BACKGROUND
At the request of the East Bay League of Conservation Voters* (EBLCV) and members of the Sierra Club (SC) Political Committee I reviewed the Comprehensive Fiscal Analysis (CFA) of the Proposed Incorporation of Castro Valley prepared for the Alameda County Local Agency Formation Commission (LAFCO) by Economic & Planning Systems, Inc. (EPS) in June 2002.

EBLCV and the Sierra Club are interested in the financial feasibility of the proposed City of Castro Valley, in part because the proposed City does would not have in place an Urban Growth Boundary (UGB). If the City is financially feasible with an adequate level of municipal services– the new City would not have a strong financial incentive for approving sprawl inducing development that in the long run rarely generates enough revenues to cover the cost of services.

CONCLUSIONS
The CFA Study indicates that the City of Castro Valley should be financially feasible while providing a level of municipal services to similar to that provided at present by Alameda County. The CFA Study also included a review of revenue and expense data for key revenue and expense categories for the City of Castro Valley and other East Bay cities that also indicated that Castro Valley should be financially feasible. 

My analysis examined recent actual per capita revenue and expense figures calculated from the Local Government Annual Financial Reports published by the State of California, Controller's Office (http://www.sco.ca.gov/ard/local/locrep/cities/9899/cities.htm). Those published figures were compared with the CFA estimates to see if the estimates were reasonable and within the range experienced in a sample of other comparably-sized Bay Area cities.  The proposed revenues and expenses of the new City are in the range experienced by existing cities. In particular, overall per capita revenues and expenses are in the range experienced in Danville, one of the more recently incorporated East Bay cities. Moreover, per capita revenues and expenses are within the wide range found in other comparably-sized Bay Area cities. This review indicates that the CFA Study is reasonable and that Castro Valley should be financially feasible and self-supporting. The Big Picture? Incorporation is economically feasible. 

REFERENCE:  CFA CONCLUSIONS
The CFA Study is a fairly comprehensive review using appropriate methodology and data to estimate the fiscal impacts of the proposed City.  One important conclusion of the CFA Study is the City would be financially feasible with the proposed tax structure and that the level of City services would be comparable to the existing level of county services and would meet the needs of Castro Valley residents.

Key CFA Study conclusions included the following: 

• “Castro Valley can be financially feasible as a City, contingent on implementation of a transient occupancy tax  (TOT) and an ongoing utility users tax  (UUT).” 
• “Municipal service levels are anticipated to be at an adequate level.”
• Unincorporated Castro Valley pays more in taxes than it receives in County services.

There is a TOT or hotel tax for the unincorporated areas of Alameda County already on the Nov. 5, 2002 ballot. 
The CFA analysis shows that at present unincorporated Castro Valley actually pays more to Alameda County for services (See Fiscal Impacts on Other Agencies) than it receives in services. The new City would actually need to make payments to Alameda County to offset negative financial impacts on Alameda County.

Gary Zimmerman and wife Jan (who was on the MAC for a few years) was asked by Sierra Club and EBLCV to analyze the CFA.  Some of us worked with them on "Save the Ridgelands" (including Diana Hanna) several years ago.  They went to Austria where he taught for a year, they now live in Walnut Creek.

Gary has an MA & BA in economics, and He's been an economist for a couple of decades. He's done the fiscal analysis on a number of projects, proposals, and even looked at CV incorporation twice now!