turnback Revenue
Garland and Saline counties each received
approximately $2.4 million in Highway User
Turnback Revenue in FY2010. Only a small share
of this turnback revenue can be attributed to
Hot Springs Village residents. This is due to the
formula used in calculating highway turnback
revenue which is:
Highway Turnback Revenue = (County area (31%) +
License fees (17.5% + Total population (17.5%) +
Rural population (13.5%) + Equal distribution (20.5%))
Hot Springs Village residents increase the
highway turnback revenue primarily because they
increase the total population and pay license fees.
However, these two factors only account for
35 percent of the total in calculating turnback
revenue. The population of Hot Springs Village is
8 percent of Garland County’s population and
5.6 percent of Saline County’s population.
County Expenses
However, these figures may still overestimate
the cost of county services to Hot Springs Village
residents because the Hot Springs Village Property
Owners Association provides law enforcement,
streets and roads, fire protection, sanitation and
other utilities. Therefore, the Garland and Saline
county governments do not have to provide these
services for Hot Springs Village residents.
Deducting law enforcement expenses, the estimated per capita county expenditures are $49 for
Garland County residents and $82 for Saline
County residents.
With a population of 13,748, the Hot Springs
Village residents’ estimated share of county
government expenses was $877,108 in 2010
(Table 10). It is estimated that services provided to
Garland County residents of Hot Springs Village
Table 10, Estimated Net Benefits to County Governments
Region
Garland
Saline
Total
$516,422
$2,014,818
$2,532,475
$430,777
--
$430,777
HSV Residents’ Share of Expense
$380,602
$496,505
$877,108
$566,597
$1,518,313
$2,084,909
cost $380,602 and services provided to Saline
County residents of Hot Springs Village cost
$496,505. These figures are calculated by multiplying the per-person expense for each county
($49 and $82) by the number of people living in
the Garland and Saline county areas of Hot
Springs Village.
Net Benefits to Garland and
Saline Counties
Due to the growth of the Saline County
area of Hot Springs Village, the financial
benefits received by the Saline County government have increased considerably. The total net
benefits going to the two counties increased
about 35 percent from $1.55 million in 2004 to
$2.1 million in 2010 (Table 10) (Figure 14), with
most of this growth in Saline County. Saline
County net benefits grew by 20 percent during
this period due to a substantial increase in property assessments in the Saline County area of
Hot Springs Village. The net benefits indicate
that the residents of Hot Springs Village contribute more to county governments than the cost
of services received.
Figure 14. Net Benefits to Saline and
Garland Counties
School Districts
Jessieville and Fountain Lake School
District Revenues
The property tax is the primary source of local
revenue for the Fountain Lake and Jessieville
school districts. The property tax provides 95 percent of local revenue for the Fountain Lake school
district and 86 percent for Jessieville. However,
local revenue provides only 83 percent of the
revenue for Fountain Lake and less than half
(49 percent) for Jessieville school districts.
Both school districts receive approximately
81 percent of their property tax revenue from Hot
Springs Village property owners. However, only
45 percent of the students attending Jessieville
schools live in Hot Springs Village. An even greater
disparity exists in the Fountain Lake School District.
Property owners in Hot Springs Village contribute
81 percent of the property tax revenue for the
school system, but they have only 14 percent of the
students in the Fountain Lake schools.
The estimated property tax revenue generated
by the school districts is calculated by multiplying
the total assessed value of property in each school
district by the school district school millage. The
total assessed value of property in the Jessieville
school district in 2009 was $125 million, and the
total school millage was 34 in 2010 (Table 11).
Multiplying the $125 million by 34 mills ($34 per
$1,000 of assessed value) equals nearly $3.5 million in expected revenue for Jessieville. Similarly
total property assessments in the Fountain Lake
school district were approximately $357 million in
2009, with a school district millage of 34.8.
Multiplying the total assessments times the
Fountain Lake school district millage yields
estimated revenue of $10 million.
