Orange City Council
May 26, 2026

11661 San Vicente Blvd. Suite 306
Los Angeles, California 90049-5111
310.820.2680-p
www.stanleyrhoffman.com
2375 N Tustin St., Residential Project
Fiscal Impact Analysis
City of Orange
Prepared for:

Melia Homes LLC
9860 Irvine Center Drive
Irvine, CA 92618
Attn: Gavin Reid, Vice President, Land Acquisitions
(949)759-4367
December 12, 2025
SRHA Job #1410
Attachment 5
Stanley R. Hoffman Associates, Inc.

December 12, 2025 i
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Fiscal Impact Analysis
City of Orange

CONTENTS
Tables .................................................................................................................................. ii Figures ................................................................................................................................. iii EXECUTIVE SUMMARY ........................................................................................................... iii CHAPTER 1 INTRODUCTION .................................................................................................... 1

1.1 Background ...................................................................................................................... 1

1.2 Approach .......................................................................................................................... 2

1.3 Organization of the Report .............................................................................................. 3 CHAPTER 2 PROJECT DESCRIPTION .......................................................................................... 4

2.1 Development Description after Buildout ......................................................................... 4

2.2 Assessed Valuation and Property Tax .............................................................................. 6

2.3 Projected Off-Site Retail Sales and Use Tax ..................................................................... 8

2.4 Major One-Time Development Impact Fees .................................................................... 9 CHAPTER 3 FISCAL IMPACTS .................................................................................................. 10

3.1 Proposed Residential General Fund Impacts ................................................................. 10

3.2 Proposed Residential Other City Funds Impacts ............................................................ 12

3.3 No-Project Scenario: Major Revenues Analysis ............................................................. 12 CHAPTER 4 CITY OF ORANGE FISCAL ASSUMPTIONS .............................................................. 14

4.1 City General Assumptions .............................................................................................. 14

4.2 City Revenue Assumptions ............................................................................................. 16

4.3 City Cost Assumptions .................................................................................................... 20 APPENDIX A SUPPORTING FISCAL TABLES ............................................................................. 24 APPENDIX B PROJECT REFERENCES ....................................................................................... 31 Stanley R. Hoffman Associates, Inc.

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TABLES
2-1 Development Description after Buildout ............................................................................. 5 2-2 Assessed Valuation and Property Tax .................................................................................. 6 2-3 Estimated Existing Assessed Valuation ................................................................................ 7 2-4 Off-Site Taxable Retail Sales Tax .......................................................................................... 8 2-5 Summary of Estimated One-Time City Development Impact Fees ...................................... 9 3-1 Summary of Projected Fiscal Impacts after Buildout ......................................................... 10 3-2 General Fund Detailed Projected Recurring Fiscal Impacts ............................................... 11 3-3 Comparison of Major Revenues: No Project Scenario ....................................................... 13 4-1 City Population, Housing and Employment Assumptions ................................................. 15 4-2 Recurring General Fund Revenue Factors ......................................................................... 17 4-3 General Fund Recurring Cost Factors ................................................................................ 20 4-4 Calculation of City General Government Overhead Rate .................................................. 21 A-1 Inflow-Outflow Patterns of Workers Employed in the City ............................................... 24 A-2 General Fund Recurring Revenues .................................................................................... 25 A-3 Current Tax Rate Area (TRA) Allocations ........................................................................... 27 A-4 Estimated Property Tax In Lieu Vehicle License Fee (VLF) Factor ...................................... 27 A-5 Estimated Average Household Income, Single-Family Ownership, Orange County .......... 28 A-6 Calculation of Use Tax Factor ............................................................................................ 28 A-7 Net Costs: Public Works, Comm. Development, and Comm. Services .............................. 29 A-8 Details of Comparative Revenue Performance Evaluation for Non-Residential Uses ....... 30

FIGURES
1 Project Location, 2375 N Tustin Street Residential Project ................................................ iii 2 Comparison of Major Revenue Categories: Residential versus Commercial ...................... iv 1-1 Project Vicinity, 2375 N Tustin Street Residential Project ................................................... 2 2-1 Conceptual Site Plan, 2375 N Tustin Street Residential Project .......................................... 4 Stanley R. Hoffman Associates, Inc.

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EXECUTIVE SUMMARY
This study evaluates the annually recurring fiscal impacts from the proposed Melia Homes for- sale single-family residential project on the City of Orange General Fund. The project is being proposed at 2375 N Tustin Street, which is currently occupied by a vacant Best Buy. The study estimates project-generated General Fund revenues, including taxes and fees, compared against General Fund costs for the provision of City services to project residents. • As shown in Figure 1, the project site is sandwiched between residential uses to the north and south, and therefore, ideally suited for a continuation of these same uses. • The current commercial property has been vacant for two years and has not been able to attract viable lessees despite persistent efforts. Limited street-front access on N Tustin Street, combined wi th a large presence of existing commercial in the vicinity, make the site unattractive for retail uses in an increasingly tough market for brick-and-mortar stores. • The proposed redevelopment to residential use includes 71 single family units comprising 3- and 4-bedroom units in the size r ange of 2,000-2,100 square feet. The project will have a stabilizing effect on the neighborhood through community ties and economic development benefits from new household spending on goods and services captured within the City.

Figure 1
Project Site Location
2375 N Tustin Street Residential Project, City of Orange 1 Project Location, 2375 N Tustin Street Residential Project Source: Melia Homes, LLC; Stanley R. Hoffman Associates, Inc.

Stanley R. Hoffman Associates, Inc.

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• Overall, it is estimated that the propo sed Melia Homes residential project wi ll have a net positive fiscal impact on the City General Fund of $92,600 on an annually recurring basis in constant 2025 dollars, based on $203,400 generated in total gross revenues and $110,800 in City operations and maintenance costs (details in Section 3.1). • The proposed project also generates a total of $2,686,865 in one-time development impact fees, including $1,539,205 for City capital projects, $667,000 in school fees, and $481, 000 in County fees.
• The proposed project is compared with a ‘No Project’ scenario that assumes the continued use of the existing vacant building by viable commercial uses identified for the site, including sports and fitness uses, deep discount sto res, and seasonal stores. To fully lease out the available 40,000 sf vacant space, a combination of these uses might be necessary. • As shown in Figure 2, evaluated for major revenue categories, the limited viable commercial uses identified for the vacant property generate between $44,300 and $61,100 to City General Fund revenues (details in Section 3.3).
• This is significantly lower compared against around $184,000 for the same majo r revenue categories, for like-to-like comparison, generated by the proposed residential project. In fact, even after backing out General Fund costs, the net fiscal surplus of the proposed residential project is higher compared against the gross revenues from the commercial uses. • Overall, from the fiscal and economic perspectives, the propo sed Melia Homes residential project is a better fit for the specific case of 2375 N Tustin Street site compared to the limited viable tenants for the existing vacant commercial property.

Figure 2
Comparison of Major Revenue Categories: Residential versus Commercial 2375 N Tustin Street Residential Project, City of Orange (in Constant 2025 Dollars)
2 Comparison of Major Revenue Categories : Residential versus Commercial Source: Stanley R. Hoffman Associates, Inc.
$183,587
$44,335
$61,136 $54,903
$0
$2 0,0 00
$4 0,0 00
$6 0,0 00
$8 0,0 00
$1 00 ,000
$1 20 ,000
$1 40 ,000
$1 60 ,000
$1 80 ,000
$2 00 ,000
Proposed Residential Gyms Discount Stores Seasonal Stores Major revenue categories included in
this graph are Property Tax, Property
Tax In-lieu of Vehicle License Fee, On-
site and Off-site Sales and Use Tax, and
Business License Fees.

Stanley R. Hoffman Associates, Inc.

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Fiscal Impact Analysis
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CHAPTER 1

INTRODUCTION
This report presents the fiscal impact analysis for the proposed 2375 N Tustin Street Residential Project. The fiscal impact analysis projects recurring public revenues and costs to the City of Orange General Fund assuming full development of the project. Major one-time development impact fees are also projected for full buildout of the project.

1.1 Background
The proposed project includes 71 single family residential units for-sale on a 4.23-acre site (184,259 square feet) (APN 372- 642- 31) located in the central portion of the City of Orange between the Costa Mesa Freeway (SR 55) and N Tustin Ave, as shown in Figure 1. Regional access to the project is provided by the Costa Mesa Freeway to the west and the SR-91 Freeway to the north of the City.

The project site currently includes a vacant commercial property, formerly occupied by Best Buy, and is zoned as ‘Limited Business Tustin Redevelopment Project Area (C-TR)’, as per an overlay update made by the City Council in 2021, which accommodates commercial development. The existing commercial property has been vacant for two years and has not been able to attract viable lessees despite persistent efforts. This proposed redevelopment project for the site is a new for-sale single family residential development, which will replace the existing vacant commercial, for a total of 71 units, including 3-bedroom units (Plans 1, 2, 4 and 5) and 4-bedroom units (Plan 3).

