Irvine | San Jose | San Francisco | Riverside
Dallas | Houston | Raleigh | Tampa
www.FinanceDTA.com
Public Finance
Public-Private Partnerships
Development Economics
Clean Energy Bonds
FISCAL IMPACT ANALYSIS
REPORT
EPD SOLUTIONS, INC.
PROPOSED SOUTH COAST TECHNOLOGY CENTER
PROJECT
CITY OF SANTA ANA, CA
May 13, 2024
www.FinanceDTA.com 18201 Von Karman Avenue, Suite 220
Irvine, CA 92612
EPD SOLUTIONS, INC.
FISCAL IMPACT ANALYSIS REPORT
PROPOSED SOUTH COAST TECHNOLOGY CENTER
PROJECT
CITY OF SANTA ANA, CA
Prepared for:
EPD Solutions, Inc.
3333 Michelson Drive, Suite 500
Irvine, CA 92612
Attention: Meaghan Truman
TABLE
OF CONTENTS
SECTION PAGE
I EXECUTIVE SUMMARY ................................................... 1 A Purpose of th e Study .......................................................... 1 B Fiscal Impacts on the City Evaluated in This
Study .................................... Error! Bookmark not defined.
C Description of the Proj ect ................................................. 1 D Conclusions of the Fiscal Impact Analysis
(“FIA”) ..................................................................................... 3 II INTRODUCTION .............................................................. 4 A Scope and Methodology – Recurring Fiscal
Impacts .................................................................................. 4 B Major Assumptions and Analysis Used in
This Repo rt ........................................................................... 5 C Limitations – Accuracy of Information ......................... 6 III DESCRIPTION OF RECURRING FISCAL
REVENUES/COSTS ........................................................... 8 A Analysis of Recurring Revenues, Case Study
Method .................................................................................. 8 B Analysis of Recurring Revenues, Multiplier
Method ................................................................................ 12
C Analysis of Recurring Costs, Case Study
Method ................................................................................ 15
D Analysis of Recurring Costs, Multiplier
Method ................................................................................ 15
IV FISCAL IMPACTS ........................................................... 18 A Total Recurring Revenues ............................................... 18 B Total Recurring Costs ...................................................... 19 C Overall Net Fisc al Impact ................................................ 20
APPENDICES
APPENDIX A FIA
1 SECTION I
EXECUTIVE SUMMARY
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
I EXECUTIVE SUMMARY
A Purpose of the Study
The objective of this Fiscal Im pact Analysis (“FIA”) Report (the “Report”) is to analyze the incremental net fiscal impact of the proposed South Coast Technology Center project (the “Project”) on the City of Santa Ana (the “City”) General Fund. To provide the City with a comprehensive evaluation of the Project’s potent ial, this DTA Report will evaluate whether the Project is likely to generate an incremental net fiscal surplus or a net fiscal deficit to the City’s General Fund.
B Incremental Fiscal Impacts on the City’s General Fund The fiscal impacts identified in this Report include annual recurring municipal revenues and costs that result from the Project’s proposed land use scenario. To provide an accurate fiscal picture of the Project, the Report will focus exclusively on annual recurring revenues and costs.
Recurring revenues to the City General Fund id entified in this Report are generated from a variety of sources, including property taxes, sa les taxes, in-lieu vehicle license fees, utility user taxes, licenses and permits, franchise fees, fines, and other revenue sources. Although these revenues vary from year to year, they recur on a regular basis and are part of the City’s annual budgeting plans. The recurring costs to the City General Fund are equally important in this analysis. Recurring costs are associat ed with a variety of City services, including public safety, public works maintenance, and general government administrative services.
Similar to annual revenues, these are costs that the City must anticipate and plan to fund on a yearly basis.
Revenues that are considered non-recurring to the City General Fund, such as various permitting fees, are excluded from this analysis. These types of revenues have been excluded as new development is generally required to pay specific user fees, such as grading and building prior to the construction of the project. As these are considered one-time revenues, there is no expectation that new development will need to pay these fees on a recurring basis. In addition, costs imposed as a result of the proposed Project that are considered to be non-recurring, such as im pact fees, are also excluded from the FIA calculations because they are expended on a one-time basis to fund new development’s fair share of capital improvement costs.
C Description of the Project
The Project site, as depicted in Figure 1 below, is generally comprised of two separate sites located on both sides of Susan Street in the Ci ty, with the site on the east side currently developed with three existing office building s located at 3100, 3110 , and 3120 West Lake Center Drive, and the site on the west side encompassing approximately 5.58 acres of vacant land. The entire Project site is located within the City Specific Development No. 58 (“SD- 58”) zoning district, with the permissible land uses comprised of commercial/retail uses and professional and business offices.
2 SECTION I
EXECUTIVE SUMMARY
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
Figure 1: Aerial Map for the Project Site
The Project proponent is proposing to demo lish the existing office buildings and appurtenant infrastructure on the Project site,and to amend the permissible uses of SD-58 for the Project site to include limited light industrial uses (“LLIUs”), including but not limited to product assembly, the manufacture of bi ological, biomedical, and pharmaceutical products, the manufacture of scientific, engin eering, and medical instruments, wholesale, warehousing, machine and other metal working shops, and research laboratories.
As illustrated in Figure 2 and presented in Tabl e 1 on the following page, the Project site is proposed to be redeveloped with three bu ildings encompassing approximately 313,244 building square feet (“BSF”) of LLIU space.
Figure 2: Proposed Project Site Plan
3 SECTION I
EXECUTIVE SUMMARY
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
Table 1: Proposed Land Uses for the Project
Land Uses Building Square Feet
Industrial Building 1 112,230
Industrial Building 2 121,645
Industrial Building 3 79,369
Grand Total 313,244
D Conclusions of the Fiscal Impact Analysis (“FIA”)
The body of this Report will present the results of the incremental FIA, including narratives and tables detailing the fiscal impacts of the Project on specific General Fund revenue and expenditure categories. As presented in Table 2 and illustrated in F i g u r e 3 , b e l o w , the Project site is anticipated to generate a sizable annual recurring incremental fiscal surplus at build-out of $257,736 based on the generation of $460,412 in annual recurring revenues and $202,676 in recurring annual costs. Overall, the annual revenues generated are projected to equal 2.27 times the associated City General Fund costs. In a fiscal impact analysis, a revenue/cost ratio >1 is expected to generate a po sitive net fiscal impact. A summary of the overall incremental fiscal impacts of the Project to the City General Fund is provided in Appendix A .
Table 2: Net Fiscal Impact (the City’s General Fund)
Category Impact/Ratio
Total Recurring Revenues $460,412
Total Recurring Costs* $202,676
Annual Recurring Surplus/(Deficit) $257,736
Total Annual Revenue/Cost Ratio 2.27
Figure 3: Net Fiscal Impact (the City’s General Fund)
4 SECTION II
INTRODUCTION
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
II INTRODUCTION
DTA has been retained by EPD Solutions, In c. to analyze the fiscal impacts of the development of the proposed South Coast Tech nology Center project (the “Project”) on the City of Santa Ana (the “City”) General Fu nd. The Project site is generally comprised of two sites located on both sides of Susan St reet in the City, with the one on the east side currently developed with three existing office buildings located at 3100, 3110, and 3120 West Lake Center Drive, and the one on the west side encompassing approximately
5.58 acres of vacant land. The entire Projec t site is located within the City Specific Development No. 58 (“SD-58”) zoning district, with the permissible land uses of professional and business offices and commercial/retail uses.
