HomeMy WebLinkAbout028Michelle Farfan
From:David W. Joh nso n < djoh nson @co jefferson.wa.us >
Wednesday, January 07,20L5 L1:14 AM
Garth Mann
peckassoc@comcast.neU David W. Johnson; Schipanski, Rlch; Hollinger, Kristy
Brinnon Group Comments
image003jpg; image004jpg; Brinnon Group Comments,pdf
Sent:
To:
Cc:
Subject:
Attachments:
Ga rth,
For your review, attached are the comments from the Brinnon Group on the DSEIS. We will follow up next week with a
proposal on how to proceed. A separate email contains all the other comments.
Tha nks I
David Wayne Johnson - LEED AP - Neighborhood Development Associate Planner - Port Ludlow Lead Planner
Department of Community Development Jefferson County
360.379.4465
IND_cmykl
Mission: To preserve and enhance the quality of life in Jefferson County by promoting a vibrant economy, sound
communities and a healthy environment.
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IBrand Promoter lmage small.jpg]
1
David W. Johnson
From:
Sent:
To:
Subfect:
Attachments:
Barbara M oore-Lewis <bri n n on grou p@g mai L com>
Friday, January 02,2015 1 1:1 1 AM
David W, Johnson
Fwd: Brinnon Group Comments on DSEIS
D SE I S s u m maryBG (611227 .pdt; Desti n ation_Reso rt_l m pact-S tu dy ( 1 ). pdf ;
waterworksConsultantsWaterReview ( 1 ). pdf; Si lver Tip Solutio ns. pdf ; walmart. pdf
David,
Attached are Brinnon Group comments on the DSEIS. Comments are organized
. 1) issues in the DSEIS,. 2) mitigation proposed in the DSEIS that is inadequate, and. 3) recommendations for adequate mitigation.
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Also attached are supporting dosuments to our analysis of the DSEIS.
All of the attachments are part of the public record and must appear there entirely.
Attached are
. the Brinnon Group summary. The Destination Resort Impact Study. The UC Berkeley Institute for Research on Labor and Employment study on the impact of Walmart
stores. Water Review by Waterworks Consultantso Water Review by Silvertip Solutions
We'd like to state for the record that DCD refused to extend the public comment period despite requests from a
number of citizens, giving the developer 5l/2 years to prepare the DSEIS and the public 45 days (with 3 major
holidays) to analyze and respond..
The county has a goal of improving tourism revenue in south county. This proposed resort does not meet that
goal.
r It will pay mainly poverty level wages and will drive down the level of wages in the surrounding area,
. It will cost the few taxpayers (many on fixed incomes) in this small county more in laxes for
infrastructure, life safety services, and social services than it returns in revenue.. It may raise utility rates for south county.. It degrades the unique environment that is economically important to the whole peninsula.
. It damages or depletes the entire Black Point aquifer.
If the preferred "no action" alternative is not selected, any approval of this project should be conditioned upon a
complete analysis of the ascertainable and potential economic impact of the proposed MPR during and after
construction.
Before construction begins, the developer should be required to
1
1) deposit the amount of all ascenainable direct and indirect costs regarding services and infrastructwe
into a fund available to local government to cover the costs as they are incurred, and
2) furnish a performance bond issued by a highly rated insurer to cover all potential costs that cannot be
ascertained beforehand, including repairing any environrnental damage incurred over a 50 year period
because of the development and the costs of cleanup and restoration if the project is started but
abandoned.
In this way, local government will try to assure no net economic loss to the cornmunity.
Thank you,
Barbara Moore-Lewis
Secretary/Treasurer, Brinnon Croup
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BRINNON GROUP
ISSUE SUMMARY
Pleasant Harbor Marina and Golf Resort DSEIS
The DSEIS proposes a Master Planned Resort (MPR)on a 231 acre site. There are 3 options:
1. 18-hole golf course, 890 residentlal units, 49,772 square feet of commercial space and resort
amenlties, 33 acres of natural area, and 2.2 million cubic yards of earth moved,
2, 9-hole-golf course 890 residential units, 52,650 square feet of commercial space and arnenities,
80 ac res of natural area, and 1 million cubic yards of earth moved.
3. 3. No action.
We would recommend no actlon at this time untilthe followlng proposed mltigation is accomplished.
When approprlate, this summary will break out the plan into lssues when construction is in progress and
issues afterconstruction is complete. lssues presented applyto both of the action choices.
Construction for this particular proJect is projected as being at least a 10 year process! There is
no guarantee that the construction won't last longer, as the approval process for it has stretched out.
Problems during construction include out of town construction workers and contractors, unstable
ground, county and taxpayer debt and increased taxes, traffic bottlenecks, more trucks on the road, and
chemicals and drugs sent into all Black Point wells.
DSEIS ISSUE INSUFFIC!ENT DSEIS
MITIGATION
PROPOSED MITIGATION
ORDINANCE 01-0128-08 lists a
number of condltlons about
actions the developer needs to
propose in the DSEIS
It is unclear the way the DSEIS is
written whether the conditions
of the ordinance are being met.
ln several instances, such as
allowing other residents access
to resort wells when there is salt
water intrusion in the private
well, the DSEIS appears not to
meet the conditlons.
The developer to prepare a
separate document listing the
conditions from the ordinance
and the ways they are being
addressed in the DSEIS, This will
allow both the public and local
government to track compliance
with the conditions.
DSEIS ISSUE !NSUFFICIENT DSEIS
MITIGATION
PROPOSED MITIGATION
Atthough the marina is included
in the MPR area and ordinance,
construction, traffic, water
usage, and waste water
treatment for that site are not
described in this document. The
DSEIS covers 231 acres of the
development and the
Development Agreement covers
256 acres of development,. Local
governments and citizens cannot
understand the entire impact of
the development with only part
of the information about lt.
Developlng marina under
existing site plan without local
government or cltlzen review
and input,
Developer to revise DESIS to
include all relevant plans for
marina included in the MPR.
Both local Bovernments and the
public have the right to know the
actualimpacts of the additional
developrnent.
There is a "no actlon" optlon in
the DSEIS. This option is not
developed in the document in
the way the two options for
building the resort are
developed. lt appears that it is
not actually being considered.
There are insufficient details
about the no action optlon in the
DSEIS to be able to make a
reasonable compa rison of
options.
Developer to prepare DSEIS
document to include full details
of no actlon option.
ECONOMTC TSSUES
State taxes are9Yo ofsales. 6.5%
goes to Olympla and2.5% comes
to Jefferson County. Taxes
received can be spent anywhere
ln county, while the brunt of
traffic and fire distrlct costs are
born by south county. We will
pay levies attached to property
taxes for school, fire
department, and sheriff costs.
Full tax revenue will not be
avallable until Phase 4 and Full
Build Out, whlle the costs will be
present during the whole
construction period,
The developer and a few
business owners are the only
ones who will experience
economic benefit. Local
government and all county
taxpayers will experience higher
taxes/fewer services,
Developer does not pay
sufflclent taxes to cover costs of
infrastructu re and public servlces
needed by the resort itself,
resort members, and resort
employees.
Development agreement
specifically says that the county
will not ask for more economic
mitigation than is in the MOUs.
Developer to identity true costs
of infrastructure and public
services during and after
construction and arrange to pay
those costs, above what is paid
in taxes, to local and county
government, A study in Oregon
of simllar destination resorts
found that the standard model
for a golf-course subdivlsion-
oriented destination resort
presents local governments and
taxpayers with a substantial net
burden (in the mlllions of dollars)
that wlll resuh in either higher
overall taxes or a decrease in the
quallty of basic services.
OSEIS ISSUE INSUFFICIENT DSE!S
MITIGATION
PROPOSED MITIGAT!ON
Construction jobs llke this are
done by large companies who
have out of town sub
contractors, and out of county
suppliers. The onlyJobs typically
available to local people are
minimum wage day laborers,
Profits from the companles and
wages from most of the workers
will leave the county.
Conditions set for the DSEIS
require as much employment of
county residents as possible, as
much use of county contractors
as possible, and sourcing
construction materials frorn
within the county,
The DSEIS states that 1750 jobs
will be created, but this is the
number for all four phases and
many of the Jobs will be the
same for all four phases
Set a 20% threshold for contracts
given to county resldents and
ernployment of county residents.
Developer to calculate actual
number of construction jobs
over the 4 phases.
The average median income
(AMl) in Brinnon is 542,579. The
number of direct jobs created at
or below 80% of AMI are 223.
Construction and lndlrect jobs
with an income of S34,143 equal
342. 83% are considered
poverty level by U.s. Department
of Health and Human Services
sta ndards.
r 48 jobs are above AMl,
ranglng frorn 536,000 to
Ss2,9tar 108 jobs are 510,593 to
St+,:8 t
. l2L Jobs are from S19,2qt to
s28,ooo
2014 Poverty Guldesllnes of
USDHHS:r Family of 5: 527,910r Family of 4: 523,850r Family of 3: 519,790o Family ol2: %15,730
Creation of substantial number
of poverty leveljobs in south
county and an increased need
for taxpayer funded health and
social services.
Developer to prepare a report of
the services uses by employees
with wages below the Brinnon
AMI and an estimate of the cost
of those services. Developer to
pay for costs of servlces to these
employees provided by tax
funded entitles. A report
prepared of minimum wage jobs
at Walmart estirnated that
Walmart costs surrounding
communities S13 million in
economic actlvlty and S14,5
million in lost wages over 20
years.
DSEIS ISSUE INSUFFICIENT DSEIS
M!T!GATION
Taxpayers will subsidize life
safety services
ln 2013 there were 249 EMS calls
for about 800 Brinnon residents.
Add the estimated 2000 resort
resldents and there wlll be about
520 calls a year. The MOU with
the fire department is for
S3,333/month. This is not
enough to hire another EMT.
The inadequate funding can go
for 10 years or more. Also, local
fire department is responsible
for all traininS costs and upkeep
of used ladder truck Statesman
will provide...all rneaning hlgher
local taxes for fire department.
The developer says if the resort
has trained EMT staff, they wlll
be available to surrounding
community.
For police, the developer will
provlde a 500 square foot room
(srnaller than a 2 car garage) but
no budget to supply and staff
it...meaning higher,taxes for all
county residents,
The Sheriffs Department says no
addltlonal county resources will
be needed if resort has privete
security.
Developer to prepare analysis of
true costs of life safety services
and to make provisions to pay
for those services to local
governrnent entities.
Developer to present plan for
trained EMT staff,
Developer needs to describe role
and training of private security
that will replace county sheriff
staff, What willbe their
authority? Willthey be able to
ha nd le traffic accidentsfatalities
and other emergences involving
resort residents and/or Brinnon
residents?
Taxpayers will subsidize road
improvement and repair for
heavy equiprnent
None Developer to prepare analysis of
true costs of road lmprovement
and repair and rnake provisions
to pay for those services to state
and local government entities
lnternet service to local area ls
inadeguate because of volume
of use of existing equipment;
resort use will compound
internet access problems.
None Developer to pay to upgrade
internet infrastructure to the
same speed consumers receive
in the metropolitan areas,
PROPOSED MITIGATION
DSEIS ISSUE !NSUFFIC!ENT DSEIS
MITIGATION
PROPOSED MITIGATION
Af ttf totrstf rr-fff o.tr
280 jobs are projected, with the
maJority low income or
minimum wage. lt's not stated
how many of these Jobs are part
time,
Developer must build low
income housing or provide land
or money for it,
Developer to state how many
jobs are part tlme. Developer
subsidize rents for low income
workers in the housing
constructed or present evidence
that wages will allow these
workersto rent thls houslng. .
Developer to pay for costs of
services to these employees
provided by tax funded entities.
Developer will provide a 500
square foot clinic for use by
medicalpersonnel; use by resort
members only,
Developer to use local medical
and hospltal resources but to
provide mitigation only for
resort members.
Developer to prepare analysis of
true costs of life and safety
services and to make provisions
to pay for those services to local
government entitles, including
local hospitals and medical
services subsldlzed by local
taxpayers.
MOU with Brinnon schools
specifies 5z per tee tlme to go to
schools and scholarships to be
given to Jefferson County school
children.
No estimate of real revenue
from tee tirnes. No dedicated
fund for scholarships; no details
of who will be eligible.
Developer to prepare report on
income to Brinnon school and on
scholarships to Jefferson County
children. For example, are home
schooled children eligible?
Money needs to be placed in
dedicated account before
construction begins that will
cover scholarshlps
TRAFFIC
Data used for the traffic study is
totally inadequate, Highway 101
on the east slde of the Olyrnpic
Peninsula is the only non toll
direct connection to the l-5
corridor and is used for all major
shipments of goods, as well as
for resldentlal and tourist traffic.
When serious accidents occur,
101 is shut down for long
periods of time, affecting both
commerce and quatity of life.
There are serious economlc,
health, and safety costs for the
entire Peninsula.
The Loss of Service data is from
2000, The actual car trip count is
from 2005. The data does not
count accldents that do not
occur at intersections (leaving
out collisions with anlmals,
McDonald Cove, and the tanker
truck that exploded on the
Duckabush hill, Consultants paid
by the developer have
consistently minimized both the
effects of unsafe driving and
unsafe drlving conditions on 101
in their reports and ln response
to comments on their reports.
The developer to do an up to
date traffic report with data
from 201,4 or later. This will
include all accident reports
between Olympia and 104. (The
Peninsula Daily News reports
that tourist trips increased 25%
durlng 2014 and the Olympic
National Park has similar data).
Developer to present adequate
mitigation for current traffic.
Developer to pay for mitigation
for projected add itiona I traff ic.
DSEIS ISSUE INSUFFICIENT DSEIS
MITIGATION
PROPOSED MITIGATION
Heavy equipment on highway,
increasing congestion and
accidents
Developer says earth will be
moved within resort area
because it will be used for
construction materlals; no
evldence gravel fits
specifications
Developer to present evldence
that the earth moved from the
site qualifies for construction use
and provldes data on the
amount that will be moved on
the site vs what wlllbe moved
on the highway. Developer
proposes mitigation for
increased truck traffic and pays
for mitigation,
Machinery used will be scrapers,
excavators, bulldozers, wheeled
front loaders, a portable
screening pla nt, feed-hoppe r,
portable gravel crusher, finlshing
crusher, water trucks, conveyor
belts systems, and
vibratory/sheep-foot compactor
rollers. This will be 1200 feet
away from the closest exlsting
residence,
None Developerto present report on
nolse lmpact on other Black
Point residences and to propose
mltlgation. Oeveloper to pay for
mitigation.
Affiitins.{ruq,ton
There will be up to 4100 added
daily trips from resort trafflc on
state and local roads; there was
a 25% increase in tourist traffic
in 2013 alone on the Peninsula;
there will be bottlenecks in
Hoodsport
Buses will run to Seatac and
visltors will take a route to resort
that includes lengthy ferry
waitlng and heavy Seattle traffic
instead of the easier ; traffic
volumes calculated with out of
date and incomplete data
Developer to do traffic analysis
with recent data on traffic
volumes and wlth all accident
data. Developer will calculate
road improvements needed
from accurate traffic data and
rnake provislon to pay for those
irnprovements. Developer to
hold local meetings discussing
traffic lmprovements with local
residents before proceeding.
Developer to provide proof of
estimates of bus usage.
The increased traffic along Hood
Canalwill increase the nitrogen
problems and dead zones ln the
Canal.
Buses will run to Seatac and
visitors will take a route to resort
that lncludes lengthy ferry
waiting and heavy Seattle traffic
instead of the easier ; traffic
volumes calculated with out of
date and incomplete data,
Developer to do an analysis of
the envlronmental impact of the
increased traffic on the health of
Hood Canal, using current
science, and propose mitigation.
DSEIS ISSUE INSUFFICIENT DSEIS
MITIGATION
PROPOSED MITIGAT!ON
WATER
The water rights were awarded,
but addltionalwells were never
drilled, A pump test was
atternpted on an existing well,
but was aborted after
equipment failure, so draw down
rate and avallable volume was
never proven. Usage amounts
have not and will not be
determined untilfull build out,
with the caveat that for each
phase durlng the 10+ years of
construction adequate water
must be proven.
For each phase during the 10+
years of constructlon, adequate
water must be proven.
Developer must test the existing
well and provide adequate data
on drawn down rate and
available volume. Developer
must show adequale water
supply not only for resort but for
all Black Point wells, existing and
future. Computer models which
have been used are not
acceptable.
Developer must define what
mitigation will be provided if
volume is not sufficient and the
aquifer is depleted for all wells.
The water supply well ls
developed below sea level and
will always be susceptible to salt
water lntrusion or cause
intrusion to the wells along the
south and east coasts of Black
Point. This is not a well used for
testing sah water lntrusion
Yearly monltorlng Require the developer to test
the water supply well monthly
for salt water lntrusion and to
submit the reports to the county
health department,
The salt water lntrusion samples
are taken from 3 Statesman
wells that are not located where
sah water intrusion is likely to
happen
Yearly monitoring Require the developer to test all
water supply wells monthly for
salt water intrusion and to
submit the reports to the county
health department.
The developer is required bythe
ordinance conditions to provide
access to the resort water
system by any neighboring
parcels if saltwater intrusion
comes an issue for them.
Restrictive Nelgh borhood Water
Policy that requires 3 years
monitoring of private wells
before a claim can be made and
the developer to decide if claim
is valld.
County health department to
decide if well has salt water
intruslon. lf so, developergives
access to resort system at
standard county hook up and
rnonthly usage rates.
osEts tssuE INSUFFICIENT DSEIS
MITI6ATION
PROPOSED MITIGATION
Statesman's tests for salt water
intrusion are to be collected
quarterly, but to be submitted to
the Department of Ecology once
a year. Thls means residents
with neighboring wells may have
to wait up to a year to start the
process of provlng salt water
intrusion is due to the water use
ofthe resort.
Yearly rnonitoring Require the developer to test
the water supply monthly for salt
water intrusion and to submit
the reports to the county health
department
The pumping plan for the supply
well wlll influence salt water
intrusion
None Require the developer to submit
a pumping plan that will
minimize salt water intrusion in
resort and neighboring wells.
Attortoi*iu*iiin
There is one aquifer on Black
Point, recharged by rainwater.
The resort wells could deplete
the aquifer.
Water studies are done by
computer modeling.
Developer to do actual water
studies on the property to be
developed and to prove the
avallability of water for all
residents. lnclude wells that
already have salt water intrusion
(not in DSEIS). Require a bond to
compensate other residents if
aquifer is depleted.
Developer to prepare report
about how resort will be
mothballed or environment
restored in case of aquifer
depletion. Developer to provide
a bond to cover costs of
rnoth ba lling and/or restoration.
There already is salt water
intrusion in Black Polnt wells;
resort wells could cause more
sah water lntrusion not onv in
adjacent wells but in resort wells
as well,
Put up a bond that would cover a
desalinization plant.
It is unclear how much water is
projected to be used. Figures
from 70 to 175 (standard usage)
are in the document.
Forcing waste water down wells
to recharge the aquifer.
Developer to do water plan with
consistent numbers that fits with
historical supply and not
recharging the aquifer ln thls
way,
DSEIS ISSUE INSUFF!CIENT DSEIS
MITIGATION
PROPOSED MITIGATION
The aquifer is recharged by
rainwater. There are extensive
changes to the land that will
affect the amount of permeable
land. There is no information on
how low rainfallyears would
affect the assumptions of the
water model. Because
everything is based on a
computer model, there is no real
proof that recharge will take
place as described with the
development of the land.
Recharge may be significantly
less.
None Developer to present a plan for
drought years, taking into
account the changes in the
landscape to be made by moving
at least 1 million cubic feet of
dlrt and rock. Developerto
demonstrate that recharge rates
will be as projected in DSEIS.
Statesman has put several
restrlctlve conditions on what an
individual well owner has to do
to prove thelr potable wellwater
was lost due to Statesman's
actions.
This is in conflict wlth the DOE
conditions on the water rights,
including Statesman conditions
that they can demand additional
evidence that they are at fault. lf
the developer does accept fault,
the owner may hook up, at
Statesman's cost, to their water
system and then they will have
to pay for it's use, This is also in
conflict with the conditions DOE
placed.
Developer to rewrite
Neighborhood Water Poliry in
concert with owners of local
wells so that local owers'
concerns are answered. County
health department to facilitate
this rewrlte.
The util'rty district created for the
operatlon of the Water Systern
and Sewage Treatment Plant has
to make enough profit to cover
maintenance and future
replacernent of deterioratln g
equipment.
Sometime ln the future the
entire Sewage Treatment Plant
will have to be replaced, Owners
of prlvate wells that are
compromised by the water use
of the resort and want to hook
up to the resort water system
wlll have to pay unspecified fees.
The developer to clarifo fee
structure of utility district,
includlng hook up fees and
monthly fees for owners of
private wells who use the utility
district systern.
DSEIS ISSUE INSUTFICIENT DSEIS
MITIGATION
PROPOSED MITIGATION
WASTE WATER
No Class A water treatment
system removes soluble
chemicals. This means that the
medications people use daily will
not be removed from the water.
Statesman plans to use the
water in irrigation, fire
suppression, and to recharge the
aquifer. The water will be forced
down wells into the aquifer,
where it will contaminate any
water drawn from the single
aquifer,
None Prohibit the developer from
contaminating the aquifer with
chemicals left from the water
treatment or require water
treatment that removes all
chemicals.
OTHER
All storrnwater runoff from new
pollution generating impervious
surfaces must be treated before
discharge to on or off site
locatlons to comply with
Stormwater Management
Manual for Western
Washington.
This does not indicate how they
are going to treat the water,
Mitigation can help with
stormwater runoff, but not
eliminate it. Developer to
prepare report on ways to
mltlgate the stormwater runnon.
These can lnclude
a stormwater fihers (which go
onto the stormwater
entrances and filter out oils
and other pollutants; they
should not be used by
themselves for they don't
always work),
tarps (which will trap water
while allthe earth is being
moved; this will help keep
the water from running off
and glvlng the construction
workers time to filtrate the
water into storage
containers to be cleaned).
and
controlllng the erosion
(controlling how workers are
move the soil around the
work site may save water
from running off into the
Hood Gnal).
a
a
DSEIS ISSUE INSUFFICIENT DSEIS
MlTIGATION
PROPOSED MITIGATION
Movlng soil releases the stability
of the ground. Moving at least 1
million tons of earth at the site
will affect the stabillty of the
ground. lt wlll also affect the
stormwater, all surface waters
from rain and snow. This is
runoff that does not collect ln
the ground. The plan to rnove
storrnwaterto a retention pond.
That pond will let the water sink
into the aquifer, transferrlng the
pollutants of construction to the
aquifer, Less stability of the site
wlll cause more stormwater to
run off, be absorbed into the
aquifer, or go in Hood Canal.
Pollutants include oils,
antifreeze, and other liqulds
from construction equ ipment,
pesticides, and fertlllzers.
Storing stormwater in holding
pond or allowlng lt to go into the
Canal. Various methods of
treating pollutants in water.
Lack of information on chemicals
(herblcldes, pesticides, or
fertilizers)that will be used for
goH course grass maintenance or
any dlscussion of how the
developer plans to protect
groundwater or stormwater
runofffrom the use ofthese
chemlcals.
Developer to provide evidence
that plans in the DSEIS treat
stormwater to remove
pollutants are realistlc,
The BMPs (Best Management
Plans) for golf course
maintenance needs to be
explained in detail.
Natural wetlands ln the resort
area will be cleared and used as
retention ponds, These
wetlands are pollutant removal
systems and clean the ground
water.
Destroying wetlands will destroy
the natural systems now intact
and the wetland will no longer
be able to help in natural
f iltration of stormwater.
Wetlands mitigation plan has not
been done.
Developer to revise plan to leave
wetlands as wetlands. The kettle
with the wetland needs to be left
as it is because this will help the
project to clean some of the
stormwater runoff that will be
caused by this project.
Developer to do wetlands
mitigation plan before approval
of DSEIS.
Biosolids will be sent to Shelton
for processing
No proof of agreement about
disposal of biosolids, lnadequate
information on amount of
biosolids. lncreased truck traffic
for the biosolids, Unclear lf thls
is included in the traffic analysis.
Developer to prepare a report on
biosolids, including proof of a
plan to dlspose of them and an
estimate of truck traffic that will
be generated.
Mason County PUD f1 has
agreed to supply power for the
first phase,
Lacking in details about PUD
services to be supplied and how
they wlll be funded; no mention
of possible rate increase for all
rate payers in PUD #1 from
increased energy usage.
Developer to present agreement
with PUD for public review,
including possibility of rate
lncreases for all rate payers.
March 2@9
:::iti '
Fiscal and Economic lmpacts of
Destination Resorts in Oregon
__t
l:.
,'
t
Fisca! and Economic lmpacts of
Destination Resorts in Oregon
March 2009
For: Central Oregon landVatch
By: Eben Fodor
Fooon & AssoctATESuc
Commurdty
Plennlrg Conruhlrg
Eugene, Oregon
www, FodorandAsso ciates. co m
rVith research and analysis by
David Hinkley
lmpact of Destlnation Resorts in Oregon
March 2009
Covcr photo crcdit: Sandy Lonadalc
p"ge I
Fodor & Associates
Table of Contents
3. Thornburgh Fiscal Impact Analysis
Room Taxes
5. Thornburgh Resort Costs...,......
Transponation System Costs,.........
School Facilities Costs..........
Fire & EMS System Costs..........
Public Safery System Costs.
Parks & Rec. System Costs.
General Government Facilities.
6. Fiscal Impact Summary,..
Revenue Summary
Costs of Facilities
Services Impacts
Fiscal Impact Conclusions
7. Thornburgh Resort's Economic Impacts..,...
Job Creation and Employment Impacts,..
Vho t$7ill Fill New Rcsort !obs: Locals or Newcomers? ............
Housing Impacts of Thornburgh Resort
Economic Risks .,,..,...
Economic Impact Conclusions .................
8. Implications for Impacts of Destination Resons in Oregon
Appendices
A-1, Property Tax Explanation
A-2. Transient Room Tax Explanation..........
A-3. Populadon Projection Used in Study.....
A-4. Tax Bases for Jurisdictions Used in Study
A-5. About the Authors
lmpact of Destination Resorts in Oregon
March 2009
l3
22
24
27
40
48
53
59
64
67
67
67
68
69
7A
7L
76
78
8l
83
85
86
89
90
94
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99
100
page 2
Fodor & Associates
lntroduction
The recent proliferation of destination resorts, and the number of new resorts
currently being proposed io Oregon, raises concerns about the potential impacts of
these resort on local communities, cities and counties. Based on a literature review
performed as paft of the research for this study, there are no independent, third-
party studies evaluating destination resort impacts. The only readily-available
sources of information are the resort developers' own studies prepared as part of the
land-use application materials.
This report represents the best effort to date to assess the impact of destination
resorts in Oregon. It is a complex task and there are an almost unlimited number of
potential impact areas that could be studicd. To establish a manageable scope of
work within the proiect budget, the focus of this study is on the fiscal impacts of
resorts. Fiscal impacts are those that affect local governments and local taxpayers.
They include both the tax revenues that will be generated and the costs to provide
the services and infrastructure required to support the development. In addition to
fiscal impacts, the economic impact of destination resorts was evaluated iu terms of
job creation and housing impacts.
This study does not address any of the environmental or social impacts associated
with residential and recreational development of resorts in the Stare. Instead this
study focuses on the monetary (fiscal and economic) impacts these destination
resorts have on the local communities where rhey are being built.
In order to study resort impects in detail, the proposed Thornburgh Resort in
Deschutes County was used as a case study. The Thornburgh Resort is to be located
near Redmond and just wcst of the existing Eagle Crest Resort. The Thornburgh
Resort would be a medium-sized resort and was considered to be fairly typical of
past and future resorts in the State.
This report is intended to be transparent. All sources of information are
documented and all the calculations and methodologies are explicit. Where data
were not available, rcasonable assumptions were made. These assumptions are also
clearly stated. In some cases, where good dau were not available, alternative
scenarios were used to examine a range of possible conditions.
lmpact of Destination Rssors in Oregon
March 2009 page 3
Fodor & Associates
l, Destination Resorts in Oregon
Destination resorts tlpically involve 500 to 3000 single-family homes and various
recreadonal amenities, such as golf courses and clubhouses, in an attractive narural
setting located away from existing cities and growth centers.
The term "destination resort" has a unique legal meaning in Oregon. Special smtus
was given to "Destination Resorts" allowing them outside urban growth boundaries
under Goal 8 (Recreational Needs) of the Land Use Planning Program.rThis action
appears to be based on the assumption that the tourism benefits would outweigh the
costs associated with this form of rural dcvelopment. In 1987, provisions for
destination resorts were enacted into state law and codified in Oregon Revised
Sututes (ORS) 197.435 through 197.+67. According ro ORS 197.d*0:
Tlw Legulatioe Assembly finds that:
(l) h is the Poliq of this state to prmnte Orcgon as a oacation destinatim and to
encourdge wurisn as a oaluable segnent of our state's econony;
(2) There is a grouting nted to prooide year-round destination resort accotnnndations
to attract aisiws and encourage them rc stay longer. The establishmmt of
dcvinadon resorts will prwide jobs for Oregonians and contribute to tlu state's
economic deoelopmmt;
(3) k is a difficvlt and conly process tu siu and establish destination resorts in rural
areas of this state; and
U) The siting of destination reson facilities is an issue of swteatide concem.
The State Legislarure attempted to enforce the tourism aspects of these
developments by requiring a certain minimum amount of overnight
accommodations and certain visitor-oriented facilities.2 The intent was apparently
that without such reguirements, destination resorts would likely be little more than
the classic, sprawling rural subdivisions that the Land Use Program was intended to
prevent. However it is unclear that resorts are actually meeting their overnight
accommodations requirements due to a lack of reporting and enforcement
mechanisms.
In spite of State requirements, residential lots and private homes outnumber
overnight accommodations by more than two to one, Residential lot sales represent
the primary feature of existing and proposed destination resorts. Questions remain
as to whether the destination resorts are essentially rural subdivisions that are
increasingly having adverse impacts on cities, counties and the sate that are not
I Goal 8: Recreational Needs (OAR 66G'015-0000(8).
2 State Law requires that destination resorts permanently allocate one overnight housing unit for
every two residential units in r$(Iestern Orcgon and two overaight units for every five residential units
in Eastern Oregon (see ORS 197.445(4)).
lmpact of Destlnation ResorB in Qregon
March 2009 pase 4
Fodor & Associates
adequately offset by tourism benefits. Our literarure review found no studies
examining these impacts in detail, other than those prepared by the individual
resort developers themselves. So we are left with an inadequate understanding of the
full impacts these development are having across the State.
The Growth -o{ Pgstination Resorls
Destination resorts have proliferated rapidly in the State and will have incrcasingly
significant impacts, both positive and negative. At this point, Oregon has eight
existing resorts, most of which are historic or pre-Goal E resorts, Another seven are
approved and under construction, and thirteen more have been proposed. Figure l-1
shows these existing, approved and proposed resorts on a map of the State. Central
Oregon shows tbe highest concenuation of resons in all stages of developmeot.
Sourhern Oregon and the Coast are also seeing resort development. Deschutes
Counuy has seen far more resort development than any other county, but Crook,
|efferson and Jackson counties are also seeing a high level of resort development.
Figure 1-1: Deslination Resorls in Oregon by Stalus
8@:lot, B.y.rd
lmpact of Destination Resorts in Oregon
March 2009
Wr llowr
lrorr!$
umrtl
Unlor
WrfcoPoII
5*. Jall''ton Wh!.lor
Llnn 0runt
Crook
D.achutr.
L.na
Iu[rmrh
Hood RlYar
3hrmn
W!3hlnglon
nn mook
Ytmill
Llncoln
Banton
f rrrrr,,g
Und..
tQ *cpot
I fultdqt l
Oougll.Cooa L!t.Hrmry
Cuny
Nhmrtlr
***r*
o
M.lh.ur
paEe 5
Fodor & Assoclates
Chckrm.r
{Erkal
Table l-l provides a more-detailed summary of destination tesorts that are
completed, under construction, and proposed in the State. The land use and housing
unit data from this table is illustrated graphically in Figures I-2 and l-3.It is
evident that destination resorts are expanding rapidly. Ifthe recently-approved and
proposed resorts are built, Oregon's destination resort capacity will approximately
triple.
The rapid growth in destination resorts raises a number of questions. Is there going
to be a market demand for so uluch resort capacity? \Pill new nesorts compete with
established resorts and undermine their viability? And will thc economies of Central
Oregon and other popular resort locations become wlnerable in the event of a
possible downrurn or collapse of the resort market?
lmpact of Destlnatlon Resorts ln Oregon
March 2009 paSe 6
Fodor & Associates
Table 1-1
Destlnatlon Besorts ln 0regon, January 200901
Goal 8?Auss Homeslles TotalResons
Eandon Dunes
Eagle Crest
Sunriver/Crosswater
Black Butte
lnn ol ttn Seventh lrrlt.
Running Y Ranch
Otter Crest
Salishan
Goal 2 exception
yes
NO
Pre-Goal
Pre-Goal
YeS
Pre-Goal
Pre-Goal
Deschutes
Deschutos
Deschutes
Deschutes
Klamath
Llncoln
Llncoln
2,000
1,772
3,3'r0
1,300
310
6,000
35
750
600
891
3,220
1,251
20
896
144
369
150
585
936
425
210
305
130
0
750
1,476
4,1 56
1,676
230
1,201
274
369
$ublolal:15,417 7,391 2,141 10,132
Under ConstrucUon
Brasada Ranch
Hldden Canyon
Remlngton Ranch
Caldera Springs
Pronghorn
Tetherow
Paradise Ranch
Propored Eesorls
Yes
Yes
Yes
Yes
Yos
Yes
Yes
Crook
Crook
Crook
Deschutes
Deschutes
Deschutes
1,800
3,250
2,079
390
640
698
320
9,171
300
1,225
400
160
215
298
67
900
3,675
1,200
480
645
677
267
600
2,450
800
320
430
379
200
79Subtotal:
Crossing Trails Yes
Pacific Rogue Ranch No
Aspen Lakes Yes
Skyline Forest NoThomburg Yes
Heaven's Gate Yes
Hkldon Valley Rancho Yes
Table Bock Yes
Pondorosa Land & Catte Yes
The Metolian(2) Yes
Cresconl Creek Ranch Yes
Naplos Golf & Beach Yes
Elkhom Estates Yes
Crook
Curry
DBschutes
Deschutes
Deschutes
Douglas
Jackson
Jackson
Jeflerson
Jeflerson
Klamath
Lincoln
Marlon
580
592
550
1,500
1,970
500
883
2,'100
3,500
640
5,000
576
4U
240
150
100
0
425
200
TBD
600
1,000
180
785
0
40
730
650
400
950
1,375
400
TBO
1,800
3,500
630
2,750
1 ,155
190
490
500
300
950
9s0
200
TBD
1,200
2,500
450
1,965
1,155
1s0
Subtotal:1 0 1
(2) Dab on numbor ol unib not linal at fiis time (TB0
(3) Dwelling units only. Holel rooms vvere not included
126
wh0n in ormalion was available to separate fiem lrom dwelling units. Where
dala lor fie number ol ovomiglrt units wls nol avaihbh, roquired Stato minirums were applied lo Goal E resoG.
lmpact of Destination Resorts in Oregon
March 2009 pate 7
Fodor & Asrociates
0n
Destinallon Resort Acres
Total= 43,509 acres
Undcr
Con!trucllon,
9,1T1
ErlSing Rsrrlq,
15,477
Proposad, 18,855
lmpact of Destination Resorts ln Oregon
March 2009
Figure 1-2
Figure 1-3
Destlnatbn Resort Housing Unfts
(Homes & Oerr*ght Units)
Exldlng Re$rlq
10,132
Under
Constructlon,
7$44
Proposd, 14,530
page 8
Fodor & Associates
The Destination Resort e,ontroversy
The booming growth in destination resorts has led to increasing concern about their
impacts and more questions than answers. Do we need more destinadon resorts, or
do we have too many already? Are these resorts beneficial to the local economy, or
are they iust generating profits for a few and low-wage iobs for the rest? Are local
governments reaping giant tar windfalls, or are they incurring more costs than they
can recover? Are resons allowing more Oregonians to vacation in beautiful rural
areas, or are they destroying the beauty of the Iandscape and rural character
Oregonians currently enioy? Are resorts well-planned developments that are
carefully integrated with the narural environment, or are they just low-density rural
sprawl and ecological disasters that threaten ground water and desuoy habitat?
Regardless of the answers to these questions, opposition to new resorts has grown.
For example, Iast year residents of conservative, rural Crook County voted 2 to I to
halt the spread of resorts in that county. According to an editoria,l in The Oregonian
newspaper,3
Crook County op?onents have some justification in warning that these projects are
essenially large nbdioisions under the guise of destinatian resorts, They aill, as
critics conplaiq have a significant impaa on the county's oehicle traffr.c, wat*
suppb and wildlife habitat.
Pineville boostm of the nal resorts cotectly point out thdt they contribute heaoily
through Fopetry taxes and create hundreds of iobs. But opponenu are eqtally correct
in noting that the inJlux of lomes will infiate land ualues, Pttttiag unwelcome
pressure on farmland ond making luusing unaffudable for workers who will fill all
those loa,s-pajting nevt jobs,
Iobs for Vhom?
In spite of high unemployment in Central Oregon, alarming information was
reported in the Bend Bulletin last year that many of the local resorts were hiring from
outside the U.S. to fill their jobs.a According to the articlc, instead hiring locally, the
Sunriver Reson actively recruited foreign workers at overseas job fairs, hiring 85
workers from countries such as Litbuania, Brazil and Mexico. Inn of the Seventh
Mountain hired I I workers from Jamaica and Indonesia. Other resorts may be doing
the same. Even if some resort$ are not hiring foreigners, studies show that many of
the new jobs they create will go to newcomers rather than locals.'
3 "Putting the Brakes on Destination Resotts," editorial, Tlu Otegonion, May 27,2008,
a *Unemployment might be high, but resorts still utruggle to fill some jobs," Tfu Bulledn, May ll,
2008,t See: lYlo Benefits ftwt lacal tob Growth" Migants or tlw Original Residents, by Timothy J, Bartik,
Regional Srudbs, vol. 27, No. 4, 1993.
lmpact of Destination Resorts ln Oregon
March 2009 page 9
Fodor & Assoclates
Resort-o.r Rural Subdivision?
It is increasingly clear that the primary incentive for building destination resorts is
the traditional profit resulting from the real estate sales of residential lots.
Developers rarely build more tourism accommodations than they are required to
provide by law. The resort-oriented features appear to be little more than the vehicle
by which the subdivision is allowed. Certainly the golf courses and resort amenities
enhance the value ofthe residential lots, but developers recognize that the resort
components are marginal, risky and often unprofitable investments.
Meeting the tourism-oriented overnight accommodation requirements of Goal E has
been challenglng for resort developers, Newer resorts are focused more on
residential lot sales and Iess on tourism accomrnodations. There has been an
increased use of smaller, lower-cost units, such as hotels and timeshares, to meet
overnight lodging requirements.6
Resorts that are close to urban areas may end up functioning more like suburbs. The
Eagle Crest Resort, for example, is less than six miles from downtown Redmond,
making urban amenides and iobs just a IO-minute drive away. Some resor$ mey
evolve into rural communities or tourns of their own. The Hidden Canyon Resort for
example, which will be located in Powell Butte (Crook County), will have a
population roughly equal to that of the City of Madras, if it is fully developed. The
proposed Ponderosa Resort could have a population three times that of the City of
Sisters.