The focus of the fiscal analysis is the ongoing operations and maintenance costs to the City of Orange as provided through the General Fund. General Fund revenues include property, sales and use taxes and other taxes; franchise fees; fines and forfeitures; licenses and permits; charges for current services; revenues from other agencies; use of money and property; and other miscellaneous revenues. The ongoing range of services that the City of Orange provides includes police and fire protection; planning; public works, including engineering, road maintenance and park maintenance; community services; library services; and general government. Also projected are special fund revenues, including the Gas Tax Fund, which receives revenues primarily from gasoline taxes collected by the Federal and State governments, and Prop 172 Public Safety and Measure M2 Transportation funds, which are 1/2 cent sales tax measures earmarked for public safety and transportation projects, respectively.

Stanley R. Hoffman Associates, Inc.

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Figure 1-1
Project Vicinity
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
1-1 Project Vicinity, 2375 N Tustin Street Residential Project Source: Stanley R. Hoffman Associates, Inc.

1.2 Approach
The fiscal analysis and the estimated major one -time development impact fees associated with the 2375 N Tustin Street Residential Project are based on data and assumptions from the following sources:
• City of Orange revenue and cost factors are estimated based on the City of Orange, Fiscal Year 2025-26 Adopted Budget.
• The fiscal methodology is based on previous fiscal analyses prepared by Stanley R. Hoffman Associates, as presented in Chapter 4.
• Project information was obtained from the project developer, Melia Homes LLC. • Cost and revenue factor s are projected In Constant 2025 dollars and are not adjusted for possible inflation.

N Tustin Street
Costa Mesa Fwy

Vacant
Best Buy
Stanley R. Hoffman Associates, Inc.

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1.3 Organization of the Report
Chapter 2 presents the detailed project description for the 2375 N Tustin Street Residential Project assuming full buildout. Chapter 3 consists of the detailed fiscal impacts from the project on the City’s General Fund revenues and expenditures, and one-time development fees. Chapter 4 describes the assumptions for the fiscal analysis. Appendix A presents supporting fiscal assumption tables, and a list of project references appears in Appendix B.

Stanley R. Hoffman Associates, Inc.

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CHAPTER 2

PROJECT DESCRIPTION
This chapter presents the detailed development description for the proposed 2375 N Tustin Street Residential Project assuming full buildout of the project.

2.1 Development Description after Buildout
The proposed redevelopment project for the site is a new for-sale single family residential development, which will replace the existing vacant commercial, for a total of 71 units, including 3-bedroom units (Plans 1, 2,4 and 5) and 4-bedroom units (Plan 3), as shown in Figure 2-1.

As shown in Table 2-1, the project includes 10 Plan 1 units of size 2,0 08 square feet, 16 Plan 2 units of size 2,014 square feet, 13 Plan 4 of size 2,086 square feet, and 18 Plan 5 units of size 2,117 square feet adding up to a total of 57 3-bedroom units, and 14 Plan 3 4-bedroom units of size 2,057 square feet. Total residential population for the proposed project is estimated at 202 persons, which i s calculated by applying a ratio of 2.84 persons per household (PPH) for the City of Orange obtained from the California Department of Finance (DOF) for 2025, as shown in Table 2-1.

Figure 2-1
Conceptual Site Plan
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
2-1 Conceptual Site Plan, 2375 N Tustin Street Residential Project Source: Melia Homes, LLC

Stanley R. Hoffman Associates, Inc.

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Table 2-1
Development Description after Buildout
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
2-1 Development Description after Buildout
Proposed Project
Residential
Buildout
A. GROSS ACRES 4.23
B. DEVELOPMENT
Residential
Units
Plan 1 - 3 BR (2,008 sf) 10
Plan 2 - 3 BR (2,014 sf) 16
Plan 3 - 4 BR (2,026 sf) 14
Plan 4 - 3 BR (2,086 sf) 13
Plan 5 - 3 BR (2,117 sf) 18
Total Units 71
Estimated Residential Population 1 (@2.84 PPH)
Plan 1 - 3 BR (2,008 sf) 28
Plan 2 - 3 BR (2,014 sf) 45
Plan 3 - 4 BR (2,026 sf) 40
Plan 4 - 3 BR (2,086 sf) 37
Plan 5 - 3 BR (2,117 sf) 51
Total Residential Population 202
Service Population 2 202
Average Price
C. ASSESSED VALUATION per Unit 3 Total Valuation
Plan 1 - 3 BR (2,008 sf) $1,139,000 $11,390,000
Plan 2 - 3 BR (2,014 sf) $1,154,000 $18,464,000
Plan 3 - 4 BR (2,026 sf) $1,154,000 $16,156,000
Plan 4 - 3 BR (2,086 sf) $1,169,000 $15,197,000
Plan 5 - 3 BR (2,117 sf) $1,169,000 $21,042,000
$82,249,000
$22,327,825
$59,921,175
$151,225
D. PROJECTED OFF-SITE SALES AND USE TAX TO CITY 7 $39,052

1. Based on city-wide household size obtained from California Department of Finance, 1/1/2025

2. Defined as 100 percent of the residential population, and 50% employment where applicable.

3. Average unit prices provided by Melia Homes are best estimates, including premiums and upgrades.

4. Project valuation estimated based on unit price provided by Melia Homes LLC.

5. Obtained from the Orange County Assessor parcel information system for the project site.

6. Property tax calculation discussed in Section 2.2.

7. Off-site sales and use tax from project houesehold spending discussed in Section 2.3.

Sources: Stanley R. Hoffman Associates, Inc.

Melia Homes LLC
California Department of Finance (DOF),E-5 City/County Population and Housing Estimates Orange County Assessor, Parcel Information System, ParcelQuest Projected Property Tax ( incl. PTVLF) to City General Fund 6 Total Project Valuation 4
Less Existing Valuation 5
Net New Valuation
Stanley R. Hoffman Associates, Inc.

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2.2 Assessed Valuation and Property Tax
Assessed Valuation
As shown in Table 2-1 and Table 2-2, total valuation for the Project is estimated at about $82.25 million, based on information provided by the project proponent, Melia Homes, LLC.

As shown in the following Table 2-3 the existing valuation of the project site is $22.33 million.

When this existing value is subtracted from estimated total valuation, net new valuation for the proposed redevelopment is estimated at about $59.92 million. While the total valuation at buildout of $82.25 million projects the basic 1 percent annual property tax related revenues to the General Fund, the net new valuation of $59.92 million is used to calculate the Property Tax In-Lieu of the Motor Vehicle License Fee (PTVLF) generated from the project at buildout.

Table 2-2
Assessed Valuation and Property Tax
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
2-2 Assessed Valuation and Property Tax
Proposed Project
Residential
Category Buildout
A. ASSESSED VALUATION
Total Project Valuation 1 $82,249,000
B. PROJECTED PROPERTY TAX
Annual 1 Percent Property Tax Levy $822,490
(@ 1% of Valuation)
Annual General Fund Property Tax 2 $111,677
(@ 13.6% of 1 Percent Levy)
C. PROJECTED PROPERTY TAX IN LIEU VLF
Net New Annual Valuation for Property Tax In Lieu VLF $59,921,175 Projected Property Tax In Lieu VLF (@ $660 per $1,000,000 assessed valuation) 3 $39,548 D. TOTAL PROJECTED PROPERTY TAXES INCL. PTVLF $151,225

1. Valuation is provided by Melia Homes, LLC.

2. The total City's share of the basic one percent property tax levy is 13.6 percent, as shown in Appendix A.

3. PTVLF factor of $660 per million new valuation is calculated from historical data, as shown in Appendix A.

Sources: Stanley R. Hoffman Associates, Inc.

Melia Homes, LLC
Stanley R. Hoffman Associates, Inc.

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Table 2-3
Estimated Existing Assessed Valuation
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
2-3 Estimated Existing Assessed Valuation
Projected Property Tax
The City General Fund will receive property tax at about 13.6 percent of the basic one percent property tax levy on assessed valuation for the Tax Rate Area 008-124, where the project parcel is located. As shown in Panel B of Table 2-2, for the proposed project, annual property tax to the City General Fund is projected at $111,677 at buildout.

Projected Property Tax In lieu of Vehicle License Fees (PTVLF) The City General Fund receives property tax in lieu of VLF (PTVLF) based on the increase in assessed valuation in the City. As shown in Appendix Table A-4, historical trend data indicates that the PTVLF in the City increases at about $660 per million dollars of assessed valuation (AV).

As shown in Panel C of Table 2-2, annual PTVLF after buildout of 2375 N Tustin Street Residential Project is projected at $39,548, based on the estimated net new project valuation of $59.92 million.

Taken together, the City share of the basic 1 percent property tax levy on the overall new valuation for the project and the PYVLF from net new valuation (increment) for the project, results in $151,225 in overall annually recurring property taxes accruing to the City General Fund, as shown in Panel D of Table 2-2.
2025 Assessed Valuation
Land Improvement Personal Real Estate Tax Rate
Parcel Number Value Value Property Exemptions Total 1
Area
372-642-36 2 16,597,293 5,730,532 0 0 $22,327,825 008-124 Total $16,597,293 $5,730,532 $0 $0 $22,327,825

1. The total assessed valuation was calculated by subtracting the total real estate exemptions from the sum of the land value, improvement value, and personal property.

