HomeMy WebLinkAbout06-C (FISCAL IMPACT)ATTACHMENT C
Fiscal Impact Analysis
ALFRED GOBAR ASSOCIATES
August 30, 2016
Ms. Konstanza Dobreva — EPD Solutions
C/O
INTRA -CORP SOCAL-1 LLC
4041 MacArthur Blvd., Suite 250
Newport Beach, CA 92660
Subject: Fiscal Analysis of Vintage Residential Project
Dear Ms.:
Enclosed please find one copy of the report titled, "Fiscal Analysis of Vintage Residential
Project." We appreciate the opportunity to serve Intra -Corp SoCal-1 LLC and EPD
Solutions in the preparation of this report. Please feel free to contact us with regard to
questions you may have about the report.
We look forward to the opportunity of working with you and your firm on future projects.
Very truly yours,
ALFRED GOBAR ASSOCIATES
Alonzo Pedrin
Principal
alonzo@gobar.com
(714) 772-8900 x310
F:\VINTAGE-FIA_AUG-16\AUGUST 30, 2016\B
17461 Irvine Blvd., Suite P, Tustin, CA 92780 (714) 772-8900 www.gobar.com
FISCAL ANALYSIS OF VINTAGE RESIDENTIAL PROJECT
Prepared for:
INTRA -CORP SOCAL-1 LLC
August 2016
ACA
ALFRED GOBAR ASSOCIATES
17461 Irvine Blvd., Suite P, Tustin, CA 92780 (714) 772-8900 www.gobar.com
ALFRED GOBAR ASSOCIATES
Table of Contents
CHAPTER
I EXECUTIVE SUMMARY...................................................................... 1-1
II VINTAGE PROJECT FISCAL ANALYSIS ............................................
Fiscal Analysis Overview............................................................
II -1
Vintage Project Description........................................................
II -1
Fiscal Revenue Assessment......................................................
11-3
Fiscal Cost Assessment.............................................................
11-7
Net Fiscal Effect of the Vintage Project ......................................
11-14
III EXISTING INDUSTRIAL FISCAL ANALYSIS .......................................
Existing Land Use Description.................................................... III -1
Fiscal Revenue Summary .......................................................... III -2
Fiscal Cost Summary................................................................. III -3
Net Fiscal Effect of Existing Industrial ......................................... III -3
EXHIBIT
11-1 Development Assumptions — Vintage Residential
11-2 Property Tax Revenue — Vintage Residential
11-3 Transfer Tax Revenue — Vintage Residential
11-4 Sales Tax Revenue — Vintage Residential
11-5 Business License Revenue — Vintage Residential
11-6 Franchise Fee Revenue — Vintage Residential
II -7 Population Driven Sources of General Fund Revenue
11-8 Per Capita Based Revenue — Vintage Residential
11-9 Summary of Fiscal Revenue — Vintage Residential
II -10 City of Tustin Police Department FY2016-17 Adopted Budget
II -11 Incident Rate Comparison of Police Response Call Activity
II -12 Direct Cost of Police Protection — Vintage Residential
II -13 Incident Rate Comparison of Fire Response Call Activity
II -14 Direct Cost of Fire Protection — Vintage Residential
II -15 City of Tustin Public Works Department
II -16 City of Tustin Parks & Recreation Department
II -17 Cost of Per Capita Based Services
II -18 Operating Administration & Fixed -Cost Overhead Burden
11-19 Summary of Fiscal Cost — Vintage Residential
11-20 Summary of Net Fiscal Effect — Vintage Residential
III -1 Existing Land Use Assumptions
III -2 Summary of Fiscal Revenue — Multi -Tenant Industrial
III -3 Summary of Fiscal Cost— Multi -Tenant Industrial
III -4 Summary of Net Fiscal Effect — Multi -Tenant Industrial
Fiscal Analysis of Vintage Residential Project i
ALFRED GOBAR ASSOCIATES
Chapter 1
Executive Summary
The purpose of this fiscal impact analysis is to determine the extent a proposed land
use development will generate sufficient revenue to cover the cost of providing the
probable range of services that on-site residential and open space activities can be
expected to demand. This report addresses the fiscal effect associated with
development and occupancy of a 6.8 -acre proposed residential project (Vintage)
located on the southwest corner of 6th Street and B Street within the old town area of
Tustin. The proposed Vintage project will replace an older multi -tenant industrial
development, and as such, this report also compares the anticipated fiscal performance
of the proposed project and the estimated fiscal performance of the existing land use.
The Vintage project will consist of 140 residential townhomes ranging in value from the
low $600,000's and a pocket park facing 6th Street. The project will provide convenient
pedestrian access to the roughly 300 residents expected to reside in the development.
Once developed and occupied the Vintage is anticipated to represent a positive fiscal
benefit. Fiscal revenue generated by project land use is expected to exceed the cost
of providing public services site occupants are likely to demand from the City of Tustin
as summarized below.
Summary Of Net Fiscal Effect On General Fund
Vintage Residential At 426 W. 6Th St
Project
Overall Fiscal Effect Of Land Use
Effective
Net Fiscal
Development
Project
Annual Annual Net Annual
Rev: Cost
Effect
Activity
Acreage
Revenue Cost Benefit/(Cost)
Ratio
Per Acre
Residential
Melrose Place
4.4
$ 105,442
$
43,443
$ 61,999
2.42: 1.00
$
14,033
Veranda Court
2.3
49,702
23,009
26,693
2.16: 1.00
11,580
Project Residential
6.7
$ 155,144
$
66,452
$ 88,692
2.33: 1.00
$
13,192
Parks & Open Space
Park Space
0.1
$ 13
$
1,319
$ (1,306)
0.00:1.00
$ (15,025)
Subtotal
0.1
$ 13
$
1,319
$ (1,306)
0.00:1.00
$
(15,025)
Street Circulation
Misc ROW's/Off-Site
-
4,013
(4,013)
Circulation Subtotal
-
$
$
4,013
$ (4,013)
$
-
Project Overall:
6.8
$ 155,156
$
71,783
$ 83,373
2.16:1.00
$
12,243
Source: Alfred Gobar Associates.
Fiscal Analysis of Vintage Residential Project I-1
ALFRED GOBAR ASSOCIATES
The Vintage project will generate about $155,000 per year in fiscal revenue from
property tax, sales tax on resident purchases at City -based establishments, and other
revenue sources. By contrast, the Vintage project is anticipated increase the cost of
providing police protection, fire protection, and per capita recreation and maintenance
services by about $72,000 per year. In effect, the Vintage project is expected to
generate about $2.16 in added revenue for every $1.00 of added service cost it creates
resulting in a net fiscal revenue stream of roughly $83,000 per year (2016 dollars).
The site is currently improved industrial building representing 183,000 square feet of
gross building area. The existing tenant profile has changed over the years but
presently includes about 15 businesses involved with cabinet-making, business -to -
business distribution, business services, and religious -based community service. The
estimated fiscal performance of on-site activities is summarized below.
Summary Of Net Fiscal Effect On General Fund
Multi -Tenant Industrial At 426 W. 6Th St
Project
Overall Fiscal Effect Of Land Use
Effective
Net Fiscal
Development
Project
Annual Annual Net Annual
Rev: Cost
Effect
Activity
Acreage
Revenue Cost Benefit/(Cost)
Ratio
Per Acre
Industrial
Wholesale/Distrib
2.2
$ 15,197
$ 8,241
$ 6,955
1.84:1.00
$ 3,119
Manufacturing
2.6
7,808
9,718
(1,911)
0.8:1.00
(732)
Business Services
0.4
1,262
2,167
(904)
0.58:
1.00
(2,206)
Non -Indust Svcs
1.6
4,532
6,235
(1,704)
0.72:
1.00
(1,092)
Subtotal
6.8
$ 28,798
$ 26,361
$ 2,437
1.09:1.00
$ 358
Street Circulation
Misc ROW's/Off-Site
4,013
(4,013)
Circulation Subtotal
-
$
$ 4,013
$ (4,013)
$ -
Project Overall:
6.8
$ 28,798
$ 30,374
$ (1,576)
0.94:
1.00
$ (231)
Source: Alfred Gobar Associates
Current improvements and business activities represent a small but negative fiscal
burden (about $1,600 per year) for the City, in terms of revenue generated to cover
cost of public services demanded (primarily Police and Fire protection). A factor
contributing to weak fiscal performance is low taxable property value per acre that
describes existing industrial improvements.
From a fiscal standpoint the proposed Vintage project represents a significant
improvement in fiscal performance because it will generate a revenue stream that
exceeds the cost of public services likely to be demanded. A more detailed discussion
of this fiscal analysis is provided in the main report.
Fiscal Analysis of Vintage Residential Project I-2
ALFRED GOBAR ASSOCIATES
Chapter 11
Vintage Project Fiscal Analysis
Fiscal Analysis Overview
The purpose of this analysis is to determine whether or not the proposed development
program will enable the City of Tustin to provide ongoing public services that project
land use activities are likely to demand. A related study objective is to evaluate the
project's effect on recurring fiscal revenue and expense that describes the City General
Fund, the primary budget mechanism used fund the delivery of community-based
public services. The net effect of the project on budget revenue and expense
determines whether the proposed development represents a net fiscal benefit or fiscal
burden to the City. The project represents a fiscal benefit if recurring revenue
generated from project development and occupancy is sufficient to cover the
corresponding cost of services that will be demanded. Conversely, the project
represents a net fiscal burden if recurring revenue is not sufficient to cover the
anticipated increase in project -driven public service expense. The principal sources of
fiscal revenue and cost likely to be affected by the proposed Vintage project are
identified below and discussed further in later sections of this chapter.
Sources of Revenue
Sources of Cost
Property Tax
Police Protection
Property Transfer Tax
Fire Protection
Retail Sales Tax
Public Works Functions
Business License Fees
Roadway Maintenance
Franchise Fees
Park Facility Maintenance
Per Capita Revenue
Rec-Community Services
Fines & Penalties
Government Overhead
Motor Vehicle Fees
General Administration
Charges For Services
Fixed -Cost Services
Vintage Project Description
The Vintage is an infill development that will consist of 140 townhome style housing
units ranging size from 1,430 to 2,250 square feet with private garages, on-site
circulation and guest parking, open space paseos, and a pool & clubhouse amenity.
The Vintage will replace an older 183,000 square foot multi -tenant industrial complex
occupying 6.8 acres at the southwest corner of 6th Street and B Street in the old town
Fiscal Analysis of Vintage Residential Project II -1
ALFRED GOBAR ASSOCIATES
area Tustin. The Vintage project is located within walking distance (1/8 to 1/4 mile) of
historic homes and shops located in the historic downtown area of Tustin, which should
contribute to a pedestrian -oriented leisure lifestyle for the approximately 300 project
residents. Precise marketing plans do not currently exist for the Vintage project, but it
is expect unit pricing will generally reflect current competitive pricing of other similarly
designed for -sale housing in the surrounding area, as illustrated below.