Effects of the Natio.nal Recersion
The dramatic expansion of the destination resort industry in Oregon has been fueled
in part by a booming real estate market that seemed to have no end. Ten years of
unprecedented growth peaked in 2007 and has declined rapidly since. The economic
models for destinations resorts were based on assumptions of continued high land
values, high real esmte demand, and rapidly e:qpanding tourism. However, the
ongoing collapse of the inflated netional real estate bubble and the ensuing
economic downturn requires that these assumptions be revised.
In the past, the residential lots in a destination resort have been largely purchased
by individuals as second homes and investment properties. The curent economic
recession will contract the market for second homes and will reduce the appeal of
real estate investing. Unless the national economy has an unexpected, drrmatic
recovery, more and more potential homebuyers will be economically constrained.
Potential tourists are likely to reduce travel and shun expensive vacations to save
5 See: Desrinotion Reson Sitiz& e presentation by Bob Comight, DLCD in Prineville, October 15,
2008, http:/Apww.oreeon,sov4l"CD/docs/rulemakins/101508/item4 att-D.odf.
lmpact of Destinadon Resorts in Oregon
March 2009 page l0
Fodor & fusociates
money.T A Central Oregon economic forecast shows tourism to be "extremely weak"
and contracting through at least the end of 2010.r Owners of second homes may find
the cost of owning two homes to be too expensive. Under this scenario, it is likely
that more of the lots created in destinatior resorts will be purchased for primary
residences. \7e may see a similar shifi in existing resorts, with more second homes
and rental properties changing to primary residences. Resort developers may
respond to the weak economy by downscaling homes to make them more affordable
as primary residences.
I n fra st ru c tu re_I[e_g4 s
The residential component of the destination resort functions much like any
subdivision in a rural area. It is removed from the retail services and amenities
people require. [t is lacking adequate infrastructurr and services required byan
urban population. Greater travel distances are required for commuting and meeting
daily needs. This generates demand for more roads with more capacity. \Ufhen traffic
growth is projected in Crntral Oregon, including destination resorts,
the funding gap to bring the state highways to standards for traffic congestion is
approximately $ZSO million over the next 20 years.'
Resorts located close to cities and towns run the risk of becoming more residential,
as residents have access to the nearby urban amenities homeowners desire. The
proposed Thornburgh Resort is to be located approximately seven miles from
Redmond. Such resorts may have the effect of attracting higher-end housing away
from the cities, which underrnines the cities'property tax base while increasing their
effective populations and adding ro demands for more roads and schools.
County and municipal governments will be severely squeezed for financial resources
over the next few years as a result of;r Decreasing property values that reduce properry tax revenues;. A weak economic outlook thet may reduce other sources of income;. Govcrnmelt costs increasing at rates exceeding Measure 47 and 50 limits on
property tax increases of 3%; and,
o Decreasing Federal payments to counties in lieu of timber revenues.
tVill the new destinadon resorts be a golden goose, or the straw that breaks the
camel's back? Fiscal impact analysis can provide the answer.
7 Early reports indicate that maior tourism destinations such as Las Vcgas are sceing significantly
lower tourism rcsulting from the recession. Gaming revenues there arc down 25,87o, room ralec have
declined L4.3yo, and many construclion proiects have been canceled or sceledback, according to the
Los Angeles Times (published in The Register-Guard Newspaper, 12126108).
E Presentalion Uniud Staces and Cental Ongon Economic Retievt and Forecast, by Dr. Bill Vatkins,
Executive Director, UCSB Economic Forecast Project, January 2009, http://www.ucsb-
cfn. com/P PJL2 0"09/Q R_V atk i n s. ep t.
'Source: Gary Farnsworth (ODOT), Mecting Minutct for Central Oregon Area Commission on
Transportation, COACT, September 13, 2W7, page 3.
lmpact of Destlnation Resorts in Oregon
March 2009 page I I
Fodor & fusociates
2. The Thornburgh Resoft Case Study
In order to examine the irnpacts of destination resorts in detail, a typical resort was
selected for in-depth analysis. The proposed Thornburgh Resort has a similar profile
to most of the resorts in Oregon, It is typical in terms of its size and mix of
development. It is to be located in Deschutes County, home to more destination
resorts than any other county in the State. Due to its pending application, extensive
current materials are available on the planned resort.
As shown in Table 2-1, the proposed Thornburgh Resort is to have 950 residential
ownership units and 425 overnight units, for a total of 1,375 residential units. The
application proposes a S0-room hotel with restaurant, three golf courses, recreational
facilities, and retail space.
Table 2.1: Thorubutgh Resofi Profile for Impact Analysis
Melric
otal acres
Acres open space (incl. Golf)
Residential ownership units
Residential overnight units
Hotel rooms
Goll courses (regulatlon 18-hole)
GoJf courses - par 3
Other facilities:. Retail spaceo RealEstate Sales otfice. Hotel and restaurant. Recreational. Convention facility,
business center
Water system
Sewer system
Peterson
Eoonomic Beport
1,980
No info
1,400
Unclear
100
3
'l
Land Use
Application
20,000 ttz
15,000 ftz
75,000 ft2
60,000 ft2
Unspecilied size
6 new wells,2
reservoirs
2 drain fields
Used in lmpacl
20,000 ft2
15,000 ft2
75,000 ftz
60,000 ft2
Assumed part
ol hotelirest.
6 new wells, 2
reservoirs
2 drain fields
1
1
1
,970
,293
9s0
425
50
3
0
1,970
,2810)
950
425
50
3
0
(1 ) From Final Masler Plan.
Since the Thornburgh Reson is unbuilt, certain types of data were not available. For
example, the ultimate occupancy rates and vehicle trip generation rates were
unavailable. To reflect the most likely scenario for the Thornburgh Resort at full
buildout, data was used from the nearby Eagle Crest Resort. Eagle Crest app€ars to have
a similar profile in terms of the mix of uses and relative price ranges for lots and homes.
lmpact of Destination Resorts in Oregon
March 2009 page 12
Fodor & Assoclates
3. Thornburgh Fiscal lmpact Analysis
Fiscal impact analysis generally refers to the evaluatiou of the financial and
budgetary effecm of alternative land uses or public policies on local governmental
iurisdictions or other local service providers. These may include cities, counties,
school districts, special-purpose districts, water and wastewater service disuicts, and
regional authorities. Sometimes state governments are also impacted.
S7hile the focus of fiscal impact analysis is on government revenues and costs, the
broader public policy question is: How will this actiou or decision affect local
Bxpayers and the general public? Answers to this broader question allow elected
officials to determine how the proposed action will affect local nx rates or the
quality of local services. This question tends to be one of most interesting to local
voters and the public in general.
As shown in Figure 3-1, the fiscal irnpact analysis compares the changes in revenues
with the changes in costs of a local government entity that result from an action or
decision. Revenues include taxes, fees and other income. Costs include operation
(services) and maintenance (O&M) and new or expanded capital facilities and
equipment.
Figure 3-l: Diegram of fiscal impacts of landdevelopment on local govenrment
(Fodor & Associates).
Revenues Costs
Usually local governments must balance their budgets so that costs don't exceed
rcvenues. While this is true for government services, it is not the case for major
capital expenditures. Local governmenm may issue general obligation bonds for new
capiral facilities rhat enable them to carry debt. General obligation debt is a
reasonable way to finance facilities that have a broad public benefit. However, when
the new facilities are constructed primarily to serve new development, an inherent
lmpact of Destination Resorts in Oregon
March 2009
Local
Government
(Clty, County or
SchoolDistrlct)
.Froperty Tares
.Oher Taxes
.0ther Revenue
(leos, potmlts, gtc.)
.Malntsnanco
.Caphal Facllltles &
Equlpment
.Operatlon
page 13
Fodor & Associat€s
inequity results, and all taxpayers pay to fund facilities that benefit a small segment
of the population.
One solution to this problem is the LID, or local improvement district, that limits
funding of improvemerm to the beneficiaries. Another is the impact fee, or systern
development charge (SDC) in Oregon, that directly recovers some or all of the costs
associate with providing certain facilities to new development. Deschutes County
also uses "Community Service Disuicts" to assess the costs of sorne public safety,
fire protection and library services directly to the geographic districts they serve.
Pr{blic Infrpstructure Reouired .h.v Thornbursh Resort Development
Table 3-l below summarizes the categories of infrastructure required by new
development. The costs associated with all onsite facilities and services (such as local
roads and utility lines) are assumed to be borne by the developer. Only the offsite
impacts are examined here. Of these, transportation and schools typically represent
the greatest costs, so much of the analysis work focused on these two categories.
Teble 3.1: Basic Public Iufrastructure Requiredby New Development
Transportation
School Facilities
Fire & EMS Facilities
Police Facilities
Parks & Rec. Facilities
Sanitary Sewer System
Storm Drainage Systom
Water Service Facilities
Library Facllities
General Gov. Facilities
Solid Waste FaciliUes
Public Open Space
The Deschutes County Codero requires that the resort dcveloper pay for onsite water
and sewer systems, so it was assumed that the costs assosiated with these facilities
and services are borne by the resort and its future residents and visitors. The long-
term viability of these onsite watcr and sewer systems is unclear. For example, the
curent plans indicate that the reeort's sewer system will rely on drain field disposal
for an indefinite period of time. This method of disposal can contaminate
groundwater and has a limited lifespan. The high water demand from the resort may
r0 Deschutes County Code, Chapter 18.I 13. Destination Rcsorts Zone - DR
AI
Yes
Yes
Yes
Yes
Yes
NA
NA
NA
No
Yes
No
No
lmpact of Destination Resons in Oregon
March 2009 page 14
Fodor & Associates
deplete local groundwater supplies and the resort may be obliged to indemni$
nearby landowners.
The County has no requirements for offsite stormwarcr management facilities or
services, so it was assumed that onsite stormwater management will not have offsite
fiscal impacts. These resort developments are contingent on provision of open space
within the development.rr Therefore, additional open space needs may not be
generated by the development.l2 However, any new reridential development is likely
to incrcase demands for certain County parks and recreational facilities, so these
impacts were included in the study.
Electric power, natural gas, telecommunications, and solid waste disposal services to
the resort are operated by private businesses. These services also require offsite
infrastructure investments. Such costs tend to be added to the utility rates that are
paid by all customers, not iust resort residents. The costs associated with increased
rates for these services were not included in the study because they are not public-
sector costs and because it is difficult to obtain the necessary revenue and cost data
from private companies.
Impact Analvsis Methodology
In order to evaluate the potential impacts of the Thornburgh Resort, two scenarios
are compared: unbuilt and full buildout. The unbuilt scenario assumes no change in
current land use. The full buildout scenario assumes the resort is entirely built out
(all proposed facilities are built and all lots are developed with homes). In all
likelihood the resort will take many years to build out and may have undeveloped
lots remaining long after most construction is completed.
To simplify the impact analysis, both the unbuilt and full buildout scenarios were
compared for the year 2008. This simplification enables a direct comparison of
before and after costs and revenues and eliminates the time-values of various cash
flows in different years. By comparing built and unbuilt scenarios, the vagaries of
uncermin approval dates and construction schedules are eliminated. It is intuitively
more useful to consider the alternatives of a resort that is either built or unbuilt
under current economic and fiscal conditions than to consider one opdon today and
the other 12 years in the future.
A destination resort creates both direct and induced impacts. As described in the
Economic Impacts section of this neport, a resort induces additional growth and
I' According to Deschutes Counry Codg DDC 18.113.060(DXl), sThe resort shall have a minimum
of 50 percent of the total acreage of the dwelopment dedicared to permanent open sp8ce, excluding
yards, streets and parking areas," Golfcourses are considered open space,
Iz Increased use of public lands surrounding resorts by resorr residents is common. For example, the
Pronghorn Resort rccommended that their propcrty oE ners use adjoining BLM land for enercising
dogs in a recent newslener.
lmpact of Destlnadon Resorts in Oregon
March 2009 page 15
Fodor & Associates
development beyond its physical boundaries. This is primarily the result of new jobs
created at the resort. Many of these jobs will be filled by newcomers who will require
additional housing and have fiscal impacts of their own. In this study the induced
impacts were evaluated only for schools. All other impact areas reflect only the
direct fiscal impacts of onsite development within the resort. The induced irnpact on
schools was addressed because student generation will be significantly increased by
influx of new workers at the resort and this iuformation may be useful to school
districts for facilities planning purposes.
All revenue and cost figures are given io 2008 dollan and values. Costs from otber
years were adiusted to 2008 values based on the appropriate inflation index or
construction cost index, Tax rates were based on the 2008-09 rates. The mosl recent
available data was used throughout the analysis.
It is important to note that from an accounting perspective, there are two basic types
of costs and revenues: annual streams that occur every year, and one-time costs or
payments, Tax revenues and service costs represent the former. Infrastructure costs
and any associated System Development Charges are treared as the later. As soon as
a new resort development is completed, the residents and visitors will need adequate
road capacity, classroom space for their children, fire protection, and public safety
services, so these facilities must be in place.
There are a number of standard methods for estimating the demand for new
facilities and infrastructure a new development will generate. Each method has
advantages and drawbacks. The methods used here were selected to yield the best
estimates of demand given the limitations of available data. In most cases the
capacity of services and infrastructure must be adequate to serve peak demands. For
example, police and fire protection capacity must be adequate to meet peak demand
periods, not just average demand. In such cases, the demand for public facilities was
based on peak season resort occupancy, rather than average occupancy.
The terms "gross" and "net" are used to describe costs and revenues in this report.
In the case of costs, a gr?ss cost would be the total cost to provide a particular facility
or service, while the net casr would be the gross cost, minus any payment or revenue
from the resort towards that facility or service. In other words, it is the balance of
costs after any revenues are deducted. Tax revenues are treated as gross revenues
because they are used to pay for government costs. The net revenue for a particular
service, if any, is the surplus left over after the costs of providing the service are
deducted.
The fiscal impact reporting begins by evaluaring the revenues the resort is likely to
generate from property taxes and room taxes, Then the costs are addressed. And
finally, the cosrs are compared with the revenues to determine nct impacts.
lmpact of Destination fusorts ln Oregon
March 2009 page l5
Fodor & Associates
4. Revenues from the Thornburgh Resort
A significant selling point for new dcstination resorts has been the tax revenues they
will generate for county governments. As described later, increased tax revenues are
offset by increased costs for public facilities and services required by the resorr. In
this analysis, both property tax revenues and transient rroom tax revenues are
estimated for the proposed Thornburgh Resort.
Property Taxes
The Thornburgh Resort Company LLC submitted a report by Peterson Economics,
of El Cerrito, California, which provided their estimate of property tax revenues, bur
made no estimate of room taxes. The property tax revenue estimate provided by the
developer was approximately three times greater than the revenue calculated here.
This was partly due to use of overinflated real estate values that may have seemed
realistic during the 2004-2005 boom period, but are our of line with current real
estate prices and the assessed values at the nearby Eagle Crest Resort.rr The annual
property tax figures by Peterson were also inflated at an annual 3% rate over the 12-
year construction phase so that the final annual tax revenues at completion were
given for the year 2016 and are much higher than they would be today. The taxes
calculated here are based on the revenues that would be generated ifthe resort were
fully completed in 2008 under the 2008-09 tax rates.
Tables 4-1 and 4-2 summarize the estimated property tax revenues from the
residential and commercial properties planned for the Thornburgh Resort. The
combined total property tax revenues are $5.1 million per year based on a total
assessed value of approximately $375 million, as shown in Table 4-3,11 The $5.1
million tax revenue estimate is about one-third of the amount estimated by the
applicant in the Peterson Report.rs However the figure calculated here is in line with
data reported by other sources for actual tax revenues from other resorts.ro
In order to deterurine where tax revenues will go in Deschutes County, the
individual tax rates for each taxing district applicable to the resort were used and the
rr Eagle Crcst Rcsort is considered to be comparable to the proposed Thornburgb Resort in terms of
its real estatc values.
r{ Aesessed values are for tax purposes and not the same as real market values,
r5 For comparison purposes, the tar revenues cstimated by thc applicant in thc Peterson Report were
adjusted from the 2016 buildout year back to 2008, resulting in an estimate by Peterson of
$17,500,000 pcr year,
16 Tax revcuues were reported for 2005-06 tax year by Linda Swearingen (a lobbyist and consultant
for destination resons) for various resorts in a presentation to the League of 'V/omen Voterg
November 2005, She reponed annual tax revenues for Eagle Crest at $4096,058 and for Black Butte
at $6,315,414.
lmpact of Desdnation Resorts in Oregon
March 2@9 page 17
Fodor & fusoclates
results provided in Table 4-4, Technical details on the methodology used for
property tax calculations are provided in the Appendix to this rcport.
lmpact of Destlnadon Resons ln Oregon
Harch 2009 page 18
Fodor & fusociates
Table {l
Frop?rt1TyF tfuuDu - mrr hrrorlmilt iohl AsrrmdAU Proplitylu lroprlyhrrr Prop.OTu.r
ol Unllr -, F) prr Unlt Oo Rrtr lrl $lnelr Uil o lor TyDr no
Resldential0vemigfrt'x) 425 $190,000 $320,000 SS10,000 $250,410 '14.0041 $3,507 11,445,655
Estmaled Ptoporty Trx Baconucr fom Bcsidcnfirl Proparilos rl Thoruburgh Rc8oil lrxa
(Assunns lull buildail rnd 200E49 hx ratos and property vrlues)
Erllmdld Rrrl tlutr! l4q1pq1Un[ r]
r0 14.0041
0) H0usie Drtr 19 frfin !r trE on p!06 ?2 ol ihr Rlrlrad .Dohdon d.lrd &dl 21, 2O8. iln, nbr dslvrd |rorD dnr m oGdull3 Conty'! Dll"l- 3yrbl[
(2) Ihb lalb lncld6! rl .h0L lrmly rBUr.Sd popoty ,.Crd.l. ot orn.rlt o. Ld raut{o,r.
{3) Rr.l M.Ai Vf& fiilV) b th! tu[ Opnb.d El/l ot h. lrnd n(0. lrlprDllllilrt!. lttk rlchd I h ml ured h cdcuhb lure.
hhndrd t0 ,r&cl d.clnho pr'lco! h rul .rtu m.rt0b. S.r Pmp0rty Tr lr.Uo&hgy h Apprnftlo{ dstrib,
Corl R0ductbn ln wlrc ic htond0d lo Glkcldsclldno prlc6 rn nal Btalr mefiots, S0r Propcny Tu lrdMolo{y ln Appcnft tor d.lalr.
cab{hto lh8 pro0€ny lanr dua on. prrcd.
A.8o!.d VdIr ol r popaiy. Thr EEaftr Vrlu RrUo |tr Rrod ProgntE b 49,1,
h.r brm l3rumrd thd wt.n Dqrlut6 Couriy Runl fn Prollcllon ol{rtl , I Elos outr lh ud nlal| caDollst{lhs lor thor pmp..lios lhil $ry ul chil0d l0 Anr 2{04.
(!) A$r,n d Asr.$€d Vr[r (AV] lin$ Pmp.rty Iu Fal!.
(10) Calcdrcd fim ?mp&iy Trxss ShDa Uolt' llilr 'ilmbir o, thii'tm.t 0.97 (to nlLct 3* trdwllon lo, oDfill. p.ynnt).
lndlvldurly-o*n0d R.ridmlhl Unit B$o in 06chtr9 County C0d0 1E.t13.060 D 2, lt hra b{€n Blum0d fi8t rlsy wl rl b bdll.
lh0r0 unlh, whlch rhowrd u anroal pmporly ur p.ymrnl ol 14,{53,593.68,
lmpact of D6tination Rcsorts in Oragon Fodor & furoclrtos
Much 2009 pagc 19
01950tra)
Table 't-2
Esllmtlod Property Trr Baycnuss kom Commonly hcld ad Commarcial Propsrly rl lhornbutgh Bsrort fl)
(Assums lull bulldout and 200&09 hr rells and propsfiy values)
Esllmrtcd Brr! liladrd Vtht pcr Ut{l o}
Propcrly Typ.
Numb!l
0l Urilr lol r) lmlroyrmrilr {'l lol.l
ProFily Iu PnDlrlI Trxot
Rrl. Et 8!nCr Unll
A$asrod
l/{6810}
Prop.rly
Trxrr tol
Irr!oq
Hotol and Con oroncs Contor (o
Gotl Club House P)
Goll Gourse (ro)
SPs Frcillty llr)
Recreatlon Centet Ir2)
Commericrl Drwlopmenl 11r)
Roal Estrte ofiice l1{)
1
2
1
2
1
1
$2,1 69,000
$s78,{00
01,949,850
$43it,600
$723,000
0578,400
$43i1,800
$15,000,0@
$4,000,000
93,000,000
$5,000,000
$3,000,000
t4,000,000
$3,000,000
$1 7,169,000
04,578,{00
04,949,E50
05,433,800
s3,723,000
$4,57E,400
$3,4$,800
sE,429,979
92,247,994
$2,430,378
$2,667,996
$1,827,993
$2,247,ss4
$1,685,906
st 4.0041
t1 4.0041
01 4.0041
$1 4.0041
s1 4.0041
01 4.0041
$1 4.0041
Sl 18,05,1
$31,4E1
$34,U35
$37,s63
$25,599
$31,4E1
023,611
$1 14,513
061,073
$99,043
$36,242
$49,663
0s0,537
t2?,903
Tolal:ltlspxt
l{oles
0) Dab lq tt& lau. was oblrhrd tm 0lr lhmiurgh Alglcallon ddrd +21{E, lh! Dnchd.t Courny 0,1^A1 spbm md clod iourcss.(2) R.rl Mnllt Yrbr (RLy) i. lt. fi/l rp9.rltd vdltr ol $r hnd rndo, tnprcyomnb. Tlhh lr.chd, I b not ut.d b crhrldB 1416.
ndlf[o0 h dr F h nll0d doc{nhg ]oal .d8t. vrlutr. S.c ftlpr{ly Tu lr.rh0doSgy h App.ndi hr d6bilt.
UEGA .nd Amo&rn Socldy ol 0oll Couft. ABhr.ctr wrb siar.
ha iloprfly trxai du, on r Drrc!|.
Att6.d VsIr. ol r pglsdy, The Erc?ti0n \rrlur Batr0 lff flsson Pmprr06s lG 49.1,
b$n rrgumrd Uat xhon oBsoh,tos Counly Rurd Fh Pmt6c!0n olrtlct #t talB ot{rtln .nd [rcur nrponrilililrs hr lhogc propeilh0 hst thoy wlll chu0sd lo Anr 2-m4.
(E)
{e)
fl0)
(t 1)
(14
(13)
{10
{15)
IS,mo sg lt tuUdim m r 150,000 rq n H. hcludr. H0tr1, R.ltrurul, lrrrnd Conwnlbn Fmlllio8,
?0,000 rg lt hldine on 40, 000 sq fi lol hclldll Lockfl noomr, Pro Ehop .ld Food Scrylc! Ar.1
25,00 !q ,l ol lulldrur so r 50,0ql rq tt bt. Incljoos Filn s6 Csntr, Serm ,nd Shm rcomr, M$t4! ilcr.
15.0(tr !q n ol builtu08 m 8 30,000 loot l0l.
20.0fl !q lt or oultrllcs m r 40,0(tr sq n lgl. hcldd Brnh Fbiln Shop, Dnre qon. Grocsry, Dry Clltner si M Gahry.
t 5,0m !q tl ot !ulr&lo. m . 30,0O rq ,l lot. hcldr $hr lo.sirg snd Propity Man.$mont oliccs.
Tu.t illlcrd by 3l lor on&YB grym8nL
lmpact of Dctin:tion RsorE in Oreton
Mrch 2OO9
Fodor & fusocl8s
page 20
Table 4-3
Estimated Total Properly Tax Revenues lrom Thornburgh ResDrt
(Assumes full buildout and 2008-09 tax rates and property yaluqq) _
Properly Type Tolal Asssssed Ualus Annual Properly Taxes
ResidentialProperty $344,313,750 $4,677,150
Commercial 47 13,973Tolals: $374,788,817 $5,091,123
Table 4-4
Disrin
(Assumes tull buildoul and 2008-09 tu rales. Thornburgh ostmetod lotal assessed value ol $374,788,8'17)
lD Tax District Tar Rate toperty Tales(z)
001 Deschutes County
007 Jail Bond
010 Fairgrounds Bond
011 County Libnary
020 Countywide Law Enforcement
021 Rural Law Enforcement
070 Redmond Library
090 CountyExtensior/4H
093 911
095 911 Local 0ption 2008
202 RuralFlre District #1
351 Redmond Area Park & Rec Distrlct
620 SchoolDistrict #2J
626 School #2J Bond 92 & 93
628 School #2J Bond 2004
651 High Desert ESDt3t
670 C0CC(t)
671 COCC Bond
Total 14.0041 $5,091,123
(l ) Tax rates lrom D€schules Cc[lnty 2t)0&09 Summary ol Assessment and Tu Roll page 80.
(2) Tu revenuos - (AV/l m0) r To( RaS x 0,97. Amount t0 tadu dbticts assuming h0 property oxnef taftes advantage
ol he 3% &count lor payh0 in lul prior b 1 5 November.
(3) Hlgh o$eil Edwalional Ssrvice Distict
(4) Cenlral 0r0g0n Community College.
1.2783
0.1335
0.141
0.55
0.95
1.4
0.0567
0.4224
0.1618
0.23
1.7542
0,3717
5.0251
0.8307
0.293
0.0964
0.6204
0.0889
$464,720
$48,533
$51,260
$199,950
$345,368
$508,963
$20,613
$8,143
$58,822
$83,615
$637,731
$135,130
$1,826,851
$301,997
$106,519
$35,046
$225,543
$32,319
lmpact of Destinatlon Resorts in Oregon
March 2009 page 2 I
Fodor & Associates
Room Taxes
Transient Room Tax revenues are generated from hotels and other overnight
lodging facilides in Deschutes County. The tax ratc is 7o/o of the total room charge
payable to the County. As shown in Table 4-5, the estimated room ux revenue from
the Thornburgh Resort is $430,296 per year. A complete technical explanation of
room tax calculation is provided in the Appendix to the report, Currently room tax
revenues are allocated to rural law enforcement and tourism, as shown in Table zl-6.
Table 4.5
Estimated Transient Room Tar Revenues lrom Proposed Thornburgh Resort
(Assumes lull buildout and 2008-09 tax rates and rental rates)
Type ol Unit
l{umber Dallyol Room
Unitsll Rate@
0ccupancy Tax
Rate(u Rale({}
Eslimaled
Daily Tax
BevenueQ
Estimated
Annual Tax
Revenueol
Hotel Booms 50 $121
Residential 0vernight Unitso 425 $162
29% 7o/o $12329% 71o $1,398
Subtotal:
Less Collection Reimbursemenfls):
$44,827
$408,115
$452,943
($22,647)
Revenue to CounU: $430,296
1 . Number ol UniB availablo as Visitor-orisnted Unit$ is 18ken lrom page 4 of fie Revlsed Applicatbn dated April 21, 2008.
2. E8timatod Avorago Room Rate subiect to he Room Tax, The rate lor bo Holol is based on a weightod averago ol fi6 ratgs lor Holels, Motels and lnns
locatd in the Great0r Bedmond Area. Tho lnn at Ea0l0 Cr0st Eiowod standard room rates ol $95 to $126 por nlght, dependlng on season. The rale lor
Rssidontial 0vernight [Jnits is the average ol the dafly nts lor 39 units ln he Greater Redmond oregon Area cunenty bted on the Vacaion Rontels by Owner
websito for tle area. Twenly-elght ot fiese were located h Eaglo Crest Resofl
3, Whk hB tohl monuly Transiem Room tax receipb are availaDle, acud occupancy dffi ls ofiemely ditticun t0 come by. So an occupancy rato ol 90%
wai assumed for fie monfi ol August and hBn adiuElsd ,or h0 oth0r monlhs basod on Total Transiem Room Taxes paid lo lhe County l0r thal morlh, From
$isanaverageannual occupancyratool 29%lorallrentdtypeswasderlved. Iltistablewasalsorunassumlnganannual occupancyrateol 100%,and
50%l0rbofityposof unlts.TheresuldngestimaledrevenuelorDeechutosCounlywas$1,E18,01010r10096and $909,005.13f0r50%annualoccupancy
rates.
4. Ths cunentTu rato as sel by DeschrJtss Counly orfiiancB.
5, The number d units times ho occupancf rab, lime€ fie daly room rale, times 7%,
6, The estimated oaily Tu Revenue [mos 365 days. For resilential unib, an 8096 ropning ralo lor room tixos was assumed. 1fi)% reporting was assumed
fo{ hotel room$.
7. 425 is tro number of un'rB fiat would be suDiect to a r,eed r0sulctlon requlring thal hey be availaHs lor Short TErm R0nhl al hast 38 w0eks a year. lt is
possible thrt some 0l tho owners ol hs olhor 950 housinq unts in he ro,sorl mighl also waot to rent their unlts at leasl some ol lhe timo, so tre actual
numbor of availablo r0ntal unils could be highor,
8. oeschutes County Code 4.08.120 roqulres the opeEtor b bill tho fanslenl lor tho Room Tu as a separate line item on the involce oI receipt and ahws he
operalor lo rEtain a Collectjon Beinbursomont Charge of up lo 5% ol all revenues collected. While it b possible lor an operator lo ruhh hss hen he Jull 5%
permined, for $e purpos0s ol this estmatg a full 5.,6 has besn 6sum6d.
lmpact of Destination Resoru in Oregon
March 2009 page22
Fodor & Associates
Table 4-6
Distribution ol Hoom Tax Rsvenues lo Counly
(Assumes full bulldout and 200&09 room tax rates and renbl valws)
Sharell) Amounl
For Rural Law Enforcement 73% $314,116
For Tourism-Related Activities 2710 $116,180
(1) Ihio distbrrtion assumos lhe sarne 73-27% split as was used in fie FY 2fi)&09 Budg*forfie Canty.
lmpact of Destinatlon Resons ln Oregon
March 2009 page 23
Fodor & Associates
5. Thornburgh Resolt Costs
This section examines the fiscal impacts of the proposed Thornburgh resort on the
following six major service categories:
r Transportation System. Schoolso Fire & EMSo Public Safety Systemr Parks & Recreation System. General Government
As described previously, costs occur in two basic categories:
1. Capital Costs: Initial, one-time costs for the increment of new or expanded
capiml (facilities, infrastructure and equipment) necessary to provide
adequate levels ofservice to the resort; and,
2, O&M Costs: Annual costs for operation and maintenance (O&M) of the
services provided to the resort.
The capital costs for expanding facilities, infrastructure and equipment were
calculated for all six of the above service categories. These capital costs tend to be
the greatest costs associated with serving new development, The O&M costs for
providing services were calculated for firelEMS, public safetn and parks and
recreation. The tax revenues for each of these service areas were also determined, so
that service costs could be compared with reyenues.
For transportation and schools, revenues come from multiple sources (County, State
and Federal) and are allocated based on formulas described in the following
sections. Since revenues for these two categories could not be tied directly to th€
resort, it was not possible to compare the annual O&M costs with the revenues
resulting from resort development. O&M costs were not calculated for general
government services due to the complexity of assigning service costs to rhe resort.
The cost impacts the resort will have on these systems may be offset by tax revenues
and impact fees or mitigation fees the resort will pay, The only impact or mitigation
fees identified in this study are related to the mansportation system. Deschutes
County enacted transportation SDC (system development charge) in 2008. The
Oregon Department of Transportation (ODOT) is seeking mitigation funding from
the resort for impacts to intersections with state highways. Both of these potential
revenues are computed and deducted from the transportation system costs, The
County collects no other impact fees and the Redmond School District collects no
impact fee from new development,
lmpact of Destinadon Resorts in Oregon
March 2009 page24
Fodor & Arsociates
The Thornburgh Resort is also credited with future tax payments that could
potentially go towards repaying bonds for the infrastructure needs the resort creates.
A new destination resort will increase the local tax base, which will distribute the
bond repayment cost more widely. For example, if a new resort increases the local
tax base by 5o/o, it will pay for 5% of the bond costs. The remaining9l% will be paid
by the existing community. However, it is the new development that is creating the
demand for new facilities that are calculated in this study, not the existing
community. Therefore, new development will pay for only a fraction of the facility
costs it creates (llz}'h in this example). The actual Z00El09 tax bases for each
category of service and the potential contribution of the resort towards future bond
repayments is provided in the Append*.
To aid iu calculating some costs, an estimate of the number of houses used as
primary residences at the Thornburgh Resort and an occupancy rate of these
residences was devcloped. Average occupancy per household in Deschutes County
was 2.5 persons per rhe 2000 Census. The Census data is for all existing housing, and
therefore does not accurately reflect the occupancy of new housing. New housing is
typically larger than the average of exiting housing and typically has more occupants
per unir. TheAmeican Housing Suruey provides date on new homes for maior cities
in the US. The nearest city survey is for Pordand where new housing units were
found to have 8.2%higher occupancy levels than for all existing units.rT This same
adiustment was applied to Deschutes County to produce an estimated household
occupancy rate of.2.7 persons per new house.
The percentage of housing in destination resorts used as primary residences has
been the subject of some debate. Resort housing could be used for a primary
residence, a second home (or vacation home), or a rental home (overnight unit),
Undoubtedln the mix of home uses will vary from resort to resort. The nearby Eagle
Crest Resort appers to have a very similar profile to the proposed Thornburgh
Resort and was used to establish a likely percbntage of owner-occupied homes
serving as primary residences.
A complete tabulation of residential properties at Eagle Cresr was generated by
Deschutes County from County tax assessment data.r' There were 1,538 residential
properties that were developed with homes on the tax rolls. Of these, 559 property
owners received tax statements at their Eagle Crest address. Tax statements are
usually sent to the property owner's primary residence, so this is highly indicative of
a primary residence address.
ti Amnican Housing Suney for the Pottlarul Menoplitan Area: 2002r Issued July 2003, U.S. Department
of Housing and Urban Development.
tt Result from this tabulation were providcd in Excel format to COLW by Tim Berg, Deschutes
County Commuuity Development Department on February 26,2009.
lmpact of Destlnatlon Resorts in Oregon
March 2009 page 25
Fodor & Associates
According to a $urvey provided to the County by Eagle Crest Resort, an estimated
252 of the single family homcs in the resort were being used as overnight units
(rental units) in March of 2008.te Deducting the 252 overnight units from the 1,538
total residential units leaves 1,286 owner-occupied units (both primary residences
and second homes). Based on the addresses of the tax statements, the 559 primary
residences represent 43% ofthe 11286 owner-occupied units. The acrual percentage
of primary residences will be higher if some resort residents have tax bills sent to a
post office box or to an accountant's address.
It Letter from Alan VrnVliet ofJeld-Wen Developmcnt to Catherinc Morrow providing rcsults of an
annual housing survey, dated Msrch 25r 200E.
lmpact of Destlnatlon Resorts ln Oregon
March 2009 page26
Fodor & fusociates
Transpoftation System Costs
A key issue in destination resort development is the demand they place on the
transportation infrastructure. The new rravel demand generated by resorts creares
costs for the required transportation infrastructure. The full cost of the
transportation infrastructure to serve new growth is reflected both in the new
infrastructure that rnust be built and in the existing capacity that is consumed.
Travel demand is a function of both the number of new vehicle trips generated and
the average trip distance. The combination of the number of daily trips and rhe
average distance of trips results in the daily "vehicle miles traveled" or VMT. VMT
reflects actual roadway usage, and therefore provides a good measure for allocating
transporEtion system costs.
Another measure of travel demand is "peak-hour trips," which is intended to reflect
demand on the system during the peak period. Peak-hour uips are widely used in
transportation srudies because they provide an indication of transponation system
conditions at the busiest time of day. However, as roads become more congested,
travelers shift their travel tirnes to avoid congestion.Instead, they contribute to
congestion at other times. As transportation systems become more and more
overburdened, peak congestion periods extend to multiple hours and can occur
throughout the day.
One deficiency of peak-hour trips is that they only caprure those trips generated at
the peak hour (usually 5-6pm weekdays) and miss traffic generation at other times.
Schools, for example generate considerable traffic at other hours. Resorts will also
generate most trips at other hours for golf and other recreational activities. With this
me&sure, naffic sources that do not generate peak-hour trips are not counted as
impacting the transportation system, despite increased travel demand. Peak-hour
trips are based on the peak traffic hour of the adiacent roadwaS and not the peak for
the source of the trips being studied.
Destination resorts are typically sited in relatively remote locations outside of Urban
Growth Boundaries (UGBs) and away from existing cides and towns. Due to their
remote locations, residents and guests will travel farther to reach common
destinations, such as employment, grocery stores, department stores, etcetera. As a
result, VMT generation will tend to be higher pcr unit of development than it would
be in an urban location.
Studies show that even in urban areas, the per capita VMT increases by a factor of
two to three, or more on the urban fringe compared with the urban core. Daily per-
capita VMT was found to be two to four times greater in the Atlanra suburbs than in
lmpact of Destlnatlon Resorts ln Oregon
March 2009 prge27
Fodor & Associates
the city's core area.2o Similar lindings were obtained for Eugene-Springfield in a
1994 travel study by Lane Council of Governments." According to a study in Rhode
Island (1999), rural towns had on average 16.5 miles of local roads per 1,000 housing
units, or almost three times as many as urban core communities (6.1 miles per 1,000
housing units),22
Figure 5-l: Time of day for trips in rural Oregon (Aregon Traoel Behavim Swoey,
oDoT,2000)
Based on the Oregon Traoel Behavior Suruey,23 Deschutes County's rural households
reported an average of 7.31 daily vehicle trips. This is lower than the 9.57 trips that
would be estimated using theffI'Tip Gencrarrbr manual.za Average rural uip time
was 16.52 minutes, While this trip time is comparable to that in urban areas, rural
trips will tend to cover rnore distance and be at a higher average speed, requiring
r0 Source: Atlanta Journal-Constitution, 1219102, bascd on data from Georgia Regional Transportation
Authority.
2t lg94 Estimated VMT per Capita by Production Zonerby Lane Council of Govcrnments,
22 Tlu Costs of Suburban Sprawl and Urban Decay in Rlwde Island, Executive Summary, by Grow Sman
Rhode Island, 1999, Providence, RI, The Rhode Islaod Foundation.
23 Orcgot Traoel Bchaobt Stmtey, ODOTr 2000, Table 4.2. Accordiag to ODOT, survey data involves
some underreponing, so acoal daily trip will be higher than reported (see footnotc, page9 of Oregon
Traoel Beluoim Suruq).
2+ Institute of Transportation Engineers' reference manual for rrip generation, 8d Edition.
lmpact of Destination Resorts in Oregon
March 20O9
69c
J{t
tqh.':
.l{lr
:
2%
,q,
-'* - ; -:: -i* * * b L i E -.L'- *.*'-i: $c?qitl??+ete4tg€sEte*et. E8Ett8*eStEtsEtBBtttssBB8ij * n q t di 3 ( d, d, S i i! *.t'r I'ot € r; + " i {
page 28
Fodor & Assoclates
more road infrastructure. If an average rural speed of 40 mph is assumed, the average
rrip disunce would be tl miles and household VMT would be 80.5 miles per day.25
The Cost of Transoortation Facilities
The "proiection-based" method for estimating transportatio[ sy$tem costs uses a
planning estimate or projection of the future system improvements that are needed
as a basis for allocatint costs to the new devclopment that will occur over the
planning period. The County has prepared a 2O-year list of transponadotr proiects as
part of its adoption of a new transportation System Development Charge (SDC) in
2008. This list covers all proiects in the unincorporated areas of the County that are
anticipated from 2008 to 2028. The total cost of all proiects is $280 million. Proiect
costs are funding by a mir of Countg Sute and Federal sources.