2. The latest assessment data for the parcel site in the Orange County Assessor Parcel information system is listed under the previous parcel number prior to a recent tract map revision with minor changes to internal lot lines.

Sources: Stanley R. Hoffman Associates, Inc.

Orange County, Auditor-Controller/Treasure/Tax Collector, 2025 Roll Values Stanley R. Hoffman Associates, Inc.

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2.3 Projected Off-Site Retail Sales and Use Tax
The City General Fund will also receive retail sales and use tax generated by the off-site spending activities associated with project households for an estimated total of $32,362, as shown in Table 2-4. The total sales and use tax accruing to the City General Fund are calculated from an estimated total of $2.73 million in taxable sales in off-site spending of project households at a 50 percent capture rate within the City. This generates $27,264 in annual retail sales tax at 1 percent of taxable sales (Bradley-Burns sales tax), which when factored for use tax factor for the City at

18.7 percent of sales tax results in total annual sales and use tax of $32,362 accruing to the City General Fund. Household expenditures are based on an estimated average household income of $240,000 for single-family ownership households in Orange County residing in units constructed since 2020, obtained from the American Community Survey, 2019 -2023 5-year estimates, as shown in Appendix Table A-5.

Over and above the Bradley-Burns 1 percent sales and use tax accruing to the City’s General Fund, taxable sales associated with project household spending within the City will also result in revenues accruing to the City’s special funds, including the Prop 172 Public Safety ½ cent sales tax and the Measure M2 ½ cent sales tax, as discussed in Chapter 3.

Table 2-4
Off-Site Taxable Retail Sales Tax
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
2-4 Off-Site Taxable Retail Sales Tax
Proposed Project
Residential
Category Buildout
Annual Off-Site Residential Retail Taxable Sales
Estimated Average Household Income of Project Households 1 $240,000 Total Project Household Income (71 Units) $17,040,000
Retail Taxable Sales (@ 32% of total household income) 2 $5,452,800 Projected Off-Site Retail Taxable Sales Captured in City at 50% Share $2,726,400 Total Annual On-Site and Off-Site Taxable Sales
Sales Tax (@ 1% of taxable sales) $27,264
Use Tax (@ 18.7% of sales tax) 3 5,098
Projected Residential Sales and Use Tax Captured in Orange $32,362

1. Project average household income estimated from data obtained from the American Community Survey for ownership households residing in 3 and 4 bedroom single-family units built after the year 2020 in Orange County, as shown in Appendix A.

2. Residential taxable purchases are estimated at 32 percent of household income, based on Consumer Expenditure Survey data. The fiscal analysis assumes the City will capture 50 percent of the taxable retail purchases from new households.

3. The calculation of the use tax factor is included in Appendix A.

Sources: Stanley R. Hoffman Associates, Inc.

American Community Survey, 2023 5-yr Estimates, Public Use Microdata Sample (PUMS) Bureau of Labor Statistics, Consumer Expenditure Survey Stanley R. Hoffman Associates, Inc.

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2.4 Major One-Time Development Impact Fees
Development fees are one-time fees paid by the developer to offset the additional off-site public capital costs of new development, and are estimated based on the City of Orange, Development Fees, Updated July 1, 2025. Processing fees, such as project permits and plan check fees that are charged to offset public processing costs are not estimated in this analysis.

As shown in Table 2-5, the total major one-time fees collected from the Project towards City public capital expenditures, including parks, library, fire, police and transportation facilities are projected at $1.54 million. An additional $666 thousand are collected for school facilities, combining to a total of $2.21 million in City fees. Including $481 thousand charged by the Orange County Sanitation District, total one-time fees from the project are projected at $2.69 million.

These one-time fees are provided here for information only and subject to final evaluations and agreement between the project proponent and the City.

Table 2-5
Summary of Estimated One-Time City Development Impact Fees 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
2-5 Summary of Estimated One -Time City Development Impact Fees

FEE CATEGORIES
Estimated
Amount
City of Orange, One-time Fees
Park Dedication and In Lieu Fees (Quimby) $16,615.69 per DU 71 DUs $1,179,714 Library Facilities DIF $1,370.44 per DU 71 DUs $97,301
Fire Protection Facility Fee $1,467.00 per DU 71 DUs $104,157 Police Facility Fee $727.04 per DU 71 DUs $51,620
Transportation System Improvement Program (TSIP) $1,498.78 per DU 71 DUs $106,413 $1,539,205
School Development Fee $4.57 per SF 145,892 SF $666,726 $2,205,932
County, One-time Fees
Orange County Sanitation District Fee
4 Bedroom Units $7,770.00 per DU 14 DUs $108,780
3 Bedroom Units $6,529.00 per DU 57 DUs $372,153
$480,933
$480,933
$2,686,865
Sources: Stanley R. Hoffman Associates, Inc.

Community Development Department, Building Division, 2025 Total One-Time Fees
Basis
Proposed
Development
City One-Time Fees less School Subtotal
OC Sanitation District Subtotal
County One-Time Fees Total
City Collected One-Time Fees Total
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CHAPTER 3

FISCAL IMPACTS
This chapter presents the fiscal impact analysis details for the 2375 N Tustin Street Residential Project on the City General Fund after buildout for operations and maintenance. Fiscal impacts are shown In Constant 2025 dollars with no adjustment for possible future inflation. The fiscal assumptions for the analysis are presented in Chapter 4.

As shown in summary Table 3-1, a recurring annual surplus of $92,602 is projected to the City General Fund from the proposed residential project at a revenue-to-cost ratio of 1.84. Major one- time fees are estimated at about $2.69 million for the proposed project.

Table 3-1
Summary of Projected Annual Fiscal Impacts after Buildout 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
3-1 Summary of Projected Fiscal Impacts after Buildout

3.1 Proposed Residential General Fund Impacts
Detailed projected annually recurring fiscal impacts to the City General Fund after buildout of the project are included in Table 3-2. Based on projected annually recurring revenues of $203,372 and projected annually recurring costs of $110,770, an annually recurring surplus of $92,602 is projected to the City General Fund after buildout.

Proposed Project
Residential
Category Buildout
A. GENERAL FUND IMPACTS (FUND 100)
Annual Recurring Revenues $203,372
Annual Recurring Costs $110,770
Annual Recurring Surplus $92,602
Revenue/Cost Ratio 1.84
B. PROJECTED SPECIAL FUND REVENUES
Fund 270: Gas Tax $6,135
Fund 120: Proposition 172 - Public Safety - 1/2 Cent Sales Tax $1,013 Fund 263: Measure M2 - Transportation - 1/2 Cent Sales Tax $2,842 C. ESTIMATED MAJOR ONE-TIME FEES $2,686,865
Sources: Stanley R. Hoffman Associates, Inc.

Stanley R. Hoffman Associates, Inc.

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Table 3-2
Detailed General Fund Annual Recurring Impacts: Proposed Project 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
3-2 General Fund Detailed Projected Recurring Fiscal Impacts Proposed Project
Residential Percent
City of Orange General Fund (Fund 100) Buildout of Buildout Recurring Revenues 1,3
Property tax (General Fund) $111,677 54.9%
Property Transfer Tax 1,357 0.7%
Off-site retail sales and use tax 32,362 15.9%
In lieu property tax (VLF) 39,548 19.4%
Franchise Fees: Gas and Electric 2,093 1.0%
Franchise Fees: Cable 1,424 0.7%
Franchise Fees: Other 174 0.1%
Fines and forfeitures 2,731 1.3%
Recreation and Current Services 5,044 2.5%
Other revenues 287 0.1%
Transfers in 4,052 2.0%
Interest on invested revenues 2,624 1.3%
Total Projected Revenues $203,372 100.0%
Recurring Costs 2,3
Police Protection $47,060 42.5%
Fire Protection $30,836 27.8%
Animal Control Services (County Contract) 2,007 1.8%
Library 5,902 5.3%
Public Works 2,975 2.7%
Community Development 922 0.8%
Citywide Community Services - Rec, Park, Human 10,482 9.5% General Government (Overhead) 5,310 4.8%
Subtotal Recurring Costs $105,495 95.2%
Contingency/reserves (@ 5% of recurring costs) $5,275 4.8% Total Recurring Costs $110,770 100.0%
Annual Net Recurring Surplus $92,602
Revenue/Cost Ratio 1.84
PROJECTED SPECIAL FUND REVENUES 4
Fund 270: Gas Tax - Street Maintenance $6,135
Fund 120: Proposition 172 - Public Safety - 1/2 Cent Sales Tax $1,013 Fund 263: Measure M2 - Transportation - 1/2 Cent Sales Tax $2,842

1. Recurring project-related General Fund revenues are based on revenue projection factors shown in Table 4-2.

2. Recurring project-related General Fund costs are based on expenditure projection factors shown in Table 4-3.

3. Revenue and cost factors are applied to project development quantities shown in Table 2.1.

4. Special fund revenues are not part of the General Fund, and have been projected here based on factors shown in Table 4-2. These funds are earmarked for specific uses.

