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no.648
ALASKl\POWEn I'.UT1l0RITY RESPONSE
TO AGENCY COMMErTS or LICENSE
APPLICATION;REFERE CE TO
COMME T(S):1.497
SUSITNA ilYDROELECTRIC PROJECT
SUBTASK 4.5:SocIoEcormrlIC STUDIES
Draft Final
PROJECTION ~SSUMFTI0NS,
METHC'DOLOGY,AND
OUT!!uT FORMATS
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METHODOLOGY AND·.OUTPUT'FORMATS
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ASSOCIA TES~NC,.....
ARLIS
Alaska Resources
Library &Information Services
Anchorage.Alaska
TABLE OF CONTENTS
Page No.
I..I NTROD UCT ION €I I>eo Cil ~0 '"$£>iJ Ii>'0 e "I!l o:ll ri/.~•III III D '0 iCl·flo III oil '1\1 0 00 ..CI ~IIli oil .•..1
11.FERC REQUIREMENTS AND NEEDS ••••••o •••••••••••••••••••••••••••2
III.OBJECTIVES OF THE SOCIOECONOMIC STUDIES......................4
I V.OVERY lEW OF THE MODEL........................................5
A.Ceonceptual Foundation,Choice of
Method and Techni ques ......•...........' . . .... . .... . . . . . . 5
B.Model Structure .•••.•..•••..•....•......................•
Y.ECONOMI C-DEt~OGRAP HIe MODEL...•.....•••.••.............•..•...
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A.Baseline Projections...............................26
B.Di rect Work Force........................................36
C.Secondary Work Force.....................................55
VI.PUBLIC FACILITIES AND SERVICES..60
A.Overvi e\'/of f·1ethodol ogy.... . . . . . • . . . . .... . . . . . . . . . . . . . . . .60
B.Geographic Scope ......•..................................60
C.The Computerized Modul e eo eo • •61
D.Types of Service Standard?.61
E.Assumptions and Service Standard Used....................67
VII.FISCAL t·10DULE.............•...........................•....•.75
A.Overview of the Fiscal Impacts Module....................75
B.Impact Areas and Local Jurisdictions.....................76
c.Projection of Revenues and Expenditures..................77
D.
""'"
E.
F.
G.
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Link of the Fiscal Module to Other Modes.82
Baseline Projections.............................83
Impact Projections '"...89
Reports.... . . . .•.. . ...... . . . . . . . . . ...... . . . . . . . . . . .... . . .89
REFERENCES..•.•.. ...•.• . . . . . . ...• ..•. . ...•.. ...•. . ..•. . . . . . . . . . ....93
Table 1:
Tab1 e 2:
Table 3:
Tab1 e 4:
Table 5:
Tab 1e 6:
Table 7:
Tabl e 8:
Table 9:
Table 10:
Table 11:
L 1ST OF TABLES
Page No.
Potential Impact Areas and/or Worker
Tracking Points••••.•.•.••~•••.•..••.•••••••••.•.•••.13
Projected Percent Share That Censu s Divi sions
Will Represent of Employment in the Anchorage
and Fairbanks Subareas...............................29
Projected Percent Share That Census Divisions
Will Represent of Population in the Anchorage
and Fa irbanks Subareas...............................32
Assumptions for Baseline PopUlation Growth
Rates for Selected Communities Located Near
the Project Si teo ...•.••..••...•••..••••••..••.. .....33
Population per Household Assumptions...................35
Seasonal ity of Project Employment......................38
1981 Hourly Wage Rates Used to Calculate Payroll 54
Impact of the Project on Pol ice Protection
in the Matanuska-Susitna Borough.....................62
Summary of Public Facility and Service
Standards for Selected Communities in the
Loca 1 Impac t Area................................ . . . .66
Fiscal Module Reports:Revenues and
Expenditures,Impacts on BUdgets (1985 -1993).......91
Fiscal Module Reports:Revenues and
and Expenditures,Impacts on Budgets (1994 -2005)...92
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LIST OF FIGURES
Page No.
Structure of Public Facilities and Service Module........63
Direct Construction Work Force...........................42
Structure of Susitna Model..............................12
r'iethodology Used to Project
Settlement Patterns of Direct Work Force........40
15
Baseline Population,Employment
&Housing Projections..........................•..•.••27
Struc ture of Ec onomi cjDemograph i c ~Iodul e.. ... ••. .•. . . .•.24
Resident and Non-Resident Project and Related
Em p1oyme ntan d Po pu1at ion.. •. . ••. . . . . . . . . . . . . •. . . . . . . .25
Design Overview of Data*Model
Economic Modeling Software...........•..•.•..•.•......21
Potential Impact Locations in the Local
Impac t Area ....•..•.....•...•.....••...........•....•.
-----Figure 1:
Fi gure 2:
Fi gure 3:
Fi gure 4:
Figure 5:
Figure 6:
Figure 7:
Figure 8:
Fi gure-9:
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,~Ie INTRODUCTION
The main purpose of this paper is to present the assumptions and
methods"that have been used to project potential socioeconomic impacts
of the proposed Susitna Hydroel ectri c Project.Another purpose is to
describe the formats that will be used to report results of future
analysess
Many of the assumptions and methods described in later sections of this
paper are the same as those used in the preparation of Chapter 5 of
Exhibit E (February,1983).Because of the current need to detel"mine
potenti a1 impacts that coul d resul t from alternati ve managemen t and
design scenarios,some methods \'iere refined.and some new assumptions
and methods were developed.
Most of the changes from earlier methods occurred in the portion of the
economic-demographic module that involves origin and sett1ement of
workers.A gravity allocation element was created in response to the
need to model the effects of a1ternative camp/village sizes and other
attributes,work force characteristics.transportation options for
workers,access corridors,and scheduling.Other changes,'",hich
primarily increased the ease with which assumptions may be changed,
occurred in most elements of all of the modules of the model.
This paper is organized in seven sections.Sectio"n II presents the
Federal Energy Regulatory Commission's (FERC's)requirements and needs,
while Section III describes the near-and long-term objectives of the
socioeconomic studies.Section IV provides an overview of the impact
projection methods,and the structure of the model used to project
impacts.The paper concludes with detailed presentations of each of
the three parts (modules)of the model.
II.FERC REQUIREMENTS AND NEEDS
The Report on Socioeconomic Impacts,a required section of the Susitna
Hydroelectric Project license application Exhibit E,must identify and
quantify the impacts of constructing and operating the Susitna
HYdroelectric Project,including impacts on employment,population,
housing,personal income,local government services and tax revenues,
and socioeconomic conditions in the communities and other jurisdictions
in the vicinity of the project.
The Report is to incl ude,among other thi ngs:
1.An evaluation of the impact of any substantial project-induced
in-migration of people on the impact area's governmental
facilities and services,such as police,fire,health,and
educational facilities and programs;
2.Estimation of the numbers of project construction personnel who:
-currently reside within the impact area;
-Would commute daily to the construction site from places
situated outside the impact area;and
-Would relocate on a temporary basis within the impact area.
3.A determination of whether the existing supply of available
housing within the impact area is sufficient to meet the needs
of the additional project-induced population;and
4.A fiscal i~pact analysis evaluating the incremental local
government expenditures in relation to the incremental local
government revenues that would result from the construction of
the proposed project.(Federal Register,November 13,1981).
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FERC regulations do not explicitly define mitigation policy nor goals
for socioeconomic impacts.However s mitigation measures for addressing
significant and adverse potential effects of the project must be
developed to satisfy the mitigation and other requirements of the
National Environmental Policy Act.Hence~it is necessary for the
Report to also address mitigation issues.
.,
The Report on Socioeconomic Impacts s as part of the Susitna Project
license applications was submitted to FERC in February.1983.The
Report was accepted by the FERC s .a1 though FERC requested suppl ementa1
infonnation primarily concerning the methods utilized in analyzing
impacts and the formulation of an impact mitigation plan.The Report
presents alternative mitigation measures.and a definite mitigation
plan will be prepared as project management and design plans evolve.
3
III.OBJECTIVES OF THE SOCIOECONOMIC STUDIES
The main objective of the socioeconomic studies is to satisfy FERCls
requirements and needs.Secondary objectives include:
o Providing information that will help the Alaska Power Authority
make decisions on measures to mitigate potential adverse
socioeconomic impacts and on interdisciplinary issues,such as
the selection of an access corridor or camp/vi11age sizes and
qual ity.
o Provi di ng p1 anning i nformati on to communities,the Ma t-Su
Borough and state agencies so that they can anticipate and
cooperatively plan for avoiding and mitigating potential adverse
project-induced socioeconomic impacts.
4
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IV.OVERVIEW OF THE MODEL
To meet the above objectives,it was necessary to develop impact
projections and assessments,and alternative mitigation measures,that
would help in designing the project,assessing environmental impacts,
and determining project (easibility.Additionally,it was desirable to
develop impact projection methods and procedures ,that would allow
projections to be easily and periodically revised before and during
project construction.
A.Conceptual Foundation,Choice of Method and Techniques
1.Conceptual Foundation
Any of several alternative theoretical concepts can be used as the
f04~dati on of an impact proj ecti on and assessmen t mode 1.These
alt~rnatives include 1ocation,central place,and economic base
I ;I .theon es.
Location theory has limited usefulness for this socioeconomic
assessment.It's strengths are in estimating the potential for the
development of interrelated industries,and for assessing the growth
potential of direct industries and industry sectors.This information
was not required as part of this.study.
Like location theory,central place theory h.as limited usefulness for
this study.It's strength lies in providing a means to estimate the
geographic distribution of impacts.Although it was not the main
conceptual foundation for the projections,it provided part of the
conceptual basis for predicting workers'settlement patterns.This is
discussed further in Section V-B-2.
Economic base theory was relied upon heavily for this study because its
strength lies in estimating how secondary industry sectors will change
in reponse to a change in direct industry sectors.This is relevant
5
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for this project because one of the most significant sources of impacts
will be employment and population growth that is stimulated by the
project's direct employment.As a result,the quantifying approach is
detenninistic (causal )--relationships between the variable(s)to be
forecast and influencing variables/factors are identified and
determined,and then incorporated into the forecasting process.
In economic base theory,there are two key concepts.First,it assumes
that the economy may be split into two sectors:direct and secondary.
Businesses and other economic entities that sell goods and services at
places outside of the local economy comprise the direct sector,and
those that sell goods and services within the local economy comprise
the secondary sector.Second,it assumes that the amount of secondary
activity is determined by the amount of direct activity.Thus,an
increase in direct activity (e ..g .•employment)is accompanied by a
corresponding,and roughly predictable,increase in secondary activity.
Aggregate employment multipliers are commonly used to estimate
employment effects that are likely to result from changes in direct
employment.Other mul ti pl i.ers may be used to estimate popul ati 0 n
effects that result from the increases in direct and secondary
employment.Aggregate employment.and other multipliers are discussed
further in later sections of this paper.
2.Choi ce of Method
Methods that were considered for implementing an economic base model
included aggregate employment multiplier,intersectoral flows.and
input-output.Several criteria were developed to evaluate these
methodological alternatives.There were also several constraints that
influenced the choice of methodology.The criteria and constraints may
be grouped as follows:
a.Criteria:
-Must quantify impacts at the local (community)level.and to a
lesser extent,regional and statewide levels.
-Must use best possible techniques to estimate secondary
employment impacts.
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-Must have consistent methodology for "with projectll and
"wi thout project"projections.
Must be easy to update results.
-Must provide information that is useful to decision makers
(FERC,APA,local jurisdictions).
b.Cons tra i nts:
-Must be able to develop and use the model within the budget
and other resources available.
-Availability of data.
-Must be consistent with the Institute of Social and Economic
Research's (ISER's)projections of employment and population
at the state\'lide and regional (railbelt and subareas)levels.
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Each of the three alternative methods differ substantially in their
data requirements.cost and time for development,and the level of
detail prOVided in the results.The input-output method can be the
best method to use from a resu1 ts perspective (e.g••it is capabl e of
providing detailed projections of impacts on industry sectors).For
this analysis.however,this method could not have provided detailed
projections because the local economies (boroughs/census divisions)of
Al aska are not 1arge enough for an input-output method to be
functional.Further,the cost of development and impl ementation of
this method would have been prohibitive even if it were potentially
functional.The intersectoral flows method would have also been
preferred from a results perspective.but it too would have resulted in
excessive development and implementation costs.
Part of the reason for the high costs associated with these methods is
that large amount of primary data would have been required on a
continuing basis.For the input-output method,it would have been
7
necessary to collect primary data to support the development of
technical coefficients (direct requirements coefficients or
input-output tabl e)at the borough/census divi sion 1evel •Besides the
budget and time constraints.it is very doubtful that a meaningful
input-output table could have been developed.This is because the
Ma t-Su Borough I s economy is not yetwell-devel oped,among other factors.
Similarly.the intersectoral flows method would have required a table
showing requirements coefficients.Because it focuses solely on
exports.data requirements are less than those reqired for the
input-output method.Nevertheless,these data requirements would have
been quite substanti a 1.and it is doubtfu 1 tha t a mea ni ngful table
could have been developed due to the limited size and breadth of the
Mat-Su Borough1s export economy.Moreover~the level of detail of the
regional economy produced by this type of method would exceed the
requirements of this project.
The aggregate employment multipl ier method was chosen because
techniques were available to provide more detail to the impact
projections~and it did not share the shortcomings of the methods
discussed above.Further.ISER's MAP model.being an economic
base-econometric model,flt 'f,ell with this decision.Accordingly,it
was decided that the ISER employment and population projections would
serve as baseline projections for the statewide~railbelt region,and
subarea (multi-borough/census division)levels~and that baseline
projections for borough/census divisions and smaller areas would be
derived by di saggregati ng the ISER projections.The techni ques used to
disaggregate these projections are discussed in Section V-B-2.
The method used to project impacts of the project follows economi c base
theory in that secondary (support sector)impacts of the project are
estimated using employment mUltipliers.It is assumed that the level
of secondary activi ty is uniquely determi ned by the 1 evel of di rect
(basic sector)activity~and that a given change in the level of direct
activity will bring about a predictable change in secondary activity
(leistritz and Murdock,1981).Thus,the creation of a given number of
construction jobs will create a predictable number of secondary jobs in
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related industries and the service sector.The techniques used to
estimate secondary employment effects are d;scussed further inSect;on
V-C-l.
It would have been preferable to use income instead of employment as
the indicator to measure economic change if adequate data had been
availab1e.Employment may not be an accurate indicator of economic
activity in sectors that experience technological change,and if
different direct industries have significantly different wage rates
and/or input purchasing patterns).However,it was not possib1e to use
income because adequate income data was not available.
3.Tech"i ques
Severa1 techniques were used in conjunction with the aggregate
employment multiplier method to project impacts.Some of the more
important techni ques are:
o Gravity allocation model (used to allocate inmigrating workers
to communi ties)
o Trend analysis (used to allocate ISERls ~1Jl..P model IS baseline
employment and population projections to smaller geographic
areas)
o Person per household trend mUltipliers (used to project numbers
of households)
o Per capita planning standards (used to project demands for
public facilities and services)
o Per capita fiscal multipliers (used to project local
juri sdi cti on s I revenue s an d expend i tu re s,wi th an d wi thou t th e
project
Each of these techniques is discussed in Sections V -VII.
