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Richard M. Gollis, Principal THE CONCORD GROUP June 3, 2020 Page 7 RECURRING FISCAL IMPACTS Property Tax Revenue All property taxes in the state of California are levied at a rate of 1 percent. The City's share of the 1 percent property tax levy is 19.4%, as provided by the County of Orange ("County") Auditor - Controller. The Developer provided RSG with the Project costs that consisted of $5 million for land, and $77 million for hard and soft costs. This $82 million adjusted for inflation over the construction period, would amount to an assessed valuation of $86.4 million at buildout. To accurately portray the effect of the Project to the City, property tax revenues presented in this report are net of any existing revenues. The existing site is currently valued at $6.3 million. When adjusted for inflation over the construction period the value is $6.9 million, providing the City an estimated $13,375 in year 2023 absent the construction of the Project. The new development would provide $167,657 to the City in that same year. Therefore, the net new property tax revenues to the City would be $154,282 at buildout. Table 3 NET NEW PROPERTY TAX REVENUE 4th and Mortimer At Buildout Existing Assessed Value $ 6,894,078 Proposed Project Assessed Valuation' 86,420,908 Net New Value $ 79,526,830 City Property Tax Rate 19.4% Annual Estimate Existing Property Tax Revenues $ 13,375 New Property Tax Revenues $ 167,657 Net New Property Tax Revenues $ 154,282 Source: County of Orange Auditor Controller, RSG, Inc. ' Inflated pursuant to the construction schedule To project future property taxes, RSG assumed 2 percent inflation on property tax revenues over the 25-year projection period, resulting in $2.9 million (net present value, discounted at 4 percent) in net new property tax revenues for the City General Fund. Property Tax in -lieu of Motor Vehicle License Fee Revenue Established in 1935, the Motor Vehicle License Fee ("MVLF") was essentially a tax on vehicle ownership. It is collected by the State annually when vehicles are registered and was historically allocated to cities and counties based upon a statutory formula. In 2004, during the State's budget crisis, about 90 percent of each city's MVLF revenue was replaced with property tax revenue, and cities in particular began to receive an allocation of property tax from the Educational Revenue Augmentation Fund ("ERAF") in an amount equal to what they would have received in MVLF under an older MVLF allocation formula. Under current law, the property tax in -lieu of MVLF 75C-451