Most of these projects are capacity-increasing and will serve the needs of new trowth
in the County. However, a portion of the proiects are maintenance-related and will
not expand the system capacity. Only a very brief description is available to
characterize each project on the 20-year list and no further informarion was available
from the County. A simplified system was used to allocate individual project costs
between capacity expansion and maintenance functions. New roads were allocated
I00% to rneet the needs of new growth. New bridges were allocated 75% to new
growth. Road "widening and overlays" and "road reconstruction and widening,"
were allocated 50% to new growth. None of the costs for pedestrian and bike lane
improvements were allocated to growth as they were considered system-wide
upgrades.
Based on this cost allocation, $240 million or 86% of these costs are growth-related
(capacity increasing), while $39 million, or l4Yo are for maintenance. Table 5-1
provides a summary of the project cost allocation. As shown in column 5 of Table 5-
l, Deschutes County will fund less than one-third of growth-related ransporation
facilities, while the State will fund two-thirds. (The Federal funding is shown as
being fairly small, but Federal transportation funds that are distributed by the State
are listed under the State funding, so the actual Federal contribution is larger than
shown.)
2t Thc average speed of40 mph was used to reflect overall averag€ trip speed, including stops, slarls
and turns on roadways with typical 55 mph speed limits. This was intended to be conservarive, as
higher trip spccds would result in longer trevel distances and greater road costs.
lmpact of Desrlnation Resorts ln Oregon
Harch 2009 page 29
Fodor & fusociates
Table 5.1
20-year Transporlatlon System ProJect Llst lor Unlncorporaled Area of Deschutes County (2008-2028)fl'
2 34
Percent
olTotal Growth-Related
Costs Proiect GostsFunding Enti
Total Proiect
Gosts
5
Percent ol
Growth
Gosts
B
Growth
Gosl per
!4itd1
7
Cosl per
Typical llew
House(')
1
Oeschutes County $96,614,339 35% $70,165,715 29% $2,273 $6,137
State ol Oregsntzr $1 57,500,000 56% $157,500,000 66% $5,102 $13,775
FederalGov,G) $25,431,250 9% $12,715,625 5Yo $412 $1,112
Totals: $279,545,589 100% $240,381 ,340 100% $7 ,787 $21,024
(2) Shle tundino includes funds tlm the tsderal Government h he Stalo oo hb dsurbulion orly shows liml source ol lunds.
(3) Growlh-rolated cosls aro dividsd by lhe projected @pulation increase 0vsr fie same 2&year period.
(4) Cost associaled wlth new house are based on an occupancy rat6 ol 2.7 porsons, as descrlbed earlier ln thls sec{on ol $e r€port
The per-capita cost for population growth can be estimated by allocating the growth-
related (capacity increasing) components of the County's total future transportation
system costs for the next 20 years ($240,381,340) to the estimated population
increase for the same period, During this time period the population of the
unincorporated County is proiected to grow from 56,609 in 2008 to 87,480 in 2028,
an increase of 301871 people,26 This results in a cost of $7,787 per new person
(column 6 of Table 5-1). The County's share of this cost is $2,273 per person.
The cost per neiv house can be estimated based on the typical occupancy mte of 2.7
persons per new house (calculated earlier). At this occupancy rate, the total cost per
new house is $21,024. The County's share of this cost is $6,137 per new house.
A new transportation System Development Charge (SDC) was approved by
Deschutes County in July of 200E to help recover a portion of the County's share of
capacity-increasing transportation costE. Ifhile the State SDC StarutezT allows for a
reimbursement component, the County's fee does not include a reimbursement
component to recover the cost of existing roadway capacity that will be consumed by
future growth. The SDC fee will be phased in gradually up to $3,504 per new peak-
hourvehicle trip by 2011. Fora new single-family dwelling, l.0l peak-hour trips are
generated and the SDC is $3,539 per SFD (not including the $45 administrative
charge allowed by State Stanrte). Deducting the SDC (full 201I rate) from the
County's gross cost per new house ($6137) results in a net uansportation system
cost to the County of $21598 per new house for the capacity-increasing components,
26 Based on Dcschutes County 2000-2025 Coordinated Populadon Forecast, Thc forccast was
extcnded to 2028 using thc growth rate for the 202G2025 period of Z.Zo/olyat,
17 oRS 223.297-314.
lmpact of Destinadon Resorts ln Oregon
March 2009 page 30
Fodor & Associates
Be-i.r-nbu rspm e n t Ya [u e o f Exi sti n &Tran sp o Lta tio n I n fra s tru ctu r.e
As noted, the Deschutes County SDC projea list does not address the value of
transpormtion infrastructure capacity that has already beeu built that will be
consumed by new development (also referred to as "excess capacity"). If average
roadway congestion levels on existing roads did not increase over the 2O-year proiect
timetable, then there would be no loss in mobility (or increase in congestion), and
therefore no *consumption" of existing excess capaciry. However, it is unlikely that
the County will be able to build enough new facilities to prevent such congestion
increases. Nationwide thc roads have become increasing congested as cities, counties
and states across the country have been unable to keep up with demand,zt
To investigate changes in traffic levels on existing roadways, historic traffic sount
data must be analyzed. The County's traffic count data reports Average Daily Traffic
(ADT) for 281 roadway segments.2' Data was obtained from the County for the I l-
year period, 1998 to 2008. Data was not available for every year for every segment, so
the average of the traffic counts in the first four years (1998-2001) was compared
with average of the last four years (2005-2008). Only the 212 rcad segments that had
traffic counts in both time periods were anelyzed. The results show that traffic
increased from an average ADT per road segment of tr473 to 11780, an increased
volume of 20,Eo/o on County roads in a roughly seven-year span.30 It is therefore
reasonable to conclude that new development in the County is generating
transportation system demand faster than the County is building new capacity and
that new development is consurning existing excess road capacity.
There is no data on the exisdng excess capacity of County roads. The County's
Level-of-Service (LOS) standard for rural roads is "D" or better. A LOS of D
represents average daily traffic (ADT) of up to 9,600 vehicles for a wo-lane road.
Therefore, 9,600 ve hicles is the effective capacity of the roadway under the LOS
standard. The County's 1996 Tronsportation SystmrPlaz shows ADT and LOS for
the 36 busiest roadway segrnents in the County at that time. None of the segments
exceeded a LOS of D and most were rated B or C with 3,000 to 5,000 ADT. Based on
rhis somewhat dated dara, ir appear$ that therCounty had morc than 50% excess
capacity on its main road network in l996.rt
zt The 2007 Urban Mobiliry Repot, by the Texas Transportation Ine tirute reports that over last 24
years we have built only 4l% ofthe transportation infrastructure nccessary to keep up with growing
demand.
2e A sample of this data can be found on the Deschutes County Road Depanment web site at
http://www.co,cleschutes.or.us/download.cfrn?DownloadFile:0D8135C.L-_B.D-Ii_[)-57Q1-
9.!.-1781q9-FA737581. Thc full data set was used for this study.
'0 This increase in traffic occurred over a period ofapproximately seven years, based on using the
midpoint of each of the two periods compare d. The period is approximate because traffic count data
was not available for all years.
rr The more-reccnt County traflic count data referred to earlier shows an average ADT at 272 road
locations of I ,780 for rhe 2005-2008 period. If all of these roadways have a capacity of 9,600 ADT,
lmpact of Destlnadon Resons ln Oregon
March 2009 page 3 I
Fodor & Acaociates
The value of the County's excess roadway capacity is significant, however, due to
data limitation there is no direct way to accurately determine either the value of this
capacity or the amount that will be consumed by new development. However, rather
than leave this cost area completely unaddressed, a very rough, but conservative
estimate was developed. To make this estimate, the following rough assumptions
were used:
1. Excess capaciry in 2008 is at least 40% ofexisting roadways.
2. New development over the next 20 years will consume half of the remaining
excess capacity.
3. The value of the excess capacity can be indexed based on its replaccment costs
today and the population increase served by the total value ofthe capacity-
increasing proiects on the SDC proiect list.
To roughly estimate the replacement value of the existing ransportation system it
was assumed that the value could be based on the estimated costs necessary to serve
future population growth. The value of the growth-related (capacity increasing)
projects in the ?O-year SDC project lisr is $240,38I,340, This rcsults in a cost of
57 1787 for each new person projected in the County over the 20-year period.
Applying the per-capita cost to the 56,609 persons currently living in the
unincorporated Counry in 2008 results in an existing system value of $441 million.
This figure is the approximate replacement value for the system required to serve
today's population. The figure is low, since it does not account for building the
excess capacity that exists today. None-the-less, as a very rough estimate, the value of
excess capacity consumed over the next 20 years is 20% of $441million, or $88
million. Dividing $88 million by the proiected population growth over the next 20
years of 30,871 people, results in a reimbursement cost of $2r856 per new person.
Based on an occupancy rate for new homes of 2.7, the reimbursement cost per new
home is $7,711,
Table 5-2 combines the value of new facilities and the value of excess capacity used
to serve new growth in the unincorporated area of the counry. As shown, total
transportation system costs (from all funding sources) for new growth are $101637
per person, $281720 per new house, and $3,929 per daily vehicle trip. Note that the
estimates in Table 5-2 are based on planning projections and are therefore only as
accurate as the proiections they are based upon.
then therc is approximately 80% excess capacity in the road network. However, the data is not
adcquate Io assess the actual capacity ofeach roadway segment.
lmpact of Destination Resorts ln Oregon
March 2009 page 32
Fodor & fusociatec
Table 5-2
Estimated fransportalion Syslem Gosts to Serve Neu Growth lor Unincorporalod Area ol Deschules
Counly (2008-2028)
Cqqrly !q{s State Gostsot Federal Cosls Tota! Gosls
Value of New Gapacity lor FutureGrowth(l) 970,165,715
Value of Existing Capacity ConsumedG) share unknown
$157,500,000
share unknown
$12,715,625
share unknown
$240,381,340
$88,000,000
Total Growth-Belated Costs share unknown share unknown share unknown $328,381,340
Cost per Capita for New Populationts)
Cost per New House(a)
Cost per Daily Vehicle Trip(s)
$10,637
$28,720
$3,929
(2) Rough ostmatB based on estimatEd oxcoss syslern capacity conrumad by nar growtr.
(3) Growlh-r0ht0d cosB are divitled Dy fie trolected popula0on increase over the same 2o-year period.
(4) Cost assoclated wifi new house aro ba0Bd 0n an occupancy rats ol 2,7 persons, as describsd at [E beginning of this section.
(5) Based on h0 0regoo Tftwl Eshayiot Suoe/, Deschutes Couniy's rural housBholds reported an average ol 7.3'l dairy yehicle tlps.
(6) State funding includos tunds lrom Federal Govemmentb fio Slale so tris distribution only shorvr final source o1 funds.
Transoonation Syst_egr Impacts of Thornbqrgh Resort
Estimating the transportation system impacts associated with a destination resort is
more complex because standardized data on destination resort travel demand is
unavailable and the use has unique characteristics. These resorts contain a variety of
commercial and residential uses, The commercial uses cannot be readily estimated
from the same per-capita basis used for residential land uses. Also, resorts will
accommodate a certain percenage of vehicle trips internally. Internal trips are those
that do not leave the resort, and would include residents visiting the golf course or
resort restaurant, Sincc the road structure within the resort is funded entirely by the
resort developer, these internal trips do not create an impact on the external public
road system.
There are various estimates for the number of external vehicle trips generated by
resorts. The Thornburgh Reson submined their own uaffic srudy showing that a
vast majority of vehicle trips would be accornmodated internally and that the reson
would generate a total of 517 peak PM hour trips (5-6pm weekdays).3z However, the
"peak PM trips' metric failed to capture the peak trip generation by the resort,
which occurred earlier than for the adjacent roadways. Peak resort traffic occurred
between lpm and 4pm.
'2 Transgortation Impacr Analysri, Revision II, by Group McKenzie, Scptember 28r2005,Table 98
lmpact of Destination Resorts in Oregon
March 2009 page 33
Fodor & fusociates
A study by Kittelson and Associatess' measured the traffic generation from the
nearby Eagle Crest Resort by counting trips in end out of the resort for several
weekday periods. The study concluded that 4.4 offsite trips are generated per
residential unit and suggested that this is an appropriate value to use for destination
resorts. These trip counts include all the commercial and recreational activities at
the resort, as well as the residences. Therefore, they are an indication of the total trip
generation by the resort, indexed to the number of residential units.
The Thornburgh Reson has 1,375 residential unirc. Based on th€ Kittelson Study,
the resort would generate at total of 6,050 daily vehicle trips. These would all be
external, or offsite trips. For comparison purposes, the trips were estimated using
standard trip generation rates for conventional development (see Table 5-3). As a
conventional development, the uses at Thornburgh would generate approximately
17,054 daily vehicle trips. However, since destination resorts are likely to
accommodate more vehicle trips internally than conventional developments, the
empirical dau from Kittelson was used instead.
Using the estimate based on the Kittelson Study of 6,050 daily trips and the cost per
vehicle trip of $3,929 from Table 5-2, the total gross transportation systern cost
associated with the resort is $23.8 million. To obtain a net cost for the Thornburgh
Resort, SDC payments and developer contributions to the transportation system
must be deducted. That step is done at the conclusion to this section.
Table 5-3
Conventional Trip Generatlon Estlmate lor Thornburgh Destiration Besorto)
pescripron (rrE cod.) .-Vnitso,
E1l;illed E'peili$Dai::
Single Family Homes (210) DU 1 ,375 13,1 59
Hotel (310) Rooms 50 446
HealttVFitness Club (493) TSF Gross 60 1,976
General 0ffice (710) TSF Gross 15 165
Shopping Center (820) TSF Gross 20 859
Ouality Restaurant (931) TSF Gross 5 450
Tolal Trips:17,054
(1)
(2)
Based on /If /np Aenentlon mdnua!, 7h Editon,
DU = dwelhg units; TSF = trousand squarB leet 0, gloss tloor area
t' Central Oregon Reson Tig Generatior. Studyrby Kittelson end Associates, Scptember 12, 2006.
lmpact of Destination Resorts in Oregon
March 2009
Fodor & fusociates
page 34
Standards-Based Costing Method
The transportation system costs calculated above in Table 5-Z are based on the
pro jected population growth of the County and the projected transportation
infrastructure needs for the next 20 years. Both projections are estimates for a long
period of time and could involve substantial errors. It is notoriously difficult to
estimate future populadon growth, but it is even more difficult to anticipate and
accurately estimate all the transportation infrastructure needs for a county 20 years
into the future.
To examine the ransportation system costs from another perspective, a standards-
based impact analysis was performed, This method is based on meeting County
level-of-service (LOS) standards. Travel deniand was used to determine the number
of new lane-miles of roads that are needed to serve new homes. A roadway cost per-
lane mile was developed and the number of lane-miles required by new development
was used to estimate road costs.
Estimates of new road costs were not available from Deschutes County, so road costs
per lane-mile were compiled from three sources, including the County SDC proiect
list and ODOT in order to develop a reasonable esrimare. Values for rwo-lane, rural
roads on flat terrain were selected. As shown in Table 5-4, the average cost per new
Iane-mile for all sources is $3.4 million.
The seven new roads on the Deschutes County Transportation SDC Proiect List
were used to develop one road cost estimate. The average cost of these roads per
lane-mile was $3 nrillion. The cost for one road segment included an overpass, so
that some other roadway costs are included as well. Representative road costs should
include the costs of intersections, signalization, bridges, and other associated system
costs,
For comparison, Table 5-4 shows the road costs for a rural road on flat terrain from
ODOT's Highway Economic Requirement System ($2.7 million/lane-mile) and an
estimate for rural roads from the Victoria Transportation Policy Institute ($4.5
million/lane-mile). These figures bracketed the Deschutes County road costs, so the
$3 million per lane-mile figure was used for road costs.
lmpact of Destination Resorts in Oregon
March 2009 page 35
Fodor & Associates
Table 5.4
Road Cost Estimates lrom Various Sources
(All costs adiusted to 2008 dollars)
Gost per Lane-Mile
Conslruction Land
Source Cost uisilion Cost Tolal Cost
Roads in utes Co, SDC Project $2,807,982 40,000
0D0T New HERS lmprovoment Costs(z) $2,461,980 $240,000 $2,701,980
Victoria Transportqtionlolicy lnstituteo $4,'199,040 $263,310 $4*402.,180
Average ol Sources: $3,40f,114
(1 ) Averaoe cost l0r new roads on lbt. Land values based on total toad RoW wldth o, 80 leet and land acquhlilon cosB of $50,000 per acre.
(2) 0D0T New Hghway Economic Rsquiromont Syslcm (HERS) lmffovomsnt Coslg, lanemile cosE tor constructing nsw runl maior colhclor on
llet brrain.
(3) Source: WPI Transporlatlon Cost and Benelil Anabsis [ - Road*,ay Cotts, Iable 5.6.&4, January 2009, Vafue lor uruilvided h[hwayr h
outlying arcas. Year 2000 dohrs w6rs adiust d to 2tt08 using 0regon Highway Consuuctbn Cost Tnnds,
As described earlier, the Ongon Traael Behaoin Surzay provides the best available
travel demand data for rural households in the unincorporated area of Deschutes
County. From this survey data it was estimated that the average daily rural
household VMT is 80.5 miles. To tr'anslate this into a lane-mile demand for new
roadways, a level-of-service standard must be assumed. The County's minimum
LOS smndard of "D" represents the maximum congestion limits acceptable on
County roads. The ADT at LOS D is 9,600 vehicles. A two-lane roadway operating
at LOS D could accommodate 4,800 vehicles per day per lane in each direction. At
this congesdon level, the lane-mile distance required to accommodate the 80.5 miles
of daily VMT generated by the typical rural household is 0.017 lane-miles, The cost
of building 0.017 lane miles at $3 million per lane-mile, is $51,000 per new
household.
To maintain a higher LOS standard of "C'(ADT of 5,700, closer to what County
residents now enioy), requires 0,028 lane miles per new householfl, or $84,000 in
new road system costs per new household. The costs on a per-trip basis are shown
for both LOS standards in Table 5-5, tUflhile costs of $51,000 to $84,000 per
household may seem incredibly high, they should be adjusted even higher to reflect
the higher occupancy rate that can be expected in a new home compared with the
average of existing homes frorn which the travel survey data was derived. Using the
8% higher occupancy rate ofa new house relative to an existing house, the costs
would be $55,000 to $90,700 for LOS of D and C respectively.
lmpact of Destination Resorts in Oregon
March 2009 page 36
Fodor & Associates
Table 5.5
Standards-Based Transporlalion $ystem Gosls pel New Vehlcle Trlp
Gosl Per Household Cost Per New Uehicle (t)
Cost to mainhin LOS 'D'1,000 977
Cost to mainhin LOS "C" $84,000 $11,491
(1) Ba$ed on 7,31 Mps per hmsshold ruponod tor Doschutos County in he 0regon Travd Bdnvior Svrwy,
These standards-based costs are much higher than the $28J?0 per n€w house cost
estimated by using the County's 2O-year proiections for new road infrastructure and
population growth. One possible reason for the higher standards-based cost is that
the County is not planning enough future road capacity to maintain current LOS
sundards and will see roads become increasingly congested in the furure. As
meutioned previously, road congestion is increasing nationwide and planned road
construction is inadequate to maintain current standards. The high cost of
maintaining even the County's minimum LOS sandard under continuing growth
may be too high for the public to bear. Instead of paying for construction of new
roads, courty residents wilt likely pay indirectly through the travel delays and
increased fuel use essociated with growing congestion.
S tan4ardq-Ba$ed Transportati.on System Imoacts of Thornbureh Besort
As noted previousl5 a destination resort generates a complex mix of uses and
accommodates many of its vehicle trip onsite. The trip generation estimate from
Kittelson and Associates is a total trip generation rate of 4.4 trips per dwelling unit
that includes all uses in the resort (residential and commercial). For Thornburgh
this would be 6,050 daily vehicle trips. Using the cost per vehicle trip to mainuin a
LOS of D of $6,977 from Table 5-5, the cost for building the offsite road capacity for
6,050 new trips is $42.2 mi[ion.
Depending on the fiscal impact analysis method employed, the gross transponation
facilities costs for the Thornburgh Resort would range from $23,3 million to $42,2
million (see Table 5-6). While both figures are reasonable estimates, the higher,
standards-based figure probably does a better job of representing the full cost of
transportation system impacts. This is because the standards-based method assures
that the currenr minimum LOS standard of D is maintained, while the projection-
based method does not.It is also worth reiteradng that the LOS sundard used here
still allows for a considerable increase in average road congestion rhat is not
included in the $42.2 million cost, and therefore is a conservative (low) estimate.
lmpact of Destination Resor6 in Oregon
March 2009 page 37
Fodor & Associates
Table 5-6
Estlmaled lransportallon Syslem Costs lor Thornburgh
Resoil
lmpact Analysls Method Cosl
Planning projection-based estimate $23.3 million
Standards-basedestlmate(L0S=D) $42.2million
Net Transp-o_Ilgtio.n C,ost from Thornb,urgh Resort
To obtain a net cost, SDC payments and developer contributions to the
transportation system must be deducted.
The Thornburgh Resort will pay a Transportation SDC for each development. The
SDC may be based on the smndard rate indicated in the SDC adoption resolution, or
an alternative rate based on the applicant's data showing that a reduced number of
vehicle trips will be gcnerated.x The approximate total SDC payments under both
methods range from $1.8 million to $6.5 million, as shown in Table 5-7,
Table 5.7
ITE
Gode $0G Category
EstimatEd SDC Paymenls lor Thornburgh Resorl - Conventlonal Method
(Assumes lull rato charged wifi no Hp rettuctions)
Erpected PM Trip
Unlls Unils Rale PM Trips
Gost per
TriPltt
FUIISDC
Rate
210 SF Detached
310 Hotel
493 Athletic Club
710 GeneralOtfice
814 SpeciaW Retait
931 Ouality Restaurant
DU
Rooms
TSF Gross
TSF Gross
TSF Gross
TSF Gross
1388,8
29,s
34s.6
22.4
54.2
'10,8
1 375
50
00
15
20
5
1.01
0.59
5.76
1,49
2.71
2.1s
$3,504 $4,866,180
$3,504 $103,369
$3,504 $1,210,992
$3,504 $78,314
$3,504 $189,917
$3,504 $37,668
$6,486,430
Alternative Method with Trip Beductions
Resorts Estimated PM Peak Trlpstzl 517.0 $3,504 $1,811,568
(1)
(2)
Acludos administrawo loes,
Transporta0on lmpacl Anal/s16, Bevision ll, by Group McKonzia, SsplBmbor 28, 2t05, Tablo 98, prepared lor Thomburgh Besort
According to an unsigned "Cooperative Improvement Agreemenr" between the
Thornburgh Resort and ODOT, the resort will mitigate its immediatq direct
'a Deschutes County Rcsolution #2008-059 cstablishes the SDC charge, standard rates, and the
allowance for cxccptions to the standard rates.
lmpact of Destination Resorts in Oregon
March 2009
fotals 1851.2
page 38
Fodor & Associates
impacts on a nearby intersection with the State highway. This mitigation includes
payment of up to $1,125,000 towards improvements at the Cline Falls HwyAJS 20
intersection in Tumalo, The improvement to the Cline Falls HwyAJS ZO
intersection is included on the SDC proiect list, so this contribution should be
deducted from the resort's gross transportation system costs. The maximum
porential paymcnt of $1,250,000 is applied,
The increase in State gas tax revenues resulting from the resort should also be
considered. Gas taxes are collected from gasoline sales, but the State distributes
them to counties based on the number of registered vehicles in the county. The
extent to which the resort increases the number of county-wide registered vehicles
will determine the increase in gas tax revenues attributed to the resort. Only
permanent, year-around residents of the resort are likely to register their vehicles
locally. There \ryas no clear method for estimating the increase in the number of
register vehicles resulting from the resort, so this impact could not be computed.
However, the impact would be quite small. For example, if there were 400 additional
registered vehicles, County Road Fund revenue would increase less than $16,000,
which would be insignificant relative to the costs."
The final cost esdmate for the transportation system impacts of the Thornburgh
Resort assumes that the resort will apply for trip reductions to lower their SDC
p&yment to a total of $1.8 million. As shown in Table 5-8, the final cost range is
$20.7 million ro $39.1 million, depending on the impact method used. The higher
standards-based figure is used in the final impact analysis because it does a better
iob of reflecting the fu[ impacts of this development, as discussed previously.
Table 5-8
lmpact Analysis Method
Estlmated Het Transportation Syslem Costs for Thornburgh Resort
MaxlmumSDG Deueloper
Gross Cosl Paymenl3ltl Conlrlluliultzt Net Cost
Planning proiection-bassd estimate
Standards-based estimate (Los=D)
$23,770,450
$42,210,850
,568) ($1,250,000)
,568) ($1,250,000)
$20,708,882
$39,149,282
1
1
($'1,81
(U,ql
(1)Assumes altemats SDC calculaton mehod wifr tip rsductions.
(2) Mulmum possible contribution towards 0DOT expenses at fie Cllne Falls Hwy^JS 20 intelsectlon.
3t For rhe 2007-08 fiscal year Deschutes County received $7963Q77 in State Road Funds and had
1ASr4QZ registered vehicles, equivalent to $38.77 pcr registered vehicle (based on Oregon Departmcnt
of Transportation, Financial Services, Highway Revenues Apportionmcnt data),
lmpact of Destlnation Resorts in Oregon
March 2009 page 39
Fodor & fusociates
School Facilities Costs
Destination resorts will generate new K-12 school students and additional demand
for school facilities. This section looks at the likely impacts of the proposed
Thornburgh Resort on the reyenues and costs of the Redmond School District. The
resort will generate school students both from the new resort housing and from the
newcomers attracted to fill iobs created by the resort.
According the current Working Draft of the Deschuus County Compeheniae Plan:35
Schook
One of the basic problems with largu oilaunts of rcsidential dateloprnent is that it
rarely pays in propnry wxes for the smtices that must be prooided. Th;i Lt
particularly tnte for the most expensioe public facility-schools. Additional pernloncnt
residmces require more facilitics and teachers. lfihm this plan was usrifien, much of
the new danlopmew had been proaidedfor seasonal reueation and atas thnefore rut
lihcly to require schook. Houteoer, tlw County was realizing tlut rnuch of the
seasonal dwehpment was becoming full-tine residences, This fnced the school
districts n seek additionalfunds fu neat buildings and more rcachm. In additbn,
costs rose because many of the new residences u)ere in ntral areas and required eun
rnore expensioe busing.
$tudent Qeneration bv Resort Housing
The new, private resort homes that are occupied as primary residences will generate
new school students, but the specific level of srudent generation is unknown. There
is no data that clearly differentiatc the student generation rate of a private home in a
destination resort from a typical new home in the sarne county. If resort homes are
occupied full-time by tbeir owners, they may have a similar demographic profile to
other new houses in the area, If they arc used as part-time second homes (or vacation
homes), they will generate few, if any new srudents. It is assumed that homes built
exclusively for overnight lodging purposes will generate no new students. Therefore,
homes designated for overnight lodging are not included in the following analysis.
As described at the beginning of this section, homes used as primary residences were
found to constitute 43o/o of owner-occupied (non overnight) units in the nearby
Eagle Crest Resort. This percentage may vary considerably from resort to resort. In
order to examine the potential impacts of the proposed Thornburgh Resort, two
scenarios are used to model the range of potential student generation by the private,
owner occupied homes in the resort:
to lVmhing Drafi Deschutes Coun6t Congtelursive Plan, draft of 5-14-08, Page 3-18.
lmpact of Destination Resorts in Oregon
March 2009 page 40
Fodor & Associates
Scenario #1: High student generation. Private, owner-occupied homes in the
resort are assumed to generate the same demand as new private homes elsewhere in
the County. (Overnight units are assumed Io generate no demand,) This scenario
may become increasing likely if resort homes are purchased and used as primary
residences. The Thornburgh resort has no age limits or household limitarions
regarding children, so the market will decide who owns these units and how they are
used. A continued weak national economy may encourage consolidation of horne
ownerships, reducing the number of second homes. A weaker economy may also
reduce the sizes and prices of future resort homes, making them more attractive to
families.
Scenario #22 Low student generation. This is the "vacation resort' scenario.
Private, owner-occupied homes in the resort are assumed to be used largely as
retirement homes and as second (vacation) homes and to generate oalry 250/o of the
new sildents generated by new homes elsewhere in the County. This scenario would
be more applicable if expensive, higher-end housing is constntcted, which would
favor more-affluent owners and may reduce the number of families with school-age
children and increase the percenuge of retirees without school-age children.
If a resort were age-restricted (such as 55 and above), it might generate no students
from the new homes, However, we are not aware of any destination resorts in
Oregon with age restrictions.
ln Deschutes County, 16.l% of the population is of K-12 school age,5 through 17
years of age.3' This is slightly lower than the statewide school-age figure of 16.9% of
rhe population. Applying the percent of school-age children to the occupancy rate of
2.7 for new homes, yields a school-age gencration rate of 0.43 students per new
house.
State Law requires that destination resorts provide a certain amount of overnight
accomrnodations to assure that they meet their tourism function. In Deschutes
County there must be at least one housing unit available for overnight
accommodations for every two private, owDer-occllpied housing unit created at a
destination resort, Most resorts build only the minimum number of overnight units,
and therefore adhere closely to this ratio. It is not clear that resorts continue to
adhere to the minimum number of overnight units once construction is completed,
and some overnight units may convert to owner-occupied status.
For the Thornburgh Resort,950 of the 11375 housing units will be owner-occupied.
A S}room hotel will be used to meet the balanoe of the overnight housing
requirement. There are no age or demographic restrictions on ownership, so the use
3'The most recent US Census cstimales for households in Deschutes County are for 2006. This data
includes the incorporated areas ofthe county,
lmpact of Destlnatlon Resorts ln Oregon
March 2009 page 4 I
Fodor & Associates
of these homes will be market-driven. These homes may be used either as primary
residences or as second homes (vacation homes).
Table 5-9: Estimated K.l2 shrdent genetation by rcsidential housiag at
Thornburgh Resort.
Scenarlo #1 Scenarlo #2
Total owner-occupled housing units
Students generated per housing unit
Students generalq! by reliort housiqg
950
0.43
409
950
0.11
102
SLUdenf. Generation from Resort Emplovment
In addition to student generation from the housing in a destination resort, there is a
secondary demand resulting from the new iobs created at the resort. These new iobs
will attract new households to the area and generate new students. Since the
constnrction jobs Bre temporary, the number of new students generated by reson
employment will fluctuate as households move in and out of the area to meet
employment needs.
Employment impacts are addressed in more detail in the Economb lrnpacu section of
this report. The direct and induced employment resulting from the Thornburgh
Resort is estimated to peak in year six at 2,015 iobs and then decline by lr47l jobs to
a steady level of 544 iobs from year twelve onward. There is no stralghtforward
method for estimating school system impacts resulting frorn short-term
employment. Undoubtedly the srudents generated by the 1,471 temporary iobs will
significantly impact the school system.
This study evaluates the school impacts resulting from only the permanent iobs
generated by the resort. These employment-related school impacts are included in
order to better account for the full impact resort development has on the local school
district. Based on estimates developed in the Economic Impacts section, 347 new
households will be created by the 408 iobs filled by newcomers.
Table 5-10: Estimated K.l2 student generation by newcomers fiIling pemranent
iobs at Thornbugb Resort.
Total new housing units for resort-related employment
Students generated per housing unit
347
0.43
149Students generated by resofi
lrnpact of Destlnation Resorts in Oregon
March 2009 page42
Fodor & Associates
Table 5-11 shows total student generation for new resort housing and resorr
employment. Under Scenario #1, reson housing will generate a similar number of
new students as other new housing in Deschutes County, resulting in a total of 558
new students. Under Scenario #2, resort housing will generate only 25% of the
srudents of a typical new house in the County, resulting in a total of 253 new
students, These two scenarios provide a reasonable range of 251 to 558 new students
generated by the Thornburgh Resort.
Table 5-ll: Total K-12 student generation by Thornburgh Resor 6sssing and
employment.
Scenarlo #1 Scenario #2
Students generated by resort housing
Students generated by resoft employment
Total students generated
409
149
102
149
558 251
Sg-Lqpl Fu.ndipg in Olegpn
Schools in Oregon are funded primarily by a combination of state and local sources.
The primary local source is property taxes. The Sute School Fund formula
determines how much state funding a school district gets. The formula bases the
state funding on the number of students served and deducts the local propefiy tax€s
going to schools, The state funding is directed to school operations, maintenance,
repairs and transporution needs. If the local property tax revenues increase due to a
new destinadon resort, the state contribution to local school funding will be reduced
by an equal amount. For new students generated by the resort, the district will
receive the same funding per srudent as they do for the rest of their students.
Therefore, new developments provide no extra funding to local school districts for
general operations.
New school facilities needed to serve growth are funded primarily through issuance
ofvoter-approved local general obligation bonds that are repaid through local
property taxes. Local property tax revenues for bond rcpayment are not deducted
from the State's operation funding.
The tax base for the Redmond School Dietrict comes from the total assessed values
of the District in both Deschutes County and Jefferson County. Table 5-12 shows
the total tax base is $4,9371455,942 for 2008-09.
lmpact of Destination Resorts in Oregon
March 2009 page 43
Fodor & Associates
Table 5-12: Assessed value for the Red'nond School District 2J tax base.
County
Assessed Value Total
2009.090f
Deschutes County $3,594,082,824
.Jefferson C,ounty $1 ,343,373,1 18
Total School District Tax Base: $4,937,455,942
(1) Source: Bedmond School 0hrtct
Assuming that the Thornburgh Reson is fully built out as planned, the estimated
increase in the assessed value of the school district's tax base would be $37417881817,
At full buildout, Thornburgh would represent 7,lo/o of. the tax base available to the
school district. Based on the estimated increase in the toul tax base available to the
Redmond School District that would be created by the Thornburgh Resort, the
resort will pay for approximately 7.1% of facility bonds issued for new construction
by the District. This percentage will be deducted from the school facility costs
generated by the resort.
School Facilitv Costs
To estimate the cost of expanding school facilities to increase student capacity, the
total costs for new facilities at all grade lcvels must be determined. The Redmond
School District passed a bond in May of 2008 for a new high school and new
elementary school. A new middle school was built by the District in 2006. The costs
for these new facilities are addcd to the land values to obtain a total school facility
cost for each grade level, as shown in Table 5-13 bclow.
Table 5-13: School facility cests, Redmond School Disuictr 2008.
Grade Level Building Gosl Land GostF,
Total School
FaclliU Cost
High schoolfl)
Middle school@
Elernentary schoolfl)
$80,000,000
$22,764,955
$20,000,000
$13,600,000
$3,000,000
$2,600,000
$25,764,955
$22,600,000
$93,600,000
Notss:
(1) Building costs based on a bond lssue by he Eerlmond SD approved by vsbrs May 20,2008 as lVhasuro 9-56.
(2) Bul5ing cosl based on Ellon Gregory MiJdle School complot8d in 2006 for P0 milion. Cosa adFstd to 2008 uslm ENR
Coostructbn Cost lndex 1or clos06l locaton (Seatle).
(3) Besed on etual acreage and a cunenl land valuc aslimato ol 3200,000 per acre,
The total school facility cost is divided by the capacity of sudents for each facility to
calculate at cost per unit of student capacity (see Table 5-14).
lmpact of Destinatlon Resorts in Oregon
March 2009 page 4,1
Fodor & Associates
Table 5.14: School faciHty costs perunit student capacity, Redmond School
Districtr 2008.
Cost pu Unit
Tolal School Student Student
Grade level Facility Cost Capacltyrl) GapIgiU. . _
High school $93,600,000 1400 $66,857
Middle school $25,764,955 804 $32,046
Elementary school $22,600,000 600 $37,667
(1) Capacity lor each school lrom Rerlrnond School District.
The "cost per unit of student capacity" is then distributed across the student
generation rate at each grade Ievel for a tlryical new house in Deschutes County, as
shown in Table 5-15. Based on faciliry costs in the Redmond School District, the
total school facilities cost associated with typical new house is $21,542,
Table 5.15: School facility costs per new house, Redmond School District,2008.
Grade Level
Cosl per
Unit
$ludent
Capacity
Percent ol
Tolal Sludents
at Grade
Lsvelrl
Student
Generatlon by
Grade [eve! lor
New House
School
Facllity
Cosls per
New House
High school
Middle school
Elementary school
$66,857
$32,046
$37,667
47lo
23Yo
30%
0.202 $13,5070.098 $3,1470.130 $4,888Totals: 100% 0.430 $21,542
Estipated School Facili$es Costs for Thornburqh Resort
The Redmond School District does not charge a school excise fee (a development
irnpact fee authorized by the State Legislature) for new and expanded school
facilities, so development makes no direct contribution to school facility costs
outside of ordinary property tax payments. [f the district were to adopt the feg ir
could collecr up to $1 per square foot. A new 3,000 square foot house would pay a fee
of up to $3,000.
Based on the high and low student generation rate scenarios (Scenarios #1. and #2),
it is possible to esdmate the range of total srudents gene rated by the destination
resort and the resulting total facility costs. The Thornburgh Resort will generate
costs for new and expanded school facilities ranging from a low estimate of $12.6
million to a high of $21.9 million, as shown in Table 5-16.
lmpact of Destination Resorts in Oregon
March 2009 page 45
Fodor & Associates
Table 5.16: Total facility costs for K.l2 student generation by Thoroburgfi
Resort housing and employment.
Scenario #1 Scenarlo #2
Number of primary rosidences in resort(l)
Number of new households for permanent employees
Total new households generating school-age students
Total students generiated (at 0.43 per house)
School facility costs per new house
950
347
238
347
1297
558
$21,542
$27,939,97{
585
251
$21,542
$12,591,299Total school lacilities costs (#houses x
Note ('1 ) Sconario #1 assume$ that 950 o$,n0r.occupied resort hous$ wlll have similer occupancy lo typical n€u/ houses ln DeschuEs
Counly, whlle Sconarb #2 assumes $al only 25$ ol rssorl houses will b0 similar and fio rssl will bs socond homss lhal gonsrale no
school children.
For the final fiscal impact on school facilities, only the student generation from
Thornburgh Resort housing was included. Impacts from resort employment were
not included in order to be consistent with the rest of the impact study, which did
not include secondary or induced impacts. The costs associated with only the resort
housing range frorn $5 million to $20 million, as shown in Table 5-17.
Table 5-17: Total facility costs for K-12 student generation by Thotnburgh
Resort housing.
Scenarlo #1 Scenado #2
Number of primary residences in resorfll)
Total students generated (at 0.43 per houss)
School lacility costs per new house
Total school lacilities costs (#houses x $/hse):
950
409
$21,542
$20,464,900
238
102
$21,542
$5,116,225
No10 (1 ) Scsnario # l arsumBE $at 950 o$,n6roccupied resort houses will have simila, occupancy to lyplcal new houses in Desclxrbs
County, whlle Scenario #2 assumes that only 2595 of rssort housBs riill bs similar and thE rost will be socord hom6s ftal gsn$als no
6chool childron,
In order to credit the resort for future property tax payments thar would potentially
contribute ro school construction bonds, the estimatedT.l% contribution to the tax
base should be deducted from the school facility costs attributed to the resort (see
previous discussion on this). Therefore the net costs for school facilities attributed
to the resort range from $4.8 rnillion to $19 million, as shown in Table 5-18. To be
conservative, the $4.8 million cost associated with the low-student-generation-rate
scenario (Scenario #2) was used in the final cost estimates.
lmpact of Destlnation Resons in Oregon
March 2009 page 46
Fodor & Associates
Table 5.18: Net K.l2 school facilities costs for Thornburgh Resoil after
deducting future plopeily tax conttibutions.
