on local spending patterns and is used to establish the costs of existing services
for a new development. The basic premise of this method is that current
revenue/cost ratios per person and per unit is a potential indicator of future
revenue/cost impacts occasioned by growth. New capital expenditures required
for provision of services to a development are not added to current costs;
instead, the present debt service for previous improvements is included to
represent ongoing capital projects. The advantage of this approach is its
simplicity of implementation and its wide acceptance by both consultants and
local officials. The downside of this approach is that the methodology calculates
the “average” cost as being the expected cost, which is often not the case and
costs can be understated or exaggerated; significantly in some instances. If one
student is added to a school system, limited cost impacts will occur; however,
based on an “average” cost to educate one student the cost would be noted as
$18,000/year which includes such costs as existing debt, building maintenance,
administrative and other factors, all of which will be minimally impacted by the
addition of one student. The “true cost" could be significantly less, especially in
those communities with declining enrollment.
The Marginal Cost Approach is a more realistic methodology that can be used to
estimate and measure developmental impacts based on actual costs that occur
in the community. At this time, a “level of service” exists in Nashua to serve the
community. This existing service level, for the most part, addresses the needs
of the community through existing tax collections. As new development occurs,
pressures are placed on some departments to address increased demands,
while other departments see negligible, if any impacts. In reviewing the
potentially impacted town departments specifically, a truer picture of anticipated
cost impacts can be determined. The Report will use this methodology unless
discussions with Department heads lead to no definitive cost conclusion, in which
case the Average Costing Method will be applied.
Given the nature of the proposed development project, as will be shown by the
analysis below, few significant impacts will be felt by City departments. Any
required off-site road improvements will be addressed during the approval
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