Vintage Unit Value vs Area Small Lot/Attached Home Pricing - 2016
$900,000
$850,000 -------
$800,000 --------- --------- ------ ---- --------------- •------:�.� .••■•--------
---
•
• ■ M
a $700,000 • ---..l-- •- -----------------------------
! i •
� $650,000 ----------------- •-•--�.-�-+�'�-..A---------------------------------------------
o� $600,000 --------------- -�.----- -
Q $550,000 -_--:---------- ----- ---- ------I-
----- ----------------------------------
$500,000 �8 ------------------------ --------------
$450,000 ------------------------- ------------------------
$400,000
1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400
Unit Size (Sq Ft)
•City of Irvine ■ City of Tustin ♦Vintage Project
Source: Real Estate Economics, New Homes.com, Alfred Gobar Associates
The estimated home value used to characterize the Vintage project is important
because unit value greatly influences the amount of property tax revenue that is
generated and property tax accounts for nearly 20% of General Fund revenue support.
In addition, home value offers a reasonably good indication of household income,
corresponding retail spending, and related sales tax revenue received by the City.
Sales and Use Tax accounts for more than 43% of General Fund revenue support.
Unit pricing used to estimate the 2016 property tax value of the Vintage project is
summarized below.
Estimated 2016 Housing Unit Values - Vintage
Housing Product Plan
I Bdr I
SF/Unit
Units
Eff Value
I Value/SF
Melrose Place 1
3
1,723
29
$658,000
$382
2
4
1,829
33
717,000
392
3
3
1,948
15
705,000
362
4
4
2,249
8
768,000
341
4A
4
2,258
7
772,000
342
Sub -Total:
1,884
92
$705,000
$374
Veranda Court 1
3
1,434
24
$596,000
$416
2
3
1,588
12
646,000
407
3
3
1,720
12
658,000
383
Sub -Total:
1,544
48
$624,000
$404
Project Overall:
1,768
140
$677,000
$383
Source: Alfred Gobar Associates
Fiscal Analysis of Vintage Residential Project II -2
ALFRED GOBAR ASSOCIATES
A more detailed summary of the Vintage project is identified in Exhibit 11-1, including as
description of the number of units, average home values, expected occupancy, project
population, etc. As shown, it estimated about 95% of project units will be occupied at
any time, suggesting an overall project population of about 300 residents. The Vintage
project is planned to include a pocket park fronting along 6th Street and accessible to
the general public. Overall, the completed project is estimated to have a taxable
property value of about $95M, described in current 2016 dollars.
Fiscal Revenue Assessment
Property Tax
The City of Tustin receives a portion of the 1% basic property tax levy, as determined
by the Tax Rate Area (TRA) underlying the property. The TRA dictates how each $1.00
in property tax is appropriated among multiple taxing agencies. The project is located
in TRA 13-000 and $0.1066 of each property tax dollar is appropriated to the City for
unrestricted budget support, while another $0.0205 is appropriated to support a City-
wide landscape and lighting district (LLD). A summary of annual property tax revenue
generated by the Vintage project is detailed in Exhibit II -2.
The Vintage project is an infill development that will replace an existing industrial land
use that already generates property tax revenue for the City of Tustin. In this regard,
the property tax benefit that describes the Vintage is limited to the net increase in
property tax revenue over what is already generated by the existing land use. After
accounting for the current assessed value of existing site improvements, the Vintage
project is expected to generate a net increase in property tax revenue for the General
Fund of approximately $84,000 per year. The $19,500 per year in funding support for
LLD operations is not included since this source of property tax revenue is restricted to
the LLD operations, which are not part of the General Fund budget scope.
Property Transfer Tax
All cities within the State of California receive $0.55 in property transfer tax revenue for
every thousand dollars of property tax value involved in a taxable transfer (usually via
resale). The adopted General Fund budget anticipates $350,000 will be generated
during the FY2016-17 fiscal period from sale or transfer of property improvements
within the City. During the FY2015-16 fiscal period, $453,900 in transfer tax revenue
Fiscal Analysis of Vintage Residential Project II -3
ALFRED GOBAR ASSOCIATES
was generated from a citywide base of property value equal to roughly ($7.5B),
suggesting 11% of total property value was sold during that period. Residential
properties account for the majority share of transfer tax revenue because they turnover
more quickly than most types of income properties, which often serve as long-term
company assets. Within any given year, about 8% to 12% of total residential value in
a community is typically sold and subject to property transfer tax. Exhibit II -3 identifies
estimated transfer tax revenue that will be generated once the Vintage project is
developed and occupied. For purpose of this fiscal analysis, a conservative
assignment equal to 8% of the project taxable value is used to describe the annual
average share of units sold. The 8% sales rate suggests a given living unit is sold once
every 12.5 years. As shown, the Vintage project is expected to generate approximately
$4,100 per year in transfer tax revenue.
Retail Sales Tax
Retail is a population -serving form of land use, which means retail exists to meet the
purchase needs and desires of trade area consumers. Household purchase habits are
greatly influenced by available income to support consumption demand as household
expenditure survey data from the Bureau of Labor Statistics suggests below.
Household Expenditures on Retail Products & Services
80%
70%
0 60%
U
C
50%
0
0 40%
M:
10% i I I I I I I I i
$0 $25,000 $50,000 $75,000 $100,000 $125,000 $150,000 $175,000 $200,000
Household Income Before Taxes
o BLS 1994 Survey o BLS 2011 Survey —o- BLS 2013 Survey
Source: BLS Consumer Expenditure Sur\ey, Alfred Gobar Associates
As shown, household retail spending has risen as a share of total income over the
years but remains strongly influenced by the overall level of income. Housing value
Fiscal Analysis of Vintage Residential Project II -4
ALFRED GOBAR ASSOCIATES
offers a good barometer of household income because of consumer purchase
preferences and loan underwriting practices. Estimated housing values within the
project suggest resident occupants can be characterized by annual incomes ranging
from $100,000 to $125,000 per household. Households in this income range can be
generally expected to spend 23% to 25% of total income on retail goods and services.
The City of Tustin benefits from a strong base of commercial -retail establishments able
to attract sales support from residents in adjoining communities. In 2014, City -based
retail establishments captured the equivalent of nearly $21,300 per capita in taxable
sales while the corresponding level of performance for all retail establishments
throughout the State of California was about $10,500. Despite a strong retail base that
includes the Tustin Market Place, The District, two Costco's, and Tustin Auto Center,
not all retail spending by project households will flow to City -based establishments. For
purpose of this analysis, a 75% assignment is used to describe the share of project
household retail spending likely to be transacted within City -based establishments.
The corresponding sales tax revenue benefit is summarized in Exhibit II -4. As shown,
project households can be expected to generate an additional $28,000 per year in sales
tax revenue through support of City -based retailers.
Business License Fees
The City of Tustin charges an annual business license fee for all business
establishments according to a Council -adopted license fee schedule. In general, the
business license fee is based on a tiered schedule tied to the prior year business
receipts. Within the Vintage project, business license fee revenue will be limited to
home-based businesses. The US Department of Labor conducts periodic studies of
home-based enterprises. Prior to the Great Recession, survey data indicated that
roughly 1 out of 50 households engage in a home-based business, although more
recent information suggest it is closer to 1 out of every 40 households. In addition,
fictitious business filings with the County Recorder often trigger business license
enforcement by local municipalities. For purpose of this fiscal analysis it is assumed 1
in every 40 housing units within the Vintage project will engage in home-based
business activity prompting the need to file for a business license. Exhibit II -5 identifies
the estimated amount of business license fee revenue that will be generated upon
Fiscal Analysis of Vintage Residential Project II -5
ALFRED GOBAR ASSOCIATES
development and occupancy of the Vintage project. As shown, only about $120 per
year can be anticipated from home-based business within the project.
Franchise Fees
The City collects franchise fees from utility and service providers for the right to use
City streets and property to conduct business operations. Franchise fees are imposed
on utility -based service providers according to alternative payment schemes
established by the Public Utilities Commission (PUC), including payment based on a
percentage of gross consumption receipts paid by households and business located
within the City. The City of Tustin collects a franchise fee equal to 1% of customer
electricity charges, 1% of customer natural gas charges, and 5% of customer cable
television charges.
Exhibit II -6 identifies the estimated average monthly charges incurred for each affected
utility services and the corresponding amount of franchise fee that will be generated.
The estimate of revenue is based on allowances for units of service consumption (i.e.
KWH, BTU, subscriptions, etc.) identified in a study of 2020 energy demand sponsored
by the California Energy Commission and precedent consumption charges for various
forms of utility service provided throughout Southern California. A 60% subscription
rate allowance is used to characterize cable service participation among project
households. As shown, the Vintage project is expected to generate about $7,200 per
year in franchise -fee revenue.
Per Capita -Based Revenue
Many fiscal funding sources can be treated as per capita based revenue because they
are significantly influenced by the size of the population being served. Common
population based sources of fiscal revenue include: licenses and permits (service fees,
special permits, etc.); fines and penalties (traffic citations, parking tickets, etc.); charges
for services (recreation program fees, program reimbursements, etc.); and some
government subventions (motor vehicle in -lieu, public safety sales tax, etc.) that tend
to increase in connection with population increases. Exhibit II -7 identifies all budgeted
sources of revenue support for the FY2016-17 General Fund and further describes
each in terms of a general revenue classification, amount budgeted, and fiscal method
used to evaluate the revenue source. As discussed above, property tax, sales tax,
Fiscal Analysis of Vintage Residential Project II -6
ALFRED GOBAR ASSOCIATES
business license fees, and other revenue sources are affected by specific project
conditions that require a case method approach to evaluate. Revenue sources that
tend to be affected by incremental increases in resident population are identified as
"qualified per capita revenue". Per capita based sources of revenue account for about
16% of overall General Fund support or the equivalent of $105 per capita of resident
population. Once developed and occupied, the Vintage project is expected to host
approximately 300 residents, as shown in Exhibit II -8 and generate about $31,000 per
year in added revenue support for the General Fund budget.
Fiscal Revenue Summary
Exhibit II -9 summarizes the principal sources of fiscal revenue likely to be affected by
project development and occupancy. For all principal sources of fiscal revenue, the
Vintage project is expected to generate about $155,000 per year (2016 dollars) in
funding support for the General Fund. Among the principal sources of fiscal revenue
generated by the Vintage project, property tax revenue accounts of the lion's share of
support (54% or $84,000 per year), followed by per capita based revenue (20% or
$31,300 per year), then retail sales tax revenue (18% or $28,000 per year). All
combined, these three sources of revenue account for 92% of total General Fund
budget support that can be expected once the Vintage project is developed and
occupied.