Table 11, School District Property Assessments 2009
Region
Fountain Lake
Jessieville
Total
School District – Total
$356,705,168
$125,162,856
$481,868,024
$289,933,410
$102,156,127
$392,149,537
81.3%
81.6%
81,4%
HSV Share of Total
25
Residents of Hot Springs Village live in either
the Jessieville or Fountain Lake school district and,
thus, Hot Springs Village property owners pay
property tax that goes to either one or the other
school district. As can be seen in Table 12, Hot
Springs Village property owners contribute substantially more revenue to the Fountain Lake
school district than to Jessieville. Calculation of
the property tax revenue contributed by Hot
Springs Village property owners is similar to calculations for the school district. The total assessed
value of property of Hot Springs Village property
owners in the Jessieville school district is multiplied
by the millage (34) to obtain the estimated property tax revenue going to the Jessieville school district. The assessed value of property in the
Jessieville school district of Hot Springs Village is
$102 million. Multiplying the $102 million times
the millage of 34 equals approximately $3.5 million or 81 percent of the property tax revenue
received by the Jessieville school district (Table 12).
A similar procedure is used to estimate the
property tax revenue going to the Fountain Lake
school district from Hot Springs Village property
owners. Hot Springs Village property owners in
the Fountain Lake school district had property
assessments of $290 million in 2009, which is multiplied by the millage (34.8) to yield property tax
revenue of nearly $10 million in 2010. This is
81 percent of the property tax revenue received by
the Fountain Lake school district.
As expected, both school systems benefit
greatly from Hot Springs Village property owners.
Hot Springs Village property owners pay approximately $3.5 million in property taxes to the
Jessieville school district and $10 million to the
Fountain Lake school district.
School Costs
Not only does Hot Springs Village generate
revenue for the Jessieville and Fountain Lake
school districts, but there are also costs associated
with sending students living in the Village to
these schools. Figures from the Arkansas
Department of Education are used to calculate
the cost of students from Hot Springs Village
attending the Fountain Lake and Jessieville school
districts. According to the Annual Statistical
Reports for the 2009-2010 school year the per
pupil expenditures for the Jessieville School
District were $8,573 as compared to $10,214 for
Fountain Lake. These figures are for current
expenditures which include both operating and
capital costs.
While a large share of the property tax revenue for the Jessieville and Fountain Lake school
districts comes from Hot Springs Village property
owners, a much smaller proportion of the students attending these school districts come from
Hot Springs Village. According to school district
officials, 303 of the 890 students attending
Jessieville schools during the 2010-2011 school
year were from Hot Springs Village, and only
164 of the 1,213 students attending Fountain
Lake schools were from Hot Springs Village.
Therefore, only 22 percent of the students
attending Jessieville and Fountain Lake schools
are from Hot Springs Village, whereas Hot
Springs Village property owners provide 81 percent of the property tax revenue for these two
school districts combined (Figure 15).
Using the per pupil expenditures of $8,573
and $10,214 for the Jessieville and Fountain
Lake school districts, respectively, total costs for
Table 12, Estimated Property Tax Revenue for School Districts From Hot Springs Village,
2009-2010
Region
Fountain Lake
Jessieville
Total
School District – Total
$12,413,340
$4,255,537
$16,688,877
$10,091,771
$3,473,308
$13,565,079
81.3%
81.6%
81,4%
HSV Share of Total
students residing in Hot Springs Village are easily
calculated. However, substantial funding for these
schools comes from the state and federal governments. To calculate the local cost for each student,
the per pupil expenditures are multiplied by the
share of revenue that comes from local sources.
The Jessieville school district receives considerably
more funding per student from the state of
Arkansas than does the Fountain Lake school district. The Jessieville School District receives less
than half (49 percent) of its revenue from local
sources compared to 83 percent for Fountain Lake
Therefore, per pupil costs borne by county residents for the Jessieville and Fountain Lake school
districts are $4,218 and $8,498, respectively. Using