Net School Facllllies Gosls
$cenario #1 Scenario #2
Total school facilities costs:
Future property ta( contribution (at 7,1%)
$20,464,900
($1,453,008)
$5,1 16,225
($363,252)
Net school lacllities costs:$19,011,892 ${,752,973
lmpact ol Destination Resorts in Oregon
March 2009 page 47
Fodor & Assoclates
Fire & EMS System Costs
The Thornburgh resort would receive fire and emergency medical service (EMS)
services from the Deschutes County Rural Fire Protection District #l (DC
RFPD#l). Four of the ten existing land parcels that make up the proposed
Thornburgh Reson are located within the boundaries of the Fire District and the
remaining 6 parcels have been recently annexed within the District at the request of
the reson developer.
Deschutes County Rural Fire Protection District #1 does not independently
provide fire and EMS services, but rather has entered into a cooperativc agreement
with the City of Redmond to jointly provide Fire Protection and EMS services to
both City and District residents through Redmond Fire and Rescue (RF&R), tI(ith
an annual budget of $6,483,074 and utilizing the services of 40 career and23
volunteer fire fighters, Redmond Fire and Rescue provides fire and EMS services to
the 42,000 residents of its 145 square mile service area(450 square miles for
ambulance service).38 To do this it operates four fire stations: The Headquarters
Station located within Redrnond proper; the Airport Station at Roberts Field; and
the Cline Falls and Terrebonne Fire Stations within DC RFPD#1.
Ooerational Canacity
Assessing the capacity of a fire department is a difficult task, First, it is impossible,
for both fiscal and operational ressons, to have a fire department of sullicient size to
meet all possible operational simadons. Second, the random neture of emergency
calls makes e stablishing a reasonable base level of service difficult. In 2007 RF&R
experienced 4,253 dispatched 9-1-l scrvice calls, 2,E64 in the city of Redmond and
1,388 rural calls.3e This included2,894 EMS calls, 830 fire calls and 511 medical
transfers, !flhile this averages out to roughly 12 calls per da5 or 3 calls per smtion
per day, these call levels are not consistent. They can come in bunches as well as one
at a time. Several years ago, a single arsonist, starting fires along Highway 97
managed to overtax the fire departments in three Central Oregon counties.{
The impression from Chief KnorCs report on RF&R operations in the agency's 2007
Annual Repon is that of an organization operating within its capabilities. Yct one of
the uufunded budget requests in the FY 2008-09 RF&R Budget was for three
additional firefighter/paramedics to staffa second ambulance to handle non-
emergency medical transfers. Because this wenr unfunded, the Terrebonne position
il 2007 Annual Report, Redmond Fire & Rescue, page I I and data provided by RF&R staff.
r'2007 Annual Report, Redmond Fire & Rescuc, page 3.{ From phone converration with Redmond Fire and Rescue staff.
lmpact of Destination ResorB in Oregon
March 2009 page {8
Fodor & Assoclates
is vacant and they are unable to respond to calls for these transfers.ar It appears that
the Redmond Fire & Rescue has suflicient capacity to provide a reasonable level of
Fire Protection for the 42,000 residents living and working within its l45-square
mile area of responsibly. !fihether the RF&R has sufficient un-utilized operational
capacity to provide additional fire protection for the residents of the Thornburgh
Resort is not clear.
Qapit?l Costs
The combined operation provides one fully-equipped fire station for every 101500
residents.{zIn order to apply this current population-based service standard to the
resort, an "effective population" rvas used that reflects rhe number of structures at
the resort rcquiring fire protection. This population figure is the number of people
typically associated with these structures in the County and is not intended to
represent the actual population of the resort at any given time.{! As shown in Table
5-19 the Thornburgh Resort would have an effective population for Fire/EMS
demand of 3,813. To meet the suudard of one station for every 10,500 peoplg an
additional 36.3o/o of a fire station would need to be provided to meet the demand
Thornburgh places on the capacity of Redmond Fire & Rescue.
Table 5-19
Thornburgh Ellective Population Estimate lor FirelEMS Syslem Demand
Number of
units
Pelsons per Persons pelunito) TypelaType of Housing Unit
Hotel
Residential Overnig ht Units(3)
Houses
Esllmated Population: 3,813
Notes:
(l)Hotel room occupancy figure is an eflimale, The 2,7 llgure us0d ls fie resldentlal occupancy nt6 lor now
homes ln Deschutes C$nty.
(2) Number ol UniE x Per$ons p6r UnrL
(3) Th6se are fi6 houslng unis $at wouE be subject lo a deed rostiction roguiring trlat fiey be aailatle tor Bhorl
lem renhl at least 3E weolo a year,
ar Section 2, Fire Fund,City of Redmond FY 200&09 Budget, page 5
a2 It would be preferabte to use number of addresses or rypc or numbcr of structures located wirhin
thc district as the main mctric in an evaluation of this type, but as Redmond Fire & Rescue does not
have that data we were limited to what is available, which is population data.{'In the case offire protection, all buildings (empty rs wetl as occupied) have the potential ofplacing
demand on the capacity of the systcm. "Effective population" was used herc to rellect the number of
structutles in the reson, relative to thosc sewing the gencral population, This population figure is
differenr than the figure used in estimating the dernand Thornburgh would place on public safety or
public parks. In rhe case of public safety or the park sysrem, it is people who place demand on the
capacity of the systcm.
50
425
950
100
1,'148
2,565
lmpact of Dstination ResorB in Oregon
March 2009 page49
Fodor & Assoclates
2
2,7
2.7
The Terrebonne Fire Station opened in August of.2007 and is the newest station in
the Redmond Fire and Rescue system. It cost $1.3 million dollars to construct. The
cost of constructing a similar station in 2008 is about $1r362,920.n This station is
staffed 2al7 by 6 firefighters and has rhe equipment listed in Table 5-20.
Table 5.20
Fire Apparatus al Terebonne Fire $talion
GoslEquipment Type(t)
Light Rescue TruckP)
Llght Brush Truck (Type 6 Fire Engine)t3)
Heavy Brush Truck(a)
Fire Engine6)
AmbulanceF)
$70,000
$90,000
$150,000
$250,000
$1 50 000
Total $700,000
t{otes
(1) Equipmont lBt providod by slatl at lh6 Tembonn0 Shton. ln additon to $E
apparatur llsled that station also haE a boat to facilihls accsss to pem ol smith Rock
Pair
(2) The cost flgurc \,va$ e$timaled using prices lor usod oquDmont cunenty listed on
fis lnlornot
(3) Ihe $80,m0 E tho amourt budgetod to purDhase h0 rucL
(4) The cost ligure was 0s[ma10d using prices lor used equbment cunenty llsted on
he lnternet
(5) ThB cost value u$od was providsd by RF&R sutl
The combined cost of constructing a oew station and providing it with the same
tlpe and number of apparatus is about $2,062,920.45 Based on the estimated need to
provide 36,30/o of a new fire station to serve the Thornburgh Resort, the total capial
cost for providing Fire Protection services to the resort is about $7481840.
Oregon Law does not permit the imposition of System Development Charges or
impact fees to recover the Fire/EMS system capital costs associated with new
developmenr. Therefore, these capital costs for expanding the system will fall on all
of the property owners within the DCRPD#1, not just those in the Thornburgh
Resort.
One of the proiects RF&R has been undertaking is researching the feasibility of a
fire station in DCRF?D#I's southern area. Due to prudent fiscal planning the
DCRFPD#I has $840,800 in its building reserve fund and $77,250 in its equipment
( Adjusted using the ENR Construction Cost Indcx for the nesrest city (Seattle).
{t [n addition to the fire house stnrcture and the Iire apparatus there sre a largc number of othcr items
that are nceded for a fully functioning Fire Starion. Items such as beds, stovc, washer-dryer, hoses,
breathing appsratuE tools, lights, hose nozzles, etcetera) were not includcd in this cost cstimate.
lmpact of Destlnatlon Resort in Oregon
March 2009 page 50
Fodor & Arsociates
reserve.{6 However, rhat is much less then the $21062,920 needed to build and equip
an additional fire station in the Disuict's southern operating area, panictlarly as
those funds would also be needed to cover the eventual replacement of existing
buildings and equipment,
To obtain the final net fire/EMS system costs, estimated future conuibutions to the
District tax base from the resorts are deducted from the cost above. If fully
developed, the Thornburgh Resort would represent 22o/o of.the DCRF?D#I tax
base. Deducting the contribution through future tax payments, leaves a net cost for
fire/EMS facilities of $580,8I3, as shown in Table 5-21.
Table 5-21: Net fire/EMS facility cost for Thornburgh Resoft after deducting
future property tar contributions.
l,lel Fire/EMS Facilitias Gosts
Total fire/EMS facillties cost:
Future property ta( contribuflon (at 22%)
$748,840
($10a,ozz;
tlel llre/EM$ lacililies cost:$580,813
Ooer.ational Costs
Redmond Fire & Rescue has an annual budget of $6487,876 of which $5r830,680 is
allocated for department operations.lT'{t That amouut includes the replacement of
the division commander's vehicle and $271000 to replace four ambulance gurneys
and similar operational expeuses, For the service district population, this operations
cost amounts to $138.83 per resident per year.
For the estimated 3,813 Thornburgh residents, it should take about $529,359 to
maintain this level of service. It is important to note that l8 of the firefighter
positions in the RF&R are to be filled by volunteers. As such, the value of their
labor is not included in that operational cost.a'At this time, finding individuals with
rhe interest, ability and commitment necessary to become volunteer firefighters is
not easy.
As reported in the Reuenues section of this report, Thornburgh Resort property
owners will pay Bn estimated $637,731 in property taxes to the DCRFPD#1. This
exceeds the estimated cost of$529,359 needed to provide the current level ofservice
(6 DCRFPD#1 Ff 2008-09 Annual Budget
o7 Scction 2, Fire Fund, City of Redmond FY 2008-09 Budget, page 4
1r lbid
ae Section 2, Fire Fuod, City of Redmond FY 2008-09 Bu{get, page 2
lmpact of Destlnatlon Resorts in Oregon
March 2009 page 5 I
Fodor & Assoclates
for those residents. The revenue surplus of $1081372 would not be adequate to meet
the capital cosrs ro build and equip the additional fire station infrastructure
necessary to serve the resort.
There is another non-rnonetary operational cost that the rest of the District
residents will bear, at least in the short term, because of the development of the
Resort within their District: A reduction in the level of service caused by increased
driving rime. The Thornburgh resort is located at the extreme edge of the district's
southwest boundary and, as a result, fire and EMS vehicles going to and coming
from Thornburgh will have longer response times to call in orher parts of the
disrrict, The construction of an additional fire station in the southern part of the
DCRFPD# ['s operating area should mitigate some of this negative impact.
Additionally, as the proposed Thornburgh Resort is not intended for permanent full
time residents, it is not a likely source of addidonal volunteer firemen and this
burden will fall on the other full-tirne residents of the District. So while the property
taxes should adequately cover the day-to-day costs ofproviding fire protection for
the Thornburgh resort, the need to provide volunteer firefighters and to bear the
mafor portion of the capital cost ef constructing and equipping an additional station
as well as a reducrion in service due to extended travel times until it is built means
that in the final analysis rhe current residents of the Deschutes County Rural Fire
Protectiou District #1 would incur net cosls if the Resort is constructed.
lmpact of Destination Resorts ln Oregon
March 2009 page 52
Fodor & Associates
Public Safety System Costs
Public safety involves many different functions, including patrols, prosecution,
incarceration, parole, 911 services, courts, and others. Some resorts provide their
own onsite security and patrol services. Sunriver, Black Bune and Pronghorn are
examples. Some, such as Eagle Crest provide limited onsite securiry, These services
lack the police powers of the Sheriffs officers and are therefore a limited substitute
for County public safety services.so Thornburgh Resort has not indicated that it will
provide any onsite security, so security and patrols are assumed to be provided by
the Sheriffs Department.
To estimate thc impacts of the Thornburgh Resort on public safety facilities and
services, data is needed on public safety facility costs and the Sheriff s Department
operating budget. This analysis was complicated by the many different public safety
functions and the lack of usable facility cost data.
There are three Sheriffs substations that serve unincorporated Deschutes County:
Terrebonne, Sisters and La Pine substations. There is no facility cost data for any of
these since two are being lease d (Sisters and Terrebonne) and one is part of the
South County Building that contains multiple uses, The service area for the
substation also cannot be determined, since they have no particular boundaries and
overlap coverage. The Thornburgh Resort could be served by either the Sisters or
Terrebonne substation. In addition, the main Sheriffs office in Bend provides
services for the unincorporated area near Bend.
Public safety functions include:r 9l I County Service District. Adult Parole and Probatione Community Justice - Juvenile. District Attorney's Officer Justice Courtr SherifPs Office. Deschutes County Adult Jail
Public safety facilities must be adequate to handle peak demands at the height of
tourist season. There is very little opportunity to adjust or downsize the system for
off-peak periods. For this reason, public safety facilities must have capacity to serve
the resort during peak occupancy.
50 Private security scrvices are limited in their ability to arrest, detain and use force and do not replace
the need for tnte law cuforcement services.
lmpact of Destination Resorts ln Oregon
March 2009 page 53
Fodor & Associates
The Deschutes County Adult Jail was built in 1994 and has a capacity of 228 beds.
According to the Cottections Needs Assassment: Deschutes County, Volume One, Master
Plan (Janua ry 26,2A0Q,'r the capacity of the jail is currently being exceeded. The
2005 average daily population (ADP) was estimated to be 270 inmates. Modeling of
future jail demand results in a projected ADP of 578 in the year 20[5, increasing to
El8 in 2025. A nvo-phased plan is proposed for meeting current and future jail
expansion needs.
Allowing for fluctuations in iail bed demand, the first phase of development would
address projected corrcctions needs through year 2015 et 690 beds, with occupancy
of expanded facilities assumed to occur, in the year 2010. A second phase of
development would then address projected corrections ueeds through the year 2025
at975 beds, with facility occupancy assumed to occur in the year 2020. The cost for
phase one is $70,989,839. Phase two, to be constructed startiug in 2020, will cost
approximately $5+ million.
Table 5-22
Deschutes Jail Expansion Master Plan(l)
Populatlon Existing JailEstlmateo Beds
Jail Beds
Needed(a)Yaar AOPO)
2005 143,053 228 284 3492010 '166,572 690 427 5202015 't89,443 690 578 6902020 214,145 975 689 8202025 240,811 975 818 , 975
,
(1 ) Conectlons Needs Assessment: Deschubs Counly, Volum0 0n0, Ma$ter Plan and Volume lwo,
Technicd Appentlices, January 26, 2006.
(2) Based on D0schnbr County 2000-?025 Coordinabd Population torecasl.
(3) ADP is average daily populalion lrom page 0,3,3 o, Conectlons Needs Assessment Cunsnl valueslor
AoP ere hlgher fian actJal to hcbde early releases,
(4) lncludas capacity to handlo daiv fluctuations (psakinq ractor),
Based on the estimated population increase of 3,688 people resuhing from the peak
occupancy of the Thornburgh Resort (Table 5-23) and the cost for the associated
increase in jail capacity, at $1,129 per person (Table 5-24), the associated cost for iail
capaciry is $4,163,752. Note that jail facility costs are assigned on a population-
weighted basis and do not assume that resort residents will be more or less likely to
be incarcerated than average residents. In principle, all residents benefit equally
from the increased safety that adequate jail facilities provide.
5t Cqnections Needs Asscssmcnt: Deschutes QounU, Volume Ong Master Plan and Volume Two,
Technical Appendiccg January 26,2006. Sec htto://www.co.deschutes.or.us/g$r/.obieqtid/298167F2-
BDB.D-5 7C I -9A,456F28 8808D-227/1n dcx. gfm.
lmpact ol Destinatlon Resore in Oregon
March 2009 page 54
Fodor & fusoclates
Table 5-23
Thornburgh Peak Population Estlmale lor Public Salety Syslem Demand
Type ol Housing Unit
Number
ol units
Persons
per unltor
Peak
0ccupancy
Rate G)
Persons per
TYPg to
Hotel
Residential Ovemight Units (a)
Houses
2
2,7
2,7
90
1,033
2,565
50
425
950
90%
90%
100%
Estlmated Populalion:3,688
Notes:
(1)Hotel room occupancy ligure is an cstnale. The 2.7 ligure is tre residenlial occupancy rab lor a new house h DeschutDs
County. Tlb occupancy rats is applied to ovemighl houslng as well, eyen lhouoh many resort ronhls sho,v capaciv lor I to
12 persons.
(2) Tho p0ek occuparcy rates used for $e hotel and ovemlghl unlts are hose used 10 g8nBralo he t?nslenl room tsx data.
(3) Numbcr ol Unlts x Persons pBr Unit x occupanDy Rato.
(4) Those ers lho housing units fiat would be subiecl lo a deed restlction requidng fiat th0y be availablo lor short tcrm ,sntal
at hast 38 wgoks a yoar,
Table 5-24
Jail Expanslon Costs Associaled wilh Populalion Growth
Phase One Cosfl) $70,989,839
lncrease in Beds 462
Cost per New Bed: $153,658
Increase ln Needed Beds,2005-2015 341
Cost for increase in needed beds,2005-2015 $52,397 ,262
Cost per capita for population growth,2005-20158) $1,129
(l) Cost lo meet prolecled nsods in 2015 per Corrections NeedsAssessnent:Oeschules
Co{rnry, Volums One, Mastor Plan and Volume Two, Technical Appendhes, January 26, ?006.
(2) Populallon growth for fih porlod was basrd on $e otlicial populalion lorecasl l0r
Deschutes County providod in lhe Appondix.
To estimate the costs for other public safety facilities (other than iail facilities), the
2008-09 Deschutes County Capital Asset Query File was used to compile capital
costs. It was impossible to determine values for all facilities because some are shared
facilities thar provide multiple functions and there was no way to separatc out the
public safety components. These faciliries are indicated as zero-values in Table 5-25,
Table 5-25 provides the moEt complete listing possible from the Capital Asset
database. Each facility cost was adiusted to 2008 building costs using the ENR
Construction Cost Index for the year in which the asset was built or purchascd to
obtain an estimated current replacement value. The total e$timated replacement
lmpact of Destlnation Resorc in Ore6on
March 2009 page 55
Fodor & Associates
value of public safety facilities is $22.5 million. This total does not include some
shared facilities nor any rented facilities. Land values, patrol cars and SherifPs
equipment costs were adiusted for inflation to 2008 values.
Table 5-25
Value of Erlsting Public $afety Facilities (Exctuding Jaillnt
Source: Deschutes County 2008{9 CapitalAsset 0uery File
(All buildings and lmprovements adiusled to 2008 values uslnq ENR Construction Cost lndex)
Dept Code
(Locatlon Codcl Facility/Depllgmq
Buildings and
lmproueme[q
[and
!muqtleuedr
TotalFacility
Valuee)
2l Civil/Special Units29 Automotive/Communiclatlons33 lnvestigations/Evidence34 Patrol35 Records38 Court Security39 Emergency Services41 SpecialServices43 Training75 911 General 0perations82 Adult Parole/Probation45 Non-DePartmental{3)
45(170002) Sheritl's 0tficeBuilding
45(170202) Juvenile Community Justice Bldg
45(170302) RegionalConectional Building
Facillties Subtolals: :
170*** Patol Cars (V0+1t't
170*** Sheritf Equipment (SE)(a)
170100 Land lor Public Salety Bldg (LA)o
lmpact of Destination Resorc in Oregon
March 2009
$248,02{ $18,996,586
$1,688,946
$488,409
$1,359,059
$o
$0
$7,653
$18,214
$0
$0
$o
$7,819
$0
$200,727
$152,855
$3,863,921
$10,929,783
$3,567,591
$0
$70,222
$0
$45,536
$7,653
$18,214
$0
$0
$0
$7,819
$132,266
$200,727
$223,077
$0
$45,536
$o
$o
$o
$0
$0
$0
1$32,266
$0 $3,863,921
$0 $10,929,783$0 $3,567,591
$18,748,562
TotalC Value:
(1) three Shefffs Srfshtiom were not included because hey are renled or shard lacilitic8.ofier sharsd lacillties also wero not included.
(2) Total costs do nqt lnclude thB valuae ol any sharEd lacililir8 or taciliti0s usod r0r Nblic salety puposes tnat are rent0d, suct as fie Terrcbonna
and SistolE SubEtations.
(3) only pnblic salety laclllties werc lncludod lrom fils departmont code.
(4) CaIs, equipmsnt rnd hnd costs adiusted lor lnllatlon to 2008 values uslm fie Coosumer Price lndeL
To arrive at a per-capita cost for public safety facilities (not including iail cost), the
total of facilities values of $22.5 million (from Table 5-25) were distributed across
the entire County population. The full County 2008 population of 156,733 penions
page 56
Fodor & Associates
was used because most of the facilitics serve the entire County,52 The per-capita cost
for thesc public safety facilities is $14. Based on the demand resulting from the
assumed peak popularion of the Thornburgh Resort of 31688 persons (Table 5-23),
the incrernental cost for expanding these faciliries ro serre the resorr is $53t,072.
As shown in Table 5-26, the total public safety facility costs associated with the
Thornburgh Resorr is $4,694,824. It is important to note that the cost value is
understated due to the lack of data mentioned previously.
Table 5-26
Per New
Person For Resort
Jail Expansion
0ther Public Safety Facilities
$1,129
$1 44
$4,163,752
$531,072
Total Gost:$4,694,824
To obtain net public safety facility costs, esdmated future tax contribution by the
Thornburgh Resort are deducted from the cost in Table 5-26. At full buildout, the
resort would represent 2,2o/o of.the County's tax base and would fund the same
percentage of County faciliry cosrs. As shown in Table 5-27, the net cost for public
safety facilities is $4,591,181.
Table 5.27: Net public sefety facility cort for Thornburgh Resort after deducting
future property tax conftibutions.
Nel Public Salety Facilities Costs
Total public safety facilities cost:
Future property tu contribution (at 2.2%)
$4,694,824
($103,64s)
Nel public salety lacllltles cost:$4,591,181
t2 Exccptions are the patrol cars and parrol facility cost, which serve primarily the unincorporated
area, These costE arc relativcly small, so the crror is negligible, but the effect is to slightly lower
public safety costs attributed to the resort,
lmpact of Destination Resortr in Oregon
March 2009 pagc 57
Fodor & Assoclates
Tolal Public Salety Facllity Gosls lor Thornburgh Resorl
Cost of Public Safew S.9_IyigJs
The acrual amount spent for the Sheriffs office for the budget year ending June 30,
2008 was $26,844r500.t3 This expenditure was allocated to countywide and rural
service districts as shown in Table 5-28. The cost for each district was divided by the
2008 population for the district to arrive at per-capita costs. Rural unincorporated
residents received service from both districts, so the total per-capita cost is $295 per
year. For the estimated 31688 peak residents of Thornburgh Resort, the cost to
provide public safety services is approximately $1,087,960 per year.
Table 5.28
Sherill's Deparlmenl 2008 0perations Gostsflr
District
Population
Expenditure $erved
Per-Capita
Gosl
Countywide District $15,908,322 156,733 $102
RuralDistrict $1 178 193
Total
Ended June 30, 2008, pages 63 and 64.
As shown in Table 5-29, the total esdmated annual public safety revenues from the
proposed Thornburgh Resort are $1r310,884. This is about $223,000 more than the
estimated costs to serve the resort, The surplus is due to the allocation of 73o/o of all
room taxes to law enforcement, as described in the R eaenues section,
Table 5-29
Eslimated Publlc Salety Revenues lrom Thornburgh Resort
Revenue Source Rsvenue(u
$345,368
$508,963
142,437
116
folal:884
t1 Comprehensive Annual Financial Repoa, Deschutes County, Oregon, For the Fiscal Year Ended June
30,2008, pages 63 and 64.
Countywide Law Enlorcement
RuralLaw Enforcement
911 Service
Share of resort room taxes to law enforcement 1
lmpact of Destination Resorts in Oregon
March 2009 page 58
Fodor & Associates
Parks & Rec. System Costs
The Thornburgh Reson is within the Boundaries of the Redmond Area Park and
Recreation District (RAPRD). The Disuict is supported through a combination of
user fees and property taxes. The District operates the Cascade Swim Center, with a
25 meter indoor pool, the RAPRD Activity Center with indoor basketball, volley
ball courts and batting cage; and multipurpose activity room; the High Desert
Spons Center with 4 softball lields a BMX track and a Remote Control Airplane
Landing field; Borden Beck Iflildlife Preserve a 26-acre park and nature preserve
located along the Deschutes River, and Historical Tetherow Crossing, an 11-acre
Deschutes River-front park.
The recreational opportunities offered by RAPRD at its swim and activity centers
directly duplicate those that would be available to Thornburgh residents and guests
at Resort-owned and operared facilities. As those facilities are closer and should be
available at little to no out-of-pocket expense, it is likely that Thornburgh residents
and guests would use the resorts facilities rather then driving long distances to a
similar RAPRD facility. Thus it is reasonable to conclude that rhe Thornburgh
Resort would have no measurable impact on the operation of the RAPRD Aquatics
and Activity Centers.
The facilities provided by the High Desert Sports Center are not duplicated at the
Thornburgh Resort. But as the resort is intended to provide short term rentals, and
vacation or se cond homes, it is not like ly that many of the residents would be
participating in local softball leagues or otherwise using these facilities. The one
possible exception would be out of area teams renting a house or houses to stay in
while participating at a tournament hosted by the High Desert Sports Center or
Cascade swim Center. However, if that should occur, it would be more eccurate to
say that the sports complexes w€re utilizing the short term housing capacity of the
Resort rather than Resort residents utilizing the capacity of the sports complexes.
Thus it is reasonable to conclude that the Thornburgh Resort would have no
significant impact on the operation of the High Desert Sports Center.
Iflhile the resort does intend to provide open space for the use ofresidents and
guests these facilitjes do not duplicate those provided by Borden Beck \flildlife
Preserve and Historical Tetherow Crossing Park. The Deschutes River is one of the
significant tourisr attractions in Central Oregon. The Thornburgh Resort does not
have any river frontage and both of these parks include extensivc Deschutes River
frontage. For this reason it is reasonable to assume that residents and guests of the
Thornburgh Resort would utilize these two parks.
lmpact oI Dstlnatlon Resorts ln Oregon
March 2009 page 59
Fodor & Associates
Caoital Costs
The flexible nature of park facilities such as the Borden Beck l7ildlife Preserve and
Historical Tetherow Crossing Park makes it diflicult to determine the maximum
number of users that could utilize them at a time. Thus making a determination of
whether they are at, over, or below capacity difficult to impossible. It is however,
relatively ea$y to determine what the curreot level of service that is being provided
by these two parks to the 32,000 residents of the Redmond Area Park and Recreation
District, and from that determinc the amount of similar river front park acreage that
would be needed to maintain that level of service.t{ Currently RAPRD provides
1.156 acres ofopen space per 11000 residents.t'
Table 5-30
Parks and 0pen Space Operaled by RAPRD
Facility Acreage
Borden Beck Wildlile Preserve
Historical Tetherow Crossing Park
Total Acreage 37
Park and recreation facilities receive peak demand in the summer months, the same
time that resort occupancy will peak, Thc limited data available for the proposed
Thornburgh Reson does not contain any demographic or population figures, but it
is possible to arrive at a peak population estimate for the resort by working from the
number of planned housing units, as shown in Table 5-31. If the advertisements for
vacation rentals in the greater Redmond area are any indicator of the occupancy
rates, the cstimate for the occupancy of residential overnight units of 2.7 persons
may be low. Many of these ads indicate that rental homes sleep from 8 to 12 persons.
5a Population figure was provided by RAPRD staff.
5t (37 acreV(32000/1000) = Ll56 acres per thousand residents
26
11
lmpact of Destlnatlon Resons in Oregon
March 2009 page 60
Fodor & fusoclates
Table 5-31
Thornburgh Peak Population Estimate for Park System Demand
Type ol Housing Unit
Number
ol unlls
Persons
per unllfl)
Peak
0ccupancy
Rate Fl
Percons per
TyDelr)
Hotel
Residential Overnight Units F)
Houses
2
2,7
2.7
90
1,033
2,565
50
425
950
90%
90%
100%
Eslimated n:
r00m 0ccupancy occupancy rau lof a ne$,
County.
(2) The peak occupancy rales used lorh0 h0tel and oyomlghtuniB arE the samo as trloso u$ed lo 0enorate lhe transhnl
room hx data
(3) Numbor of Uoib x Persons per Unh x 0ccupancy Rale.
(4) Thess arc h€ housing unib fiat worrld bs subl€cl to a deed Estiction requiring hat thsy bo avallable l0r sh0rt lorm Bnbl
at loasl 3E $/osks a yser.
To meet the current standard of 1.156 acres per 1000 residents, the RAPRD would
need to acquire an additional 4.26 Acres of parkland with river frontage for the
estimated 3,688 new Thornburgh residents. At an acquisition cost of $2501000 an
acre,t6 that 4.26 acres would cost the district $1,065,000.
As RAPRD does not impose a Systems Development Charge for Parks the money
for this land acquisition would need to come from District Reserve Funds, operating
revenues, a Parks Bond or some combination thereof. Given the current political
climate and the funds available to the district it is unlikely that this land acquisition
would happen. So rather than peying to meet this new demand for service, the
existing residents would likely experience a reduction in the level of scrvice. The
new level of service would be lowered to 1.036 acres per 1000 residents.
Crediting the Thornburgh Resort for future property tax contributions (assuming
full buildout), results in a net cost for parks and recreation facilities of $463,562, as
shown in Table 5-32.
'6 Replacement Land cost was provided by RAPRD staff.
lmpact of Destlnation Resorts ln Qregon
l'larch 2009 Pqte 6 I
Fodor & Associates
an
Table 5-32; Net parks and recreation facility cost for Thornburgh Resort after
deducting frrture propetty tax contributions.
Net Parks and Recreation Facilities Costs
Total parks and recreation tacilities cost:
Future property ta( contrlbution (at 56%)
$1,065,000
($601,438)
l,let parks and lecreation lacilities cosl:$463,562
Qperating Co.st$
As it is unlikely (for the reasons provided above) that Thornburgh residents would
be utilizing the Cascade Swim Center, the RAPRD Activity Center, or High Desert
Sports Center, there should not be any additional operational costs caused by the
resort's demand on the capacity.
As for the Borden Beck Wildlife Preserve and Historical Tetherow Crossing Park,
which are more likely to be urilized by Thornburgh residents, they do not currendy
generate General Fund operating expenses. Historic Tetherow Crossing Park is in
the public planning phase of development and the limited operations of the Sflildlife
Preserve are supported by gifts, donations and inter-fund transfers to a special fund.
This year the fund's $40&dollar beginning balance was supplemented by a transfer
of $500 from the District's General Fund. On the expenditure side, a total of $500
dollars5T has been budgeted for Materials and Services out of the fund's $90O-dollar
balance. The salary and benefits for the minimal Groundskeeper labor are absorbed
into that of the rest of the District's operations. This breaks down to $15.63 per
thousand residents,
Assuming that the per-capita cost generated by new users is equal to the current per-
capita cost, and no new acreage is provided, then the increased operating cost
resulting from the 3688 peak Thornburgh residenm is $57.63.
If the additional 4.26 acres is added to the park so as to maintain current levels of
service, then an additional $81.91 would be needed to provide the same level of
operations and rnaintenance e:<penditures that the ITildlife Preserve currently
receives,
-.C._o-{rclusi.on
Thornburgh property owners will be paying taxes toward the Redmond Area Parks
and Recreation District amounting to an estimated $135,130 peryear. This greatly
'7 The actual expenditure for FY 2006-07 was $551 (RAPRD 08-09 Annual Budget).
lmpact of Destination Resons in Oregon
March 2009 page 62
Fodor & Associates
exceeds the $57.63 operadng cost associated with meeting their demand on parks
capacity.
In terms of level of service, District residents would likely see a small drop from
1.156 acres to 1.036 acres per 1000 residents. There is a limir to how many
development proiects similar to the Thornburgh Resort could be constructed within
the District's boundaries before the cumulative negative impacts caused by
reductions in the level of service are felt by the current population.
lmpact of Destination Resorts in Oregon
March 2009
Fodor & Assoclates
page 63
General Government Facilities
The costs for expanding Deschutes County's general government facilities to
accommodate the Thornburgh resort are calculated in this section. None of the
infrastructure or facility costs addressed on other sections of this report are included
here, so there is no duplication of costs.
Deschutes Counqy's Capital Asset Data File was used to identify the costs of all
County facilities purchased or built since 1978 (Table 5-33). This database does not
include the road system or facilities operated by independent districts, such as
schools, fire, and parks. Note that the County rents some facilities, so these costs will
not be included here. The costs for each of these facilities were adjusted to reflect
2008 replacement values using the ENR Construction Cost Index and the BLS
Consumer Price Index. Facilities for the Sheriffs Office and the County |ail were
removed from this list, as they were already included in the Public Safety Impacts
section of this report.
Table 5-33
tteschutei Gouniy Generat Governmenl Facilitles CoslslJ)
(All costs adjusted to 2008 values)
Buildings and Land Vehicles,
lmprovements lmprovemenls Equlpment
(BU, Bl) (Ll) Land and 0ther TotalValueFacility
All County Facilities $120,614,699 $34,384,960 $18,388,936 $115,653,683 $289,042,278
543,82Sheriff & Jail 1 1 177
values
Sh0ritl and Jail fscitities werE ddEssed under Public Sal0ty lmpacts,
The new population added by the Thornburgh Resort that would require general
county services was assumed to be limited to the occupants of primary residences.
As previously describe in this report, primary residences were found to comprise
43% of rhe owner-occupied housing at the nearby Eagle Crest Resort, so this figure
was applied to Thornburgh, Other property owners at Thornburgh who have second
homes may also used County services and facilities, but this impact was considered
to be relatively minor. As shown in Table 5-34, the estimated population in primary
residences at Thornburgh is 1,103 persons.
lmpact ol Dectination Resons in Oregon
March 2009 page 64
Fodor & Associates
Table 5-34
Itornburgh Population Estimale lor Genera! Government Facilities Demand
Type ol Housing Unil
Number
ol unils
Persons
Per un[(r)
Percenl
Primary
Resldencesc) Populaliorls)
0wner-0cc Houses 950 2.7 43%
IIe 2.7 occupancy rate is lor a new houses ln DeschulEs County.
Percsm primary residences ls basod on an analy8is of uI records ,or fie Eagle Cresl Rosort.
Numbor ol UniB x Persons per Unil x % Primary Residences.
Countywide General Government Facilities
Cost fbl5-33)
2008 County Population(1 )
Per-Capita Facilities Cost
Thomburgh Population Estimate (Ibl 5-34)
General Gov. Faci!. Cost:
1 103
(1)
(2)
(3)
Based on the per-capiu value of existing County facilities of $1,617 shown in Table
5-35, rhe cost of expanding general government facilities in Deschutes County to
accommodate the Thornburgh Resort is estimated to be $11783,984.
Table 5-35
$253,498,455
156,733
$1 ,617
1,103
$1,783,984
(1) Fr0m Coordinatod Population ForecasL
Since the resort will make future tax payments to the Countn those payrnents
should be deducted from the facilities cost in Table 5-35. When fully built out,
Thornburgh Resort will represent approximately Z,2o/o of the County's tax base and
will rherefore fund 2,2% of. these facility costs. The net cost for general government
facilities after deducting future tax revenues is $117441601, as shown in Table 5-36.
lmpact of Destination Resorts in Oregon
March 2009 page 65
Fodor & Associates
General Governmenl Facilities Cosls Associated with
Tiornburgh Resort
Table 5-36: Net general government facility cost for Thornburgh Resort after
deducting future propefiy tax contributions.
I'let General Government Facilities Costs
Total general gov. lacilities cost:
Future propefi ta< contributlon (at 2.2%)
$1,783,984
($3s,383)
Net general gov. lacilities cost:$1,744,601
The costs and revenues associated with general government services were not
estimated in this study, as there are many types of services and it would have been
very difficult to determine how much demand for each of these services would be
created by the Thornburgh Resort.
lmpact of Desdnarion Resons in Oregon
March 2009 page 66
Fodor & Acsociates
6, Fiscal lmpact SummarT
The section compares the costs and the revenues calculated in the previous sections
to determine the net fiscal impacts for the proposed Thornburgh Reson.
Revenue Summary
Table 6-l sumrnarizes the total gross annual tax revenues that are estimated for the
Thornburgh Resort. Combined property and room tax revenues total $5,521,419 per
year. These gross revenues go to pay for all ofthe services and facilities provided by
local government to the resort and therefore do not represent a net windfall. As
shown below, these revenues are more than offset by t}te infrastrucrure costs created
by the resort.
Table 6-l: Annual revenue summary for Thomburgh Resort.
Revenue Summary
Revenue Category Revenue
Proporty Tax Revenue
Total Room Tu Revenue
$5,091 ,123
296
Total Annual Revenues
Costs of Facilities
As shown in Table 6-2, the total net cost for the five categories of infrastructure
required by the Thornburgh Resort is estimated to be $51,284,705. These are
effectivcly one-time costs to local governments that are "due" upon completion of
the resort. As noted previously in the text, some of the transponation system costs
will be incurred by the State, so not all of these costs will accrue to Deschutes
County and its various districts.
I
lmpact of Destlnation Resorts in Oregon
March 2009 page 67
Fodor & Associates
Table 6.2: Net cost summary for iirfrastnrcture required by Thornburgh Resort.
Nel Facilfi Cost Summary
Galegory ol Faclllty Nel Qosl Eslimalel,
Transportation System
School Facilitiese)
Fire & EMS Facilitios
Public Salety Facilities
Parks & Rec. Facilities
Gen Gov. Facilities
$39,149,292
$4,752,973
$580,813
$4,591,181
$463,562
$1,744,601
Tolal Net Cost:$51,284,705
(1) Nel cosls are total gro$s costs, mirxrs arry paymenls 0r revenues
lrom te resort that lund lnfrastrUcuJre, lnctrJdlng lutJre tu paymBnb
rnd SDCs.
(2) The school cost lbure is lor fie lower estlnale ol student
geneBllon lo Scenano #2.
Services lmpacts
The costs to provide ongoing services were calculated for three of the six impact
categories and compared with the tax revenues generated for that same category. It
was not pracrical to calculate comparative values for schools, transportation and
general government, as described prcviously. Table 6-3 summarizes the revenue$
and costs and gives a net impact for each category of service. The net impacts are
positive for each category. The total net impact is a surplus of $466,344 per year.
This accrues to the County and its service districts, since each of these services is
funded exclusively by either the County or the service disrrict.
Table 6-3: Net annual services impact for Thornburgh Reeort.
Net Annual Selvicss lmpacls lor lhorniulgh Besorl
Gategory ol $eMce Bevenue Estimate Gost Estimate t'lst lmpact
Transportation Systsrnttl
School Facllities(1)
Fire & EMS Facilities
Public Safety Facilities
ParK & Rec. Facilities
lmpact of Destlnatlon Resorts ln Oregon
March 2009
135 130
Totals:
rcYenue cosb werE are
combinaton ol EourEes (Fedoral, Shte and Counly) and revenues lrom ho re6ort could nol b? dsterminsd.