Source: Stanley R. Hoffman Associates, Inc.

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Proposed Project: Major Recurring City General Fund Revenues and Costs Projected Recurring Revenues. As shown in Table 3-2, the major recurring revenues for the General Fund after buildout of the proposed 2375 N Tustin Street Residential Project are property tax, property tax in lieu of vehicle license fees (PTVLF), and total retail sales and use tax. These three revenues represent about 90 percent of total recurring revenues after project buildout.

Revenue factors are discussed in Table 4-2.

Projected Recurring Costs. As shown in Table 3-2, major City General Fund recurring costs after buildout are Police and Fire services. These two recurring costs represent about 70 percent of all recurring costs after buildout. Other major cost categories include Community Services and Library, which taken together constitute a share of about 15 percent of total General Fund expenditures. Cost factors are reported in Table 4-3.

3.2 Proposed Residential Other City Funds Impacts
Also projected are revenues to certain special funds that are associated directly with project population and project off-site taxable sales. These special fund revenues are over and above the General Fund revenues and are dedicated toward specific earmarked uses as described below.

Gas Tax Revenues (Fund 270). As shown in Table 3-2, projected Gas Tax revenues associated with population growth from the development is estimated at $6,135. These funds are dedicated toward street and roadways maintenance and projects identified by the City.

Proposition 172 (Fund 120) – Public Protection 1/2 Cent Sales Tax. As shown in Table 3-2, projected Prop 172 Public Projection revenues associated with off-site taxable sales growth from project households is estimated at $1,013. These funds are dedicated toward public safety, including police, fire and emergency needs.

Measure M2 (Fund 263) – Transportation 1/2 Cent Sales Tax. As shown in Table 3-2, projected Measure M2 revenues associated with off-site taxable sales growth from project households is estimated at $2, 842. M2 funds are earmarked for City transportation-related projects in coordination with the Orange County Transportation Authority (OCTA).

3.3 No-Project Scenario: Major Revenues Analysis
A ‘No Project’ scenario is evaluated for major City revenue categories for purposes of comparison against the proposed residential project, including property tax, PTVLF, sales and use tax, and business lice nse tax. The ‘No project’ scenario assumes continued use of the existing vacant building with potential new tenants for the estimated 40,000 square feet of commercial space.

This comparison is strictly a public revenue analysis and not a comprehensive fiscal impact analysis, which would also include public costs.

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As noted, the building was previously occupied by Best Buy, which failed at this location and is not a viable option any longer, according to the property owner of 2375 N Tustin Street.

Furthermore, it was indicated that interest from alternative tenants for the current property is minimal, despite persistent attempts to identify and recruit, due to its location and lack of street- front access on N Tustin Street. Tenants likely to occupy this space, with a medium level of confidence include sports and fitness uses, and seasonal or deep discount retail stores (dollar stores). To fully lease out the available vacant space, a combination of these uses might be necessary. Major revenues to the City General Fund generated for each operation (business) is summarized in Table 3-3. Details are provided in Appendix Table A-7. The assumptions made here represent best case scenarios, and likely outcomes might be significantly lower.

As shown in Table 3-3, an evaluation of major City revenue categories indicates that the limited viable commercial uses identified for the vacant property generate between $44, 300 and $61,100 to City General Fund revenues.

This is significantly lower compared against $184,000 from the proposed Melia Homes residential project for the same revenue categories, shown previously in Table 3-2. In fact, even after backing out General Fund costs, the net fiscal surplus for the proposed project ($92,602) is hig her compared against the gross revenues generated by the evaluated ‘No-Project’ commercial uses.

Table 3-3
Comparative Major Revenues from Hypothetical Uses: No Project Scenario 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
3-3 Comparison of Major Revenues: No Project Scenario
Gyms Discount Stores
Seasonal Stores
(Annualized)
Property Reuse Assumption Renovation Minimal Change Minimal Change Floor Size (sf) Assumption 40,000 10,000 10,000
New Total Assesed Valuation $27,127,825 $22,577,825 $22,427,825 Operations
Gross Revenues $3,000,000 $2,500,000 $2,000,000
Taxable Retail Sales $300,000 $2,500,000 $2,000,000
Number of Employees 10 22 17
Major Public Revenues
Property Tax City Share: 13.6% of 1% $36,894 $30,706 $30,502 Property Tax In-Lieu of VLF $3,168 $165 $66
Sales and Use Tax Total $3,558 $29,650 $23,720
Business License Fees $715 $615 $615
TOTAL ESTIMATED MAJOR REVENUES $44,335 $61,136 $54,903
Source: Stanley R. Hoffman Associates, Inc.

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CHAPTER 4

CITY OF ORANGE FISCAL ASSUMPTIONS
This chapter presents the revenue and cost assumptions for the fiscal analysis of the proposed 2375 N Tustin Street Residential Project to Orange. Fiscal impacts are projected for the City’s operating General Fund. All projections are In Constant 2025 dollars with no adjustment for future inflation.

The general City demographic and economic assumptions used for calculating fiscal factors are first presented. The assumptions for projecting recurring revenues are then presented followed by the assumptions for projecting recurring costs. The City’s revenues and costs as presented in the City of Orange, Fiscal Year 2025/26 Adopted Budget and additional budget details provided by City staff are the sources for calculating fiscal factors.

4.1 City General Assumptions
Fiscal impacts that are not based on valuation and taxable sales are generally projected based on a per capita, per employee, or per service population basis at City average rates. Some fiscal impacts are projected based on other factors, such as per developed acre. General fund revenue and cost factors are estimated by dividing the Fiscal Year (FY) 2025/26 Adopted budget categories by the City’s resident population, employment, total service population or developed acre , as appropriate. Table 4-1 provides the City’s general assumptions for this fiscal analysis.

Population
City of Orange’s total population of 139,724 is based on the California Department of Finance (DOF) estimate as of January 1, 2025. The City population estimate is used for developing factors that project certain revenues and costs on a per capita basis.

Employment
The City employment estimate of 128,889 for the year 2025 represents an interpolation of the years 2019 and 2035 forecasts for Orange City from the Southern California Association of Governments (SCAG) Adopted 2024 Regional Transportation Plan Growth Forecast. As shown in Appendix Table A-1 according to the latest Bureau of Census Longitudinal Employer-Household Survey for 2022, about 93 percent of workers employed in the City (or 119,697 of the 2025 jobs) commute from outside the City. A share of 50 percent of this non -resident employment is used for estimating the City’s service population for certain revenues and costs, as explained next.

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Table 4-1
City Population, Housing and Employment Assumptions, 2025 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
4-1 City Population, Housing and Employment Assumptions Assumption Description
2025 Population and Housing 1
132,804 Household Population
6,920 Group Quarters Population
139,724 Total Population
48,301 Total Housing Units
46,745 Occupied Housing Units (Households)

2.84 Persons per Household
2025 Employment 2
128,889 Estimated Total Workers Employed in City
times
93% Estimated Share of Workers from Outside the City 3
equals
119,697 Estimated Workers from Outside the City 3
2025 Service Population
139,724 Total Population
plus
59,849 50% Share of Workers from Outside City 4
equals
199,573 Estimated Total Service Population
City Developed Acres
10,315 Estimated total City developed acres 5

1. Population and housing estimates are from the California Department of Finance (DOF) for January 1, 2025.

2. The total employment estimate is for 2025 based on an interpolation of the 2019 and 2035 estimates from the Southern California Association of Governments (SCAG), RTP Adopted 2024 Growth Forecast.

3. To avoid double-counting of individuals, the 2025 total estimated City employment is factored by 93 percent based on the Census Bureau's LEHD Survey estimates of the share of employed workers who live outside the City.

4. Reflects the reduced impact on City services from workers due to their less than around the clock presence in the City.

5. Estimated developed acres in the City are provided by City GIS staff.

Sources: Stanley R. Hoffman Associates, Inc.

State of California, Department of Finance, E-5 Population and Housing Estimates for Cities, Counties and the State, January 1, 2020-2025, Sacramento, California, May 2025.

Southern California Association of Governments (SCAG), Adopted Regional Transportation Plan (RTP), 2024 U.S. Census Bureau, Longitudinal Employer-Household Dynamics (LEHD) Program, OnTheMap 2022 City of Orange, Community Development Department
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Service Population
Fiscal factors that are impacted by population and employment are estimated by allocating total budgeted revenues or costs to the estimated service population. Service population includes the City’s resident population (139,724) plus 50 percent share of the estimated employment commuting-in to the City (59,849). As shown in Table 4-1, the service population for the City is estimated at 199,573, which is used for certain revenue and cost categories, as discussed in the following sections.

