Population Forecast Model

The Nichols Population Impact Model is a computerized population-forecasting tool. The model is especially useful at looking at the impact base level developments will have population. The model has three key drivers:

• the construction and operations work forces associated with the base level economic development;

• the gross-up factors or multipliers that relate the direct project employment to the overall employment by including indirect jobs (those created by suppliers) and induced jobs (those required to meet the needs of the direct and indirect workers); and,

• the known percentage of persons by age group who will die in any given year as well as the known probability that women in selected age groups will give birth (age cohort survival component).

Unlike most population forecasts that are static in nature, the Nichols Population Impact Model is designed to allow frequent updates as new information comes forward. The model is sensitive to local unemployment rates, the number of local people in the workforce, housing construction impacts, and other factors.

Further information can be obtained by emailing Maarten Ingen-Housz or by phoning him at (780) 409-1755

Municipal Fiscal Impact Model

The Nichols long-term financial planning model is a fiscal planning tool that simulates future financial conditions of a community over a defined projection period. Financial status is estimated through projections of expected future population and community development, which in turn drives changes in capital and operating expenditures, assessments, and tax rates. The intended application of the model is as a management tool by the community's financial planners to explore potential "what if" scenarios of possible future conditions and changes in policy.

The model was developed using Microsoft Excel for Windows. The model is comprised of a number of worksheets that are linked together in the order in which they will most commonly be used. The model may be applied in a number of different ways. One way is to make predictions from a single simulation. For example, a set of assumptions can be inputted into the model and the resulting impact on expenditures, taxes, and mill rates generated. While this is a legitimate use of the model, the user should be cautioned against undue reliance on the output given the level of aggregation and approximation inherent in the model.

A more effective way of using the model is to compare the results of different "runs" of the model employing varied assumptions. This method is the preferred and recommended usage, because it is not affected to the same extent by errors resulting from inaccurate assumptions. Examples of using the model to compare different "runs" employing varied assumptions could reflect a comparison of alternative service levels, the impact of a major development, slower population growth, higher than expected capital costs, or changes in financing approaches.

Nichols Applied Management has applied the model on behalf of a number of municipalities. Some customization of the model may be required to meet the specific circumstances and needs of the jurisdiction and the model must be calibrated using historical and current financial and operating data. The firm provides training in the use and updating of the model.

Further information can be obtained by emailing Gerry Fardoe or by phoning him at (780) 409-1753

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