Friday Harbour Resort Analysis of Economic and Fiscal … and Fiscal Impacts... · Friday Harbour Resort Analysis of Economic and Fiscal ... Friday Harbour Resort Analysis of

Friday Harbour Resort

Analysis of Economic and

Fiscal Impacts

December 20, 2017

Friday Harbour Resort

Analysis of Economic and Fiscal Impacts

Prepared for:

Friday Harbour Resort Holdings Inc.

Prepared by:

Altus Group Economic Consulting 33 Yonge Street Toronto Ontario M5E 1G4

Phone: (416) 641‐9500 Fax: (416) 641‐9501

[email protected]

altusgroup.com

December 20, 2017

December 20, 2017

Friday Harbour Resort Altus Group Economic Consulting

Analysis of Economic and Fiscal Impacts Page i

EXECUTIVE SUMMARY

Altus Group was retained by Friday Harbour Resort Holdings Inc. to analyse

the economic and fiscal impacts of an additional 1,000 units being sought for

approval at the Friday Harbour Resort in the Town of Innisfil (also

hereinafter referred to as “Friday Harbour”, or the “Resort”).

Friday Harbour Resort Holdings Inc. proposes to amend the County of

Simcoe Official Plan, the approved Official Plan Amendment for Friday

Harbour (“OPA 17”), and Zoning By‐law No. 029‐05 to increase the number

of non‐permanent seasonal ownership units on the site from approximately

1,600 units to approximately 2,600 units. All additional units will be

incorporated into the existing approved development area.

The additional 1,000 units will:

Optimize the use of the land already designated for development;

Optimize the tourism and recreation development potential of the

site;

Optimize the use of existing and planned infrastructure (water,

wastewater and roads) and public service facilities (fire stations);

Generate approximately $33.5 million in development charges

including approximately:

o $20.5 million in Town‐wide development charges;

o $6.9 million in area specific development charges for water

and wastewater (based on current rates);

o $5.8 million in development charges for Simcoe County; and

o $1.8 million in development charges for the Simcoe school

boards

Generate approximately 1,180 person‐years of direct employment in

the construction industry, 850 person‐years of employment in

industries that provide materials and services to the construction

industry and 440 person‐years of “induced” employment as a result

of the direct and indirect employment impacts;

Increase potential spending by seasonal residents and their visiting

friends and relations in retail stores and services in Innisfil and

elsewhere in Simcoe County;

December 20, 2017


Analysis of Economic and Fiscal Impacts Page ii

Generate approximately $5.5 million in annual property taxes

including:

o $3.1 million for the Town of Innisfil

o $1.5 million for Simcoe County

o $916,400 for education purposes

Generate an annual fiscal operating surplus for both the Town of

Innisfil and Simcoe County in the base scenario and in various

scenarios tested that consider:

o The assessed value of additional units;

o The magnitude of potential cost savings arising from the

privately operated and maintained services within the Resort;

and

o The ability of the additional units to rely on existing

infrastructure rather than requiring additional infrastructure

works.

Result in an additional $44 million in annual spending by owners and

renters of the additional units, on goods and services, a substantial

amount of which will add to the demand for a broader range of retail

options both locally within the Resort, and throughout the Town and

County.

Providing an additional 1,000 resort units will help meet the objectives set

out in the Town’s Community Strategic Plan to promote economic

development, cost effectively finance the construction of water and

wastewater facilities, promote tourism, encourage the development of

appropriate tourism facilities (including accommodation) and ensure optimal

utilization, relevance and value of existing infrastructure.

The proposed increase in units will also help to address issues identified in

the Town’s Tourism Destination Management Plan (2016), which identified a

lack of roofed overnight accommodations in the Town and recognized Friday

Harbour as being “poised to become the region’s primary tourism

destination”. Building approximately 1,000 more “second homes” in Friday

Harbour, all of which may become part of the Resort’s Rental Management

Plan, will help to compensate for the lack of hotels in the Town. These

additional units will not displace the planned 400 hotel units, which remain a

component of the resort plan.

December 20, 2017


Analysis of Economic and Fiscal Impacts Page iii

TABLE OF CONTENTS

Page

EXECUTIVE SUMMARY ................................................................................. i

1 INTRODUCTION ...................................................................................... 1

1.1 Friday Harbour Resort ................................................................................................... 1

1.2 Overview of Additional Units Being Proposed .......................................................... 1

2 ECONOMIC IMPACT OF ADDITIONAL UNITS .............................. 3

2.1 Economic Benefits Generated by Construction .......................................................... 3

2.2 On‐Going Economic Benefits ........................................................................................ 5

2.3 Implication for Innisfil’s Retail Sector .......................................................................... 6

3 FISCAL IMPACT OF ADDITIONAL UNITS ....................................... 8

3.1 Revenues .......................................................................................................................... 8

3.2 Operating Costs .............................................................................................................10

3.3 Range of Net Fiscal Impacts .........................................................................................18

3.4 Conclusions Regarding Fiscal Impact .........................................................................19

4 CONCLUSIONS ....................................................................................... 20

December 20, 2017


Analysis of Economic and Fiscal Impacts Page 1

1 INTRODUCTION

This report provides an analysis of the economic and fiscal impacts on the

Town of Innisfil and Simcoe County of an additional 1,000 resort residential

units proposed to be developed within the existing approved development

area of the Friday Harbour Resort.

