what resolution copper could mean to the superior region...painting the picture . elliott d. pollack...

Elliott D. Pollack & Company

What Resolution Copper Could Mean to the Superior Region

June 12th, 2013

Presented By: Danny Court

Economist, Elliott D. Pollack & Company


ELLIOTT D. POLLACK & Company

7505 East Sixth Avenue, Suite 100 Scottsdale, Arizona 85251 480-423-9200 P / 480-423-5942 F / www.arizonaeconomy.com / [email protected]

•  Economic and Fiscal Impact Analysis/Modeling

•  Real Estate Market and Feasibility Studies

•  Litigation Support

•  Revenue Forecasting

•  Keynote Speaking

•  Public Finance and Policy Development

•  Land Use Economics

•  Economic Development


Current Economic Conditions


Population

Year Population Avg. Annual % Change

1960 4,875 1970 4,975 0.2% 1980 4,600 -0.8% 1990 3,648 -2.8% 2000 3,254 -0.6% 2010 2,837 -1.4%

Source: U.S. Census


Where Are Superior Residents Working?

Source: U.S. Census


0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

$20-30 $30-40 $40-50 $50-60 $60-70 $70-80 $90-100

# of

Wor

kers

Income Range (‘000’s)

Annual Incomes in Pinal and Gila Counties, 2011

Pinal (n=53,880) Gila (n=13,660)

Resolution Copper direct jobs will contribute to the top end of incomes


Town of Superior Financial Health

 Currently in a deficit

 Projected to run a chronic deficit (expenditures exceed revenue)

 Solutions include:  raising property tax rate  Raising sales tax rate  charging for additional services


Resolution Copper Painting the Picture


What drives an economy?


Flow of a Region’s Economy Base Industries

Manufacturing, Mining, Tourism, Export-Related Business Services, Retirement, Etc.

Local Market Industries Retail, Construction, Local Business Services, Banks,

Local Government

Spending by

Base Industries


The health of an

economy is a function

of its export, or

“base” industries.


Those industries where demand for goods & services comes from outside the region

“Export” or “Base” Industries

This creates demand for local goods & services.


“Local Market” or “Domestic Sector” Industries

  These industries exist because of demand created within the local market

 These industries are chasing $$ brought in by export related industries.

  What happens in these industries is a function of what happens to “export” or “base” sector industries.


EMPLOYMENT


Construction Employment brings an immediate

economic boost.


Multiple Simultaneous Solar Farm Projects


Daytime Construction = Tourism Spending


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Solar Projects Resolution Copper

Peak Construction Employment

2-4 Years 8-10 Years


Permanent Jobs


Resolution Copper

- 2,300 Indirect Jobs

- 1,400 Direct Jobs

DECADES OF PERMANENT EMPLOYMENT

- $107.2 mil in wages

- $113.3 mil in wages

Image Source: Rio Tinto


• Resolution Copper will employ 1,400 people (Direct Impact).

• That creates a ripple effect of an additional 2,300 jobs throughout the state.

• Superior will be able to capture a portion of those jobs.


Top 30 Ripple Effect Industries


Tax Revenue


 New Tax Revenue will help stabilize Town government

 Will also result in lower taxes for residents


Property Taxes


Case Study – Greenlee County


School District

Student Population

Net Assessed Value

Value per Student

Combined District Rate

A $75,000 home in Superior pays $381.29 in school district property taxes.

The same home in the Morenci School District pays $204.19 in school district property taxes.

Clifton 68 $13,662,226 $200,915 2.3337

Duncan 364 $12,690,883 $34,865 8.9125

Morenci 1,342 $261,324 2.7225 $350,696,790 Superior 443 $20,791,082 $46,932 5.0838


0

100

200

300

400

500

600

Resolution (est.)

Freeport Morenci

Freeport Safford

BHP Pinto Valley

Freeport Miami

Thou

sand

s

Copper Production per Year (tons)

1.5x 5x 8x 15x

Copper Production = Property Value


County-Level property taxes could also decline.

Current County NAV

2012 County Property Tax

Rate

Est. Resolution

Copper NAV $2.15 billion 3.7999 ~$500 mil

Adding 20% to county-wide valuation


New Population


• New workers who move to Superior will include families.

• Each new person = $348 annually in state shared revenue.

• With over 3,700 new jobs, new home construction will likely be demanded.


Direct Jobs – Where will a years wages go?

$3,000

$3,000 $21,000 $75,000/yr

$1,000

$4,000

$3,000

$1,000

$8,000 Sources: Resolution Copper, BLS Consumer Expenditure Survey

JOBS


QUESTIONS?

what resolution copper could mean to the superior region...painting the picture . elliott d. pollack...

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