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Utility User, Franchise and Business Taxes <br />The Report estimates Utility Users Taxes based on household data for phone, electricity, gas, and water expenditures <br />for Project residents and Energy Information Association (EIA) estimates of utility expenditures for retail properties for <br />the Project's retail space. <br />Business Tax estimates are based on annual sales of the retail future retail tenants and business activities of the <br />property management company. These are acceptable methodologies, and the predictions are in line with <br />assumptions made in comparable studies. <br />Fiscal Expenditures <br />The Report applies a standard pro rata fiscal expenditure for the service population of the Project (which is derived <br />from commuting patterns of the City's residents and workforce. Based on estimated demand for City services from <br />people living and working in Santa Ana (with demand adjusted to reflect time spent in the City as it varies between <br />full-time residents and in -commuters), the Report estimates a service population of 1,399 persons for the Project. <br />This methodology is a standard practice and widely accepted for general planning purposes. <br />The Report estimates that City expenditures for the service population would result in an increase of approximately <br />$354,000 for the first full year of buildout, or approximately $253 per person. This estimate is based on the City <br />budget for Fiscal Year 2019-2020 and considers whether expenditures are variable versus fixed costs. The estimate <br />excludes costs such as the City Manager's office and City Attorney's Office but scales up services such as the Police <br />and Fire Departments. AECOM recently conducted a series of fiscal analyses for the City that adopted a similar <br />approach that combined budgetary and demographic analysis with interviews with City staff. The most recent report <br />(March 2020) estimated a pro-rata expenditure of $487 per member of the service population. The AECOM estimate <br />represents an increase of $234 over the Report's estimate, a variance that if applied to the overall estimate has a <br />substantial impact on the Gross Expenditures and Net New Revenues from the Project. Using the same assumptions <br />as the Report in calculating the rolling 25-year impact (Net Present Value at a discount rate of 4 percent), AECOM <br />estimates fiscal expenditures at approximately double of that estimated by the Report. The results of these estimates <br />are shown in Table 5. <br />Table 5: Adjusted Fiscal Expenditure Estimate <br />Pro Rata City Expenditure Estimates <br />Total Annual 25 Year Net <br />Service Expenditures at Recurring (NPV <br />Population Pro Rata Share Buildout at 41/6) <br />Report 1,399 $253 $353,986 $7,026,724 <br />AECOM (2020) 1,399 $487 $681,313 $14,354,016 <br />Source: US Census LEHD, ESRI, Santa Ana 2019-20 Adopted Budget, AECOM <br />This adjusted fiscal expenditure estimated carries over to the estimate of Net New Revenue. As shown in Table 6, <br />estimated adjustments to annual fiscal revenues (sales tax) and expenditures result in net new fiscal revenues of <br />approximately $540,000 compared to $890,000 for the first year of buildout out. As shown in Table 7, estimated <br />adjustments to fiscal revenues and fiscal expenditures result in a net present value estimate of $10.3 million, <br />compared with the Report's estimate of $16 million. <br />Table 6: Adjusted Fiscal Revenue and Expenditure Estimates <br />Adjusted Annual Fiscal Impacts at Project Buildout <br />Sales Tax at First Year Fiscal Expenditures at First Net New Fiscal Revenues at <br />Buildout Year Buildout First Year Buildout <br />Report' $225,610-$353,986 $891,096 <br />AECOM $248,960-$681,313 $540,418 <br />(1) Assumes Sales Tax cash flow analysis from Table 2 in the Report <br />Source: TCG, RSG, AECOM <br />