Model: Middle Value Firm 1
Assumptions for All Models:  
Projects are a 2 phase investment
The first phase begins operation in January 2010, and is completed in 2011.
The second phase begins in January 2015 and is completed in 2016.
The same tax abatement is offered for both phases.
Land is sold, not donated, to investing firm.  Proceeds go to City.
Project Summary:  
Capital Investment in Plant: $50,000,000
Annual Local Expenditures by Firm: $3,000,000
New Jobs:                    500
Average Wage per Job: $44,000
Average Value of Home Purchased: $251,433
Total New Households in City and County:                    437
City Revenue per Firm Employee Household: $0
Additional Jobs in City and County:                    422
Tax Abatement/s Offered: 80%
Length of Tax Abatement/s:  10 Years 
Number of Abatements:                        2
Value of Tax Abatements, Total: $12,926,497
Value of All Incentives Offered: $12,926,497
Value of All Incentives per Job: $25,853
Value of Incentives in Hourly Pay: $0.83
Returns for Jurisdictions: City County School Total, Local Jurisdictions
Revenues $53,464,659 $45,010,204 $56,273,313 $154,748,176
Costs $29,554,855 $18,407,178 $6,854,975 $54,817,008
Revenue Stream, Pre-Incentives $23,909,804 $26,603,026 $49,418,338 $99,931,167
Value of Incentives Offered $2,919,906 $3,581,599 $4,081,656 $10,583,161
Revenue Stream with Incentives $20,989,898 $23,021,427 $45,336,682 $89,348,006
Returns for Jurisdictions, Discounted: City County School Total, Local Jurisdictions
Discount Rate 4.89%
Discounted Cash Flow, Without Incentives $12,233,690 $13,841,980 $25,739,685 $51,815,355
Benefit/Cost Ratio, Without Incentives                   1.74                 2.34               8.08                    2.70
Discounted Cash Flow, With Incentives $10,238,295 $11,394,401 $22,950,378 $44,583,073
Benefit/Cost Ratio, With Incentives 1.62 2.10 7.31 2.46
Lawrence Discounted Cash Flow Pre-Incentives Post-Incentives
Pre-Build and Years 1-5 $822,565 $233,834
Years 6-10 $1,378,355 $398,941
Years 11-15 $1,798,850 $1,371,600
Years 16+ $8,233,920 $8,233,920
Douglas County Discounted Cash Flow Pre-Incentives Post-Incentives
Pre-Build and Years 1-5 $1,245,188 $523,042
Years 6-10 $1,772,839 $571,476
Years 11-15 $1,940,707 $1,416,636
Years 16+ $8,883,247 $8,883,247
Appendix 1: Sources of Revenue and Costs as a Share of Revenue
Revenue Source City County
Property tax from Households 18.3% 33.1%
Property tax from Firm 28.3% 41.3%
Sales Taxes from Residents and Employees 22.4% 8.1%
Sales Taxes from Firm 3.8% 1.2%
Franchise Fees, Households 4.9%
Franchise Fees, Firm 2.6%
Other 19.6% 16.3%
Total, Revenues 100.0% 100.0%
Costs as Share of Revenue
Capital Costs, Households 2.0% 0.4%
Capital Costs, Firm 5.5% 4.7%
Operating Costs, Residents 38.5% 30.1%
Operating Costs, Indirect Employment 18.4% 12.0%
Operating Costs, Firm 23.4% 14.2%
Infrastructure on the Firm's Property 0.0% 0.0%
sub-total, costs 87.9% 61.4%
Abatements 5.5% 8.0%
  Other Incentives 0.0% 0.0%
Total, Costs as Share of Revenue 93.4% 69.3%
Sensitivity Analysis City Change in Benefits County Change in Benefits
Tax abatement increase of 1% ($24,942) ($12,068)
10 additional indirect jobs $13,905 $35,549
10 additional direct jobs $74,660 $109,950
$1,000,000 additional capital investment $118,650 $158,294
$1,000 additional wages to direct employees $268,946 $239,317
1 mill increase in property taxes $411,585 $477,138
Summary of Tax Incentive Package
Incentive Valuation  City  County
Tax Abatements: $2,919,906 $3,581,599
Buildings: $0 $0
Roads, Sewer, Water, Other Infrastructure: $0 $0
Land or Other Incentives: $0 $0
Evaluation of Incentives Offered: City County
Total Value of All Incentives: $2,919,906 $3,581,599
Incentives per Direct Job: $5,840 $7,163
Incentives per Total Jobs: $3,167 $3,884
Incentives per Dollar Capital Investment: $0.06 $0.07