1 -SPR19-01;DBA19-01_114 AND 117 E 5TH STREET

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5 Utility User Tax The City assesses a utility user tax of 5.5 percent on electricity, gas, water, and telephone revenues generated within Santa Ana. Utility costs were estimated by RSG based on a review of similar projects and utility costs in Orange County. Assumed annual utility expenditures subject to the City’s UUT consist of: Gas at $270 annually ($240 in 2019$), water at $540 annually ($480 in 2019$), electric at $1,351 annually ($1,200 in 2019$), and phone at $878 annually ($780 in 2019$). Based on these assumptions, RSG estimates that utility user tax revenues generated by the Project will be approximately $35,699 per year, or $1.3 million ($708.3 thousand in 2019$) over the 25-year projection period. Resident-Derived Sales Tax The additional residential households in Santa Ana are expected to result in increased sales for retailers and restaurants within the city. RSG obtained average annual household expenditures for households within a 5-minute driving radius of the Project from ESRI Business Analyst Online. By adjusting the household expenditures based on taxable and non-taxable sales, RSG estimates that each household generates approximately $17,000 in taxable sales per year. RSG adjusted this figure to 50 percent as the Project is in close proximity to several significant shopping centers, including Bristol/Sunflower Plaza, Bristol Marketplace, Mainplace Mall, and Downtown Santa Ana, among others, which lie within Santa Ana, however, many other shopping destinations exist in other cities nearby (Orange, Tustin, Garden Grove, Anaheim, Irvine, and Costa Mesa). In 2018, Santa Ana Voters approved a local transactions and use tax, increasing the current 7.75% sales tax by 1.5% until 2029, and then by 1% until 2039, when the tax will expire. The initiative, which was referred to on the ballot as Measure X, was titled the “Santa Ana Neighborhood Safety, Homeless Prevention and Essential City Services Enhancement Measure,” and is expected to generate approximately $60 million dollars annually until 2029, and $40 million dollars annually until 2039. RSG took this increase into consideration when analyzing the affects the new residents will have on the general fund. The total residential derived sales tax revenue from the regular tax rate is approximately $19,103; or $696 thousand ($379 thousand in 2019$) over 25 years. On top of this, the residential derived sales tax revenue from the Measure X increase is $28,654, or $520 thousand ($340 thousand in 2019$) over 25 years. UTILITY USER TAX REVENUE 4th + Main Energy Expenditures per Household 2,950$ Number of Households 220 Total Residential Energy Expenses 649,080$ City Tax Rate 6% City Tax Revenues 35,699$ Sources: City of Santa Ana Energy Information Administration, RSG, Inc. 1- 145