9
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B.~del Structure
1.Overview
Having established aggregate employment.multiplier as the method,the
next step was to design a model that could use this method to produce
appropriate projections.Several needs were considered during the
des;gn process.These were :
o Ability to meet the information requirements of FERC,NEPA,APA,
and local officials (e.g.,employment.population,housing,
public facilities and services.and fiscal impacts).
o Ability to produce annual projections for up to 25 years.
o Ability to efficiently h~ndle multiple scenarios.
o Amenable to sensitivity analysis.
o Ability to quantify potential impacts in detail,and for small
geographic areas.
o Ability to efficiently interact vlith r.wnitoring and mitigation
activities.
o ADi 1 ity to produce resul ts that are useful:(1)in i denti fyi ng
potential problems,(2)to decisionmakers,and (3)to the
mitigation activity.
o Capable of being updated quickly,efficiently,and at low cost.
o Capable of being manipulated at low cost.
o Relatively short processing (run)time.
o Ability to create many diverse reports (output formats).
o Ability to have results validated and the model calibrated.
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With these considerations in mind,the structure for the model was
developed.The general structure is shown in Figure 1.Here it can be
seen that the model is composed of three main modules.each containing
equations that compute basel i ne and·Ilwith-project"(construction and
operations)projections.Comparisons of these projections yiel d impact
projections.
This general structure mirrors economic base theory,as the source of
impacts rests in the economic-demographic module (creation of direct
jobs),and these impacts are reflected in the public facilities and
services,and fiscal modules.New populations associated with
construction workers,secondary workers,and dependents create demands
on housing and public facilities and services.The budgets of local
jurisdictions are impacted by these new demands.
Each of the modules are discussed further in Sections V,vr,and VII,
and each of the considerations presented above are addressed at
appropriate places in these sections.Before proceeding on to the
detailed discussions,however,it is appropriate to discuss in more
detail several key considerations,inclUding the need for
computerization.These are discussed below.
2.Key Considerations
a.Ability to Quantify Impacts in Detail,and for Small Geographic
Areas
As the nearest communities to the construction sites are quite small,
and any settl ement by workers waul d create measurabl e impacts,it I'/a s
necessary to consider developing the capability to quantify potential
impacts for small geographic areas.Based upon a review of the
attributes of these communities,it became apparent that some workers,
under certain conditions,would probably be attracted to,and settle in
these small communities.As a result,a rather large number of small
impact areas were delineated.These are shown in Table 1.A map
showing the impact Areas is shown in Figure 2.
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Figure 1
STRUCTURE OFSUSITNA MODEL
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Tabl e 1
POTENTIAL IMPACT AREAS,AND/OR WORKER TRACKING PDINTS
LOCAL
Work.sites:
Work camp 1 (At Watana)
Village 1 (At Watana)
Work.camp 2 (At Devil Canyon)
Village 2(?)
Cantwell
Cantwell railroad camp
Cantwell community
Cantwell area (Cantwell,Denali and other areas of Western Denali Highway)
(not to be used at this time due to lack of baseline data)
Healyarea (not to be used at this time due to lack of baseline data)
.,.-;..McKinley (not to be used at this time due to lack of baseline data)
Nenana area (not to b~used at this time due to lack of baseline data)
.~..Paxson (not to be used at this time due to lack of baseline data)
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Trapper Creek
Talkeetna
Gold Creek (not to be used at this time due to lack of baseline data)
Railroad communities:(not to be used at this time due to lack of baseline
data)
Shennan
Curry
Chase
Chul itna
Canyon
Lane
Hurricane/Indian River subdivision
(not to be used at this time due to lack of baseline data)
Palmer
Wasilla
Houston
Other Mat-Su Borough
Surburban
Rural and Remote
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Table 1
(continued)
REGIONAL (census divisions)
Anchorage
Fairbanks-North Star Borough
SE Fairbanks
Seward
Kenai-Cook Inlet
Yukon-Koyukuk
-
Ma t-Su Borough .(Trapper Creek,Talkeetna,Palmer,Wasilla,Houston,
Hurricane-Indian River,Gold Creek,Railroad
commnities)
Va 1dez-Chi ti na-Whi tti er·
Gl ennall en
Valdez
Copper Center
Gulkana
Note:The model is structured to include these communities should it
become necessary to conduct impact analyses for these communities.
Basel ine data would be required for these analyses.
Note:The region will be expanded from the original ISER Rail bel t region to
include a portion of the Yukon-Koyukuk census division as Cantwell and other
potentially impacted communities are in this census division.
14
.,
Figure 2
POTENTIAL IMPACT LOCATIONS IN THE LOCAL
IMPACT AREA
Nenana
McKinley Park
Cantwe 11
Hu rri ca ne -:~--t----:7~:'::"'J
Tra ppe r·Cree k-----t::.:.;~~~,...:....::::...:..--.-.\~
Talkeetna
o
15
Canyon
Gold Creek
Sherman
Curry
Lane
Chase
r
Paxson
~le
Local Impact Area
Regional Impact
Area
b.Ability to Efficiently Handle MUltiple Scenarios
There are several aspects of project design and management that will
affect the level,distribution,and composition of socioeconomic
effects that are currently uncertain.These include:
a Choice of access corridor
o Transportation mode(s)and frequency for workers
o Size and quality of construction camp/village
o Work schedules
o Local hire and training programs
Additional project characteristics possibly subject to revision during
detailed project design are:
o Manpower requirements and timing of same
a Timing of construction for Watana and Devil Canyon dams
Analysis of alternative scenarios will help decisionmakers select
policies,with substantial knowledge of the range o~possible impacts.
The model is designed to project with-project socioeconomic variables
using these scenarios,and to accommodate and produce different
baseline projections.Hence,ranges of potential impacts can be
prov;ded.
c.Amenable to Sensitivity Analysis
The model must be able to accommodate alternative assumptions
concerning various economic and demographic relationships in the impact
areas,and to determine the sensitivity of projections to variations in
these assumptions.Some examples of assumptions are:
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o Percent of total work force that will relocate (settle)in
corrmuni ti es
o Possible deviations from derived employment multipliers
o Local supply of skilled and unsk.illed labor
o Number of dependents per accompanied worker
o Number of school-age children per accompanied worker
a Attractiveness indicators for communities
Determining how sensitive the results are to changes in these and other
assumptions helps decisionmakers and planners prepare fora possible
range of impacts.A.s actual data for these assumptions are obtained
from monitoring local community conditions prior to and after
construction begins,the assumptions can be revised.This will result
in more accurate projections,and permit formulation of responsive
mitigation measures.
The model is designed to easily accommodate changes in assumptions in
the pre-construction,construction,and post-construction phases.
d.Computer Software
It was appropriate to computerize the model in view of the following
needs:
o Ability to efficiently handle multiple scenarios.
o Amenable to sensitivity analysis.
o Ability to efficiently utilize results from and provide input to
the monitoring and mitigation activities.
17
o Ab i1 i ty to produce resul ts that are useful:(l)in i dentifyi ng
problems.(2)to decisionmakers.and (3)to the mitigation
acti vi ty.
o Capable of being updated quickly.efficiently,and at low cost.
a Capable of being manipulated at low cost.
o Relatively short processing (run)time.
o Ability to create many useful and diverse reports (output
fonnats).
The model was computerized using the Data*Model economic and financial
modeling software package.It is operated on a Wang Virtual Memory
computer system.It takes between two and three hours to run the
Susitna impact model and generate the 50 standardized reports that "Jere
de.veloped for it (print-out of all the results takes considerably
longer).The model has been structured so that assumptions and data
are easily changed and the set of alternatives can be performed
efficiently.
The planning of a computerized economic impact model needs to take into
account both hardware and software considerations.The major criteria
that were used to determine the way the model would be computerized
i ncl uded:
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1.Ability of the computer system (hardware)to handle a very large
model,in terms of both on-line computer memory and storage
capacity;•
2.Cost of development of the model;
3.Operation and storage cost;
4.Flexibility of reporting {a software consideration};
5.Operation speed (related to both hardware and software);
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A modeling software package was chosen over the alternatives of custom
programming of a model or using a timeshare statistical package for
several reasons.Use of modeling software results in a lower set-up
cost than the first alternative by avoiding the development time of
programming,and has a lower operating cost than timeshare systems.
The advanced report~riting capability of the system means that any
combination of variables in the various parts of the model can be
displayed in a report,and that the model and equations can be defined
before all the report formats are developed.In addition,this
software allows non-programmers to create and modify the model.
Finally,use of in-house software and computer equipment will allow
integration of the model with custom programming or statistical
analysis software.as appropriate.Some speed in running the model was
given up as result of the choice of using a minicomputer rather-than
timesharing options on a mainframe.
Description of the Software
-Data*Model is a computerized spreadsheet program in which the data,
calculations and reports are independent modules.The model can handle
up to 500 time periods and 30,000 rows.Data*Model is available for
approximately l2differen~mini-and micro-computer systems.The major
components of a model using this software are:
A Row Definition,which defines all names-of data inputs,
parameters and variables that are used in the model.
Model definition files.which store data and equations.The
interrelationships of data input.parameters,and variables are
defined here.
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-!
2.
3.A Spreadsheet,the data file in which the results of the mode1 's
calculations are stored.
19
4.Report formats,which store instructions for the presentation of
any combination of projections (resu1ts)and assumptions.A
variety of reports are generated from each spreadsheet model.
-Vertical report formats store instructions for the variables
that are to be displayed,and the order in which they will
appear.
-Horizontal report formats define the horizontal dimension of
the reports:the time periods that are to be shown and the
order in which they will appear.
As Figure 3 shows.the rowname file and model definition files co~bine
to produce a spreadsheet of all data and calculations in the model.A
report is generated by speci fyi ng the spreadsheet to be reported on and
the vertical and horizontal definitions to be combined.This modular
structure allows an efficient way of handling multi-scenario models,in
that the data or assumptions can change without affecting the rest of
the model or the structure of the reports.
Data*~bdel contains a number of built-in features that increase the
efficiency and ease of model building and manipulation.These include
(1)linking statements,which allow various modules to run
automatically,in sequence,without further input from the user;(2)
automatic percent change calculations over time;(3)goal-seeking
routine (in which a result is requested and the model calculates a
component of the equation);(4)lead and lag equations,(5)routines
for inflation.sums and means,accumulation of values over time,and
financial routines such as depreciation,amortization,present value,
etc.The equations in the model are functionally linked.
A limitation of Data*Model is its lack of sophisticated matrix handling
functions,which increases its set-up cost relative to other
spreadsheet programs.An equation needs to be written out for each
variable and each impact area.This facet of the software was accepted
as a cost that is compensated for by the speed of operation (compared
20
-.
-
t 't \1
Figure 3
DESIGN OVERVIEW OF DATA*MODEL
ECONOMIC MODELING SOFTWARE
I MODEL DEFN.I
l-----------~------IIDATAI
I &I
I COMPUTATIONS I
I
V
-j J
,
:'
1
N.....
J I
ROW DEFINITIONS 1---->1
I J
I I ROWS
I I
I I
SPREADSHEET
I
I DATA
I
I
I
I ------------------------------
I J HORIZONTAL REPORT FORMAT
I ------------------------------
I I
V V
------------------------------------I V R
I E"E
I R P
ITO
I I R
leT
I A
I L
I
)
D I
E I
F I I
I 1----->1
N I I
I I I
T I I
I I I
o I
N I
REP 0 R T
~-----------------------------------._._-..-
to other modeling programs))the flexible reporting options)and the
ability of the system to handle the large number of equations and
impact areas.Its effects were mitigated by use of a custom program
which facilitated the copying and editing of groups of row definitions
and equati ons.
e.Ability to Create Many Useful and Diverse Reports (output formats)
As discussed above)the reporting flexibility of the model is
substantial.The reports now being generated by the model are intended
to meet most of the decisionmakers'needs.However)it is probable
that additional reports will be required or desired".Because of the
reporting flexibility)these reports will be available quickly and at
low cost.
The model currently produces reports that compare conditions with the
project during the projection period (1985-2005)to projected
conditions without the project,rather than to current conditions.
This is an important distinction for two reasons.First)the magnitude
of popul ati on i nfl ux and other effects rel ated to the project need to
be evaluated in light of the size of population (and other variables)
that would be in the impact area in the absence of the project.
Second,because many of the impact areas are expected to grow and
change rapidly over the next 20 years,whether the project occurs or
not)comparison of the "with project lT scenario to current conditions
would be misleading.
In the areas of housing and public facilities and services)the model
also compares total demands with the project to the capacity of the
communities to fulfill these demands.
22
-
-
-
-
--
-
.....
-
v.ECONOMIC-DEMOGRAPHIC MODEL
The economic-demographic (£-D)module calculates the impacts of the
project on population,employment,and housing,by impact area and
year,and provides detailed population influx and efflux information to
the public facilities and services,and fiscal modules.This
information is used in these modules to determine impacts on public
facilities and services,and local jurisdictions·expenditures and
revenues.Input i nformat;on,and i nformati on concerni ng impacts,is
provided by year and by impact area to help local jurisdictions with
mitigation planning.
In response to FERC's requirements and needs,and the needs of the APA
and local jurisdictions,the module also provides detailed information
on employment,payroll,spending,and settlement patterns of the direct·
construction work force.For example,this information inc1udes
employment by residence and by year,payroll by labor category and
year,spending patterns of construction workers by year for selected
impact areas,and demand for housing,by impact area and by year.
The general structure of this module is shmv'n in Figure 4.Here it can
be seen that the module produces both total and direct impacts.
Another important feature,implicit in Figure 4,is that direct
construction employment ;s separate from indirect construction-induced
employment (i.e.,secondary employment generated by direct construction
activity and employment),and that contruction employment is separate
from the operations employment.This allows for more detailed impact
projections and assessments,and is methodologically superior to a more
aggregated trea~~nt of the work forces.
The general method for projecting total project-related employment,and
totalin-migrant workers and population,is shown in Figure 5.Here it
can be seen that the number of direct and secondarY jobs created is a
function of (1)direct manpower requirements and (2)the number of
secondary jobs created by the direct construction jobs.Employment
multipliers were used to estimate these secondary jobs (see Section
V-C-l ).
23
,Figure 4
STRUCTURE OF ECONOMIC/DEMOGRAPHIC MODULE
-
-
8a.-.s:<t:/,~L.+
0,r£cl PiV·U .'
21
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'---~~~>Ir f).,~,c.';I
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(CO/1I~/s of 2a--2f)
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24
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8a.s &J 11 E...
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I]as £~~£..1/1 ~.r.
{'a.r~c/Ij !.If,j~etl,o'1
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/J _._-_
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Figure 5
RESIDENT AND NON-RESIDENT PROJECT AND RELATED EMPLOYMENT AND POPULATION
~f"COfIJ~
t1S~·0
Od
,t:rj ;d
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I-3 CQ
~t'"~>-!HtJ::1
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,I
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(jli-~J IJorj ~IC~t [
fly PAce..or Rc~'"-?>
_'I '/0/10:..:_@ __:.L t -------...-.--..-70 .
"I £,-/'!3rM!..1..--..f),.J.I Jor/<~r!.I
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--,be 0t~l;':0 ~-.--..-~---'~Vr ~~/..-;--r let.I :£,'~r'/""'J~\.-'1 .~ra/1 /0_•~-J-/I"'....J
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N
U'1
The total number of in-migrant workers is simply total direct manpower
requirements less the number of jobs filled by local residents,plus
the number of secondary jobs that are not filled by local residents.
Total in-migrant population is calculated by applying a dependents per
in-migrant worker value to the direct in-migrant workers,and adding
thi s .to the i n-mi grant secondary popul ati on.Thi s popul ati on is
calculated by applying Q persons per household value to the in-migrant
secondary work force.
Total in-migrant population is compared to baseline population
projections to arrive at total impacts,as indicated in Figure 5.
