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HomeMy WebLinkAbout2024-02-23 DRAFT1 Jefferson PFDIndependent Financial Feasibility Review Proposed PFD Formation by Jefferson County, Washington / Prepared for Washington State Department of Commerce By Susan Musselman LLC Dated ____________,2024 Independent Financial Feasibility Review Proposed PFD Formation by Jefferson County, Washington [Index to be inserted] Independent Financial Feasibility Review Proposed PFD Formation by Jefferson County, Washington [Executive Summary to be inserted] Independent Financial Feasibility Review Proposed PFD Formation by Jefferson County, Washington INTRODUCTION Snapshot of PFD Proposal A multi-agency steering committee has recommended creation of a countywide Public Facilities District (“PFD”), in Jefferson County (the “County”) for the purpose of constructing an aquatics and wellness facility, to replace an existing pool owned by the Port Townsend School District (the “School District”) and leased to the City of Port Townsend (the “City”). The pool is currently operated by the Olympic Peninsula YMCA (the “YMCA”) pursuant to an agreement with the City. The proposal subject to this review is for the County to create a PFD, and for the PFD to seek funding for PFD administration, facility operation, reserves and debt service through a sales and use tax (subject to voter approval) and other legally available revenue. Independent Financial Feasibility Review State law (RCW 36.100.025) requires an independent financial feasibility review to be completed prior to: formation of a PFD by a county, issuance of any indebtedness by a PFD, or the long-term lease, purchase or development of a facility by a PFD. The independent financial feasibility review must be conducted by the department of commerce through the municipal research and services center or another contracted entity. The purpose of the review is summarized here: The review is to examine the potential costs to be incurred by the PFD and the adequacy of revenues or expected revenues to meet those costs. Upon completion, the independent financial feasibility review is to be a public document and must be submitted to the governor the state treasurer, the state auditor, the PFD and participating local political subdivisions and appropriate committees of the legislature. This review is triggered by the proposed formation of a PFD by Jefferson County and is provided by Susan Musselman LLC, through contract with the State’s Department of Commerce. Information regarding the contractor is provided in [Appendix xx] The PFD is expected to seek a more detailed, project specific review prior to issuance of any indebtedness, or the long-term lease, purchase or development of a facility by the PFD in the future, as set forth above. PFD Formation in Washington State State law allows for PFDs to be formed by cities, counties or contiguous groups of cities with an Interlocal Agreement under 39.34 RCW. The process and details relating to creation of a PFD are set forth in detailed statues in Sections 35.57 (formation by cities) and 36.100 RCW (formation by counties). Upon creation, the PFD is an independent taxing district and has all the usual powers and responsibilities of a municipal corporation. Among these is the power to impose certain taxes, to impose charges and fees for use of its facilities and to accept and expend gifts, grants and donations. For a review relating to the formation of a PFD we, as independent consultant, will necessarily rely upon planning and work undertaken by various parties to develop a vision and general proposal. Because the PFD will not be bound by the prior work and plan of the entity forming the PFD, the review will focus on costs specifically related to the PFD formation and start-up needs. The specific programs, location, design and project costs referenced herein should be viewed as aspirational. PFD Powers Upon formation, a PFD is an independent taxing district and has all the usual powers and responsibilities of a municipal corporation. Among these is the power to impose certain taxes, to impose charges and fees for use of its facilities and to accept and expend gifts, grants and donations. State law specifically provides the following: A public facilities district constitutes a body corporate and possesses all the usual powers of a corporation for public purposes as well as all other powers that may now or hereafter be specifically conferred by statute, including, but not limited to, the authority to hire employees, staff, and services, to enter into contracts, including contracts with public and private parties, to acquire, own, sell, transfer, lease, and otherwise acquire or dispose of property, to grant concessions under terms approved by the public facilities district, and to sue and be sued. PFD Funding and Revenue Various charges, fees and taxes are legally available for imposition by PFDs under state law, some of which require majority vote by the electorate within the PFD. Charges and fees for the use of any of its facilities Admission charges In limited cases, vehicle parking charges Sales