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," CDIAC Recommended Guidelines and Empire Economics Credentials The principal consultant for the Market Absorption Study is Dr. Joseph T. Janczyk. He will design the economic real estate model for CFD No. 2005-01 and present the conclusions to the City of Santa Ana and the Financing Team. Additionally, he will be assisted by his staff, which will be responsible for the compilation of the economic and real estate data required for the research and also conduct market field surveys. Furthermore, Dr. Janczyk will provide the key results in a convenient format to each of the other professionals, and will discuss these with them, including the Special Tax Consultant, the Appraiser and the Underwriter. Finally, the Market Absorption Study, Summary and Delivery Letter will be distributed via E-Mail in PDF format to facilitate its distribution and also its use in the Official Statement. In 1994, with the input of municipal finance professionals, the California Debt and Investment Advisory Commission (CDIAC), of which the State Treasurer serves as chair, published the Appraisal Standards for Land-Secured Financings (CDIAC Standards). Since that time, many California issuers have recognized the CDIAC Standards as a basis for the conduct of appraisals under the Mello-Roos Act, as well as providing standards for market absorption studies. Empire Economics meets the minimum recommended qualifications as proposed by CDIAC for market absOlption studies, with respect to three key aspects: independence, qualifications and experience, and types of projects. CDIAC Recommendations I. Avoid Conflicts of Interest: Knowing that developers and builders may influence the outcome of a market absorption study, market absorption analysts should describe their business relations with developers and builders during the past three years in the market absorption study. Empire Economics Independence I. Empire Economics conducts market absorption studies onlv for govemmental entities, and this has provided numerons public entities with a high level of comfort. By comparison, other firms that provide services to developers/builders may encounter "conflicts of interest" in trying to represent both the private and pnblic sectors. 2. Empire Economics, as part of the Market Study, will sign a Certification ofIndependence which includes the next two points. · Empire Economics has not performed any consulting services for the District's property owners nor the developers/builders during at least the past five+ years. · Empire Economics will not perform any consulting services for the District's property owners nor developers/builders during at least the next three years. QualijlcauonsandExperience I. Educational Qualifications: The market absorption analysts should possess at least a Bachelors degree but preferably an advanced degree with courses in real estate and economics. 2. Experience with Land-Secured Financings: The market absorption analysts should possess a minimum of five years of experience in performing market studies for land-secured fmancings. Additionally, they should be well versed in analyzing economic and real estate data that relates to the pricing and absorption of properties contained within a CFD and through this experience be capable of addressing issues unique to land-secured financing, including the use of Price Points in the Rate and Method of Apportionment. I. During the past twenty years, Dr. Joseph T. Janczyk, president of Empire Economics, has prepared market absorption studies for more than three hundred and fifty Plarmed Communities and Business Parks, providing the comfort level required for numerous California counties, cities, school districts, water districts and other special districts to fmance over twelve billion dollars worth of capital improvement projects. 2. Dr. Janczyk received his Doctorate in Economics from the University of California. As a tenured Economics Professor at California State University, he taught courses in microeconomics, macroeconomics, regional economics, and computer modeling. Dr. Janczyk has been a featured speaker at numerous seminars including the Municipal Bond Analysts, California Debt Advisory Commission, and California Association of Realtors, and Moody's Investor Services amongst others. 9