the local costs per student, the total local cost for
the 303 students from Hot Springs Village attending Jessieville schools is nearly $1.3 million.
Similarly, the total current expenses that are paid
from local revenue for the 164 students attending
Fountain Lake schools is $1.4 million.
school districts benefit from the property tax
revenue generated from Hot Springs Village,
Fountain Lake receives a large share of the benefit. Not only does the Fountain Lake school district receive the greatest benefit, but the net
benefit has increased the most rapidly. Net benefits received by the Fountain Lake school district
nearly tripled between 1995 and 2010. This is
because of the new home construction in the
school district by families with few students.
Figure 15. School District Property Tax
Revenue and Students From Hot Springs
Village
Net Benefits to Jessieville and
Fountain Lake School Districts
Both school districts receive substantial
monetary benefits from property owners of Hot
Springs Village. After deducting the cost for Hot
Springs Village students to attend Jessieville and
Fountain Lake schools, the net benefits to the
Jessieville and Fountain Lake school districts are
approximately $2.2 million and $8.7 million,
respectively (Table 13).
Figure 16. Net Benefits to Fountain Lake and
Jessieville School Districts
As the population of Hot Springs Village
grows, so do the benefits accruing to the
Jessieville and Fountain Lake school districts
(Figure 16). School districts benefit disproportionately from Hot Springs Village because there are
few students living in Hot Springs Village in proportion to the value of property. Although both
Table 13, Estimated Net Benefits to School Districts 2009-2010
Region
Fountain Lake
Jessieville
Total
$10,091,771
$3,473,308
$13,565,079
HSV Share of Expenses
$1,393,680
$1,278,029
$2,671,708
$8,698,091
$2,195,280
$10,893,371
27
Summary
Both Saline and Garland county governments
and the Jessieville and Fountain Lake school
districts receive substantial monetary benefits
from having Hot Springs Village within their
boundaries. The total benefits that accrue to
county governments and local school districts are
estimated at $13 million. The county governments
benefit because the county does not have to pay
for the cost of constructing and maintaining roads,
providing police and fire protection and other
utilities which are provided by the Hot Springs
Village Property Owners Association and paid
from a monthly lot assessment fee. The county
also benefits from a larger average value of
property assessment per household and the
resulting larger share of property taxes paid per
household in Hot Springs Village.
Since the property tax is the primary source of
local revenue for the school districts and since the
residents of Hot Springs Village have more expensive homes and fewer school-age children than the
average Garland and Saline county household,
school districts are a substantial beneficiary of
Hot Springs Village Schools. Civic organizations
and the residents of Garland and Saline counties
also benefit from the time and expertise of Hot
Springs Village residents. Many Village residents
volunteer their time and expertise to help improve
the schools and the quality of life for Garland and
Saline county residents.
APPENDICES
Appendix 1. Land Use –- Hot Springs Village
Land Use
Platted
Unplatted
Commercial
POA
Recreation
Total Lots & Acreage
Garland
County
Acreage
Saline
County
Acreage
Hot Springs
Village
Acreage
5,200
1,650
20
3,800
1,650
12,320
4,200
4,620
10
3,100
1,350
13,280
9,400
6,270
30
6,900
3,000
25,600
29
Appendix 2. Living Units* and Property Owner Units
YEAR
FREE
Timeshares/
Standing
Townhouses
Single
Family
Homes
Year End
Annual
Cancellations
Net New
Construction
1977
Grand
Total
Housing
Units
Property
Owner Lot
Units
1,450
16,891
1978
46
190
236
1,686
18,104
1979
25
98
123
1,809
19,442
1980
29
35
64
1,873
20,440
62
62
1,935
21,385
1981
Commercial
Buildings
1982
33
47
80
2,015
22,109
1983
40
126
166
2,181
23,425
1984
88
161
4
245
2,426
24,655
1985
80
188
8
260
2,686
26,126
1986
31
218
16
233
2,919
26,994
1987
5
206
8
203
3,122
27,373
1988
4
172
3
173
3,295
28,046
1989
7
225
4
228
3,523
28,847
1990
8
218
3
223
3,746
29,541
1991
8
210
4
214
3,960
29,853
1992
9
316
1
324
4,284
30,143
1993
2
453
7
448
4,732
30,337
1994
18
352
21
349
5,081
30,567
1995
9
272
11
270
5,351
30,780
1996
26
303
3
326
5,677
30,990
1997
22
279
10
291
5,968
31,606
1998
16
226
3
239
6,207
32,012
4
1999
21
217
4
234
6,441
32,507
4
2000
26
153
2
177
6,618
32,905
10
2001
12
147
4
155
6,773
33,271