Fiscal Cost Assessment
Police Protection
Estimates of required police protection often rely on a personnel index (e.g.: sworn
officers per 1,000 population) to calculate additional funding resources required to
serve new development. Population -based estimates fail to consider service demands
represented by nonresidential forms of land use such as retail complexes, offices,
industrial parks, etc. The Consultant employs a methodology that assigns the cost of
public safety services on the basis of demand per increment of land use served. This
approach reflects the notion that different forms of land use demand different levels of
protective service. For example, the amount of police protection demanded per acre
of low-density residential housing is different than the level of demand corresponding
to a higher -density apartment project or retail development. The actual incidence of
Fiscal Analysis of Vintage Residential Project II -7
ALFRED GOBAR ASSOCIATES
police service response to a given geographic location may at times be low or high
relative to similar forms of land use activity within the community due to unique site
circumstances or transient nature of criminal behavior. Police beat statistics often
reveal a disproportionate share of available protection resources repeatedly directed in
specific geographic locations of a community on a periodic basis. In large measure,
however, public protection represents a readiness cost that must be allocated among
all land uses that will eventually demand a service response. In this regard, the cost
of providing police protection can be approximated on the basis of distinct forms of land
use likely to demand alternate levels of response call activity and service.
Police protection and other types of public safety service reflect a form of readiness
capacity. For police protection, readiness capacity is tangibly evident by the presence
of a police facility, command structure, patrol units, investigative units, and other
components of public service. Maintaining readiness capacity involves both fixed and
variable (direct) expenses that reflect the cost structure involved in delivering public
protection service throughout the community. Exhibit II -10 describes the Consultant
estimate of the cost structure that describes the Tustin Police Department. Overall,
about 35% of the Police operating budget reflects relatively fixed cost required to
maintain base elements of the command structure and facilities supporting service
delivery. By comparison, about 65% of the operating budget reflects relatively variable
costs that are likely to change as the community grows and service demands in the
community evolve. A special tabulation of response call data (described below) was
used to identify the incremental and direct expense per response call by the Tustin
Police Department, equal to approximately $275 per response call.
Each Police response call represents a monopoly of readiness capacity (a patrol unit
cannot simultaneously respond to two calls in different locations). The inherent
monopoly of readiness capacity is managed through the use of patrol districts, work
schedules, community policing, data analysis, and other practices used to optimize
resource delivery. The Police Communications Unit prepared a special tabulation of
response call activity over a 30 -month period in order to identify an overall average cost
for response calls demanded by land use activity in the community. As shown below,
Police resources are actively engaged for a wide variety of call activity. Over the past
30 -months, the Tustin Police Department has actively responded to an average of
about 59,900 calls per year in order to meet community demand for service.
Fiscal Analysis of Vintage Residential Project II -8
ALFRED GOBAR ASSOCIATES
Citv of Tustin Communication Center Incident Activit
Incident Calls 1
2014 1
2015
12016 (6 -Mo) I
12 -Mo Avg 1
911 Calls By Landline
3,692
3,717
2,143
3,820
911 Calls By Cell Phone
6,165
6,840
4,176:
6,870
Officer Initiated
15,604
13,888
7,496
14,800
Non -Emergency Calls
20,631
22,874
14,674 ':
23,270
Traffic Stop
9,801
9,778
5,152
9,890
Citizen Walk -In To Front Counte
1,172
1,286
776:
1,290
Total Incident Calls 57,065 58,383 34,417 : 59,940
Source: City of Tustin Police - Communication Unit
Distinct forms of land use demand unique levels of Police protection service. Exhibit
II -11 compares the incidence rate of service demand describing alternate forms of land
use within several California communities for which response call data has been
compiled by the Consultant. Also included in the comparison, is a hypothetical
simulation of response call demand describing the City of Tustin based on General
Plan land use data. As shown, the incident rate of response that describes demand for
protection service varies from community to community and primarily reflects individual
agency operating procedures and community social dynamics driving alternate levels
of response activity for similar forms of land use. As example, the incident rate of
response for all residential land use in the City of Upland (15.24 response calls per
acre per year) is nearly three times the corresponding level that describes the City of
Redlands (5.45 response calls per acre per year). Practical realities that produce the
variation in response activity for similar land use is one reason a sampling of multiple
communities offers a useful reference to gauge about the level of protection service
likely to be demanded by land use activities of the Vintage project.
Exhibit II -12 identifies the estimated direct cost of providing Police protection service to
the residential land uses of the Vintage project. The indicated incident rate of response
call demand describing the Vintage project is equal to a 75th percentile level of service
demand describing the many analogous communities evaluated above. Overall, the
Vintage project is projected to demand protection service represented by 70 and 75
Police response calls per year at a cost of about $20,000 per year.
Fire Protection
The approach used to evaluate Fire protection cost is very similar to the method used
to evaluate Police protection cost. The City does not maintain its own Fire Department
Fiscal Analysis of Vintage Residential Project II -9
ALFRED GOBAR ASSOCIATES
but instead contracts with the Orange County Fire Authority (OCFA) for protection
service. The service contract for the FY2016-17 budget period amounts to $7.16 million
in General Fund expense. Annual service reports by the OCFA indicate land uses in
the City of Tustin have demanded an average of 4,936 incident responses per year
during the 2013, 2014, and 2015 calendar periods. The contract service agreement
with the OCFA eliminates the need to employ a command structure and maintain
suppression equipment and facilities in order to provide protection service to the
community. The service contract, however, is subject to periodic adjustment to reflect
growing service demands throughout the community and, as such, can be interpreted
to reflect fixed and variable components of the operating cost structure that describes
OCFA readiness capacity. For purpose of this fiscal analysis, 35% of the service
contract expense is assigned as a fixed component of cost while 65% of the service
contract expense is treated as a variable (direct) component of cost.
Exhibit II -13 provides a comparison of other California communities for which Fire
response data has been tabulated. Also included in the comparison, is a hypothetical
simulation of response call demand describing the City of Tustin based on General
Plan land use data. Variation in Fire incident response distinguishing similar forms of
land use within different communities exist but not to the same extent as evident for
Police response activity. Exhibit II -14 identifies the estimated direct cost of providing
Fire protection service to the residential land uses of the Vintage project. Overall, the
Vintage project is expected to demand protection service represented by about 20
response calls per year at a cost of about $19,800 per year.
Public Works Functions
The Tustin Public Works Department is tasked with a variety of protective and
maintenance functions that support community demand for a safe physical
environment. Protective services primarily consist of engineering -based functions
required in connection with public infrastructure improvements (facility engineering,
traffic safety, etc.) and private property improvements (plan checks, site inspections,
etc.). The Public Works Department is also responsible for the maintenance and
upkeep of valuable equipment and facilities used by the City and the community.
Exhibit II -15 summarizes the FY2016-17 Public Works operating budget in terms of
three major service responsibilities. As shown, about 36% of the $12.8 Million
Fiscal Analysis of Vintage Residential Project II -10
ALFRED GOBAR ASSOCIATES
operating budget ($4.59M) reflects fixed -cost public service functions that will not be
directly affected once the Vintage project is developed and occupied. These public
service functions, however, add to the overhead burden of the project.
Another 27% of the Public Works operating budget ($3.47M) reflects maintenance
responsibility for park facilities that is provided in response to public demand for
recreation and cultural engagement. Although, a significant component of park
maintenance involves relatively fixed cost, increased levels of labor and supplies is
required to maintain quality conditions as public demand and use of such facilities
increases. For this reason, park and community facility maintenance functions of the
Public Works Department reflect a per capita based service expense equal to $41 per
capita, based on the City current population.
Finally, about 37% of the Public Works operating budget ($4.79M) is directed to
roadway, facility, and landscape maintenance within the public right-of-way. Public
roads and right-of-way reflect an infrastructure and transport system that not only
serves community residents and businesses but also facilitates circulation for residents
and businesses from other parts of Orange County. According to the City 2015 CAFRS
report, the City maintains roughly 129 centerline -miles of right-of-way, with an
estimated 323 lane -miles of circulation improvements at an annual cost of more than
$14,800 per lane -mile of roadway. For purpose of this analysis, right-of-way (roadway)
maintenance is a cost responsibility assigned per lane -mile of circulation improvement
directly serving the project site location. It is important to note, the identified
maintenance cost per lane -mile of roadway is strictly limited to the General Fund budget
operations and does not include substantial capital improvement activity funded with
Gas Tax, Measure M, and other Non -General Fund revenue sources.
Recreation Services
The Tustin Recreation Department is responsible for offering recreation and cultural
enrichment programs to City residents and other adults that work in City -based
establishments. As shown in Exhibit II -16, the FY2016-17 operating budget of the
Recreation Department is equal to $3.74 million. About 80% of the operating budget
($2.98M) reflects services offered in direct response to public demand for recreation
and cultural programs. The remaining 20% of the operating budget ($0.76M) describes
Fiscal Analysis of Vintage Residential Project II -11
ALFRED GOBAR ASSOCIATES
a fixed -cost services that add to the overhead burden on the spectrum of services likely
to be demanded once the Vintage project is developed and occupied.
Roadway Maintenance
The Vintage project is an infill development intended to replace an existing industrial
development. As such, project development will not add to the circulation system
maintained by the Public Works Department, nor will the project increase the overall
volume of site traffic activity. The existing industrial land use, however, has existed for
some time and likely required roadway improvements to provide needed site access.
The Vintage project is essentially a replacement land use, and for purpose of this
analysis, is assigned roadway maintenance responsibility attributed to the preceding
land use. The 6.8 acre site location has a total of roughly 1,200 lineal feet of frontage
along 6th Street and B Street. Both roadways are local streets designed for one lane
of thru traffic in either direction. In effect, the site location is directly served by roughly
0.25 lane -miles of roadway, representing about $3,700 per year in roadway
maintenance responsibility for the City Public Works Department.
Per Capita Based Services
Exhibit II -17 identifies two per capita based public services likely to be directly affected
population growth associated with the Vintage project once developed and occupied.
As shown, recreation services reflects a service function provided by Parks and
Recreation in direct response to public interest and participation in programs offered.
Additional recreation services likely to be affected by the project population represents
about $10,500 per year in added service cost. Park and related facility maintenance is
a service function performed by the Public Works Department but is closely linked to
recreation program activity. Park and related facility maintenance cost can be expected
to increase in response to City population growth, including added residents at the
Vintage project. Increased park maintenance cost associated with population growth
and the Vintage project amounts to roughly $12,200 per year. All combined, City
population growth and the Vintage project represents an increase of about $22,700 per
year in the cost of per capita services provided by the City.
