Team Members: Mary Anne Benvenutti Chad Brown Roger Carr Elizabeth Franklin Dave Free

Financial Feasibility

Project Capital Cost

Base Cost (Worst Case Scenario) The tax assessed value of Fluvanna real estate totaled $3.35 billion in A $0.05 tax increase, from $0.48 to $0.53 per $100, would be required to cover project debt service (assuming no revenue generation). For the average $250,000 home, this represents an annual obligation of $125, or $10.42 per month. With this increase, Fluvanna County would retain one of the lowest real estate tax rates in the area.

Project Revenues Wholesale Rate: forecast at $3.50 per 1,000 gallons. Retail Rate: forecast at $7.00 per 1,000 gallons. Wholesale and retail combined operating costs projected at $4.50 per 1,000 gallons. Although not accounted for in the financial model, operating costs benefit from economies of scale: Connection fees projected to average $754,000 annually - assumed to cover costs only. Availability fees, estimated as high as $2.93 million, have been excluded from the projection.

Real Estate Appreciation Utilities foster commercial development which accelerates real estate appreciation directly and indirectly. Density example (1 home per 2 acres vs. 2 homes per 1 acre): 300 homes X $350,000 = $105 million 1,200 homes X $350,000 = $420 million Louisa example: Lowe’s tax assessed value: $13 million Best Western tax assessed value: $8 million An increase of $373 million in taxable value, or 11.1%, would cover debt service entirely, independent of any other revenue sources. Annual appreciation of approximately 2.5% would generate sufficient incremental cash flow to cover debt service in just over 4 years.

Sales Tax Revenue 1% sales tax retained by Fluvanna County. Perspective on development in Louisa: An average Lowe’s store generates annual revenue of approximately $30 million. An average Wal-Mart super-center generates annual revenue of $65 million. 1% retained sales tax revenue equates to $950,000. Assuming growth of $15 million in sales per year results in annual sales tax revenue of $750,000 in year five.

Louisa County Example

Other Capital Sources Other capital sources may include state and federal grant assistance. Fluvanna County has requested a $10 million participation in the Economic Stimulus Package. Financing programs available through USDA Rural Development. FUSD may be eligible for a grant.

Assumptions Detail