Similarly,direct project~related population is compared to baseline
population projections to arrive at direct impacts of the project.
The techni ques used to make basel ine proj ections are di scussed in the
next section.This discussion is fol1O\'Jed in subsequent sections by
presentations of techniques used to make "\oJith project"projections.
A.Baseline Projections
Figure 6 displays the structure of the baseline projection portlon of
the economic-demographic module.The approaches and projection
techniques used are discussed below.
1.Employment
Basel i ne projections for employment in the Ra il bel t region and its
three subareas,Anchorage,Fairbanks and the Valdez-Chitina-Whittier
census division (see Figure 2),were generated by the Institute of
Social and Economic Research's (ISER's)Man-in-the-Arctic-Program (r~p)
econometric model (September 1981).This model was also used for the
determination of the need for energy during the projection period.As
additional data from the MAP model is made available,baseline
projections can be updated.
26
-
-
-
))1 ,1 'J \\1 1 -1 "-!-'"J }
Figure 6
BASELINE POPULATION,EMPLOYMENT
&HOUSING PROJECTIONS
I
f ~ov.s:!y·tf..t •.
0-.
K..e.--.'t R:u.,
:1 1
t
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.f!.:_c::'1 ~'N'5
PPH~"
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1
IS£R R~,iMA./
POl"..E"'-p.
fi'Y_~_c-I,~"oS
J
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G:.MU.J LJ..'V,,j.OIl
PDp,.,..,rrA.p.
I PrO/H.i,'o/l.oJ'19f
CeMu,/);"':'..-r;~~~/<"c.~~..s:r.S,{tt.ru "f'ArJ.~f}'-V,J'M %SM.4I -->
"'~'rJaI\lJ SuWt.of SlL.£a..I~a.-S
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fJI,~Iqr,'c tL /PQ:aCL/()..';'~~
I,,-J;f e"fP 10./nI.{f1 (,.,.,
I AileA o':3:!J C ,..h.',.,Ift"t.s
oS u ,CL-n:.Q.,.l"QJ1 eI //1Ic:.e.",.r us ~VI.:s-,Ons
~
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C Q .r>f I"f (//f,'(,;!'J .y',.,.(
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""~.E~(/.....,,.
t/o.(.Aft It«,.
7
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-----fh'.l~c/~!~ff/(;l.uU,(I1/Ls ,:.w /luv.J"::!:J ~,'.,;,C rOtv II.
,'.-1 eLl "Iwtll ,.OI~ir --;l-I?ct./c:.-.S
--;>
Cro <>/11 ;fa If!S
~Of',1 c.r COA"~"rl •-+,..
Co ....r'f(/I1'~...s ~"cl6""16.,-s,,f,ff ~,9'..4 I..,
;t/o/~s
;£""1'7'"'r1!Cli2-1tp,,,/::"Cl~I &1 CO'"dc/FIt;;k vJ
2..J:.rCO/1<r:_/1ollrc;;~clufJ I~JC1SF~/7~.
Frank Orth &Associates,Inc.used ISER's projections as the basis for
the employment projections for the various census divisions that
comprise the Anchorage and Fairbanks subareas (Anchorage/Kenai-Cook
Inlet/Se\'/ard/Mat-Su Borough,and Fairbanks-North Start Southeast
Fairbanks,respectively).These were calculated from ISER's subarea
employment projections using several steps:
1.A time series of employment in each census division was
collected for 1964-1980).These data were derived from
unemployment insurance records collected by the Alaska
Department of Labor.They are considered to be the most
consistent and accurate series of statistics on employment in
Alaska.The major limitations of the series are that (1)
employment is listed by place of work rather than place of
residence;and e2}the figures do not include workers who are
not covered by unemployment insurance.
2.The percentage that each census division in the Anchorage
subarea and Fairbanks subarea represented of total employment in
that subarea was calculated annually.In general,the trends in
employment were relatively stable,with the Mat-Su and Kenai
census divisions increasing their percent shares of the
Anchorage subarea slightly during the 1970's.
From these numbers.percent change in the percent shares was
also calculated.For each census division,a trend analysis of
the increase in percent share over time was performed,which
yielded the average increase or decrease in percent share for
that census division.
3.Based upon the assumption that these historical trends will
conti nue,the average increase in percent share \"las appl i ed to
the 1980 figure to obtain a set of projections of percent share
of employment for each census division for the years 1981
through 2005 (see Table 2).
28
-
-
-
-
,-Tab 1e a
PROJECTED PERCENT SHARE THAT CENSUS DIVISIONS
WILL REPRESENT OF EMPLOYMENT IN THE ANCHORAGE
AND FAIRBANKS SUBAREAS*-
Percent of Employment In Percent of Employment In
Anchorage Subarea Fairbanks Subarea
,~~--Kenai -Ma t-Su Fairbanks Southeast
Anchorage Cook In 1et Seward Borough North Star Fa i rbanks
I"'""1981 87.0 7.7 1.5 3.6 95.4 4.6
1982 86.8 7.8 1.5 3.7 95.4 4.6
1983 86.7 7.9 1.5 3.8 95.4 4.6
1984 86.5 7.9 1.5 3.9 95.4 4.6
1985 86.3 B.O 1.5 4.0 95.4 4.6
1986 86.2 8.1 1.5 4.1 95.4 4.6
1987 86.0 8.2 1.5 4.2 95.4 4.6
1988 85.8 8.3 1.5 4.3 95.4 4.6
1989 85.6 8.3 1.5 4.4 95.4 4.6
1990 85.5 8.4 1.5 4.4 95.4 4.6_.'991 85.3 8.5 1.5 4~5 95.4 4.6
1992 85.1 8.6 1.5 4.6 95.4 4.6
1993 85.0 8.7 1.5 4.7 95.4 4.6
1994 84.8 8.7 1.5 4.8 95.4 4.6
1995 84.6 8.8 1.5 4.9 95.4 4.6
1996 84.5 8.9 1.5 5.0 95.4 4.6
1997 84.3 9.0 1.5 5.1 95.4 4.6
1998 84.1 9.1 1.5 5.2 95.4 4.6
1999 83.9 9.1 1.5 5.3 95.4 4.6
2000 83.8 9.2 1.5 5.3 95.4 4.6
~2001 83.6 9.3 1.5 5.4 95.4 4.6
2002 83.4 9.4 1.5 5.5 95.4 4.6
2003 83.3 9.5 1.5 5.6 95.4 4.6
2004 83.1 9.5 1.5 5.7 95.4 4.6
2005 82.9 9.6 1.5.5.8 95.4 4.6
*As defined in the Institute of Social and Economic Research1s
Man-In-the-Arctic economic model.
~,
-
29
4.These percent share projections were then mUltiplied by ISER's
employment projections for the Anchorage and Fairbanks subareas
to obtain projections of employment,by place of employment,for
each census division.-
Employment data for the communities of the Mat-Su Borough are not
reliable,due to data collection and reporting problems.Thus,
employment was not projected at the community level.
2.Population
The methodology used to project population in the various impact areas.
without the project,is similar to the employment methodology listed
above.Baseline population was projected independently of the
employment projections as a result of the need to disaggregate the
regional trends to smaller areas.In these census divisions and
communities,population and employment trends differ significantly.
Baseline p~f!jections of popUlation in the Railbelt region and the three
subareas o~Anchorage,Fairbanks and the Va1dez-Chitina-Whittier census
division were generated by the ~~p model (September 1981).As
additional data from the ~AP model is ~ade available.these projections
can be updated.
Population projections for the various census divisions thatcoQprise
the Anchorage and Fairbanks subareas (Ancho~age/Kenai-Cook Inlet/
Seward/Mat-Su Borough,and Fairbanks-North Star/Southeast Fairbanks,
respectively)were calculated from the population projections for the
subareas using these steps:
1.A time series of population in each census division was
collected for 1964-1980.These data are mostly derived from
U.S.Bureau of the Census data.The Mat-Su Borough data
included data co11ected in annual surveys conducted by the
Mat-Su Borough Planning Department.As a result of the rural
and rapidly increasing population in the Borough,it was
believed that the Planning Department's surveys were more
accurate than U.S.census data.
-
-
-
J .a._..III --...~•••a ·a.....-======~~
-
4.These percent share project;ons were then mul ti pl i.ed by ISER IS
employment projections for the Anchorage and Fairbanks subareas
to obtain projections of employment,by place of employment,for
each census division.
-Employment data for the communities of the Mat-Su Borough
reliable.due to data collection and reporting problems.
employment was not projected at the community level.
2.Population
are not
Thus,
.-
'~
-
The methodology used to project population in the various impact areas,
without the project,is similar to the employment methodology listed
above.Baseline population was projected independently of the
employment projections as a resul t of the need to di saggregate the
regional trends to smaller areas.In these census divisions and
cOr;Jmuniti es.popul a ti on and employment trends di ffer significantly.
Baseline projections of popUlation in the Railbelt region ~nd the three
Ff
subareas of Anchorage,Fairbanks and the Valctez-Chitina-Whrftier census
division were generated by the MAP model (September 1981).'As
additional data from the MAP model is made available,these projections
can be updated.
Population projections for the various census divis{ons that co~prise
the Anchorage and Fairbanks subareas {Anchorage/Kenai-Cook Inlet/
Seward/Mat-Su Borough.and Fairbanks-North Star/Southeast Fairbanks,
respectively}were calculated from the population projections for the
subareas using these steps:
1.A time series of population in each census division was
collected for 1964-1980.These data are mostly derived from
U.S.Bureau of the Census data.The Mat-Su Borough data
included data collected in annual surveys conducted by the
Mat-Su Borough Planning Department.As a result of the rural
and rapidly increasing population in the Borough,it was
believed that the Planning Department's surveys were more
accurate than U.S.census data.
30
2.The percentage that each census division in the Anchorage
subarea and Fairbanks subarea represented of total population in
that subarea was calculated annually.In the Anchorage subarea,
the figures showed that the percent shares of population
accounted for by Mat-Su Borough and the Kenai-Cook Inlet areas
have increased rapidly,while the percent share of the
Municipality of Anchorge has declined.
From these numbers,percent change in the percent shares was
also calculated.For each census division,a linear regression
of the increase in percent share over time was performed,-whi ch
yielded the average increase or decrease in percent share for
that census division.
3.Based upon the assumption that these historical trends will
continue,the average increase in percent share was applied to
the 1980 figure (or 1981 for the Mat-Su Borough)to obtain a set
of projections of percent share of population for each census
division for the years 1981.through 2005.These are displayed
·inTable3.
4.These percent share projections were then multiplied by ISER's
population projections for the Anchorage and Fairbanks subareas
to obtain projections of population,by place of population,for
each census diVision.
5.Population projections for several of the cowmunities of the
Mat-Su Borough were caculated separately.Annual growth rates
were projected for the future based on historical growth rates
and the changing population distribution patterns in the
Borough.These growth rates are displayed in Table 4.
As a result of this methodology,both (l)the population
increase based on historical trends and (2)the population
increase related to economic development are taken into
account.ISERls regional and subarea projections explicitly
31
...
-
-
'-
-
-
-
32
Tabie 4
ASSUMPTIONS FOR BASELINE POPULATION GROWTH RATES
FOR SELECTED CONfrlUNITIES LOCATED NEAR THE PRQJ EeT SITE
-
Communi'ty 1981-1990 1991 -2005 -
Pa 1 mer 6.5%3.5%
Wasilla 7.5%7.5%
Houston 10.0%10.0%
Trapper Creek 4.0%4.0%
Talkeetna 5.0%5.0%
can;:well 2.0%2.0%-
33
--
-
-
-
"
included assumptions on economic development scenarios and the
percent share methodology reflects the trends in the
distribution of growth within the region.
3.Housi n9
Projections of housing demand were calculated for each of the
cOll1l1unities likely to be affected by the project and for the Railbelt
region as a whole.Housing demand was calcuated by applying
population-per-household projections (see Table 5)to the projected
popul at ions of each commun ity and censu s di vi sian.The
population-per-household measures were assumed to decline gradually
over time to converge with the national and state averages.These
measures were derv;ed from the ISER study of the need for power in the
Railbelt (Goldsmith and Huskey.1980).In the ISER model,average
population per household is estimated to decline by 20 percent over the
next twenty years,and is consistent with the projected decline in the
national level.
Current housing supply est1mates were obtained from the U.S.Census
Bureau (1980)and community surveys where available.Housing stock was
assumed to increase in direct proportion to the growth in the number of
households.Baseline housing supply was projected by multiplying the
number of households by an assumed average vacancy rate of five
percent.The exception was the area of the Mat-Su Borough outside the
incorporated communities,for which it was assumed that the vacancy
rate (25 percent in 1981)would fall over time.
No differentiation among types of housing was made,and the timing of
housi ng cons tructi on was not estimated.These simpl i fica ti cns were
appropriate for the following reasons.The Mat-Su Borough is
increasingly becoming a bedroom community in which single family
dwellings on plots of an acre or more predominate.As a result of the
large population increase expected in the Mat-Su Borough in the next
twenty years.with or without the project,it is likely that there will
be a continuous need for new housing,fueled by increasing demand.In
many of the communities closest to the project,there is currently very
34
TABLE 5
POPULATION-PER-HOUSEHOLD ASSUMPTIONS
Ma t-Su Trapper -State Borough Creek Ta lkeetna Cantwell Pal mer Wasi 11 a Hau stan
-1981 a 3.073 3.270 3.300 3.300 2.750 3.153 3.127 2.900
1982 3.064 3.240 3.269
3.269 2.741 3.128 3.103 2.885
1983 3.053 3.210 3.238 3.238 2.733 3.103 3.079 2.871
1984 3.040 3.180 3.207 3.207 2.725 3.078 3.055 2.856
1985 3.041 3.150 3.176 3.176 2.717 3.053 3.027 2.842
1986 3.031 3.121 3.144 3.144 2.709 3.028 3.008 2.828 -,
1987 2.998 3.091 3.113 3.113 2.701 3.003 2.984 2.813
1988 2.960 3.061 3.082 3.082 2.693 2.978 2.960 2.799
1989 2.932 3.031 3.051 3.051 2.685 2.953 2.936 2.785
1990 2.900 3.002 3.020 3.020 2.677 2.929
2.912 2.770
1991 2.876 2.972 2.989 2.989 2.669 2.904 2.889 2.756
1992 2.849 2.942 2.958 2.958 2.661 2.879 2.865 2.742 -.
1993 2.824 2.912 2.927 2.927 2.652 2.854 2.841 2.727
1994 2.801 2.883 2.896 2.896
2.644 2.829 2.817 2.713
1995 2.777 2.853 2.865 2.865 2.636 2.804 2.793 2.699 -
1996 2.754 2.823 2.834 2.834 2.628 2.779 2.770 2.684
1997 2.731 2.793 2.803 2.803 2.620 2.754 2.746 2.670 """"
1998 2.707 2.764 2.772 2.772 2.612 2.730 2.722 2.656
1999 2.682 2.734 2.741 2.741 2.604 2.705 2.698 2.641
2000 2.657 2.704 2.710 2.710 2.596 2.680 2.674 2.627
2001 2.637 2.674 2.679 2.679 2.588 2.655 2.651 2.613
2002·2.617 2.645 2.648 2.648 2.580 2.630 2.627 2.598
2003 2.597 2.615 2.617 2.617 2.572 2.605 2.603 2.584
2004 2.577 2.585 2.586 2.586 2.564 2.580 2.579 2.570
,'!'l'!!'\
2005 2.556 2.556 2.556 2.556 2.556 2.556 2.556 2.556
a.Matanuska-Susitna Borough Planning Department,1981.