and use taxes, subject to voter approval Lodging fees, restricted to certain lodging facilities, subject to voter approval Within limitations, property taxes, subject to voter approval State law provides that the taxing authority of a PFD may not be restricted by the forming jurisdiction or by any action of the PFD. Additionally, PFDs are allowed to issue voted or non-voted general obligation bonds and revenue bonds, within certain statutory limits. PFD Operations As a newly formed municipal corporation, the PFD will face expenses relating to administration and operation of the entity itself. This cost is present for any new PFD. Until legally available revenue sources are implemented, a newly formed PFD will have no sources of revenue to pay these costs. Implementation of viable and legally available revenue sources will likely require approval by the electorate. Any such election will require funding. Independent Financial Feasibility Review Proposed PFD Formation by Jefferson County, Washington BACKROUND OF PFD PROPOSAL A multi-agency steering committee has recommended creation of a countywide Public Facilities District (“PFD”), in Jefferson County (the “County”) for the purpose of constructing an aquatics and wellness facility, to replace an existing pool owned by the Port Townsend School District (the “School District”) and leased to the City of Port Townsend (the “City”). The pool is currently operated by the Olympic Peninsula YMCA (the “YMCA”) pursuant to an agreement with the City. The Existing Pool A multi-agency steering committee has recommended creation of a countywide Public Facilities District (“PFD”), in Jefferson County (the “County”) for the purpose of constructing an aquatics and wellness facility, to replace an existing pool owned by the Port Townsend School District (the “School District”) and leased to the City of Port Townsend (the “City”), referred to herein as the existing pool. The pool is currently operated by the Olympic Peninsula YMCA (the “YMCA”) pursuant to an agreement with the City. The existing pool is located on the Mountain View campus which is owned by the School District. The pool was built in 1963 and is nearing the end of its life. It is recognized by the parties that the existing pool is nearing the end of its life and there is an interest in developing a new aquatic center. Lease of Existing Pool to the City As the owner of the property and pool, the School District in 2009 leased the pool to the City which gave the City operating control of the pool. The original lease ran from August 2009 through August 31, 2017. A subsequent lease was entered into on June 24, 2014 and expires on August 31, 2032. The lease includes an option to extend through 2047. The lease states that the pool has operational and capital issues and is subject to possible closure if unexpected emergency repairs are required and funding is not available or it is not feasible to make the repairs. The City is responsible for considering and potentially funding and undertaking repairs. The lease also provides that the premises may be used for constructing and operating a new recreational facility on the premises utilizing a fee based operational model and specifically allows for the City to partner with community non-profit agencies, such as the YMCA, to provide for additional improvements and facilities. While the School District retained approval rights for any project, it may not be unreasonably withheld. City of Port Townsend – Lessee/Operator The City has leased the existing premises, including the pool, from the School District since 2009. During that time, the City has invested in the facility, including roof repairs and mechanical (HVAC) repairs and upgrades. The City made lease payments to the School District, which started at $60,000 in 2009 and increased by CPI through 2019. Since January 1, 2020 the rent under the lease has been $1 per year. The City has maintained and operated the pool for use by the public and provides certain hours for the School District’s exclusive use as is agreed from time to time. Starting in [year?], the City contracts with the YMCA to provide day to day operation of the pool. YMCA – Pool Operator The City has an operating agreement with the YMCA for operation and management of the pool on behalf of the City. The lease, dated December 14, 2023, runs through December 31, 2025 and contemplates the potential earlier closure. The agreement includes a 90-day termination provision, applicable to either party, and the potential to extend the term beyond 2025. [please confirm the initial year of YMCA operation. Was it directly operated by the City prior to that time?] The YMCA has discretion and control in matters relating to management and operation of the facilities and is to make a good faith effort to maintain certain minimum hours of pool operations. The agreement provides for the YMCA to make the pool and programs available for use and participation by the public on a fee basis, without requirement for a membership. The YMCA is obligated to honor agreements in the lease between the City and the School District relative to