Fiscal Analysis of Vintage Residential Project II -12
ALFRED GOBAR ASSOCIATES
Government Administration and Overhead
Theoretically (by definition), overhead costs that are relatively unaffected by changes
in the level of direct services being provided. It can be argued, therefore, that increases
in the cost of direct services provided by the City would have no impact on general
government and fixed -cost service functions such as City Council, City Manager,
Human Resources, Finance, City Attorney, etc. In contrast to accounting theory, the
cost of many general government administration and fixed -cost service functions does
tend to increase as the cost and scope of public services increases.
A summary of FY2016-17 budgeted expense for general administration and other fixed -
cost service functions of the City is described in Exhibit II -18. As shown, the total
operating expense related to overhead, administration, and fixed -cost service functions
is estimated at approximately $22.7 million in effective cost. The effective overhead
burden excludes the cost of capital outlays, debt service, and offsetting revenues from
charges for administrative support services. For purpose of this analysis, offsetting
revenue is strictly limited to charges for General Fund services (refer to Exhibit II -7)
associated with Community Development Department, Police, and other department
services.
The City's administrative and overhead burden represents a cost that cannot be
justifiably assigned to a specific land use activity, but instead must be shared by all
operating functions within the direct program scope of the City's budget. The overall
program scope of the City budget for FY2016-17 amounts to $220.0 million, while the
direct budget scope amounts to $139.6 million (after deducting capital outlays, debt
service, offsetting revenue, and general government administration and fixed -cost
service functions). Based on a direct program budget scope of $139.6 million and
effective cost of $22.7 million for general government administration, the effective
current burden of the City is estimated at 16.3% of total operating cost.
For purposes of this analysis, the effective overhead burden assigned to direct service
cost generated by the Vintage project is equal to one-half the current overhead burden
rate, or 8.14%. While overhead cost cannot reasonably be expected to remain
unchanged when direct service cost increases, future increases in overhead cannot be
realistically expected rise in direct proportion to increased service expense either. To
assign overhead cost at a directly proportional rate of service cost increases suggests
Fiscal Analysis of Vintage Residential Project II -13
ALFRED GOBAR ASSOCIATES
the current administrative body has not achieved any operating efficiency with respect
to public services being managed.
Fiscal Cost Summary
Exhibit II -19 summarizes the principal sources of fiscal expense likely to be affected by
project development and occupancy. To provide community services in response to
increased public service demand, the Vintage project represents about $72,000 per
year (2016 dollars) in added operating cost for the General Fund. In terms of increased
public service demand, Police protection represents the largest component of added
cost (28% or $20,000 per year), followed closely by Fire protection (nearly 28% or
$19,800 per year), then park and related facility maintenance (17% or $12,200 per
year), and finally recreation program services (15% or $10,500 per year). All combined,
these four public services account for 88% total annual cost added to the General Fund
operating scope that can be expected once the Vintage project is developed and
occupied.
Net Fiscal Effect of the Vintage Project
Fiscal revenue generated by the Vintage project is expected to exceed the cost of
providing General Fund public services site occupants are likely to demand from the
City of Tustin. As shown in Exhibit II -20, the Vintage project will generate about
$155,000 per year in fiscal revenue from property tax, sales tax on resident purchases
at City -based establishments, and other revenue sources. By contrast, the Vintage
project is anticipated increase the cost of providing police protection, fire protection,
and per capita recreation and maintenance services by about $72,000 per year. In
effect, the Vintage project is expected to generate about $2.16 in added revenue for
every $1.00 of added service cost it creates resulting in a net fiscal revenue stream of
roughly $83,000 per year (2016 dollars).
F:\VINTAGE-FIA_AUG-16\AUGUST 30, 2016\B
Fiscal Analysis of Vintage Residential Project II -14
Exhibit II -1
Site Development Assumptions
Vintage Residential At 426 W. 6Th St
Project
Development
Activity
Description of Project
Dev Intensity D.U.'s and
Acreage Of Dev. Bldg. Area
Level of
Occup. Or
Utilization
Taxable Property Value'
Per Project
Unit Overall
Population & Jobs`
Per Project
Unit Overall
Residential
(DU's/AC) (Dwellings)
($000/Du) ($000)
(Pop/Du) (Residents)
Melrose Place
4.42 20.8 92
95%
705 64,860
2.24 196
Veranda Court
2.31 20.8 48
95%
624 29,950
2.24 102
Project Residential
6.72 20.8 140
95%
$ 677 $ 94,810
2.24 298
Parks & Open Space
(FAR) (000 Sq Ft)
($000/Ac) ($000)
(Ac/Job) (Jobs)
Park Space
0.09 - -
100%
$ 2,500 $ 220
20 -
Subtotal
0.09 -
$ 220
-
Project Overall:
6.81
$ 95,030
Residents: 298
Jobs: -
Note:
Taxable property value is
for 2016 based on current tax rolls and new home sales comps for similar sized small lot/attached units
within City of Tustin and City of Irvine and current assessed value of existing industrial improvements.
2 Estimate of resident population and on-site employment adjusted to
account for estimated occupancy for each land use activity.
Source: Intra -Corp SoCal-1 LLC; Urban Arena Site Plan - Sheet A-2; Alfred Gobar Associates
Vintage-FIA—Tustin-Aug-1 6/Assumptions
Exhibit II -2
Property Tax Revenue
Vintage At 426 W. 6Th St
Residential
Melrose Place 4.4 $ 14,681 $ 54,424 $ 58,035 $ 11,191 $ 58,035 $ 13,136
Veranda Court 2.3 12,994 24,507 26,133 5,039 26,133 11,337
Project Residential 6.7 $ 14,102 = $ 78,931 = $ 84,168 $ 16,230 $ 84,168 $ 12,519
Parks & Open Space
Park Space 0.1 2,500 = $ 12 - $ 13 $ 2 $ 13 $ 147
Subtotal 0.1 $ 2,531 = $ 12 - $ 13 $ 2 $ 13 $ 147
Project Overall: 6.8 $ 13,954 - $ 78,943 = $ 84,181 $ 16,232 $ 84,181 $ 12,361
Note:
Increment value reflects the total taxable project value per acre of land and improvements less the current 2016 per acre
property tax value of the project site location ($15,939,425 divided by 6.75 acre describing APN 401-341-04).
2 Property tax rate describes the respective share of the basic 1.0% levy appropriated to the City of Tustin for taxable
properties located within Tax Rate Area 13-000. LLD property tax is not a source of General Fund support.
Source: Orange County Assessor; Orange County Auditor -Controller; Alfred Gobar Associates.
Vintage -FIA _Tustin -Aug -16 PROP TAX
8/30/2016 3:06 PM
Increment
Property Tax Sources`
General Fund
Project
Land Use Summa
Tax Value Of
City of Tustin City
Property Tax Revenue
Development
Developed Taxable Value
Land Use
Tustin LLD
Project Per
Activitv
Acreaae Per Ac ($000)
($000)1
(Rate=0.1066) (Rate=o.o2osl
Overall Acre
Residential
Melrose Place 4.4 $ 14,681 $ 54,424 $ 58,035 $ 11,191 $ 58,035 $ 13,136
Veranda Court 2.3 12,994 24,507 26,133 5,039 26,133 11,337
Project Residential 6.7 $ 14,102 = $ 78,931 = $ 84,168 $ 16,230 $ 84,168 $ 12,519
Parks & Open Space
Park Space 0.1 2,500 = $ 12 - $ 13 $ 2 $ 13 $ 147
Subtotal 0.1 $ 2,531 = $ 12 - $ 13 $ 2 $ 13 $ 147
Project Overall: 6.8 $ 13,954 - $ 78,943 = $ 84,181 $ 16,232 $ 84,181 $ 12,361
Note:
Increment value reflects the total taxable project value per acre of land and improvements less the current 2016 per acre
property tax value of the project site location ($15,939,425 divided by 6.75 acre describing APN 401-341-04).
2 Property tax rate describes the respective share of the basic 1.0% levy appropriated to the City of Tustin for taxable
properties located within Tax Rate Area 13-000. LLD property tax is not a source of General Fund support.
Source: Orange County Assessor; Orange County Auditor -Controller; Alfred Gobar Associates.
Vintage -FIA _Tustin -Aug -16 PROP TAX
8/30/2016 3:06 PM
Exhibit II -3
Transfer Tax Revenue
Vintage At 426 W. 6Th St
Parks & Open Space
Park Space 0.1 2,500 $ 220 $ - $ -
Subtotal 0.1 $ 2,531 $ 220 $ - $ -
Project Overall: 6.8 $ 13,954 $ 95,030 $ 4,172 $ 613
Note:
1 Estimated Transfer Tax revenue is based on a property transfer rate equal to 8% for residential property and 1 % for
non-residential property. Cities receive $0.55 in transfer tax revenue per $1,000 of assessed value involved in the
taxable transfer or sale of property. For 2015, the total secured value for all property in Tustin exceeded $7.5 Billion.
During the FY2015-16 budget period, $453,903 in transfer tax revenue is anticipated suggesting an overall effective
property transfer rate equal to 11 % of total secured value. The property transfer rate assigned to the project is
relatively modest and suggests each residential property is only sold once every 12.5 years, on average.
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 TRANSFER
8/30/2016 3:06 PM
Taxable
Annual Transfer
Project
Land Use
Summary
Value of
Tax Revenue'
Development
Developed
Value Per
Land & Impvts
Project Per
Activity
Acreage
Acre $000
$000
Overall Acre
Residential
Melrose Place
4.4
$ 14,681
$ 64,860
$ 2,854 $ 646
Veranda Court
2.3
12,994
29,950
1,318 572
Project Residential
6.7
$ 14,102
$ 94,810
$ 4,172 $ 620
Parks & Open Space
Park Space 0.1 2,500 $ 220 $ - $ -
Subtotal 0.1 $ 2,531 $ 220 $ - $ -
Project Overall: 6.8 $ 13,954 $ 95,030 $ 4,172 $ 613
Note:
1 Estimated Transfer Tax revenue is based on a property transfer rate equal to 8% for residential property and 1 % for
non-residential property. Cities receive $0.55 in transfer tax revenue per $1,000 of assessed value involved in the
taxable transfer or sale of property. For 2015, the total secured value for all property in Tustin exceeded $7.5 Billion.
During the FY2015-16 budget period, $453,903 in transfer tax revenue is anticipated suggesting an overall effective
property transfer rate equal to 11 % of total secured value. The property transfer rate assigned to the project is
relatively modest and suggests each residential property is only sold once every 12.5 years, on average.
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 TRANSFER
8/30/2016 3:06 PM
Exhibit II -4
Sales Tax Revenue
Vintage At 426 W. 6Th St
Hroject
Development
Activity
Developed
Acrea e
i axaoie 5aies unteria
Intensity Occup Eff. Sales
of Dev. Rate Per Unit
I
i ota1
Taxable
Sales
6aies i ax Kevenue
Project Per
Overall' Acre
Residential
(Total Dwellings)
(Per Occup DU)
($000 Taxable)
Melrose Place
4.4
92
95%
$ 27,400
$
2,521
$
18,906
$
4,279
Veranda Court
2.3
48
95%
25,600
1,229
9,216
3,998
Project Residential
6.7
140
$ 26,783
$
3,750
$
28,122
$
4,183
Parks & Open Space
Park Space
0.1
-
100%
$ -
$
-
$
-
$
-
Subtotal
0.1
-
$
-
$
-
$
-
Project Overall:
6.8
n.a.
n.a.