35
little vacant housing available to support a sizable increase in
population.Housing distribution within communities,the types of
housing that will be constructed,and the speed with which the supply
of housing will respond to or antiC;pate the demand can only be guessed
at,and this was complicated by the long time frame for the project and
the impact model.
Thus,it was felt that detailed projections of housing supply would be
of limited usefulness due to the expected large changes in the housing
market in the local impact area and the uncertainty surrounding any set
of assumptions.In this model ,the emphasis of the determination of
project-related effects on housing is placed on the effects that the
project wil1 have on the demand for housing.Housing supply will be
addressed by the community and household monitoring program.
B.Direct Work Force
1.Work Force Requirements
a.Annual Work Force.
Estimates of work force requirements for the project,by trade and by
year,were obtained from the project engineers (Acres flmerican,1981).
The estimates include all manpower required for the construction of the
access road and camp/village;power facilities and transmission
facilities;and all management,adminstrative,and operations-personnel.Manpower for off-site activities such as procurement,
manufacturing,shipping and a portion of the engineering staff are not
included in these estimates.The different types of workers are added
up into three labor categories -laborers,semi-skilled/skilled and
~administrative/engineering,and total work force by year is also
cal cul ated.
Construction of the first phase of the Watana dam will require a
significantly greater number of workers than both the second phase of-Watana and construction of the Devil Canyon dam.This difference can
36
little vacant housing available to support a sizable increase in
population.Housing distribution within communities,the types of
housing that will be constructed,and the speed with which the supply
of housing will respond to or anticipate the demand can only be guessed
at,and this was complicated by the long time frame for the project and
the impact model.
Thus,it was felt that detailed projections of housing supply would be
of limited usefulness due to the expected large changes in the housing
market in the local impact area and the uncertainty surrounding any set
of assumptions.In this model,the emphasis of the determination of
project-related effects on housing is placed on the effects that the
project will have on the demand for housing.Housing supply will be
addressed by the community and household monitoring program.
B.Direct Work Force
1.Work Force Requirements
a.Annual Work Force.
Estimates of work force requirements for the project,by trade and by
year,were obtained from the project engineers (Acres American,1981).
The estimates i ncl ude all manpower requi red for the constructi on of the
access road and camp/village;power facilities and transmission
facilities;and all management,adminstrative,and operations
personnel.Manpower for off-site activities such as procurement,
manufacturing,shipping and a portion of the engineering staff are not
included in these estimates.The different types of workers are added
up into three labor categories -laborers,semi-skilled/skilled and
administrative/engineering,and total work force by year is also
cal cul ated.
Construction of the first phase of the Watana dam will require a
significantly greater number of workers than both the second phase of
Watana and construction of the Devil Canyon dam.This difference can
36
~I
-
-
--
-
-
~.
.-
-
be attributed to the additional labor requirements in the initial years
for construction of the work camp and village,the access road and to
the more labor-intensive nature of a gravel-fill dam (Watana)than a
concrete arch dam (Devil Canyon).·'.
b.Accommodation of Changes in Manpower Requirements and Construction
Schedules.
In the model.the construction.and operations work force requirements.
by trade (such as carpenter,millwright,ironworker,plumber.etc.)for
each dam,are entered separately.This will facilitate adjustment of
the model if the size of the work force changes,if the trade mix is
altered,or if the schedule for either or both of the dams is changed.
c.Seasonal ity.
The demand for construction manpower will vary during any given year.
Monthly manpower requirements are calculated by the model using the
following steps:
1.The percentages of the total.yearly work force that will work in
each month were projected.These percentages are displayed in
Table 6.The model was designed to accommodate different
seasonal ity assumptions for the major 1abor categori es,if
appropriate.
2.For each labor category,the number of workers in each year are
multiplied by the percentages for each month to yield the
numbers of workers in that labor category needed in each month.
3.For each month,the number of laborers.semi-skilled/skilled and
adminstrative/engineering personnel are added to obtain the
total construction work force needed per month.
37
Table 6
SEASONALITY OF PROJECT EMPLOYMENT:
PERCENTAGES OF PEAK ANNUAL CONSTRUCTION WORK FORCE
THAT WILL BE EMPLOYED IN EACH MONTH
-
January 30 %
Februa ry 31 %
r~a rch 43 %
April 66 '.t
~1ay 72 '.t
June 87 '.t
July 99 %
August 100 %
September 90 %
October 69 %
November 51 ':r
iO
December 35 %
38
-
-
-.
-
".
2.Or;gi n and Settlement Pa tterns
a.Overview
This portion of the module addresses four basic questions:
o From where do the direct workers originate?
a Which direct workers settle in the local communities?
o Where do the in-migrant direct workers settle?
o How many in-migrant workers leave when they are no longer
employed on the project,and when do they leave?
This portion of the module is a critical part of the model because it
largely determines the magnitude and geographic distribution of the
project's impacts.For this reason,special care has been taken to
structure this portion to allow for quick and efficient analysis of
multiple scenarios,and sensitivity analysis of key assumptions.
The methodology used to project settl ement patterns for the \'l'ork force
is diagrammed in Figure 7.Here it can be seen that,in general,only
married workers are expected to relocate their permanent residences
(The model has been structured to also account for single workers who
may relocate their residences).It can also be seen that the magnitude
of in-migration by married workers is expected to be influenced by
several major factors.These include:
,~place of origina
0 1abor category
a attractiveness of the work camp
0 leave schedules (days on and days off-~/ork )
0 access corridor/mode of transportation
--
39
Figure?
METHODOLOGY USED TO PROJECT SETTLEMENT PATTERNS OF DIRECT WORK FORCE
D;re~IJ}c'JI..t'Cfl-
6y:
•~)tlc-£"of Orj;~
•J-e-:boY"ea-fe!pr'r -
,.-------------~---------------.-
Ildjvd ,n--tJrf ~y
..s:,'Z<z....o.p f/Jork G,n;
:*"
~I
R.eJ6~d;"/W()yJ<{'y')
r~G-t.e-"0 )"'r,,Jc.
WO vii C<:-./???
f:?e)6c.o :!t"rrj ~Jo~k2.~
J-Yl c(.(~OJ f,rTltY"!
!/JOY/(Grr-p
v~-f-<.)OC£f,ij
(,{)ov Ke y..>I
·~i-rt,/,W,~...h.
IJtpY.f ..r
CcnY1IUJ1/'f."
bisiy,'6e-d 0-
to A/0,Y.f!.)1-
CoI'H,ffU(n 'I -
hl~Ir',6J,"'"'1 O-{:
Kp)P<.a:f'Hj WOy"J44J
lh t"n !'tUJ,I /loAf
*The work camps are currently planned to accommodate all workers.Single
and married workers will have a strong incentive to relocate if the camps
are not large enough to accommodate all workers.
40
-
Assumptions concerning the last three of these factors can be varied to
provide socioeconomic input to the work force and project access
analyses that will be conducted by the Power Au thori ty.
Further,it can be seen in Figure 7 that the distribution of inmigrant
workers to impact areas is projected using a gravity model.Travel
time or cost of travel to the work sites,relative attractiveness of
communities as places to live,and other factors are incorporated into
this model.This model is designed to address several of the ~ork
force and project area access issues that will be considered by the
Power Authority,including the transportation and access corridor/mode
of transportation options.
In reviewing Figure 7,it should be noted that workers will relocate to
local communities temporarily or permanently if the \'Iork camp is not
large enough to accommodate all single and married workers.In this
case,single as wel1 as married workers that cannot be accommodated
will relocate to the community located nearest to the work camp that
can accommodate additional residents.
The following sections provide more detailed descriptions of the
methodology outlined in Figure 7.Assumptions and methods concerning
outmigration of workers are provided at the end of Section V-B-2.
b.Origi n of the Direct Workforce
The technique for estimating the origin of the direct work force is
shown in Fi gure 8.Here it can be seen that the di rect work force
trades data was aggregated over trades into labor categories (Laborers,
Semi-skilled/Skilled and Administrative/Engineering).Next,
assumptions regarding the percentage of workers in each labor category
that would originate from the Railbelt Region,other parts of Alaska
excluding the Railbelt Region,or outside of Alaska were developed.
Assumptions for the proportion of workers that will originate from (a)
the Railbelt Region~and {b}other parts of Alaska excluding the
Rail bel t Region,were based upon analysi s of unemployment data for the
41
Figure 8
feu /Ic-;;-l rL~~~/-tJDrk-::;-"
R..;:s','or7 ~'_._.--~(Ur~us :.J,.{~a.1rnld/
/,i,t l.,~,I"(~/(,J,';'.L /~
s;,_...t
Uo r J..hie:E..
d),/}fa.c.'of
Or;.]/~I
DIRECT CONSTRUCTION WORK FORCE
_/{Jor-Ie forcc.,.
8JjJ/Q~'of
;r}~,
V';:.J'/70.-J../:rc c-f::[JUIL.
8y L,;L 6"r G/;:.:Jcry
.tA<5crcr..'t,O,'I
-..-!?<4!-S,r1!.J£.-._--
lr II;~,r:-!Co".sf.k:~.J'~N 1--~i-I
//'OIJ ,'r_/l=k~=s~r}-----1,t...a.Oor~rS'I r---_.I11·-.1d I :,.(a.£oras (ron(
-_._.~~-uf..IIaIL'-~3--1
f . -1
.,nf,'.SII/t-cl/.~U1L,/.1llf ._~-
i Ji..?:'--..:-s7..s '.(;.f)n(O/J,t:rl I','~L "A~cf r-""-ld.c~«s <11"A')'~:;':--I\;of //Ia.sJ.rz --._
Q c..~~------'---_.I L J·l I
--------'lS/.s Ir-M1 H I f"./~roJ.r.t tJtJrk{fJ
tZ:.t_",?fJt!.:if.;s;',) /~
I i/;~-II-"7------1 ~~};:)/Pi ,~oJ~ls;.l.,!;2:~~1
A/?rvnt ~
__J-J~
Otrf-o!-S'!{Ji:.
/),i..f.c::I .
(t'J ,l[ditl C t;I(.
U-J t:.-rc £.
I:ftL/-t~/.~&-d
~.",{aciG
I
I
L -'~
~
N
J ).1 .,,I I .J .J J )J
-
'.
trades,and discussions with labor union business managers,Alaska
Department of Labor economists,and construction contractors.Current
and probable future availabilities for workers were approximated,and
compared to direct work force requirements.Based upon these
comparisons,the amount of labor,by labor catego~,that would be
supplied from each of the three areas was estimated.These estimates
(origin assumptions)are as follows:
Work Force Origin Assumptions
Railbelt Region Dther AK Outside AK
Laborers 85%5%10%
Semi-skilled/skilled 80 5 15
Administrative/Engineering 65 5 30
The model is structured to allow for sens i ti vi ty testing of these
a ssumpt ion s.
The amounts of labor that will originate from the census divisions of
the Rai1be1t Region and selected communities/cities of the Mat-Su
Borough and Cantwell were also estimated.These estimations were made
by assuming that project employment will be distributed among census
divisions based,in part,upon each census division's average share of
total construction employment in the Rai1belt Region during 1979 -
1981.These shares were adjusted to reflect the census division's
proximity to the construction sites relative to other census
divisions.The shares (origin assumptions)are as follows:
Assumptions on Work Force Origin Within the Railbe1t:
Anchorage:
Ma t-Su
Kenai-Cook Inlet
Se\'/ard :
Fai rbanks
S.L Fairbanks
Valdez-Chitina-~~ittier
YUkon-Koyukuk.
43
55.9%
6.7
11.1
0.2
23.8
0.2
2.1
(to be determined in coordination
with the above shares)
Direct employment was estimated for residents of selected Mat-Su
Borough cities/communities based upon each city/community1s recent
average share of total population in the Borough.Trends in population
shares were also taken into account ;n making initial estimations of
city/community shares of the Borough's direct project employment.
population data were used in lieu of employment data because employment
data are not available for most cities/communities.
As with the census divisions,these shares were adjusted to reflect a
city/community's proximity to the construction sites relative to other
cities/communities.The shares (origin assumptions)that were used are
as follows:
Assumptions on Work Force Origin Within the Mat-Su Borough:
-
-
-
Pal mer
Wasilla
Houston
Trapper Creek
Talkeetna
Other Mat-Su Borough
Suburban
Rural and remote
10%
8
5
1
4
72
,...
Both Mat-Su city/community share assumptions and census division share.
assumptions can be easily altered for sensitivity testing.
c.Residency and Movement of Direct Workers
The direct construction work force will be composed of single and
married workers (the latter category includes cohabitants that are not
married).It is assumed that none of the single workers will choose to
relocate thei~permanent residence closer to the construction sites.
Instead,the single workers will reside at the camp/village while at
work,and maintain their original permanent residences.The only
exception to this pattern will occur if the camp is not large enough to
44
-
-
-
-
....
-I
'.
accommodate an single workers that need housing.In this case.it is
assumed that some of the single workers will seek temporary housing,or
establish permanent residence,in nearby communities.Because single
workers will generally not relocate~they are handled separately in
thi s part of the model •.
In contrast,it is assumed that some of the married workers will choose
to relocate their permanent residences closer to the construction sites
(though they themselves will remain at the work camp during the week).
Married workers will also have an additional incentive to relocate if
the camp cannot accommodate all married workers.
i.Relocation of ~drried Direct Workers
Numbers of Workers That Will Face the Relocation Decision
The first step to estimating the number of married workers who 'will
relocate to cities/communities is to determine the total number of
married \'/orkers.This is done using single:married data from other
projects (U.S.Army Corps of Engineers,1981).Next,married
workers are allocated to the three labor categories using the labor
category multi pl i ers di scussed above.It shaul d be noted tha t the
single:married ratio,and the labor category multipliers can be
adjusted to provide for sensitivity testing.
Workers who will be confronted with the relocation dectsion will be
those for whom there is no room at the village.It was assumed
that housing would be available at the village for the
engineering/administrative (E/A)and semi-skilled/skilled (5-S/S)
workers and their families.The available housing will be split
unequally between these labor categories,with more of the housing
available to the E/A workers.The model is structured to allow for
adjustment of the shares of housing available at the village for
each of these labor categories.
45
Once these E/A and S-S/S workers are subtracted from total married
workers,the number of workers who are confronted with the decision
to relocate to cities/communities,remains.The next step is to
apply the origin multipliers discussed above to each labor
category.This calculation provides the number of married workers,
by place of origin (Rail belt Region,other parts of Alaska outside
of the Railbelt Region,and outside of Alaska),that face the
relocation decision.
14umber 0 f Worker s TIl at Wi 11 Re 1 oca te
The number of workers that will relocate is estimated according to
workers'place of origin and labor category.It is assumed that
both these factors will influence the relocation decision.Place
of origin is important because it affects travelling time;labor
category may al so affect the magnitude of i nmi gratian because the
number of workers who have dependents and the average duration of
employment may vary by 1 abor category.
In addition.the attractiveness of the camp and village,leave
schedules,and access corridor/mode of transportation may influence
workers I incentives to relocate.As the attracti veness of the camp
and village increases,the incentive to relocate should decrease.
As leaves become more frequent,or the time/cost of travel
increases,the incentive to relocate (o~obtain temporary housing)
will become greater.
Accordingly,unique relocation multipliers can be assigned to
workers from each place of origin and labor category.The model is
structured to allow for adjustments in camp and village
attractiveness,and leave schedules.
The projected number of relocating workers,by place of origin and
labor category,is calculated by applying the relocation
multipliers to the number of workers who face the relocation
decision.These workers have the option to relocate to the
Railbelt Region,and census divisions and cities/communities
therei n.