use of the pool by the School District. The City agreement with the YMCA provides for payments to the YMCA, to subsidize the operating budget, in an amount that can vary each year and is typically around $400,000. The City remains responsible for completing any routine and major repairs to the pool facility and equipment. The YMCA operates [other pools] STEERING COMMITTEE Formation and Purpose In February 2023, the City, the School District, Jefferson County Public Hospital District #2, the County, the Port of Port Townsend, Jeffco Aquatic Coalition (“JAC”) and the YMCA entered into a Memorandum of Understanding (MOU) to plan together to provide long-term infrastructure and opportunities for improving community health and wellness. This group of partners formed a Steering Committee to undertake a planning effort and to support development of a proposed aquatic facility. Each of the parties to the MOU contributed funds toward the planning, including $30,000 by the City, $100,000 by the County, $50,000 by the Hospital District, $5,000 by the school district, $5,000 by the Port of Port Townsend, and $3,000 by JAC.   Funds were initially used to undertake a feasibility study. As reflected in the feasibility study, MOU and other documents, the creation of the Steering Committee represented an effort to bring together the interests of various entities into one plan. Since completion of the Study, the Steering Committee has continued to meet and has adjusted plans and proposals based on new information or feedback on revenue options. (Note that the Port of Port Townsend discontinued its participation as of December 31, 2023) It has been stated that the partners to the MOU intend to remain committed to the goal of developing an aquatic center, with or without additional recreational facilities as the capital budget permits, regardless of the final decisions on facility design and location. While the Port of Port Townsend and the Public Hospital District provided helpful information and input to the Steering Committee, the Port discontinued its participation as of December 31, 2023, and the Public Hospital District determined that they would not incorporate services within a proposed facility [confirm this is accurate description] Key Partners The City of Port Townsend The City has been leading the effort to explore options for replacement of the existing pool, which is located in the city and is operated under control of the City. The City has loaned staff to the project and has funded various studies relating to the existing and proposed pool. The City obtained rough cost estimates and input on potential upgrades to the existing pool and determined that it is not financially feasible. While the project may have initially been viewed as a City project, it became apparent that the user base extended beyond the city limits and the revenue potential for a countywide PFD is much greater than a City-formed PFD would have. [ include if true: the City is considering the options for financial support the City could provide to the PFD, which support could come in the form of loaned staff, loans or direct funding.] Based on the recommendation of the Steering Committee that a countywide PFD be formed, the City and County agreed to jointly fund this financial feasibility review which is required by the State prior to formation of a new PFD. Jefferson County To date, the County’s involvement in planning for a new aquatic facility has included participation as part of the Steering Committee, because there is an interest in supporting the activities. The County provided $100,000 of funding from the American Rescue Plan Act, for this effort. The County has not historically provided funding for the existing swimming pool. [include if true: After being requested to consider formation of the PFD, the County is considering the options for financial support the County could provide to the PFD, which support could come in the form of loaned staff, loans or direct funding.] As stated above, the County and City are jointly funding this financial feasibility review. Port Townsend School District The existing pool is located on the Mountain View campus and is owned by the School District. As the owner of the property and pool, the School District has an interest in using the pool for school-related sports and activities. If the PFD determines that the Mountain View campus is the preferred location for a new aquatic center, it is expected that the School District will lease property at that location to the PFD for a nominal fee. Olympic Peninsula YMCA The City has an operating agreement with the YMCA for operation and management of the existing pool on behalf of the City. If the PFD determines that it would like enter into an operating agreement with a third-party provider, it is expected that they will enter into an operating agreement with the YMCA on similar terms as the current agreement with the City. The Study states that the operating budget is based on the assumption that the YMCA serves as operator of the proposed facility and the YMCA provided input for development of the staffing plan