NA
NA
$637,731
$1,310,884
NA
NA
($529,359)
($1,087,960)
NA
NA
$108,372
$222,924
$1 35 048
a
page 68
Fodor & Associaes
Fiscal lmpact Conclusions
The net $51.28 million in infrastructure costs associated with the Thornburgh
Resort greatly overshadow the $4661344 annual surplus for Crcunty services.
In order to consider the overall net fiscal impacts of the resort, the annual surplus
for County services was converted to an equivalent amount of capital that could be
financed with this cash flow. The $4661344 surplus could service interest and
principal payments on a 2O-year loan at 6% interest for $5.35 million. Assuming this
surplus was used for rhis purpose, the $51.28 million in infrastructure costs could be
reduced to $45,94 million, as shown in Table 6-4.
Table 6-4
Net Fiscal lmpact ol Thornburgh Resorl
Net lnfrastructure Cost
Less Capital Equivalent of Revenue Surplusttl
$51,284,705
($5,348,967)
Nel Fiscal 738
revenue
at lntGsl over 20 yoaB.
In conclusion, local governments and local taxpayers will be left with a net cost
burden of $45.94 million if the Thornburgh Reson is fully completed as proposed.
This is a net cost after the resort has been credited for all known payments and tax
revenues it will generat€. The $45.94 million cost will be externalized and will
ultimately be borne by other taxpayers (not the resort) through some combination of
higher taxes, reduced public services, and lower facility service standards.
a
lmpact of Destlnauon Resorc in Oregon
March 2009 page 69
Fodor & Associates
a
7. Thornburgh Resort's Economic lmpacts
This section provides a review and rnalysis of the iobs and housing issues resulting
from destination rcsorts by examining the proposed Thornburgh Resort as a
representative case srudy, The resort developer, Thornburgh Resort Company LLC,
maintains that the resort will create many new construction and operations iobs and
will have litde impact on housing in the area. To support their position, they have
submitted the following two reports as part of the required application materials:
An Economic and Benefit Srudy for the Thornburgh Destinatbn Reson in Deschutes
County, Aegon, for Thornburgh Resort Company LLC, by Jon Peterson of
Peterson Economics, January 21, 2005.
An Employtee Housing Analysis for the Thomburgh Destination Reson in Deschutes
Qounty, Aregon, for Thornburgh Resort Company LLC, by Jon Peterson of
Peterson Economics, August 22, 2005,
These reports are referred to here respectively as the Petmon Economic Repon and.
the Pevrson Housing Repon and collectively as the Paerson Repon.
The Peterson Economic Report was prepared as part of the required application
materials for the Thornburgh Resort. Deschutes County Code Chapter 18.113(8X19)
requires the desdnation resort applicant to provide:
An economic impact and feasibiliry analyis of the proposed danbpment prepared by
a quaffied grofessional economist(s) or financial analyst(s) shall be prutided which
includes:
a. An anolyis which addresses the economic aiabili.ty of rte propsed
deoeloPment;
b. Fisc.ql irytagts ottlw oroiect including changes in employrunt, inaeased
tox reoenue, dqng4s lor neu,m.increased l?aels gf oublic seruices, hwsing
for emplqtees and the fficts of loss of resource lands duing the life of the
proj ect. I Emphasis added. J
ln spite of the Code requirem€nt, the Peterson report lacks a complete analysis of
the fiscal impacts of the project and instead focuses on the propeny mx revenues
that may be generated if the resort is completed. Absent from the report is any
analysis of the demands for new or increase levels of public services, The report also
neglects to report transient room tax revenues from overnight lodging.
The Peterson study, like many economic impact studies provided by developers,
ponrays an unrealistically optimistic and beneficial picture of the development
a
lmpact of Destlnation Resons in Oregon
March 20O9 page 70
Fodor & fusociates
proiect, Tax revenues, for example, are proiected by Peterson to be three times
greater than for comparable resorts located nearby. According to a separate study
comparing proiected tax revenues for commercial developments with actual mx
revenues after the developmen$ were completed, proiected revenues were found to
be overstated by an avcrage of.39Yo.t8
The portrayal of resort development as beneficial is also achieved by ignoring the
costs and negadve impacts of the project. The Peterson Report ignores all external
costs associate with the Thornburgh Resort development. Vhile new jobs,
employment compensation and property tax revenues are presented in explicit
detail, there is little to no effort made to address the many costs associated with
providing public services, public infrastructure, or any of the potendal adverse
impacts on the community and the environment. In this case, rnost of the costs are
likely to be borne by the current and furure residents of Deschutes County via
increased taxes or declining services, or both. Costs that are externelized by thc
developer and shifted onto the local community improve the developer's
profitability at the expense of local residents.
fob Creation and Employment lmpacts
The employment and compensation data in the Peterson Econornic Report (as Table
II-l) was revised downward seven months later in the Peterson Housing Report (as
Table l), so the more-recent Housing Report data is used here. The Housing Report
bases projected wages for the Thornburgh Resort on a past proiection for an analysis
the company did for the Suncadia Resort in Roslyn, ltrA in 2002 and inflated to
2005 values. By their own figures, almost half of employees (49y") wil[ make less
than $21,000 per year and 67% will make less than $26,000 per year. As shown in
Table 7-1, Federal guidelines indicate that household incomes below $Zt,ZO0
represent the poverty level for a family of four. Such households may quali$ for
Federal aid from the Food Stamp Program, the National School Lunch Program,
the Low-Income Home Energy Assistance Program, and the Children's Health
Insurance Program.
5t Comnqcial Deoelopment: Impact Analysis Befme and Afur Qonstruction, by C. Fred DeKan Ph.D, and
Barbara M. Yates, Ph,D,, Ecoaomic Ileoelopmcnt lournal, fall 2005, p 7,
lmpact of Destination Resorts in Orqgon
March 2009 page 7 I
Fodor & Assoclates
Table 7-l: 2008 US Poverty Guidelines.
Persons
lq Family or.t!qq!g[g!L
48 Gontiguous
States and D.G.1 $10,4002 $14,0003 $17,6004 $21,2005 $24,8006 $28,4007 $32,000I $35,600
Efeacn aOOitlonalpes
Source: Foderal R0gistor, Vol, 73, No. 15, January 23, 2008, pp. 3971-3972
Resorts are notoriously low-paying businesses. The "leisure and hospitality" sector,
that includes destinadon resorts, pays the lowest of any employment sector in
Deschutes County. This sector paid average annual wages of only $16,095, about half
as much as the average annual wage in Deschutes County of $31,492 in 2006,
according to the Oregon Employment Department.re
The Pererson Report appears to be considerably overestimating wages for the
proposed Thornburgh Reson. Peterson claims that only 7% of iobs will pay less than
$16,000 per year. This contrasts sharply with the $16,096 av-erqge wage in this sector.
Many more than 7o/o of the iobs created at the resort will likely pay minimum wage.
Such jobs include maids, waitresses, dishwashers, groundskeepers, landscape
maintenance workers, ianitors, and laborers. Minimum wage in Oregon was $7.25
per hour, or about $14,500 in 2005 when the Peterson report was written. In 2008
the State's minimurn wage was $7.95 per hour, or approximately $151900 before
taxes.
According to Oregon's Report on Pweny 200660 for Deschutes County:
The 2005 aaerage [monthlyJ wage of $2,624, howeoer, prwed inadequate for single
parents, Deschutes Qounty's 2005 aoerage wage could not fund the basic family
budget fw a single aduh and one child or tnorc. The second largest industry in
Deschutes County,leisure atd hospitalty, paid dn aasrage wage nearly half of the
county aonage-$I,342 a month. ,,, Families edrning poaerty larcl wages could
afford no tnore than 40,2 percent of basic family expenses in Deschutes Cw.nry.
5e Oregon Employmenr Department, 2006, as quoted in 2007 Cnfral Orcgoa Area hofile , by Economic
Developmcnt for Central Oregon.
6o Oregon Housing and Community Services.
lmpact of Destination Resorts in Oregon
March 2009 page72
Fodor & Associates
Based on the Peterson Housing Reportr6r the median wage offered at Thornburgh
would be about $21,000. Median household income in Deschutes County was
$45,894 in 200462, more than rwice as much rs the resort will pay, Even if two
members of a household worked full time at the Thornburgh Resort, they would
still make less than the median County household income in 2004 and the effect of
the resort will be to depress median wages in the County.
Peterson uses "induced iobs" to enhance the total employment-related
compensation associated with the resort. However, this induced employrnent works
both ways: increasing iobs when hiring, but decreasing iobs in a similar proportion
when firing. Using Peterson's assumption of 0.5 induced iobs per construction iob
and 0.2 induced iobs per operations job, total employment associated with rhe resort
will peak at 2,015 iobs in the sixth year of development. However, when
construction is complcted, 1,471 of these jobs will be lost.
The loss of 1,471iobs is roughly equivalent to the closing of Central Oregon's
second largest employer, Les Schwab Tire Centers (1500 employees).It will have an
even greater impact due to the relatively higher salaries paid to constnrction
workcrs. The loss of these jobs will have a profound impact on the region as these
households struggle to pay bills and seek to relocate to other areas in search of
employment. The lost iobs are likely to increase local demand for social services and
public assistance and may result in evictions, foreclosures and bankruptcies. The
magnitude of these job losses could negatively impact the local economy for years
after the resort is completed.
6r Peterson Housing Report, Table 2.
o According to the US Census Bureau.
lmpact of Destlnatlon Resorts in Oregon
March 2009 page 73
Fodor & Associates
Figure 7.1: Direct employment at the proposed Thornburgh Resort estimated by
Peterson (based on Peterson Housing Report, Table l).
Profected Direct Jobs, Thomburgh Reeon
1 200
000
800
600
400
200
0
1
1 2 3 4 5 6 7 8 I 10 1'r 12
Protect Year
g Construction Jobs tr Operations Jobs
il
I
lmpact of Destination Resort! in Oregon
March 2009 page74
Fodor & Associates
Figure 7-2: Total direct and induced employment at the proposed Thoraburgh
Resort estimated by Peterson (based on Peterson Housing Repon, Table l).
Figure 7-3: Employment changes resultiag from the Thotnburgh Reoort
development (based on Peterson Housing Report).
1 000
800
600
400
200
0
-200
-400
-600
Annual Changes in Projected Enploylrent, Thornburgh Besort
899
r85
123456 8 I 10 11
.490
Prolect Year
-512
566
.179 .188
lmpact of Destination Resorts in Oregon
March 2009
Projected Jobs, Thornburgh Resort
2500
2000
1500
1 000
500
0
12345 67
Project Year
8 I 10 11 12
u DirectJobs tr ldrced Jobs B TotalJobs
page 75
Fodor & Associates
Theoreticallg the only way to prevent such employmert shocks from impacting the
local economy (other than not building the resort in the first place) is to continually
and indefinitely build more resorts at a steady and even pace in Deschutes County.
However, this approach is completely irnpractical as the County could not sustain
such development over the long term, and it would be impossible to uansition
seamlessly from one developmeut to the next for employment purposes.
Who Will Fill New Resort fobs: Locals or Newcomers?
The Peterson Report claims that "in excess of 9QYo" of employees will live in
Deschutes County. To support this, they cite anecdotal evidence from conversations
with the management of Black Butte and Eagle Cresr Resorts that a "vast maioriry"
of employees live within the County. \Vithout additional evidence, Peterson claims
that these employees were also local County residents before their employment at
rhese resorts.u'This apparently forms the bases for Peterson's conclusion that only
8% to 10% of iobs created at Thornburgh Resort will be filled by newcomers.
However, empirical data and studies indicated that the percentage of newcomers
moving into Deschutes County to fill resort jobs will be much higher.
Recently it came to light in a Bend Bulletin article that not only are resorts filling
some of their iobs from out of the area, they are actively recruiting foreigners.n The
Sunriver Resort fille d 85 jobs last year with people from as far away as Lithuania,
Brazil and Mexico.
People may move to a new county for a variety of reasons. Deschutes County has
outstanding recreadonal opportunities and naural amenities that attract people
from all over the country. A limiting factor to County in-migration is employment.
$7hile there may be a large number of people who would like to live there, most will
need employment to make such a move successful. Thus, the more jobs created in
the County, the morc people will be able to move there.
To a large extent this same phenomenon applies statewide in Oregon. The State is
viewed as offering attractive natural amenities and a desirable quality of life tbat act
to stimulate in-migration. But the limiting factor to in-migration is the lack of
employment opportunities. As a result of this "penl upo demand, new jobs created in
the State are rapidly absorbed by newcomers and unemployment levels tend to
remain consistently above the national average. This was the case even during the
1990s, a decade of the most rapid economic expansion and job creation in the State's
history.
tr Job seekers who move to a new location seeking work ofien obtain a local address to use for job
applications, so employers may Dot know if they arc hiring new arrivals.
n "Unemployment might be high, but resorts still struggle to fill some jobs," ?lz Bulletin, May I l,
2008.
lmpact of Destlnatlon Resons in Oregon
March 2009 Pqge 76
Fodor & fusoclates
As shown in Figure 7-4rthe US Census found t}rat "work-related" reasons accounted
for 31.1% of all intercounty moves.t' More specifically,24o/o of all moves were either
for new jobs/transfe$ or to look for work. "New iobs and iob transfers" accounted
for the most moves of any category in the Census survey. Clearly, employment is a
major motivational factor in rnigration. This factor is amplified when a region offers
additional amenities and quality-of-life benefits as found in Central Oregon.
Figure 7-4: Reasons for moving to another county (US Census).
lntcrcounty movcfs
Other reasons l0.l
Family.related reasons 26.9
Work-related reasons 31. I
Housing-related reasons 3 1.9
Sou(e: U5, C!6sr Burau, Cur.ot Populatlon Surey, Mard a0m.
When new iobs are created in a community by a development project, its proponents
often claim that the iobs will go to local workers. However, studies show that in the
near terrn, 40o/o to 60% of new iobs go Io newcomers and in the longer term, 60% to
9fflo of these iobs are filled by newcomers,6 Applying the midpoint estimates to the
Thornburgh Resort, we can assume that construction iobs are shorter-term iobs that
are filled by 50% newcomerr and operations iobs are longer-term and are filled by
75% newcomers. As shown in Table 7-2rat peak employment, the resort will
generate an estimeled net in-migration of lrl50 workers to fill the iobs. This is
considerably more than the 133 newcomers identified in the Peterson report.
65 Why People Movc: Brploring the March 2000 Curunt Population Suntey, Special Studies, US Census
Bureau, March 2001.
66 See: Wo Benefits from l-ocal Job Growth, Migants m tlw Original Residcnu, by Timothy J. Banik,
Begional Studies. vol.27, No. 4, 1993.
lmpact of Destination Resorts in 9regon
March 2009 page77
Fodor & Associates
Table l.?zPeak In.Migratiou to Deschutes County Due to Direct and Induced
Jobs at Proposed Thomburgh Resort.
Job Source
Peak
EmPloYmelllt)
Percenl Jobs to
NewcomersGr
Jobs to
Newcomers
Construction
Const. lnduced
0perations
0per, lnduced
Total:
964
482
474
95
50%
s0%
75%
75%
482
241
356
71
2,015 1 150
(1 ) Bassd on Polerson Housino Report (2) From Bartik, 1 993.
Housing lmpacts of Thornburgh Resort
Increased demand for housing will tend to increase prices, especially when there is a
relatively fixed supply of housing and a marked increase in demand. Unless housing
is expanded ro meet the new demand, prices will increase and housing will become
less affordable in the County. The loss of housing affordability becomes a regional
cost associated with the resort,
The Peterson Housing Report states that, due to the vacancy rate in Deschutes
County, all housing needs generated by construction and ongoing operations at the
resort will not "pose a problem." This conclusion seerrs to imply that the resort will
have no significant impacts on the local housing demand or supply in Deschutes
Counry. To the conrrary, we find that the resort will have substantial impacts on the
needs and demands for local housing.
Peterson indicates that additional offsite iob creation will be induced by the onsite
jobs at the resort. However, no consideration is given to tbe housing demand created
by the induced employment. Peterson reports that induced iobs peak in year six of
the development at 577 iobs. Total iobs are estimated to peak at 2,015 at that time,
including construction, operations and induced employment. The addition of more
than 2000 new jobs to Deschutes County, many of which are temporary and low-
paying, will have a very significant impact on the local housing market.
This effect on the housing market is aggravated by the fact that most of these iobs
(985 by Peterson's estimate) will be temporary. Temporary demands for a significanr
quantity of local housing can create multiple problems. As the demand grows
rapidly, housing prices go up, housing availability and affordability decline, and
additional home construction may be stimulated, As the temporary demand comes
to an end, there is a glut of housing with a sharp increase in vacancies and unsold
homes that may leave the housing market in worse shape than before the resort
started.
lmpact of Destlnation Resorts in Oregon
March 2009 Pqge 78
Fodor & Associates
Most ongoing iobs will be low-paying groundskeepers, maids, and maintenance
positions. Such jobs may anract workers who will require low income housing
assistance and will increase demand for affordable housing in the County,
Furthermore, many of the lower-paying iobs will be seasonal, or have significant
seasonal variations in employment. Seasonal iobs will further stress households that
are struggling to afford market-rate housing as their employment varies from season
to season. Lowcr-paid workers will have rnore difficulty finding affordable housing
near the resort and they will need to travel farther to meet their housing needs, The
additional commuting requirements will further exacerbate their financial stress,
Renters in Deschutes County are currently struggling to meet housing costs.
According to the US Census,4l% of the County's renterc are paying more than 30%
of their income for rent.67 Ncw destination resorts will increase local housing
demand and push up rental prices forcing more local residents to spend a greater
share of their incomes on housing.
Peterson estimates that during the I l-year period of resort construction, between 37
and 133 housing units will be required to supply the new workers (both construction
and reson operations) and that all of these units can be met from the current
inventory of vacant housing. However, this conclusion is based partly on the
unrealistic assumption that more than 90% of jobs will be filled by local residents
and that only E-10% will be filled by people moving into the county.
As shown previousln rhe Thornburgh Resort is likely to attract newcomers to fill
1,150 of the peak iobs generated by the resort. Most of these newcomers will create
new households in the County. However, some may live with others or have a spouse
that is also employed by the resort. To estimate new households it was assumed that
30% of the newcomers will either live with others who work at the resort or have a
spouse also working at the resort. These cohabitating workers would reduce demand
for new housing by 15% (half of 3070). The newcomers will therefore generate a peak
demand for 978 housing units in Deschutes Counry (Table 7-3).
67 Source: U.S. Census Burcau, 2005 American Community Suruey, Deschutes County
lmpact oI Destination Rosorts ln Oregon
March 2009 page 79
Fodor & Associates
Table 7-3: Estimated new house,holds crcated by peak employment at
Thornburgb Resort.
Jobs &Generated Number
Peak jobs at Thornburgh
Peak jobs to newcomers (from Table 7-2)
Newcomers cohabltating (30% assumed)
Households by new cohabltating workers
Households by other new workers
Total new households by newcomere :
5
1,150
345
173
805
978
The Peterson Housing Report states that there was "an existing vacancy inventory
of more than 320 rental units in Deschutes County" in order to show that the
County can absorb the modest demend they predict from resort employees wirhour
generating any need for additional housing. However, the Peterson data does not
appear to bc accurate and there is no source cited. The Cennal Aregon Rental Suntey
Resuhs for 2004 showed 4l I vacant units for all of Cenual Oregon. The most recent
Central Oregon Rmtal Suntey Resuhs for 2Q07 (1" Quarter) showed 270 vacancies for
all of Ccnral Oregon with a 6,860/o vacancy rate. However, this survey provides only
a partial account of vacancies, since the US Census 2005 American Communiry Suruey
shows there were 181552 rental units in Deschutes County in 2005 with a va@ncy
rate of 6.4%, or about lrl87 vacant units.
Vacancies always exist in the rental housing market and don't necessarily represent
housing availability. Vacancies afe a natural part of the rental housing business.
Turnover of rental units typically requires a period of vacancy between tenants so
that the unit can be cleaned, marketed and leased. Rental units also require repairs
and improvements during unoccupied periods. Less-desirable, substandard, or
overpriced units may take longer to rent. Rental vacancy rates in 2005 were 9.8%
nationally and 8.3% in Oregon, much higher than the 6.4% mte in Deschutes
County.
The likely demand for housing resulting from resort employment will be much
greater than Peterson has estimated. Peterson estimated a peak demand of 133
housing units, cornpared with the estimate here of 978 housing units. It is
unrealistic for the Thornburgh Resort to rely on local rental vacancy rates to meet
the housing needs for the estimated 1,150 peak iobs filled by newcomers.
As shown in Table 7-4,the Thornburgh Reson is projected to create direct and
induced long-term employment of 544 percons from year 12 of the project onwards.
An estimate d75o/o of tbese jobs will be filled by newcomers. Of the 408 permanent
iobs filled by newcomers, an estimated 347 new households will be created by these
lmpaa of Destlnatlon Resorts in Oregon
March 2009 page 80
Fedor & Associate
employees.$ This will result in a perrnanent demand for 347 new housing units in
the Counry.
Table 74: Newcomerc to Deschutes County Filing Pennanent Direct and
Induced fobs at Ptoposed Thornburgh Resort (year 12 ofproiect aud onwards).
Job Source
Permanent
EmPloYmelltl)
Percenl Jobs to
I'lewcomersG)
Jobs lo
ilewcomers
0perations
0per. lnduced
Total:
453
91
75%
75%
340
68
544 408
(1) Based on Petrson Housing Repot
(2) From Bartik, 1993.
Spending by Destination Resolts
The tlryical economic analysis presented by a developer estimates the total gross
spending in connection with the development as a net benefit to the local
community. The spending estimate is often magnified by use of multiplier-effects to
show even greater benefit to the local communiry as direct spending ripples through
the local economy. Thus, spending figures typically include both direct and induced
(secondary) spending for wages, construction materials and services.
Such spending figures tend to greatly overstate local benefits. For example,
assumptions are made that 100% of spending for construction, including materials
and supplies, will stay in the local county. However, construction materials such as
lumber, cement, appliances, cabinets, flooring, plumbing fixtures, lighting, doors,
windows, plaster and paint are obtained through a narional and international supply
network. It is highly unlikely that a significant portion of these construction
materials will be produced within the county. Therefore, most of this spending
quickly leaves the county.
Many economic studies also assume that other construction-related spending, such
as design, engineering, and construction labor, will smy in the local county.
However, many of the design firms and construction companies are likely to be
based out of the area, or even out of state. Most of the expenditures to firms and
employees based out of the area will leave the local county.
6r Estimate assumes that 30p26 of employces will share housing with another ernployeg reducing
househotd generation by l5 percent.
lmpact of Destination Resorts in Oregon
March 2009 page 8l
Fodor & Assoclates
Use of 'multiplier effects" is a common practice in economic analysis. Multipliers
are used to show how money can be recycled in a community or region and can
significandy inflate the apparent economic benefits, In contrast, empirical studies
show that local growth does not result in real benefits to the community in terms of
increased per-capita income,6e Therefore, it must be assumed that much of the direct
and indirect economic activity flows out of the community and does not
significantly benefit local residents. In this case, "multiplier effects" are likely to be
offset by national builders, national building materials suppliers, and non-local
workers who will mke much of the money out of the community.If multipliers are
to be used in impact analysis, they should be applied to cost as well as revenues (see
sidebar on this topic).
In the case of the Peterson Economic Report for the proposed Thornburgh Resort,
compensation is estimated for both direct and induced iobs. While totaling all the
wages paid for direct and induced employees is straighdonrard, it is far less clear
how this spending should be counted in terms of net benefits to Deschutes Couuty.
6e Gottlieb, Paul D,, Grol:th lVithout Gtwtth: An Alternatfue Ecodomic Dcoelopmcnt Goal For
Metropolitafl ArcasrCenter for Regional Economic Issucs, Weatherhead School of Management, Case
Wcttern Reserve University, A Discussion Paper Preparcd for The Brookings Instirution Center on
Urban and Merropolitan PolicS Febntary 2002.
lmpact of Destinatlon Resors ln Oregon
March 2009
Use of multipliers
An increaslngly common method among the bullding industry and some govemments for prolectlng liscal
impacts involves the use of multipliers derlved from economic models. Using data lrom the models, an
analyst mig[t take the estimated direct economic activity in dolhrs associated with a proiect and 'multiply" il
by a given amount to account also lor indirect, secondary impacts. The total measure of economic activity is
then used to estimate rBvenues lor the purpose ol determining liscal impacts.
Such multiplier approaches to liscal impact analysis suffer lrom sevoral shortcomings. First, the multipliers
are usually obtalned from economic models of large regions or shtes. But they are applied at the level ol an
individual localjurisdiction that ls usually only a fraclion of a region's or stale's economy. The smaller the
lurisdiction relative to the economic region for which the muhipliers have been derlved, the less reliable the
multipliers will be l0r lhat Jurisdiction,
Furthermoro, while the multipliers are applled to the revenue side ol the budget, few such analyses €vor apply
a multiplier to he cost side of the local budget The implicit (but often wrong) assumption is fiat local
governments can generate rBvenue from secondary, induced, or indlrect development without incuning
increased cosls in provlding services to that development. Anolher shortcoming of tre mulliplier approach is
its lendency to "double-count' revenuss, A multiplier-based liscalanalysis of a pmlect might crodit it with the
additional revenue impacts as derlvod from 1,000 new iobs elsewhere in the jurisdiction. But, when the
separale fiscal impact analysis of the development where these jobs are located is (or was) prepared by its
developer, the revenues would also be claimed on behalf of thal development.
Source: 0evelopnaaB and 0ollars: An lntoduclion to Flscel lmpact Anafisls ln bml Use Ptannlng, by
Michasl L. Slegel, May 2000, Natural Resources Defense Council.
page 82
Fodor & fusociates
\flages benefit the individual employee, but he or she must exchange their time and
labor for the wage. Employment is therefore an economic uansaction exchanging
labor for money. From the local perspective, existing residents of Deschutes County
will benefit from resort employment if:
l. They are currently unemployed and obtain employment at the resort, or
2. They are working part-dme and obtain full-time employment at the resort, or
3. They are currently employed, but are able to obtain higher wages at the resort.
On the other hand, existing residents of Deschutes County will not benefit from
resort employment if newcomers move into the County to fill the jobs. Only the
incremental increase iu the incomes of existing local residents resulting from resort
employment can be counted as a clear economic benefit, This incremental increase
in income is a fraction of the total compensation figure estimated for the resort and
does not include the 40o/o to 90% of new jobs likely to go to newcomers.
Economic Risks
ln addition to considering the likely economic impacts of a successful and
completed resort, there are emerging risks associated with resort development that
could dramatically affect local homebuyersr local government investments, and the
local economy.
The national economic downturn has revealed structural weaknesses in the real
estate markets. Property values became over-inflated and banking institutions lent
too much money to unqualified buyers. The supply of homes grew at record levels
until supply greatly exceeded demand. It may take several years before the real estate
market stabilizes. In the mean tirtre, foreclosures and bankruptcies are at levels not
seen since the Great Depression.
In the past, California provided many of the second home and investment home
buyers in Oregon. Many were able to transfcr equity from their California homes to
make these purchases. But California's real estate market has suffered greatly. The
median price of a home in that state dropped 3E% in December from a year earlier.To
Under any circumstances, a destinadon resort is a risky business venture. If it goes
well, it is a potential bonanza to investors. But a great deal of investment is required
up front. Typically a hundred million dollars or more must be borrowed and spent
to build these resorts. The Thornburgh Resort estimates the total project cost at
$160 million.?' Tfhat happens if revenue sueams don't match projections? t0flhat if
70 December median home prices in California dropped to $249,000 from $402,000 a year earlier rhe
Associated Press reportcd January 22,2009.
TrPeterson Economic Report, Table IV-1,
lmpact of Destination Resorts in Oregon
March 2009
Fodor & Associates
page 83
lots don't sell, or prices drop? If one resort fails, how will other resorts in the area be
impacted?
In Deschutes County the Tetherow Resort's golf course was heralded as the "Best
New Course of 2008" by Golf Magazize. However, lot sales have stalled investors are
unable to make loan payments, and the bank is foreclosing on properties.T2
The large, upscale Tamarack Resort in Idaho made the Wall Steet Jountal last yeat
when investor money dried up and the resort went into default on loans.T'
Construction of resort facilities stopped and the bank filed for foreclosure.
Homebuyers had already committed more than $500 million for fancy homes,
condos and building sites. The resort village remains unfinished, home sales have
withered and the local economy is suffering. The resort closed on Marcb 4,2009 and
250 employees were fired, Of 2,100 planned chalets, condos and town homes, only
250 are completed.Ta
The Vineyards Resort in Yakima, rUTA declared bankruptcy last year." It was to be a
destination resort in wine country designed as a Tuscan-themed village wirh 500
acres, 600 homes, an l8-hole golf course, clubhouse, hotel, and recreation center.
They were unable to obtain financing for the $100 million investment needed. The
posh Yellowstone Club resort in Montana is also declaring bankruptcy.76
According to the lVall StreaJwmal article on the Tamarack Resort,
A resoft's success was often stahed to real-estate sales: As a Tamaruch lender
recounted in recent coun filings, the resofi had a business model in whhh "operating
expenses would exceed revenues and tlu pimary source of ptofit would be generaud
by the sale ofreal estate."
Destination resorts are following the same business model as the rural subdivision:
buy large tracts of cheap rural land to make hundreds, or thousands, of buildable
residential lots for a large profit. The resort elements are often unprofitable, but
make the residential subdivision possible. The Tetherow and Pronghorn Resorts in
Deschutes County have been unable to build the required amount of overnight
housing, which is intended to support tourism. According articles in the Bend
Bullctin, Pronghorn was to have completed a hotel by 2006.77It has received four
time extension from the County and cut its planned hotel expenditure in half.
72 "Tethcrow housing lots are entering forectosurc," The Bend Bulbliz, January I5, 2009,
7t Vall StreetJountalr"la ldaho, Ski Resort's Promise Fades," 7n/2008.
7a "Tamarack Reson closesi employees cut looscr" Seattle Post-Intelligencer, March 4, 2009,
7! Reported by the Associated Press, November 23, 2008 in the Seattle Post-Intelligcncn.
76 See http://www.bloomberq.com/apps/neys?pid=2,060! 103&gld=ai-WurVSzHIY&refgr= news.
77 "W'ithout financing, Terherow on hold indefinitely: Hotel won'I open in spring 2009 as planned,"
Thc Bend Bullctiz, October 15, 2008.
lmpact of Destination Resons in Oregon
March 2009 page 84
Fodor & Associates
If Thornburgh Resort is successful, its developer could make $300 million on lot
sales, almost doubling its investment. The lucrative profit potential for developers
creates a formidable incentive for them to pursue resort projects on Oregon's cheap
rural lands in beautiful natural settings, They can afford to spend liberally to make
their resort proiects possible.
Economic lmpact Conclusions
o Mauy of the economic impact studies provided by developers poruay an overly
optimistic picture of the development proiect's beuefits by ignoring the costs
associated with providing public services, public infrastructure, and the potential
adverse impacts on the community and the environment.. The "leisure and hospitality" sector (that includes destination resons) paid
average annual wages of only $161096, the lowest of any employment sector in
Deschutes County and about half as much as the average annual wage in the
County of $31,492 in 2006.. Even if two members of a household worked full time at the Thornburgh Resort,
they would still make less than the median household income in 2004 and the
effect of the resort will be to depress median wages in the County.. Housebold incomes below $211200 represent the Federal poverty level for a
family of four.. Most jobs created by the resort will be temporary and when construction is
completed, 1,471 iobs will be lost, causing ripple effects in the local economy.. The addition of more than 2000 peak new jobs to Deschutes Counry will have a
very significant impact on the local housing market, especially when the
temporary iobs are lost.o Low-wage jobs created by the resort will increase demand for affordable housing.. While the Peterson Housing Report estimates a peak of only 133 new households
gencrared by the resort, it is more realistic that a peak of 978 new households will
need to find housing in Deschutes County.r After the resort is completed, there will be an estimated permanent demand for
347 new housing units in the County.
lmpact of Destinatlon Resorts in Oregon
March 2009 page 85
Fodor & Associates
8. lmplications for lmpacts of Destination Resofts in Oregon
This section considers the potential sutewide and regional impacts that may result
from rhe resorts that are currently under consrrucdon and those that are proposed.
In order to examine the potential statewide impacts of destination resorts in Oregon,
total figures for the number of residential units were calculatcd for all resorts that
are currendy planned or undcr construction. The total number of residcntial units
was then used as an index for gauging statewide impacts. The impact per residential
unit is based qn the impact analpis for the Thornburgh Resort.
As described previously the Thornburgh Resort is fairly typical of destination
resorts in Oregon in terms of its overall profile (land area, rnix of homes and
overnight units, and recreational facilities). Some factors affecting impact will vary
from place to place. For example, sewage treatment, water supply, and stormwater
management may involve offsite public expenses for some resorts, but did not in the
case of Thornburgh. Such cost factors may be governed by counry policies and
individual siting issues. The transportation system impacts of the Thornburgh
Resort were partially mirigated by the transportation SDC irnplemented recently by
Deschutes County. Total estimated transportation SDC payments for the resort were
deducted from the transportation system costs. Most counties in Oregon have no
transportation SDC, so the costs will be higher in those counties. It should also be
noted that no impacts were calculated for Thornburgh Resort for libraries. As a
result of these factors, Thornburgh's fiscal cost impacts may be somewhat less than
for the typical new resort. None-the-less, it serves as the best available gauge at this
time, The net fiscal impact per residential unit for the Thornburgh Resort is a cost
of $33,408.?t
Based on the 221374 residential units in destination resorts that are either under
consrnrction or proposed in Oregon, the total fiscal impact is estimated to be a ner
cost of $747 million, As shown graphically in Figure 8-1, almost rwo-thirds of this
cost will come from the resorts that are proposed. Note that these net infrastnrcture
costs are the externalized costs from the resorts after all payments and contributions
are deducted.
78 This net coEI incorporates the proiected revenue surplus from services in the form of the capital
cost that could be financed with thc same annual revcnue stream, as describe d in the Fisul Impact
Conclusions section,
lmpact of Destlnation Resorts in Oregon
March 2009
Fodor & Associates
page 86
Figure &1
Future Stalewide Rosort Costs
(Tolal Net Cosr - $747,455,21 1)
Resorts Under
Conslructbn,
$262,039,728
Rosorts Phnned,
$485,415,48s
Destination resorts have regional impacrs rhat often receive little or no
consideration in the resort planning and siting process. Resorts located near cities
tend to create a fundamental fiscal inequity. The counties receive all the tax
revenues, and the nearby cities receive much of the impacts, especially from
increased traffic. Resort residents and visitors will avail themselves of the urban
services and amenities of the city. They uray travel to the cities to purchase
necessities, for entenainment, or to commute to work in these cities. They may also
travel through these cities going to and from the resort and to visit other attractions
in the area. Resort employees are likely to find housing in the nearby cities and will
create additional uaffi c.
The City of Redmond will be especially impacted by new resort development, as
four new destination resorts are planned nearby: Remington Ranch, Hidden
Canyon, Brasada Ranch, and Thornburg Resort. The Remington Ranch Resort is
just 5 miles from Redmond and it is estimated that 75%of the trips generated by the
resort will use the city's road network. An estimate 35o/o of. the trips fnom the
proposed Hidden Canyon Reson will be to, or through, Redmond.
According to City of Redmond Public !florks Dircctor, Chris Doty, the city's growth
is currently constrained by road capacity and by requirements of the State's
Impact of Destination Rerorts in Oregon
March 2009 page 87
Fo&r & Associates
Transportation Planning Rule.Te Yet resorr development can coutinue to burden
these transportation facilities without having to midgate their irnpacts.
Housing needs for resort employees put added pressure on nearby cities to provide
additional affordable housing, as resort workers are among the lowest-paid in the
State.
Impacts of resorts on nearby cities are beyond the cities' conrol and occur outside of
the cities'planning processes. Redmond, for erample, collects a Transporution
System Development Charge on new development within the city, but is unablc to
collect such charges from resort development.
Resorts have the potential to function like suburban subdivisions or bedroom
communities, uking advantage of a nearby city's urban amenities, but paying no
taxes to the ciry. Revenue sharing by the county, or mitigation requirements from
the resort developers, could offset some of these impacts,
D Letter from Chris Dory regarding Remington Ranch Rcsort to Bill Zelenka, Crook County
Planning Department, September 7, 2006.
lmpact of Destination Resorts in Oregon
March 2009
Fodor & fusociates
page 88
Appendices
lmpact of Destinatlon Resons in Oregon
March 2009 page 89
Fodor & fusociates
A- !. Property Tax Explanation
The single largest revenue source for local governments, school districts and
agencies in Oregon is the property tax. Property subiect to taxation includes all
privately owned real property (land, buildings, and improvements). This tax is
collected by the county tax collector for all agencies within the county, As the
boundaries of the various taxing districts do not align the county is divided into
Code Areas. Each Code Area represents a unique combination of taxing districts.
For the 2008/09 tax year, the proposed Thornburgh Resort was located in wo
different Code Areas: 2-003, with a total tax rate of $12.2499 per thousand dollars of
Assessed Value; and, 2-004 with a total tax rate of $14,0041 thousand dollars of
Assessed Value. The difference being that property in 2-004 is subiect to a tax from
Deschutes County Rural Fire Protection District #1.
Table A-l
Tax Gode Area 2-003r!