The Project proponent is prop osing to demolish the existing office buildings and appurtenant infrastructure on the Project site, and amend the permissible uses of SD-58 for the Project site to include limited light industrial uses (“LLIUs”), including but not limited to product assembly, the manu facture of biological, biomedical, and pharmaceutical products, the manufacture of scientific, engineering, and medical instruments, wholesale, warehousing, m achine and other metal working shops, and research laboratories.
To provide the City with a comprehensive evaluation of the Project’s potential, DTA will determine whether the Project is likely to generate an incremental net fiscal surplus or a net fiscal deficit to the City’s General Fund.
A Scope and Methodology – Recurring Fiscal Impacts
Fiscal impacts arising from a land developm ent plan can be broadly categorized as one of two types, specifically one-time impacts or recurring impacts. Each of these types may, in turn, be divided into a revenue comp onent and cost component. In this Report, i t i s a s s u m e d t h a t o n e - t i m e r e v e n u e s w o u l d d i r e c t l y o f f s e t o n e - t i m e c o s t s . T h i s i s consistent with Section 66000 et. seq. of the California Government Code, which authorizes a municipality to require the paym ent of development im pact fees equal in value to the cost of the public infrastructure necessary to support a development project.
Thus, the fiscal impacts considered in this Report focus on ongoing, or recurring, fiscal impacts of the Project on the City General Fund. Revenues that are generated outside of the City General Fund (e.g., special district revenues) or costs that are incurred by the City outside of the General Fund (e.g., costs financed through a special district) are not included within this fiscal analysis.
The FIA presented in this Report utilizes tw o methods of analysis, specifically the Per Capita/Multiplier Approach and Case Study Approach. The primary Multiplier Methodology used is the Per Capita (“Persons Served”) Methodology , which recognizes the fact that the exact relationship of service demands and revenue-generating potential between residents and employees is difficult to quantify. In order to address this challenge, several assumptions are employed.
5 SECTION II
INTRODUCTION
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
First, based on more than 30 years of preparing fiscal impact studies and performing peer reviews of similar studies prepared by other consulting firms, DTA has determined that utilizing a Persons Served population co mprised of all residents and 50% of the employees working at locations within a given service area is common fiscal practice in generally quantifying the impacts of new deve lopment if more specific local data or facilities usage data is not readily available. This ratio suggests that a resident generally has twice the fiscal impact of an employee on the use of a typical public improvement and can be applied to a City’s General Fund budget to calculate average revenues and costs per Person Served on a Citywide basis using a Multiplier Approach. While a fiscal impact analysis focused on marginal revenues and costs associated with a specific new development project (with greater emphasis on a Case Study Approach) is often applied to larger projects, the consulting budgets required to evaluate individual metrics related to each type of municipal revenue and serv ice, including interviews with individual municipal departments, can be prohibitive f or smaller projects. As a result, while DTA did utilize a Case Study Approach for General Fund revenues and costs that were easy to quantify (e.g., property taxes, sales taxes, and utility user taxes), many of the metrics employed in this Report are based on average revenues/costs per Person Served utilizing the Fiscal Year (“FY”) 2023-2024 City budget as could be applied to the Project.
DTA also used solely a
Per Employee Methodology in this Report to project recurring fiscal factors that relate to employment only, such as business license revenues. Similar to the Persons Served Methodology discussed above, the Per Employee Methodology involves dividing the applicable revenues/costs by the total number of employees in the City utilizing the FY 2023-24 City budget, and applying these factors to the specific number of employees forecast to be working within the Project under the given scenario.
For the purposes of the Report, all recurring revenues and costs are stated in constant (uninflated) 2024 dollars based on the assumption that the relative impacts of inflation in future years will be the same for both fiscal impact categories.
B Major Assumptions and Analysis Used in This Report
B.1 Discounting Revenues and Expenses
Certain revenues and expenditures presente d in this Report are not expected to increase on a one-to-one basis with the addition of new development. To project these numbers without any adjustment would result in inaccurate conclusions.
To accurately account for this factor, DTA applied a series of discount rates to specific budget components. Based on an examination of the numbers presented in the City’s annual General Fund budget, 15% and 90% discount rates were applied to several revenue categories as documented in Appendix A-1 . As discussed in the previous section of this Report, revenues that are considered non- recurring to the City General Fund, such as revenues generated by building/planning/engineering fees, are excluded from this analysis. Furthermore, DTA applied a 100% discount rate to financing source categories that are deemed 6 SECTION II
INTRODUCTION
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
static, in terms of their not being anticipated to increase significantly as a result of the construction of the Project. This includes intergovernmental and commercial cannabis tax revenues, revenues generated by property rentals, jail leases, and advertisements, and cost recoveries and reimbursements
This same discounting technique was appl ied to the General Fund expenditures to accurately reflect the estimated ratio of fixed costs to variable costs. Notably, DTA has assumed that no discount factor s would be applied to police, public works, and fire protection expenditures. As documented in Appendix A-1, a 15% discount rate is applied to remainin g services expenditures. The marginal increase in the general government overhead costs associated with the additional non-general government expenditures incurred by new development is assumed to be 75%, which means a 25% discount was applied to these overhead costs.
B.2 Employee Generation
DTA estimated the number of direct employees at the Project’s build-out based upon the 737 Square Feet per Employee (“SF/E”) provided by the Project proponent. Based on several data source s that provided this type of data for similar land uses, DTA deemed this metric to be appropriate for the Project. As summarized in the attachment for Appendix A-3, the Project is anticipated to generate 425 direct on-site employees at its build-out.
B.3 Valuation per BSF
This report provides an estimated valuation per BSF calculation. Accuracy in these calculations is important because these to tals are used to determine expected property revenues. The estimated valuat ion of $389.79 per BSF is derived based on the projected land value and construction costs of $122.1 million and 313,244 BSF as provided by Project proponent.
C Limitations – Accuracy of Information
The fiscal model in the Report contains an analysis of revenues, costs, and impacts to the City resulting from the Project. This model is based on information provided to DTA by Project proponent, the City’s FY 2023-24 budget, the County’s FY 2023-24 Assessor’s Roll, Housing and Population Information from th e California Department of Finance, a 2023 City of Santa Ana Employ ment Profiles analysis using North American Industry Classification System codes as prepared by Environics Analytics, a U.S. Energy Information Administration Energy Consumption Survey, Internet research performed by DTA regarding various industries, and addi tional assumptions derived from DTA’s municipal cost database, as compiled by DTA from previous fiscal impact studies prepared by the firm. The sources of inform ation and basis of the estimates calculated in the Report are stated herein. While DTA is confident that the sources of information are reliable, DTA does not express an opin ion or any other form of assurance on the accuracy of such information. The analysis of fiscal impacts contained in this Report is 7 SECTION II
INTRODUCTION
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
not considered to be a “financial forecast” or a “financial projection” as technically defined by the American Institute of Certified Public Accountants. The word “projection” used within this Report relates to broad expectations of future events or market conditions. Since the analysis contained he rein is based on esti mates and assumptions that are inherently subject to uncertainty and variation depending on evolving events, DTA cannot represent that such estimates will definitely be achieved. Some assumptions inevitably will not materialize, and unantici pated events and circumstances may occur.
