When moving forward with future economic development efforts, Leavenworth County and its cities might soon have another tool at their disposal.
The Leavenworth County Port Authority voted Wednesday to move forward with an agreement that would give the county access to a computer model used by the Center for Economic Development and Business Research at Wichita State University.
According to Steve Jack, executive director of the Leavenworth County Development Corporation, the model would provide an in-depth cost-benefit analysis on the impact of offering incentives to potential businesses looking at moving into Leavenworth County.
WSU’s computer model takes inputs like capital investment, infrastructure costs, property and sales tax rates and potential jobs and wages for the company, all projected over a 10-year period and outputs a list of projected fiscal impacts like the rate of return on investment a “benefit-cost ratio.”
He said the cities of Wichita and Salina, Kan., and Johnson County already use the model.
Jack said the model and the resulting data analysis regarding fiscal impact is available for the county, the cities, the state and local school districts. The service would cost $3,500 a year, which includes an unlimited amount of data analyses for the county and the cities and five annual analyses for the impact on the state or school districts without additional costs.
However, Jack said he was told that the school district readouts would not be needed except in rare cases where new development would not have a positive impact — for instance, if a school district would need to build a new facility to handle a dramatic increase in enrollment. Analyses for the state would also be unnecessary, Jack said, unless the county needed to prove that the state should offer more incentives.
He said LCDC has a software model that it purchased some time ago, though there is no support for it and gathering and programming the data for the many different parameters is cumbersome.
“It’s not rocket science, but there’s a lot of work involved,” he said.
Currently, Jack said the process of determining the appropriate level of incentives for a potential business is not as precise as it could be.
“In the absence of experts, we have had to rely on gut feeling,” he said.
The main benefit of the new system, he said, is to have a customizable, scientifically-derived “benefit-cost ratio” to give to the county and the cities of what the costs would be for incenting a given project is versus the long-term fiscal benefit of that company.
Board Secretary Ed Chapman Jr. asked how any government or organization looking at the results of the model could be sure of their validity or that of the input data.
Jack said he could ask WSU about certifications on the method. Mark Loughry, city administrator for the city of Basehor, said no computer model is going to be perfect, but it is another tool at the county’s disposal in making decisions as to what level to incent potential businesses.
Leavenworth, Kan. —