Estimated Total City Developed Acres
Some costs, such as public works and community development, are projected on a per-developed acre basis. As shown in Table 4-1, developed acres within the City are estimated at 10,315 acres, as provided by City Geographic Information System staff.

4.2 City Revenue Assumptions
City General Fund
The General Fund revenue factors for projecting annually recurring revenues in the fiscal analysis are summarized in Table 4-2. These revenue factors are based on the City’s FY 2025/26 budget revenues detailed in Appendix Table A-2 and the City’s population, employment, housing unit, and service population estimates that are presented in Table 4-1.

As shown in Table 4-2, projected General Fund revenues include property tax; property transfer tax; property tax in lieu of vehicle license fees (VLF); sales and use tax; franchise fees; fines and forfeitures; interest on investments; charges for services; other revenue; transfers to the General Fund; and recreation and other fees and charges. Because there is no commercial development being proposed for the new project, revenues generated only by employment/business growth are not projected, such as the business license tax.

Property Tax. Property tax revenues are projected based on the City’s share of the one percent property tax levy on the estimated assessed valuation for the 2375 N Tustin Street Residential Project proposed development. The current allocation rates of the one percent property tax for tax rate area (TRA) 008-124 in which the project is located are presented in Appendix Table A-3.

The City’s total allocation of the one percent property tax levy is 13.6 percent.

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Table 4-2
Recurring General Fund Revenue Factors
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
4-2 Recurring General Fund Revenue Factors
Fiscal Year
2025-26
Adopted
Revenue Source Budget Projection Basis 1
GENERAL FUND (Fund 100) 2
Tax Revenue
General Fund Property Tax 3
$39,648,536 Case Study: Project Valuation 13.58% City general share of 1% levy Property Transfer Tax $552,567 Property Turnover and 3.0% Residential turnover rate Valuation Assumptions $0.55 per $1,000 assessed valuation Property Tax In Lieu Vehicle License Fees 3
$19,016,506 Case Study $660 per $1,000,000 assessed valuation Sales and Use Tax 4
$50,113,960 Project HH Off-Site Taxable Exp. 1% of taxable sales Use Tax Factor Use Tax as Percent
of Sales Tax 18.7% of sales tax
Franchise Fees:

Gas and Electric $2,067,500 Service Population = 199,573 $10.36 per service population Cable $968,500 Housing Units = 48,301 $20.05 per unit
Other $171,364 Service Population = 199,573 $0.86 per service population Fines and Forfeitures $2,697,576 Service Population = 199,573 $13.52 per service population Interest on Investments $1,607,697 Percent of Projected Recurring 1.31% of projected General Fund recurring Revenues of $123,012,395 non-interest revenues
Charges for Current Services
Recreation and Other Current Services 5
$3,489,059 Population = 139,724 $24.97 per capita
Other Revenue $282,847 Service Population = 199,573 $1.42 per service population Transfers In $4,003,980 Service Population = 199,573 $20.06 per service population General Fund Total (Projected) $124,620,092
SPECIAL FUNDS 6
Gas Tax Fund (Fund 270) $4,243,665 Population = 139,724 $30.37 per capita Proposition 172 - 1/2 Cent Sales Tax (Fund 120) $1,568,381 $31.30 per $1,000 sales and use tax Measure M2 - 1/2 Cent Sales Tax (Fund 263) $4,400,436 $87.81 per $1,000 sales and use tax

1. For fiscal factors that are based on population and employment, an estimated service population factor is applied, which represents the total population plus estimated employment that commutes into the City.

2. Detailed General Fund revenues are included in the Appendix section.

3. Property tax and property tax in lieu of vehicle license fee (PTVLF) based on project-specific valuation assumptions, as discussed in Chapter 2.

4. Sales and use tax based on specific project-based estimations on household income and spending, as discussed in Chapter 2.

5. Recreation and Other current service changes are for background City resident services,and do not include development-related one time fees and charges, as shown Appendix Table A-2.

6. Special fund factors are based on total gross revenue amounts by fund reported in the City budget, and do not net out any fund specific activity costs.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year 2025/26 Adopted Budget
State of California, Department of Finance, E-5 Population and Housing Estimates for Cities, Counties and the State, January 1, 2020-2025, Sacramento, California, May 2025.

Southern California Association of Governments (SCAG), Adopted Regional Transportation Plan (RTP), 2024.

Projection Factor 1
Per $1,000 of Sales and Use Tax
Per $1,000 of Sales and Use Tax
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Property Tax In Lieu Vehicle License Fees (PTVLF). Cities and counties began receiving additional property tax revenue to replace vehicle license fee ( PTVLF) revenue that was lowered when the state reduced the vehicle license tax in 2004. This property tax in lieu of VLF is projected to grow with the change in the citywide gross assessed valuation (AV) of taxable property from the prior year. Property tax in lieu of VLF revenue is allocated in addition to other property tax apportionments. Property tax in lieu of VLF in the City is projected to increase at an average of $660 per million dollars of AV (see Appendix Table A-4). This factor is based on the relationship between City AV and the PTVLF received by the City over the last 5 years.

Sales and Use Tax. As part of the total sales tax levied by the State, all cities and counties in the State generally receive a basic one percent (1.0 percent) Bradley-Burns sales tax and have the option to levy additional sales taxes under certain circumstances. In addition to sales tax revenue, the City receives revenues from use tax, which is levied on shipments into the state and on construction materials for new residential and non-residential development not allocated to a situs location. Use tax is allocated by the California Department of Taxation and Fee Administration (CDTFA) to counties and cities based on each jurisdiction's proportion of countywide and statewide direct (point-of-sales) taxable sales.

Use tax revenues to the City of Orange are estimated at an additional 18.7 percent of point-of- sale sales tax, as shown in Appendix Table A-6. Calendar Year 2024 sales tax data obtained from the CDTFA estimates that $9.09 million of the total sales and use tax revenues were made from levies designated as use tax and the remaining $48.57 million of the sales and use tax was point- of-sale sales tax. Therefore, use tax revenues to the City of Orange are estimated at an additional

18.7 percent of point-of-sale sales tax. Sales and use tax are projected for off-site retail spending of project households.

Franchise Fees. The City receives franchise fees from gas and electric; cable and other services.

Gas and Electric Franchise Fees. As shown in Table 4-2, gas and electric franchise fees are projected at $10.36 per service population based on the City budget revenues of $2,067,500 and the City service population estimate of 199,573.

Cable Franchise Fees. Projected at $20.05 per unit based on $968,500 of revenues and 48,301 residential units in the City.

Other Franchise Fees. Projected at $0.86 per unit based on $171,364 of revenues and 199,573 service population in the City. These are shown in the City budget to include waste remediation activities.

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Fines and Forfeitures. Fines and forfeitures are projected at $ 13.52 per service population, based on total revenues of $2,697,576 and the City service population estimate of 199,573 as shown in Table 4-2. Revenues in this category include vehicle code fines, parking citations, vehicle release fees, citation fees and other general ordinance fines.

Interest on Investments. These revenues are projected at 1.31 percent of projected recurring revenues based on budget interest on investments of $ 1,607,697 as a share of projected recurring non-interest revenues of $123.01 million
Charges for Current Services. This category includes charges and fees for a variety of background population-based services such as charges for recreation, processing fees etc. which increase based on population growth . These do not include one -time processing fees associated with development activities. These revenues are estimated at $24.97 per capita resident.

Other Revenue. As shown in Table 4-2, these revenues are projected at $1.42 per service population based on contributions, reimbursement and other revenues of $282,847 and the City’s estimated service population of 199,573.

Transfers In . Transfers to the City General Fund from all other funds, excluding General Obligation funds, are projected at $20.06 per service population based on City budget revenues of $4.0 million and the City’s estimated service population estimate of 199,573.

Special Fund Revenues
Special funds are also projected here to identify revenue impacts over and above the General Fund, which however might be earmarked for specific uses. Special fund factors here are based on total gross revenue amounts by fund reported in the City budget, and do not net out any fund specific activity costs.

State Gasoline Tax. State Gasoline tax accrues to the Gas Tax Fund based on population growth.

Gas tax revenue factor of $30.37 per capita is based on $4.24 million for FY 2025/26 and city population of 139,274. These revenues are earmarked for street and roadways projects.

Proposition 172 (Half Cent Sales Tax). These revenues are projected at $31.30 per $1,000 of sales and use tax based on City estimated FY 2025/26 Proposition 172 revenues of $1.57 million and the City’s total sales and use tax estimate of $ 50.11 million, and are earmarked for public safety needs including police, fire and emergency.

Measure M2 (Half Cent Sales Tax). As shown in Table 4-2, these revenues are projected at $87.81 per $1,000 of sales and use tax City estimated FY 2025/26 Proposition 172 revenues of $1,568,381 and the City’s total sales and use tax estimate of $50.11 million earmarked for transportation projects.

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4.3 City Cost Assumptions
The cost factors that are used in preparing the fiscal analysis for the 2375 N Tustin Street Residential Project are presented in Table 4-3. These factors are based on the adopted expenditures in the City’s FY 202 5-26 Adopted Budget and the City’s population, service population and developed acres estimates that are presented in Table 4-1.