0lslrict Total Rate Educallon Governmenl Non-Llmiledld
001 Deschutes County007 Jail Bond010 Fairgrounds Bond,011 County Library020 Countywide Law Enlorcomenl021 Rural Law Ertorcemenl070 Redmond Library090 County Extensior/4h093 91 1095 I'11 Local 0ption 2008
351 Redmond Area Park & Rec Dlstrict620 School Dislrict #21626 School #2j Bond 92 & 93628 School #2i Bond 2004651 High Desert Esd670 CoCC,671 COCCBond
1.2783
0.1 335
0.14'10
0.5500
0.9500
1.4000
0.0567
0.0224
0.1618
0.2300
0.3717
5.0251
0.8307
0.2930
0.0964
0,6204
0.0889
5.0251
0.0964
0.6204
1.2783
0.5500
0.9500
1.4000
0.0224
0.1 618
0.2300
0.3717
0.1 33s
0.1410
0.0567
0,8307
0,2930
0.0889
Tolal 12.2409 5.7419 4.9642
80 Data from Deschuteo County 2008-09 Summary of Asscssment and Tax Roll page 80.
1.5438
lmpact of Destination Resorts in Oregon
March 2009 page 90
Fodor & furociatec
td Dlslrlcl
Table A.2
Tar Code Area 2-004t1
Total Rato Educatlon Govenment lJon-Llmiled
001 Deschulos County007 Jail Bond0'10 Falr0rounds Bond,011 County Library020 Countywide Law Enforcement021 Rural Law Enforcenrent070 Redmond Libnry090 County Extenslor/4h093 91 1095 911 Local Option 2008202 Rural Fire Distilct #1
351 Redmond Area Park & Rec Distrlct620 School District #2j626 School #2j Bond 92 & 93628 School #2j Bond 2004651 High Oeserl Esd670 CoCC,
lmpact of Destination Resorts in Oregon
March 2009
1.2783
0.1335
0.1410
0.5500
0.9500
1.4000
0,0567
0.0224
0.1 61 I
0.2300
1,7542
0.3717
5.0251
0,8307
0.2930
0.0964
0.6204
1.2783
0,5500
0.9500
1.4000
0.1 335
0.1 41 0
0.0224
0.1 618
0.2300
1,7542
0.3717
0,0567
0.8307
0.29s0
5.0251
0.0964
0,6204
,6,11_ C,0 c_c Bo$ 0.088e ., __., Q.08.9eTolal 1{,00{1 5.7419 6.7184 1.5138
Since l997tz the assessed value (AV) of a property, and not its real market value
(RMV), is used to calculate the amount of property tax due. This assessed value was
initially esublished in 1997 by rolling back the RMV of a property to 90% of its 1995
level. As long as the resulting AV is less then the current RMV this value is allowed
to increase by 3% annually, For new properties, like the proposed Thornburgh
Resert, the County Tax Assessor's Office appraises the propeny and sets a RjVIV for
the land and its irnprovements. Then, an Exception Value Ratio is applied for the
"property class" of the parcel to arrive at the properties initial RMV, For example,
the AV of a parcel in a property class with a ratio of 0.46 and a RMV of $100,000
would be $46,000. The Exception Value Ratio is calculated annually and is the ratio
berween AV and RMV for properdes of the same property class, The Current
Exception Value Ratio for resort properties is 0.491.t3
Property tax is levied on July I and due on November 15 each ycar. It can be paid
either in a single payment on or before November 15, in which case a 3% discouut
can be Bken, or in three payments due on the 156 of November, February and May
If taxes are not paid within three 1rcars the property is subject to foreclosure,
8l Data from Deschutes County 2008-09 Summary of Assessment and Tax Roll page 80,
82 A relatively detailed hisrory ofthe Oregon Property Tax systcm can be found as Appendix B of
Oregon Property Tax Statistics an annual publication of the Oregon Departmcnt of Revenue,
83 Deschutes County 200E-09 Sumrnary of Asscssment and Tax Roll, page 9.
page 9 I
Fodor & Ascociates
PronertLlgx Revenue Methodoloel,
The basic formula for calculating the inidal property taxE* on a new development
such as Thornburgh is simple and straight forward.It is:
Property Tax = ((RMV x Exception Value Ratio)/1000) x Tax Rate
The (RMV x Exception Rario) establishes the initial AV for a new property. All that
is necessary is to supply values for the RMV, Exception Ratio and Tax Rate. The
"Property Class" for the Thornburgh Resort is "#8 Resortr' and the Excepdon
Value for all properties in the Resort for 2008-09 is 0.491 which u'as the value used.
As pointed out earlier, the Thornburgh Resort was located in two different Code
Areas (2-003 and 2-004) with different tax rates. But, as those parcels not in Code
Area 2-004 are to be annexed into the Deschutes County Rural Fire Prevention
District #l,Er it was assumed that the $14,0041 tax rate of Code Area 2-004 would
apply to all properties in the r€sort.
Establishing a RMV for each type of propeny was difEcult as only the briefest of
descriptions was provided in the Thornburgh Resort Application. These
descriptions lacked information as to parcel or lot size, building size, construction
materials to be used, amenities or expected or proposed costs. Three different
methodologies were used to establish a RMV for the various types of propenies.
For thc 1,375 residential propertiestt proposed for the Thornburgh Rcsort a single
methodology was used. The laud-use application for the resort contained very little
inforrnadon on the characteristics of the residential developrnent, so for calculation
purposes, it was assumed that all the residential units aud lot sizes would be similar.
To arrive at a value for these properties, a sample of 49 residential properties located
in the nearby Eagle Crest Resortr wrs obtained by selecting a number of parcels
from each of the tax maps conmining part of Eagle Cresr. The current RMV for the
land and improvements for each of these parcels was obtained from Deschutes
Counry's D.I.A.L system.tr Townhouses were excluded from the sample. Average
values were calculated for a sample of 38 lots and 35 houses.
84 In subsequent years the formula is the samc as all other property, (AV/I000)*Tax Rate,
85 Letter from Fire Chief Tim Moor of DCRFPD# I to Deschutes County Commissioners dated 25
March 2008.
E6 Thc toral includes 425 with decd restrictions that thcy be availEble for shon term rental and 950
without the deed restrictions.
87 Eagle Crest Resort is an existing Destination Resort similar in concept to Bnd located in close
proximity to thc proposed Thornburgh Resort for which properry tax records were availablc.
88 This is an onlinc rax record system.
lmpact of Destination Resorts ln Oregon
March 2009 page 92
Fodor & fusoclates
The County RMV data from 200E reflects the peak prices of the real estate bubble
should be adjusted downward to reflect current market conditions. The Standard
and Poor's/Case-Shiller 20-city housing price index fell l8% in October of 2008 from
a year earlier.re It appears that this downward trend in real esute values is likely to
continue through 2fr)9 and possibly longer. To reflect the decline in values, ayerage
values from the Eagle Crest sample were reduced by 20% to obtain the RMV of the
residential land and improvemcnts in our calculations.
For Commercial and resort-owned propertiesrm total building square footage was
provided in the application. A $200 per square foot construction cost was used to
establish an RMV for the commercial improvcments. To determine the RMV of the
land it was assumed that the lot associated with a building would be twice the square
footage of the building (i.e. 5trlo lot coverage). To reflect declining real esute values,
the value of comparable developed commercial parcels at Eagle Crest were reduce by
20 percent in the same manner as residential property.
For the Golf Courses it was assumed that they would be 150 acres each and would
cost $3 million dollam each to construct." The land value was obtained by averaging
the cost per acrc of 5 Eagle Crest parcels identified as containing significant parts of
a golf course.
89 Year-over-yeer declines in property values were reportcd in the Standard and Poor's/Case-Shillcr
2O-city housing price indcx. See Ilozra hices post. 18 percent annual drop in October, by I,tW
Elphinstong AP, Deccmber 30, 2008,
90 Hotel, Recreation Centers, Golf Club Houses, SPA and Retail Center
9l The web sites for the United States Golf Association and American Sociery of Golf Course
Architects both conrain a $1.6 to 4.5 million range for the construction cost of a Golf Coursg $3
milllion is roughly the midpoint in that range.
lmpact of Destination Resorts in Oregon
March 2009 page 93
Fodor & A33ociates
A-2. Transient Room Tax Explanation
Deschutcs County imposes a Transient Room Tax on the guest of any Hotel or short
term rental housingez located in an unincorporated part of the counry, This tax is in
the amount of 7% of the full rent charged by the rental manager for the occupanry of
a room. Thc room tax is not imposed on items separate and independent from the
use of the room'5 nor is it imposed on recreational feess.If the room is rented es part
of a package deal that includes food and or recreational activities the Hotel operator
is permitted to exclude from the rent the cost of providing the food or activities.
The hotel operator collects this ux on behalf of Deschutes County at the time the
room rate is paid. Monthly, the hotel or rental operator remits the amount of taxes
collected minus a 5% "Collecrion Reimbursement Charge."
Revenues from the Transient Room Tax are cumently being used to fund services
provided by the Sheriffs Office and for tourism through the Central Oregon Visitors
Association.t' By state law the minimum proportion spent on tourism promotion
and tourisrn-related facilities can not be less then that allocated on I July 2003. The
current division is about 73W27o/o with the maiority going to the SherilPs Office.eu
In the FY 2008-09 Annual Budget $2,415,020 or about 19.6% of the operating funds
devoted to Rural Law Enforcement came from Transient Room Taxes.eT
Rg-gm Tax IU,ethodolo qy
In its most basic form estimating the ainount of revenue raised by the Deschutes
County Room Tax from a hotel is a very straight forward process. The revenue
equals the room rate, times the occupancy rate, times .07, dmes 365 days, minus 5%
of the total, Making an estimate of a proposed hotel where the only information is
92 The Deschutes County Code (DCC) defines "Hotel" as "...any structurc or space, or any portion of
sny strucnrrc or space which is or intcnded or designed for Transient Occupancy for 30 days or less,
for dwellin& lodging or sleeping purpo$€s, and includes, but is not Iimited to any Hotel, inn, tourist
home, tourist accornmodation, condominium, motel, studio Hotel, hostel, bachelor Hotel, lodging
house, bed and brcakfast, vacation homq vacation rental homg rooming house, apartment house,
public or private dormitory, fratcrnity, sororitg public or private club, mobile home, R.V. or
trailer park, campgrounds private home, or similar structurc or portions thereof so occupied. [DCC
4,08.0451
93 Items such as Food seryice, Room Service, Pay for view movies long distance telephonc.
94 "Recreation Fee" means a fee chargcd, assessed, or allocated by a Hotel to a Hotel occupant or
occupants for use of Destination Resort recreation facilities, whether thc Hotel charging the
Rerreation Fee is a Destination Reson or has a contracl or agreement with a Destination Reson for
use by the Hotel's guests of the recreation facilities of thc Destination Reson, [DCC4.0t.065]
95 Deschures County Annual Budget for Fiscal Year 200E-@ page iii,
96 Deschutes County Annual Budget for Fiscal Year 200E-09 pages 332 and 370
97 Deschutes County Annual Budget for Fiscal Year 2008-09 pagB 370
lmpact of Destlnatlon Resorts in Oregon
March 2009 paga94
Fodor & Associates
the number of rooms, as is the case here, requires a number of assumptions to be
made.
In order to estimate the average room rate, it was assumed that the Hotel and other
rental units would meet the American Automobile Association's Three-Diarnond
Ratinges criteria. This rating is the middle of a 5 tevel scale and is typical of the
ratings he ld by other resorts in Oregons. There are 14 Three-Diamond Hotels
operating in Deschutes County of which rate information is available for l2 of them,
The rates range from a low of $89 to a high of $439 per night. Based on the number
of distribution of room types in the AAA Guide, it was assumed that there are four
times as many inexpensive rooms as there are expensive rooms. The weighted
average room rate is $l2t per night.
Just as there is little information on the configuration of the hotel there is little
information on the configuration of the 450 houses that will be available for shon-
term rental. [n order to estimate vacation home rental rates, the assumption was
rnade that they would resemble those currently on the short term rental market for
the Greater Redmond area. The Vacation Rentals by Owner web site listed 39
vacation homes available for vacation rental in Redmoud, Oregon.roo Twenty-eight
of these listings were for rentals in Eagle Crest Resort. The rates for these houses run
from $100 to $300 a night, with an average rate of $162.
The last variable is the occupancy rates for each type of unit, While the total
monthly Transient Room tax receipts paid by all operations subject to Transient
Room Taxes are available, actual occupancy data is extremely difficult to come by.
To develop an annual occupancy rate estimate, a peak occupancy rate of 90% was
assumed for the month of August and then an adjusted occupancy rates for each of
the other months was calculated based on the actual rnonthly Transient Room Taxes
paid to the County for that month. From this an average annual occupancy rate for
all rental g?es was derived, as described below.
Occuoancv Rates for Room Tax Revenues
Room tax revenues are difficult to e$dmate for a planned, but unbuilt resort such as
Thornburgh. Occupancy rates and reporting rates (the percent of private rentals for
which room taxes are paid) must be esdmated. To estimate occupancy rates, County-
wide room tax revenuesror were eramined and adiusted to reflect the likely seasonal
et According to AAA, "Three diamond lodginp offer a distinguisbcd style. Properties are multi-
faceted with marked upgrodes in physical altributes, amenitiec and guest comforts.'(AAA Oregon
and Vashington Tour Book, AAA Publishing, Heathrow, Florida, 2008, page 2l)s The 2008 AAA Oregon and !flashington Tour book lists 7 Oregon Resorrs, one Two-Diamond, fivc
Three-Diarnond and onc Four-Diamond.
ro Data collccted on 2l December 2008 from hrtp;www.vrhbo.com/vacation-
rental s/region/usa/Oregon/c entral-ore gon,
r0r Data from Deschutcs County Treasurcr Marty wynn.
lmpact of Destination Resorts in Oregon
March 2009 page 95
Fodor & Agsociates
nature of this resort. The County-wide vacancy rate was estimated based on the
assumption that a peak occupancy rate of 90% is achieved during the peak month of
August. This rnay be overly optimistig as many private rentals will be occupied by
owners during this month. However, this peak occupancy rate was used as a
reference to estimate occupancy rates for the rest of the year (see Figure A-l).
Average annual occupancy for the County was estimated to be 33% based on this
method.
Hotels and lodging in Bend, and resorts such as Sunriver and Inn of the Seventh
Mountain, are close to Mt. Bachelor and can maintain modest winter occupancy
rates. However, resorts such as Thornburgh are located too far away to benefit from
skiing. Since Thornburgh would lack off-season appeal, it was assumed rhat rental
occupancy would drop to an average of l0% from November through April. For the
remainder of the seasou, County-wide vacancy rates are applied (see Figure A-2).
This results in an average annual occupancy rate at Thornburgh of 29o/o.
Figure A-l: Deschutes County occupancy rates based on monthly room tex
revenue$.
Estimated Rental Occupancy Rates,
Deschutes County,2007
o
t!E
(,
IE
CLaL'oo
100%
90Yo
80o/"
70To
6V/"
50%
40%
300/
20%
10o/o
o%
/\
/\
/\I \
\
/\/
\./
Efl5Eg;=EF8gE
lmpact of Destlnation Resorts in Oregon
March 2009 page 96
Fodor & Assoclates
><----<
Figure A-2: Occupancy rates used for Thornburgh Resort.
Estlmated Rental Occupancy Rates fol
Thomburgh Resort
0)
(E
tr,
I
Go.Jooo
100%
90%
80Yo
70%
6V/o
5V/o
400/
30%
20%
10%
o%EEEFgS=gS8EE
I \I \
I \I \
-/'/
Resort vacation homes that are managed by a property management firm will tend to
fully report room taxes, as the room t8x revenues provides compensation ro these
firms to offset administrative and collecdon costs. However, privately-owned
vacation homes that are owner-managed may not fully report rcom taxes to the
County. This situation may occur at Ergle Crest Resort, where a recent property
owner suryey conducted by Jen-\trfleld specifically mentioned that survey
respondents would not be reported to the County if they were renting their house .
For Thornburgh, it was assumed that 80% of privately-owned rental homes are fully
reporting room taxes, and that 100% ofhotel room rentals are reported,
lmpact of Destlnation Resorts in Oregon
March 2009 page97
Fodor & Associates
\
A-3. Population Projection Used in Study
The population figures used throughout this study are from the Deschutes County
2000-2025 Coordinated Population Forecast. The forecast data for each of the 5-year
increments was interpolated using exponential growth rates to create data for each
year in between, making it possible to examine population changes over any period
of time. In order to create a Z0-year forecast through 2028, the proiection dam was
expauded beyond 2025 to 2028 using the same growth rate as in the final 5-year
period (2020-2025),
Table A-3
lnlerpolaled Population Data lor Every Year to 202E
Based on Deschutes County 2000-2025 Coordlnated Populaflon Forocast
Year
Bend Redmond Sisters Unincorp. Tota!UGB UGB UGB Counly Gounty
2005 69,004
2006 71,294
2007 73,661
2008 76,106
2009 78,632
2010 81,242
2011 83,135
2012 85,072
2013 87,054
2014 89,082
2015 91,158
2016 92,981
2017 94,841
2018 96,738
2019 98,673
2020 100,646
2021 102,337
2022 104,056
2023 105,804
2024 107,582
2025 109,389
2026 111,?27
2027 1'13,095
2428 114,995
19,249
20,100
20,989
21,916
22,885
23,897
24,953
26,056
27,208
28,411
29,667
30,979
32,348
33,778
35,272
36,831
38,459
40,159
41,935
43,788
45,724
47,745
49,856
52,060
1,768
1,864
1,966
2,074
2,187
2,306
2,379
2,454
2,532
2,611
2,694
2,782
2,874
2,968
3,065
3,166
3,275
3,387
3,503
3,623
3,747
3,875
4,008
4,146
53,032
54,199
55,391
56,609
57,854
59,127
60,428
61,757
63,116
64,505
65,924
67,374
68,857
70,372
71,920
73,502
75,119
76,772
78,461
80,187
81,951
83,754
85,597
87,480
143,053
147,475
152,033
156,733
161 ,578
166,572
170,914
175,369
179,940
184,630
189,443
194,144
198,962
203,900
208,959
214,145
219,231
224,437
229,768
235,225
240,811
246,530
252,385
258,379
Dah lrom County (populauon lor inlormodiato year8 ar€ addod).
Added pro,ections based on prwlous s-year growlh rates.
lmpact of Destination Resorts in Oregon
March 2009
Fodor & Assoclates
page 98
A-4. Tax Bases for f urisdictions Used in Study
The total assessed values of the tax base for each of the local iurisdictions used in
this study are provide in Table A-{. The final column of the table shows the
percentage of each tax base that would be represented by the Thornburgh Resort if
fully developed. This percentage was treated as the potential future contribution by
the resort towards repayment of bonds associated with the infrastructures costs
generated,
Table A-4
Potential Contribulion to lnlrastruclure Cosls lhrough Fulure Tax Payments
Bategoryollnlraqtructure Jurisdiotu
Assessed Value
ol Tax Baseo)
Transportation Systern{s) Deschutes County NA NA
School Facilities Rodmond School Dist, $4,937,455,942 7 .10/o
Fire & EMS Facilities DCRFPD#1 $1,295,518,889 22,4%
Public Safety Facilities Deschutes County $16,602,476,500 2.20/o
Parks and Rec. Facilities RAPRD $288,870,875 56.5%
Gen Gov. Facill0es Deschutes County $16,602,476,500 2.?%
(1) Dah trom he 200&09 DiEtrft Summary Tablo on pag€ 16 ol $e 2008-09 SumrEry of Assessment and Tax Roll published by fie
Deschutes CqJnty A$s8s60a 0ffaco. Assessed valu8 o, school dlsficl lrom Redmond Schgol Di$uict.
(2) The percent of $e tolal futlro Ex bate r0pr0$0nt0d by lhs resoil based on a lully-devebped r8son wllh a tohl assessed lax valuo ol
$374,788,617.
(3) Tnnsponatjon sysEm b notlurded by proporty tues.
lmpact of De*ination Resorts ln Oregon
March 2009
Percent ol
Future Taxes
Paid by
Thornburghler
pa6e 99
Fodor & Assoclates
A-5. About the Authors
Mr. Fodor holds a Masters in Urban and Regional Planning and a M.S. degree in
Environmental Studies, both from the University of Oregon. He holds a B.S, degree
in Mechanical Engineering from the University of Sflisconsin - Madison.
David Hinkley, Research and Aualysic
Mr. Hinkley has worked since 1996 providing public policy research, analysis and
advocacy services to lobbyists, candidates, businesses and individuals. Areas of
expertise include land use codes, government budgeting, tax increment firancing,
development impacts, state land use programs, systems development charges,
transportation issues, disability issues, bottle bills, campaign contributions, and
liquor laws. He served 8 years on the City of Eugene's Public Works Rates Advisory
Committee helping to revise the City's System Development Charge methodologies
for transportadon, waste wster and parks systems.
Mr. Hinkley holds a Bachelors of Arts degree in History from the University of San
Francisco and a B.S. degree with Honors in Criminal Justice Adminisuation from
San tose State University.
lmpact of Destination Resorts in Oregon
March 2009 page 100
Fodor & Associates
Eben Fodor, Principal Author
Mr. Fodor is Founder and Principal of Fodor & Associates, a consulting firm based
in Eugene, Oregon since 1993. The firm specializes in community planning and
land use consulting, including fiscal impact analysis, growth management,land-use
planning, economic forecasting, and research and analysis. He is an expert in
development impact analysis. He created a development impact model for the City
of San Diego that quickly estimatcs infrastructure and service costs for new
developments of any size and mix of uses. He has examined the fiscal impacts of
development proposals in Washington, Oregon, Maryland and tUflyoming for various
clients. He conducted statewide assessments of infrastructure irnpacts of residential
development in Oregon and \U(rashington,
Watenrorks Consu ltants
4017 Willowbrook Lane
Bellingham, WA 98229
360-296-8084
Memo
To: Gerald Steel
From: Llyn Doremus
Date: July 17, 2009
Re: Technical review of: Water Supply and Groundwater lrnpact Analysis
Pleasant Harbor Marina and Golf Resoil - November 20, 2008 (SDEIS)
Recommendations for Additional Hydrogeologic Testing at Black Point
Background
The Pleasant Harbor Marina and Golf Resort is planned for construction on the
Black Point Peninsula in Hood Canal. The peninsula is surrounded by salt water
for more than 757o of it's shoreline. At least 15 wells are located along the Black
Point eastern and northern shorelines that are at risk of seawater intrusion,
Hood Canal is known to have a serious problem with depleted dissolved oxygen
contsnt, which has resulted in what has been termed a "dead zone". The dead
zone creates conditions where a wide range of sea life that requires dissolved
oxygen in the waters of their environment cannot survive. The depleted oxygen
condition is known to result from enhanced activity of bacteria and algae that is
promoted by discharge of nutrients (nitrogen and phosphorus) dissolved in
surface and groundwater to Hood Canal. The two conditions: seawater
surrounding the Black Point Peninsula and the potential for seawater intrusion to
degrade water quality in shoreline wells, and extreme sensitivity of Hood Canal
biologic health to the release of nutrients generate a very delicately balanced
hydrogeologic environment in which the Resort is proposed for construction.
The Resort water supply for residential, commercial and inigation purposes has
been proposed through a combination of rainwater capture, reuse, reclamation,
infiltration, and groundwater withdrawal processes. While the general scheme of
the suppty system has been outlined in previous documents, the specifics of how
each of the components will operate has not yet been accurately defined. The
potential for negative impacts of the various supply system components on the
delicately balanced hydrogeologic environment is high, A sophisticated
understanding of the Black Point hydrogeologic system is mandated to assess
potential for degradation from the proposed water supply scheme to dissolved
oxygen levels in Hood Canal, to seawater intrusion into the Black Point aquifer,
and for the design, maintenance and operation of that system to function without
degrading the Black Point aquifer and Hood Canal,
These comments address the hydrogeologic characterization presented in the
report: Water Supply and Groundwater lmpact Analysis, Pleasant Harbor Marina
and Goff Resorf by Subsurface Group, LLC, November 20, 2008 (Report)with
respect to the information necessary for characterization, design and operation of
a water supply system that does not degrade the Black Point aquifer. The
accuracy and completeness of the Report assumptions, information and
conclusions are assessed, and recommendations for additional testing to fill in
the information gaps in the Report are listed.
Hydrogeologic System
Groundwater moves through the sediments and rock, which, along with the other
water moving through the system, defines the hydrolgeologic system of a specific
site, Sediment tends to form in layers, which can be visualized as a "layer cake"
type configuration. Sediments and rock layers with a large percentage of void
spaces typically transmit water more quickly, which is termed a high permeability
hydrogeologic unit. Sediment layers that are more dense, with tiny void spaces
are termed "low permeability" or "impermeable". Low permeability sediment
layers impede downward migration (infiltration) of groundwater, and tend to
accumulate water on their upper surface. This is normally how unconfined
aquifers form. The permeability of an aquifer is usually determined by
conducting a pump test. With the exception of the single pump test of the
American Campground well, and the marginal data generated from that test,
there is no data presented on the aquifer properties of the various hydrogeologic
units on the Black Point Peninsula.
RECOMM ENDATION FOR ADDITIONA L TESTING
The Report describes results from a pump test conducted in the American
Campground well for 48 hours to assess the permeability and other aquifer
properties in the well vicinity. The data generated by the test was found to
be insufficient to assess the aquifer properties, because the drawdown in
Water Supply and Grounduater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendalions 2
the monitoring wells was almost undetectable. Pump testing should be
conducted in all of the wells that are proposed for water supply purposes.
The pumping rate used should be equivalent to the rate at which water is
proposed for withdrawal for the water supply needs of the resort (at a
minimum 75 gallons per minute to provide the 121 acre feet annual use
projection), because of the likelihood that individual wells may be relied
upon for the full volume for the resort water demand when problems with
water level drawdown and seawater intrusion o@ur. The tests should be
run for sufficient duration (minimum 72 hours) to derive measurable
drawdown curye in at least one of the monitoring wells, so that reliable
aquifer properties can be calculated.
The direction of groundwater movement is defined by the groundwater gradient
Groundwater moves from locations of high water elevation level to low elevation
discharging eventually to lower-elevation surface water bodies. The groundwater
elevation pattern often mimics the ground surface topographic elevation pattem.
Downgradient (lower groundwater elevation) locations manifest the affects of
groundwater movement and withdrawal in higher elevation locations. lt is
important to understand the directions of groundwater movement in order to
assess the magnitude and distribution of ground water level decreases
associated with groundwater withdrawal (pumping from wells). ln particular,
reduction in the groundwater levels in shoreline areas increases the risk of
seawater intrusion into water supply wells.
The Report presents an interpretation of groundwater flow direction towards the
center of the peninsula and then to the east (discharging into Hood Canal). The
groundwater surface elevation contours are illustrated in Figure 4 of the Report,
and suggest that a groundwater high point (at MW-z) dominates groundwater
flow direction on the entire peninsula. That single data point (MW-z water level
elevation) is disproportionally valued in interpreting the groundwater flow
directions.
RECOMM ENDATION FOR ADDITIONAL TESTING
Groundwater levels should be measured in every accessible Black Point
Peninsula well on the same date, so that a groundwater elevation contour
level map can be constructed that is reliable for use in interpreting the
direction(s) of groundwater movement. A better understanding of the
direction of groundwater movement will support a better interpretation of the
groundwater withdrawal impacts to private wells on the Black Point
Peninsula and seawater intrusion risk.
Water Supply and Grounduater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendations 3
Diagrams of the Blaclr Point Peninsula hydlogeologic system are presented in
the Report Figures 11 , 12 and 13. Much of the site is covered with dense, low
permeability till, About one third of he site has additional sediments deposited
on top of the till that are higher in permeability and allow water to migrate more
quickly through them. Water that migrates downward through these higher
permeability sediments might slow down and accumulate in a "perched' aquifer
upon encountering the underlying low-permeability till. There is no evidence of
perched conditions at this site presented in the Report.
Basalt bedrock is shown in Figures 13 in wells located on the northem part of the
site. The contribution of groundwater flow transmitted through bedrock to the
Black Point aquifer is not well characterized in the Report, nor is the bedroclr
permeability, or the hydraulic connection between bedrock and the overlying
unconsolidated sediments. With the exception of the single pump test of the
American Campground well, and the marginal data generated from that test,
there is no data presented on the aquifer properties of the bedrock or
unconsolidated sediment hydrogeologic units on the Black Point Peninsula, or on
the hydraulic continuity between unconsolidated sediment units and the bedrock
underlying them. Further pump testing (as previously described) is necessary to
better define aquifer properties of the hydrogeologic units and the hydraulic
continuity with bedrock on the site.
Water Budget
A water budget uses estimates or measurements of each component of the
hydrologic cycle to assess the entire movement of water through a specific
hydrologic system annually. For the purposes of characterizing the impact of the
proposed water management scheme on the the Black Point Peninsula aquifer
and hydrogeology, the water budget should encompass the entire Peninsula, To
prevent or at least minimize detrimentalimpacts it is essential that the
components of the water budget are defined as accurately as possible.
A $pical equation for a water balance is as follows.
Ppt=E+Q+dss+dSE
Where:
Ppt = annual precipitation
E = annual evaporation plus transpiration (evapotranspiration)
Q = stream flow or surface water runoff
dS" = the change in quantity that is stored as surface water for the year
(negative for a decrease in tho water quantity in surface storage)
Water Supply and Grounduater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendations 4
dSe = the change in the water quantity that is stored as groundwater for
the year (negative for a decrease in the groundwater storage, indicating a
drop in groundwater levels)
Surface Water Flow l
Although surface water is not flowing onto the proposed Pleasant Harbor Resort
site, the quantity of water discharged from Black Point Peninsula as stream flow
impacts the water budget for the Peninsula. Accurate stream flow
measurements help reduce uncertainty in other portions of the hydrologic budget
that are more difficult to estimate. Stream flow emitting from the lake in the
eastern-central portion of Black Point Peninsula, as well as any other stream flow
on the Peninsula needs accurate assessment in order to calculate its contribution
to the water budget, and its influence on the other components of the budget.
RECOMMENDATION FOR ADDTTTONAL TESTTNG (8)
Stream flow emitting from the lake on the eastemcentral margin of the
Peninsula, and flowing to the east shoreline should be monitored to assess
the rate of surface water runoff from the Peninsula.
Surface Water Sforage
Surface water is typically stored in lakes and wetlands. To better understand the
changes in surface water storage that are ongoing under current conditions
(dSs), and that may be expected from the proposed use of kettles as water
storage facilities, the water sbred in Lake (on the eastern margin of the
Peninsula) should be monitored for changes in lake elevation. lt is likely that the
lake is in hydraulic continuity with groundwater, and receives groundwater
discharge. A better delineation of lake level variations, and their relationship to
precipitation quantities and timing, and groundwater levels will improve the
understanding of how groundwater moves through the Peninsula hydrogeologic
system.
RECOMMENDATI0N FOR ADDITIONAL TESTTNG @Ss)
Monitor lake level elevation over the period of a year (concurrent with other
monitoring data collected).
Precipitation
Precipitation provides water that supports the various water uses and hydrologic
components. Annual precipitation at this site is poorly understood because of the
variability in precipitation along the north south extent of Hood Canal, and the
lack of monitored data collected in the Black Point Peninsula or Brinnon vicini$.
Water Supply and Groundwater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendations 6
RECOMM ENDATION FOR A DDITI ONAL TESTING (Ppt)
Precipitation should be monitored on the Black Point Peninsula for an entire
year, ln addition, the data available from the NOAA approved weather
station at location A5461 on the west side of Hwy. 101 across from
Pleasant Harbor should be analyzed. See Attachment t hereto.
GroundwaterSforage
Groundwater that is stored in an aquifer is the amount of water that is added to
the aquifer over the course of the year (termed recharge) minus the amount
withdrawn or discharged from the aquifer. Recharge to an aquifer derives from
precipitation that infiltrates into the ground. Discharge from an aquifer typically
goes to stream flow (Q), or it may be pumped for water supply or irrigation
purposes, or, in this case, includes flow into Hood Canal to diminish salt water
intrusion into the fresh water supply. The difference between the amount
recharged and the amount discharged is the change in storage (dSg).
Quantification of recharge is an important factor in assessing the storage
changes in groundwater, as is quantification of the discharge.
Recharge of an aquifer results from vertical infiltration of precipitation that falls on
the ground surface overlying the aquifer. Aquifers are more rapidly recharged
when the sediment overlying the aquifer is of "high permeability" and when there
is high annual precipitation. Consider if the precipitation that infiltrates to
recharge the aquifer is half (50%), the standard assumption when data is not
available to calculate actual recharge rates. For this site the annual precipitation
rate is not well known, which makes the annual recharge rate even more difficult
to assess. Table 3 lists 55 inches for annual precipitation in Quilcene (the
closest site monitored). Half of this is 27 inches, or 2.3 feet. For this 220 acre
site, this provides an annual recharge of 504 acre feet (significantly less than the
783 acre feet claimed in the Report on page 17). The presence of low
permeability till will slow down groundwater infiltration, and likely reduce the rate
of groundwater recharge to the aquifer even further than estimated using these
assumptions.
There will be substantial additional evapotranspiration saused by the watering of
the golf course and other vegetation in the hot months of the year. This has not
been adequately considered.
RECOMM EN DATION FOR ADDITIONAL TESTING (dsg)
Groundwater levels in the three monitoring wells (MW-l, MW-2 and MW-3)
should be monitored for at least one year, to determine the variation in
groundwater elevation. Precipitation should be monitored on the site for at
Water Supply and Grounduater lmpact Analysis, Pleasant Harbor Marina end Golf Resort
Technical Review and Recommendations 6
least one year to determine the actual precipitation received annually
(concurrently with other monitoring data collected). Analyses of recharge
quantities and rates should be done using monitored data, and presented in
the calculation of the water budget for the site. A separate set of
calculations should be done assuming serious drought conditions - perhaps
an estimated 500-year drought.
Quantification of groundwater discharge is calculated using measurements of
changes in groundwater elevation, stream flory measurements, pumped
quantities from the aquifer, and precipitation measurements. lt is important to
delineate the groundwater flow direction and to delineate locations of
groundwater discharge, to more accurately assess the annual amount of
groundwater discharging from the aquifer. The change in groundwater storage
calculated amount (dsg) relies upon an accurate estimation of annual
groundwater discharge and its relative value with respect to the annual recharge
amount. Additionally, discharge of groundwater from beneath the proposed
resort to Hood Canal, that contains contaminated landscaping chemicals
(especially nitrate and phosphorus) poses a significant risk to the environmental
health of Hood Canal.
Evapotranspiration
The information presented in the Report on estimations of evapotranspiration
(24.1 or 24.2 inches per year), need to be presented with data, formulas, tables,
and assumptions used in those calculations, as part of the comprehensive water
budget estimation.
Sumrnary of Recommendations for Additional Testing
To better understand the hydrogeologic response to the proposed water supply
management scheme in this relatively sensitive groundwater environment, each
of the components of the hydrologic cycle should be more accurately quantified.
ln addition, the aquifer properties must be better defined to design a supply
system that does not overstress the aquifer. The following tests are
recommended in order to gather that information.
Aquifer properties
Aquifer testing - pump tests should be conducted for a minimum of 72 hours in
any wells that might be proposed for water supply purposes (American
Campground Well, Pleasant Tides Coop Well (Sam Boling Water System/Black
Point Water Company)and MW-2). Pump tests should be conducted for long
Water Supply and Groundraater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendations 7
enough to generate a measurable drawdown in at least two monitoring wells in
the vicinity. Pumping rate at the Pleasant Tides Coop Well should include the
300 gpm for existing water rights plus the proposed new withdrawal.
. Pump testing at MW-2 should include installation of a monitoring well, at a
location that is as close as existing wells are to the eastern shoreline, in
line with the MW-2 well. Chloride testing of water pumped from the
aquifer should be done when the MW-2 is pump tested,
r Pump testing at the Pleasant Times Coop Well should include monitoring
for water level drawdown and for chloride at the other Black Point Water' Company wells, the Babare well, the Tudor well and the oher Pleasant
Harbor Beach Tract Owners wells,
Seawater intusion
Chloride content in groundwater should be determined in samples collected from
wells pumped adjacent to the marine shoreline over the duration of the pump
tests. At a minimum one sample should be collected prior to initiation of
pumping, another after at least 12 hours of pumping and a third shortly before
pumping is stopped. More samples provide more confidence in the data
collected, and the interpretations derived from that data. Chloride concenbations
between 100 and 200 mgil indicate wells at moderate risk for seawater intrusion,
with 200 mg/l being the trigger for high risk, according to lsland County's
Seawater lntrusion Policy (a copy is included with these comments as
Attachment 2).
Groundwater movement
Groundwater levels should be measured in every accessible well on the same
date, so that a groundwater elevation contour level map can be constructed that
is reliable for interpreting the direction(s) of groundwater movement. A better
understanding of the direction of groundwater movement will support a better
interpretation of the groundwater withdrawal impacts to private wells on he Black
Point Peninsula and seawater intrusion risk.
Water Budget
The presentation of the water budget in the Report makes it impossible to assess
the individual components of the water budget, their relationship to each other,
and what data was used to derive them. A comprehensive explanation of the
water balance calculations must be provided. This should include:
r water budget equation used
o Values for each component the equation
Water Supply and Groundraater lmpact Analysis, Pleasant Harbor Marina and Golf Resort
Technical Review and Recommendations 8
. data, calculations and assumptions used to derive each value
ln particular the following components need better delineation.
Precipitation
Precipitation should be monitored on the Black Point Peninsula site for the
duration of a year (concurrent with other monitoring data collection).
Recharge
Groundwater levels should be monitored with continuous electronic logs in the
three monitoring wells, and reported for the duration of a year to assess the
range of groundwater level variation, and the recharge resulting from
precipitation events. Precipitation monitoring should coincide with groundwater
level monitoring periods. Precipitation should be used to evaluate the changes in
groundwater levels associated with precipitation events (i.e. recharge)
Evapotranspiration
Evapotranspiration calculations, and the data and assumptions used in those
calculations needs to be presented in report form.
Streamflow
Stream flow emitting from the lake on the eastem margin of the Peninsula, and
flowing to the east shoreline should be monitored to assess the rate of surface
water runoff from the Peninsula.
Lake Level
Monitor lake (located in the central-eastern portion of Black Point Peninsula)
level elevation over the period of a year concurrent with other monitoring data
collected.
Water Supply and Grounduater lmpact Analysis, Pleasant Harbor Marina and Golf Resorl
Technical Review and Recommendations 9
SILVER TIP
sOLUTIONS
Wrtcr budgct rurlysls for Black Polnt
Pcnlurula rnd the propored Plerrent llrttor
Marlna rud Golf Course
June 3, 2010
Ilr. Chrlsdna J. Brnderagoda
l-{2}.5014191
ch rlstlu r@cllvcrtlprol.som
Llyn Dorcmus
Watervorks Cousultrutr
360-29G80t4
Itynrdele@gmall.com
I
Execudve Summary
Tbe Plcasant Harbor Roort and Marina is proposed for construction on Black
Poiot Pcninsula; the 220 acte frcility would dramatically chaogc thc laod surfacc of the
710 acrc petrinsula located ia Hood Canal. A dsta-based water budgct was calculated for
the Black Point for currcnt forested conditions srd for the chargod lurd cover and watcr
usage conditions pro,posed for the Resort. S/ith the consEuction and opcration of the
Rccort, 60 acres will be corwertrd to irrigated golf coursc, 37 acru to bruildings and
paved imperviorrs zurfaces, l7 acrcs to lined inigation pond water Etorag6, 60 acrcs will
remaia in native furest cover, and we assume the remainder of the 46 acrco will be rucd
for biorctcntion or rain gardens.. The chmgcd laod covor will modiS tbc cxisting watcr
balancc that distributes annual prccipitation to the procecscs of wapotranspiration and
goundwarcr infilration. Evapotraospiration (ET) was calculatod for daily timestcps
rsing climate conditions (monitored et Quiloeoe) and limitcd by thc available watcr
(precipitation and ponded surface watcr). rilaterponded in wdlands, bogs and fens at
the groud sr.ufacc infiltratcs to recharge grouudwater at a rate linit€d by thc soil
infilration capacity of thc Black Point till scdimcnts aftcr the daily ET demand is mct.
tilith Rcsort devclopment impcrvious surface and laudscapcd arcas will generate
surfacc water nrnoff Tbe watcr budget we calculala, based ou &e Eovironmcoal Impact
Satcrnent (EIS) and Resort project plans, includes surface water runoff, cbanges to fte
evapoturspiration rates asd the aff*t$ of groutrdwatcr pumping. The rernoval of eees
from 160 acres of the sitc will modi$ evapotranspirztion rates, causing ET increases in
summcr montts and decreases in winftr monthe. To supply thc commscial and dourestic
water nc€ds and tbe landscaped aress water demand, groundwatcr will be prmpcd from
the aquifer. We sstimatc that groundwatcr rccharge r.itl be reduccd by as much as 50Yo
as a conscquetrcc of: the groundwatcr pumping (for inigation and human consumptiur),
changea to the wapotranspiration rates and generation of gurface watcr runofffrom
impcrviors surfaces landscapcd arcas. Witr thc dccrcasc ln recharge to thc groundwatcr,
wG cxpect thc aquifer to bc steadily dcpleted, givco the proposed dwelopmcat plans.