46
-
-
..
-
-
-
Geographic Places of Relocation
It is difficult to accurately predict where workers will settle.
They will consider a myriad of things when they make their
deci sions.
Recogni zing that it is not possibl e nor appropri ate to try to
account for all factors that workers may consider.the approach is
to focus upon the most likely factors.After reviewing the
socioeconomic literature,and analyzing the situation in the
Railbelt Region,the attractiveness indicators listed below were
determined to be the most relevant for that segment of the Susitna
work force that will consider relocating.
Community Attractiveness Indicators
Hous i ng
School s
Public Facilities and Services
Wholesale/Retail/Finance,Insurance.Real Estate/Services
(number of establishments or employment)
Land available for development
The previous version of the model considered the above indicators
in an infonnal way.Workers were allocated to communities based
upon judgement.With a growing need to take into account
alternative assumptions,it was decided to allocate workers in a
more systematic and explicit manner.
To systematically apply these indicators (decision criteria),
incorporate other important factors,and to be able to perform
sensitivity analysis~it was decided to create an equation whose
parameters and variables could be easily manipulated.The
attraction-constrained version of the gravity model was chosen over
more complex formulations,such as capacity-constrained and 1 inear
programming (LP)models,for two reasons:(1)considerably more
47
'.
data would be required for the more complex formulations,
particularly for the LP model (these data are not now available,
and would only be available at substantial cost);and (2)the
simpler formulation can predict quite well magnitudes and locations
of demand that are important for planning.
The equation that incorporates the indicators is:
-aTij=Bj OJ Wi dij (Stenehjem and t~etzger.1980),
where:
T..=Number of workers that are predicted to settle in
lJ .
place i and commute to work site j (j =Watana or Devil
Canyon).
Bj =A constant scaling factor that constrains the total
number of workers commuting from alternative communities to
the number of jobs that these workers fill at the work site
~-a}-1(:£"T ..=O.).B.=(W.d ..D..l lJ J J .1 lJ J,
O.=Number of workers that are predicted to relocate.
J
-
Wi =Measure of the attractiveness of a coomunity as a place
to settle;this measure is,itself,the result of a
calculation in which the community IS rating on each
attractiveness indicator is weighted and tallied.The
following weights are used:
Community Atractiveness Indicator
Housi n9
Schools
Public facilities and Services
Wholesale/Retail/FIRE/Services
Land available for development
48
Weight
3
2
2
2
1
-
-
-
.-
.....
~'
Each indicator.is we~ghted according to its perceived
importance rel ati ve to another indicator.These wei ghts
will remain constant in all applications of the model.An
ordinal scale of 1 -S·wil1 be used to rate the
attractiveness of an indicator in one place relative to
that same indicator in another place.
dij =Mean transit time from community to work site (an
average of the winter and summer transit times).Note:Mean
transit time could be replaced by out-of-pocket travel
expenses,where dij could become e-aCij (C =out-of-pocket
travel expenses).
a =Weighting factor attached to the mean transit time
measure.Note:"a"becomes larger as the worker gains more
opportunities to leave the camp (e.g.,more frequent leaves,
or mere liberal camp rules).Also,as cross-sectional data
for Tij ,Wi'and dij become avail able,the parameter "a"
can be more accurately calibrated through the use of
regression analysis.It will also be possible to assess the
statistical .significance for alternative values for a.
!he following assumptions will be used in the implementation of the
model:
Travel time to the work site:workers will prefer to minimize
travel time from their residence to the work site.Places with
lower transit times to the work site will be preferred over
those with higher transit times.
Cost of travel to the work site:workers will prefer to minimize
the cost of travel from their residences to the work site.
Places with lower costs of travel to the work site will be
preferred over those with higher costs of travel •
Leave schedule:as leaves become more frequent,places located
closer to the work sit~will be preferred over those located
fa rther away.
49
As data on project-related population change in the various
communities becomes available (through the monitoring program)t the
above equation may be modified with the intent of improving the
accuracy of settlement projections.
The gravity model will be used to project settlement for:
-Workers who ori gi nate from other parts of Al aska t and outs i de
of Alaska.These workers may relocate to Anchorage,
Fairbanks,Mat-Su (and cities/communities therein),
Yukon-Koyukuk (and cities/communities therein),and
Yaldez-Chitina-h~ittier (and cities/communities therein)
census divisions.
-Workers who originate from Anchorage,Kenai-Cook Inlet.and
Fairbanks census divisions.These workers may relocate to the
cities/con~unities of the Mat-Su and Yukon-Koyukuk census
divisions.
ii.Relocation of Single and Married Workers (Special Case)
As discussed earlier t single and married workers may live in nearby
co~munities if the camp does not have enough capacity to accommodate
all workers.In this case,the single-to-married ratio is applied to
the number of workers that cannot be accommodated at the camp,to
obtain numbers of single and married workers that must find
accommodations elsewhere.It is assumed that these workers seek
housing in the nearest community.
The origin and labor category multipliers are applied to these
temporarily or permanently relocating workers to obtain information
that is necessary for worker tracking purposes.In addition,an
estimate is made for the percent of married workers who will choose to
have their dependents accompany them to their place of relocation.
This information is used in the popUlation influx calculations
discussed in Section V-B-3.
50
--
-
-
-
-
.....
The total number of married workers t used as the starting point for
projections in the general case (discussed in section i.above ),is
diminished by the number of married workers that cannot be accommodated
at the camp.This is done to avoid double-counting.
d.Outmigration of Workers
It is assumed that a percentage of the inmigrant workers that are no
longer employed on the project will choose to move due to lack of
employment opportunities or other factors.The model has the
flexiblity to move these inmigrant workers from their places of
relocation in any given year,and at any given rate.
Currently,it is assumed that 50%0 f the workers who i n-mi grated from
outside of Alaska.or from other parts of Alaska outside of the
Railbelt Region.and lose their employment on the project,will
out-migrate.They will leave their places of relocation and return to
their original place of residence or go elsewhere in search of
employment.
On large projects in the lower 48 states,an average of about 30-40 I'
percent of the workers rJhO completed their employment on projects chose'
to remain at their places of relocation.The percentage is assumed to
be higher for this project because it is expected that workers will
stay in the area after construction on Watana ends,hoping to obtain
employment on the Devil Canyon Dam during 1994-2002.After 2002,it is
expected that a large number of these workers will choose to remain in
the area because by that time t~ey will know about job opportunities in
the area and will have an attachment to the area.
It is assumed that workers who relocated from areas of the Railbelt
Region to places closer to the work sites,do not outmigrate when their
employment of the project ends.Instead,these workers remain at their
places of relocation and search for new employment •
51
3.Population Calculations
The cumulative population influx into each impact area is calculated in
the model as a function of :(1)the cumulative number of in-migrating
direct workers;(2)the percentage of those workers that are assumed to
be accompanied by dependents;and (3)the average number of dependents
per accompanied worker.
It ylaS assumed that 100 percent of the direct workers who relocate to
the Railbelt region will be accompanied by dependents (The model is now
structured to allow this percentage to vary).Since housing will be
provided on-site,there will be little incentive for most single
workers who come from outside the Railbelt region to establish.
residences in a nearby community.On the other hand,in-migrating
direct workers with families who cannot obtain family housing on-site
will be more likely to desire housing for their dependents in the
region.It should also be noted that a largi~;percentage of the work
fo'rce for this project will be skilled tradej$men,and such workers are
'"more likely to have families than unskilled construction laborers.
This assumption can be easily changed in the computerized model,for
sensitivity analysis purposes.
An assumption of 2.11 dependents per accompanied construction worker
was used to calculate the population influx associated with the direct
work force.This figure is an average derived from a survey of
construction projects throughout the United States that was performed
for the U.S.Corps of Engineers (U.S.Army Corps of Engineers,June
1981).Comparable data on Alaskan projects are not available.The
resultant population per household figures differ from the household
size projected for the state.The specific construction worker measure
was used because construction workers have been observed to have
characteristics slightly different from the population as a whole.
52
-
-
-
-
4.Payroll
Payroll is calculated by multiplying the number of workers of a given
trade by the number of hours worked in an average month by the hourly
pay rate.The payroll figures are projected in constant 1981 dollars.
Numbers of Hours.The assumptions on numbers of hours varied by type
of worker:
Laborers -
Semi -ski 11 ed/sk ill ed -
232 hours
232 hours
(54 hours per
week,4;3 ';Ieeks
per month)
(54 hours per
week,4.3 r/eeks
per month)
Administrative/Engineering -208 hours (48 hours per
week,4.3 weeks
per mon th)
Operations Work Force -208 hours (48 hours per
week,4.3 weeks
per month)
-
Wage Rates.Wage rates for laborers and semi-skilled/skilled workers
were obtained from the Alaska Department of labor (ADOL)and are
displayed in Table 7.These wage rates are routinely collected by ADOl
through industry surveys,and are the ~...orkers'base rate of pay
exclusive of any fringe benefits and prior to standard deductions.
Wage rates for engineering/adminstrative and operations/maintenance
personnel were obtained from Acres American.Inc.and are the workers'
Alaskan base rate of pay exclusive of any fringe benfits and prior to
standard deductions.These wage rates do not include travel
allowances,housing allowances,or other other highly variable types of
compensation.
53
Table 7
1981 HOURLY WAGE RATES USED TO CALCULATE PAYROLL
-
,I
$14.37
14.81
15.80
9.50
9.14
6.09
12.45
20.93
17.46
21 .31
18.65
18.93
20.73
8.25
8.12
5.94
6.46
4.61
7.24
7.63
7.87
7.45
9.25
$11.36
16.62
18.30
7.17
7.55
10.00
HOURLY WAGE
B1 asti ng
Laborers
Excavating
Moving Storage
Fire
Janitor
TRADE
Electric Powere Gen.
Mechanic -Auto
Truck Driver (Heavy)
Air
Nu rses
Telephone Operator
Purchasing Agent
Sheetmetal
Welders
Electricians
Pa fnters
Bri ckl ayers
.Pi pefitters
Sa rtenders
Cooks
Laundering
Recreation
Nursery
Secretarial
Data Processi ng
Teachers
Commercial Artists
Landscapers
$15.00
13.21
17.48
15.80
6.00
5.75
7.63
16:93
20.97
17 .57
9.50
18.51
18.82
20.73
13.13
5.71
19.45
10.24
18.29
7.21
6.41
4.67
9.49
$18.30
17 .13
16.1,6
15.66
6.10
10.10
14.43
HOURL Y WAGETRADE
LABORERS
Dr;11;ng
Cement
Pumpi ng
Material Handling
Securi ty
Pol ice
Waste Di sposal
SEMI-SKILLED/SKILLED
Stationary Engineer
~~chanic -Machine
Mechanic -Engine
Truck Driver (Light)
Bu s Dri ver
Radio/T.V.
Medical Assistant
Structural Steel
Boilermakers
El ectronics
Ra i1 Transport
Carpenters
Roofers
Plumbers
Chefs
Kitchen Workers
Electrical Transmission
Photography
Ai rpl ane Pi lots
Bookkeeping
AccomfiJodation
Writers
Office Managers
ADMINISTRATIVE/ENGINEERING
Electrical Engineer 14.37
Civil Engineer 14.17
Mechanical Engineer 11.38
Mining Engineer 22.00
Geologist 12.92
I1Ydrology 12.00
Managers 9.49
Electrical Eng.Draft
Civil Engineer Draft
Mechanical Eng.Draft
Surveyers
Geotech
Environment
Misc.Professionals
11.10
9.21
9.21
12.92
10.10
8.92
10.00
-
-
54
-~
.~
".
c.Secondary Work Force
1.Mul ti pl i ers
Secondary employment was estimated by applying location and
time-specific secondary employment multipliers to the on-site
construction work force and any operations workers that maintain
permanent residences in the region outside of the villages and
construction camps.These work forces include both the single and
married workers discussed in the previous section.The following
multipliers were applied to these work forces:
-
Census Division
Anchorage
Ha t-Su
Kenai-Cook Inlet
Seward
Fairbanks
SE Fa i rbank s
Multiplier (Time Period)
1.1 (1983-84);
1 .2 (1985-87);
1.3 (1988-96);
1.4 (1997-2005)
O.8 (1983 -8 7);
0.9 (1988-2005)
0.4 (1983-89);
o.5 (l 9 90 -9 9);
0.6 (2000-2005)
0.3 (1983-99);
0.4 (2000-Z005)
0.5 (1983-89);
0.6 (1990-99);
0.7 (2000-2005)
0.2 (1983-99);
0.3 (2000-Z00S)
....
Valdez-Chitina-Whittier
55
0.3 (l983-99);
0.4 (2000-Z00S)
The value of each location-specific mUltiplier was assumed to increase
with time due to import substitution and other factors that reflect a
maturing and growing economy.
It is implicitly assumed that the secondary employment multiplier
associated with workers housed on-site is zero.This multiplier is
expected to be very low or insignificant in all areas except,perhaps,
Cantwell and the Mat-Su Borough.Accordingly,the multipliers for
these areas have been raised slightly.
~,
The secondary employment multiplier for Anchorage was developed as part
of an in-depth theoretical and empirical analysis of the Anchorage
economy (Tuck,1980),and the multiplier for Fairbanks was taken from
an industrial development projects impact assessment model developed by ~
Dr.Bradford Tuck and Environmental Services Ltd.for the Fairbanks
Northstar Borough.
The secondary employment multipl ier for the:r·1at-Su %l'ough is based
upon research conducted jointly by Dr.Tuck and Frank Orth &
Associates,Inc.The multiplier was initially estimated to be 0.76,
and was raised to 0.80 to account for the expected effect of
expenditures made by workers who reside at the camp or village and take
occasional excursions in the Railbelt Region and/or travel to their
residences outside of the Railbelt Region.
Multipliers for the remaining census divisions are based upon work
conducted by Dr.David ReaUfile (Reaume,1980).Dr.Reaume estimated
regional multipliers as follows:
Gulf (Cordova-McCarthy,Kenai-Cook Inlet,Kodiak,Seward,and
Valdez-Chitina-~~ittier census divisions):0;2
Interior (Fairbanks,S.E.Fairbanks,Upper Yukon,and Yukon-Koyukuk
census divisions):0.4
56
.-
.-
i~
The multipliers used for the Kenai-Cook Inlet.Seward.and
Va1dez-Chitina-Whittier census divisions are slightly higher than Dr.
Reaume's estimate for the Gulf Region.This is because it was assumed
that the secondary sectors of these census divisions·economies would
grO\'i relative to the basic (direct)sectors of their economies during
1980 -1983.
The multiplier used for the S.E.Fairbanks census division is lower
than that for the Interior Region because it was known that the
multiplier for the Fairbanks census division was about 1.5.Given that
the economy of S.E.Fairbanks is far less developed than that of
Fairbanks.a multiplier of 0.2 was assumed for S.E.Fairbanks.
The model is structured to allow for adjustment of these multipliers.
This flexibility is especially appropriate because several of these
multipliers may change more or less quickly than the rates of change
assumed above.
Flexibility is also impDrtant because it may be appropriate to lower
the mUltipliers associated with the direct construction work force.
Recent research (Denver Research Institute.1982)has shown that these
multipliers are frequently over stated.Accordingly,the model will be
run using several values for the multipliers.
2.Origin and In-migration
Since the employment multipliers were app1ied to the on-site
construction workers according to their places of residence,the
distribution of secondary sector jobs within the region was
simultaneously detenni ned.Thus,it was assumed that seconda ry sector
jobs will be created where construction workers maintain their
permanent residences.
