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27 <br />Summary of Assessment <br />Based upon Johnson Consulting’s independent review of the financial feasibility of the <br />formation of the proposed PFD, it is our impartial opinion that revenue from a 0.2 percent <br />sales tax, if approved, would be sufficient to cover estimated operating costs for the PFD, with <br />surplus to cover higher operating costs as well as operating shortfalls at the proposed projects <br />following PFD formation. At the time of this study, based on information provided by Kittitas <br />County, the proposed PFD has been identified as a potential financing partner to support <br />operations of the identified large recreation projects – 1). Upper Kittitas County Community <br />Recreation Center; 2). Ellensburg Community Fieldhouse; and 3). Kittitas Valley Aquatic <br />Center – amounting to $3.1M annually. Even under a scenario where the entirety of this <br />funding support is required in 2028, reflecting preliminary project schedules, and assuming <br />that the PFD is formed and funded in Q1-2027, the debt service schedule indicates that <br />accrued PFD revenues will be sufficient to cover this level of operating support, while also <br />maintaining its own operations. <br />Estimated taxable retail sales throughout Kittitas County grew at a compounded annual rate of <br />7.46 percent between 2019 and 2024, demonstrating long-term robustness. Under a <br />Conservative scenario, it is estimated that PFD revenues would amount to an average of <br />$4.1M annually (between 2027 and 2043) and under a Moderate scenario, it is estimated that <br />PFD revenues would amount to an average of $5.36M annually (between 2027 and 2043), <br />exceeding the estimated PFD operating costs and proposed funding support to the identified <br />projects ($3.17M). Formation of the PFD with sufficient time to accrue revenues, and/ or <br />staggered project timing, will be critical to minimizing the likelihood and magnitude of any <br />funding gaps in early years. Longer-term projections indicate sufficient capacity to support <br />administrative costs and project-related funding needs as cumulative revenue surpluses are <br />achieved. <br />If the proposed PFD is formed, the PFD board of directors will need to refine estimates of <br />revenue available from a potential sales tax and develop a budget for PFD administration, any <br />annual operating shortfalls and reserves. This will inform how much revenue is projected to be <br />available to support operating shortfalls for the proposed projects and any debt service on <br />bonds. Continued refinement of these assumptions will further support implementation and <br />long-term success.