$
3,750
$
28,122
$
4,130
Note:
' The City receives a 1 % share of taxable sales transacted within City -based establishments. Residential unit values offer a reasonably
good indication of household income. It is estimated project households will spend 23% to 25% of annual pre-tax income on taxable
products & services (based on BLS household expenditure survey data). State Board of Equalization data indicates City -based retail
establishments captured over $1.72 Billion in taxable sales during 2014, or the equivalent of nearly $21,300 per City resident (a level of
performance over two times the Statewide average of nearly $10,500 per capita). The strong competitive attraction of City -based
retailers can be expected to capture a large share of project household expenditures assigned at 75% for purpose of this analysis.
Source: Bureau of Labor Statistic - Household Expenditure Survey; State Board of Equalization; Alfred Gobar Associates.
Vintage -FIA _Tustin -Aug -16 SALES TAX
8/30/2016 3:06 PM
Exhibit II -5
Business License Revenue
Vintage At 426 W. 6Th St
Project
Business
Estimated
Bus Lic Revenue
Development
Developed
Licenses Per
No. of Bus.
Project Per
Activity
Acreage
Dev Acre'
Licenses
Overall Acre
Residential
Melrose Place 4.4 0.5 /ac 2 $ 82 $ 19
Veranda Court 2.3 0.4 /ac 1 41 18
Project Residential 6.7 0.4 /ac 3 $ 123 $ 18
Parks & Open Space
Park Space 0.1 Neg'I /ac Neg'I Neg'I
Subtotal 0.1 $ - $ -
Project Overall: 6.7 $ 123 $ 18
Note:
' Estimated business licenses reflect home occupation rate of roughly 1 license per 40 occupied residences
and the average floor area per existing business establishment identified during site field visit in July 2016.
2 Based on City of Tustin business license fee schedule. Fee owned is tied to prior year business
receipts. Fee schedule as follows: $41 Up to $100K; $51 Up to $200K; $61 Up to $300K; $81 up
to $600K; $101 Over $600K in prior year receipts.
Source: City of Tustin; Alfred Gobar Associates.
Vintage -FIA _Tustin -Aug -16 BUS LIC
8/30/2016 3:08 PM
Exhibit II -6
Franchise Fee Revenue
Vintage At 426 W. 6Th St
Project Land Use Summary Avg Monthly Consumption Franchise Revenue
Development Developed D.U.'s and Occupancy Cost Per Described Unit Project Per
Activity I Acreage Blda. Area Level Elect. I Gas I Cable Overall Acre
Source: California Energy Commission -Energy Demand 2010-2020, Adopted Forecast; Alfred Gobar Associates
Vintage -FIA Tustin -Aug -16 FRANCHISE
8/30/2016 3:06 PM
Franchise Fee W
1.00% 1.00% 5.00%
Consumption Metric:
KWH BTU Svc. Lines
Residential
(Per Occupied Dwelling)
Melrose Place
4.4
92 95%
$ 126 $ 26 $ 64
$
4,950
$
1,120
Veranda Court
2.3
48 95%
104 20 58
2,265
983
Project Residential
6.7
140 95%
$
7,216
$
1,073
Parks & Open Space
(Per Developed Acre)
Park Space
0.1
- 100%
- - -
$
-
$
-
Subtotal
0.1
$
-
$
-
Project Overall:
6.8
I $
7,216
$
1,060
Source: California Energy Commission -Energy Demand 2010-2020, Adopted Forecast; Alfred Gobar Associates
Vintage -FIA Tustin -Aug -16 FRANCHISE
8/30/2016 3:06 PM
Exhibit II -7
Population Driven Sources Of
General Fund Revenue - FY2016-17
FY 2016-17
General Classification
Budgeted For
FIA
Qualified Per
General Fund Revenue
of Revenue Source
FY2016-17
Method'
Capita Revenue
Property Tax in Lieu of VLF
License, Permit, Fee
6,450,000
Capita
6,450,000
Property Taxes
Property Tax
9,156,400
Case
-
Residual Property Taxes
Property Tax
1,500,000
N/A
-
In Lieu -Prop Tax
Property Tax
19,300
N/A
-
AB 1290 Pass Thru
Property Tax
75,000
N/A
-
Special Tax B
Property Tax
3,200,000
N/A
-
Franchise Fees
Franchise Fee
1,854,000
Case
-
Sales Tax Backfill
Sales & Use Tax
-
Case
-
Sales and Use Tax
Sales & Use Tax
23,844,400
Case
-
Sales Tax - Public Safety - Prop 172
Sales & Use Tax
284,200
Capita
284,200
Transient Occupancy Tax
Sales & Use Tax
1,250,000
N/A
-
Business License Fees
License, Permit, Fee
400,000
Case
-
Real Property Transfer Tax
License, Permit, Fee
350,000
Case
-
New Construction Tax
License, Permit, Fee
150,000
G&A Offset
-
Planning Plan Check Fees
License, Permit, Fee
171,300
G&A Offset
-
Building Permits & Plan Checks
License, Permit, Fee
856,400
G&A Offset
-
Fees and Other Permits
License, Permit, Fee
290,700
Capita
290,700
Fines and Forfeitures
Fines and Penalties
776,000
Capita
776,000
Interest Income
Use of Money & Property
175,000
N/A
-
Use of property
Use of Money & Property
1,003,400
N/A
-
POST Reimbursement
Intergovernmental
35,000
G&A Offset
-
Revenue from Other Agencies
Intergovernmental
20,000
G&A Offset
-
State Grants
Intergovernmental
3,000
G&A Offset
-
Federal Grants
Intergovernmental
90,000
G&A Offset
-
Sports Fees
User Charge
299,500
Capita
299,500
Class Fees
User Charge
300,000
Capita
300,000
Other Recreation Fees
User Charge
199,500
Capita
199,500
Transfer In
Other Revenue
1,188,500
Capita
118,900
Reimbursement from Other Funds
Other Revenue
1,200,000
Capita
120,000
All Other Sources
Other Revenue
488,300
Capita
48,800
$ 55,629,900 $ 8,887,600
Estimated City Population on Jan 1, 2017: 84,500
General Fund Revenue Per Capita $ 105.18
Note:' FIA Method refers to approach used to estimate sources of revenue or expense affected by project development. The capita
method reflects sources influenced by incremental changes in population served. Case method reflects sources that
require analysis of project -specific criteria (e.g.: site location, project valuation, household income, and other unique
project factors) to determine affect on sources. G&A Offset method reflects charges used to offset operating expense
of department administrative and fixed -cost public service functions. N/A reflects budget sources largely unaffected by the
proposed development.
Source: City of Tustin FY2016-17 Adopted Budget; California Department of Finance - Populaiton Research; Alfred Gobar Associates
Vintage-FIA—Tustin-Aug-16/CAP REV -1
Exhibit II -8
Per Capita Based Revenue
Vintage Residential At 426 W. 6Th St
Project
Development
Project Description/Characteristics
Per Capita Revenue'
Project
D.U.'s and
Occupancy
I
On -Site
Project
Per
Activit
Acreage
Bld . Area
& UtilitV
Population
Overall
Acre
Residential
(Dwellings)
(Residents)
Melrose Place
4.4
92
95%
196
$
20,615
$ 4,666
Veranda Court
2.3
48
95%
102
10,728
4,654
Project Residential
6.7
140
298
$
31,343
$ 4,662
Parks & Open Space
(Jobs)
Park Space
0.1
-
100%
-
-
-
Subtotal
0.1
-
$
-
$ -
Project Overall:
6.8
n.a.
$
31,343
n.a.
(On -Site Pop) (Per Resident)
Resident -Based Revenue: 298 $ 31,343 $ 105.18
(On -Site Jobs) (Per Job)
Job -Based Revenue: - $ - n.a.
Note
1 Identified per capita revenue describes qualified sources of support for the General Fund and does not
include other population driven sources of restricted funding such as Gas Tax ($19.36/Capita).
Source: City of Tustin FY2016-17 Adopted Budget; Alfred Gobar Associates
Vintage -FIA Tustin -Aug -16 CAP REV -2
8/30/2016 3:09 PM
Exhibit II -9
Summary Of Fiscal Revenue
Vintage Residential At 426 W. 6Th St
ProjectProperty
Project Fiscal Revenue By Source
Annual
Fiscal Revenue
Project Land Use Revenue Per Capita
Development Project
Tax Transfer Retail Business Franchise Driven
I
Project Per
ActivityAcreage
Revenue Tax Sales Tax License Fees Revenue
Overall Acre
Residential
Melrose Place
4.4
€ $
58,035 €
$ 2,854
$
18,906
$
82
$
4,950
Veranda Court
2.3
26,133
1,318
9,216
41
2,265
Project Residential:
6.7
$
84,168:
$ 4,172
$
28,122
$
123
$
7,216
Parks & Open Space
Park Space
0.1
$
13
$ -
$
-
Neg'I
$
-
Subtotal!