3
2002
4
169
6
167
6,940
33,631
4
2003
15
173
1
187
7,127
34,043
7
2004
20
237
4
253
7,380
34,057
4
2005
18
242
0
260
7,640
34,082
5
2006
15
291
3
303
7,943
34,108
7
2007
0
219
10
209
8,152
34,129
0
2008
0
83
0
83
8,235
34,142
4
2009
0
63
1
62
8,297
34,146
0
2010
0
80
0
80
8,377
2005-2010 Total
33
978
14
997
637
6,431
141
6,927
Grand Total
* Based on Building Permits
Source: Information provided by the Hot Springs Village Property Owners Association.
0
16
8,377
34,146
52
Appendix 3. Social and Economic Characteristics
of Hot Springs Village Residents
Garland
(HSV)
Garland
County
Saline
(HSV)
Saline
County
Hot Springs
Village
Population_1970
0
54,131
0
36,107
0
Population_1980
2,083
70,531
0
53,176
2,083
Population_1990
5,259
73,397
1,102
64,183
6,361
Population_1995
6,768
81,049
2,320
73,604
9,088
Population_2000*
6,927*
88,068
3,723*
83,529
10,650
Population_2004
7,301**
92,141
4,594**
89,234
11,895**
Population_2010
7,702
96,024
6,046
107,118
13,748
Population Characteristics
Median Age
Population 17 and Younger (%)
Population 65 and Older (%)
44
39
67
21%
24%
7%
21%
15%
58%
Number of Households
40,994
41,441
7,108
Number of Family Households
26,510
30,674
5,130
Average Household Size
2.3
2.6
1.9
Average Family Size
2.8
3.0
2.2
Household with Individuals Under 18
10,996
14,537
530
Housing Units
50,548
44,811
8,546
Occupied Housing Units
40,994
41,441
7,108
Owner Occupied Housing Units
28,438
32,245
6,464
Renter Occupied Housing
12,556
9,196
644
$85,000
$93,700
$132,000
Household Income (Median)
$36,454
$51,082
$43,510
Household Income (Mean)
$52,049
$60,925
$53,628
Family Income (Median)
$46,418
$61,294
$50,321
Per Capita Income
$22,318
$24,099
$28,470
Less than 9th grade
5.20%
4.90%
1.40%
9th to 12th grade, no diploma
9.80%
8.40%
3.50%
High school graduate
33.20%
35.40%
26.70%
Some college, no degree
Owner Dwelling Value
Information from American Community
Survey***
25.00%
23.30%
33.70%
Associate's degree
7.20%
6.30%
6.80%
Bachelor's degree
13.40%
15.20%
18.30%
6.20%
6.50%
9.60%
Graduate or professional degree
* Source of this data is the Hot Springs Village Property Owners Association.
** These figures were estimated based on the number of occupied housing units. Source: Census of Population, Bureau of
Census, U.S. Department of Commerce.
*** Information on Hot Springs Village from the American Community Survey is incomplete. The information for Hot Springs
Village does not include the Census Blocks that were excluded in the 2010 Census of Population.
31
Appendix 4. Garland and Saline County Revenues and Expenses, 2010
Garland County
Saline County
Total
$1,568,482,791
$1,402,708,894
$2,971,191,685
$184,436,068
$207,713,156
$392,149,538
12%
15%
13%
2.8
9.7
$4,391,752
$13,606,276
$17,998,028
$516,422
$2,014,818
$2,531,239
12%
15%
14%
$7,894,522
$0
$7,894,522
$430,777
$0
$430,777
Assessments (2009)
County Total
Hot Spring Village
HSV as % of Total
Millage*
Property Tax Revenue (2010)
County Total
Hot Spring Village
HSV as % of Total
Sales Tax Revenue (2010)
Sales Tax Revenue (County)
Sales Tax Revenue HSV (%)
5%
5%
Property & Sales Tax Revenue (2010)
(County)
Property & Sales Tax Revenue
$12,286,274
$13,606,276
$25,892,550
$947,199
$2,041,818
$2,962,017
8%
15%
11%
County Population
96,024
107,118
203,142
Hot Spring Village
7,702
6,046
13,748
8%
5.6%
6.8%
$55,617,769
(County)
(Hot Spring Village)
Hot Springs Village (% of total)
Population (2010)
HSV % of County
County Expenses Estimated (2010)
County Expense (Total)**
$29,995,742
$25,622,027
County Expense (per capita)
$312
$239
Expenses from local taxes (per capita)
$128
$127
HSV Resident Expenses (per capita)***
$49
$82
Property Tax
$516,422
$2,041,818
Sales Tax
$430,777
$0
$430,777
($380,602)
($496,505)
($877,108)
$566,597
$1,518,312
$2,084,909
Revenue from Hot Springs Village
HSV Residents Share of Expenses
** County Expenses are estimated based on actual 2002 expenses and adjusted by the CPI.
$2,531,239
Appendix 5. Property Tax Assessments, Revenue and Costs
School Districts and Hot Springs Village
Fountain Lake
Jessieville
Totals
School District
$356,705,168
$125,162,856
$481,868,024
Hot Springs Village
$289,993,410
$102,156,127
$392,149,537
HSV % of Total
81%
82%
81%
Millage
34.8
34.0
School District
$12,413,340
$4,255,537
$16,668,877
Hot Springs Village
$10,091,771
$3,473,308
$13,565,079
81%
82%
81%
$10,214
$8,573
83.2%
49.2%
$8,498
$4,218
1,213
890
2,103
164
303
467
13.5%
34.0%
22.2%
$10,091,771
$3,473,308
$13,565,079
Hot Springs Village Student Costs
$1,393,680
$1,278,029
$2,671,708
Net Revenue from HSV to School Districts
$8,698,091
$2,195,280
$10,893,371