Therefore, the actual results achieved may vary from the projections stated throughout the Report.
8 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
III DESCRIPTION OF RECURRING FISCAL REVENUES/COSTS
A Analysis of Recurring Revenues, Case Study Method
A.1 Property Taxes – Secured and Unsecured
Property tax revenues are specifically ba sed on the City’s estimated share of the general 1% ad valorem property tax levy. Per the County Auditor’s Office, the City’s General Fund receives approximately 19.30% of the FY 2023-24 basic 1% [Proposition (“Prop”) 13] property tax from the Tax Rate Areas (“TRAs”) encompassing the Project.
The remaining 80.70% are distributed to a variety of taxing entities as summarized in Table 3 below, with 67.35% of the total estimated $1.22 million in annual property taxes earmarked for educational purposes. The basic 1% property tax collected is considered a significant source of muni cipal revenues. The net apportionment factors for each taxing entity represent the fraction of the FY 2023-24 basic 1% ad
valorem property tax that it will receive from the Project TRAs after deducting the projected Education Revenue Augmentation Fund (“ERAF”) property tax shifts.
Table 3: 1% Ad Valorem Property Tax Distribution Among Taxing Entities Taxing Purpose/Taxing Entity
Net
Apportionment
Factor
Estimated
Property
Tax
County 0.10522489379 $128,480
General Fund 0.06706762904 $81,890
Flood Control District 0.02152166856 $26,278
Parks CSA 26 0.01663559619 $20,312
City 0.19296953238 $235,616
General Fund 0.19296953238 $235,616
Education 0.67354729727 $822,402
ERAF Fund 0.19081315008 $232,983
Santa Ana Unified School District 0.37790501072 $461,422 Rancho Santiago Community College District 0.08310048144 $101,466 Orange County Department of Education 0.02172865503 $26,531 Special District 0.02825827656 $34,504
Orange County Cemetery District 0.00054103515 $661
Orange County Vector Control District 0.00121524893 $1,484 Orange County Water District 0.00781725639 $9,545
Orange County Transit Authority 0.00305422873 $3,729
Orange County Sanitation District #7 0.01563050736 $19,085 Grand Total 1.00000000000 $1,221,002
Note: All numbers are subject to rounding.
9 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
Major property tax assumptions are summarized in Table 4 below.
Table 4: Property Tax Assumptions
Description Assumptions
Land Use and Estimated Taxable Valuation
Industrial Building One 112,230 BSF @ $389.79/BSF
Industrial Building Two 121,645 BSF @ $389.79/BSF
Industrial Building Three 79,369 BSF @ $389.79/BSF
Total Land Use Net Taxable Value $122,100,000
Secured Property Tax – Net Apportionment Fact or to the City as a Fraction of 1.0% Property Tax Rate (Net of ERAF)
City’s General Fund 19.296953238%
Unsecured Property Tax – Unsecured Taxes as a % of Secured Property Value Non-Residential Property 10.00%
Property Tax Transfer
Non-Residential Property Turnover Rate 0.00%
Transfer Tax as a % of Assessed Value 0.11%
Property Transfer Tax Passed Through to the City 50.00% Property Taxes in Lieu of Vehicle License Fees (“VLFs”) City – Total Assessed Value (FY 2023-24) $34,504,366,076 City – VLF Property Tax Revenues (FY 2023-24) $42,044,300 VLF Property Tax In-Lieu per $1,000 Assessed Value $1.22 Unsecured property taxes collected in the City are levied on tangible personal property that is not secured by real estate. Specific examples of unsecured property include trade fixtures such as manuf acturing equipment, computers, dock equipment, conveyors, forklifts, and racks and shelves.
A.2 Property Taxes in Lieu of VLFs
The passage of Prop 1A in California in 2004 enacted a constitutional amendment that introduced a new methodology to calculate Property Taxes in Lieu of VLFs. Per California Revenue and Taxation Code §97.70 , the amount of Property Taxes in Lieu of VLFs now grows in proportion to the growth rate of gross assessed valuation in a city or county. Property Taxes in Lieu of VLF revenues are projected to grow with the change in the Citywide gross assessed valuation of taxable property from the prior FY.
Property Taxes in Lieu of VLF revenues constitute an addition to other property tax apportionments and were calculated for the purposes of this Report at $1.22 per $1,000 increase in assessed valuation on a Citywide basis. Table 4 presents details 10 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
regarding the property tax assumptions ut ilized in the FIA. Property tax revenue generated in this category is presented later in the report in Table 10 .
A.3 Sales Taxes
Direct sales tax revenues are generated by taxable sales from businesses within the City. The current sales tax rate in the City is 9.25%, with sales tax collected by the State and distributed to the City. The City currently receives approximately 2.54% of taxable sales receipts, which include a 1.00% sales tax established by Municipal Code §35.51 and Measure X sales tax, a 1.50% voter-approved sales tax to provide funding for neighborhood safety, homeless prevention, and essential City services enhancement. In addition, the City curre ntly receives approximately 8.87% of the Proposition 172 sales tax receipts generated within the City (a 0.50% voter-approved sales tax dedicated to local public safety), which is equivalent to 0.04% sales tax rate.
Measure X rate will decrease to 1% in 2029 and sunset in 2039. In generating the fiscal impact models for this Report, DT A has conservatively assumed that Measure X sales tax at the Project’s build-out will only be 1%. In aggregate, 2.04% of taxable sales receipts are passed through to the City for purposes of this FIA. As reflected in Table 5, the proposed on-site non-residentia l land use types are conservatively assumed not to generate any taxable sales.
Table 5: Sales Tax Assumptions
Description Assumptions
Percentage of Sales Tax Passed Through to the City 2.04% Local Employee Spending (Spending in Fast Food/Deli/Lunch Eateries) $951 Non-Project Capture Rate of Retail Spending (Within the City) 25% Taxable Sales per BSF
Industrial Building One $0.00
Industrial Building Two $0.00
Industrial Building Three $0.00
Indirect sales tax revenues, as summarized in the table above, are generated by the purchases made by the Project’s employees within the City. With respect to on-site employee retail spendings, DTA conservati vely limited the scope to meal purchases occurring in quick-service restaurants. Based on studies outlined in the International
Council of Shopping Projects’ Office-Work er Retail Spending in a Digital Age , DTA estimates that an employee within the Project will spend an average of $951 annually in the Fast Food/Deli/Lunch Eateries category near their place of work. Assuming the off-site businesses in the City would capture on average 25% of the Project employees’ annual spending, each employee is estimated to spend $238 annually off-site within the City. The direct and indirect tax revenues generated are presented later in the Report in Table 10 .
