A fiscal deficit for Sutter Creek, albeit a curable one, is predicted to be caused by the proposed Gold Rush Ranch and Golf Course subdivision development.

A city-commissioned analysis suggests that serving the needs of thousands of residents living within the 945-acre subdivision could cost around $3.3 million annually after a fourth and final project phase was complete. Toward offsetting that, the project after buildout would create General Fund revenues of around $1.9 million, according to the study by the Goodwin Group of Sacramento. Consultants recommend a variety of measures to cure a projected annual deficit of around $1.4 million.

An assessment district for the subdivision would almost certainly be necessary, according to consultants. Many cities have moved to offset projected deficits from approved developments through founding so-called Mello-Roos community-facilities districts.

"To address the negative fiscal impact anticipated in each year after buildout, implementation of a community-facilities district is recommended," the study found. "Its ability to finance a wide range of public services and the flexibility inherent in its special tax rules make a Mello-Roos special tax one of the most effective and administratively practical funding alternatives available today."

In a "per-unit" assessment, each Gold Rush Ranch household would owe Sutter Creek some $854 in 2007 dollars annually.

Developer Bill Bunce called a Mello-Roos assessment a "baseline" for cost recovery by the city.

However, city costs incurred during a years'-long development of some 1,330 houses would tend to be "volatile," and so would call for installation of more mitigation measures, said Chris Curry, a senior associate with Goodwin.

"During development in a given year, per-unit cost might not cover the city's expenses," Curry said.

So, Goodwin recommends that an agreement be struck where the developer would advance money to Sutter Creek during such periods to cover expenses.

"There may be periods where master-developer advances are the most sensible," Bunce said.

During a 15-year development duration, revenues from secured property taxes levied on Gold Rush Ranch parcels are projected to begin at $69,021, to reach $366,074 by year five and to reach $762,396 by year 15.

Annual expenses to the Sutter Creek Police Department are predicted to start at $25,620 but to reach $1.12 million by year 15. Expenses to the city public-works and roads divisions are projected at $228,464 in year one, thereafter rising slowly but steadily to $535,012 in year 12, after which they would level off, according to the study.