AICP Flashcards
National Environmental Policy Act
NEPA (1969) resulted in the creation of the Council on Environmental Quality. The Act requires that the environmental impacts of a project be considered. An Environmental Assessment is required to determine whether there is a significant environmental impact. The act requires the preparation of an Environmental Impact Statement (EIS) where necessary. EIS are for federal actions significantly affecting the quality of the human environment. If the environmental assessment determines that there is a significant impact, then an environmental impact statement is required.
Environmental Impact Statement
Introduction includes a statement of the Purpose and Need of the Proposed Action;
Description of the Affected Environment;
Range of Alternatives to the proposed action. Alternatives are considered the “heart” of the EIS;
Analysis of the environmental impacts of each of the possible alternatives.
Must address:
- Probable impact of the proposed action;
- Any adverse environmental effects that cannot be avoided;
- Alternatives to the proposed action;
- Relationship between local short-term uses of the environment and the maintenance and enhancement of long-term productivity of the land;
- Any irreversible and irretrievable commitments of resources that would be involved in the proposed action.
Cost-benefit Analysis
estimates the total monetary value of the benefits and costs to the community of a project(s) to determine whether they should be undertaken. Typically, this is used for public projects such as highways and other public facilities.
Cost-benefit analysis requires that all costs and benefits be converted to a monetary value. This means that social and environmental benefits, such as the preservation of open space, have a monetary value. This is one of the biggest challenges in conducting cost-benefit analyses.
Cost-effectiveness Analysis
A method for selecting among competing projects when resources are limited, was developed by the military. For example, if a community has $50,000 to spend on park improvements then several different projects can be prepared, such as adding playground equipment or purchasing a new lawn mower.
The cost-effectiveness ratio is CE Ratio = (cost new strategy - cost current practice)/(effect new strategy - effect current practice).
Net Present Value
Shows the net monetary value of a project, discounted to today’s present value.
Linear programming
project management method that attempts to find the optimum design solution for a project. This system takes a set of decision variables within constraints and comes up with an optimum design solution.
Program Evaluation and Review Technique (PERT)
Alternative to CPM. Scheduling method that graphically illustrates the interrelationships of project tasks. PERT is a good choice when precise time estimates are not available for project tasks. The U.S. Navy developed this method in the 1950s and it is now used widely in the defense industry. The PERT planning process involves the following steps:
• Identify the specific activities and milestones;
• Determine the proper sequence of the activities;
• Construct a network diagram;
• Determine the critical path;
• Update the PERT chart as the project progresses.
Critical Path Method (CPM)
Alternative to PERT. Tool to analyze a project. The analysis results in a “critical path” through the project tasks. Each project task has a known amount of time to complete and cannot be completed before the previous one is completed. The longest pathway is the critical pathway.
Impact fees
Payments required by local governments of new development for the purpose of providing new or expanded public capital facilities required to serve that development. The fees typically require cash payments in advance of the completion of development, are based on a methodology and calculation derived from the cost of the facility and the nature and size of the development, and are used to finance improvements offsite of, but to the benefit of the development.
Line item budgeting
Emphasis is on projecting the budget for the next year while adding in inflationary costs. The advantage of this method is that it does not require any evaluation of existing services. Line-item budget only looks one-year into the future and is not linked with strategic, comprehensive, or capital improvement plans. It lacks focus on programs, looking at individual expenditures rather than how those expenditures fund programs and/or the results of those programs.
Planning, Programming, Budgeting Systems (PPBS)
PPBS is focused on planning through accomplishing goals set by a department. The advantage of this method is that it helps departments place their programs in perspective and evaluate efforts and accomplishments. The disadvantage is that it is time-consuming to prepare and requires that goals and objectives be stated in measurable terms. For example, a department may evaluate the number of permits that are issued per month rather than the satisfaction of applicants.
Planning, Programming, Budgeting (PPB) includes the following components:
Budget organized by program areas (includes program mission statements, objectives, and indicators of success);
Long-range planning of goals, programs, and required resources;
Policy analysis, cost-benefit analysis, program evaluation.
PPBS has limited success because of its heavy information requirements and the incompatibility of program format with control mission.
Zero-Base Budgeting (ZBB)
ZBB emphasizes planning and fosters understanding within all units of an organization. The advantage of this method is that it requires a department to consider every aspect of its operation and concentrate on why it does things the way it does. This is also the disadvantage, because it is time consuming to justify every activity.
Zero-Base Budgeting (ZBB) includes the following components:
Efficiency and effectiveness of programs to be re-evaluated on a regular basis;
Agencies to prepare “decision packages” for each program that look at the impact on mission of “low”, “medium”, and “high” funding;
Decision packages of all programs ranked by executive; facilitates budget cuts by City Council.
ZBB has limited success because of its intensive information requirements and limited benefits to managers.
Performance-based budget
Performance-based budgeting is focused on linking funding to performance measures. For example, funding could be tied to the amount of time it takes to process plat applications or building permits. Meeting performance goals results in funding increases. The advantage of this method is that it helps departments develop and evaluate performance standards. The disadvantage is that it is time-consuming to prepare and requires that goals and objectives be stated in measurable terms. For example, a department may evaluate the number of permits that are issued per month rather than the satisfaction of applicants.
Performance-based budgeting includes the following components:
Use of traditional function/object budget;
Performance information on workload, productivity, outputs, and outcomes;
Performance and spending may be linked through cost analysis, and program evaluation.
Financing alternatives for major capital expenses
Pay-As-You-Go uses current funds to pay for capital improvement projects;
Reserve Funds are ones that have been saved for the purchase of future capital improvements;
General Obligation Bonds are voter-approved bonds for capital improvements. GO Bonds use the tax revenue of the government to pay back the debt;
Revenue Bonds use a fixed source of revenue to pay back the debt. For example, revenue bonds could be issued to pay for a new water main. The debt would be paid back through the water use fees. Revenue bonds are commonly used to finance utility improvements and special facilities, such as baseball stadiums.
Tax Increment Financing (TIF)
Allows a designated area to have tax revenue increases used for capital improvements in that area. All but one US state permit the use of TIF. A tax increment financing district is an area with substantial blight. The designated area receives targeted investment, such as infrastructure improvements which should enable the redevelopment and reinvestment in the area. The increase in value of property results in increased tax revenue. The increment of increase in tax revenue is used to pay back the investment made in the area.
Special Assessments
Allows a particular group of people to assess the cost of a public improvement. For example, in Columbus, Ohio, the City has a plan to have every street lit by 2020. Property owners are offered the option of having regular street lights for free or ornamental street lights at their expense. In the latter case, all of the property owners on the street are assessed a fee to pay for the ornamental street lights.
Lease-purchase
Allows a government to “rent-to-own.” The benefit is that the government does not have to borrow money to finance the acquisition of a major capital improvements.