General Fund
Projected General Fund expenditures include general government, or overhead functions, and the following non-general government services of police and fire services, library, public works, community development, and community and recreation services. Animal services, while included in the City budget under general government as a contract with Orange County Animal Care, is treated as non-general departmental cost item. Also shown are contingency costs built into the overall cost projections, based on prior studies. In discussion with the City, a marginal rate of 75 percent has been applied across all cost categories, except for General Government, which is projected at a 60 percent marginal rate.

Table 4-3
General Fund Recurring Cost Factors
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
4-3 General Fund Recurring Cost Factors
FY 2025/26 Adopted Budget
Cost Category Total Adjusted
A. GENERAL FUND (Fund 100)
General Government (less Animal Contract) 2 $12,237,400 $7,342,440 5.3% of direct department costs, Police Protection $61,993,891 $61,993,891 Service Population = 199,573 $232.97 per service population Fire Protection $40,621,032 $40,621,032 Service Population = 199,573 $152.66 per service population Animal Control Services (County Contract) $1,850,840 $1,850,840 Population = 139,724 $9.94 per capita Library $5,443,573 $5,443,573 Population = 139,724 $29.22 per capita Public Works 3 $10,423,942 $9,674,486 Developed Acres = 10,315 $703.40 per developed acre Community Development 3 $6,396,669 $2,997,669 Developed Acres = 10,315 $217.95 per developed acre Citywide Community Services - Rec, Park, Human 3 $10,318,531 $9,666,872 Population = 139,724 $51.89 per capita Contingency n/a n/a Case Study 5.0% of total recurring costs

1. For fiscal factors that are based on population and employment, an estimated service population factor is applied, which represents the total population plus 50% share of estimated employment that commutes into the City. General Government Costs are assumed at a 60% marginal rate, while all other costs are assumed at a 75% marginal rate.

2. General government includes contract with the Orange County Animal Care services, which has been netted out for the purposes of General Fund overhead operational costs.

3. Public Works, Community Development and Community Services overall costs have been adjusted to exclude one-time revenues, such license,permits and processing fees associated with development activity, as shown in Appendix A.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year 2025/26 Adopted Budget
State of California, Department of Finance, E-5 Population and Housing Estimates for Cities, Counties and the State, January 1, 2020-2025, Sacramento, California, May 2025.

Percent of General Fund Costs
Citywide Projection Basis 1 Cost Factor 1
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Table 4-4
Calculation of City General Government Overhead Rate
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
4-4 Calculation of City General Government Overhead Rate Fiscal Year 2025/26 Adopted Budget
General Fund Expenditures Total
General
Government
Non-General
Government
General Government
Non Departmental (less Animal Control County Contract) $497,991 $497,991 City Council 74,196 74,196
City Manager 1,792,043 1,792,043
City Attorney 1,768,050 1,768,050
City Clerk 1,031,892 1,031,892
City Treasurer 94,758 94,758
Finance Department 4,146,107 4,146,107
Human Resources $2,832,364 $2,832,364
Non-General Government
Animal Control County Contract $1,850,840 $1,850,840
Library 5,443,573 5,443,573
Fire 40,621,032 40,621,032
Police $61,993,891 $61,993,891
Public Works:

Public Works Adminitration $1,925,919 $1,925,919
Engineering 1,409,832 1,409,832
Development Services 753,813 753,813
Street Maintenance 1,243,479 1,243,479
Refuse and Sanitation Services 129,085 129,085
Tree Maintenance 916,570 916,570
Facility Maintenance 1,449,132 1,449,132
Transportation Planning 866,132 866,132
Traffic Operations 236,705 236,705
Roadway Maintenance 125,400 125,400
Transportation Services 1,367,875 1,367,875
Public Works Subtotal $10,423,942 $10,423,942
Community Development:

Planning and Development Administration $2,032,867 $2,032,867 Advance Planning 685,753 685,753
Current Planning 938,170 938,170
Building Inspection 641,106 641,106
Code Enforcement 971,943 971,943
Permit Services 1,126,831 1,126,831
Community Development Subtotal $6,396,669 $6,396,669
Community Services:

Community Services Administration $2,004,131 $2,004,131 Leisure Services 2,060,482 2,060,482
Recreation Athletics 552,494 552,494
Environmental Services 5,354,027 5,354,027
Senior Services 347,397 347,397
Community Services Subtotal 10,318,531 10,318,531
Other - Redevelopment and Water Maintenance 319,006 319,006 GRAND TOTAL GENERAL FUND $149,604,884 $12,237,400 $137,367,484 Current General Government Overhead Rate
General Government Expenditures $12,237,400
divided by
Direct General Fund Expenditures $137,367,484
equals
Current General Government Overhead Rate 8.9%
times
Marginal Factor 60.0%
equals
Overhead Rate at 60 Percent Marginal Rate 5.3%
Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year 2025/26 Adopted Budget
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General Government. General government costs include administration and support of non- general government departmental line costs such as police, fire, library, public works etc. These costs are usually viewed as citywide overhead and are projected using an overhead rate applied to departmental line costs.

As shown in Table 4-4, General Government includes Non-Departmental, City Council, City Management, City Attorney, City Clerk, City Finance, City Treasurer, and Human Resources. As mentioned, while Animal Services contract with the OC Animal Care is shown under General Government in the City budget, this is not an overhead function as described above and is therefore netted out for the cost overhead calculation.

As also shown in Table 4-4, FY 2025/26 general government adjusted costs (net Animal Services contract) of $12.24 million represent about 8.9 percent of direct line costs of $ 137.37 million.

However, overhead costs are not assumed to increase on a one -to-one basis for new development. Based on previous fiscal analyses, general government costs are projected at a marginal rate of 60 percent, or at 5.3 percent of direct costs.

Further, all other General Fund cost factors are discussed below at a 75 percent marginal rate:

Police Protection. As shown in Table 4-3, Police costs are projected based on the citywide cost factor of $232.97 per service population, based on the adopted budget expenditures.

Fire Protection. As shown in Table 4-3, fire costs are projected based on the citywide cost factor of $152.66 per service population, based on the adopted budget expenditures.

Animal Control and Services Contract. These services are projected on city resident population basis at $9.94 per capita, based on the Orange County contract amount and city population, as shown in Table 4-3.

Library. As shown in Table 4-3, library costs are projected on a city resident population basis at a citywide cost factor of $29.22 per capita, based on the adopted budget expenditures Public Works. Public Works includes several divisions including Engineering, Development Services, Transportation Planning and Engineering, Traffic Operation, Street, Tree and Facilities Maintenance, and Public Refuse and Sanitation Services. The cost factor for Public Works has been developed on a per developed acre basis based on net Public Works costs (less one -time fees, permits and revenues) and the amount of developed land in the City of 10,315 acres. Net Public Work cost calculations adjust the total Public Works costs to back out one-time revenues, as shown in Appendix Table A-7, which are specific to one-time ad-hoc development activities in the City and are not annually recurring citywide activities. Net Public Works costs are estimated at $703.40 per developed acre, at a 75 percent marginal rate.

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Community Development. Community Development includes several divisions including Planning, Building Safety Inspection, Code Enforcement and Permit Services. The cost factor for Community Development, as shown in Table 4-3. has been developed on a per developed acre basis based on net Community Development costs (less one -time fees, permits and revenues) and the amount of developed land in the City of 10,315 acres. Net Community Development cost calculations adjust the total costs to back out one-time revenues, as shown in Appendix Table A- 7, which are specific to one-time ad-hoc development activities in the City and are not annually recurring citywide activities. Net Community Development costs are estimated at $217.95 per developed acre, at a 75 percent marginal rate.

Community Services. Community Services includes several divisions including Leisure Services, Recreational and Athletics, Environmental Services (incl. parks and rec facilities maintenance), and Senior Services. The cost factor for Community Services, as shown in Table 4 -3, has been developed on a per capita basis based on net Community Services costs (less one -time fees, permits and revenues) and the resident City population of 139,724. Net Community Services cost calculations adjust the total costs to back out one-time revenues, as shown in Appendix Table A- 7, which are specific to one-time ad-hoc events in the City and are not annually recurring citywide activities. Net Community Services costs are estimated at $51.89 per capita, at a 75 per cent marginal rate.

Contingency Costs. City General Fund contingency costs of 5 percent are applied to projected costs to account for budget and economic uncertainties based on experience from prior fiscal studies.

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APPENDIX A

SUPPORTING FISCAL TABLES
Table A-1
Inflow-Outflow Patterns of Workers Employed in the City City of Orange
A-1 Inflow-Outflow Patterns of Workers Employed in the City Category Count 1 Share
Selection Area Labor Market Size (Primary Jobs)
Employed in the Selection Area 105,164 100%
Living in the Selection Area 59,621 97%
Net Job Inflow (+) or Outflow (-) 45,543
In-Area Employment Efficiency (Primary Jobs)
Employed in the Selection Area 105,164 100%
Employed and Living in the Selection Area 7,500 7%
Employed in the Selection Area but Living Outside 97,664 93%

1. Total employment (workers) based on the survey count does not represent the total employment estimated for the City of Orange, and is used to derive inflow-outflow relationships.