and operating budget. Jeffco Aquatic Coalition JeffCo Aquatic Coalition (“JAC”) is a nonprofit corporation formed in 2007 to champion aquatic amenities and access in the county. The purpose of the JAC, as set forth in its bylaws, includes “working with community stakeholders to sustain the current publicly accessible aquatic amenities while simultaneously developing and implementing a plan that provides improved and financially sustainable aquatic facilities and programs for East Jefferson County.” Jac is designated as a 501(c) 3 non-profit corporation exempt from federal income taxes of the Internal Revenue Code. [Confirm with JAC] JAC intends to support the development of a new aquatic center through philanthropic fundraising and independently developing a campaign to support the proposed sales and use tax proposal, if one is put forth by the PFD. HEALTHIER TOGETHER CENTER FEASIBILITY STUDY Introduction In February 2023, the City contracted with Opsis Architecture (“Opsis”) to provide planning and architectural services for development of a comprehensive recreation facility feasibility study to include an aquatics center with community health and wellness amenities. The contract incorporated the work of several subcontractors including a subcontractor to provide cost estimates based on the building program and conceptual building and site design, and a subcontractor to provide operational cost recovery projections and operational cost analysis. Ultimately, the team created the Healthier Together Center Feasibility Study (the “Study”). According to the background information in the study, it is stated that: In February 2023 Opsis Architecture and its planning/design team of specialized consultants initiated work with the project Steering Committee to develop a comprehensive feasibility study to identify, evaluate, and select a preferred site, develop a market analysis, verify the aquatic and other program needs, develop a conceptual design vision with total project cost estimates, and evaluate operational and funding strategies. Working with the Steering Committee, project guiding principles were developed to guide the planning and design process. Opsis delivered a final report dated September 18, 2023 which includes, among other things, an Executive Summary and background information on the work undertaken to consider the ongoing need and interest in replacing the existing pool and adding health and wellness components. Project Siting The Study included evaluation of four potential sites in the Port Townsend city limits, using criteria developed by the Steering Committee. The City council in June 2023 approved a motion to endorse and approve a recommendation to site the new facility at the existing Mountain View campus, where the existing pool is located. As the plan is moving toward County creation of a PFD, there is some interest in looking at other sites outside of the city limits and other project or construction approaches, either of which could change the proposed capital and operating costs. The County has agreed to lead a task force of the Steering Committee to review potential sites outside of the city limits and explore alternative construction methods that may reduce project costs. The task force is expected to report back to the Steering Committee, which will then provide the additional information to the County Board of County Commissioners, the City Council and other partners. Programming/Project Features As reflected in the Study, two program options were developed for replacement of the City’s current pool, a base option focused on aquatics and a full build-out option, to include aquatics and recreation. Development of both options are based on the assumed location on the Mountain View campus in Port Townsend. A level of conceptual design was developed along with capital and operational cost estimates. The following project summary of the building program is excerpted from the Study: Preliminary Capital and Operating Costs The Study, on page 27, reports a project cost estimate of $37.1 million for the base option with $1.27 million of annual operating costs and a project cost estimate $45.9 million for the full build-out option with $2.08 million of annual operating costs. The following table summarizes the estimated capital cost as well as the operating expenses and revenues, and the resulting subsidy requirement that is projected.   