11 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
A.4 Utility User Tax (“UUT”)
The UUT is imposed by the City on the consumption of utility services of telephone, electricity, natural gas, and water. The UUT rates for those utility services are presented in Table 6 below.
Table 6: UUT Assumptions
Description Assumptions
UUT Rates
Telephone (Municipal Code §3.16.020) 5.50%
Electricity (Municipal Code §3.16.030) 6.00%
Natural gas (Municipal Code §3.16.040) 6.00%
Water (Municipal Code §3.16.050) 6.00%
Annual Telephone Gross Receipts
Industrial Building One (5 Lines) $4,800
Industrial Building Two (5 Lines) $4,800
Industrial Building Three (4 Lines) $3,840
Electricity Usage and Cost
Kilowatthour (kWh) per BSF 10.8
Rate per kWh $0.0816
Natural Gas Usage and Cost
Cubic Feet (Cu. Ft.) per BSF 26.4
Rate per 1,000 Cu. Ft. $13.29
Water Usage and Cost
Gallons per BSF 8.3
Rate per 748 Gallons $2.60
The electricity, natural gas, and water usages, as reflected in the table above, assume that the Project buildings will house manu facturing facilities. DTA utilized the applicable electrical and natural gas usage metrics from the 2018 Commercial Buildings Energy Consumption Survey (“CBECS”) conducted by the U.S. Energy Information and Administration (“EIA”), with the sourcing of the water usage metric from the 2012 CBECS compiled by the EIA . The UUT revenues generated are presented later in the Report in Table 10 .
A.5 Other Property Tax Revenue
Per California Revenue and Taxation Code §11901, et seq., and the City Code §3.22.020, sales of real property are taxed by the City at a rate of $0.55 per $1,000 of property value, excluding assumed lien s or encumbrances. Since the Project proponent indicated that it plans to own and operate the Project for an extended 12 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
period, DTA conservatively assumes that there will not be any sales of the Project components, therefore generating no property transfer tax.
A.6 Interest Income
Interest “Investment” Income revenues are generated by the increase in General Fund revenues resulting from the Project. This increase reflects growth in the following revenue categories: property taxes, VMT, sales taxes, utility user tax, and multiplier revenues (to be discussed in detail in the following sections of this Report).
Revenues from this source are usually estimated by multiplying the projected recurring General Fund revenues availabl e for investment by the Local Agency Investment Fund (“LAIF”) investment fund rate of return. A LAIF percentage of earnings cost factor of 50% is then appl ied because the funds being invested on average will be available for only 1 mont h. Investment income assumptions are summarized in Table 7 below.
The projected recurring General Fund re venues available for investment total $460,017. This calculation results in es timated investment income (less earnings cost) of $395. It should be noted that LAIF factors are determined quarterly by the California State Treasurer, whose office governs the investment of revenues by municipalities.
Table 7: Investment Income Assumptions
Description Assumptions
Investment Period for Non-Interest General Fund Revenues 1 Month LAIF Rate of Return (Estimated) 2.06%
LAIF Percentage of Earnings 50%
Projected Recurring General Fund Revenues Available for Investment $460,017 B Analysis of Recurring Revenues, Multiplier Method
The Per Capita Employee (Persons Served) Multiplier figures presented in this section play a key role in understanding the impact of the proposed Project on the City’s General Fund. As stated in the introduction section of this Report, the Persons Served approach recognizes the fact that the exact relationship of service demands and revenue-generating potential between residents and employees is difficult to quantify, so a specific set of assumptions are needed.
To address this, DTA has introduced several assumptions, including the utilization of a service population, or Persons Served population, comprised of all service area residents and 50% of employees working in the service area, as this is common fiscal practice in quantifying the impact of new development in a given service area. This number suggests that a City resident generally has twice the fiscal impact of an employee within the City on the City General Fund.
The Persons Served population of the City is estimated at 370,403, equaling the total residents within the City (299,630) plus 50% of employees working in the City (141,545).
Utilizing the above assumptions, the multipliers presented in this section and illustrated in 13 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
Table 8 quantify the marginal increase in reve nue per Person Served by each specific revenue category that will result from the development of the proposed Project.
Table 8: General Fund Revenues (Multiplier Method)
Category Amount Methodology Discount
Business License Tax $90.08 Per Employee 15%
Franchise Fees and Taxes $2 5.13 Person Served 15%
Charges for Services $24.50 Person Served 15%
Licenses and Permits $7.78 Person Served 15%
Fines, Forfeitures, and Penalties $12.98 Person Served 15% Adult-Use Retail Business Cannabis Tax $4.08 Person Served 90% Medical Marijuana Taxes $0.14 Person Served 90%
B.1 Business License Tax
Business license tax revenue is expected to increase as the City looks to expand its commercial and industrial sectors. The purpos e of this annual tax is to ensure that businesses share the burden of payment for City services used by the business and/or their employees.
Note that the revenue multiplier presented in this section has been reduced by 15% to account for only the portion of the business license tax revenues that are expected to vary with population and employee growth in the City.
DTA forecasts the business license ta x at $90.08 per employee using the Per
Employee Multiplier Method, generating $38,284 in additional revenue to the City’s General Fund.
B.2 Franchise Fees and Taxes
Franchise fees and taxes are expected to play a consistent role in contributing to the City’s General Fund over the next several years. Generally, a tax is a compulsory payment levied by the government on its citizens and various business firms. In contrast, a fee is usually defined as a voluntary payment to the government for the special services rendered by it in the publ ic interest. This distinction has become blurred as fees are usually a required part of doing business in a particular area or industry, so for the purpose of this Report, both terms will be referred to as fees.
Note that the revenue multiplier presented in this section has been reduced by 15% to account for only the portion of the franchise fee and tax revenues that are expected to vary with population and em ployee growth in the City, as opposed to such revenues that are fixed and will therefore remain unchanged by the Project.
DTA has forecasted franchise fees at $25.13 per Person Served using the Per Capita
Multiplier Method (this represents a marginal increase in revenue per additional Persons Served in this category). This is expected to generate $5,353 in additional 14 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
revenue to the City’s General Fund.
B.3 Charges for Services
Charges for services is another area that ge nerates revenues on behalf of the City’s General Fund, accounting for 3% of total General Fund recurring revenues in FY 2023-24. This category is made up of service charges and fees imposed on users for specialized services provided by the City under the rationale that benefiting parties, rather than the general public, sh ould pay for the cost of those services.
Note, only charges for non-development services are evaluated for this Report.
Note that the revenue multiplier presented in this section has been reduced by 15% to account for only the portion of the charges for services revenues that are expected to vary with population and employee growth in the City, as opposed to such revenues that are fixed and will therefore remain unchanged by the Project.
