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Potential Gosts 4, project Operating Shortfalts: At the time of this study, each of the large recreation projects that are intended to be partially funded by the proposed PFD - 1). Upper Kittitas County Community Recreation Center; 2). Ellensburg Community Fieldhouse; and 3)' Kittitas Valley Aquatic Center - have projected operating shortfalls in Year 1'24 Based on information provided by Kittitas County, the proposed PFD has been identified as a as a potential financing partner to support operations amounting to $3.1M annually. Under either of the tested projection scenarios (Conservative and Moderate Scenario), accrued PFD revenues will be sufficient to cover this level of operating funding, in addition to covering its own operating expenses, assuming that the PFD is formed and funded in Q1 -2027 and the proposed projects are either under construction, triggering lease or debt service repayments by the Project sponsors, or operational in 2028. The analysis presented herein is intended to demonstrate the PFD's cumulative revenues from the proposed 0.2 percent sales tax, if implemented. The PFD may in fact achieve higher revenue accruals if taxable sales occur at a higher rate, as may be anticipated given recent comparable tax performance, or if the proposed projects are phased. At this time, pFD funding contributions to the proposed projects are flexible and can be adjusted over time. Further due diligence by the PFD board of directors is recommended before finalizing any operating subsidy for the proposed projects. Further, the PFD would need to budget additional funds or reserves to recognize the potential for higher operating shortfalls than projected or enter into agreements with other parties ameliorate that risk. S. Costs lncurred by Kittitas County: The County will incur legal costs related to the formation of the pFD. Fufther, if the County enters into agreements with the City and/or community partners prior to formation of the PFD, or with the PFD after it is formed, this may incur additional costs. fl i'iilrlr'i 2,:r i.il jrirrs e ct.-r r'.rTY Doilr.Jl"r[:r'JIAiloN [:oR R[:\/lf]\\'(lF: p{rD frc)ltl'/i Afl()r.l (l'1At]cl"l 2,{l?6) 29