0.1
€ $
13 €
$ -
$
-
$
-
$
-
Street Circulation
Misc ROW's/Off-Site
-
-
-
-
-
-
Circulation Subtotal:
-
$
-
$ -
$
-
$
-
$
-
Project Overall::
6.8
: $
84,181:
$ 4,172
$
28,122
$
123
$
7,216
Revenue Distribution:
54.3%
2.7%
18.1%
0.1%
4.7%
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 REV SUM
8/30/2016 3:09 PM
$ 20,615
10,728
$ 31,343
$ 105,442 $ 23,866
49,702 21,562
$ 155,144 $ 23,076
$ 13 $ 147
$ - € $ - $ -
$ 31,343: $155,156 $ 22,784
20.2% 100.0%
Exhibit II -10
City of Tustin Police Department
FY2016-17 Adopted Budget
2016-17 Overhead & Variable &
Police Department Adopted Budget Fixed -Cost Service Direct Cost
Budaet Division I Expense I Functions I Functions'
Administration
100% 1,646,300E
25%
411,575E
75%
1,234,725
Salaries & Benefits
1,209,400 E
75%
907,050 E
25%
302,350
Services/Supplies/Operations
1,281,700
75%
961,275
25%
320,425
Fixed/Capital Assets (Equip/etc)
O E
100%
O E
0%
0
Fixed/Capital Assets (Equip/etc)
100% 2,491,100E
75%
1,868,325E
25%
622,775
Professional Standards
100% 2,976,700E
40%
1,190,680E
60%
1,786,020
Salaries & Benefits
1,183,100E
75%
887,325E
25%
295,775
Services/Supplies/Operations
252,450E
75%
189,338E
25%
63,113
Fixed/Capital Assets (Equip/etc)
0 E
100%
0 E
0%
0
Fixed/Capital Assets (Equip/etc)
100% 1,435,550E
75%
1,076,663E
25%
358,888
Operation Support Services
100% 4,721,100
25%
1,180,275
75%
3,540,825
Salaries & Benefits
1,405,900E
25%
351,475E
75%
1,054,425
Services/Supplies/Operations
240,400E
25%
60,100E
75%
180,300
Fixed/Capital Assets (Equip/etc)
0
100%
0
0%
0
North Area Patrol Division
Salaries & Benefits
100% 1,646,300E
25%
411,575E
75%
1,234,725
Field Support Services
482,350E
25%
120,588E
75%
361,763 E
Salaries & Benefits
2,479,800E
40%
991,920E
60%
1,487,880
Services/Supplies/Operations
496,900E
40%
198,760E
60%
298,140
Fixed/Capital Assets (Equip/etc)
O E
100%
O E
0%
0
Salaries & Benefits
100% 2,976,700E
40%
1,190,680E
60%
1,786,020
Special Operations
140,800E
25%
35,200E
75%
105,600 E
Salaries & Benefits
4,538,900E
25%
1,134,725E
75%
3,404,175
Services/Supplies/Operations
182,200E
25%
45,550E
75%
136,650
Fixed/Capital Assets (Equip/etc)
O E
100%
O E
0%
0
$ 22,152,800E
100% 4,721,100
25%
1,180,275
75%
3,540,825
North Area Patrol Division
Salaries & Benefits
5,796,400E
25%
1,449,100E
75%
4,347,300 E
Services/Supplies/Operations
482,350E
25%
120,588E
75%
361,763 E
Fixed/Capital Assets (Equip/etc)
0 E
100%
0 E
0%
0 E
100% 6,278,750E
25%
1,569,688E
75%
4,709,063 E
South Area Patrol Division
Salaries & Benefits
5,539,300E
25%
1,384,825E
75%
4,154,475 E
Services/Supplies/Operations
140,800E
25%
35,200E
75%
105,600 E
Fixed/Capital Assets (Equip/etc)
0 E
100%
0 E
0%
0 E
100% 5,680,100E
25%
1,420,025 E
75%
4,260,075 E
Police Protection - Overall Program
Scope (General Fund
Portion Only)
Salaries & Benefits
$ 22,152,800E
32% $
7,106,420E
68% $
15,046,380
Services/Supplies/Operations
3,076,800E
52%
1,610,810E
48%
1,465,990
Fixed/Capital Assets (Equip/etc)
O E
0%
O E
0%
0
100% $ 25,229,600
35% $
8,717,230
65% $
16,512,370
Total
Annual Service CaIIS2
59,940
Direct General Fund
Cost Per Service
Call $
275
Notes:
Direct operating expense reflects the variable portion of the Department budget subject to incremental
increases in service demand directly affected by corresponding increases in developed land use
throughout the City. The fixed cost component of Police protection is treated as a fixed -cost public service
contributing to the project overhead burden.
2 Total annual service calls reflects annual call activity processed through the Communicatios Unit as
tabulated by the City of Tustin Police Department Records Unit.
Source: City of Tustin FY2016-17 Adopted Budget; City of Tustin Police Records Unit; Alfred Gobar Associates
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Exhibit II -12
Direct Cost Of Police Protection Service
Vintage Residential At 426 W. 6Th St
Project Site Protection Service Demand Estimated Direct Cost
Development Developed Incident Rate Annual Call Project Per
Activity I Acreage I of Demand Demand Overall Acre
Residential
Melrose Place
Veranda Court
Project Residential
Parks & Open Space
Park Space
4.4 =
10.62
2.3 =
10.62
6.7 =
10.71
0.1 =
7.23
47 = $ 12,948 $ 2,931
25 = 6,887 2,988
72 = $ 19,835 $ 2,950
1=$
Subtotal 0.1 = 7.23 1 = $
Project Overall: 6.8 10.72 73 $
Direct General Fund Cost Per Service Call' $
275 $ 3,170
275 $ 3,170
20,110 $ 2,953
275
Note:
1 Identified cost per service call reflects direct incident rate cost of protection service equal to 65% of overall
department program budget ($25,229,600 for FY2016-17). The fixed cost component of Police protection
service is treated as a fixed public service expense contributing to the project overhead burden.
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 POLICE -2
8/30/2016 3:09 PM
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Exhibit II -14
Direct Cost Of Fire Protection Service
Vintage Residential At 426 W. 6Th St
Project Site Protection Service Demand Estimated Direct Cost
Development Developed Incident Rate Annual Call Project Per
Activity I Acreage of Demand Demand I Overall Acre
Residential
Melrose Place
Veranda Court
Project Residential
Parks & Open Space
Park Space
4.4 = 2.80
2.3 = 2.80
6.7 = 2.97
0.1 = 0.90
13 = $ 12,270 $ 2,777
7 = 6,607 2,866
20 = $ 18,877 $ 2,808
1=$
Subtotal 0.1 = 11.51 1 = $
Project Overall: 6.8 3.08 21 $
Direct General Fund Cost Per Service Call' $
944 $ 10,860
944 $ 10,860
19,821 2,911
944
Note:
1 Identified cost per service call reflects direct incident rate cost of protection service equal to 65% of overall
department program budget ($7,167,600 for FY2016-17). The fixed cost component of the fire protection contract
service agreement is treated as a fixed public service expense contributing to the project overhead burden.
Source: City of Tustin FY2016-17 Adopted Budget; Orange County Fire Authority; Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 FIRE -1
8/30/2016 3:11 PM
Exhibit II -15
City of Tustin Public Works Department
FY2016-17 Adopted Budget
2016-17 Overhead & Park & Community
Public Works DepartmentI Adopted Budget Fixed -Cost Service Facility Maintenance
Budget Division Expense I Functions' I Operations2
Administration & Emergency Service
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Engineering
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Street Maintenance Operations
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Landscape Maint (Non -CFD)
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Water Quality
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Fleet Maintenance
Salaries & Benefits
Services/Supplies/Operations
Fixed/Capital Assets (Equip/etc)
Building Facility Maintenance
Street & ROW
Maintenance
3%
428,800:
95%
407,360
3%
655,400
95%
622,630
0%
0 €
100%
0
100%
1,084,200:
95%
1,029,990
2%
883,500:
95%
839,325
2%
158,000:
95%
150,100
0%
0
100%
0
100%
1,041,500:
95%
989,425
0%
591,800:
5%
29,590
0%
139,300
5%
6,965
0%
3,325,000:
0%
0
100%
4,056,100:
1%
36,555
80%
1,482,700 €
10%
148,270
80%
2,234,900:
10%
223,490
80%
0
10%
0
100%
3,717,600:
10%
371,760
5%
133,100:
95%
126,445
5%
356,500
95%
338,675
5%
0 €
95%
0
100%
489,600:
95%
465,120
20%
489,800:
60%
293,880
20%
534,000:
60%
320,400
0%
0
50%
0
100%
1,023,800:
60%
614,280
Street & ROW
Maintenance
3%
12,864:
2%
8,576
3%
19,662
2%
13,108
0%
0 €
0%
0
3%
32,526:
2%
21,684
2%
17,670:
3%
26,505
2%
3,160:
3%
4,740
0%
0
0%
0
2%
20,830:
3%
31,245
0%
0
95%
562,210
0%
0
95%
132,335
0%
0 €
100%
3,325,000
0%
0
99%
4,019,545
80%
1,186,160 €
10%
148,270
80%
1,787,920:
10%
223,490
80%
0
10%
0
80%
2,974,080:
10%
371,760
5%
6,655:
0%
0
5%
17,825
0%
0
5%
0 €
0%
0
5%
24,480:
0%
0
20%
97,960:
20%
97,960
20%
106,800:
20%
106,800
0%
0
50%
0
20%
204,760:
20%
204,760
Salaries & Benefits
291,800:
75%
218,850:
15%
43,770:
10%
29,180
Services/Supplies/Operations
1,123,900
75%
842,925
15%
168,585
10%
112,390
Fixed/Capital Assets (Equip/etc)
0 €
75%
0 €
15%
0 €
10%
0
100% 1,415,700:
75%
1,061,775 €
15%
212,355:
10%
141,570
Public Works - Overall Program Scope (General Fund Portion Only)
Salaries & Benefits
$ 4,301,500
48% $
2,063,720
32% $
1,365,079
20% $
872,701
Services/Supplies/Operations
5,202,000:
48%
2,505,185:
40%
2,103,952:
11%
592,863
Fixed/Capital Assets (Equip/etc)
3,325,000:
0%
0 €
0%
0
100%
3,325,000
100% $ 12,828,500:
36% $
4,568,905:
27% $
3,469,031:
37% $
4,790,564
Estimated City Population on Jan 1, 2017: 84,500
Direct Per Capita Based Service Cost $ 41.05 €
Centerline Miles of Public Right -of -Way Maintained
Equivalent Lane -Miles of Roadway Maintained
Direct Cost Per Lane -Mile: $
129.1
322.8
14,843
Notes:
' For purpose of this FIA, all General Fund Public Works expense is treated as an general overheard or fixed -cost public service
function unless identified as a service function related to parks maintenance or roadway maintenance.
2 Public Works is responsible for a broad spectrum of maintenance duties related to parks and community facilities utilized
by the general public. In all, 13 parks covering nearly 99 acres, a community center, and senior center are maintained by Public
Works. Parks and community facility maintenance expense is treated as a per capita based function.
3 Public Works is responsible for a broad spectrum of maintenance duties involving infrastructure and landscape management in the
right-of-way. In all, approximately 129 miles of roadway, 120 traffic signals, 3,600 street lights, 51 miles of storm drains, and 15,800
street trees are maintained by Public Works. Identified roadway maintenance expense does not include Gas Tax and Measure M
funding and related expenditures primarily directed to capital improvements. Roadway maintenance cost is assigned per equivalent
lane -mile of roadway served with an estimated 2.5 lane -miles per center -line mile of roadway.
