0. Long Range Planning Group Update Presentation to the Board of Selectmen 17 June 2017

1. Summary of Key Analysis: Population Permits Parcels
Contents
Objective:
Provide the Board of Selectmen and general public with an update on the reports and work undertaken by Long Range Planning Group.
Agenda:
LRP Group Overview
Fiscal 2017 in Review
Summary of Key Analysis:
Population
Permits
Parcels
“New Growth” Forecasting
Next Steps

2. LRP Group Overview CHARGE
The Group is charged with collaboratively identifying, discussing, and developing responses to long term strategic issues which face Cohasset, including but not limited to the financial impact that such issues can and may have on the short and long term revenues and expenses of the Town (including the operating and capital budgets, the tax rate, and the general delivery of services including education).
COMPOSITION
Town Leadership - Town Manager / Finance Director
School Leadership - School Superintendent / School Business Manager
Board of Selectmen – Steve Gaumer / Jack Keniley
School Committee – Jeanne Astino / Katie Dugan
Capital Budget Committee – Sam Wakeman / Susan Franklin
Advisory Committee – Nan Roth / Tanya Bodell Carr

3. Fiscal 2017 in Review Five Year Forecast Model LRPG Goals & Objectives
Population Analysis
Long Range Planning Group
Health Care & Pension Expense
Permit Analysis
”New Growth”
Forecasting
Collaboration
with Town Boards
Parcel Analysis
LRP Group met 10 times during Fiscal 2017 focusing primarily on five year forecast model and key revenue/cost drivers

4. Population: Historical trends
SOURCE: U.S. Census
Average increase of 147 residents per decade
7,542
7,261
6,954
7,174
7,075
% CAGR
5,840
3,731
3,083
3,111
1930
1940
1950
1960
1970
1980
1990
2000
2010
Cohasset’s population growth averaged 2.1% per decade over last 40 years with a 0.4% CAGR in most recent 10 year census period

5. Population: LRPG analysis
SOURCE: Town Census + DESE School Attending Children Report + LRPG Estimates
Increase of 953 residents since 2007 = 1.3% CAGR
8,454
8,613
7.977
7,660
Growth since 2007 significantly outpaces U.S. census growth from

6. Permits: New construction and improvements
2009 – 2015 CAGR: 10.7%
2009 – 2015 Cumulative Average Growth Rate (CAGR):
Improvements = 9.74% New Const/House = 32.57% New Const/House (w/out Toll/Cook) = 21.03%
Pulled permits have returned (finally) to pre-recession levels

7. Permits: New construction
2010 – 2015
Average Permits = 26
Average Permits without Toll/Cook = 17
2006 – 2009 Average Permits:
New Const/House = 12
Developments have increased new house permits by more than 33 percent

8. Permits: Average value of new construction
Individual House
Average Permit Value = $720k
Individual House Average Permit Value = $460k
2010 – 2015 Average Value:
New Const/New House = $485k New Const/House (w/out Toll/Cook) = $545k Toll/Cook = $325k
Do the past three years represent a new trend in individual house construction?

9. Permits: Value of permitted new construction and improvements
Average of Total Permitted Value = $24 MM
Permitted Improvements = $15 MM
The value of permitted improvements has remained flat versus new houses

10. Parcels: Cohasset property value by land use

11. Parcels: Assessed value of residential parcels is increasing

12. Parcels: Changes in assessed value depend on the economy

13. Parcels: Historic rate of new construction varies

14. Parcels: There are a number of developable lots

15. Parcels: There are many large properties like Cook

16. Parcels: Recent development trends can last a while

17. New Growth: The value of new homes has overtaken renovations
Preliminary Analysis
Focuses on New Construction/ New Houses
Growing portion of permit value
More timely with respect to construction and realization of growth
Renovations are often delayed
XXXXX
The value of permitted improvements has remained flat versus new houses

18. New Growth: Lesson 1 - Time lag from permit to assessed value
(new homes/construction)
80% of permits take 2-3 years before assessed value is reflected in tax levy

19. New Growth: Lesson 2 - Time lag from permit to assessed value varies with economy
(new homes/construction)
80% of permits take 2-3 years before assessed value is reflected in tax levy

20. New Growth: Lesson 3 - Average variance between assessed value and permit value
(new homes/construction)
Average difference between assessed to permit value is $364,000

21. New Growth: Lesson 4 - Percentage variance is dependent on size of permit pulled
(new homes/construction)
Cohasset is the land of
Million Dollar Homes!
Home value is roughly 2 x permit value, but offset by value of existing land/building

22. New Growth: Lesson 5 - A linear regression has predictive value
(new homes/construction)
GROWTH = 338, PERMIT
R2 = 39.3
R2ADJ = 38.8
A simple linear regression explains almost 40% of the relationship

23. Next Steps: Fiscal 2018 Goal Setting
LRP Group meets in mid August to set goals and determine committee projects for the coming fiscal year

24. New Growth: Lesson 5 - A linear regression has predictive value
(new homes/construction)
Questions?
GROWTH = 338, PERMIT
R2 = 39.3
R2ADJ = 38.8
A simple linear regression explains almost 40% of the relationship