A Simple Tool to Evaluate the True Cost of Growth

Feb. 4, 2003

About the author: David Eckhoff, vice president and regional manager, headed up the four-year MIPCOM development effort for Psomas, a consulting engineering and information management firm providing services in land development, water resources transportation and information technology. The firm has offices throughout California and in Salt Lake City, Utah.

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

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

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

Eliminating the Mystery of Improvement Costs

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

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

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

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

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

Simplicity

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

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

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

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

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

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

Compact Approach to Growth

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

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

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

About the Author

David Eckhoff

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