DTA has forecasted charges for services at $24.50 per Person Served using the Per
Capita Multiplier Method (this represents a marginal increase in revenue per additional Persons Served in this category). This is expected to generate $5,219 in additional revenue to the City’s General Fund.
B.4 Licenses and Permits
In addition to business licenses, the City im poses fees on a variety of permits. This is a reliable source of revenue and it is expected to continue to be a steady contributor to the General Fund over the coming years. Note, only non-development licenses and permits are evaluated for this Report.
Note that the revenue multiplier presented in this section has been reduced by 15% to account for only the portion of the lice nses and permits tax revenues that are expected to vary with population and em ployee growth in the City, as opposed to such revenues that are fixed and will therefore remain unchanged by the Project.
DTA forecasts the licenses and permits tax at $7.78 per Persons Served using the Per Capita Multiplier Method , generating $1,657 in additional revenue to the City’s General Fund.
B.5 Fines, Forfeitures, and Penalties
To ensure the payment of various licenses and fees, the City Code empowers the City to impose penalties and collect fines in several areas. Although considered a consistent revenue stream each year, the City expects to derive 1% of its total FY 2023-24 General Fund revenues from fines, forfeitures, and penalties.
Note that the revenue multiplier presented in this section has been reduced by 15% to account for only the portion of the fines, forfeitures, and penalties that are expected to vary with population and employee growth in the City. Fines, forfeitures, and penalties are projected at $12.98 per Person Served, generating $2,765 in 15 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
additional revenue to the City’s General Fund.
B.6 Retail Cannabis Taxes
The City currently imposes taxes on the retail sales of adult-use and medicinal cannabis. Although these retail cannabis taxes currently constitute 4% of City’s FY 2023-24 General Fund revenues, DTA cons ervatively applied a 90% discount rate to account for only the portion of the retail cannabis tax revenues that are expected to vary with population and employee growth in the City, as opposed to such revenues that are fixed and will therefore remain unchanged by the Project.
DTA forecasts the retail cannabis taxes at $4.22 per Person Served, generating $899 in additional revenue to the City’s General Fund.
C Analysis of Recurring Co sts, Case Study Method
C.1 General Government Costs
General government costs are projected at a marginal rate of 75.00% of the City General Fund recurring costs, based on the assumption that the FY 2023-24 general government expenditures, equaling $99.2 mi llion, will remain at the same relative proportion of the FY 2023-24 City tota l non-governmental expenditures of approximately $283.8 million in future years. Government costs in this area are generated from several areas, including the City Council, City Manager, City Attorney, City Clerk, Finance and Management Services, Human Resource, Planning and Building, and Non-Departmental expenditures.
According to the FY 2023-24 budget, the percentage of general government expenditures to non-governmental expendit ures is approximately 34.9%. However, these general government costs are not expected to increase on a one-for-one basis as a result of the land use development de picted in this Report. Therefore, this Report assumes that general government co sts increase at an estimated marginal rate of 75%, or 26.2% of the existing General Government cost overhead rate. This approach results in annual general government costs of $42,092. A detailed explanation of these calculations is presented in Appendix A-10 .
D Analysis of Recurring Costs, Multiplier Method
As discussed previously in Section III.B, DTA utilized the Persons Served population approach to quantify the marginal increase in City’s General Fund expenditures resulting from the proposed Project. The multipliers presented in this section and illustrated in Table 9 quantify the marginal increase in expendit ures per Person Served for each specific service category.
16 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
Table 9: General Fund Expenditures (Multiplier Method)
Category Amount Methodology Discount
Police Department $396.34 Person Served 0%
Fire Department $152.49 Person Served 0%
Public Works $135.19 Person Served 0%
Park, Recreation & Community Services $34.90 Person Served 15% Community Development $14.20 Person Served 15%
Library $16.96 Person Served 15%
Museum $3.84 Person Served 15%
D.1 Non-General Government Costs
D.1.i Police Services
The FY 2023-24 City General Fund expenditures for police services are $146.8 million.
Notably, the cost multipliers presented in this section have not been discounted. The police services expenditures are projected at $396.34 per Person Served, resulting in an additional $84,420 to the City’s annual expenditures.
D.1.ii Fire Protection Services
The FY 2023-24 City General Fund expendit ures for fire protection services are $56.5 million. Notably, the cost multipliers presented in this section have not been discounted. The fire protection services expenditures are projected at $152.49 per Person Served, resulting in an additional $32,480 to the City’s annual expenditures.
D.1.iii Public Works Services
The FY 2023-24 City General Fund expend itures for public works services are $50.1 million. Notably, the cost multipliers presented in this section have not been discounted. The public works services ex penditures are projected at $135.19 per Person Served, resulting in an additional $28,795 to the City’s annual expenditures.
D.1.iv Park, Recreation & Community (“PRC”) Services
The FY 2023-24 City General Fund expenditures for PRC services are $15.2 million.
The cost multiplier presented in this section has been reduced by 15% to account for only the portion of the PRC services costs that are expected to vary with population and employee growth in the City. The PRC services expenditures are projected at $34.90 per Person Served, resulting in an additional $7,434 to the City’s annual expenditures.
D.1.v Community Development
The FY 2023-24 City General Fund expenditures for the community development services are $6.2 million. The cost mult iplier presented in this section has been reduced by 15% to account for only the portion of the community development 17 SECTION III
DESCRIPTION OF RECURRING
FISCAL REVENUES/COSTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
services costs that are expected to vary with population and employee growth in the City. The community development services expenditures are projected at $14.20 per Person Served, resulting in an additional $3,025 to the City’s annual expenditures.
D.1.vi Library Services
The FY 2023-24 City General Fund expenditures for library services are $7.4 million.
The cost multiplier presented in this section has been reduced by 15% to account for only the portion of the library services costs that are expected to vary with population and employee growth in the City. The library services expenditures are projected at $16.96 per Person Served, resultin g in an additional $3,612 to the City’s annual expenditures.
D.1.vii Museum Services
The FY 2023-24 City General Fund expenditures for museum services are $1.7 million.
The cost multiplier presented in this section has been reduced by 15% to account for only the portion of the museum services costs that are expected to vary with population and employee growth in the Ci ty. The museum services expenditures are projected at $3.84 per Person Served, resulting in an additional $818 to the City’s annual expenditures.
18 SECTION IV
FISCAL IMPACTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
IV FISCAL IMPACTS
A Total Recurring Revenues
The total recurring incremental revenues to the City are projected to be $460,412 per year.
As illustrated below in Table 10 and Figure 4 , the largest percentage of revenue generated (82.4%) is attributed to the Property Tax category (including property tax in lieu of VLFs).
Given the existing assessed value for the Project site has been artificially restricted by a 2% annual escalator, the development of the components of the Project would remove that restriction and substantially increase the prop erty taxes and in-lieu VLF revenues for the site. Attachments in Appendices A-4 through A-8 provide additional details regarding all recurring revenues and the assumptions used in their derivation.