One-time Annual  Facility Options Capital Cost Expenses Revenues Subsidy  Base $37,182,810 $1,268,557 $834,466 -$434,091  Full Build Out $46,517,939 $2,084,333 $1,731,761 -$352,572  Source: Healthier Together Center Feasibility Study It is not the goal of this review to create, test or otherwise opine on the costs for capital or operations, but rather to identify costs specific to the formation of the PFD by the County. The PFD is expected to request a separate review that will focus on operating and capital costs, prior to the issuance of any debt, as required by state law. Steering Committee Recommendations The Study states that the recommendations from the Steering Committee are to pursue the base option (estimated capital cost of $37.1 million) with a desire to implement the full build-out option if fundraising efforts allow, and that a countywide PFD be created and 0.2% Sales and Use Tax and a 2% Lodging Tax be recommended. The Study states that the Steering Committee has committed $15 million of fundraising and assumes that amount will be available for capital costs. Since the Study was finalized, the Steering Committee has increased the fundraising target to $17 million. It is expected that the PFD will fund the remaining $20.1 million through issuance of bonds. Fundraising efforts are expected to include state and federal grants and philanthropy. Capital Funding Needs - Base Option The Steering Committee recommendation at this time is to pursue the base option. Based on capital cost estimates and the fundraising targets, the capital funding needs are summarized as below. The fundraising component is a critical component of capital funding, representing over 45% of the estimated capital cost. Operating Analysis - Base Option The Study includes an operational analysis with estimates of fee-based revenue and costs to operate and maintain the proposed facilities. Revenue projections in the Study were developed based on the demographics of the service area and comparisons to statistics and similar facilities, with assumed design, operating philosophy, priorities of use and fees and charges. The operational analysis takes into consideration staffing needs based on expected use of the facility, hours of operation, key amenities and operation practices of the facility. It incorporates assumptions of staffing, wages, utility costs, insurance costs and costs of equipment and maintenance, all of which are subject to change. The Study concludes that the overall revenue does not cover all anticipated expenses. It is assumed that the City will subsidize operations with approximately $400,000 annually, equivalent to the current level of subsidy provided to the City’s existing pool. Annual Operating Analysis    Facility Options Expenses Revenues Subsidy  Base $1,268,557 $834,466 -$434,091  Full Build Out $2,084,333 $1,731,761 -$352,572   PFD REVENUE POTENTIAL After review of the legally available revenues for a PFD, the Steering Committee initially recommended that the PFD seek voter approval for a 0.2% (two-tenths of 1%) sales and use tax and a 2% lodging tax. After further investigation it was determined that the revenue potential from the 2% lodging tax is not meaningful and should not be pursued The evaluation of operating revenues and expenses have included a $400,000 operating subsidy from the City, which is required to balance the operating budget. Without a subsidy, the projected revenues are not adequate to cover expected operating costs. Potential tax revenues will be needed for PFD administration, unanticipated operating shortfalls and reserves, and debt service. Because of the need to fund PFD administration, unanticipated operating shortfalls and reserves, not all of the proposed sales and use tax will be available for debt service. 0.20% Sales and Use Tax If the voters approve the imposition of a 0.2% sales and use tax it would be collected on the countywide taxable retail sales base – both the unincorporated County and the City of Port Townsend – subject to certain exemptions. Taxable retail sales in the County for 2022 (the latest full year available from the state Department of Revenue (the “DOR”)) is reported to be approximately $785,630,000. DOR data for 2023 shows that the taxable retail sales increased approximately $20 million during the first three quarters of 2023, which could imply a tax base of $805,000.000 for 2023. Based on the implied taxable retail sales of $805,000,000 for 2023, it can be estimated that a sales and use tax of 0.2% would result in estimated annual revenue of $1,610,000. Timing of collection of sales and use tax is based on detailed statutes, which necessitates a delay between the date an election is certified and the date new tax revenue is collected and disbursed to the taxing entity. Costs for PFD Administration The scope and purpose of the Study was specific to development of capital and operating costs of the proposed aquatic center. Apart from the proposed facility, a PFD will need funding for its own administration, including initial organizational costs. Significant financial needs of the PFD will include: Staff, which may be full or part-time, to coordinate and oversee the work of the PFD, to direct investments and account for financial matters of the PFD, create agendas, take minutes, prepare and distribute information, and generally administer the affairs of the PFD. Resources to review the project proposal and make decisions on siting, design, construction and financing. This may include project design work and/or various studies. Development of sufficient planning to determine a project cost and financial needs, and method of communicating the plan and needs to the electorate Funds to pay the costs of administering an election. General administrative costs (staff, insurance, meetings) will be ongoing costs for the PFD and