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Arden Arcade's Local Economy is a Cash Cow

Incorporation of Arden Arcade was on the ballot in November 2010 as Measure D. To get to the ballot, the proposal had to pass a number of steps in the Sacramento Local Agency Formation Commission (LAFCO) process. One such hurdle was the requirement for a financial feasibility study. The analysis of Arden Arcade’s ability to fund itself was conducted using data from 2008-2009, which was one of the U.S. economy’s lowest points since the Great Depression. The analysis showed that net revenues after 10 years would range from +4% to +23%, hence the report concluded the formation of a city might be feasible. The opponents of incorporation seized on that finding, claiming “might be” was the same as “might not be” and therefore the same as “guaranteed to fail”. They were thus able to convince voters to not approve the measure. Remember, that was in 2010; that water has been long over the dam.

Now it is 2018. Changes have happened. Things have evolved. Circumstances are different now then they were in 2010. For instance, back in 2010 one of the spokespeople against incorporation, a used car lot owner bemoaning the sad state of car sales (and they were dreadful by anyone’s account), told an audience in the Arden Park Community Center that he feared car sales would not rebound. With 20/20 hindsight, we know car sales were sky high by 5 years later and have kept on going, because with the recovering economy buyers were no longer forced to put off their purchase decisions. The economy, it seems, is cyclical. It rises and falls and rises again. The question becomes one of timing — buy low, sell high as they say. Even with the cyclical variations, though, some things stay constant relative to others. For our local economy, one of the consistent factors is Arden Arcade’s strong position within the countywide economy. You see, in comparison to other nearby communities, we have a diverse local economy with retail activity all over the place and we sell big ticket items like cars (and, increasingly, mattresses!). That was so even when the economy was tanking in the recent recession. It remains so today. The Carmichael Improvement District did a study recently that looked at Carmichael’s local economy and compared it to nearby communities’ economic activity. To no one’s surprise, Arden Arcade’s retail sales far surpassed other areas and its retail sales per capita were way above the county average (2017 data). So, relative to nearby communities and the entire county, Arden Arcade’s local economy is a persistent cash cow across both good times and bad. A solid local economy like ours is a reliable indicator of municipal fiscal feasibility that should not be trivialized if a proposal for incorporation ever comes around again.

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Retail Sales comparison charts from the Carmichael Improvement District report (Carmichael CDP Economic Profile and Retail Study, Sept. 27, 2018)
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