Table 10: Recurring Fiscal Revenues (the City’s General Fund) Category Amount Percent
Secured Property Tax $235,616 51.2%
Unsecured Property Tax $23,562 5.1%
Property Taxes In Lieu of VLFs $120,157 26.1%
Indirect Sales Tax $2,066 0.4%
UUT $24,439 5.3%
Business Licenses $38,284 8.3%
Franchise Fees $5,353 1.2%
Charges for Services $5,219 1.1%
Licenses and Permits $1,657 0.4%
Fines and Forfeitures $2,765 0.6%
Adult-Use Retail Business Cannabis Tax $869 0.2%
Medical Marijuana Taxes $30 0.0%
Investment Income $395 0.1%
Total Revenues $460,412 100.0%
Note: All numbers are subject to rounding.
Figure 4: Recurring General Fun d Revenues at Project Build-Out Broken Down by Source
19 SECTION IV
FISCAL IMPACTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
B Total Recurring Costs
As illustrated in Table 11 and Figure 5 below, the City’s projected total annual incremental recurring costs are projected to be $202,676 per year. Police and fi re protection services constitute two of the largest projected costs, respectively accounting for 41.7% and 16.0% of total recurring fiscal costs. Attachments in Appendices A-9 and A-10 provide additional details about all recurring costs and the assumptions used in their derivation.
Table 11: Recurring Fiscal Costs (the City’s General Fund) Category Amount Percent
Police Department $84,420 41.7%
Fire Department $32,480 16.0%
Public Works $28,795 14.2%
Park, Recreation & Community Services $7,434 3.7%
Community Development $3,025 1.5%
Library $3,612 1.8%
Museum $818 0.4%
General Government $42,092 20.8%
Total Costs $202,676 100.0%
Note: All numbers are subject to rounding.
Figure 5: Recurring General Fund Costs at Project Build-Out Broken Down by Source
20 SECTION IV
FISCAL IMPACTS
EPD Solutions, Inc. May 13, 2024
South Coast Technology Center Fiscal Impact Analysis Report
www.FinanceDTA.com
C Overall Net Fiscal Impact
Table 12 and Figure 6 below shows the overall incremental fiscal impact to the City. T he Project site is anticipated to generate an annual recurring incremental fiscal surplus at build-out of $257,736 based on the generation of $460,412 in annual recurring revenues and $202,676 in recurring annual costs . Furthermore, annual revenues generated are projected to equal 2.27 times the associated City incremental General Fund costs.
Table 12: Net Fiscal Impact (the City’s General Fund)
Category Impact/Ratio
Total Recurring Revenues $460,412
Total Recurring Costs* $202,676
Annual Recurring Surplus/(Deficit) $257,736
Total Annual Revenue/Cost Ratio 2.27
Figure 6: Net Fiscal Impact (the City’s General Fund)
APPENDIX A
EPD Solutions, Inc.
Proposed South Coast Technology Center Project
Fiscal Impact Report
FIA
APPENDIX A-1
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
CITY FUND REVENUES (BY TYPE)
I Demographics and Other Data
2023 Estimated City Population [1] 299,630
2023 Estimated City Employees [2] 141,545
2023 Persons Served Population [3] 370,403
Notes:
[1] California Department of Finance, Housing and Population Information, January 1, 2023. [2] Environics Analytics, EmploymentProfiles by NAICS Codes 2023 for the City of Santa Ana.
II City Revenue Sources (by Type)
Total
Revenues
Revenue
Type
Fiscal Impact
Basis Discount
Fiscal Impact
Revenue
Factor
Tax Revenue $249,028,390 Persons Served $0.00
Property Tax - Exclude In-Lieu of VLF $46,525,390 Recurring Case Study 0% NA Transient Occupancy Taxes $8,500,000 Recurring Case Study 0% NA Utility Users Tax $25,800,000 Recurring Case Study 0% NA Sales Tax $64,715,400 Recurring Case Study 0% NA
Prop 172 Sales Tax $2,871,200 Recurring Case Study 0% NA Measure X Sales Tax $88,616,400 Recurring Case Study 0% NA Documentary Stamp Tax $1,000,000 Recurring Case Study 0% NA Santa Ana Residual $11,000,000 Recurring Case Study 0% NA Business Licenses $15,000,000 Recurring Per Employee 15% $90.08 Franchise Fees $10,950,000 Recurring Persons Served 15% $25.13 Interest Income $700,000 Recurring Case Study 0% NA
Charges for Services $10,675,650 Recurring Persons Served 15% $24.50 Building/Planning/Engineering Fees $10,740,000 Non-Recurring NA 100% NA Licenses and Permits $3,388,240 Recurring Persons Served 15% $7.78 VLF/Property Tax Compensation $42,044,300 Recurring Case Study 0% NA Fines and Forfeitures $5,654,100 Recurring Persons Served 15% $12.98 Intergovernmental $7,789,340 Recurring NA 100% NA
Use of Money and Property $17,956,500 Recurring Persons Served 100% $0.00 Other / Miscellaneous $10,792,020 Recurring Persons Served 100% $0.00 Adult-Use Retail Business Cannabis Tax $15,116,130 Recurring Persons Served 90% $4.08 Commercial Cannabis Tax $416,000 Recurring Persons Served 100% $0.00 Medical Marijuana Taxes $528,000 Recurring Persons Served 90% $0.14 $400,778,670 NA NA NA NA
$390,038,670 NA NA NA NATotal Recurring Revenues
[3] Assumes City population plus 50% of employees.
Revenue Type
Total Revenues
APPENDIX A-2
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
CITY FUND EXPENDITURES (BY TYPE)
I Demographics and Other Data
2023 Estimated City Population [1] 299,630
2023 Estimated City Employees [2] 141,545
2023 Persons Served Population [3] 370,403
Notes:
[1] California Department of Finance, Housing and Population Information, January 1, 2023. [2] Environics Analytics, EmploymentProfiles by NAICS Codes 2023 for the City of Santa Ana. [3] Assumes City population plus 50% of employees.
II City Expenditures (by Type)
Total
Expenditures
Expenditure
Type
Fiscal Impact
Basis Discount
Fiscal Impact
Expenditure
Factor General Government
City Council $1,021,070 Recurring Case Study NA NA
City Clerk's Office $2,411,150 Recurring Case Study NA NA City Manager's Office $3,144,680 Recurring Case Study NA NA City Attorney's Office $4,365,880 Recurring Case Study NA NA Planning and Building $20,146,220 Recurring Case Study NA NA Financial & Management Services $11,973,870 Recurring Case Study NA NA Human Resources $4,283,540 Recurring Case Study NA NA
Non-Departmental $51,847,740 Recurring Case Study NA NA Non-General Government
Police Department $146,805,550 Recurring Persons Served 0% $396.34 Fire Department $56,483,060 Recurring Persons Served 0% $152.49 Public Works $50,075,950 Recurring Persons Served 0% $135.19 Park, Recreation & Community Services $15,206,990 Recurring Persons Served 15% $34.90 Community Development $6,186,710 Recurring Persons Served 15% $14.20 Library $7,392,510 Recurring Persons Served 15% $16.96
Museum $1,674,210 Recurring Persons Served 15% $3.84
$383,019,130 NA NA NA NA
$383,019,130 NA NA NA NATotal Recurring Expenditures
Expenditure Type
Total Expenditures
APPENDIX A-3
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
LAND USE AND DEMOGRAPHICS SUMMARY
I Developable Land Use Description
A Projected Non-Residential Land Uses Building Sq. Ft. [1] Industrial Building One 112,230
Industrial Building Two 121,645
Industrial Building Three 79,369
I Non-Residential Land Use Employee Generation
A Projected Non-Residential Land Uses Sq. Ft. per Employee [2] Industrial Building One 737 BSF
Industrial Building Two 737 BSF
Industrial Building Three 737 BSF
I Projected Direct Employees
A Projected Non-Residential Land Uses Building Sq. Ft. Total Direct Employees Industrial Building One 112,230 BSF 152
Industrial Building Two 121,645 BSF 165
Industrial Building Three 79,369 BSF 108
I Total Projected Residential Population 0
II Total Projected Direct Employees 425
III Total Persons Served Population [3] 213
NOTES:
[1] Source: Project Proponent.