Some of these jobs will be filled by local residents while the
remainder will be filled by in-migrant workers from other areas.The
number of in-migrating secondary workers was determined by estimating
57
25%
15
the percent of total secondary jobs,created in each census division
and community,that is likely to be filled by in-migrants.The
following percentages were used:
Anchorage:
Kenai-Cook Inlet:
Seward:0
Fairbanks:15
S.L Fairbanks:20
Va1dez-Chitina-Whittier:30
Yukon-Koyukuk:90
Ma t-Su Borough:
""'"
--,
-Palmer:
Wasilla:
Houston:
Trapper Creek:
Talkeetna:
Other Areas:
10%
10
10
70
25
10
These percentages resulted from an analysis of the amount of labor
potentially available at each location.Unemployment data,labor force
participation rates,and underemployment information were utilized in
this analysis.These percentages were then applied to the total
secondary employment estimates,by location,to obtain the number of
in-migrating secondary workers in each location.
It should be noted that this represented an extension of the economic
base method,as this method usually ignores underemployment of labor
and often results in overestimation of the in-migration of secondary
workers and related population.This extension serves to provide for a
more realistic (lower)estimate of in-migrant secondary work.ers.It
should also be noted that the percentages discussed above will be
estimated for other locations (impact areas)at a future time.
58 -.
-
3.population Calculations
Cumulative population influx associated with the secondary work force
is calculated for each impact area by mUltiplying the
population-per-household measures that were projected for the state
under the Base Case by the estimated number of i n-mi grati ng secondary
workers.It was assumed that these workers would have the same general
demographic characteristics as present residents.
D.Housing Impacts
The impacts of the project on housing are quantified using the -
following steps:
1.The number of cumulative project-related in-migrant households
is calculated as equal1ing the number of direct and secondary
workers that in-migrate into a community or area by a given year.
2.The percent increase that this number of households represents
of the total projected number of households in the impact area
is calcul ated.
3.The projected project-related influx is compared to the number
of vacant houses that is expected under "without project"
conditions.
59
VI.PUBLIC FACILITIES AND SERVICES
A.Overview of Methodology
The general approach to forecasting public facility and service
requirements during 1985-2005 was:
1.to develop appropriate standards,for each service category and
for each relevant community,that relate service and facility
requirements to the size of population;
2.to assess the adequacy of existing facilities and services and
to quantify any over-or under-capacity using these standards;
3.to estimate future needs based on the applic~tion of these
standards to the population growth forecasts with and without
the Susitna project;
4.to indicate the significance of the impact on local
jurisdictions;and
5.to provide indicators of need for project-impact mitigation
measures.
B.Geographic Scope
Projections of impacts of the project on public facil ities and services
are calculated only for communities and other jurisdictions in the
Local Impact Area.The flexibility to project facility and service
requirements of other communities and jurisdictions in the Railbelt
region has been built into the computerized model.At this time,
hov,ever.no further work has been done to develop appropriate per
capita service standards for these jurisdictions.
60
-
-
-
-
"""'
-
.....
c.The Computerized Module
The pUblic facility and service model utilizes three types of data
input.First.the module reads in the population and household
projections from a data file that is created as an output of the
economic-demographic module.Second.assumptions on service standards
.and data on capacity are accepted.Third,information on present and
pl anned capacity is entered.
A schematic of the structure of the facilities and services module is
presented in Figure 9.Per capita service standards are multiplied by
the projected population of each community,under the "with project"
and "without project"scenarios,and the results are stored as service
requirements for that community.The effects of the direct population
influx and the total project-related population influx are calculated
independently,so that direct and total impacts can be separated for
mitigation planning purposes.
Impacts of the project are displayed quantitatively in various ways.
Project-related requirements are compared to the requirements without
the project as a percent increase.and to 1981 capacity in both
absolute and percent capacity utilization terms.
The results of the model are presented for each community or impact
area,by variable,on a yearly basis.Table 8 is an example of the
report format that is produced by this module.
D.Types of Service Standards
Service standards can be divided into two categories--average and
prescriptive.Average standards are based on recent data on existing
service levels on a per capita basis for a given area.Average
standards may be based on national,regional,state or local averages,
or on averages for a given type or size of community;their
distinguishing feature is that they are based on an average of what
currently exists.As such,they reflect the realities of funding and
staff 1 imitations that local governments face.
61
FSER/POLICEV/POLICWAH/FSERRPT
Altern~to 02 of 02
06/12/83 AT 02:52:21
Table 8 USER ..RLH
IMPACT OF THE PROJECT ON POLICE PROTECTION
IN THE MATANUSKA-SUSITNA BOROUGH
(NUMBERS OF OFF leERS)
-----..----------------------...._---------------------------------
YEARS 1985 1986 1987 1988 1989 1990 1991 1992 1993----_..----------------..-----------------------------------------
PROJECT-RELATED REQU I REMENTS
------------..---------------
Direct Project o .0 o•0 o•0 o•0 0.0 o .0 0.0 o•0 o•0
Total Project o.0 o .0 o .0 o .0 0.0 o .0 0.0 o .0 o .0
0"1
N BASELINE (Cum.)28.0 3 I .0 3:5.0 35 .0 39.0 42.037 • 0 4 I .0 45 .0
-------------------.."-------------------------..------------------------------------
TOTAL REQUIREMENTS 28.0 3 I .0 33.0 3 5 • 0 37 .0 39.0 4 ! •0 42.0 4 5 • 0
------------------f::1=:;::::==:::::::::;;::;;==========;:::=========:::========c:::c.a=I::lC::==G==:I~==:;Is:;a"~R::I
Dlroct Require.As %
Increaso Over Bosel.o.0 o •0 0.0 o .0 o•0 o•0 o.0 0.0 o .0
Tot~1 Require.As %
Incroose Over Bas e I .o.0 0.0 0.0 o.0 0.0 O.0 o.0 0.0 o.0
1981 C~p~clty 20 .0 20.0 20.0 20 .0 20.0 20.0 20.0 2 0 • 0 20.0
Excess ( Und e r )Cop.( 8 .0 )( I I .0)( I 3 •(j )(/5 .0)(17.0 )( I 9 • 0 )(21.0)(22,0)( 2 5 .0)
%Cop ~cit Y U t:l I I z •
140 . 0 i 5 :,.0 165 .C :I).0 I B5 .0 195 • 0 205 .0 2 I 0 • 0 :2:2 5 .0
I J J ~J J J J I ,J ,I
SJRUCTURE OF PUBLIC FACILITIES AND SERVICE MODULE
-
((~~0/~-.3/)
rYj?~s-of kforrr1~/~/1 Calo-//7C:!
7 -------.----
.-i/a-!c;.r }.3 CL//:,-rJ lUI /7 P/a.x.J,-o,vJ!s
~/~~/&<;rIoJjJIJ
_S ~L -J Q.//bA .s ~if 0/L%/7r/>"t/r(,:;Arls
_So/.cIUa..s-/.s:-ac~.s ~E/c:a.r
"""Po tc.c--/?{//7!jcr of;Dolce:.
;/oJ;O;/afs -gJft ~Ooelot's
""'"S Joo/s -C!-kss-roo/7t5 ~oJv.r./
(3~-,;3~)
OUQ/T!'!a-/~L
0jJ(o!:....soSIO/f 0 r
~;:Cl.c..ls
cT -r OVt:.r'10 .,I-/lCr.!:o..sc.--
Ila.S&J/l£.
£c r"L CL,.S L O)l£i
8a.s E:/~£../;";}),r.
(c;.jJt2 C 1·1;--tI~);Z:it I-0 r7
!J,.slr,~t.£It·O/f of hcrLo..S ,
OVLr Cc.::.J ra,l,c.
/1 __...,.-
For some service types,prescriptive standards are set by relevant
agencies or associations.For instance,a state government may require
certain standards for health care and education;standards for fire
protection based on insurance tables may be used widely.These
standards often vary by size,type and community,and may be voluntary
or mandatory.
A mix of average and prescriptive standards have been used in this
analysis.The objective has been to provide detailed measures of
adequate service 1evel s.for those services \..hi ch the 1oca 1 governments
now provide,while keeping under consideration the resource constraints
that communities face.Local preferences,based upon conversations
with local,state and borough officials,have been taken into account.
For some facilities and services,the required level of service varies
among communities,depending on factors such as the size of the
community and the type of communlty (urban,suburban or rural).
i'
~~,
In ~ome cases,relevant standards may be based on variables other than
I !t
poptilation per se --for example,the number of dwellings or the number
of school-age children.These variables are related to population
levels.but the actual ratios may change over time.Service categories
such as education and heal th care are especially sensitive to
demographic changes.Where possible,predictors of demographic changes
have been incorporated into the model.
Due to the many factors that influence the needs for public facilities
and services,the uniqueness of each community,and the subjectivity in
deciding adequate service levels,the standards used in the model
should not be considered absolutes,but rather as general indicators of
changing requirements with and without the Susitna project.A summary
of the standards used is di spl ayed ;n Tabl e 9.In the sections below,
specific considerations relating to the choice of standards are
discussed.
64
-
....
-
....
,...
For some servi ce types,prescri pti ve standards are set by rel evant
agencies or associations.For instance,a state government may
require certain standards for health care and education;standards
for fire protection based on insurance tables may be used widely.
These standards often vary by size,type and community,and may be
voluntary or mandatory.
A mix of average and prescriptive standards have been used in this
analysis.The objective has been to provide detailed measures of
adequate service levels,for those services which the local
governments now provide,while keeping under consideration the
resource constraints that communities face.Local preferences,
based upon conversati ons wi th 1oca 1.state and borough offi ci al s,
have been taken into account.
For some facilities and services,the required level of service
varies among communities.depending on factors such as the size of
the community and the type of co~munity (urban,suburban or rural).
In some cases.relevant standards may be based on variables other
than po~ulation per se --for example.the number of dwellings or
the number of school-age children.These variables are related to
population levels,but the actual ratios may change over time.
Service categories such as education and health care are especially
sensitive to demographic changes.w~ere possible,predictors of
demographic changes have been incorporated into the model.
Due to the ma~factors that influence the needs for public
facilities and services.the uniqueness of each com~unity.and the
subjectivity in deciding adequate service levels.the standards used
in the model should not be considered absolutes,but rather as
general indicators of changing requirements with and without the
Susitna project.A summary of the standards used is displayed in
Table 9.In the sections below,specific considerations relating to
the choice of standards are discussed.
65
.J 1-.21°
Cant...el f
15
!521
• j j-.21 b
25
Mat-Su
Talkeetna Borough
25
Trapper
Creek
25
fbuston
.11-.2/°
Wasl.l!a
25
21
120-150"12o-15ca
Palmer
25
21
Water Supply
Average·Water Supply
(gpd per capital
$e wog.e.Tre atment
$e\;age TreatmenT 150
(average gpd per capIta)
Education
Average Primary
School-Age ChI j dren
To Teacher Ratio
So I Id Waste Di sp-osal
Landf 11 I Requ Irements
(acres per 1,000
popu I atlon)
Average Secondary
School-Age Chi I dren
To Teacher Ratio
Table 9
'.SUMMA.RY OF PUBliC FACILITY AND SER\lICE:STANDARDS FOR
SELECTED COMMUNITIES IN THE LOCAL IMPACT AREA
Teacher to Support
Staff Ratio
a:I 8:1 8:1 B:I 8 :J
Health Care
Desired HospItal Bed
Ctcupancy Rate
55%
la ....Enforcement
Pollee Officers
(of f I cers per ttlousand
popu 1at jon)
1.5 1.0-1.5 1.0
Parks and ~creatlon
Playground s (acres per
1000 dwe II i ng un Its)
3.9 3.9 3.9 /IOOiI.
Ne Ighborhood Parks
(acres per thousand
d'o'eiling units)
3.3 3.3 3.3
Cormtunlty Park
(acres per thousand
d'o'el/ing unIts)
4.8
-
a Assumed to Increase from 120 gal Ions per day per capIta In 1981
to 150 go I J ons per day In 2000.
b Assumed to Increase from .1 I acres per year per thousand population In 1981
to .21 acnes per year In 2000.-66
-
-
E.Assumptions ,and Service Standard Used
1.Water Supply
Water systems are comprised of three components --the supply source.
the treatment facility and the distribution system.The most widely
used standards for water service are the average and peak water
consumption per capita,in terms of gallons per day (gpd).Facility
standards sometimes include pipe length per thousand dwellings,and
treatment capacity.
The standards are relevant only for communities that have or are
expected to develop water systems.Only two communities in the Local
Impact Area,Palmer and Wasilla,have city-wide water supply systems.
Other residents,including inhabitants of the communities that will be
most affected by the project,rely on individual wells or "communit/'
systems that serve a particular subdivision,trailer park or other
small area.
An average per ca~ita water consumpti on standard of 120 gall cns per day
in 1981 rising to '150 gpd by the year 2000 was used.The city of
Palmer currently has an average per capita water use rate of 120 gpd,
and this relatively low usage may be attributed to the relatively small
amount of industry in the area.It is expected that future growth will
include an increase in business activity and hence a rise in per capita
water consumption.
2.Sevage Treatment
The amount of sewage generated is a function of the amount of water
that is used daily.In the literature on national standards,it has
been estimated that an average of 65 percent of total water supplied
becomes sewage,or 100 gpd per capita.with the remainder used for
miscellaneous purposes such as watering lawns and gardens,firefighting
and generating steam (Stenehjem &Metzger,1980).This standard is not
appropri ate for appl ication to many Al aska communities.In the winter
67
in parts of Alaska,more water than required for use flows through the
distribution system,in order to keep the water from freezing within
the pipes.This water is then returned as sewage,resulting in sewage
flows representing close to 100 percent of water use.This is the case
in Palmer,where sewage requirements equal 100 percent of average water
usage,or 120 gallons per day·per capita.For the purposes of
projections of impacts,a constant standard of 120 gpd has been used
for Palmer,the only community with a sewage treatment system in the
Mat-Su Borough,and for Wasilla,which is planning a sewage system at
this time.
3.Solid Waste Disposal
Solid waste can be disposed through incineration or sanitary landfill
disposal;sanitary landfill has become the prevalent mode.Facility
requirements for solid waste disposal can be measured in terms of the
amount of land needed per capita on an annual basis.Published
standards range from 0.2 to 0.3 acres per thousand people.depending on
assumptions of pounds of waste per capita,depth of the site and the
rate of cDmpression of the waste.
A lower standard of .11 acres per thousand population has been assumed
initially for communities in the Mat-Su Borough and other communities
in the Local Impact Area,based on the premises that waste production
per capita is·much lower and the fill depth of the central landfills is
twice as high as national averages.This standard is calculated to
rise to 0.21 acres by 2000 and held constant at this level beti'/een 2001
and 2005.
4.Education
The major determinant of the requirement for educational faci1-ities
and services is the ratio of school-age children to population.
modified to take into account private school attendance.Two different
methodologies were used to estimate the number of school-age children
associated with the (1)Base Case population and (2)in-migrant
population associated with the Susitna project.
68
"""
-
,IJIR
-
.....
....
-
.-
-
'.
Under the Base Case.for the Mat-Su Borough.the standards that the
school district uses for planning were used in this study as well.
Short-term planning through 1987 uses an estimate of 22.8 percent
(school-age children:total population).For l~ng-range planning
purposes,an estimate of 25 percent;s used.For the purposes of this
stUdy,the ratio is assumed to rise gradually from 22.8 percent in 1987
to 25 percent in 2000 and then hel d constant at that 1 evel through
2005.In Cantwell.the present 18 percent level was assumed to remai n
constant over time in the Base Case .