1.1 FRIDAY HARBOUR RESORT

The Friday Harbour Resort development is a premier four‐season destination

resort, which represents a significant new addition to the tourism landscape

in Simcoe County. Building on the history and profile of the Big Bay Point

destination on the Innisfil shore of Lake Simcoe, Friday Harbour Resort has

been designed as a marina and recreation‐focused tourist village that offers

resort residential units along with street‐oriented resort commercial uses,

recreational facilities, a championship golf course, hotel(s) and conference

facilit(ies), live‐performance theatre uses and an environmental nature

preserve area, among many other complementary uses.

Marketing of the resort residential units in the initial phases has been very

successful. Friday Harbour has helped to shift market preferences from low‐

density cottages on large lots to a compact built form of non‐permanent

ownership accommodation including townhouses and low‐ and mid‐rise

apartments.

The Friday Harbour planning team has used what it learned through the first

phases of the development process to identify how the next phases of the

plan may be updated to optimize the use of land and infrastructure while

maintaining the approved development footprint and not impinging upon

lands set aside for natural and recreational open space uses.

Friday Harbour Resort Holdings Inc. proposes to amend the County of

Simcoe Official Plan, OPA 17, and Zoning By‐law 029‐05 to increase the

number of non‐permanent seasonal ownership units on the site from 1,600

units to approximately 2,600 units. All additional units would be

incorporated into the existing approved development area.

1.2 OVERVIEW OF ADDITIONAL UNITS BEING PROPOSED

The economic impact and fiscal impact assessment contained within this

report is based on the following proposed changes to OPA 17:

December 20, 2017



An additional 570 stacked townhouses;

A net addition of 96 townhouses (61 with water frontage, 35 others

that are within the Beach Club area, but not fronting onto water);

A total of 634 new apartment units; and

A reduction in 300 traditional non‐water related townhouses (to be

replaced by the above‐noted stacked townhouse blocks).

The net result of the changes is an increase of 1,000 units.

December 20, 2017



2 ECONOMIC IMPACT OF ADDITIONAL UNITS

This section of the report analyses the economic impacts associated with

construction of the proposed additional resort units.

2.1 ECONOMIC BENEFITS GENERATED BY CONSTRUCTION

2.1.1 Employment

Construction of the additional units will create work directly for construction

workers in Innisfil and the surrounding area. It will also create work for

employees in the industries that produce materials, services and other inputs

required for construction of the Resort. The income earned as a result of the

direct and indirect employment impacts will result in a multiplier effect

throughout the economy (referred to as the induced employment impact).

The construction employment projections were prepared by Altus Group

Economic Consulting based on Statistics Canada input‐output tabulations for

construction and related industries.

Approximately 1,180 person‐years of employment will be directly generated

by construction of the additional units. Approximately 850 person‐years of

employment will be created in the industries that provide materials and

services to the construction industry. The multiplier‐effects of the direct and

indirect employment generation will create approximately 440 person‐years

of “induced” employment.

In total, 2,470 person‐years of employment will be created as a result of the

additional units at Friday Harbour Resort.

2.1.2 Lower Tier Government Revenues

Construction of the additional units at the Friday Harbour Resort will

generate significant revenues for municipal and county governments and

school boards:

$27.4 million in development charges for the Town of Innisfil;

$934,200 in building permit fees for the Town of Innisfil;

$5.8 million in development charges for Simcoe County; and

$1.8 million in education development charges for the school boards,

which serve the Town of Innisfil.

December 20, 2017



In total, local governments and school boards will derive approximately

$35.9 million in revenues from the additional units to be constructed at the

Friday Harbour Resort.

2.1.3 Provincial Government Revenues

Direct, indirect and induced employment created through construction of the

additional units at the Resort will generate employment‐related tax revenues

for the Province of Ontario including approximately:

$4.8 million in provincial income taxes; and

$2.3 million in Employee Health Tax.

Provincial sales taxes (as part of the HST) on services and materials used in

construction of the additional units at the Resort are projected to amount to

approximately $17.9 million (subject to input tax credits).

Provincial government revenues will amount to more than $7.1 million

(plus HST of $17.9 million less input tax credits).

2.1.4 Federal Government Revenues

Direct, indirect and induced employment created through construction of the

additional units at the Resort will generate employment‐related tax revenues

for the Government of Canada including approximately:

$14.4 million in federal income taxes;

$5.5 million in contributions to the Canada Pension Plan; and

$1.9 million in contributions to Employment Insurance.

Goods and services taxes on services and materials used in construction of

the additional units at the Resort are projected to amount to approximately

$11.2 million (subject to input tax credits).

