True Cost Accounting




Stewardship America is working to advance initiatives that will engender a thriving rural economy with an economically robust agriculture, a healthy natural environment, viable rural communities and safe, abundant supplies of food and fiber		True Cost Accounting Improving government’s ability to perform activity-based accounting, make accurate projections & attain fiscal balance
Stewardship America is an eight-year-old, 501(c)(3) nonprofit charitable organization. Contributions are deductible for federal income tax purposes. If you are interested in our individual or corporate donors programs or in making a contribution, please email SAI's President Craig Evans. To learn more about Stewardship America, including its principal national and state- and county-level programs and view a list of its Board of Directors, click Organizational Profile Contact Information: Craig Evans, President Stewardship America, Inc. 621 NW 53rd Street, Suite 240 Boca Raton, Florida 33487 Phone: 561-995-1474 FAX: 561-995-1499 Email: craig@privatelands.org		Background Stewardship America made several presentations and provided input during the fall of 2000 to a Growth Management Study Commission appointed by Florida Governor Jeb Bush. The final report of the commission issued in February 2001 included 89 recommendations to improve the state’s growth management programs. The first 12 recommendations were selected as a top priority for the governor. These were based on recommendations contained in five economic studies conducted by Florida Stewardship Foundation (Stewardship America's predecessor) between 1995 and 1998. The recommendations emphasized the need for using "true cost accounting" to better understand the economic relationships between different types of land use, and to provide better information to policy makers about the long-term consequences of population growth and different land use decisions. A summary of these studies conducted by Stewardship America can be viewed at http://fl-stewardship.com/studies.htm. The Legislature approved $500,000 in June 2001 to develop a true cost accounting framework so the "true" costs of growth, sprawl and environmental degradation can be documented and more fully understood. A Fiscal Impact Analysis Working Group, convened by the Governor in September 2001 includes representation from Stewardship America. This Working Group has been cooperating with an economic consultant to develop of a true cost accounting model that was tested in 7 pilot communities and is now being made available for use by all of Florida’s 500 jurisdictions. An overview of the work completed on the state's model is available on the website of the consultant hired to develop the model, http://www.fishkind.com/dep/home.html. The final report on Phase 1 of this project, completed in December 2002, can be downloaded from the Department of Environmental Protection web site. The 54-page report is in PDF format and requires Adobe Acrobat Reader, which you can obtain by clicking on the Adobe logo. You may access the report (and the Adobe Acrobat Reader) at: http://www.dep.state.fl.us/ secretary/legislative/igov/pub.htm What it Does The true cost accounting model allows local policy makers to: See the fiscal impacts of the current mix of land uses in the local community – both as individual components standing alone, and as a whole when all the components are combined together in the local community; Better understand the impacts of proposed additions and changes to the local community – as a result of new applications pending review and approval, and/or as a result of changes in existing uses – and to see how individual projects will impact the local community as a whole and how all pending projects will impact the local community on a cumulative basis; and Ask, "What if?" For example, what if more low-income houses were built? What fiscal impacts would result from these housing units? What could be done to offset any deficits that are generated? On the other hand, what if more expensive houses also were built at the same time? Would the two changes, taken together, balance each other out? The intent of the model is to provide policy makers with better information so they can better understand: 1) the "true costs" of each land use decision that they have under consideration, 2) the cumulative impact of all decisions that are made over the course of time (one year, five years, 10 years), and 3) how the cash flow numbers associated with these decisions can change (individually and cumulatively) over time, as facilities age and the demographics of the community change.
		Project Objectives The project addressed and solved the following 11 problems in the pilot sites: 1) Data consistency. Ensure that every level of government has “core” data that has been collected and maintained in a way that is completely consistent from one level of government and from one jurisdiction to the next. 2) Data reliability: Ensure that every level of government has “core” data that has been collected and maintained in a way that is completely credible and reliable; 3) Data transparency/transfer: Ensure that this data can be credibly and reliably combined with and/or compared with data from different jurisdictions; 4) Data availability: Ensure that this data is easily available to anyone who seeks it; 5) Data use: Ensure that this data is easy to plug (or “input”) into the consultant’s modules and other 3^rd party software programs and methodologies that are widely used in the fiscal impact analysis field. 6) Data flexibility (the LEGO Approach): Ensure that this data can be used in modules, software programs and analyses in a way that allows it to be easily tweaked and manipulated and/or combined in various ways to account for local preferences and conditions. (I refer to this as the LEGO Approach – where all data sets are the same basic LEGO “pieces,” while the modules, software programs and analyses are the “instructions” that allow users to assemble these pieces into different toys or “scenarios,” which they can then modify to their heart’s content to meet their own needs. Anyone who looks at the result, will always see the basic LEGO pieces and recognize the instruction sheet that was used to begin assembly, but will then be able to marvel at the “creative” way in which it was assembled by the user to express a local need or describe a possible scenario.) 7) Data availability, use & flexibility - for 3^rd parties: Ensure that independent third parties will have access to the same data and, using this data in their own analyses, will be able to come up with reports and projections that can be checked and verified by other parties, and can be combined or compared with the analyses produced by local, county and regional governments using the consultant’s modules. 8) Focus on products that provide information for 3 basic outcomes: Ensure that the module(s) created by the consultant allow the user to EASILY generate “accounting” reports showing (1) infrastructure backlogs, (2) current revenues and costs by land use or “prototype,” and (3) projected revenues and costs by land use or prototype. 9) Improve government’s ability to perform cost accounting AND make projections: – Ensure that the module(s) created by the consultant allow the user to EASILY create and compare different “if only” scenarios, BOTH backward and forward in time. – Ensure that the module(s) will allow the user to evaluate incremental changes to see how projections are working. – Ensure that the module(s) will generate reliable, defensible data to help local government make more informed decisions. 10) Give government the ability to be “proactive” rather than “reactive.” Give all levels of government the tools so they can, on a regular basis: (1) see where they have been, (2) understand how they got where they are, and (3) consider different futures for where they might want to go. Make it easy for all levels of government to do this every 1, 2 or 3 years so they do not get 10 years down the road, hire a consultant to do a fiscal impact analysis and review the results only to say, “Omigosh! We’re in deep trouble. How are we going to fix this?” 11) Allow government to compile annual reports and updates to monitor progress, check previous projections, and adjust scenarios in a manner that does not require a lot of additional resources, complexity or cost beyond the investment that is required in executing this RFP, distributing module 1 and providing staff training to use module 1.
		For more information on state's Fiscal Impact Analysis Model, go to: http://www.fishkind.com/dep/home.html To download the report on Phase 1 of this project, go to: http://www.dep.state.fl.us/ secretary/legislative/igov/pub.htm To view a summary of Stewardship America's studies, click here. For more information on Stewardship America's other programs, visit the following links: Top \| Home Page \| Contents Page \| Programs Search \| Send E-mail You also may wish to visit a related site at: A New Look at Agriculture Designed & Maintained by Stewardship America Copyright Ó 2003 by Stewardship America All rights reserved.