The number of school-age children accompanying workers on the project
has been estimated using a ratio that was calculated.through surveys
of other large projects.of .89 schoolchildren per in-migrant worker
accompanied by dependents (U.S.Army Corps of Engineers.1981).The
number of school-age children associated with the in-migrant secondary
population was calculated on the same basis as Base Case school-age
chil dren.
A major service standard for education relates the number-of school-age
children to the number of classes and teachers.Local preferences have
been used as standards in this case.In the Mat-Su Borough school
district.planning standards include an optimum of 25 students per
cl ass for pri mary school sand 20-22 for secondary school s.In
addition.t~t-Su Borough statistics show that teachers comprise about
50 percent of total school di stri ct personnel requi rements.In
Cantwell.the Railbelt School District1s planning standard
teacher-student ratio of 15:1 was used.
Requirements for classroom space can be measured in terms of number of
classrooms or alternatively,the number of square feet per pupil (90
square feet for primary school students and 150 square feet for
secondary school students).The square feet calculations are useful to
the estimation of the cost of constructing new facilities.The model
is able to provide both sets of calculations.
69
It is assumed that the present ratios of primary school students (54
percent of total)and secondary school students (46 percent of total)
will remain constant.It is beyond the scope of thi s analysis to
forecast changes in distribution by school and by grade.
5.Heal th Care
-~.
,,,.,,,
Standards for acute publ i cheal th care focus on the capabi 1 i ty of
hospi tal facil i ti es and staff to accommodate the expected number of
patients without building overcapacity that will then add to hospital
costs.While rule-of-thumb bed multipliers of between 2.1 and 5.8 beds
per 1000 population are often used.it has become customary to base the
number of beds required on a measure of the long-term daily average
daily census of patients using the hospital divided by the desirable
occupancy rate.In Alaska,the recommended occupancy rates are 80
percent for urban hospitals and 55 percent for rural hospital s.The
formulas used are:
Acute Care Patient Days at Valley
Hospital plus Days at Alaska and
Providence Hospitals for Borough
Residents
/Borough =
Popul ati on
Hospital Use Rate
for Borough
Residents
-
Hospital Use Rate for
Borough Residents x Es tima ted
Borough /
Population
365 days
in year
=Projected Average
Daily Census (PADC)
A significant aspect of the hospital system in Alaska deserves
note.The Municipality of Anchorage has developed a comprehensive
acute and long-term health care system that provides the main
medical care for the residents of Southcentral Alaska,as well as
other areas of the state.A large percentage of people living in
areas such as the t~at-Su Borough.as well as Canb/ell.presently
elect to use hospitals in Anchorage over the local hospital due to
the larger number of doctors (especially specialists)and the more
~odern facilities.However.the percentage of patients that use
Projected Average
Da i ly Census x Proportion
of Bed Need
Met at Valley
Hospital
Minimum
/Occupancy
for_Rural
Hospital
(55%)
=Valley Hospital
Acute Care Bed
Need
-
70
,'IDi'>fU,
~
I
-
the Valley Hospital in Palmer has been rlslng rapidly in recent
years,and this trend is expected to be.accelerated by the planned
addftion to and renovation of this hospital,as well as the possible
addition of certain medical specialists to the staff.It is as-
sumed that the usage of Valley Hospital as a percentage of total
Alaskan hospital use by Mat-Su Borough residents will rise from 38
--percent in 1980 to 75 percent in 2000 and remain constant at that
level through 2005.
Age and sex distributions of the population are important
determinants of hospital use.Due to data limitations,these and
other demographic factors have been assumed to remain constant.As
data become available from communities and workers through the
monitoring program,the model may be restructured to project age and
sex distributions.
6.Law Enforcement
Police service standards range from one officer per thousand
population in unincorporated rural areas to 1.5 officers per
thousand population in small commun{ties and 2 officers per thousand
in moderately large cities.For rural parts of the Local Impact
Area,a standard of 1.0 officers per thousand was applied to the
population projections.For the southern part of the Mat-Su Borough
(outside Palmer,which has its own police force),a standard of 1.5
officers per thousand population was used;it is anticipated that
the growing suburbanization of the borough will soon justify use of
the increased standard.
Alaska State Troopers judge the relat~ve adequacy of their staffs in
terms of the average case load (i.e.number of crimes)that each
officer is charged with investigating.Six cases per Trooper is
considered average,and eight is considered the level at which
additi onal staff is needed.In the Mat-Su Borough,in 1981,there
was approximately one Trooper per thousand population.and the
average case load was about six per officer.This indicated that
the rural standard discussed above was appropriate for this area.
71
7.Recreati on
Projected requirements for recreation facilities,in terms of
acreage for playgrounds,neighborhood parks and community parks,
were calculated by applying national standards for rural areas.
Standards for playgrounds and neighborhood parks are most applicable
to the cities of Palmer,Wasill a,and Houston.whereas community
parks are planned for larger areas,and the standard pertaining to
this category is most relevant to Mat-Su Borough as a whole.
8.Other Facilities and Services
Some c ategori es of publ ic servi ces did not 1 end themselves to th is
type of quantitative approach.The method of analysi s used for
these categories are discussed below.
9.Fire Protection
The major criteria that can used to evaluate the adequacy of fire
protection are (1)the available water flow rate (gallons per
minute),(2)response time,and (3)manpower availability.There
are several standards that relate these variables to population size
in the socioeconomic impact literature.Water flow,response time
or service radii,and the equipment capacity are com~only used.It
is common in communities of less than 7,000 to rely on volunteer
firefighters;as this is not a cost item,requirements for manpower
have not been projected for communities of the local impact area.
Ho'tJever~fire protection planning in Alaska,as in many other
states,often takes the form of trying to achieve a certain fire
rating as measured by the Insurance Service Organization (ISO).The
ISO is a national organization that rates fire protection on a scale
from one (best)to ten (worst);fire insurance rates closely reflect
these ratings.
72
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-
"""
-
-,~
.-
COllUnunities without a community water system can at best achieve an
ISO rating of 8 (which is the objective that the Mat-Su Borough
presently hopes to achieve for its most populous fire districts).
Requirements to achieve a rating of 8 are:that dwelling class
property be within five road miles of a fire station (on roads that
are in good condition)and that the fire department has demonstrated
its ability to deliver 200 gallons per minute (gpm)for a period of
twenty minutes without interruption.The latter requirement implies
a need for a capacity of 4,000 gallons of water "on wheels."The
ISO rating does not relate service availability to the size of
population.
10.Transportation
The impacts of the project on transportation were analyzed with the
consultation of public officials who have responsibility for
transportation infrastructure in the region.
The capacity of the Parks Highway,the main highway in the project
area,was discussed with the Alaska Department of Transportation and
Public Facilities,and specific areas which could be transportation
bottlenecks were determined.Official~at the Alaska Railroad
confirmed that the rail line is underutilized,and could easily
handle the additional freight that the project would generate.
The Mat-Su Borough has a skeletal road framework which will need to
be expanded significantly to handle the population growth that is
expected in the next twenty years.Discussions with Mat-Su Borough
officials yielded estimates of the threshold borough population
sizes that are expected to trigger the need for additional roads.
For instance,as the popUlation of the borough exceeds 30,000,there
will be a need to build a collector road ring with a radius of four
or five miles from Wasilla.Using these threshold levels,it was
possible to estimate by how much the population influx related to
the Susitna project would accelerate the need for these
infrastructure additions.
73
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.....
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Possible future enhancements to the impact model would entail (1)
projecting the increase in traffic counts on major roads in the
impact area related to the project and (2)relating the
project-related population influx to the demand for airport
facilities.
74
VII.FISCAL MODULE
A.Overview of the Fiscal Impacts Module
1.Purpose
The purpose of fiscal impact analysis of resource development
projects,such as the Susitna Hydroelectric Project,is three-fold:
o To identify the types and magnitude of project-induced
changes in the expenditures and revenues of local governments;
o To identify or estimate the timing of project-related
expenditures and revenues;and
o To make the above information available to the mitigation
planning process.
2.General Approach
The general approach taken in the analysis of the fiscal impacts of
the Susitna Hydroelectric project was to consider tHO futures.
First,baseline conditions were analyzed and projected,for each
local jurisdiction,to provide a basis for comparison.Second,
conditions with the project were projected,using data inputs from
the economic-demographic and the public facilities and services
modul es.
In the analysis of baseline conditions,emphasis was placed on
identifying the most important sources of revenue and expenditure
items.Past and current trends in both revenues and expenditures
were examined and analyzed,and these trends were used as the basi s
for the ~rojections of future fiscal conditions in the project area.
In the projection of fiscal impacts related to the project,the
effects ~f the direct population influx and the total
project-related population influx are calculated independently,so
that direct and total impacts can be separated for mitigation
planning purposes.
75
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-
-
.-.
-
B.Impact Areas and Local Jurisdictions
Within the project impact area,there are a number of jurisdictions
that hold a variety of powers to collect taxes or otherwise receive
revenues and to provide certain public services.The fiscal powers
vested in these jurisdictions,to a large extent,determine likely
sources of future revenue and future needs for expendi tures for
public facilities and services.The distribution of fiscal
responsibilities among-jurisdictions also will affect the extent to
which any given jurisdiction is impacted by the project.In the
following section a brief description of the government organization
and fiscal responsibilities of jurisdictions in the project area is
given.For additional information on government organization in the
project area,refer to Frank Orth &Associates,Inc .•1982.
These centers comprise by far'the largest pcpulation centers in the
~rpject area.The Municipality of Anchordge is d first class hOiiie
!flule municipality while Fairbanks is a first class city.This first,'
class status provides both population centers powers to levy taxes
on real and personal property as neeced in c(Ger to provide services
to thei r resi dents.Each one of these centers prev;des a wi de range
of public facilities and services.
2.Mat-Su Borough.
The powers and responsibilities of the Borough are comprised of four
general functions:general fund administration,provision of fire
protection and road services to service areas,land management
functions,and responsibilities for the school district.General
fund administration and responsibility for the school district are
part of the Borough's area-wide duties to serve all areas in the
Borough;provision of fire protection and road maintenance to
service areas are non area-wide functions whereby only selected
areas are served.
76
3.Incorporated cities
The incorporated cities in the Mat-Su Borough are Palmer t Wasilla.
and Houston.Palmer is a first class home rule city,while both
Wasilla and Houston are second class cities.
4.Palmer
As a home-rule city,Palmer has certain certain powers of taxation.
Home rule and general law municipalities may levy tax on all real
and personal property located in the municipality to support
services provided throughout the municipality.Tne maximum rate of
taxation is three percent (thirty mills)of the full and true value
of taxable property.
5.Wasilla and Houston
As second class cities,Wasilla and Houston require a majority vote
to exercise the power of taxation.In addition,there is a tax
ceiling of five mills.For additional discussion of the tax powers
of local authorities in the State of Alaska.refer to Frank Orth &
Associ ates,Inc .•1982.
C.Projection of Revenues and Exp~nditures
1.Revenues
Sources of reven'ue are.in the mai n.determi ned by the taxa ti on
powers of a given jurisdiction together with its eligibility for
intergovernment transfers.For each jurisdiction,the major
traditional sources of revenue \'i'ere detennined and its tax powers
were exami ned.
77
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-
-
-
The next step was to determine appropriate methods of projecting future
revenues.The discussion that follows presents a list of alternative
methods including the ones chosen for this analysis.
d.uOfln Source"Revenues
"eMn source"revenues include all source of revenue that the local
jursidiction raises for itself,such as property,sales and income
taxes.These are a function of the size of the tax base and the tax
rates used.
Property values are influenced by many factors,including the level of
demand as population increases.To estimate changes in the property
tax base,a real ra te of growth of four percent was a ssumed for the
~Bt-Su Borough baseline assessed value.This rate is based on recent
observed growth rates in the Borough's total assessed value.For the
"with project"scenario,baseline pe~capita assessed valuation was
applied to the population influx to estimate additional growth in the
property tax base.Certain tax rates were assumed for the analysis
peri ad.
Sales tax revenues were assumed to grow in direct proportion to
population.The sales tax rates were assumed to be constant.
b.Intergovernmental Transfers
In estimating intergovernment revenues,it is important to understand
the criteria used by the state and federal government in allocating
transfer funds to local jurisdictions.Allocations are usually made on
the basis of local population size.Therefore,per capita based
projections are good approximations of this form of revenue and were
used in this analysis.In some cases,both population size and
geographic location are considered when allocating transfer funds.
~~eneYer appropriate,the per capita based projections in the model
were adjusted to account for location specific factors.
78
--,....-_Ili:M~_..-------------"......M_filu=_
c.Bondi n9
The Borough has in the past utilized school revenue bonds primarily for
school capital projects.The authority to do this is always sought
from the local taxpayers.as.in principal.they are responsible for
repaying this form of obligation.However.the state legislature has
in the past provided varying levels of reimbursement to the borough.
Current law allows up to 90 percent reimbursement of both principal and
interest payments.In thi s analysi s.maximum bonded indeptedness is
projected as a ratio of assessed valuation.
d.Political Factors
It is important to note that political factors,such as the form of
government of a jurisdiction and changes in state statutes.can heavily
influence the amount of revenue that may be available to a local
jurisdiction.For example.a local decision to incorporate or upgrade
the level of incorporation from a second class to a first ~~ass city.
can lead to increased taxation powers and potential reven~+~.
Similarly,a decision at the state level to change the crtieria for
providing revenue sharing assistance to local jurisdictions can have
f.ar reach i ng effects.
2.Expenditures
A first step to projection of expenditures ;s to identify the types of
public facilities and services provided by a jurisdiction.This
initial step provides a listing of the expenditure items for which
projections must be made.Suitable methods can then be identified for
making the projections.In the following section,alternative methods
are discussed as is the rationale for selecting the method which was
used in this study.
79
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-
-
Generally.there are two groups of methodologies for projecting pUblic
expenditures:(1)the average cost approaches and (2)the marginal
cost approaches.Methodologies in ~oth groups were examined for
advantages and disadvantages and for applicability to the project
area.The fo'llowiflgis a brief review of these methods.
a.Average Cost,Methodologies
Average cost methodologies include the per capita cost.service
standards.and cross-sectional regression analysis approaches.The per
capita cost method is based upon the assumption that.in real t~rms.
present per capita costs are reasonable estimates of future cost.It
is a relatively inexpensive methodology to apply.as it readily
utilizes available historic data.Its major weakness lies in its lack
of direct accounting for threshold effects (i.e.predicting the large
amount of new investment that is needed when a community reaches a
certain "size threshold").existence of excess capacity in public
facilities,and economies of scale in providing new services.
The service standards method would multiply the results of the service
requirements calculated in the facilities and services module by unit
costs to project total facilities costs.The cross-sectional
regression analysis approach estimates average service requirements
based on data from several communities in the region.Both the service
standards and regression methods require considerably more data than
the per capi ta method.Additi onally.because the regressi on method
must draw on regional data to have enough data points,it ;s sometimes
regarded as being too regionally based to constitute an appropriate
local impact projection method.
b.Marginal Cost Methods
These include the case study approach.the comparable city method.and
the economic engineering method.An important advantage of these
methods is that they are able to explicitly account for the threshold
effects.excess capacity and economies of scale.However,marginal
cost approaches require great amounts of data.may not be accurate if
80
there is uncertainty surrounding assessment of excess capacity in
public facilities and services,and in addition require great amounts
of effort to update the estimates._In general J these methods are more
expensive to apply.
c.Criteria for Methodology Selection
The following criteria were used to make a selection of expenditure
projections methodology:
o Simplicity of application while providing reasonably accurate
results;
o Availability of.data;
o Ease of update and therefore usefulness in mitigation planning
and mitigation measure revisions;and
o Applicability to impact area fiscal conditions.
