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

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

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

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

Population: Historical trends SOURCE: U.S. Census Average increase of 147 residents per decade 7,542 7,261 6,954 7,174 7,075 +281 0.4% CAGR 5,840 3,731 3,083 3,111 1930 1940 1950 1960 1970 1980 1990 2000 2010 Cohasset’s population growth averaged 2.1% per decade over last 40 years with a 0.4% CAGR in most recent 10 year census period

Population: LRPG analysis SOURCE: Town Census + DESE School Attending Children Report + LRPG Estimates Increase of 953 residents since 2007 = 1.3% CAGR 8,454 8,613 7.977 7,660 Growth since 2007 significantly outpaces U.S. census growth from 2000-2010

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

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

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

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

Parcels: Cohasset property value by land use

Parcels: Assessed value of residential parcels is increasing

Parcels: Changes in assessed value depend on the economy

Parcels: Historic rate of new construction varies

Parcels: There are a number of developable lots

Parcels: There are many large properties like Cook

Parcels: Recent development trends can last a while

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

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

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

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

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

New Growth: Lesson 5 - A linear regression has predictive value (new homes/construction) GROWTH = 338,354 + 1.0471 PERMIT R2 = 39.3 R2ADJ = 38.8 A simple linear regression explains almost 40% of the relationship

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

New Growth: Lesson 5 - A linear regression has predictive value (new homes/construction) Questions? GROWTH = 338,354 + 1.0471 PERMIT R2 = 39.3 R2ADJ = 38.8 A simple linear regression explains almost 40% of the relationship