In coordination with my last article about the complex challenge of replacing and reinvesting in our aging sewer and how we would fund and manage such a project, I went looking for a different perspective in understanding this challenge. Unsurprisingly, what I found is that Lansdale is not alone in this issue. Many local municipalities across the country are facing the same infrastructure challenge that we are managing. However, I discovered that some are using a specific metric to help them manage it: Revenue per Acre (RPA).
Since land is responsible for the bulk of revenue (taxes) for a municipality, it is easy enough to divide our land into units (could be wards, density, use, etc.) of production to compare the revenue productivity of land within or across these units. This would be like miles per gallon being used to compare the fuel efficiency of a car. Importantly, this information can then be mapped in our GIS system and allow us to visualize each parcel grouping (in whatever fashion we would like) to understand each’s contribution to our overall revenue stream.
For Lansdale, this formula would be straightforward. We would include the amount each parcel contributes in tax, electric, and sewer revenue each year, and divide it by the number of acres it occupies. This can then be mapped via GIS to better understand where revenue is coming from and how, in totality, our acreage contributes to our bottom-line budgeting and how we might be able to properly fund infrastructure improvements across Lansdale while also helping us identify a clear goal RPA either on average across the borough or for individual sections of the community.
Additionally, this would help us model the potential impact by acre and/or parcel increases in taxes and fees across our area and how that might impact each property owner, rather than reviewing these on averages across the community in an abstract way.
Similarly, this analysis would allow us to review what new development might deliver back to the community in potential revenue and the costs that might be associated with the development. For example, a new townhouse development could be proposed, but if the cost of new infrastructure (road, electric, sewer, etc.) management and development exceeds the expected tax, sewer, and electric revenues that that project would be delivering, than we may want to re-consider if that development is ideal for our community. Conversely, we may want to incentivize projects that are in existing dense areas because the infrastructure is already in place, decreasing the costs and increasing the RPA.
This is not to say that RPA is an absolute metric that should dictate all of our thinking or decision making. However, it would add a critical layer of information that we currently do not have that can then be mapped and made real in a way we have not previously explored. The use of this metric is to allow us, in an objective way, to make smarter decisions across the community based on how we generate and expend our revenue.
The reality is you cannot manage what you do not measure. We should have a statistic that allow us to have more clarity on where our revenue comes from and the impact it has on the community while also understanding the geographical implications and impact of alterations to our RPA in any given part of Lansdale. By adopting this metric into our GIS and into our budgeting process we can visualize the impact of investment in our community and the total impact it will have on moving us forward together.
(Mayoral Musings is a weekly op-ed column submitted to North Penn Now, courtesy of Lansdale Borough Mayor Garry Herbert. The views expressed are his own.)
See also:
Mayoral Musings: Municipal 5G Could Provide Revenue to Repair Lansdale’s Deteriorating Sewer System
Mayoral Musings: Exploring the Elimination of Electric Deposits for Renters
Mayoral Musings: Willow Street Solar Project
Mayoral Musings: North Penn Black History Oratorical Competition
Mayoral Musings: Annual Lansdale Police Report Preview