Sources: Stanley R. Hoffman Associates, Inc.

U.S. Census Bureau, OnTheMap Application and Longitudinal Employer-Household Dynamics (LEHD) Origin-Destination Employment Statistics, Orange, California, 2022 2022
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Table A-2 (page 1 of 2)
General Fund Recurring Revenues
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
A-2 General Fund Recurring Revenues
Table Continued…
Fiscal Year One-Time Revenues Revenues
2025/26 Development Not Projected Projected
Adopted Processing in Fiscal in Fiscal
Revenue Category Budget Revenue 1 Analysis 2 Analysis
Taxes and Fees
Property Taxes $39,648,536 $0 $0 $39,648,536
Property Transfer Tax 552,567 0 0 552,567
Property Tax In-Lieu of Vehicle License Fees (VLF) 19,016,506 0 0 19,016,506 Sales and Use Tax 50,113,960 0 0 50,113,960
Proposition 172 - Half Cent Sales Tax
Transient Occupancy Tax 6,334,000 0 6,334,000 0
Franchise- ATT Cable 93,400 0 0 93,400
Franchise-Other 171,364 0 0 171,364
Franchise - Southern California Edison 1,329,200 0 0 1,329,200 Franchise - The Gas Company 738,300 0 0 738,300
Franchise - Time Warner Cable 875,100 0 0 875,100
Subtotal Taxes and Fees 118,872,933 0 6,334,000 112,538,933 Licenses and Permits
Business Licenses and Renewal $4,095,000 $0 $4,095,000 $0 Building Permits + SMIP 1,520,000 1,520,000 0 0
Bldg -Electr, Grade, Mech, Plumb & Swr Cnctn Permits 1,038,000 1,038,000 0 0 Plan Check Permits 370,000 370,000 0 0
Annual Fire Permit Fees 200,000 200,000 0 0
Transportation Permits 35,756 35,756 0 0
Encroachment Permits 120,000 120,000 0 0
Parking Permits 7,000 7,000 0 0
Other Licenses and Permits 51,350 0 51,350 0
Subtotal Licenses and Permits $7,437,106 $3,290,756 $4,146,350 $0 Fines and Penalties
Vehicle Code Fines $380,000 $0 $0 $380,000
General Ordinance Fines 2,206,300 0 0 2,206,300
Delinquent Penalty 100,000 0 0 100,000
Library Fines 11,276 0 0 11,276
Subtotal Fines and Forfeitures $2,697,576 $0 $0 $2,697,576 Use of Money & Property
Interest Earnings $1,607,697 $0 $0 $1,607,697
All Rental /Lease Income 1,274,030 0 1,274,030 0
Subtotal Use of Money & Property $2,881,727 $0 $1,274,030 $1,607,697 Charges For Services
Plan Check Fees $485,000 $485,000 $0 $0
Zoning Clearance Fees $90,000 90,000 0 $0
Engineering Fees (Development Services) $246,000 246,000 0 $0 Encorachment Fee Plan Check $250,000 250,000 0 $0
ADU Developmemt Related Services 100,000 100,000 0 0
Application Fees for Waste Management Plan 130,000 130,000 0 0 Hazardous Materials Disclosure 300,000 300,000 0 0
IGT Reimb for Transport Fees 500,000 500,000 0 0
Adult & Youth Sports 158,959 0 0 158,959
Aquatics 54,000 0 0 54,000
Citation Validation 4,000 0 0 4,000
Civil Subpeona 1,400 0 0 1,400
Digital Media Copies 4,000 0 0 4,000
EMT Charges 0 0 0 0
EV Charge Station Revenue 30,000 0 0 30,000
Evidence Digital Media (Redacted) 5,000 0 0 5,000
False Alarms 150,000 0 0 150,000
Filing & Certification Fees 0 0 0 0
Fingerprints/Livescan 1,000 0 0 1,000
Fire Investigations (Restitution) 0 0 0 0
Firearms Inspections 1,500 0 0 1,500
Immigration Clearance Letter 800 0 0 800
Inspection Supplemental 12,500 0 0 12,500
Library Local History Fees 1,000 0 0 1,000
Note: 1 Development-related one-time processing fee revenues are deducted from projected departmental costs for Public Works, Community Development and Community Services.

2. Revenues not impacted by the project and certain revenues, such as fixed payments and grants, are not projected in the fiscal analysis.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year 2025/26 Adopted Budget
Stanley R. Hoffman Associates, Inc.

December 12, 2025 26
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange
Table A-2 (page 2 of 2)
General Fund Recurring Revenues
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
Fiscal Year One-Time Revenues Revenues
2025/26 Development Not Projected Projected
Adopted Processing in Fiscal in Fiscal
Revenue Category Budget Revenue 1 Analysis 2 Analysis
Charges For Services (continued..)
Lobbyist Registration Fees 0 0 0 0
Lot Line Adj and Certificates 12,000 0 0 12,000
Massage Processing Fee 2,000 0 0 2,000
Medical Supplies Charges 230,000 0 0 230,000
Mills Act Fees 4,000 0 0 4,000
New Processing Fee 175,000 0 0 175,000
Non-Compliance Fee 13,000 0 0 13,000
Non-Deposit Based Application Fees 4,500 0 0 4,500
OMC/CVC Tow Release 130,000 0 0 130,000
OPM/3rd Party Background Checks 1,500 0 0 1,500
Other Charges For Serv-Citation Copies 49,500 0 0 49,500 Other Fire Services 5,000 0 0 5,000
Paramedic commission contra rev FY21 0 0 0 0
Paramedic Direct Fees 2,000,000 0 0 2,000,000
Paramedic Enrollment 275,000 0 0 275,000
Passport Photo Fee 10,000 0 0 10,000
Passport Processing Fee 30,000 0 0 30,000
Private Property Impound Fees 35,000 0 0 35,000
Purge/Notification Letter 1,200 0 0 1,200
Recreation Classes 52,000 0 0 52,000
Report Fees 10,000 0 0 10,000
Reports - Basic 5,000 0 0 5,000
Safety/Hazard Permits 6,500 0 0 6,500
SB9 Applications 4,000 0 0 4,000
Special event application/permit 4,000 0 0 4,000
Summer Playground - Recreation Activity 0 0 0 0
Tow Truck Dirve ID Fee 1,000 0 0 1,000
Tow Truck Driver ID Fee-Renewal 200 0 0 200
Vehicle ID Verification 1,500 0 0 1,500
Vehicle Repossession 3,000 0 0 3,000
Witness Fees 0 0 0 0
Subtotal Charges for Current Services $5,590,059 $2,101,000 $0 $3,489,059 Intergovernmental
County Waste Disposal Agr $400,000 $0 $400,000 $0
Other Grant Revenue 218,000 0 218,000 0
Revenue from Chapman University 542,800 0 542,800 0
State Grant Funds 90,000 0 90,000 0
State Reimb-Mandated Costs 100,000 0 100,000 0
Homeowners Property Tax Relief 60,283 0 60,283 0
Subtotal Intergovernmental $1,411,083 $0 $1,411,083 $0
Other Revenue
CalOES reimbursement-sexual assault exam $18,000 $0 $0 $18,000 Donations 67,416 0 0 67,416
Expense Reimbursements 154,931 0 0 154,931
Library Prepaid Card 14,000 0 0 14,000
Other Miscellaneous Revenue 26,500 0 0 26,500
Reimbursement-DOJ Live Scan Fee 2,000 0 0 2,000
Subtotal Other Revenue $282,847 $0 $0 $282,847
Transfers In
G & A Admin - G.O. Funds $3,794,969 $0 $3,794,969 $0
Transfers From Other Funds-All Funds $4,003,980 0 0 4,003,980 Subtotal Transfers In $7,798,949 $0 $3,794,969 $4,003,980 General Fund Total $146,972,280 $5,391,756 $16,960,432 $124,620,092 Note: 1 Development-related one-time processing fee revenues are deducted from projected departmental costs for Public Works, Community Development and Community Services.

2. Revenues not impacted by the project and certain revenues, such as fixed payments and grants, are not projected in the fiscal analysis.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year 2025/26 Adopted Budget
Stanley R. Hoffman Associates, Inc.