Federal government revenues will total more than $21.8 million (plus HST

of $11.2 million less input tax credits).

December 20, 2017



2.2 ON‐GOING ECONOMIC BENEFITS

2.2.1 Employment

Based on our assumed employment ratio of 0.02 jobs per resort unit, the

additional units would generate an additional 20 jobs associated with

housekeeping, property management, security, etc.

Further, Friday Harbour Resort Holdings Inc. is exploring the possibility of

adding a spa use on the golf course lands, which would generate additional

jobs.

2.2.2 Property Taxes

The Resort will make a substantial contribution to Innisfil’s and Simcoe

County’s taxable assessment base. Based on 2016 tax rates, the additional

units proposed for the Resort would generate approximately:

$3.1 million per year in property taxes for the Town of Innisfil;

$1.5 million per year in property taxes for Simcoe County; and

$916,400 per year in property taxes for education purposes.

Additional detail regarding the approach and assumptions used to estimate

the annual property tax revenues generated by the additional units is

provided in the section of this report that deals with the full fiscal impacts of

the proposed additional development.

2.2.3 Additional Visitors

The development of an additional 1,000 units within the Resort will provide

additional opportunities for tourists (visitors to unitholders and renters) to

stay. According to the Ontario Ministry of Tourism, Culture and Sport’s

Tourism Regional Economic Impact Model (TREIM), each additional

overnight visitor (assuming a 2‐night stay), spends an average of $193 per

visit. For every 10,000 visitors to the Resort, the following will economic

benefits will result:

$1,630,000 in total GDP (including direct, indirect and induced);

$1,120,000 in new labour income;

$730,000 in additional tax revenue ($400,000 for federal government,

$330,000 for provincial government);

December 20, 2017



The TREIM model does not allow for adjustments to account for the type of

resort development, but rather represents a province‐wide average of all

tourism facilities. Based on Friday Harbour’s orientation as a “premier”

tourist accommodation, the average spending will likely be some amount

higher than the amounts estimated herein.

2.3 IMPLICATION FOR INNISFIL’S RETAIL SECTOR

The 1,000 additional resort units proposed for Friday Harbour Resort will

support the strategic initiatives recommended in the Retail Sector Discussion

Paper prepared for the Town of Innisfil by Tate Economic Research Inc. in

June 2015. The Retail Sector Discussion Paper noted:

The growth of the Town’s seasonal residents’ population will also add to the demand for a broader range of local retailing options in the Town.

The Town has a significant seasonal population base estimated at approximately 4,400 people in 2011. This population is forecast to nearly double as a result of the Friday Harbour resort community under development at Big Bay Point. This population adds to the demand for a range of retail options both locally and throughout the Town. (page iv)

Among the strategic initiatives to advance the Alcona Retail Sector identified

in the Retail Sector Discussion Paper were:

Identify and establish a department store in Alcona,

Encourage the development the local services sector, and

Ensure the character of Downtown Alcona is distinguished from

other commercial locations.

The proposed 1,000 additional resort units will substantially add to the

demand for a broader range of retail options both locally within the Resort

and throughout the Town. Total annual spending by owners and renters of

the additional 1,000 resort units is projected to amount to more than $44

million per year, based on average household spending on goods and

December 20, 2017



services in Ontario. 1 This estimate is over and above the amount spent by

visitors estimated in the previous section of this report. As the incomes of

unit owners are likely to be significantly higher than the Ontario average,

their annual spending will be higher than the provincial average.

Because resort unit owners and renters may wish to visit retail stores and

utilize other services beyond what the Resort itself offers, other Innisfil‐area

retail stores and local businesses will have an opportunity to capture a

significant share of expenditures. The Town of Innisfil Tourism Destination

Management Plan (March 2017) recommends a number of “connecting

strategies” to encourage Friday Harbour guests to patronize Innisfil‐based

business establishments. Among the proposed strategies are:

Signage to direct Friday Harbour seasonal residents and visitors to

other retail areas in the Town,

Improvements to the trail system to make it easy for Friday Harbour

cyclists and walkers to access stores, restaurants and services in

Alcona, and

A Friday Harbour visitor information services strategy to inform

seasonal residents and visitors of the range of retail stores,

restaurants and other services available in Innisfil (page 53).

One of the objectives of the Innisfil 2020 Community Strategic Plan is to:

Develop community amenities – including restaurants, shops and services – that provide valued and viable options for our community (page 3)

The additional 1,000 resort units proposed for Friday Harbour will add to the

market demand for a broader range of restaurants, shops and services in

Innisfil. Friday Harbour Resort Holdings Inc. is committed to working with

the Town of Innisfil to ensure that seasonal residents and guests of the resort

are encouraged to patronize Innisfil‐based business establishments.