[2] Source: Project Proponent.
[3] An employee is typically assumed to be equivalent to 50% of a resident given they would spend only eight active hours in the City per day versus a resident who is active for 16 hours per day. * All figures subject to rounding
Population and Employees (Totals)
Future Land Use Data
Demographic Data
Population and Employees (Calculations)
APPENDIX A-4
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
PROPERTY TAX REVENUE ANALYSIS
I Property Tax Allocation (as a Portion of the 1% General Property Tax Levy) [1] A Category / Code Allocated to City [2]
General Fund 19.296953238%
Total 19.296953238%
I Non-Residential Land Uses
A Industrial Building One
Estimated Number of Sq. Ft. [3] 112,230
Estimated Valuation per Sq. Ft. [4] $390
Total Estimated Net Taxable Value $43,746,354
B Industrial Building Two
Estimated Number of Sq. Ft. [3] 121,645
Estimated Valuation per Sq. Ft. [4] $390
Total Estimated Net Taxable Value $47,416,246
C Industrial Building Three
Estimated Number of Sq. Ft. [3] 79,369
Estimated Valuation per Sq. Ft. [4] $390
Total Estimated Net Taxable Value $30,937,400
II Total Land Use Net Taxable Value $122,100,000
I Unsecured Property Taxes - Assumptions [5]
A Unsecured Taxes as a % of Secured
Non-Residential Property 10.00%
II Property Tax Transfer - Assumptions [6]
A Turnover Rate
Non-Residential Property 0.00%
B Other Assumptions
Transfer Tax as a % of Assessed Value 0.11%
Property Transfer Tax Passed Through to City of Santa Ana 50.00% III Motor Vehicle Licensing Fees - Assumptions
Vehicle Licensing Fees per Capita NA
IV Property Tax In-Lieu of Vehicle License Fee - Assumptions Total City of Santa Ana Gross Assessed Value [7] $34,504,366,076 City of Santa Ana Property Tax In-Lieu of Vehicle License Fee [8] $42,044,300 Property Tax In-Lieu of Vehicle License Fee Increase per $1,000 Assessed Value $1.22 I Fiscal Impact Category Annual Fiscal Impact Amount
A Secured Property Tax
A.1 Projected Non-Residential Land Uses
Industrial Building One $84,417
Industrial Building Two $91,499
Industrial Building Three $59,700
B Unsecured Property Tax
B.2 Projected Non-Residential Land Uses
Industrial Building One $8,442
Industrial Building Two $9,150
Industrial Building Three $5,970
General Property Tax Assumptions
Assessed Valuation Assumptions
Other Property Tax Revenue Assumptions
Fiscal Impact Calculation
APPENDIX A-4
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
PROPERTY TAX REVENUE ANALYSIS
C Property Tax In-Lieu of Vehicle License Fee [9]
Projected Residential and Non-Residential Land Uses $120,157 II Total Property Tax Revenues $379,335
NOTES:
[1] Based on "General Fund" levy for Tax Rate Area (TRA). Data provided by the County of Orange Auditor-Controller's Office. TRA allocations adjusted for ERAF. Note, figure does not include non-General Funds. [2] Post ERAF rates based on the weighted average of the fiscal year 2023-24 rates applicable to the TRAs in the Project.
Source: County of Orange Auditor-Controller Office.
[3] Please see Appendix A-3. Subject to change.
[4] Source: Project Proponent.
[5] Based on typical DTA baseline assumptions.
[6] Project Proponent plans to own the Project for an extended period. [7] Source: County of Orange Auditor-Controller's Office. [8] Source: City of Santa Ana Adopted Budget, Fiscal Year 2023-2024. [9] Property Tax in-lieu of Vehicle Licensing Fees applies to incremental property value.
Current estimated land value of Project site of $23,491,046 excluded from calculation. * All figures subject to rounding
APPENDIX A-5
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
SALES TAX REVENUE ANALYSIS
I Indirect Sales Tax Assumptions - Employees
Annual Spending per Employee [1] $951
II Retail Taxable Sales Capture
City of Santa Ana Retail Taxable Purchase Capture [2] 25% I Non-Residential Direct Sales Tax Assumptions
A Non-Residential Land Uses Taxable Sales per Sq. Ft [3] Industrial Building One $0.00
Industrial Building Two $0.00
Industrial Building Three $0.00
I Percent to the City of Santa Ana
City of Santa Ana Municipal Code §35-51 1.00%
Prop 172 Sales Tax [4] 0.04%
Measure X Sales Tax [5] 1.00%
Total 2.04%
I Fiscal Impact Category Annual Fiscal Impact Amount
A Indirect Sales Tax
A.1 Employee Taxable Sales
Direct Employees $2,066
B Direct Sales Tax
B.1 Projected Non-Residential Land Uses
Industrial Building One $0
Industrial Building Two $0
Industrial Building Three $0
II Total Sales Tax Revenues $2,066
NOTES:
[1] Based on the average spending on Fast Food/Deli/Lunch Eateries for workers with annual income between $50K and $75K. Source: "Office-Worker Retail Spending in a Digital Age," ICSC (2012).
Adjusted for inflation assuming 3% annual inflation rate. [2] Based on typical DTA baseline assumptions.
[3] Source: Project Proponent.