December 12, 2025 27
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange
Table A-3
Current Tax Rate Area (TRA) Allocations
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
A-3 Current Tax Rate Area (TRA) Allocations
Table A-4
Property Tax In Lieu Vehicle License Fees (VLF) Estimated Citywide Factor 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
A-4 Estimated Property Tax In Lieu Vehicle License Fee (VLF) Factor Agency TRA
Code Agency ¹ 008-124
001C Orange Co Gen. Fund 0.062615037
710A O C Flood Control District 0.020088732
713A O C Parks Csa 26 0.015527978
001C Educational Revenue Augmentation Fund 0.103866006
058B Educational Revenue Augmentation Fund 0.036014851
703A Educational Revenue Augmentation Fund 0.000743519
708A Educational Revenue Augmentation Fund 0.001900578
710A Educational Revenue Augmentation Fund 0.008252694
713A Educational Revenue Augmentation Fund 0.002970467
744A Educational Revenue Augmentation Fund 0.000928959
916A Educational Revenue Augmentation Fund 0.000272872
703A Orange Co Cemetery Fund-General 0.000505004
058B Orange City 0.135778929
744A Orange Co Vector Control Dist 0.001134350
960A Orange County Water District 0.008236874
961A Orange Co. Water Dist-Water Reserve 0.000123664
708A Orange County Transit Authority 0.002850867
916A Oc Sanitation #2 Gen Fund 0.031998315
420B Orange Unified General Fund 0.470464152
400B Rancho Santiago Comm Coll Gen Fund 0.077567540
600A O C Dept Of Education-Gen Fund 0.018158611
TOTAL 1.000000000
Sources: Stanley R. Hoffman Associates, Inc.

Orange County Auditor-Controller, Property Tax Accounting, Property Tax Allocation, SECTION 99 FACTOR RPT BY TRA, 2024-25.

Property Tax Assessed VLF per
Fiscal Year In-Lieu of VLF 1 Valuation (AV) 2 $1,000,000 AV 3 2021 - 2022 14,932,479 22,844,350,739 $650
2022 - 2023 15,701,602 23,645,989,631 $660
2023 - 2024 16,845,175 24,783,277,745 $680
2024 - 2025 17,271,109 26,631,838,417 $650
2025 - 2026 18,340,648 27,264,292,435 $670
Average $660

1. The property tax in lieu VLF amounts are from the City budget documents cited below.

2. Assessed valuation amounts are from the County Assessor Office assessment rolls, as cited below.

3. Estimated VLF per $1,000,000 AV is rounded to the nearest tens.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Fiscal Year Adopted Budgets, FY 2021 through 2025 Orange County, Office of Assessor, 2021 - 2025 Assessment Rolls, City of Orange Stanley R. Hoffman Associates, Inc.

December 12, 2025 28
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange
Table A-5
Estimated Average Household Income
Single Family Ownership Households
Orange County
A-5 Estimated Average Household Income , Single-Family Ownership, Orange County Table A-6
Calculation of Use Tax Factor
2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
A-6 Calculation of Use Tax Factor
Year Unit
Built Avg. HH Inc.1
No. of
Households 1 Avg. HH Inc.1
No. of
Households 1
2020 $214,091 615 $246,360 401 $230,456,204
2021 $231,773 204 $239,776 289 $116,577,009
2022 $387,181 148 $208,108 97 $77,489,300
967 787 $424,522,513
Total Households 1,754
Average Household Inc. $242,031

1. Data from the ACS 5-year estimates, 2019-2023, Public Use Microdata Sample for Orange County obtained from IPUMS USA, University of Minnesota.

Source: Stanley R.Hoffman Associates, Inc.

American Community Survey (ACS), 5-year Estimates, 2019-2023. 3-Bedroom 4-Bedroom Aggregate
Household
Income All Units
City of Orange Annual 2024 Amount
Use Tax 1
County Pool $9,057,746
State Pool 27,406
Total Use Tax $9,085,151
divided by
Point-of-Sale Sales Tax 1 $48,569,029
equals
Use Tax Rate 2 18.7%

1. Annual 2024 data as reported by the CDTFA.

2. The use tax rate is the County Pool plus the State Pool divided by Point-of-Sale Taxable Sales Tax.

Sources: Stanley R. Hoffman Associates, Inc.

California Department of Tax and Fee Administration (CDTFA), 2025 Stanley R. Hoffman Associates, Inc.

December 12, 2025 29
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange
Table A-7
Net Cost Factors: Public Works, Community Development and Community Services 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
A-7 Net Costs: Public Works, Comm . Development, and Comm. Services Adopted
FY 2025-26
Category Amount
A. PUBLIC WORKS NET COSTS
Total Public Works Costs $10,423,942
minus
Charge for Services 550,000
Licenses and Permits 169,256
Other Revenue (incl. Use of Money and Property) 30,200
Total One-Time Fees $749,456
equals
Net Recurring Public Works Costs $9,674,486
divided by
City Developed Acres 1 10,315
equals
Net Public Works Cost Factor per Developed Acres $937.86 B. COMMUNITY DEVELOPMENT NET COSTS
Total Community Development Costs $6,396,669
minus
Charge for Services 501,500
Licenses and Permits 2,867,500
Fines and Penalties 30,000
Total One-Time Fees $3,399,000
equals
Net Recurring Community Development Costs $2,997,669
divided by
City Developed Acres 1 10,315
equals
Net Community Development Cost Factor per Developed Acres $290.60 C. COMMUNITY SERVICES
Total Community Services Costs $10,318,531.27
Charge for Services $264,959.00
Other Revenue (incl. Use of Money and Property) $386,700.00 Total One-Time Fees $651,659.00
Net Recurring Community Development Costs $9,666,872
divided by
City Population 1 139,724
equals
Net Community Services Cost Factor per Capita $69.19

1. Developed Acres in the City of Orange based on information provided by City GIS staff.

Sources: Stanley R. Hoffman Associates, Inc.

City of Orange, Adopted Budget, Fiscal Year 2025-26.

Stanley R. Hoffman Associates, Inc.

December 12, 2025 30
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange
Table A-8
Details of Comparative Revenue Performance Evaluation of Non-Residential Uses 2375 N Tustin Street Residential Project Fiscal Impact Analysis City of Orange
(In Constant 2025 dollars)
A-8 Details of Comparative Revenue Performance Evaluation for Non -Residential Uses Gyms Discount Stores
Seasonal Stores
(Annualized)
Property Reuse Assumption Renovation Minimal Change Minimal Change Floor Size (sf) Assumption 40,000 10,000 10,000
Refurb Costs per SF 1 $120 $25 $10
Existing Property Valuation $22,327,825 $22,327,825 $22,327,825 New Improvement Value (Refurb Cost) $4,800,000 $250,000 $100,000 New Total Assesed Valuation $27,127,825 $22,577,825 $22,427,825 Operations 2
Average Gross Revenues $3,000,000 $2,500,000 $2,000,000 Assumed Taxable Sales Share 10% 100% 100%
Average Retail Sales per SF 3 n/a $250 $200
Taxable Retail Sales $300,000 $2,500,000 $2,000,000
Number of Employees 10 22 17
Major Public Revenues
Overall Property Tax (1%) $271,278 $225,778 $224,278
Property Tax City Share: 13.6% of 1% $36,894 $30,706 $30,502 Property Tax In-Lieu of VLF 4 $3,168 $165 $66
Sales and Use Tax
Sales Tax (1% Taxable Sales) $3,000 $25,000 $20,000
Use Tax (18.6% of Sales Tax) $558 $4,650 $3,720
Sales and Use Tax Total $3,558 $29,650 $23,720
Business License Fees 5 $715 $615 $615
TOTAL ESTIMATED MAJOR REVENUES $44,335 $61,136 $54,903

1. Renovation cost estimation obtained from RS Means for Orange County. Gyms are assumed to undertake extensive rennovations, while discount and seasonal stores are assumed to undertake cosmetic rennovations.

2. Average annual revenues per gym franchise obtained from franchise disclosure documents.

Seasonal stores have been annualized based on a 3-month activity period.

3. Based on data presented in the report "California Retail Analytics, 2025" prepared by HdL Companies.

4. PTVLF calculated at $660 per million net new valuation.

5. Based on the City of Orange Business License Fee schedule, calculated by gross revenue brackets.

Source: Stanley R. Hoffman Associates, Inc.

RSMeansOnline - Estimation Software.

HdL Companies.

Stanley R. Hoffman Associates, Inc.

December 12, 2025 31
2375 N Tustin Street Residential Project
Fiscal Impact Analysis
City of Orange

APPENDIX B

PROJECT REFERENCES

CITY OF ORANGE
300 E. Chapman Ave.

Orange, CA 92866
City Manager
Jared L. Hildenbrand, City Manager
(714) 744-2222
[email protected]
Community Development Department
Russell W. Bunim, Community Development Director
(714) 744-7220
[email protected]
Jessica Herrera, Housing Manager
(714) 744-7270
[email protected]
Finance Department
Trang Nguyen, Finance Director
(714) 744-2238
Melia Homes, LLC
9860 Irvine Center Drive
Irvine, CA 92618
(949)759-4367
DJ Delzer, CEO
Gavin Reid, Vice President of Land Acquisitions
Chad Brown, Vice President of Planning & Development
Burnam-Ward Properties
860 Newport Center Drive, Suite 100
Newport Beach, CA 92660
(949) 992-2400
Steve Thorpe, Partner
HdL COMPANIES
Taxable Sales Information
hdlcompanies. com