1 Based on average household spending on goods and serves in Ontario of $43,351 per year including

food, household operations, furnishings and equipment, clothing and accessories, transportation,

health care, personal care, recreation, reading materials and other printed matter, education, tobacco

products ad alcoholic beverages, and miscellaneous expenditures. Source: Statistics Canada, Survey

of Household Spending, 2015

December 20, 2017



3 FISCAL IMPACT OF ADDITIONAL UNITS

This section of the report analyses the net fiscal impact (on an on‐going basis)

to the Town of Innisfil and Simcoe County of approving the additional resort

units.

3.1 REVENUES

3.1.1 Property Assessment Estimates for Resort Units

The assessment estimates utilized in the base scenario analysis are largely

based on sales prices for actively marketed and/or already sold units within

the Friday Harbour Resort2, adjusted to reflect 2012 market values (the

appropriate assessment base for 2016 tax year).3

In total, the additional units will generate approximately $487 million in net

new assessment value.

Units

Estimated Assessed

Value

Total Assessment

Value Change 25% Higher 25% Low er

$ / Unit

Townhouse (300) 741,795 (222,538,462) (278,173,077) (166,903,846)

Internal Beach Club Towns 35 1,265,622 44,296,760 55,370,950 33,222,570

Stacked Towns 570 505,465 288,114,770 360,143,463 216,086,078

Waterfront Towns 61 1,528,322 93,227,621 116,534,526 69,920,716

Apartments 634 448,464 284,326,007 355,407,509 213,244,505

Total 1,000 487,426,696 609,283,370 365,570,022

Source: Altus Group Economic Consulting based on Realnet data, MPAC

Sensitivity

Estimated Assessment Values, Friday Harbour Resort - Additional Units

Dollars

The sensitivity analysis examines the potential effect of different assumptions

regarding the assessed value of the resort units on the net fiscal impact. The

low assessment scenario assumes a 25% reduction in the assessment

estimates for the resort units. The high assessment scenario assumes a 25%

increase in the assessment estimates for the resort units. These adjustments

result in assessment value ranging from $366 million to $609 million.

2 Based on Altus Data Solutions (Realnet) information

3 We have used a 2016 base year for taxation revenues as it corresponds with the available operation

cost information for the Town and County through their 2016 Financial Information Returns

Figure 1

December 20, 2017



3.1.2 Property Tax Revenues ‐ Innisfil

We have estimated that under the base scenario, tax revenues generated for

the Town by the additional units would amount to approximately $3.1

million. Under the two alternate scenarios, total Town property tax revenues

arising from the additional units would range from approximately $2.3

million per year to approximately $3.9 million per year.

Base 25% Higher 25% Low er

Total Assessment Value 487,426,696 609,283,370 365,570,022

Tow n Tax Rate

Annual Tax Revenue 3,097,197 3,871,496 2,322,898

Source: Altus Group Economic Consulting based on Tow n of Innisf il 2016 tax rates

Dollars

Adjusted

0.635418%

Estimated Annual Tax Revenue Generated by Additional Units at Friday Harbour Resort for the Town of Innisfil

Dollars

Percent

Revenues from other sources (license and permit fees (other than building

permits), fines, penalties and investment income) amount to approximately

13.99% of Innisfil tax revenues. At this rate, the Town will receive

approximately $325,000 to $541,600 from these sources (based on the low and

high assessment scenarios), bringing the range in total annual revenue from

additional units to $2.6 million to $4.4 million.

3.1.3 Property Tax Revenues – Simcoe County

We have estimated that under the base scenario, tax revenues for the County

arising from the additional proposed units would amount to approximately

$1.5 million. Under the two alternate scenarios, total property tax revenues

for County purposes would range from approximately $1.1 million per year

to approximately $1.8 million per year.

Figure 2

December 20, 2017




Total Assessment Value 487,426,696 609,283,370 365,570,022

Tow n Tax Rate

Annual Tax Revenue 1,457,147 1,821,434 1,092,861

Source: Altus Group Economic Consulting based on Simcoe County 2016 tax rates

Dollars

Estimated Annual Tax Revenue Generated by Additional Units at Friday Harbour Resort for Simcoe County

Adjusted

Dollars

Percent

0.298947%

Revenues from other sources (license, fines, penalties and investment

income) amount to approximately 1.4% of County tax revenues. At this rate,

the Town will receive approximately $15,800 to $26,400 from these sources

(based on the low and high assessment scenarios), bringing the range in total

annual revenue to $1.1 million to $1.8 million.

3.2 OPERATING COSTS

3.2.1 Overview of Base Case Approach ‐ Innisfil

The sensitivity analysis presents a base case reflecting full average costs for

all services. This approach assumes that Town and County expenditures will

increase proportionately with the additional proposed dwellings.4 Where

specific characteristics of the Resort are likely to result in incremental costs

significantly different from the average, the implications are discussed

separately.

Figure 4 shows the calculation of full average costs per dwelling and per

employee for the Town of Innisfil. The average costs amount to $2,549.79 per

dwelling.

The base case incorporates two adjustments to reflect the nature of the Friday

Harbour Resort:

Garbage Collection ‐ this analysis assumes that garbage collection

for the additional units will be privately contracted.