[4] The City projects to receive approximately 8.87% of the Prop 172 sales tax receipts generated within the City, which is equivalent to 0.04% sales tax rate. Source: City of Santa Ana Proposed Budget, Fiscal Year 2023-2024. [5] Current rate is 1.5%, decreases to 1.0% in 2029, and then sunsets in 2039. * All figures subject to rounding
Indirect Sales Tax Assumptions
Direct Sales Tax Assumptions
Other Sales Tax Assumptions
Fiscal Impact Calculation
APPENDIX A-6
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
UTILITY USERS' TAX REVENUE ANALYSIS
I Utility Usage Assumptions
Telephone Electricity Natural Gas Water
A Non-Residential Land Uses ($ per Business) [1] (kWh per Sq. Ft.) [2] (Cu. Ft. per Sq. Ft.) [3] (Gal. per Sq. Ft.) [4] Industrial Building One $4,800 10.8 26.4 8.3
Industrial Building Two $4,800 10.8 26.4 8.3
Industrial Building Three $3,840 10.8 26.4 8.3
II Energy Price Assumptions
A Non-Residential Land Uses
Electricity Costs per kWh [5] $0.0816
Natural Gas Rate per 1,000 Cu. Ft. [6] $13.29
Water Rate per 748 Gallons [7] $2.60
I Non-Residential Land Uses
A Industrial Building One
Telephone $4,800
Electricity $98,906
Natural Gas $39,377
Water $3,238
B Industrial Building Two
Telephone $4,800
Electricity $107,203
Natural Gas $42,680
Water $3,509
C Industrial Building Three
Telephone $3,840
Electricity $69,946
Natural Gas $27,847
Water $2,290
I Utility Users' Tax Rate Assumptions
Telephone (Municipal Code §3.16.020) 5.50%
Electricity (Municipal Code §3.16.030) 6.00%
Natural Gas (Municipal Code §3.16.040) 6.00%
Water (Municipal Code §3.16.050) 6.00%
I Fiscal Impact Category Annual Fiscal
Impact Amount
A Utility User's Tax - Telephone
A.1 Non-Residential Land Uses
Industrial Building One $264
Industrial Building Two $264
Industrial Building Three $211
B Utility User's Tax - Electricity
B.1 Non-Residential Land Uses
Industrial Building One $5,934
Industrial Building Two $6,432
Industrial Building Three $4,197
C Utility User's Tax - Natural Gas
C.1 Non-Residential Land Uses
Industrial Building One $2,363
Industrial Building Two $2,561
Industrial Building Three $1,671
D Utility User's Tax - Water
D.1 Non-Residential Land Uses
Industrial Building One $194
Industrial Building Two $211
Industrial Building Three $137
II Total Utility Users' Tax Revenues $24,439
Utility Assumptions
Gross Utility Receipts
Utility Users' Tax Assumptions
Fiscal Impact Calculation
NOTES:
[1] Based on the current base cost of AT&T Business Unlimited Premium plan with varying number of lines depending on the business. [2] Source: Commercial Buildings Energy Consumption Survey, Table C15, 2018. [3] Source: Commercial Buildings Energy Consumption Survey, Table C25, 2018. [4] Source: Commercial Buildings Energy Consumption Survey, Table W1, 2012. [5] Source: https://www.electricitylocal.com/states/california/santa-ana/ [6] Source: https://naturalgaslocal.com/states/california/santa-ana/. [7] Source: Santa Ana Water District.
[8] Source: Project Proponent.
* All figures subject to rounding
APPENDIX A-7
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
MULTIPLIER REVENUE SOURCES ANALYSIS
I Revenue Category Multiplier Factor [1] Revenue Projection Basis Business Licenses $90.08 Per Employee
Franchise Fees $25.13 Persons Served
Charges for Services $24.50 Persons Served
Licenses and Permits $7.78 Persons Served
Fines and Forfeitures $12.98 Persons Served
Adult-Use Retail Business Cannabis Tax $4.08 Persons Served Medical Marijuana Taxes $0.14 Persons Served
I Fiscal Impact Category Annual Fiscal Impact Amount
Business Licenses $38,284
Franchise Fees $5,353
Charges for Services $5,219
Licenses and Permits $1,657
Fines and Forfeitures $2,765
Adult-Use Retail Business Cannabis Tax $869
Medical Marijuana Taxes $30
II Total Multiplier Revenues $54,177
NOTES:
[1] Based on the City of Santa Ana Proposed Budget, Fiscal Year 2023-2024. * All figures subject to rounding
Multiplier Revenue Assumptions
Fiscal Impact Calculation
APPENDIX A-8
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
INVESTMENT INCOME REVENUES ANALYSIS
I Investment Income Assumptions
Investment Period for Recurring Non-Interest General Fund Revenues 1 Month Local Agency Investment Fund (LAIF) Rate of Return [1] 2.06% Local Agency Investment Fund (LAIF) Percentage of Earnings Cost [1] 50.00% I Fiscal Impact Category Annual Fiscal Impact Amount
Total Property Tax Revenues (Appendix A-4) $379,335
Total Sales Tax Revenues (Appendix A-5) $2,066
Total Utility User's Tax Revenues (Appendix A-6) $24,439 Total Multiplier Revenues (Appendix A-7) $54,177
II Projected Recurring General Fund Revenues Available for Investment $460,017 III Plus: Investment Income (Less Earnings Cost) $395
IV Total Recurring General Fund Revenues $460,412
NOTES:
[1] Estimate. Subject to change.
* All figures subject to rounding
Assumptions
Fiscal Impact Calculation
APPENDIX A-9
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
MULTIPLIER EXPENDITURES ANALYSIS
I Expenditure Category Multiplier Factor [1] Expenditure Projection Basis Police Department $396.34 Persons Served
Fire Department $152.49 Persons Served
Public Works $135.19 Persons Served
Park, Recreation & Community Services $34.90 Persons Served Community Development $14.20 Persons Served
Library $16.96 Persons Served
Museum $3.84 Persons Served
I Fiscal Impact Category Annual Fiscal Impact Amount
Police Department $84,420
Fire Department $32,480
Public Works $28,795
Park, Recreation & Community Services $7,434
Community Development $3,025
Library $3,612
Museum $818
II Total Multiplier Expenditures $160,584
NOTES:
[1] Based on the City of Santa Ana Proposed Budget, Fiscal Year 2023-2024. * All figures subject to rounding
Multiplier Expenditure Assumptions
Fiscal Impact Calculation
APPENDIX A-10
SANTA ANA, CALIFORNIA: SOUTH COAST TECHNOLOGY CENTER
GENERAL GOVERNMENT EXPENDITURES ANALYSIS
I General Government Overhead Expenditures
Total Recurring Fund Expenditures (excluding General Government Overhead) [1] $283,824,980 Recurring General Government Overhead Expenditures (as a % of Total Recurring Fund Expenditures) [2] 34.9% Marginal Increase in General Government Costs 75%
I Fiscal Impact Category Annual Fiscal Impact Amount
Total Multiplier Expenditures (Appendix A-9) $160,584
II Projected Recurring General Fund Expenditures $160,584 III Plus: General Government Costs $42,092
IV Total Recurring Expenditures $202,676
NOTES:
[1] Based on the City of Santa Ana Propsed Budget, Fiscal Year 2023-2024. [2] General Government Overhead Expenditures defined as costs for Legislative, Administration, Finance, Development Services, and other General Government.
* All figures subject to rounding
Assumptions
Fiscal Impact Calculation
18201 VON KARMAN AVENUE, SUITE 220
IRVINE, CA 92612
PHONE: (800) 969-4DTA
Public Finance
Public-Private Partnerships
Development Economics
Clean Energy Bonds
www.FinanceDTA.com