Source: City of Tustin FY2016-17 Adopted Budget; 2015 City of Tustin CAFRS report; Alfred Gobar Associates
Vintage -FIA -Tustin -Aug -1 6/PUB-WORKS
Exhibit II -16
City of Tustin Parks & Recreation Department
FY2016-17 Adopted Budget
Police
Adopted
Adopd Budget
& Overhead
Direct Cost
Budget Division I
Expense I
Functions I
Functions'
Administration
84,500
Direct Per Capita Based Service Cost $
35.24
Salaries & Benefits
474,700
65%
308,555
35%
166,145
Services/Supplies/Operations
386,500:
65%
251,225:
35%
135,275
Fixed/Capital Assets (Equip/etc)
850E
100%
850E
0%
0
100%
862,050E
65%
560,630E
35%
301,420
Sports
Salaries & Benefits
668,200E
5%
33,410E
95%
634,790
Services/Supplies/Operations
332,650E
5%
16,633E
95%
316,018
Fixed/Capital Assets (Equip/etc)
8,000E
100%
8,000E
0%
0
100%
1,008,850E
6%
58,043E
94%
950,808
Classes/Cultural Services
Salaries & Benefits
264,000 E
5%
13,200 E
95%
250,800
Services/Supplies/Operations
357,000E
5%
17,850E
95%
339,150
Fixed/Capital Assets (Equip/etc)
51,000E
100%
51,000E
0%
0
100%
672,000E
12%
82,050E
88%
589,950
Senior Citizens
Salaries & Benefits
439,500E
5%
21,975E
95%
417,525
Services/Supplies/Operations
112,100E
5%
5,605E
95%
106,495
Fixed/Capital Assets (Equip/etc)
0 E
100%
0 E
0%
0
100%
551,600E
5%
27,580E
95%
524,020
Support Services
Salaries & Benefits
270,700E
5%
13,535E
95%
257,165
Services/Supplies/Operations
7,750E
5%
388E
95%
7,363
Fixed/Capital Assets (Equip/etc)
2,000E
100%
2,000E
0%
0
100%
280,450E
6%
15,923E
94%
264,528
Tustin Youth Center
Salaries & Benefits
330,600E
5%
16,530E
95%
314,070
Services/Supplies/Operations
34,850E
5%
1,743E
95%
33,108
Fixed/Capital Assets (Equip/etc)
1,400E
100%
1,400E
0%
0
100%
366,850E
5%
19,673E
95%
347,178
Parks & Recreation - Overall Program Scope
Salaries & Benefits $ 2,447,700E 17% $ 407,205 E 83%
2,040,495
Services/Supplies/Operations 1,230,850E 24% 293,443E 76%
937,408
Fixed/Capital Assets (Equip/etc) 63,250E 100% 63,250E 0%
0
100% $ 3,741,800E 20% $ 763,898E 80% $
2,977,903
Estimated City Population on Jan 1, 2017:
84,500
Direct Per Capita Based Service Cost $
35.24
Notes:
Direct operating expense reflects the variable portion of the Department budget subject to incremental
increases in service demand directly affected by corresponding increases in developed land use population
throughout the City. The fixed cost component of Department budget is treated as a fixed -cost public service
contributing to the project overhead burden.
Source: City of Tustin FY2016-17 Adopted Budget; Alfred Gobar Associates
Vintage-FIA_Tustin-Aug-16/REC
Exhibit II -17
Cost Of Per Capita Based Services
Vintage Residential At 426 W. 6Th St
Project Project Description/Characteristics Per Capita Services Capita Service Cost
Development Project D.U.'s and Occupancy On -Site Recreation Park Facilities Project Per
Activity I Acreaae Blda. Area & Utility Population I Services Maintenance Overall Acre
Residential
(Dwellings)
(Residents)
Melrose Place
4.4
92 95%
196
6,907
8,047
14,954
3,385
Veranda Court
2.3
48 95%
102
3,595
4,187
7,782
3,376
Project Residential
6.7
140
298
$
10,502 $
12,234
$
22,736
$
3,382
Parks & Open Space
(Jobs)
Park Space
0.1
- 100%
-
$
- $
-
$
-
$
-
Subtotal
0.1
-
-
$
- $
-
$
-
$
-
Project Overall:
6.8
n.a.
n.a.
$
10,502 $
12,234
$
22,736
$
3,339
(On -Site Residents)
(Per Resident)
Resident -Based Expense:
298
$
35.24 $
41.05
$
22,736
(On -Site Jobs)
(Per On -Site Job)
Job -Based Expense:
-
$
17.62 $
20.53
$
-
Note:
The direct expense of public demanded recreation services and enjoyment of park facilities is assigned on the basis of the City resident
population, which accounts for a large portion of recreation program participation facility enjoyment. In contrast, workers employed at
businesses also participate in selected programs such adult sports leagues, etc., and utilize City park facilities. To reflect the potential for
non-resident worker participation one-half the per capita rate is assigned.
Source: City of Tustin FY2016-17 Adopted Budget; Alfred Gobar Associates
Vintage -FIA Tustin -Aug -16 CAP COST
8/30/2016 3:11 PM
Exhibit II -18
Operating Administration & Fixed Cost Overhead Burden
Vintage Residential At 426 W. 6Th St
General Government Administration Functions:
2016-17
Capital Outlays,
Effective
- $ 42,000
Adopted Budget
I
Debt & Offsetting
I
Overhead
Administrative & Fixed -Cost Functions
Allocation'
Service Revenue
Burden
General Government Administration Functions:
City Council $
42,000 $
- $ 42,000
City Clerk
501,200
- 501,200
City Attorney
550,000
- 550,000
City Manager
1,524,100
- 1,524,100
Finance
1,227,400
- 1,227,400
Human Resources
751,600
- 751,600
Successor Agency/RDA
-
- -
Misc & Non -Department
1,326,900
1,487,440 (160,540)
Subtotal: $
5,923,200 $
1,487,440 $ 4,435,760
General Public Service Fixed -Cost Functions:
Community Development $ 3,136,800 $ 1,177,700 $ 1,959,100
Pubilc Works 4,568,905 - 4,568,905
Police Protection Service 8,717,230 35,000 8,682,230
Fire Protection Service 2,508,660 - 2,508,660
Parks & Recreation 763,898 176,250 587,648
Subtotal: $ 19,695,493 $ 1,388,950 $ 18,306,543
General Administration & Fixed Cost: $ 25,618,693 $ 2,876,390 $ 22,742,302
City Overall Program Budget Scope:
Overall Budget Program Scope: $ 220,009,173 $ 57,621,663 $ 162,387,510
General Administration & Fixed Cost: (25,618,693) (2,876,390) (22,742,302)
Overall Direct Program Budget Cost: $ 194,390,481 $ 54,745,273 $ 139,645,208
Administrative and Overhead Cost Structure:
Overall Direct Overhead Burden 13.2% n. a. 16.3%
Incremental Project Overhead Burden 8.14%
Notes:
1 The overall program budget scope reflects all ongoing funding sources and activities subject to City oversight.
General fixed -cost functions reflect public service expenses not directly affected by project development.
2 Capital outlays and debt service reflect average annual expenditure over 3 -year period FY2013-14 to
FY2016-17. Offsetting revenue limited to General Fund activities during FY2016-17.
3 Estimate of effective overhead burden reflects budget expense less capital outlays, debt service
payments, and offsetting revenues from charges, fees, and agency reimbursements.
Source: City of Tustin FY2016-17 Adopted Budget; Alfred Gobar Associates
File: Vintage-FIA_Tustin-Aug-16/Tab: OVRHD
Exhibit II -19
Summary Of Fiscal Cost
Vintage Residential At 426 W. 6Th St
Project
- $
Project Fiscal Cost By Service Function
Annual
Fiscal Cost
Project Land Use Cost Per Capita Cost Overhead
Development
Project
Police Fire Roadway Rec/Cult Parks & Burden
I
Project Per
Activity
Acreage
Protection Protection Maint. Services Fac Maint 8.14%
Overall Acre
Residential
- $
99
$ 1,319
$ 15,172
$ - $
- $
Melrose Place
4.4
'_. $
12,948
$
12,270
$ -
Veranda Court
2.3
€
6,887
4,013
6,607
-
Project Residentiali
6.7
€ $
19,835
$
18,877
$ -
Parks & Open Space
Park Space
0.1
$
275
$
944
$ -
Subtotal
0.1
$
275
$
944
$ -
Street Circulation
Misc ROW's/Off-Site
-
-
-
3,711
Circulation Subtotal;
-
$
-
$
-
$ 3,711
Project Overall:::
6.8
€ $
20,110
$
19,821
$ 3,711
Cost Distribution:
28.0%
27.6%
5.2%
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 EXP SUM
8/30/2016 3:11 PM
$ 6,907 $ 8,047
3,595 4,187 €
$ 10,502 $ 12,2341
$ 3,271
1,732 €
$ 5,0041
$ 43,443 $ 9,833
23,009 9,982
$ 66,452 $ 9,884
$ - $
- $
99
$ 1,319
$ 15,172
$ - $
- $
99
$ 1,319
$ 15,172
-
-
302
4,013
-
$ - $
- $
302;$
4,013
$ -
$ 10,502 $
12,234 € $
5,405 €
$ 71,783
$ 10,541
14.6%
17.0%
7.5%
100.0%
0
Exhibit II -20
Summary Of Net Fiscal Effect On General Fund
Vintage Residential At 426 W. 6Th St
Project
Overall Fiscal Effect Of Land Use
Effective
Net Fiscal
Development
Project
Annual Annual Net Annual
Rev: Cost
Effect
Activity
Acreage
Revenue Cost Benefit/(Cost)
Ratio
Per Acre
Residential
Melrose Place
Veranda Court
Project Residential
Parks & Open Space
Park Space
Subtotal
Street Circulation
Misc ROW's/Off-Site
Circulation Subtotal
Project Overall:
Source: Alfred Gobar Associates.
Vintage -FIA Tustin -Aug -16 SUMMARY
8/30/2016 3:11 PM
4.4 $ 105,442 $ 43,443 $ 61,999 2.42:1.00 $ 14,033
2.3 49,702 23,009 26,693 2.16:1.00 11,580
6.7 $ 155,144 $ 66,452 $ 88,692 2.33:1.00 $ 13,192
0.1 $ 13 $ 1,319 $ (1,306) 0.00:1.00 $ (15,025)
0.1 $ 13 $ 1,319 $ (1,306) 0.00:1.00 $ (15,025)
- - 4,013 (4,013) - -
- $ - $ 4,013 $ (4,013) - $ -
6.8 $ 155,156 $ 71,783 $ 83,373 2.16:1.00 $ 12,243
ALFRED GOBAR ASSOCIATES
Chapter 111
Existing Industrial Fiscal Analysis
Existing Land Use Description
The 6.8 Vintage project location is currently improved with four multi -tenant industrial
buildings, loading docks, a cell towner, and on-site parking for business tenants.
CoStar leasing data indicates an initial building was constructed in 1964 and the last
building was constructed in 1976. The design of on-site buildings reflects aesthetic and
operating conventions common to architecture and industrial processes of the time. At
present, the site competes as a third tier industrial location due to antiquated design
involving clear heights, column spacing, fire suppression, loading design, and other
technologies required for modern industrial processes.