Assessments (2009)
Property Tax Revenue (2010-11)
HSV % of Total
School District Expenditures
Per Pupil Expenditures
Share of Expenses from Local Revenue
Per Pupil Expenditures
School District Enrollment
School District Enrollment
Students from Hot Springs Village
Hot Springs Village Students (% of Total)
Net Revenue
Property Tax Revenue from HSV
Source: Computed from assessment data provided by Saline and Garland County Assessors Office and
the Assessment Coordination Department and school district expenditures from the Arkansas
Department of Education.
33
Appendix 6. IMPLAN® Model Description
IMPLAN® is an economic impact assessment
modeling system. IMPLAN® allows the user to
build economic models to estimate the impacts of
economic changes in their states, counties or communities. The impacts are reported as changes in
employment, income, output and value added for a
specified region.
The IMPLAN model was originally developed
by the USDA Forestry Service to estimate the
impacts of changing management practices of the
National Forest System. Since its inception, the
model has been developed and refined so that it can
be used to address a range of economic issues from
estimating the impact of new industries to the
impact of tourism or retirees. In 1993 the
Minnesota IMPLAN Group, Inc. (MIG) took
responsibility for maintaining the model and updating the databases used to generate the estimates.
Currently there are over 1,500 IMPLAN users
including universities, federal, state and local
governments, nonprofit organizations and many
private consulting firms.
There are two major components of the
IMPLAN model. The first is the software which
performs the computations necessary to derive economic impact estimates. Second is the database,
which is updated annually. The database provides
county level information for output, employment,
income and value added for 508 industries. The
production function coefficients used in IMPLAN
are derived from the U.S. Department of
Commerce’s national input-output model which is
updated every five years. The IMPLAN accounts
closely follow the accounting conventions used by
the Bureau of Economic Analysis and the format
recommended by the United Nations.
The IMPLAN model was designed to serve
three functions:
1. data retrieval,
2. data reduction and model development and
3. impact analysis.
The model is also flexible and allows the user to
make changes in the data, model formulation and
geographic area. The flexibility of the model is
what allows the model to be used to estimate the
economic impact of recreation/retirement communities. Since there is no recreation/retirement community industry in the model, there is not a single
multiplier that can be used to estimate the economic impact of recreation/retirement communities. Instead, economic impacts are estimated using
household expenditures of Hot Springs Village residents. Expenditures are allocated to approximately
280 industries in the IMPLAN model. Expenditure
patterns of Hot Springs Village residents are
derived from the Consumer Expenditure Survey1
and total household spending was obtained from
the survey of Hot Springs Village residents administered by the Hot Springs Village Property Owners
Association in January 2005.
The IMPLAN model treats household and
business operating spending differently from capital spending. Therefore, two separate estimates
were made for household and new home construction spending. The economic impacts are estimated for the combined area of Garland and
Saline counties. To do this, the data for Garland
and Saline counties were combined to form one
region. Therefore, the results reported in this study
are for the local economy which includes all of
Garland and Saline counties.
1 The Consumer Expenditure Survey is conducted by the Bureau of Labor Statistics, U.S. Department of Commerce.
i The Hot Springs Village Property Owners Association conducted a survey of Hot Springs Village households in 2010 to obtain
some demographic and economic characteristics for this study.
ii Information on the average cost of new homes by year was provided by the Hot Springs Property Owners Association.
!# # ! ! " ! # ! # # ! # #

Economic and Fiscal Impact Survey

Transcription

Similar documents

Lower Breitenbush Hot Springs Visioning

Memorial Hall Brochure

11011 ANAQUA SPRINGS | Anaqua Springs Ranch

Winterfest Wine Tasting 2016 Flyer

Welcome Picnic at Ginnie Springs

File

eibach Wins CarDomain.com`s People`s Choice Award for the 5th

Lebus.com » Wendover

Offham Parish Council “Our Village” photo competition

VM - Village Market