Aay dccrcasc in aquifcr rcchargc increaseE the potential for scawater intmsion along the
shorelincs of the Black Point Peninzula. The EIS and dorclopmant plans do not use r
rcalistic valuc for intiltration, wbich resulu in an rmdcrcstimate of surface nuroffand
overEstimate of aquifer recharge. We cstimatc that the mnrEl amount of gurface water
could be over 400 acre-ft with the proposed lasd cover changes; twicc as much as what
could be contained in a 60,000,000 gdlon liued pond- Aay untreated surfrce water
runofffrom Imdscaped gurfacec can be expectod to transport nubients to Hood Cand,
degrading thc alrcady dcpleted dissolved oxlgcn conditions.
2
1.0 lntroductlon
Black Poiot Peninsula borders Hood Canal within Water Resowce Inventory Arca
I 6 (W'RIA I 6; Sections I 5 and 22 of T25N, R2\V). Pleasant Hsrbor Marina and Golf
Resort is pmposed for development on 220 acrcs of the penineula. This constitutes
approximstely one-third of Black Point, which is cuncntly moderately orundevelopcd
mature forest. Black Point is within thc coastal Seawater Intrusion Protection Zone of
Jcf,hrson Cotmty, WA and is dcsipated as a Critical Aquifer Recharge Area"
This water budgct analysis explores the two following questions about the
proposcd dcvclopmcnt :
How much surface ntnof guantity can be expecledftom land uses that may requirc water
qualtty teatment?
How does the aqutfer recharge and drawdown change with the propasd development
compared to anrrenl recharge?
Using plans aod esrimatce from previous gtudies (Subsurface Grcup, 2A06;2020
Engineering, 200?) as well as daily climate data, we analpe the potential water supply
and demand for the proposcd Esort development ss I flnction of seasonal wcathcr
conditions, in order to estimate changes to Black Point peninsula hydrology givcn the
proposed development. This work addresscs thc insufficient scope of recent studies
(Subsurface Cmup, LLC, 2006; 2020 Enginccring, 2007) to 1) acqrately calculate
Evapotruspirotion, a major component of the overall water balance which contnols
currcnt and potcntial firture water eupply 2) thc scasonal cffccts of groundwater pumping
for irrigation requiremeots, aud to 3) prescnt a refincd watcr budgeil estimate for current
and proposed rcsort dev€lopmeut land covcr conditions. An important diffcrencc betwecn
our cstinatcs and other studies (Subsurfacc Group, LLC,2006;2020 Enginecrhg,Z007)
are related to the limitation of the annual recharge to 23 in/year plus fou inches of soil
moishre holding capacity (Morgan and Jones, 1999). This value has also bcen used by
the USGST for regional aquifcr s)4stcn analysis of Puget Sound (Vaccaro, et a1., 1998).
By comparing thc cT rrent forested conditions water budget with the modifications
to 6c water budget from the propored developmenl calculated on a daily timeste,p using
climate data collectcd in thc Black Point vicinity, we show that thc watcr budggt
estimated by Subsurfacc Group LLC (2006), dwelopcd using annual averages, does not
accorrot for the decrease in recharge aad increasc in surface ruaoffexpected with the
proposed lard cov€r change. Thc currcnt or uodcveloped water budget can be cxpocted
3
tUnitcd Stltcs Ccological Suncy
to changc dramatically under the prropoced dcveloped conditions. The mature forest land
covef, water use is arbjcct to seasonsl limis of water suppln and produces minimal
surface water nruoff,, In contrast, tho plamed irrigptcd landscaping artificially alters the
watcr budget by providing unlinitcd water supply to the laudscaped vegotatioo demande
via groundwatcr Fmping; and lhe dwclopcd impcrrrious and landscaped surfaces
produccs surfacc mnorf in cxoess of what can be controllcd by engineered ponds and
bioretention gnrdcns.
2.0 TheWaterBudget
The water budget, or water balance, is inporlaot for urderstanding how chauges
to onE componcnt of the hydrologic cycle will affect othcr components in the systcm. In
atl systems, when more resourc€s are available than are usd there is a surphu; whcn
mone rpaources are needcd than is availablg thsrc is a deficit. In natural systcrns,
vegetation develops over long time scales in balance wi0r the available rEsourccs.
Engineered hydrologic systems are gcnerally dwetopcd to ovffcome a deficit of water
during dry sr:mmer - high demand sunurrer ulonths. The long-tenn effects of the changes
are subject to a range of uncertainties. Butby defrnitioa laud dwelopment and the
assosiated land cover change, alters ths water balance by chuging the seusonality of
supply and demand.
2,7 The CuruentWater Budget
The crmeut water budgct (otilB) can be assumed to bc in balancc (changcs in
WB on an annual averag€ equal0), since tbe dcmands on the slatem have developed
depcndcnt on thc availablc water rcsourccs and infiltration capacity. We use an infinity
sip to signiS the long-tcrur balancc that has developed for tbe natural system, in
contrast to an altercd or devcloped land surface, ftere is no exccss surface water runoff,
bccause there is ro sEearq or creek which convep surface watcr runolf or channelization
that has evolved on the land surface. The anmral averEg€ water budget for the current
system is 0rcrcfore defined as:
*WB = Ralnfall- Evapotransplratlon - Groundwater recharge (1)
In Equation l, the amurnt of rai.'fall eithcr cycles back into the atmosphere
through evaporative aad vegctrtion use, collcetivcly refcned to as Evapotranspiration, or
the rainfall infiluateg through the soil to reohargc grormdwater. On a monthlytimcscale,
there is a potential for high rainfall winter months to creaE surplus water that is pondcd
on thc ground surface in wetlurdg bogt and fcns and thcn slourly infilrates (or
cvaporates). Equation 2 dcscribcs thc adjustment to the water balaocc in thc winter
caused by ao increase in rainfall. Tbcre is a d€crcase iu evapotranspiration due to cooler
tcmperaturcs, aod increase to grouodwatcr recharge at the motimum rate dcfiucd by thc
4
soils infilbation capacity (Groundwatcr rcrnarg%-1. Incrcases and dscrcases in each of
the cornpooarts ofthe warerbudget ar€ shouin with,rp and down anrows (rcspoctivcly),
with a positive (+) water bahncc (or surplus) showu for the wint€r, Equation 3 depicts the
gunmer water balaocc as defilcd by a dccreasc iD rainfrll. There is an increasc ix
wapotsanepiration due to warms d*ity tcmperatures, a grcundweter recharge rate limitcd
by the soil infiltration capacity and the available wat€r (Croudwatcr rechange6.,,1,,.165s).
A negative G) watcr brlaooe or dcficit is shown for the $umm€r. Sunrrer watcr dcficin
rpsult in tlnmct water demand by thc vegctation, sincc both cvspoEanspiration and
rcchargc are limitcd by thc available watcr.
+oWB rryrrtg - Ralnfull f - Evapotransplratlon $ - Groundwater recharge'., (21
-oWB rummcr s Rainfall .t - Evapotranspiration f - Groundwater rechargemrrulrm (31
Takcn togc6cr, winter and eummer waterbudgct (Equatioos 2 & 3) arp in an
aonud balance @quation l), whcre thc annual precipiktion, ttre capacity of tbe land
surBce to hold cxcess watcr in wctlurds, dre water usc by vcgetation, and the
groundwato rwhargc function together to balance the system.
2,2 Watcr Budgettor the hopsed Re^sort D*elopment
The water budget ( AttrB) estimatod for 6e dcvclopcd resort will dqend on
change to Orc land covcr and watcr usc. Herp we tsc thc dclta syrubol to signi$ a changc
to thc annud wucr budgct comparcd to Equation l. Thc dcrnands on 0tc orrcnt watcr
btrdgct dcpend on altcration ofthc laod surfacc due to uort developmcnq u/hich will
nodiry w8tcr pording; or seturabd surfacc watcr holding infittratiou to groundwatcr ,
aad surface nrooffquantity, The nahral undishlbed soil surfaces, wih higlt pondiog
capacity, are proposed to be rcducd from 220 acree of maturc forcst !0 60 astes of
matrue forcst Additional biorctention gardens with high infiltration capacity are also
proposed, brut we 8rc Dot awarc of the cxact plan aud number of acrcs of bioreEotion
gudcns and thcirpluncd capacity. Inperrrious surfaces (ptanned for 37 acrcs ofthe
r€oort) will geocrrte surfrce ruooff. Thc Edditiou of thie Surface Runoffvariable to the
water budget (Equatiom l) ie ehown in Equation 4.
AWB = Rainfall - Evapotransplration - Groundwater recharge - Surface Runoff
t4l
Evapotraospiratiou from tbe dcvelopc{ rceort is expcctcd to be reduced in thc
wintcr with less forcst transpiration, and inceased in the summer with mor€ grass
wapotrarspiigi6l than cureot forcsted couditions. This is explored firther as shown
conceptuslly in Equations 5 and 6. The decrease in winter cvapotranspiration will reeult
in an increasc in zurface runoff. Simultaneously, the groundwater recharge will be
5
reduccd beoausc of the change in land cover and thc CIsociatcd reductiom in surface water
holding capacity compared to undisturbcd soils of thc maturc forest. In the winter, we
can arpect a water surplus duc to rcduced cvapotranspiration and reduccd soil moisturc
capacity (Equation 5) compared to the surrcnt conditions (Equation 2). AD insrcase in
summer wapotranspiration supportcd by inigation puoping will bc ttscd to supply the
full potential ewpouanspiration water dernand of the landscaped grass, Becurse ofthe
increased wapotraospiratim demand, lcss watcr will b€ availablc for grormdwatcr
recharge in the summ6, and impervious surfaces will contiauc to gencratc surfacc nmoff
during rain evcots. In the summcr, we can expect a watcrdcficit duc to the increasc in
cvspotra$piration" nrnoffaod associated groundwato pumping @quation 6) compared
to the qilr€mt coaditions (EquEtion 3).
The annual average watcr budget for the proposed system in the winter ard
Erunmer is defined as:
++AWB rinar = Ralnfall f - Evapotransplratlon JO - Groundwater recharSer.rO
+ Surface Runoff f (5)
-AWB summer ' Rainfall .f, - Ewpotransplration f f - Groundwater recharg€rmrrvlburU
+ Surface Runofft (6)
Equations I through 6 providc the conccpoal framework for how land ue
changes affect multiple variables simultaneously. The best way to understsnd how 6ese
variables opcrate in concerf is to use observed climate dau to cstimatc average values for
cach componcot of the current and dweloped water budget, In the following sections, wc
estinate on a daily timestep, aud then average by montb, how the land cover changes due
to the proposed resort devclopmeot will increase the winter surplus, aad increase the
srunmcr deficit. This lcvcl of detail is rcquired to rmderstand whetrcr the proposcd
changes to the peninsula water budget will bc adequately addrcsscd by thc proposcd
cogineering solutions to protoct the Black Point aquifer from drawdown and the risks of
saltwatcr intnuion" as well Bri protect Hood Cand from increased surface watcr runoff
and the associated watrr quality degndation from of ttre surfacc runoff
3.O Ernpotransplradon
Evzpouanspiration is a koy element of tbe water balancc wbereby watcr is
convcrted frorn liquid to vaporphasc. Evapotanspiration (ET) is Sc combination of soil
and vcgctatiou proccoscs wherc water is rcrnoved &,om the ground gurfscc and
traosmified to the aurepherc, Dcpanding on the land covcr and stagc ofvegctation
gowth, watcr is removed from soil md water surfaccs by waporatioa as \rell as
tnnspircd by trees or crops. Potential ET i8 the amouut of wst€r that ean be evaporatod
and uanspired givcn m unlimited eupplyof water. Norrnally ET is limited in summer
months by the watq avaitability, whic,h is tenned Achnl ET. Actual ET is affcctod by
6
clirnatc conditio'ns of rain (or inigatiou water) temp€rafire, wind epced, humidity, air
pressure, and solEr radiatioo.
Evaporanspiration estimatcs prcsented in this rcport werc calculrtcd wing the
ASCE2 standardized Pcnman-Montci6 ET cquation (Jcnscn et al, 1990), The available
weatrer dau uscd for calculation of cvapotranspiration includes l) daily total solar
ndiatioq 2) averagc wind spec( 3) minimum daily tcmpcratut, 4) motimum daily
teopstrtule, 5) ninimun daily relative huuidity, Q ma{mum daily rclativc h"-ridity,
Erd 7) precipitatiou rcoordcd ia Quilcenc starting h 2006 aud continuing !o presd day
(for this rcport, analysis eoded Msrch 3 I , 2010). Solar radiation is a roquired iryut
parameEr for the ASCE stsndsrdizcd Penrnan-Montcith ET cquation. This method for
calculated ET was rccommcnded by 6e 1999/2000 ASCE Task Committce on
Standardization of ET (Walter et al,, 2000). The FAO Peunao Monteith methods (AIeo
ct al, 1998) used in 0rc Environmcntal tnpact Statcrnont (Subeirface Group, LLC, 2006)
to calculste ET pdate tte ten year old ASCE rpcor "'endstiotr" Altbough elimatc data
has bcen collected at 0re Quilccne station since 2001, solar radiation data was only
availablc for 2005-2010, This five-1rcar datasct provides 0re parunctcrs neccssary to
more amurstelycstimate thcwatcrbalancevariablc of ET, rucd io Eguations I thougb 6.
Thc evrporanspiration ratc of approximately 24 incbee per year rcported in the
EIS (Subsrfrce Group, LLC, 2006) and Watcr Supply Bulletin No, 54 (Crrimstad ard
Qarson, I 98 I ), rcpresents thc ET of I glass lurd covEred surface. It docs not account for
the sessonal diffcrcoccs in water dcmaad (tnnspiration) of forested land covcr thrt are
curcotly unmet in the summcr. In this shrdy, the transpiration of maturc forest war
cstimated using the obe€rved transpiration of a matrle Durglas-frr forcst in a maritime
climate @oweld and Bouten, 2001), wtrere they rcported a minimum transpiration raE
for nighttirnc and dry conditions and a rnaximum pcdr daytime and wet transpiration rate
that equatcs to an annual transpintioo renge of 2&50 fu/y/.The soils used in developiog
this rcfcrence tralspintion estimate wcrc wcll-drained on ice-pushed sandy loam and
loaury sand textsed river s€dincoB (TWic Disbcrepts), similar to tbose prcscot on
Black Point Peninsula. About 907o of the fine root length cur bc cxpccted to be found in
the bpsoil to a dcpth of l6 incheg (Olathoom, l99l).
Figue I illustrates how the annual average raiofall and ET varies under current
for*ted conditions and developed gnss-covercd conditions throughout thc yoar. The x-
2 Aurricu Socioty of Civil Eoginocc
'Thcre yslucc for watcr ur. by Douglas'Fir forcet was confirmcd by suthor of lhc rcfcrcncad articlo, Fred
Bosveld, pcrsonal corrcspondcncc, 05/l 0/:l0l 0.
'l
axis begins in July so fiat the winter months are ccntered in the plol Using thc Quilccne
dst8set (2005-2010), the average monthly rainfa[ (FigurE l, btuc line) tangcs b€twesn I I
inches /month iu the wintcr and I inch/uouth in the suurmer. Thc potoutial forest
tranapiration Gigure l, solid dark grcen line) dcmand is consistcntly betweer 2-3
incheVmonth. In the sr'nrrrer, wat€r demand is partially met by available surface water
stored in wetlands near 0re surface. But oncc thc ground surface dries out, there would
not bc mough watcr availablc to mca the forcst transpiration domand; irctea{ tfu Acuel
forest ET is thc estimatcd watcr dcmard (Figue l, &nhod dar* grccn lirc). In the
wintcr, 2 inchcdmonth is consistcntly usd by the forcsted vegetation, whercas thc
landecaped grass dcmand (Frgrc 1, solid light green line) is close to 0.
Tbis diffcrencc in thc seasonal water demand betwesn the forest ET and the
landscaped grass ET has implications for gcoeration of surface water runoff. The
reduocd grass ET dcrnand in thc winter contributca tro a cbauge in lasd covcr from forcst
to grass incrcascs the sr.nface watcr runoff(or water budgct surplus) ia the winter. The
Eurmerwater deurand for the inigatcd landscryed grass (Figue l, solid light green line)
peaks at a monthly averagc of 4 inchedmonth, Unlike the dcficit wabr availability ftat
causes tbc diffcrence between pote,utial and actual ET for forcstcd conditions, we cm
assuule &at the landscaped Erass potcutial ET, the maxirmu demand, will be Bet by
irrigation. Thc difference betwec,n the peak demand in July of grass (4 irchcsAnonlh),
compared to thc minimum watsr availability &om rainfall (at less than I inch/mon&), we
assumc witl be ma by the surface water stored in thc planncd lT.acre lined pond and
supplemeatcd by grormdwaterpumping. Using the Quilcene datasst (2005'2010), the
averagc aolual rainfsll estimarc for the Black Point Peninsrrla is 47.5 iochcs/yr. Of tbis
annual av€ragc, 24 inches/y io consuned by foreat ET (achtal). The annual water
demand for grass ET would bc 19 inches/yr . Whctrcr the surplue rainfall, or rainfall in
cxccss of ET deruan{ will rccharge the goundwata or bc@mc surfacc water rurofi,
dcpends on thc developcd land covcr csrditions of thc propoeed Pleasant Hartor Resort
and Golf Course and the infiltation rate ofthc undcrlying soils.
8
12i
-
Raln
10
-
61813 ET
-pstgnfl6l
Forest ET
- - lg1u3l Forst ET
789101172123456
Month
Figure l. The average monthly change ln available ralnfall, matureforest transpimtion
and grass evapotrarcpiration demand.
4.0 Groundwater Recharge and Surfrce Water Ponding
In order to estimate the effects of removal of mature forest from the proposed
dcvelopment site aud replaccment wi& ctltivated grass, inigated landscapin& and
impcrvious surface, the EIS (Subsurfacc Group, LLC, 2006) prescnts an estimate of
aquiftr recharge dcrived by subtracting annual ET and change in grotrndwater storage
&om annual precipitatioo. If it is assumed that the water budget balaoccs betwcen anaual
prccipitation and thc watcr qruntities consumed via ET, qrrface watcr runoff aod
grondwater rechugc Equatioo 4 cao bc cxpressed as:
A Groundwater recharge = Rainfall - ET - Surface Runoff (7)
A poeitive change in groundwatcr storage, implies that excess rain is rechargiog
the groundwater aquifer. A negativc change in grcundwater storage would bc expected
to lower the water t8ble.
Missing fmm the EIS water budget analysis ie the surface water storagc cffects of
ponding on groundwater rccharge, which occtrs whcn the precipitation accumulated at
the ground surfacc exceeds thc morimum soil infiltration capacity. Equations 8 (ctrrent
water balance) and 9 (developed site water balurcc) dcpict adjustnats to Equation 7 to
account for the surfacc water storagc ponding affects. Rainfall and pondcd surfacc watcr
9
6
4
2
0I
I
I
i
I
I
accumulate at the ground surfacc tndcr current soil conditions of tlrc undcvelopcd sltc
(.1") (exprcsscd in Equation I as Surface Stongeu) when thc quantity of ponded surfacc
water excoeds thc amouat that infiltrates rt the maximum mnual groundwatcr infilration
rate of 23 iry'yr , or 0.063 in/day (Morgan and Jones, 1999; Vaccero et al. l99E). This
ratc is also usod as thc annual rate for surface wEter infiltation through bioreteotion
gardens designed for high infiltration capacity. Because there is no surface water runofl
occurring from the site rmder current foregted cooditions, we havc assumed that the
pondod eufuc'e water storagc capacity of the undeveloped site is sufficient to store all
accumularcd surhcc watsr until it is eithcr evapobanspired or infiltrated. For the
developed resort site (D) conditioos, tho soil pondirg capacity is ascumcd to be less thatr
Srat ofttrc currcnt forestcd oonditione duc to grading and filling; this is rcprcscnted in
Equation 9 as Surfacc Storagep. With the dccrcascd soil infiltration capacity from thc
resolt dsvelopocnt, a gcstcr amormt of water accumulates at tbc ground surface
excccdiog the surface watcr storagr capacity. As a coneequ€alce, surface watcr nrnoff is
genersted, and is included in in Equation 9.
- Groundwater recharge = Ralnfall + Surface Storageu - ET (8)
A Groundwater recharge = Ralnfall + Surface Stongee - fi - Surface Runoff
(e)
To incorporatc &e affects of surfacc water storage (pording) into ou water
budget each of the components of the watcr balance was calculated on a daily timestep
for tbc cntirc year uirg groundwater recharge estimatsd as the smount of water tbat
infiltrated daily from the available surface water storage (rainfall and ponding) after thc
ET waler demand was submdcd. Thc maximum infilration rate was set at 23 idyear
for mature forest (Morgan and Jones, 1999; Vaccaro et al., 1998). Water that pondcd at
the ground surfacc in excess of the soil infiltration capacity for Orc daily timeset€p was
carried over to thc ncxt day's timestep calculation. If ttre amorurt of surfrce wstcr storage
pr€s€Nrt excecded the ncxt day's daily ET uptakc, water infiltrated to rccharge
groundwater for that day.
For the currcnt forested conditions, the surface wat€r storage from ponding
estimatcd to bc beld in bogs, wetlards, or lcettles ranged Aom 0-5 inches in the sumnrer,
and fiom l0 to 35 inchcs in thc winter (illustrated by tbc blue line; Figurc 2). For
landscaped grass, thc ponding mn8es from 0 to 2 inchcs year round. A eigpificant
componcnt of the ET dernand for the landscaped grass is assumed to bc met by irrigation,
which is intensivd managed to minimizc surfacc water ponding.
Oru groundwater recharge estimatqs are greatcr than those prcscntod in thc EIS
for thc currcnt forestcd conditions becuse we account for the higb infiltration capacity of
the forest soils (Morgan and Joncs, 1999; Vaccaro et El., 1998), as wcll as the capacity of
t0
ponds 8nd wctlands to storc and infiltatc surface watcr. Corrcspordingln thc impacB to
groundwatcr from thc conversion offorcst to landscapcd grass cover gencratc a g[eatsr
grorudwater dcficit thrn pr€seotcd in the EIS, duc to thc rcduction in groundwuer
rccharge associatad with thc groutrdwatcrpumping rcquircd to irrigatc grass in sumEcr
months and thc rrduction in ponding cspscity.
-For€st
Fondlng
-S656Pondhg
4{'
35
30
25
m
15
10
5
0
"fd Co Cu Co "nn's "oro*l-...-.
Figure 2. Forest atdlandscaped grats pondingdepths,
Figrrre 3 shorvs the mmthly ennual avcrage recharge in unit of acrc-ff per nronttr
comparing rccharge undcr tbe curreut conditions of 220 acres of mafiuc forest (Figure 3;
bluc liue), aad rccharge for the p,roposed resort developmeut conditions with land usc
modifications ss listed in Table 1 (Figuc 3; teal tine). With 60 acres of forest rcmaining
untouche4 60 acrcs ofdevclopcd golfcourse, and 37 acrcs ofimpervious surface, there
is only 46 acres rernaining that we assumed would be developcd into the bioretention
gardens required for the planned tnanagernent of the stormwatcr gcnerated from thc
impervious surfrccs.
1l
3
E
Table l. Resort lard cover areas
Acrrs Land Usc
60
50
37
t7
46
Golf Course
Mature Forest
lmpervlous surface
Uned Pond
Eioretent ion (assumed!
220 Total Prcposcd Dqclopment
Tbe maxintm available land surfacc is 46 acru that could be eirginecred for
managiag thc 146 acrc-ft of average annual watcr tbat will precipitate on 37 acrcs of
irupcwious surfaces, based sn the plamcd arcas for 6e resort golf course, foresg
impervious surface and lined pond areas (as listcd in Table l). With a 23 inchcslycar rate
infilration ratc, 46 acrcs of biorstcntion glrdeos would havc thc capacity to infiltratc 72
acre fcet of water aurually (or o uaximum of 7.5 acre fcet of watcr pcr moo& givcn I 2
incbcs of ponding, and rqinimum values of 2.5 asrcft in August and Sqtcmber. Z02A
Enginecring estimated that raiuwst€r harvcstiug from the 37 acres of impcrviou area
would gcncratc 132 acrr fect of surfacc watcr amnually (given the 55 inches avemge
annual precipiution recordcd at Quilccmc). tilc havc cstimated 146 acre foet avcrage
using 2005-2010 rainfatl data
If the cotire irnpenriors arca runofrof 146 acrc-ft was to be directcd to
biortcntion garrdens, in addition to 182 acr+ft of rain falling diroctly on bioretention
gardene, thac would a totrl urface watcr input of 328 afiE-ft of watcr. Of 0tis total
surfscc watcr input only 74 acrc-ft are uscd by ET, aod 72 acre-ft cao rccbargc givcn rn
undraincd filnation capacity limited by thc underlying soils (23 in/yr1 and a 12 inch
pondiry capacity. For the 83 acrcs of impcrvious suface and bionteotion grrdcus, this
leavcs a rernainder of 182 acre-ft of srnual sur{ace nuroffoccnrriug primarily bctweer
October and March, that is not addressed by ths currcnt plans. Figrue 3 shows the
avemgc moutbly rainfall oa 37 acrpg of impmriors srrrfuccs (blue line), the biorctetrtioo
gardcn recharge cEpacrty assrmiag 46 acrps of bioretention gardcor with a modmum
capacity of 7.5 acre-ft (gcen line), and thc resulting surfbcc nrnoffof rainfall in excess of
thc biorctsrtion rocharge capacity (brown line). The annual averaBc surfscc runoffftom
impcrvioru srfaces toule 146 acreft which wiU ncsd to be capturod rnd ftatcd to
avoid contarninated surfacc watcr runoff to Hood Canal . Biorctcntion capacity, iftucd
in the dwelopmenq will bc limitcd by thc rain falling dircctly on the gardc,ns. Withottt
t2
filtation and drainage systcrns, therg will be no sxcess capacity to caphrr and store
runoff from impavious surfaccs..
I
I
I 8O r "*-
70 :'" "
60 "-.
q50
e40t(30
20
10
0
-\l/3t;1
Inpul
-Bloretentlon
rechargc
--- Surface Runoff
7891011L2123456
Morth
Figure 3. The average monthly *tlmated groundwater recharge olbiorelention
estimatedfor managing the ralnfall on 37 acres of impentiotu surlacatlor the
proposed daelopment land covur ,
Figure 4 comparco thc monthly avcragc grourdwater r€chargc for the cxisting
conditions of 220 acres of maturc forcst wi& recharge for the dwelopcd sitc mixcd land
usc (as listcd in Tablc l). For thc cxisting for€sted sitc, gtoutrdwato rechargc ratrgcs
betwecn 22 urd 35 acrc-ft pcr moBU for a total of 351 acre fect por year recharge. For
thc developed cooditioas, monthly avcrags rechargc rate ranges betwe€o lG25 acrc-ff
given thc mix of land rses, for a lotal of 230 acrs-ft psr year, Subbacting 69 acre-ft of
commercial and domestic gronndwater demand', results in an annual recharge balaaoc of
160 acre-ft. Table 2 lists souroes of rcchrge fioo thc proposod darclopcd mired land
usc wbc,rt 99 acre.ft rcchargcs from thc forcstcd lan{ 69 acre'ft from &c landscaped
area, aud 72 aore-fca rcchargca through thc biorctcntiou arc s. Comparing thc elffcot
rcchargc ratc ofbctwear 300-350 acrc foct/yc8r, wittr the datrtascd estimates for
devcloped conditiotrs, 15G'200 acrc fceUyear, shows that the recharge for the dcvel@
rcaort will bc 45% of the surcnt rccharge.
' Irrigation watcr dcrnrnd is essurDed to be ukco primrrily frrom liocd pond storage. Thc actusl
dcound is cxplorcd in thc ncxt scctiorL
l3
!
:
:
i
!
I
I
i
I
I
I
!
I
:
t.-.-".
r+0
35
30
23
20
15
l0
5
0
L 2 t 4 5 6 7 E 9 101112
mofith
Figure 4. The average montNy estimated goundwater recharge under anrrentforested
conditlons exceeds the estimated rechargetor the proposed dettelopmmt land
coverfor every month otthe year.
Table 2. Annual groundwater use estimates and groundwater rechorgefor the donlopd
resort land cover
Groundwatcr Sourcc or Usc watcr +
lacrc-ft1
Water -
(rcre,ftl
(acrtft)
Recharge from forested land
gover
96
Recharge from landscaped
Ereas
64
Max recharge from
bloretentlon Bardens
69
Commercial & Dom. Pumplnt 69
Totol Rxharge 190
Subsurface Crroup, LLC (2006) intcrpres the connection betweeu ground wata
level and prccipitation to generatc a significant rise in groundwater elevation with
prccipitation eventgt. Groundwatcr elevation incrcases occurring one to two days aftcr
precipitation events leads the authors to the conclusiou tbat off-site water (zuch as thc
I
-curcntorEundw.lrr
ltchrrla
-PtopotGd
RGcharlo
(Fortll + Golt
Counrr
lf,rutanUon)
t--
' Pagc ? of 19 in EIS.
l4
Duckabush River or drainage fiom the mainland) are thc sourcc for thc groundwatcr lwel
increases, as rainwater csnnot bc orpcctcd to infiltrate lfi) vertical fect in a 24-{8 hour
time period. This exptroatioo assurncs an unsaturated o &y soil profile, and that all
precipiation cveuts could be cxpected to bave tbe samc rcspoasc. Altcmstc cxplaoations
that merit firther evaluation include the p,rceurcc of pcrched water toblcs or satruded soil
profiles, wi0r groundwatcr rtsponse based on wet vsrsus dry antecedsnt conditions. If
the watcr levcl rasponse is linkcd to watcr hcld st irt€rnrediate lcvcls in &c soil profilc,
the cffoct of land cover changc and scasond shanges in wucr lcvel rcqponsc would bc
urore extrlme than is currcotly obscrrred.
5.0 Water Use Esdmadon
Tbe diffcrcnce bctwecn surfacc w8t€r svailability and wat€r demand can be
expestcd to vary on a ycar to ]car basis dcpurding on thc annual rainfall. Figurc I shows
thc average mon&ly water demand for forest and grus wapotanspiration which in
reality varics from year to year, and througho[ 6c ycar, slt sholr'n in Figurc 4. Most
rainfall occum in &e winta montts (Figurc 4; blue line) and thc peak ET watcr dcmand
$igurc 4; rod line) oocurs in thc surnmsr mooths. The tiqi'rg and thc magniEdc of the
variations in rainfall urd cvapohaocpiratiut also chuge from year b year. Figrre 4
shows the rainfall and ET varistions for thc sixty acres of landecaping planne.d for the
developcd rssort, Using thc 2005-2010 Quilcene weather data, the 60 acres of irrigated
landscqping would require an amount of water rcpresentcd by thc difrcrcnce betr*,ccn the
rainfall (bluc) and the ET (red),when thc ET ratc excccds the amount ofp,recipitation
rpccivcd pcr month (*rc red linc has a higher valuc than the bluc linc), tf there is
insufficicnt watcr available to mcct thc lurdscapcd grass ET dcmand (thc periods when
thc red line has s high€r valuc thur tbe bluc line) thc difrcrcncc is supplicd by the
irrigation rcquiroaart (Frgtrc 4; greco linc), which is at a peak evcry ycar amtmd July.
r5
2S
20
15
a810
5
0
HHHHSqFqqAABFqEqSSESSBBS
E S g= S g E S gE,r'! E * gE .fr g E g gE so!
xfuin
-Potentlal
Gras: refeGnce ET ,*.lnltatlon requirement
Figure 1. Monthly time sqie; of observed ralnfall, calaiated ET, and the resulting
pumping requirement givenfour year olobserved weather data (2006-2009)
To calculatc the daily inigation reguircmcnt shown in Figure 4, thc precipitation
amount and evapotranspiration demand werc estimated on a daily timestep, A.n 85%
sprinkler irrigation efficiency was assumed for the 60 inigated laodscaped acres, which
rcsulted in an annual sverage estimate for irrigated watcr usc of 62 acte,ft (rangrag
bctween 4{ and 74 acrc-fl per year), depending on the weather (rairL temp€fiohrt, and
solarrzdiation). If 59 acre-ftofrcclaimedwater(&om the 65 acre-ftof commercial and
domeetic water available from groundwater pumping) is storod in a lincd pon4 an
additional l0-20 acrc-ft per year may need !o bc pumped from grormdwater b supply
irrigatiou demand ilring low preipitation (nou-average) ycars. This is less than the 108
acre-ff anuuat inigation estimate by 2020 Enginecring for thc Golf Coursc and the
Firesmart programo.
To estimate the amount of domestic pumping for each month wo used thc 2020
Engiuccring (2007) assumptiour of 890 units with 32 gaVdly water usagc psrpersorL
with 85% occupancy in thc peak Eess{rn, 50% occupancy in the mid scason, and 30%
oocupancy in the low season. Thc 2t acrc-ft arrnual eetimated commcrcial usage wss
divided cvcaly throughout thc yetr.
5 It is urclcrr which g.rcs will bc usatod with tlr FircSmut progranr; go thie dditiouul dcrnrd
was not includcd, Ttoy rnay bc inigrting thc 60 rcrcs of rstue forcsl, or inigating thc 47 rcrce of vfrat
wr elp sssurriing to bc lhc bioretcntion glrd€n footrriil r€quirsd to clpturc irpcrviou atrftce runoff.
l6
Figure 5 shows the rnonthly lvfi8g€s for groundwater rechargc and pumping for
ortrnt and dwelo@ land cover (also shown in Figure 3), along with the purrping
allocatcd to supply the irrigation demaad, and the cumulative irnpacts to thc grouadwatcr
aquifer from the resort devclopmcnt and operation. Monthly pumped amountc (to supply
iniption demand, commqrcial and domestic cmsumption) are shocm to illusfaE the
relationship betwccn monthly avcragc cstimates of thc groundwater pumping requirement
(Figue 5; red line) and groundwater recharge. Thc combiucd impact to the gundwater
aquifcr from pumping and reduced grorurdrvater rccbarge due to thc changes in thc land
covcr 8nd associated resort laodscaping is illutratcd by the thicker uavy blue linc
(rechorge-pr:mping) . Notc that tbe surnmer aquifcr balance is in dcficit given the highcr
comnrcrcial and inigation dsmands during thosc months. Comparing tho existing
groundwater recharge undcr surr€nt couditiqrs (royal blue line) with the groundwatcr
rebuge predicted under the dweloped site conditiorc (ligbt bluc linc) reveals that the
combined rcsort devclopment lord cover and water usc will gen€rstc a sigpiffcaot
reduction in groundwater rccharge to thc aquifcrr for evcry month of thc ycrr.
I
I
:
1
40
3S
30
25
!EZ0
Erse10absi
0
-5
-10
-15
sCurunt
6roundwrtet
rcdtrryr
-
Propo{rd n&h.rf,.
lPorist r
bndrcrpc +
lrpvSrrfrtc)
month
-6rE[ndrntrrPumf,q(kr&
Comm& Dsn.
Dcmmd-
Brdtlmldl
-fts{11nj,Pgm!iln1
Flgure 5, ?he monthly cverage water budget wriables afeettng groundwater recharge in
the proposed d*elopment, compared to the estlilated current groundwater
recharge.
Tablc 3 lists thc average mmthly rainfall and curcsponding rainfall hawesting
frorn 37 acrcs of impcrvioru surfacc, and 17 acres of dirrct rainfall to thc lined poud.
2020 Engineerin( 2007) cstimetcd 60 acre-ft of water supply from direct reidatl on the
pond and oru total is slightly higber at 67 acre-ft. The pond storage from direst rainfrll
(67 acrc-ft) plus thc 59 acrc-ft of reclaimcd water makes a total of I 26 acrc fcct or
approximately 4l million gallous oD av€rsgo necded for annual storagE or treatuB€mt
t7
/d"
ES \/E'
!
l\
\
i
i
47
/
capacity. This 4l million gallon storagc capacity is based on an annual sverEgp rarnfall
of 47 inches/yr; but a poud designed to cspturc $rface runoffshould be sized lugc
coough to retain more than the average r&idal amoutrt cach ycar. For example, in 2006,
the amual rainfEll was 6l inchcs. A pond sized at 60 millioa gdlons would bc
inadequate for capnrc and sttrge of the raiufall and reclaimcd water for that year, and
for other yers of higher than svcrage rainfall.
Table i. Iltonthly averagc rainfall and the resulting lotal wlames of lmpenttous surface
runoJland direct rainfall inp,tts to pond,
lmpeMous
Surlace Pond
Rdn 37 acres 17 rcrcs
Month ln/month acre.ft .cru.ft
1 7.O 21.5 9.9
2 3.3 10.3 4,7
3 4.1 12.6 5,8
4 3.1 9.6 4.4
5 2.8 8.5 3.9
6 t.7 5.3 2.4
7 4.7 2,3 1,1
8 1.0 3.2 1.5
9 1.1 35 1.5
10 3.2 9.8 45
11 10.3 31.8 14.5
L2 9.L 28,0 12.9
Towl/yr 47.s 746,5 67.3
6.0 Comparlson of Currentand Developed ResortWater Budget
To evaluate the changce to the Black Point Peninsula hydrology that may rcult
from the developmeot of 0rc Pleasant Harbor Resort rnd Marinq wc compared thc watcr
balancc for the existing Black Point Peninsula (rnatuc forest conditions) with the
dweloped and irrigatcd land covcr @roposcd forth rcsort dcvelopmc,nt) using climate
data collcctcd u Quilenc, starting from whcn thc solar radiatiou data was availablc
(March 2005- March 2010). Ttc diffcrence betweea rairfall and ET deoand was
calculatcd for currrent sitc conditioos rxing a sw€Nr day running average whcrp tbc ET
l8
was limited to thc available rainfall. The dweloped sitc golf coune grass watcr balancc
estimates includc Ef calsulatcd for grass and adds groundwater pumping for inigation
roquirod to oect grass watcr dccrau( grus potcntial ET rangss befiueen 0.1 to 4
ioohes/month. The mattue forcst water demand (for thc rcmaining 60 forested acres)
rartges betrycco 6 nriqimuru of 1.5 to 2.5 inchcs/ooath. Arnilable water remaiaing aftcr
mceting ovapobarupiration dcmands was treated as recharge up to a muimum
infiltation ratc cquivalent b 23 inches/yr (0.063 inchcs/day). If additional wa&r was
rcmaining aftcr rechargc, this watcr was sdded to surface storage ponding in thc forestod
coodition. Tbe storage that accumulated was thc zum of exccss surface water
accumulatiooT phu the stcagc availablc &om the prcvious day. The surface storage
ponding was limitcd to two inctrcs on thc 60 acres of golf coursc grass.
Figure 5 shows how the monthly avcragc rainfall is cr.urently dividd between
forcst ronspiration, and groundwatcr rechargc for tho 220 acree in the currcnt forestod
conditioo. About half of thc available w8t6 svapoxatee, u&ilc the o&er balf inJilurcs
and rccharges the aquifcr. Thsr is a scasonal shift wh€rc drcre is more ET and less
rccharge in thc zummer, ard morr rcchargc and less ET in thc winter. Wiih tho current
land covcr, 6crc is an annual average of35lr acre-ft ofaverqgc annual rechargc.
Figure 7 shows thc rcsulting iucrease in surface runoffand decltase in rechargc
wittr thc dwelopureot land covcn condition of 60 acres of mature forest, 103 acrcs of
landscapcd grass (golf coursc plus biorctention), I 7 acres ofpond, and 37 acros of
impervious surfrce Clable 1). Witb this land cover, w€ estimato a totsl snoual aversgc
rechargc of l60e acre-ft after commercial and domcstic pumpir& aud supplemcntary
inigation pumping.