4 If a development resulted in a 50% increase in the number of dwellings and a 50% increase in

employment, municipal expenditures would be projected to increase by 50%.

Figure 3

December 20, 2017



Water and Sanitary Sewer Services ‐ according to the Functional

Servicing and Storm Water Management Report (December 2017) by

SCS Consulting (the “FSR”), the sanitary system will be modified by

installing one pump, associated suction and discharge pumping

within the station, and electrical equipment associated with the new

pump.

No improvements are required to the emergency storage or existing

downstream forcemains.

The FSR also estimates the existing watermain infrastructure will not

need to be replaced to accommodate the proposed additional units,

but will need to be assessed upon each new site plan application.

Our fiscal impact model assumes that operating and maintenance

costs for the Town’s water and sewer services will be financed

through user charges. Therefore, the sensitivity analysis (as with the

original fiscal impact analysis) does not include the costs or revenues

associated with these services.

Based on the foregoing, the net impact of the proposed additional units on

annual municipal expenditures is projected to be approximately $2.5 million.

December 20, 2017



Town of Innisfil Fiscal Impact Model, Average Expenditure Estimates, 2016

Weight toNon- Net Residential Commercial

Expenditure Category Residential Expenditures Share Share Household Employee Residential Commercial Total Residential Commercial Total

Percent

General governmentGovernance 20.9 (26,054) (20,620) (5,434) (1.39) (0.56) (1,386) 0 (1,386) 0 0 0 Corporate Management 20.9 2,687,014 2,126,558 560,456 142.96 58.16 142,962 0 142,962 0 0 0

Subtotal 2,660,960 2,105,938 555,022 141.58 57.59 141,576 0 141,576 0 0 0

Protection servicesFire 20.9 5,316,074 4,207,250 1,108,824 282.84 115.06 282,840 0 282,840 141,420 0 141,420 Police 20.9 8,911,959 7,053,107 1,858,852 474.16 192.89 474,158 0 474,158 237,079 0 237,079 Conservation authority 20.9 410,951 325,235 85,716 21.86 8.89 21,865 0 21,865 21,865 0 21,865 Protective inspection and control 20.9 521,694 412,879 108,815 27.76 11.29 27,757 0 27,757 27,757 0 27,757 Building permit and inspection servic 20.9 1,724,233 1,364,593 359,640 91.74 37.32 91,737 0 91,737 91,737 0 91,737 Emergency measures 20.9 12,410 9,822 2,588 0.66 0.27 660 0 660 660 0 660 Provincial Offences Act (POA) 20.9 (236,184) (186,921) (49,263) (12.57) (5.11) (12,566) 0 (12,566) (12,566) 0 (12,566)

Subtotal 16,661,137 13,185,965 3,475,172 886.45 360.61 886,451 0 886,451 507,952 0 507,952

Transportation servicesRoads - Paved 20.9 6,344,167 5,020,904 1,323,263 337.54 137.31 337,540 0 337,540 168,770 0 168,770 Roads - Unpaved 20.9 1,258,525 996,022 262,503 66.96 27.24 66,959 0 66,959 33,480 0 33,480 Roads - Bridges and Culverts 20.9 673,882 533,324 140,558 35.85 14.59 35,854 0 35,854 17,927 0 17,927 Roads - Traff ic Ops and Roadside 20.9 3,592,756 2,843,381 749,375 191.15 77.76 191,152 0 191,152 95,576 0 95,576 Winter control - except sidew alks, P 20.9 2,487,484 1,968,646 518,838 132.35 53.84 132,346 0 132,346 66,173 0 66,173 Winter control - sidew alks, parking l 20.9 108,471 85,846 22,625 5.77 2.35 5,771 0 5,771 2,886 0 2,886 Street lighting 20.9 1,101,424 871,690 229,734 58.60 23.84 58,601 0 58,601 29,300 0 29,300

Subtotal 15,566,709 12,319,812 3,246,897 828.22 336.92 828,223 0 828,223 414,111 0 414,111

Environmental servicesRecycling 20.9 7,929 6,275 1,654 0.42 0.17 422 0 422 0 0 0

Subtotal 7,929 6,275 1,654 0.42 0.17 422 0 422 0 0 0

Recreation and cultural servicesParks 0.0 1,242,052 1,242,052 0 83.50 0.00 83,499 0 83,499 16,700 0 16,700 Recreation programs 0.0 380,548 380,548 0 25.58 0.00 25,583 0 25,583 5,117 0 5,117 Recreation facilities - all other 0.0 3,720,593 3,720,593 0 250.12 0.00 250,124 0 250,124 50,025 0 50,025 Libraries 0.0 3,959,857 3,959,857 0 266.21 0.00 266,209 0 266,209 53,242 0 53,242