The first criterion demands a method that,although simple,would meet
current standards of acceptability.The per capita cost method meets
these requirements and is the most commonly applied fiscal impact
methodo logy.
With the exception of the cross-section regression method,the average
cost methods tend to require historical data that is readily
available.The marginal cost methods require great amounts of data
that may not be available and can be complex in application.
Cost projections for this project will need to be revised repeatedly to
reflect the most current infonnation on the project and its schedule.
rt is,therefore,necessary to have a method of projection that can be
updated easily.Al though the marginal cost methods (and in particular
the case study method)can have a great deal of accuracy,their
application demands a correspondingly higher data collection effort.
As a result,marginal cost methods are more suited to a one-time
appl icati on.
81
1&
-
-
-
-
....
Using the above criteria,the per capita cost method was selected for
use in this study.It was recognized,however,that the method!s
weaknesses could be minimized by incorporating some features of the
Case Study approach.Thus,interviews with local officials were
conducted in order to gain perspectives on trends in pUblic facilities
--
usage.Furthermore,public facilities thresholds and public
preferences concerning the extent of public facilities and services
will be monitored during the project period so that adjustments can be
made during a dynamic mitigation planning process.During that
process,the per capita multipliers used and assumptions that u~derlie
them will be compared to actual costs to better facilitate mitigation.
If revised cost estimates are required,they can be made easily and
quickly.This is one advantage of the per capita method -it
facilitates a continuous mitigation process.
D.link of the Fiscal Module to other Modules
1.Input Da ta
As discussed above,many of the revenue items and most of the cost
items are projected applying per capita mUltipliers to the projections
of population and school-age children.Per capita multipliers were
obtained or computed from current and historic budg~ts.Interviews
with iocal officials supplemented this information.These multipliers
are contained within the fiscal module.The rest of the data are
derived from the other modules of the model •
2.Link to the Economic-Demographic Module
The fiscal module obtains population data from the Economic-Demographic
module.The data extracted corresponds to the type of cost projections
to be made (baseline projections,impact of the direct project-related
population influx,and impact of the total project-related population
influx)and the appropriate phase of the project.Accordingly,changes
in the economic and demographic scenarios affect the revenue and cost
estimates in the fiscal calculations.
82
3.Link to the Public Facilities Module
A significant portion of the Mat-SuBorough budget goes to education.
In fact.the school di strict budget consti tutes about 5,8 percent of the
borough revenues.Consequently,one of the important variables in
projecting fiscal conditions is the number of children in the borough.
These estimates are provided by the public facilities module.
A possible future enhancement of the fiscal calculations will introduce
a link to the public facilities.module to specifically extract
indicators of threshol d effects.Thi s 1i nkage woul d then be used
'together with monitori ng information to adjust cost estimates,as more
data become available regarding supply shortfalls.
E.Baseline Projections
This section discusses the estimation of baseline projections.A
detai,led analysis is given regarding component revenue and cost i:L:i~S,
some of the assumptions made,and specific methods of estimation for
each jurisdiction.The jurisdictions covered are Nat-Su Borough,the
cities of Palmer,Wasilla,and Houston within the borough,the
Municipality of Anchorage and the City of Fairbanks.'riithin the ~'·.at-S~
Borough,special attention is given to the general ~und,the school
operating fund.the service area fund,and the land management fund.
For jurisdictions in the local impact area including Mat-Su Borough Jnd
Palmer,Wasilla.and Houston,considerabl~effort was devoted to
projection of both the revenues and expenditures.Major sources of
revenue and important expenditure items were identified.The
Municipality of Anchorage and the City of Fairbanks are outside of the
local impact area.Consequently.only expenditure projections were
~ade.Major expenditure items were emphasized.The following is a
discussion of the modul~structure for calculations.
83
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1.Mat-Su Borough
Revenues;Two types of revenues are projected.They are "own source"
revenues and intergovernmental revenues.The only source of own
revenues is the property tax.Intergovernmental transfers received by
the borough include such categories as state shared revenues,municipal
assi stance revenues,and federal revenue shari n9.All i nterg overnment
revenues were estimated using per capita mul tipl iers.Property taxes
were projected based on an assumed real growth in the tax base of four
percent.The applicable tax rates are of two kinds:(1)the area-wide
tax rate and (2)the non area-wide rate.The first is applied to the
total Borough assessed valuation while the second is applied to the non
area-wide assessed value.Residents of those selected areas where the
Borough provides fire protection and road services pay a non area-wide
tax in addition to the area-wide tax that is paid by all residents of
the Borough.The general equa~jons used for the two types of revenues
are given below:
PTt =AVt*MR t
IGRit =the ith i tern intergovernment revenue in the year (t)
I GH i t =the ith item per capita revenue ,,
,..-
POP t =population in the Mat-Su Borough ,,
PTt =property tax .,
AV t =assessed valuation ••
M~.-the mill rate (tax rate), ,
r-
Expenditure items for the borough,such as area~wide general fund
administration.service area cost items.and land management fund.are
projected based on per capita expenditure estimates using the following
general equation:
COST it =PCCit*POP it
PPC =the per capita cost mUltiplier
POP =the popu1ation size
Subscripts:(i)identifies the ith cost item,and
(t)identifies the year.
84
2.The School District Budget
Revenues:The sChool district revenues come primarily from the state
government,area-wide local taxes,and the federal government.All
government contributions,with the exception of those from the state1s
foundation program,are based on school-age population.Foundation
program monies are granted on a per instruction unit basis and take
into account area specific cost adjustment factors.This revenue item,
however,can also be said to be based on population since instructional
units are determined by the number of students.Estimation of property
taxes was discussed above;the state and federal government
contributions are projected using per capita school child revenues and
the total school-age children.The general form of the equation used
is as fall O\'lS:
SRi t =PRit*TSC it
SR;t =nonlocal school revenue from the ith source
in year (t)
PR i t =revenue from the i th source per school chil d
in year (t)
TSC =total school age chn dren in year (t)t
3.The City of Palmer Budget
Revenues:The City of Palmer derives revenues from own sources,
intergovernment transfers,and miscellaneous sources.Own sources
include the local property taxes,sales taxes,and service charges.
Own sources constitute close to 60 percent of all revenues while
intergovernment sources contribute some 25 percent.Miscellaneous
sources are responsible for the balance.Own source revenues are
projected using per capita multipliers;intergovernment revenues are
projected based on historic percentage contributions.
Other revenue sources are the special fund charges for water and sewer
services.The projections in this category were based on per capita
cha rges.
85
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--
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_.
-
Expenditures:The city of Palmer provides a number of standard
services.Cost projections for all the various services listed below
were based on per capita cost multipliers~
Services provided include:
0 General 'admi ni strati on
0 Police
o-F;re servi ce
0 ftmbul ance
0 Parks and recreation
0 Heal th services
0 li brary
0 Publ ic works
0 Water supply
0 Sewer
Thus,the general formula for projecting the total outlay for each item
is as fo 11 QWS :
The various terms in the equation are explained above.
4.City Of Wasilla
Revenues:There are two categori es of rcvenues that the city of
Wasilla receives.They include intergovernment transfers,and
Q\'m-SQurces.Unlike the -City of Palmer,Wasil1a receives by far the
greatest amount of its revenue from intergovernment funds,which
i nelude state-shared taxes,state and federal revenue sharing,state
grants for capital projects.various transfers from Mat-Su Bo~ough and
elsewhere for the library,and other miscellaneous intergovernment
transfers.All the revenue items were projected using per capita
revenue multipliers.
86
Expenditures:Expenditure items for the City of Wasilla include:
o General administration;
o Parks and recreation;
o Library;
o Fire service;
o Capital projects.
All these were projected based on per capita expenditure multipliers
with a general formul a of the fo'rm:
5.Ci ty of Houston
Revenues:Although the composition of r[ven~e items and purpas0s is
quite varied,there are only two impor~a~t sources of revenue for the
City of Houston.These are the state and :";a.t-Su 8vrcugh.To project
baseline revenues for Houston,per capita revenues estimates were
obtained for each important revenue item and Jppi:ed to the projected
population of the city.
Expenditures:To project expenditures,per capita expenditure
multipliers for the various cost items here obtained and used with the
projected population of the city.The a~plicable expenditure items,
i ncl ude:
o Local government administration;
o Fire service;
o Parks and recreation;
o Road maintenence;
o Solid waste.
87
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!!IIfm,
-
-
-
-
"'""'i
.-.
-
..-
6.Municipality of Anchorage
For the Municipality of Anchorage,.expenditure projections were made
using the per capita cost method.Per capita expenditures for major
expenditure items were applied to the population projections;the total
expenditure was then obtained by summing over the individual items •
The most important components of expenditures are as listed below:
0 Pol ice;
0 Fire service;
0 ftmbul ance;
0 Parks and recreati on;
0 Library;
0 Health services;
0 Transportation;
0 Sewage service;
0 Soli d waste disposal;
0 Water supply.
7.City of Fairbanks
As with the Municipality of Anchorage,only the expenditures were·
projected for the City of Fairbanks.The per capita cost approach was
used.The items included in the expenditure projections are:
o Police;
o Fi re sevi ce;
o Ambul ance;
o Parks and recreation;
a Library;
o Health services;
o Transportation;
a Sewage service;
o Solid waste disposal;
a Wa ter supply.
88
F.Impact Projections
Project impacts were projected using the same fonnul as as were used in
the baseline projections.One difference in methodology concerns
estimation gf property tax revenues associated with the population
influx.The approach was to use the baseline derived per capita
assessed valuation together with the total population (including
population influx)to estimate total assessed valuation.Tax revenues
are then derived,as in the baseline projections,using the same mill
rate multipliers.
Incremental revenues and costs were projected for various aspects of
the project.The aspects considered in the fiscal calculations include
the direct increment associated with the direct project populations,
and the increment associated with the total population influx.Project
scenario total revenues and expenditures (Baseline+Project -direct and
secondary)are also projected.
G.Report s
-
-
-
-
-,
Reports are organized by jurisdiction.The revenues and expenditures
are reported as ';lell as indications of deficits.The revenue
projections reported include baseline revenues,incremental revenues
due to direct population influx,increments due to total
project-rel ated popul ati on i nfl ux,and overall revenues in the "with
project"scenario.Similar information is reported for expenditures.
The reports display total revenues and total expenditures for each
jurisdiction,rather than individual revenue/cost items.However,
back-Up tables that report on the detailed computations can be designed .~
and produced to facilitate local plannning.
For the jurisdictions where both revenues and expenditures are
projected,baseline deficits and "with project"scenario deficits are
reported.In addition,the percent increase (decrease)in the
89
'lSti'lIl
~.....
jursidiction1s deficit as a result of the project is reported.Two
sample reports are included as Table 10 and 11.These two reports are
similar~but differ in the time period of reporting.Table 10 covers
the period from 1985 to 1993 while Table 11 reports on the remainder of
the project development and beyond to the year 2005.
90
F ISM/F ISB5MSV/FIBHORIH
06/16/83 AT I I :50:55
Table 10
FISCAL MODULE REPORTS
REVENUES AND EXPENDITURES
IMPACTS ON BUDGETS
(Tho u son d s )
Mat-Su Borough General Fund
USER •LOG
---~--------------
1.0....
Year
REVENUES
PROJECT RELATED
Direct Portion
ProJ act Toto I
BASEL INE PROJECTION
TOTAL REVENUES
EXPENDITURES
PROJECT RELATED
Direct Port 1 on
Project Total
BASEL INE PROJECTION
TOTAL EXPEIIDITURES
Basellno Dotlcits
Tot.:lJ Dotlets
198 5 1986 I 987 1988 1989 1990 199 I 1992 1993
J %~r II ~_I.I r 1 J I I J J I I .1 J _J J ......1 ~
1 J I -.-1 j
F ISM/FISB5MSV/FIBHOR2H
06116/03 AT 12:15:13
Table 11
FISCAL MODULE REPORTS
REVENUES AND EXPENDITURES
IMPACTS ON BUDGETS
( " h 0 usa n d s l
Mat-Su Borough General Fund
,I
'I
USER.LBG
Year 1994 1995 1996 1997 1998 I 999 2000 2001 2002 2003 2004 lOC
-----------------------------------------------------------------------
REVENUES
PROJECT REL."TEO
Direct PortIon
ProJ act Totll I
)B"SELINE PROJECTION
~
TOTAL REVENUES
EXPENDITURES
PROJECT RELnED
'DIrect Portion
Project Totol
BASEL INE PROJECTION
TOT"l EXPENDITURES
BllSellno Dellclts
TotlllDellcts
I ,'",-f'.,,!.'f",(n J I ......+
'lIf .
REFERENCES
Alaska Department of Labor,Statistical Quarterly,various
is sue-so
Alaska Department of Transportation and Public Facilities,
Traffic Division,personal communication,September 21,1982.
Alaska State Department of Transportation and Public
Facilities,Planning and Research Division,personal
communication,September 22,1982.
Al aska State Department of Transportati on and Publ ic
Facilities,Maintenance and Operations Division,personal
communication,September 23,1982.
Alaska Rail~oad,personal communication,January,1981.
Anderson,E.and J.Chalmers,Economic/Demographic Assessment
Manual:Current Practices,Procedural Recomr:Jendations,an-aa-
iest Case,Mountain West Research,Tempe,AZ,1977.
Arctic Environmental Engineers,Sol id Waste Disposal Study,
prepared for the Matanuska-Susitna Borough,1977 and 1978.
Burchell,R.W.and D.Listokin,The Fiscal Impact Handbook,
The Center for Urban Policy Research,Princeton.NJ,1978.
Community of Cantwell,Inc.,1982 Population Census,conducted
in coordination with the U.S.Postal Service,Cantwell,AK.
Denver Research Institute,Socioeconomic Impacts of Power
Pl ants,prepared for El ectric PO'rler Research Institute,
February,1982..
Frank Orth &Associates.Inc.Susitna Hydroelectric Project
Environmental Studies,Subtask 7.05:Socioeconomic Analy~
Phase I Report,prepared for Acres Amerlcan,Inc.and the
Al aska PO'r/er Authority,Apri 1,1982.
Goldsmith,S.and Huskey,L.,Electric Power Consumption for
the Railbelt:A Projection of Requirements -Technlcal
Appendices,Institute of Soclal and Economic Research,
prepared for State of Al ask a House Power Al ternatives Study
Committee and Alaska Power Authority,May 1980.
93
-
-
....
Leistritz,F.L.and S.Murdock,The Socioeconomic Impact of
Resource Develo~ment:Methods for Assessment,Westview Press,
Boulder,CO,19 1.
Matanuska-Susitna Borough Engineering Division,personal
communication,January 3,1983.
Matanuska~Susitna Borough Planning Department,Matanuska-
Susitna Borough Population Survey,Palmer,AK,1981.
t4atanuska-Susitna Borough Service Area Coordi nator,personal
communication,December,1981.
Railbe1t School District Superintendent,personal
communi cati on,September 30,1982.
Reaume,D.M.,uAlaska Regional Economies:1980 to 1982 11
,_
Daily Journal of Commerce,Seattle WA,December 25-26,1980.
Stenehjem,E.J.and J.E.P~tzger,A Framework for Projecting
Employment and Population Changes Accompanying Energy
Development,Argonne National Laboratory,Argonne.IL,1980 .
Tuck,S.H.,Economic Development Planning for Anchorage:A
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