will presumably be paid from sales and use tax if one is approved by the voters. Until tax revenue is available, the PFD will need a source of funding for these needs. Some of the project-related costs may be able to be capitalized into the project if it is eventually funded and undertaken, but money will be needed to pay the costs before then. While the PFD will have the benefit of the Study and the recommendations of the Steering Committee, the PFD will be responsible for its own due diligence and planning for the project and this work may need to be completed prior to requesting voter approval of a sales and use tax. All of this will require funding commitments for the PFD and should be addressed prior to formation of the PFD. Funding may be provided through agreements with the County, City and/or other partners. Staff may be volunteers or loaned from the County, City or other partners. Capital Funding Plan The capital funding plan contemplates $17 million of fundraising with the balance to be paid from proceeds of bonds to be issued by the PFD. As the sole source of income to the PFD, the estimated sales and use tax revenue (roughly estimated, above, to be $1,610,000 per year, based on estimated 2023 taxable retail sales) would need to provide for PFD administration, operating shortfalls and reserves, and debt service. For illustration purposes, if it is assumed that $210,000 is budgeted for administration, operating shortfalls and reserves, this would leave $1,400,000 available to cover annual debt service. The Steering Committees consultant has estimated that debt service for $20 million of financing, for 30 years at 5.5% will be $1,513,719. The capital funding plan will be influenced by decisions about the project and capital budget, the actual amount of fundraising, amounts budgeted for PFD expenses and reserves other than debt service, bond interest rates and financing terms. The PFD, if formed, will need to refine the estimates of revenue available from a potential sales and use tax and develop a budget for how much of the overall revenue will be needed for PFD administration, operating shortfalls and reserves to determine how much revenue projected to be available to support debt service. The financing structure developed by the PFD’s financing team, term and interest rate may result in a different level of debt to be supported. It is expected that the PFD will further refine its capital funding plan prior to requesting an independent financial feasibility review relating to the issuance of any proposed debt. POTENTIAL COSTS RELATING TO PFD FORMATION This review is related to the proposed formation of a PFD coterminous with Jefferson County and is to examine the potential costs to be incurred by the PFD and the adequacy of revenues or expected revenues to meet those costs. Although significant work and studies have been performed by community partners, which resulted in the recommendation to the County to create a PFD, the Board of Directors to be appointed to govern the PFD may explore and develop different way of developing a new aquatic center. The specific programs, location, design and project costs referenced herein should be viewed as aspirational at this point. The PFD, if formed, is expected to seek an independent financial feasibility review prior to issuance of any indebtedness in accordance with RCW 36.100.025. At that stage, the PFD will need to have firm plans relating to the location, design, capital and operating costs and financing plan, as well as have in place voter approval for any required taxes or funding and any agreements relating to grants and gifts and with third party operators or partners. The potential costs to be incurred relative to the proposed formation of the PFD by Jefferson County and the adequacy of revenues or expected revenues to meet those costs follow. The PFD will need start-up funding to enable it to operate. The proposed PFD will not have its own source of revenue to pay administrative expenses, including organizational costs, insurance and administration prior to seeking voter approval for taxes. The PFD will need formation-related documents, insurance and staff to coordinate and oversee the work of the PFD, prepare and distribute information, and generally administer the affairs of the PFD. This cost is present for any new PFD and can be addressed through agreements with the County, City and/or other partners, to cover the period before PFD-implemented revenues are available. If the proposed PFD tax is not approved by the voters, the PFD would not have the means to repay any borrowed funds. No such plan or agreements are in place at this time. The PFD will need money to pay costs to undertake an election to seek approval for a voter approved PFD funding. All viable revenue sources for the PFD will require a vote of the County electorate, which will require pre-election expenditures for communication and payment of election costs. These costs will depend on many factors, but a minimum of $75,000 to $100,000 is a suggested placeholder for planning until better information is available. This cost can be paid