Subtotal 9,303,050 9,303,050 0 625.42 0.00 625,415 0 625,415 125,083 0 125,083

Planning and developmentPlanning and zoning 20.9 1,132,526 896,304 236,222 60.26 24.51 60,256 0 60,256 60,256 0 60,256 Commercial and Industrial 100.0 550,481 0 550,481 0.00 57.12 0 0 0 0 0 0 Residential development 0.0 135 135 0 0.01 0.00 9 0 9 9 0 9 Agriculture and reforestation 20.9 139,747 110,599 29,148 7.44 3.02 7,435 0 7,435 7,435 0 7,435 Tile drainage/shoreline assistance 20.9 0 0 0 0.00 0.00 0 0 0 0 0 0 Other 20.9 0 0 0 0.00 0.00 0 0 0 0 0 0

Subtotal 1,822,889 1,007,038 815,851 67.70 84.66 67,700 0 67,700 67,700 0 67,700

TOTAL 46,022,674 37,928,078 8,094,596 2,549.79 839.95 2,549,787 0 2,549,787 1,114,846 0 1,114,846

Additional Expenditures (adjusted)Additional Expenditures (base)Expenditures per

Figure 4

December 20, 2017



3.2.2 Adjustments to Base Case ‐ Innisfil

3.2.2.1 Fire Protection

The Master Concept Plan for the Friday Harbour Resort provides for a civic

use node at the intersection of Thirteenth Line and Big Bay Point Road,

which includes a fire station.

The Town will levy approximately $1.0 million in development charges on

additional proposed units for fire services, based on 2017 rates. These funds

will be earmarked for the construction of fire stations and the purchase of

additional vehicles and equipment throughout the Town.

Providing additional units within the Friday Harbour Resort is likely to

result in limited incremental operating costs relative to Town‐wide average

per capita costs of providing fire services. If we conservatively assume that

the per dwelling incremental expenditures are 50% of the Town‐wide

average, it results in $141,400 in incremental expenditures for fire services.

According to the Town’s 2017 budget, the annual cost of operating and

maintaining the Big Bay Point fire station in 2017 is roughly $970,000.

3.2.2.2 Parks and Recreation Services

The Friday Harbour Resort provides a wide variety of recreation facilities for

its residents and visitors. In addition to the marina and golf course, the

Resort will include a recreation centre (the “Lake Club”) and a Beach Club. T

recreation amenities such as pools and tennis courts will be provided within

the resort. The recreational amenities will be operated and maintained by the

Resort, the Resort Association and condominium corporations within the

Resort.

Development of the additional units is projected to generate approximately

$6.0 million in development charges for new park development and

recreation and library facilities for the Town, based on 2017 rates.

The average cost model projects that the Town will incur an additional

$625,400 in costs for the operation and maintenance of parks, recreation and

library services as a result of the additional units being proposed. However,

this average cost needs to be reduced to account for two factors:

December 20, 2017



Non‐permanent residents and visitors that will make substantially

less use of municipal amenities than permanent residents of the

Town would; and

The additional units being proposed will make more efficient use of

the amenities already planned, which will further reduce the

incremental operating costs generated.

If the impact of the additional units on the annual expenditures for parks,

recreation and library services are reduced by an assumed 80% based on the

foregoing factors, approximately $500,300 would be added to the annual

surplus, and the resulting incremental operating cost impact would be

approximately $125,100.

3.2.2.3 Transportation Services

With the exception of Friday Drive, all of the roads internal to the Resort will

be privately owned and maintained and will not be the financial

responsibility of the Town. Although the cumulative impact of additional

units being proposed will result in additional wear‐and‐tear on existing

roads in the development, no new municipal roads will be required outside

of the Resort as a result of the increased number of units.

In addition, based on 2017 rates, the development of the additional units

being proposed are projected to generate about $10.1 million in roads and

related development charge revenue for the Town and another $4.0 million

in development charge revenue for the County.

Given that nearly all of the roads in the Resort will be privately maintained,

and there are no new municipal roads required outside of the Resort, annual

expenditures for transportation services (largely road maintenance and

winter control) generated will be less than typical new dwellings elsewhere

in the Town. We have conservatively assumed that incremental per capital

expenditures can reduced by 50%. This means that approximately $414,100

would be added to the annual surplus, and the resulting incremental

operating cost would be approximately $414,100.

3.2.2.4 Potential Economies of Scale in Municipal Administration

The average cost model projects additional costs of approximately $141,600

per year for Town administration. It is unlikely that the additional units

December 20, 2017



being proposed would generate any additional costs for municipal

administration.

3.2.2.5 Recycling

The Town of Innisfil’s 2016 tax rate includes a component for recycling.

However, recycling collection is only extended to businesses on a limited

basis (i.e., businesses must remain within the household limits) and is not

typically extended to condominiums. The removal of recycling collection for

the Friday Harbour Resort would add approximately $420 to the annual

surplus.

3.2.3 Overview of Base Case Approach – Simcoe County

Figure 5 shows the calculation of full average costs per dwelling and per

employee for the County of Simcoe. The average costs amount to $873 per

dwelling.

When applied to the net number of proposed additional units, the net impact

on annual municipal expenditures is projected to amount to about $872,900.