' Etccrs gurface acctrnulrtion ls the gum of wetcr avrilablc aftcr mcoting ET dermnde rnd after
i!filtrating !o thc marimum daily infiltetioo crpacity.
r35l rcre-ftirtheunrulsvcraSoueingdrta&omwalcr1mn2006,2009(l0ill2005-9402009).
362 asc-t is tbc ronud sum of thc rnothly rvcmgg uoiag &tr from 3232005-161/2010.
e l5o acrc-fl, ir thc annrul owragB ucing da6 from wrtar pan 2006-2009 (t0/1D005-9/30tr009).
172 rcre-ft ir thc urnurl cum of lhr monthly avcragc urhg &u from 3/2312005-3RlDOl0,
I9
I CrJn"nt Forcst
Ilemend
lOrmnt
6routrdwrter
rechrrga
nonth
Figure 6., The distribution fu month of rainfall used to meet ET dentand and recharge
groundwaler ln ma ture forest conditl ons.
10off
9M
8ffi
70*
60x
5dr6
1g?6
30t6
20,6
1ofi
0t6
1234567891011L2
100t6
9016
80t6
?o'i
6016
5016
aor6
30t6
7gx
10'6
o*
rSurface Sunoff
I GrassET
I Forc$ ET
I tstlmetEd iechargc
12315 891011L267
mantt
Figure 7. The monthly water distribution between the water balance components is
shownfor the resort d*elopment land covs scheme of 60 acres of mature
foresl, 103 acres o/landscaped grass, 17 acrw ofpond, and 37 aaes of
imperttious sudace.
20
.,: .'
With the dwcloped site lard covrr, considcring impervious uurfac€s 8nd
lurdccaped Erass, therc ig lcss nnface ponding capacity and increased surfacc wat€r
nrnoffdruing Orc high rainfall winter months. This surfacc watct runoffrcduc€s tbe
annual avenge rechargc ss it dmins overland from the oitc instcad of in6lrating to
recharge the aquifcr. Wc cstimate that the surfacc nrnofffrom landscaped grass isl90
acrs-ft annually, which will rcquirc watcr Ec8tmsnt for rsmoval of herbicides urd
fcrtilizcrs. Ttc surfacc nnofffrom impcrvioru surfaccs gcnerated ic 146 acrc-t. Surfacc
runoff&om impervioru surfaoec (in cxcess of biorctcntion capacrty asurning 47 acrcs of
built gardeas) and srrface nrnofffrom lardscapcd grass, totals 330 acre-ft psr )lc8r oa
averagc. This sudace runoffoccurs primarily in the winter months. Dcpendiag on
storm pattsms, thc monthly surface runoffmay range bctwccn I asrp-ff/month in ttrc
sumrncr to 64 acre-ff/month in the wintqr, The total smourt ofwater rcquiring
tasnsgcm€nt in tbe dwelopmeut is shown in Tablc 4.
Table 4. Yolumes of waler requiring surface wdtq management or teatment in the
proposed development.
acre-ft gallons
Landscaped grass surface runoff 155 50,553,247
Surface Runoff from impewious
surfaces and direct rain on gardens in
excessof capacity
139 45,146,516
Llned pond slze requirement to
contain direct rain and reclalrned
water
tz7 41,289,398
42 fi16,9E9,161
zl
Total quantty r:qulrlng watr
rcqulrlng menagcmcnt
Table 5 summarizcs ftc watcrbudget for thc cursnt conditions of 220 acres of
Eature forest ffus ennud avcragc rainfall vol,rmc tom 2005-1010 was 743 acre-ft; 435
acre-ft was used to ru€st ET donand, and the reirraining watcr volunre rcchargcd Ere
groundwatcr. Dcpcnding on tho timing ofrainfall throughout the year, &e regult of using
r daily data-bascd approacb show thc curent aquifor recharge may rango bctween 30G
350 acrc-ft por )car.
Table 5. Watu Budget resultsfor cwneat conditions 2N&2010,
Acres Land Use
220 Mature Forest
In tbeir reort plans, 2020 Engineering (2007) prcs€Ets a waterbalanc€ sutunsry
(in Figure 2-3 Water Cycle concept flow diagram) that calculate an Evcrag€ annual
rainfall of l03l ocre feet per year; 491 acre fect of which is allocated to groundwater
infiluation. An additiooal 136 of the accuurulated surface rraterruroff, precipitation
onto storagc ponds and reclaimed watet is storod at the ground $rfacc (257 acrc fceQ iu
storage poods. The pond storagc capacity dcscribed iu the 2020 Enginc€riog report is
125 acre feet, lcaving approximately ll2 acre feet of surface water goreratcd annully
bcyond the planned storsge capacity. Given the watfi uses listed for trc757 acre fcet of
surface water storage (golf course irrigation, 90 acre fect" firc smart irigFtion I8 acrc
fce$ cvaporatiou tom tbe storlgp reservoir, 13 acre &et; and aquifer recharge, 136 acre
feet of excess surface watcrproposcd to rccharge groundwatcr. These values uc listed
by land use and watcr source in Tablc 6a as the EIS watcr budget.
Thc very low infiltratioo rates of trc till sediments below the ptoposd Resort site
urake the actual mecbanism for transport of this quantity of surface water into the
groud unrealistic. Figurc 2-3 of &e 2020 Engincering r€port shows this 136 acre fcct
as recharging goundwatcr ttuough E'tox'extcnding from the gound zurfacc to the
ground wat€r tbat is supplied by ovcrflow &om thc storagc reservoir. In addition, thc
estirnate of 491 acre feet of groundvrater infilCIation for the sitc, is also unrcalistic oud
bepud tbc till ssdimcot infilrrtioa capacity. Surface \f,atcr cantrot actually bc infilratcd
into ttrc ground hrough a box; tre low infiltation capacity of tlrc till scdimcne (23
inches/ yr) uandatcs that an arca of approximatcly 65 acre feet of grormd eurface is
rcquired for infilrating this quandty, Thc cunent resort configrration does not includc
land designated for surface inftltatiou ouly. Without arealistic mcars of groundwater
infiltration, cxc€ss surfacc water will nrnoff, with the potential to transmit contarninants
to 0re surrormding surface watcrs of tlood Canal.
Thc estimatc ofhigh quantitics of nrrface ruaoff arc supportcdby the dataSasEd
water budgct shonm in Table 6b wing annual wcrages of the daily data aad calculations
dcscribod carliar in thie report. The annual svctage rechargc by infiltation with thc
proposed land usc (Table t) would bc approximatcly 229 acre-ft. To give a comparable
22
Raln ET RrchargG
743 435 308
rnnual rainfall a,rnount to the EIS, we also ghow results in Tablc 6c using the same data-
basod oe&ods, trut for 2006, a ycar with raiufall similar to tbc long-tcrrn annual rainfall
cetimatc. Using 2006 raiofall, thc aonual recharge would be approximatcly 259 acre-ft.
In Table 6a, the EIS cstimate and development plans, the total surface wEtrr input
ie tbe wm of I 13l acre.ft of rainfall, 90 acrc,ft of irrigation for golf cotuse gras{r, and l8
acre-ft fo the Fircsmart progrun; thc total is 1249 aere-fr. In Table 6b, tbe dsta-brs€d
surfacc water input is the sun of 743 acrc-fr of rainfrll, 59 acre-ft of inigatim watcr
plus lt acre-ft forthe Fitrsmart progre; tbe total is 820 acr€-ft. h Tablc 6c, the
surfrcc watcr input using 2005 data totsls 1068 acrt-ft. Although thcre was hig[er
rainfall in 2006 comparcd to tbc nrerage, it fell primarily in the winter, An additional4
acre-ft would havc bcco rcquired for golf-coursc irrigatiou bascd on surumcr rainfrll
amounts and teqcotures.
Table 6a, 6b, 6c, Water Budget Comparison between estimales presented in lhis report
ond in the EIS (Subsudace Sclcnce LLC, 2006). The uruccounted for surplus in both the
ctrrent and darcloped stte EIS water budgets indicates that unae*ountedlor water
storsge is occurring in the waler nunagement scheme,
Table 6a. EI9 Water budget
Acres Land Use
Total Source
Golf Course (lrrlgBtlonl
Mature Forest (Firesmart)
lmpeMous surface
Lined Pond
Bloretentlon
Total Proposed
220 Development
60
60
17
t7
46
Rain ET Recharge
Ground
water
Pumplng
Pond
Pumpln8
Pond
Contalnment
1131 508 491 65
90 90
1818
132
13
1239 521 491 65 108 132
23
Table 6b. Dao-based Water fudget
Acres Land Use
Total Source
Golf Course
Mature Forest
lmpervious surface
Llned Pond
60
60
37
L7
46
60
50
37
t7
Total Proposed
22O Development
Table 6c. Data$ased Water budget (thts rqort)for 2006, a wateryedrwith comparohle
rain as the EIS armual rainfall estlmate
Acres Land Use
Total Source
Golf Course
Mature Forest
impeMous surface
Llned Pond
Eloretentlon
Proposed
2ZO Development
Tbe summary resulu of thc watcr budget ruing data from Tablc 6 uc showu io
Table 7 for aaoual surface nrnoff, annual increase to pond storage, totd exccss wstcr
reguiriug rnanagcmcot, and estimatad addition to aquifer. Using the EIS and
dwelopment plan watcr sourc€ and us€ values, herc is 192 acr+ft of annual surfaco
runoff&at is not addrcseed in &eir plans. This is dcrived usirg sn urcalistic irfiltration
rate and unexplaiaed oxccus reohrge into a box discusEed ear[er in this ncport. Using
date-bnscd vslucs (2@5-2010), 6e anntul avcrage surface runofffor thc propoacd
development may be 330 actc-ft or up to 520 acre-ft on a high rainfall year (i.e. 2006).
24
Raln
ET
(total)Recharre
Grsund
water
Pumpins,
Pond
Purnping
Pond
Containment
743 65
59 101 64 59
18 119 95 18
0 0 1'f5
29 0
77 69
229820326 6$77 146
Raln
ET
ttotatl Rechar8e
6round
water
Pumplng
Pond
Pumping
Pond
Containment
987 65
63 1M 69 53
18 141 11s 18
0 0 146
30 0
80 74
1tl510683552596581
All mcthods and assumpioos shorv that there will be annual hcresses to psnd
storagc, not a long-tcrm balaucc. Maoagenrent of pond overllow is not discussed in
devclopment plane. The btal exccss watcr rcquiring managcmqrt will be 203 acre-fl per
year using developme,lrt plan values, but will likcly be in the rarge of 370-555 acrp.ft
per ycar. krigation requirernurts cam be met, for the most parq ttsiog thc volume of
wat€r expected o bc rpclaimed by domestic and commcruisl us€. The rainfall excrss
expoctcd to grocrate surface water runoffou the proposcd Rcsort has not bcen givcn
adcquate study or Plnnning,
Tablc 5 aad the related discussion show that the ctneot rcchargc is likely raages
befiileen 300-350 acrc-ft psr ycar. Thc EIS and dcvclopment plarr watcr sourcc and usc
valuec, when looked at with thc watcrbudg$ approaclg sbow ftat thcy expect to
recharge the aquifer more than currsnt conditions, 426 acre-ft after pumping
rcquirements. This dernonstrates that the infiltation rstes thsy 8s6[rmc arc urcasoruble,
Es 6ey have not proposed auy cuginecriag solutions that ars €xpectcd to increasc the
overall infiluation and rechargc capacity ofthc 220 scr€s cornpared to current
conditions. It is morc likely, givea trc 23 tnlyr irfilratim and recharge capacity
((Morgsn and Jones, 1999; Vaccaro, et al., 1998) md a data-bascd waterbudgct
approach, that thc propsed derelqpmcut will Mucc the annual rechargp to bctwcen
160-200 are-ft pcr ycar, This rsprcseils morr than a 50% decrcasc in annual recharge.
Table 7. Woter Budga Comparison between estimates presented in thls ruporl and in the
EIS (Subsurface Science LLC, 2006). The unaccountedlor wrplw ln both the
annent and developed site EISwater budgets indicata lhot unaccountedfor
water storage k ocarrhg in the waler marugeilent scheme.
Ers
D.t -
brsad
lnputs
2m5.
10
Dtta.
bascd
lnputs
2006 frcm Teble 5Water
Annual surface runoff 192 330 520
Raln-ET - Recharye +
Pumnns
Annual lncreasc to pond storaEc 11 41 36 Contalnment-PumpinS-ET
Total excess water to manage 203 171 555 Runoff + Pond Overlloru
Estlmated addltlon to aquifer 426 154 194 Recharge - Pumplnl
25
7.0 Concluslons
The Pleasaot HarborRcsort and Golf Course consultant rcports (Subcurfacc
Group, LLC, 2006; 2020 Enginecring 2007) dcscribc that slorm water and sewag€
effluent from tbe dwclopmcnt will by contrained in closed slrtoms. lMater dsmand
scenarios dividc thc 220 aorc devclopmcnt ioto 123 acres of landscapcd grass (and
assumed bioracotion), 37 acrcs of impcrvlors surfacc, and 60 asres of mailre forsst
(Table 1). Frcm the 37 acrcs of impervious surfaces, water is proposcd to bc collected
and reinroduced to thc aquifer, primarily ftrough the use of biorctentioa or rain glrdsns.
Irrigation dsmand is proposed to be met primarily by a lined 17 acrc pond which will
hold direct raiDfall urd rcclaimcd water. Evqpouuspiratim losscs &om thc pond surface
are cetimoted at lcs thur I perccot of the annual pr+devclopment water budget (3
percent by 2020 Engineering, 2007), aod rechorge is sssumcd to be maintainod over the
yeEr.
Usrng daily calculations of water budget variablcs based on locat cliroste
observations (2005-2010), we used a data-based approaoh to calculate a watcr budget tbat
accounts for tha seasonal disUibution of rainfrll and associatcd snpply aud dcmands of
the curent forcsted land cover aud propoeed mixed use land cwcr. By dircctly
calculating thc orapofanspintion demands, and limiting thc infilbation based on a
appropriate soil infittration capacity ratc, wG wcte ablc to more dircctly cstimate not only
thc rechargc, but the surfaoc nrnoff. Surfac€ wder qtulity dcgradation in tbc watcn
s1111esarling Black Point wifl rcsult tom watcr mnning ofrof laadscaped
surfaces,coatriuing fertilizers and landscaping chenicals, if it is not caphred and treated.
Of the aonual average of surface runoff, 155 acrc-fr from landscapcd gnss that
Eay requirc tr€shent for fcrtilizcrs and pesticidcs aud 139 acre-ft Aom impervioru
surfaces which will also require treatmeot. This rcpreseuts water in srcess of bioretcntion
gard€n capacity (assuming highly pcrmeable landscaping is built). A l7 acre lincd poad
is pmposcd to bc used to contain on-pond rainfall and ueated domcstic wasto water. This
lincd pond is planncd for a storage capacity of40,000,000 gallons in an avcrago year and
upwards of 60,000,0fi) gallons for hi&cr than svcrsge prccipitation ycars to prwent
overflow of rpclaimed wat€r givco maximum ennual rainfatl conditions. The average
annul zurfacc runoffhas not bccn addressed by thc proposed devolopment plurs. Wc
estimate Srat a total of 140,000,000 gallons (420 acre-ft) will nccd to bc managed
annually.
The at'nual avcrags grormdwater rechrrge is, for the currcot forested land use,
apprroximately 30G3$ acm-ft. The rechargc estimatod for thc proposed dcvelopmcot
site plan for thc Pleassnt Harts Rcsort and Gotf Corusc is approximately 160-200 acrt-
ft. Tlris rsprcscnts 45-50o/o of the current grouudwato rechargc compared to ctnrent
26
conditioos. Thc dwclopmcnt plan estimatc of 426 acre-ft is based oa unrcalistic
infilnation and rccharge ratcs. Bccaucc the proposod dwelopmcnt plans do not
adcqrutcly accormt for thc seasoral variation of annual rainfall, the resultiog seasoaal
chauges in surface runoffand rechargc and not adoquately addrcssed. If thc drawdown of
the local aquifer or discharge of untrcatcd stonnwater or wastewatcr into Hood Canal is
unacceptablc, thcn drc prcposed dcsign fails to mest environmental protcction and
rcstoration goalsro. With the continued long-temr rcduction in aquifcrrccharge, thc
groundwater lwels cao be expected to drop and salt watcr intrusion to occur in wells
located along thc Black Poiat Peninsula shorclincs.
l0 2O2O Bngilccriag, Juruary 31, 200?, "Watcr Rcsource Managcrncnt A Sustrinrbtc Wrtct
Reeourcc Managomcut Plur', Proprrcd for Strtcemen Corpoation. Pagp 5,
27
Use of thls report
Silvcr Tip Solutims, LLC. has prepared this memo for Gcrald Stcele ard his
agpnts for usc in the undcrstanding of the hydrologic conditions of Black Point Peuinsula.
Ttrc scopc of ourwork does not include scrrriccs relatsd to construction or dcsigrr of
watr cnginecring syetc,ms. The rcsulr prEs€rtcd in thic rcport nclarc to the probability of
hydrologic conditions only oa thc Black Point Peninsula ud not any other watcrshod or
systern. Therc are possible vrriations ia hy&ologic cooditions that may not be
represented in this worlr. Our report, conclusions, urd intcrprctations should not bc
constnred os I warranty of bydrologic conditions. Wc rccommend that Gcrald Stccl and
his ageots contiuue to aupport thc oollection of data aod coosultatim senrices to waluate
whctber futurc conditious differ from $ose anticipatcd. Incorporation ofupdated
climate, steamflow, groundwater, and water usc data into thc watcr budgct aud
hydrologic modeling syEtcm used io this worlc may rcsult in diffsent results, conclusions
and interpretations than are prcsentcd in his rcport.
28
References
2020 Engineering. 2007, "Water Resource Managpment: A Sustalnable Water Resource
Management Plan", Prepared for Statesman Corporation. January 31, 2007
Allen, R.G., 1.5, Perelra, D.Raes, and M. Smlth. 1998. "Crop Evapotransplration: Guldellnes for
computlng crop water requlrements,' lnlg. ond Draln. Poper 56, Food ond Agr. Org ol
the Unlted Notlons. Rome. 300 pp.
Bosveld F.C,, and W. Bouten, (2001), Evaluatlon of transplratlon models with observatlons over
a Douglas-flr forest, Agrlcuhrrnl end Forest Msteorology, 708,247-264.
Grlmstad, P. and R.J. Carson. 1981. Geology and Groundwater Resources of Eastsrn Jefferson
County, Water Supply Bulletln No. 5+ Washlngton Department of Ecology. 125 pp.
Morgan, O.5, and J.L Jones, 19!19, Numerlcal Model Analysis of the Effectr of Ground-water
Wthdrawals on Oischarge to Streams and Sprlngs ln Small Baslns typlcal of the Puget
Sound Lowland Washln3ton. U.S. Geolqical Survey Water-Supply Paper 2192,73 W.
Olsthoom. A.F.M., 1991, Flne root fuisl$ rnd root Uomass of two Dougilx-fir stands on sandy
soils ln The Netherlands l. Rmt blomass ln carly summer. Ncth. J. Agrlc. Sd. 39, 49{0.
Subsurface Group, LIJC, 2006. EIS Groundurater (Ver 1,6l,doc, ProFa No. SG0601-02, "Pleasant
Harbor Marlna and 6olf Resort - Water Supply and Groundwater lmpact AnalysiC'. June
26,2006
Vaccaro, lJ.. Hansen, A.J. and M-4. Jones, 1998, Hydrogeolqlc Framework of the Pqet Sound
Aqulfcr System, Wrshlngton and Erltlstr Columbla, Reglonal Aqulfer-System Analysls *
Puget-Wlllamette Lo$rland, U.S. GeologlcalSurvcy Professional Paper 1424-D.
Waher, 1.A., R.G. Allen, R. Elliot, M.E. Jenren, O. ltenfisu, B. Mecham, T.A, Howell, R. Snyder, P.
8rown, S. Echlngs, T. Spofford, M, Hattendorf, B.H. Cuenca, J.L Wright, 0, Martln. 2(rc0.
ASCE's Standardized Reference Evapotranspiration €guation. Proceedlngs of Watershed
Management & Operatbns Management.
29
Jensen, M.E., R-0. Burman and R.G. Allen, Editors, 1990. Computer Prograrn Supplement to ASCE
Manual 70: Evapotransplration and lrrlgatlon water reguirements.
I'' EIRI(!LiIY
rEFoB
cf,NrrR
December 2OOl
UC BenxELEY CErwen
A DowNWARD PusH:
Tne lmpncr oF WAL-MART Srones oN
Rerrul Wnces AND BerurFrrs
Arindrajit Dube
UC Berkeley lnstitute for Research on Labor and Employment
T. William Lester
UC Berkeley Department of Clty and Regional Planning
Barry Eidlin
UC Berkeley Departrnent of Sociology
EXECUTIVE SUMMARY
Empirical evidence suggests that employees at Wal-Mart earn lower average wages and receive less
generous benefits than workers employed by many other large retailers. But controversy has perslst-
ed on the question of Wal-Mart's effect on local pay scales. Our research finds that Wal-Mart store
openings lead to the replacement of better paying jobs with jobs that pay less, Wal-Mart's entry also
drives wages down for workers in competing industry segments such as grocery stores.
Looking at the period between 1992 and 2000, we find that the opening of a single Wal-Mart store in
a county lowered average retail wages in that county by between 0,5 and 0.9 percent. In the general
merchandise sector, wages fell by f percent for each new Wal-Mart. And for grocery store employees,
the effect of a slngle new Wal-Mart was a 1.5 percent reduction in earnings.
When Wal-Mart entered a county, the total wage bill declined along with the average wage. Factoring
in both the irnpact on wages and jobs, the total amount of retail earnings in a county fell by 1.5
percent for wery newWal-Mart store, Similar effects appeared at the state level.
Dt *
With an average of 50 WaI-Mart stores per state, the average wages for retail workers were l0 percent
lower, and their job-based health coverage rate was 5 percentage points less than they would have
been without Wal-Mart's presence, Naflonally, the retail wage bill in 2000 was estimated to be $4,5
billion less in nominal terms due to Wal-Mart's presence.
The study addressed a number of methodological issues that have plagued previous attempts to
assess the effect of Wal-Mart on local labor markets. A less sophisdcated statistical model risks con-
founding the effects of Wal-Mart openlngs wlth unobserved economic factors (positive or negative)
that might have drawn the retailer to specilic locatlons. We use the spatial pattern of Wal-Mart's
gfowth (radiating out of fukansas over time) to identiSWal-Mart store openings that are not driven
by local economic conditions. This helps ensure we are measurlng the results of store openings, not
preexisfl ng conditions,
Further, we investigate (and reject) the possibility that wage declines were an artlfact of changes in
demographics of the retail workforce. If Wal-Mart jobs bring more minorities, women, young people
or workers with Iower educational attainment into the retail work force, the wage decline could be
accounted for by the lower earning potential of these groups. But conuolllng for age, gendel
ethnicity and education did not change the results. Overall, the resuJts strongly support the hypoth-
esis that Wal-Mart entry lowers wages and benefits of retall workers.
WAL-MART WAGES
Wal-Mart's size and growth over the past two decades, and its contibution to reshaping retailing in
America, means that it may be an important force in shaping wages for low-end workers. Existing
widence suggests that Wal-Mart pays lower wages and benefits than other large retailers. In 2005, the
company reported an average hourly wage of $9.68 per hour.r An earlier study of pay scales in
California found that Wal-Mart employees earned 26 percent less than workers in comparable jobs,
defined as retail firms with 1,000 or more workers.z A national study found a 25 percent earnings gap
with retailers overall, and 28 percent with large retailers, though wages did not look significantly
different from those paid by other discount stores.3
There are two general problems with comparing Wal-Mart workers' wages with thos€ of other
retailers. Wal-Mart started and has its greatest presence in lower-wage and more rural areas, which
wtll account for some part of the wage differential. Second, Wal-Mart makes up a large share of
general merchandlse workers, Siving it a significant impact on the average wage of these workers. Its
employees account for 55 percent of all general merchandise workers, and 7l percent of employees
who work for large general merchandise companies in the country. To get a valid comparison with
other general merchandisers, we adjusted retail wages in the Current Populaflon Sunrey to match
Wal-Mart's location and adjusted for Wal-Mart's conEibution to the average general merchandise
wa8e.
I WaI-Man Srores, Inc, 2005. http://wwwwalmarlfacts,com/associates/default.aspx#a41.
2Dube,ArlndrafltandKen)acobs,2004. HiddenCostofWat-Martlobs:llseofsafetyNetProgrqmsbyWal-MartWortarsin
Cablornla. University of Callfomia-Berkeley, Center for [abor Research and Education.
3 Bernhardt, Annene, fuimol Chaddha and Siobhan McGrath, 2005. What Do We Know About Wal-Marrl New York
Univeraity Brennan Center for Jusrice.
2 RESEARCH BRIEF A Downward Push: The lmpact of Wal-Mart Stores on Retail Wages and Benefits
The results still found a sizeable wage gap between Wal-Mart and other general merchandising
employers: 17.4 percent. The gap ls smaller when compared to all groceryworkers (7,5 percent) but
larger when compared to large grocers (17.5 percent). In the area of large general merchandise
companies, meaning businesses wlth more than 1,000 employees, Wal-Mart employees earned more
than 25 percent less than workers in competing stores.4
RESEARCH METHODS
Anecdotal evidence suggests that competitors perceive the need to lowerwages and reduce benefits
to compete with Wal.Mart, In 2003, as Southern California unions negodated thelr contracts with
grocery chains, competition withWal-Mart came up repeatedly as a rationale for loweringwages and
cutting benefits.5 Although such anecdotal accounts are common and reported often in the media,
there is not much ln the way of rigorous academic research on this question. We sought to test the
hlpothesis that WaI-Mart store openings depress local wages and benefits. Our research investigat-
ed the effect that a new Wal-Mart store had on the economy of the surrounding county and state by
comparing how wages for retail workers, especially grocery and general merchandise ernployees,
changed over time in response to a store opening.
Any effort to esdmate the tmpact of individual store openings in a credible way encounters a
fundamental methodological obstacle: Wal-Mart does not randomly choose where to expand. In
deciding where to open a new store, manatement may take into account several factors, including
the cost of labor. If the company selects areas where wages are already falling in order to minimize
competition for employees, the results might artificially indtcate that Wal-Mart's arrival in a county
caused wages to fall. Alternatively, and more important in reality, Wal-Mart may choose sites with
sEong economic prospects to take advantage of a healthy consumer market. Such local booms
usually lead to an upilck ln workers'wages. When Wal-Mart store openings are correlated with local
economic booms, the results would mistakenly indicate thatWal-Mart raised wage6 or had no effect
on local wages-euen when lts entry caused wages to be lawer than they would haue been. tn eirher
case, there is the danger of confusing the factors enticing Wal-Mart to open a particular store with the
effects of the store's arrival in the local economy. This problem is what economists call selection bias.
In order to resolve this problem, our research began with the fact that Wal-Mart has spread out over
time from its initial headquarters. The flrst Wal-Mart store in 1962 was in Rogers, Arkansas. Since
then, new stores have sprung up at increasing distances from the centeq like a circular ripple
spreading away from a drop of water. The farther a county is from Benton Counry Arkansas (ground
zero for Wal-Mart), the later it erperienced the Wal-Mart growth spurt (see Figure I on page 4). This
pattem of expansion allowed the company to take full advantage of distribudon networks and lower
the overall costs of expansion,o
a Dube, Arlndra,lt and Steve Wertheim, 20a5. Wal-Mart and Job Quality: whot Do We Know and Should We fure?
University ofCalifornia-Berkeley, Center for Labor Research and Education,
5 Goldman, Abigail and Nancy Cleeland, 2003. 'iAn Empire Built on Bargalns Remakes the WorHng Worldi Los Angeles
Times (November 23, 2003). Pearl*ein, Steven, 2003, 'lVal-Mart's Hidden C*sts!' Washington Post (October 29, 2@3).
6 Gt"ff, Thomas O., 1998, 'The Locations of Wal-Mart and Kmart Supercenters: Contrasdng Corporate Strategies,' fie
Projexional Geographer 50 (l): 46-57. Holmes, Thomas 1.2005, The Diffusion of Wal-Mart and Ecoromlcs oI Denslty.
Unpubltshed manuscrlpl
DECEMBER 2OO7 3Dube, Lester and Eidlin !
a
'-t
'-': -
Map 3: Store
Figure l. Wal-Mart store locatons 1992, 1996 and 20fi)
Number of lVal-Mart stores
. l-2
. 3-6
. 7-12
o 13-19
-
ftlsTslslsg
4 RESEARCH BRIEF I R Oo*n*ard Push: The lmpact of Wal-Mart Stores on Retail Wages and Benefits
Hap 1:
2r;.
:.., J
l.- -. r
.)'
Byfollowingthe ripple of store openings across lhe country and over time, tfie are able to testwhether
retail wages fell in its wake. Looking at store openings based on both how far the county is from
Wal-Mart's "ground zero" and the year in question, our estimates avoid the seleclion bias that can be
a problem for similar sildies. We also subject our results to a number of different tests of internal and
extemal validiry which all indicate that our methodology is robust.
Our study uses two sources for data on wages: the Quarterly Census of Employment and Wages,
employed by the US Bureau of Labor Statistics, which provides county-level informadon; and the
March Supplement to the Current Population Survey, which provides greater detail about wages and
benefits, but only at the state level.
WAL-MART'S NATIONAL EXPANSION
The study focuses on the period 1992-2000, the time period when Wal-Mart expanded outside the
South and exploded lnto major metropolitan areas. During this time, Wa[-Mart grew from 1,800 US
stores to 2,500, an increase of almost 40 percent. During the 1990s, the corporation expanded from
the South to the Midwest, and then to the West and Northeast, By the end of the lg90s, more than
half the counties in America had aWal-Mart in them, and some had manymore.
In 1992, half the Wal-Mart stores were ln rural countles. But during the next eight years, three-
quarters of new stores were in metropolitan counties, as Wal-Mart enpanded from its rural starting
point,
WAL.MART OPENINGS PUT DOWNWARD PRESSURE ON COUNTY WAGES
When Wal-Mart's timing of expansion ls taken into account, we find strong evidence that each new
Wal-Mart lowered retail wages (see Table f). Opening a single Wal-Mart store lowers the average
retail wage in the surrounding county between 0.5 and 0.9 percent. In the category of genera)
merchandise, wages fell about I percent for each new store, while workers in grocery stores saw aver-
age wages decline about 1.5 percent. As we would expect, there was no noticeable effect on wages in
other low-paying economic sectors that did not compete with Wal-Mart, Restaurant workers, for
example, saw no change in their take-home pay as a result of big box entry into their county.
Table l. County-level otlects from the entry of a single llYal-Mart storc
Average Vlagc Aggregate lUage Blll
Retail workers:
General merchandise
workers
Grocery employees:
0.5-0.9% lower
l% lower
1.5% lower
Retail sector: ].5% lower
Dube, Lester and Eidlin DECEMBER 2OO7 5
Several lndependent factors explaln the fall in wages associated with
Wal-Mart openings. First is the substitution effect: a new Wal-Mafi
store replaces better paylng jobs with lower-paying ones. Since
Wal-Mart workers account for more than half of general merchan-
dising employees, mixing lower-paid Wal-Mart jobs in with higher-
paid jobs reduces average wages nodceably' A second factor is
competition: Wal-Mart pushes down wages in competing
businesses, This is most evident for grocery stores, where the effect
on wages is purely a result of competitors cutting costs in response
to WaI-Mart (see sidebar.)
Some research suggests that Wal-Mart may be responsible for a
small net increase in Jobs,8 Our study demonstrates that the opening
of newWal-Mart stores produces a decline not iust in average wages
but in the total wage bill of a county. E/ery new Wal-Mart in a
county reduced the combined or aggregate earnings of retail
workers by around 1.5 percent. Given that the fall in total wages was
greater than the decline in average wages, it is highly unlikely that
ihere is compensating positive employment growth associated with
a Wal-Mart store opening. This is consistent with research by
Neumark et al.,e who find that once the timlng of store openings is
taken into account, there is no evidence ofjob gains,
At the national level, our study concludes that in 2000, total earnings
of retail workers nationwide were reduced by $4.5 billion due to
Wal-Mart's presence, and these losses were concenEated in meuo-
politan areas,ro
WAL.MART OPENTNGS REDUCED STATE-LEVEL
EARNINGS AND BENEFITS POTENTIAL IMPACT ON
FIRMS'COSTS
We also perform a state-level analysis of Wal'Man's impact. By the
year 20fi), there were 2,500 Wal'Mart stores in the US, an average of
iO per state. Our study finds that each new Wal-Mart lowered the
average hourly wage of retail workers in the surrounding state by
two-tenths of a percent (see Table 2)' Ftfry new Wal'Mart stores
would mean a l0 percent average wage reduction.
0 Basker, Bmek, 2005. 'lob Creation or Destructlon: Iabor Market Effects of
Wal-Marr Exparrlloni Revlew of Bconomics and Srrrtstics 87(l): l?4-18[t.
e Neumark, David, Junfu Zhan and Stephen Ciccarella, 2005. "The Effects of
Wal-Mart on Local Labor Markets," NBER Worktng PaperNo. 11782, ,
t0 On average, a single store reduced lhe retail wage blll by I percent in a metro
county, In 2000, metro counties had an average of 1,5 Wal'Mart elores, and had a
total ierail wage bill of $300 blllion, This produced an annual reduction in the
nominal wage bill by $a,5 billion.
6 RESEARCH BRIEF I R Oo*n*ard push: The lmpact of Wal-Mart Stores on Retail Wages and Benefits
Table 2. State{evel €,ffocG of Wa},Mart openinga on retail wofierc
The study was also able to measlue the effect of Wal-Mart stores on healthcare beneffts using the
Current Population Survey. While employees in the retail sector typically do not enjoy good health-
care benefits, anecdotal evldence suggests that Wal-Mart employees receive employer-sponsored
health insurance at a lower level than workers in competing businesses, Our data indicates
Wal-Mart's job-based coverage rate was higher than retailers in general, but lower than large
retailers, including large general merchandisers and large grocery stores.rr
Iust as Wal-Maft's low wages depressed wages in competing businesses, we found similar effects on
the rate of health insurance. The research demonstrates ttrat t0 new Wal-Mart store openings in a
state uanslated to a I percentage point reduction in the proportion of retail workers who received
health insurance from their employer.
EFFECT ON METROPOLITAN COUNTIES
Wal-Mart's effect on countywages appeared only in metopolitan statistical areas. The strong decline
ln earnings that was wident in metropolitan coundes dld not show up in rural counties. This result
is consistentwith other research that shows that rural areas are more likely to have low-wage firms.12
Where wages are low to begin with, the arrival of the retail chain is less significanr. Thris is especially
true because the minimum wage becomes binding at lowwage levels, which is more likely in rural
areas. In metro areas with better-paying jobs and a higher rate of unionization, Wal-Mart's entry was
more likely to have an impact on the labor market. Thls is particularly important since the large
majority of new Wal -Mart stores are located in metro areas. This also e:cplains the greater reslstance
to Wal-Mart store locations ln metropolitan compared to rural areas, since workers and unions have
more to lose in urban seftings.
ll Dubu and Wertheirr, 2005.
l2 Anderrson, Fredrik, Harry Holzer and Iulia Lane, 2fi)2. 'Itre Interaction of Workers and Flrms in the Low-Wage labor
Markeq' IEHD Working Paper.
Average Retall
Ulager
Employer.Sponsorod
Health lnsurancc
Effects of a single store
opening
0,2 percent lower 0.1 percentage point lower
Effects of l0 store
openings
2 percent lower I percentage point lower
Effects of 50 WalMarts
(fte average number
per state)
l0 percent lower 5 percentage points lower
Dube, Lester and Eidlin DECEMBER 2OO7 7
CONTROLLING FOR DEMOGRAPHICS
gne possible explanation for the apparent reduction in wages is a change in the mix of the worKorce,
If Wal'Mart hlres more minorities, women and young-people than its compedtors, then the wage
difference could be explained by the lower earnfungs of these BIoups, regardless of where they work
A related possibility could be a change in hours of worh skills of workers and fringe benefits. lf
Wal-Mart hires dispropordonately more part-time workers or less skilled workers, for example, then
the apparent decline in average wages might not result from a reducdon in wages for comparable
employees.
In order to investigate this possibility, we use the Current Population Survey data (from the Annual
Demographic Supplement), whlch provides details on indMdual worker characteristics. We look at
the impact of Wal-Mart expansion in a state on the average hourly wages for retall workers (as
opposed to earnings per worker in our other dataset, the QCEW), and control for the demographics
of the workforce, i.e., gender, age, education and race, as well as the average wage of workers without
a college education.r3 Controlling for these factors does not change the overall concluslon.
Wal-Mart's effects on wages in surrounding areas created lowerwages for a set of retail workers, not
a change in who was working retail.
CONCLUSIONS
Until now there have been few studies documenting the effecrs on compensation lrom Wal-Mart's
entry into a new labor market. The few studies that do address the question focus on a small set of
counties in primarily rural states. Because of methodological limitadons, none are able to distinguish
the effects of Wal-Mart's arrival from the particular condidons that attracted the retailer to open in a
given area ln the first place,
The new research strongly sutgests that Wal-Mart entry lowers wages for employees in compedng
businesses, and the effect can be seen at both the county and state levels. Controlling for
demographic or skill mix of the worKorce carulot explain the results. Wal-Mart openings depress
average and aggregate wages and reduce the proportion of the workforce that is covered by
employer-sponsored health insurance.
Of course, Wal-Mart's presence is also likely to bring lower prices. Existing research shows big-box
stores like Wal-Mart can use their distribution systems and leverage with suppliers to produce
substandal savings to consumers.ra However, to the extent that competint on cost produces negative
effects on low-wage workers, thds is an important consideration when deciding the "rules of the
garne' that big-box retailers need to abide by, Artd since wage and benefit savings are not the main
part of the cost advantage for a company like Wal-Mart, it could continue to pass on most of these
savings while paying hlgher wages and benefits. These factors should be taken into account by
policy makers in their decision-making on economic development.
13 fio be sure, whether or not lower wages brlng in more disadvantaged groups does not change the fact that wages are
reduced for retail iobs. Our analysis further ehows thal this cannot "explain" the fall in wages,
14 Hausm*, ferry and Ephralm Leibtag, 2005. "Consumer Benefrts from Increased Competition in Shopping Ouilets:
Measuring the Effect of Wal-M arli' NBER Working Paper No. I 18ff).
8 RESEARCH BRIEF I R Oo*n*ard Push: The lmpact ol Wal-Mart Stores on Retail Wages and Benefits
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Acknowledgments
We would like to thank Judith Barrish for support tn wridng and
editing this brtef. We also appreciate the helpful commeats and
reviews we received from Emek Basker, )ared Bernstein,
Oeindrila Dube, David Fairris, Michael Hicks, Ken lacobs, Ethan
Kaplan, Alexandre Mas, Suresh Naidu, and seminar pardcipants
at IIES (Universiry of Stockholm), Universlty of Uppsala,
University of California-Berkeley, University of California-
Riverside, Center for Arnerican Progress, Economic Policy
Institute, American Enterprise Institute, and the Annual
Conference of the American Sociological Association.
We also wish to thank General Service Foundation, which
provided partial funding of this research.
The vlcws expressed ln thls pollcy brlef are those of the authors and do not
necessarily represent the Regents of the Uniuerstty of Callfornla, UC
Berkzley l^ttitutp for Research on Labor and Employment, General
Seruie Fouttdfltion, or collaborating organizatioru or funders.
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