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

Financial Feasibility

Project Capital Cost

Total Core Pipeline 45,000

Fluvanna Co. Share 22,500 FUSD Connector 3,800

Total Fluvanna Capital Cost 26,300

Estimated Debt Service* 1,792 *Assumes 30 yr. amortization; 5.5%

Projected Pipeline Capital Costs ($000's)

Base Cost (Worst Case Scenario) The tax assessed value of Fluvanna real estate totaled $3.35 billion in

2008. 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.Buckingham $0.44Orange $0.47Fluvanna $0.48Goochland $0.53

Cumberland $0.59Madison $0.59Louisa $0.62Albemarle $0.71Nelson $0.72Greene $0.72Comparable Co. Avg. $0.59

Comparable County Tax Rates

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:

Volume: 1.0 MGD 1.5 MGD 2.0 MGD 2.5 MGD 3.0 MGDWholesale Rate: 3.50$ 3.50$ 3.50$ 3.50$ 3.50$ Operating Costs: 2.66$ 2.15$ 1.90$ 1.76$ 1.64$

Operating Costs per 1,000 Gallons vs. Pipeline Volume

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 AppreciationUtilities 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 million1,200 homes X $350,000 = $420 million

Louisa example:Lowe’s tax assessed value: $13 millionBest 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 Revenue1% 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

Fiscal Year Revenue* ExpendituresFY 1998-1999 $748,564FY 1999-2000 $372,990FY 2000-2001 $981,971FY 2001-2002 $316,319 $1,220,710FY 2002-2003 $370,139 $2,749,419FY 2003-2004 $780,394 $29,202FY 2004-2005 $1,668,511 $945,488FY 2005-2006 $2,192,499 $837,559FY 2006-2007 $2,835,366 $247,640FY 2007-2008 $3,006,849 $615,132TOTAL $11,170,077 $8,748,675*Revenue does not include sales tax.

Comparison of Revenue and Expenditures for Zion Crossroads Growth Area

Other Capital SourcesOther 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.

Projection 2010 2011 2012 2013 2014 2015 2016

Total Debt1 26,300 26,300 25,946 25,571 25,176 24,758 24,317 Debt Service2 1,447 1,447 1,792 1,792 1,792 1,792 1,792

Taxable Real Estate3 3,350,000 3,350,000 3,350,000 3,350,000 3,350,000 3,350,000 3,350,000 Tax Rate 0.48 0.48 0.48 0.48 0.48 0.48 0.48 RE Tax Income4 16,080 16,080 16,080 16,080 16,080 16,080 16,080

Required Tax Rate per $1005 0.52 0.52 0.53 0.53 0.53 0.53 0.53

ERUs6 (actual) 1,667 1,917 2,167 2,417 2,667 Water Volume (GPD) (000's)7 - - 500 575 650 725 800 Retail Water Sales Income8 - - 456 735 830 926 1,022 Est. Commercial Sales Revenue9 15,000 30,000 45,000 60,000 75,000 Sales Tax Revenue10 150 300 450 600 750 Incremental RE Tax Revenue11 402 814 1,236 1,669 2,113

Required Tax Rate per $10012 0.52 0.52 0.50 0.48 0.46 0.44 0.42 Incremental Cost / (Benefit)13 1,447 1,447 784 (57) (725) (1,403) (2,093)

Total Debt14 16,300 16,300 16,080 15,848 15,603 15,345 15,071 Debt Service2 897 897 1,111 1,111 1,111 1,111 1,111 Required Tax Rate per $1005 0.51 0.51 0.51 0.51 0.51 0.51 0.51 Required Tax Rate per $10012 0.51 0.51 0.48 0.46 0.44 0.42 0.40 Incremental Cost / (Benefit)13

897 897 103 (738) (1,406) (2,084) (2,774)

Fluvanna Co. Water System Financing ($000's)

Impact of $10 Million Received in Stimulus Money ($000's)

Assumptions Detail1 - Assumes $45 million split 50% with Louisa Co.; assumes $3.8 million FUSD connector

2 - Assumes 5.5% interest rate - interest only for two years, followed by 30 year amortization

3 - 2008 county-wide value of tax assessed real estate

4 - 2008 revenues from real estate taxes

5 - Assumes no incremental revenue from water system; tax increase covers debt service

6 - Assumes 1,667 ERUs initially (500,000 GPD / 300 GPD per ERU); increases by 250 ERUs annually, reaching 1.5 MGD in 13.33 years

7 - Assumes 250 ERU's added per year (75,000 GPD)

8 - Assumes wholesale rate of $3.50, retail rate of $7.00, and total retail and wholesale operating costs of $4.50

9 - Assumes commercial sales revenue of $15 million added per year

10 - Assumes 1% sales tax revenue retained by Fluvanna Co.

11 - Assumes 2.5% appreciation in real estate beginning in 2012 taxed at $0.48 per $100

12 - Assumes all incremental revenue sources netted against debt service (water sales, sales tax revenue, real estate appreciation)

13 - Net annual cost or benefit to Fluvanna County compared to 2008 real estate tax revenue

14 - Assumes Fluvanna Co. Debt reduced by receipt of $10 million in federal stimulus money