3.2.4 Adjustments to Base Case – Simcoe County

3.2.4.1 Health Services and Assistance to Aged Persons

Visitors and non‐permanent occupants of the Resort will utilize County

health services. The expenditure estimate includes approximately $131,400

per year in expenditures for public health services, hospitals and ambulance

services. It also includes over $101,700 for assistance to aged persons.

3.2.4.2 General Assistance and Social Housing

Non‐permanent residents and visitors are precluded from qualifying for

welfare or social housing in Simcoe. The average cost model projects a net

impact on general assistance and social housing of approximately $206,500

per year. Eliminating these costs due to the exclusion of permanent residents

from the Resort would add about $206,500 to the annual surplus for the

County.

3.2.4.3 Potential Economies of Scale in Municipal Administration

The average cost model projects additional costs of approximately $15,200

per year for County administration. It is assumed that the additional units

December 20, 2017



being proposed would not result in any additional on‐going municipal

administration costs.

3.2.4.4 Recycling

As noted previously, the businesses and condominium corporations are not

expected to have recycling pick‐up service. The removal of recycling

collection for the Friday Harbour Resort would add roughly $62,500 to the

annual surplus.

December 20, 2017



County of Simcoe Fiscal Impact Model, Average Expenditure Estimates, 2016

Weight to Adjust-Non- Net Residential Commercial ment

Expenditure Category Residential Expenditures Share Share Factors Household Employee Residential Commercial Total Residential Commercial Total

General Government Percent

Governance 25.7 895,910 665,811 230,099 100% 4.82 2.17 4,823 0 4,823 0 0 0Corporate Management 25.7 1,923,223 1,429,277 493,946 100% 10.35 4.65 10,354 0 10,354 0 0 0

Subtotal 2,819,133 2,095,088 724,045 15.18 6.82 15,178 0 15,178 0 0 0Protection ServicesProtective inspection and control 25.7 276,589 205,552 71,037 100% 1.49 0.67 1,489 0 1,489 1,489 0 1,489Emergency Measures 25.7 571,640 424,824 146,816 100% 3.08 1.38 3,078 0 3,078 3,078 0 3,078

Subtotal 848,229 630,376 217,853 4.57 2.05 4,567 0 4,567 4,567 0 4,567

Transportation ServicesRoads - Paved 25.7 31,866,230 23,681,942 8,184,288 100% 171.56 77.13 171,565 0 171,565 85,782 0 85,782Roads - Bridges and Culverts 25.7 21,658 16,096 5,562 100% 0.12 0.05 117 0 117 58 0 58Winter control - except sidew alks, PL 25.7 6,072,638 4,512,986 1,559,652 100% 32.69 14.70 32,695 0 32,695 16,347 0 16,347Winter control - sidew alks, parking lots 25.7 (84,149) (62,537) (21,612) 100% (0.45) (0.20) (453) 0 (453) (227) 0 (227)

Subtotal 37,876,377 28,148,487 9,727,890 203.92 91.67 203,923 0 203,923 101,961 0 101,961Environmental ServicesSolid w aste collection 25.7 145,588 108,196 37,392 100% 0.78 0.35 784 0 784 0 0 0Solid w aste disposal 25.7 15,752,235 11,706,547 4,045,688 100% 84.81 38.13 84,809 0 84,809 0 0 0Recycling 25.7 11,601,856 8,622,121 2,979,735 100% 62.46 28.08 62,463 0 62,463 0 0 0

Subtotal 27,499,679 20,436,864 7,062,815 148.06 66.56 148,056 0 148,056 0 0 0Health ServicesPublic health services 25.7 8,377,395 6,225,807 2,151,588 100% 45.10 20.28 45,103 0 45,103 45,103 0 45,103Ambulance services 25.7 16,024,177 11,908,645 4,115,532 100% 86.27 38.78 86,273 0 86,273 86,273 0 86,273

Subtotal 24,401,572 18,134,452 6,267,120 131.38 59.06 131,376 0 131,376 131,376 0 131,376

Social and Family ServicesGeneral assistance 0.0 7,724,735 7,724,735 0 100% 55.96 0.00 55,962 0 55,962 0 0 0Assistance to aged persons 0.0 14,033,797 14,033,797 0 100% 101.67 0.00 101,668 0 101,668 101,668 0 101,668Child care 0.0 3,121,511 3,121,511 0 100% 22.61 0.00 22,614 0 22,614 22,614 0 22,614

Subtotal 24,880,043 24,880,043 0 180.24 0.00 180,244 0 180,244 124,282 0 124,282

Social Housing 0.0 20,777,178 20,777,178 0 100% 150.52 0.00 150,521 0 150,521 0 0 0

Recreation & Cultural ServicesLibraries 0.0 847,179 847,179 0 100% 6.14 0.00 6,137 0 6,137 6,137 0 6,137Museums 0.0 1,999,330 1,999,330 0 100% 14.48 0.00 14,484 0 14,484 14,484 0 14,484Cultural services 0.0 797,426 797,426 0 100% 5.78 0.00 5,777 0 5,777 5,777 0 5,777

