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FISCAL & OPERATIONAL FORECAST <br />Of the Corbin Downs PUD on the Towia of Hillsborough <br />OVERALL_FOECASTING METHODOLOGY <br />This forecast was prepared to help assess the financial viability of annexing the proposed Corbin <br />Downs development. While great effort was put into the forecast to ensure it represents reasonable <br />projections regarding financial and operational impacts on the Town of Hillsborough, it is still a <br />forecast predicated on a set of plans and assumptions -this means there are no absolutes or <br />guarantees. The linchpin in forecasting all revenues and expenditures for the development is the <br />proposed "build out" schedule for Corbin Downs provided by the developer. Not if, but when this <br />schedule changes (if annexed), so will the entire financial analysis for this project. In addition, the <br />Town's operational response will likely alter (e.g., when and what type of services would be <br />provided). <br />First, a high level of staff input was used in preparing this forecast. All department heads were <br />provided maps, build-out schedules, population projections, and expected land use. In most cases <br />the department heads worked with their staffs to develop their recommendations on the timing and <br />type of service delivery necessary if Corbin Downs is annexed. The Town Manager reviewed and <br />made adjustments to the departmental service plans. Details on how the forecasts were prepared are <br />available in the following sections. <br />The primary goal in preparing this forecast was to develop realistic, yet safe projections regarding <br />the financial impact on Town operations. The worst case scenario would be for the forecast to paint <br />too "rosey" a picture and after annexation the Town realize Corbin Downs is actually a cost burden <br />on existing taxpayers and utility customers. To increase the probability of producing a "safe" <br />forecast two simple rules were followed: 1) slightly underestimate revenues and 2) overestimate <br />expenditures. When a serious forecasting dilemma arose, the worst-case scenario was sometimes <br />taken (as you'll see when the expenditure/revenue allocations were applied to fire protection). <br />Hopefully, this approach will increase the comfort level of elected officials,, citizens, and <br />governmental staff as we all evaluate the potential impact of Corbin Downs on the Town of <br />Hillsborough's operations. <br />Feedback and Suggestion's: This forecast is by no means flawless, in fact there are an infinite <br />number of ways this development could be analyzed. Since the ultimate goal of this entire process <br />is to help the Town of Hillsborough Board of Commissioners make a well informed decision <br />regarding this issue, the Town Manager encourages everyone (e.g., citizens, elected officials, and <br />staff) to feel free in making suggestions on how the forecast/analysis could be improved. The staff <br />will be glad to go back and make whatever changes are necessary to provide additional or superior <br />information that will aid in the decision-making process regarding the proposed annexation of <br />Corbin Downs. <br />A key philos~hy to remember when reviewing the forecast and analysis: If a reader simply uses <br />the "bottom line" figures provided in spreadsheet analyses for the General and Water/Sewer Funds <br />as their sole basis for developing an opinion about the financial viability of the proposed Corbin <br />Downs annexation, then the opinion will be an uniformed one. To use an old saying, that is quite <br />appropriate in reviewing this analysis, the "devil is in the details." <br />2-1 <br />