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Draft Memorandum June 11, 2013 EPSP Alternatives Infrastructure Cost Burden Review Page 3 Figure 1 Summary of Findings Total Infrastructure Potential Program "Finished" Feasibility Alternative Market Value Infrastructure Cost/Value Special Tax: Cost Estimate Ratio Potential EPSP Alt. 1 $0.93 B $184.4 M 19.9% 0.77% Marginally Feasible EPSP Alt. 2 $1.08 B $195.1 M 18.1% 0.65% Marginally Feasible EPSP Alt. 3 $1.15 B $204.5 M 17.8% 0.61% Marginally Feasible EPSP Alt. 4 $1.21 B $259.2 M 21.3% 0.57% Least Feasible EPSP Alt. 5 $1.45 B $270.5 M 18.6% 0.48% Marginally Feasible EPSP Alt. 6 $1.74 B $291.7 M 16.8% 0.40% Most Feasible Methodology and Assumptions Financing Feasibility Standards For a large-scale development project, the infrastructure cost burden must bear a reasonable relationship to the value of the development being created and must not onerously impact the developer and/or the eventual property owners. Based on extensive experience with financing plans for major development projects, EPS recommends the following feasibi ity screening standards: 1. "Cost/Value Ratio"The total backbone infrastructure cost burden ( ncluding impact fees) should not exceed 15 percent of the total EPSP development va ue. 2. "Tax Burden Threshold"' If a special tax on the new development (such as a Mello- Roos Community Facilities District) is used to finance backbone infrastructure, the combined tax burden (base tax rate plus special taxes) should not exceed 2.0 percent of the properties' assessed value, meaning that the CFD alone should not exceed approximately one percent of value. The above feasibility tests are designed to provide a high-level, first screen on the viability of each alternative from an economic and financial perspective. Both tests are relatively simplistic and may either overstate or understate the true financial performance of each alternative for a variety of reasons. For example, the development community is likely to pursue a variety of n1 1 21 00 0112 1 0 9 0EastPleasenton\RepornIn(estructure Burden MemorandumlOraft.1(6.10)1121090_fnframm061013.0oe,