Subtotal 3,643,935 3,643,935 0 26.40 0.00 26,399 0 26,399 26,399 0 26,399Planning & DevelopmentPlanning and zoning 25.7 2,963,692 2,202,519 761,173 100% 15.96 7.17 15,956 0 15,956 15,956 0 15,956Commercial and Industrial 100.0 1,914,852 0 1,914,852 100% 0.00 18.05 0 0 0 0 0 0Agriculture and reforestation 25.7 (616,023) (457,808) (158,215) (3.32) (1.49) (3,317) 0 (3,317) (3,317) 0 (3,317)

Subtotal 4,262,521 1,744,711 2,517,810 12.64 23.73 12,640 0 12,640 12,640 0 12,640

TOTAL 147,008,667 118,396,046 26,517,533 872.90 249.90 872,903 0 872,903 401,225 0 401,225

Additional Expenditures (adjusted)Additional Expenditures (base)Expenditures per

Figure 5

December 20, 2017



3.3 RANGE OF NET FISCAL IMPACTS

3.3.1 Town of Innisfil

The sensitivity analysis identifies a range of possible impacts on the Town of

Innisfil’s annual revenues and expenditures from development of the

additional proposed units. At the low end of the impact range, total annual

revenues ($2,647,871) would exceed total annual expenditures ($2,549,787) by


At the high end of the impact range, total annual revenues ($4,413,119) would

exceed total annual expenditures ($1,114,846) by approximately $3,298,272

per year.5


$3,530,495 $4,413,119 $2,647,871

Expenditures

Base $2,549,787 $980,708 $1,863,332 $98,084Adjusted $1,114,846 $2,415,648 $3,298,272 $1,533,025

Source: Altus Group Economic Consulting

Revenue (including taxes and other revenues)

Projected Surplus

Projected Surplus, Build-Out of Additional Units of Friday Harbour Resort, Town of Innisfil

3.3.2 Simcoe County

The sensitivity analysis identifies a range of possible impacts on Simcoe

County’s annual revenues and expenditures from development of the

additional proposed units. At the low end of the impact range, total annual

revenues ($1,108,666) would exceed total annual expenditures ($872,903) by


At the high end of the impact range, total annual revenues ($1,847,777) would

exceed total annual expenditures ($401,225) by approximately $1,446,553 per

year.

5 The low expenditure estimate includes allowances for 50% cost savings compared to averages for

fire, police and roads, 80% cost savings for parks, recreation and library services, and administration

and recycling costs are excluded.

Figure 6

December 20, 2017




$1,478,222 $1,847,777 $1,108,666

Expenditures

Base $872,903 $605,319 $974,874 $235,764Adjusted $401,225 $1,076,997 $1,446,553 $707,442

Source: Altus Group Economic Consulting

Projected Surplus, Build-Out of Additional Units of Friday Harbour Resort, Simcoe County

Revenue (including taxes and other revenues)

Projected Surplus

3.4 CONCLUSIONS REGARDING FISCAL IMPACT

This fiscal impact analysis for the additional units being proposed for the

Friday Harbour Resort development is consistent with earlier studies we

undertook for the already approved units, which found that the Resort will

“pay its own way” and generate a fiscal surplus for both the Town of Innisfil

and County of Simcoe.

The scale of the fiscal surplus will depend on the assessed value of the

additional units, as well the magnitude of potential cost savings related to

privately operated and maintained services within the Resort (recreation

facilities and roads).

Figure 7

December 20, 2017



4 CONCLUSIONS

Adding 1,000 resort units to the Friday Harbour Resort will help optimally

utilize the infrastructure already constructed and to be constructed, and will

help provide additional support for businesses within the Resort and

elsewhere in the Innisfil and Simcoe County. These additional units will

provide immediate and ongoing economic benefits, and will generate a fiscal

surplus for both the Town and County.

Providing an additional 1,000 resort units will help meet the following

objectives set out in the Town’s Community Strategic Plan:

Promote economic development;

Establish strategies and structures to cost effectively finance the

construction of water and wastewater utility services;

Promote tourism;

Promote and encourage the development of appropriate tourism

facilities, including restaurants, shops, accommodation and

recreation providers; and

Ensure optimal utilization, relevance and value of existing

infrastructure before investing in the development of new

infrastructure.

The proposed increase in units within the Friday Harbour Resort will also

help to address issues identified in the Town’s Tourism Destination

Management Plan (2016), which recognized Friday Harbour as being “poised

to become the region’s primary tourism destination” and identified a lack of

roofed overnight accommodations in the Town. Allowing for 1,000 more

“second homes” in Friday Harbour, all of which may participate in the

Resort’s Rental Management Plan, will help to compensate for the lack of

hotels in the Town. These additional units will not displace the planned 400

hotel units within the Resort, which remain a component of the resort plan.

Documents

Friday Harbour Resort Analysis of Economic and Fiscal … and Fiscal Impacts... · Friday Harbour Resort Analysis of Economic and Fiscal ... Friday Harbour Resort Analysis of