Based on a review of business license records, leasing data, and a site visit in July
2016, the existing profile of on-site business activity can be characterized as follows.
Existina Land Use - 420 6th Street (Freewav Commerce Center
Site Activity
320-630
B Street
1 640-694
B Street
1 418-428
6th Street
1 420-436
I 6th Street
On -Site
Total
Rentable Building Area (RBA)
28,160 33,584 43,323 65,657
170,72
Existing Business Activity
(Business Activity Description)
(Est. Jobs
Synthetic Grass Store
Whsle/Dist
2
Permlight Products
Whsle/Dist
6
Product Dist (E-Cig)
Whsle/Dist
2
H&J Cabinet Mtg
Mfg
2
Cabinet Mtg
Mfg
2
Cabinet Mtg
Mfg
2
KeithCo Mtg
Mfg
7
Pool Pump Mtg
Mfg Mfg
9
Printing Studio
Mfg
2
Angelina Bridal Svcs
Rental
2
HBP Dance Studio
Rec/Instr
1
Sandbox Mktg
Bus Sws
4
Harris Histology Svcs
Per Svcs
4
Calvary Chapel
Civic -Admin Civic-Distrib
10
AT&T Cell Tower
Utility -Infra
Available lease Space
n. a. n. a. n. a. n.a.
Estimate of On -Site Workers:
55
Note:
Rentable building area reflects space subject to lease. Actual total building area is roughly
183,00 square feet, including non -rentable space required for mechanical -safety equipment.
Source: Lee & Associates, Costar Group, Alfred Gobar Associates
The existing buildings occupy roughly 183,000 square feet of gross building area, but
only about 170,700 square feet reflects rentable area after deducting space required
Fiscal Analysis of Vintage Residential Project III -1
ALFRED GOBAR ASSOCIATES
for mechanical related equipment. Due to age and functional design limitations, the
tenant profile of occupyied building space has constantly changed over the past several
years (evidenced by numerous signs for non-existent businesses). The profile of
tenants occupying space at the site location is likely to change in the future as it has
repeatedly in the past but the mix of business activity described above provides a good
indication of activities likely to characterize land use activity at the site location.
A more detailed summary of existing industrial land use at the site location is identified
in Exhibit III -1. For purpose of this analysis, it is assumed site buildings will remain
100% occupied (as is currently the case). In addition, it is estimated about 15 unique
business establishments currently occupy on-site building space and employ roughly
50 to 55 workers on floor area per worker ratios identified. County Assessor records
also indicate the currently taxable value of site improvements is roughly $16 million, as
shown. Available business license data suggests several on-site businesses reported
less than $600,000 in prior year business receipts. The manufacturing, business
service, and religious orientation of existing business activity also suggests the share
of business transactions subject to sales tax will be minimal. For purpose of this
analysis, it is assumed that only about 10% of estimated on-site business activity (or
roughly $900,000) is subject to sales tax.
Fiscal Revenue Summary
Exhibit III -2 summarizes the principal sources of fiscal revenue that likely characterize
existing industrial land use activity at the site location. For all principal sources of fiscal
revenue, it is estimated existing industrial activities generate about $29,000 per year
(2016 dollars) in funding support for General Fund operations. Among the principal
sources of fiscal revenue, property tax revenue is by far the most significant (59% or
$17,000 per year), with sales tax (31 % or $9,000 per year), business license fees (5%
or $1,400 per year), and franchise fees (4% or $1,200 per year) accounting for the
balance of support. Combined, property tax and sales tax account for 90% of total
General Fund budget support generated by existing industrial land use activity at the
site location.
Fiscal Analysis of Vintage Residential Project III -2
ALFRED GOBAR ASSOCIATES
Fiscal Cost Summary
Exhibit III -3 summarizes the principal sources of fiscal expense that existing industrial
activity at the site location is estimated to demand in General Fund services. Overall,
it is estimated that existing industrial land use at the site location requires public
services that represent about $30,300 per year (2016 dollars) in General Fund
operating cost. In terms of public service most in demand, Police protection represents
the largest component of cost (45% or $13,800 per year), followed by Fire protection
(28% or $8,500 per year), then maintenance related to roadway improvements (12%
or $3,700 per year), and finally the overhead burden of general administration and
fixed -cost services (8% or $2,300 per year). All combined, these four services account
for 93% of the total annual cost required to provide General Fund public services
demanded by existing on-site industrial activities.
Net Fiscal Effect of Existing Industrial
Fiscal revenue generated by existing industrial land use at the site location falls short
of the cost of providing General Fund public services that site activities likely require of
the City of Tustin. As shown in Exhibit III -4, existing site development and business
activity generates nearly $29,000 per year in fiscal revenue but at the same time
requires slightly more than $30,000 per year in General Fund expense for public
services. Current site improvements and business activities represent a small but
negative fiscal burden (about $1,600 per year) for the City of Tustin. A significant factor
contributing to the weak fiscal performance of existing land use is the low taxable value
of site improvements per acre of land use.
F:\VINTAGE-FIA_AUG-16\AUGUST 30, 2016\B
Fiscal Analysis of Vintage Residential Project III -3
Exhibit III -1
Existing Land Use Assumptions
Multi -Tenant Industrial At 426 W. 6Th St
Project
Development
Activity
Description of Project
Dev Intensity D.U.'s and
Acreage Of Dev. Bldg. Area
Level of
Occup. Or
Utilization
Taxable Property Value'
Per Project
Unit Overall
Population & Jobs`
Per Project
Unit Overall
Industrial
(FAR) (000 Sq Ft)
($000/SF) ($000)
(SF/Job)
(Jobs)
Wholesale/Distrib
2.23 0.62 60
100%
$ 87 $ 5,210
6,000
10
Manufacturing
2.61 0.62 70
100%
87 6,100
2,900
24
Business Services
0.41 0.62 11
100%
87 960
1,800
6
Non -Indust Svcs
1.56 0.62 42
100%
87 3,670
2,800
15
Subtotal
6.81 0.62 183
100%
$ 87 $ 15,940
3,300
55
Project Overall:
6.81
$ 15,940
Residents:
-
Jobs:
55
Note:
Taxable property value is
for 2016 based on current records from the Orange County Assessor Office.
2 Estimate of on-site population and employment accounts for estimated occupancy
describing each land use activity.
Source: Intra -Corp SoCal-1 LLC; Urban Arena Site Plan - Sheet A-2; Alfred Gobar Associates
Indust-FIA—Tustin-Aug-1 6/ASSUME
Exhibit III -2
Summary Of Fiscal Revenue
Multi -Tenant Industrial At 426 W. 6Th St
ProjectProperty
5,556
Project Fiscal Revenue By Source
Annual
Fiscal Revenue
0.4
Project Land Use Revenue
Per Capita
Development
Project
Tax
Transfer Retail Business Franchise
Driven
I
Project Per
ActivityAcreage
6.8 $
Revenue
Tax Sales Tax License Fees
Revenue
Overall Acre
Industrial
Wholesale/Distrib
Manufacturing
Business Services
Non -Indust Svcs
Subtotal
Street Circulation
Misc ROW's/Off-Site
Circulation Subtotal
Project Overall:
Revenue Dist
2.2 '_. $
5,556
2.6 €
6,505
0.4
1,024
1.6
3,913
6.8 € $
16,997
4,532
2,905
$ - € $
28,798
6.8 $
16,997
ribution:
59.0%
Source: Alfred Gobar Associates.
Indust -FIA _Tustin -Aug -16 REV SUM
8/30/2016 3:00 PM
$ 57 $ 9,000 $ 303 $ 281
67 - 606 630
11 - 162 66
$ 175 $ 9,000 $ 1,395 $ 1,231
0.6% 31.3% 4.8% 4.3%
$ - $
15,197
$ 6,815
-
7,808
2,991
-
1,262
3,079
-
4,532
2,905
$ - € $
28,798
$ 4,229
$ - $
28,798
$ 4,229
0.0%
100.0%
Exhibit III -3
Summary Of Fiscal Cost
Multi -Tenant Industrial At 426 W. 6Th St
Project
205
Project Fiscal Cost By Service Function
Annual
Fiscal Cost
Project Land Use Cost Per Capita Cost
Overhead
Development
Project
Police Fire Roadway Rec/Cult Parks &
I
Burden
Project Per
Activity
Acreage
Protection Protection Maint. Services Fac Maint
8.14%
Overall Acre
Industrial
Wholesale/Distrib
Manufacturing
Business Services
Non -Indust Svcs
Subtotal
Street Circulation
Misc ROW's/Off-Site
Circulation Subtotal
Project Overall:
Cost Di
2.2
2.6
0.4
1.6
6.8
6.8
Aribution:
$ 4,408 $ 2,832 $ -
5,234 2,832 -
826 944 -
3,306 1,888 -
$ 13,774 $ 8,495 $ -
- - 3,711
$ - $ - $ 3,711
$ 13,774 $ 8,495 $ 3,711
45.3% 28.0% 12.2%
176 $
205
$
621
$
8,241 $
3,696
425
495:
732:
9,718
3,723
108
125:
163:
2,167
5,284
264
308:
469:
6,235
3,997
974 $
1,134
$
1,985
$
26,361 $
3,871
-
-
302:
4,013
-
$
-
$
302;$
4,013 $
-
974 $ 1,134 1 $ 2,287 1 $ 30,374 $ 4,460
3.2% 3.7% 7.5% 100.0%
0
Source: Alfred Gobar Associates.
Indust -FIA _Tustin -Aug -16 EXP SUM
8/30/2016 3:00 PM
Exhibit III -4
Summary Of Net Fiscal Effect On General Fund
Multi -Tenant Industrial At 426 W. 6Th St
Project
15,197 $
Overall Fiscal Effect Of Land Use
Effective
Net Fiscal
Development
Project
Annual Annual Net Annual
Rev: Cost
Effect
Activity
Acreage
Revenue Cost Benefit/(Cost)
Ratio
Per Acre
Industrial
Wholesale/Distrib
Manufacturing
Business Services
Non -Indust Svcs
Subtotal
Street Circulation
Misc ROW's/Off-Site
Circulation Subtotal
Project Overall
2.2 $
15,197 $
8,241
$ 6,955
1.84:1.00
$ 3,119
2.6
7,808
9,718
(1,911)
0.80:1.00
(732)
0.4
1,262
2,167
(904)
0.58:1.00
(2,206)
1.6
4,532
6,235
(1,704)
0.72:1.00
(1,092)
6.8 $
28,798 $
26,361
$ 2,437
1.09:1.00
$ 358
- - 4,013 (4,013)
- $ - $ 4,013 $ (4,013)
6.8 $ 28,798 $ 30,374 $ (1,576) 0.94:1.00 $ (231)
Source: Alfred Gobar Associates.
Indust -FIA Tustin -Aug -16 SUMMARY
8/30/2016 3:00 PM