through funding agreements with the County, City and/or other partners. There will be no assurance that the tax proposal(s) will be approved by the electorate. No such funding plan or agreements are in place at this time. The PFD is likely to incur costs for additional studies, planning or review prior to seeking a vote on PFD-imposed taxes. The PFD Board will need to do its own due diligence and planning for the project, which will likely require funding prior to seeking a vote on tax referendum for PFD revenue. The PFD Board could decide to study different options for the location, design and cost of the project, rather than pursuing the proposal recommended by the Healthier Communities Steering Committee. While some of these costs can be capitalized into the cost and financing of the eventual project, the money is likely to be needed prior to having PFD revenue. If the proposed PFD tax is not approved by the voters, there will be no ability to capitalize or reimburse these costs. No funding for project planning costs prior to a successful tax referendum has been identified at this time. As proposed, the project requires significant fundraising for capital, in addition to any capital financing by the PFD. The project proposal includes a commitment from community partners to provide fundraising efforts targeting $17 million of the Project Costs This level of fundraising, representing over 45% of the estimated capital cost, will be a critical component for a successful funding plan for the project as currently envisioned. The County (pre-formation) or the PFD (post-formation) can mitigate this risk by entering into a memorandum of understanding or similar agreement to clarify and solidify these commitments. Fundraising efforts are expected to include state and federal grants and philanthropy and any agreements can clarify which partner will pursue specific sources. If formed, the PFD will need to refine and adapt the project plan and financial model based on actual fundraising results and project plans prior to moving forward to project financing. As proposed, the operational analysis indicates that the project will require an operating subsidy. The Study projects that the operating revenues will not be sufficient to cover operating and maintenance expenses and will require an annual subsidy. The City has agreed to provide a subsidy of approximately $400,000 each year. The PFD would need to budget additional funds or reserves to recognize the potential for additional operating shortfalls, or enter into agreements with other parties cover this risk. Expenditures by the City related to the proposed PFD The City has led the effort for the Healthier Together initiative and administration of the Steering Committee. Presently, the City provides approximately $400,000 of funds annually toward operation of the existing pool and has indicated that it is willing to provide similar financial support to the operation of the proposed new pool. The City has a strong interest in supporting an initiative to replace the existing pool which is nearing the end of its life. The City may incur additional costs related to formation of the PFD if it enters into memorandum of understanding or other agreements with the County and/or community partners prior to formation of the PFD, or with the PFD after it is formed. If successful, formation of the PFD, approval of new tax revenues, and operation of the pool by a new entity, will eliminate the City’s need to make additional investments in the existing pool. Expenditures by the County related to the proposed PFD The County will incur legal costs related to the formation of the PFD, and may have costs for consultants, advisors, outside attorneys and/or county staff. The County may incur additional costs related to the formation of the PFD if it enters into memorandum of understanding or other agreements with the City and/or community partners prior to formation of the PFD, or with the PFD after it is formed. Appendix xx Provider of this Independent Financial Feasibility Review This review is conducted by Susan Musselman LLC, an independent consulting firm contracted by the state Department of Commerce for this purpose. Susan Musselman LLC was formed in 2018 by Susan Musselman, Principal, for the purpose of providing selected consulting services to municipal entities in the state of Washington. Ms. Musselman began her career in public finance in 1982 and in 1996 formed her own independent financial advisory firm for the purpose of assisting governments in the Northwest with development and execution of financing plans. Her clients included cities, counties, school districts, state agencies, public facilities districts, fire districts and universities, primarily in Washington. After selling her financial advisory firm and subsequently retiring from the regulated securities advisory work, Ms. Musselman formed Susan Musselman LLC to provide a limited level of general consulting relating to capital projects, revenue estimations and budgeting. Ms. Musselman has direct experience as advisor relative to formation of PFDs, including development of formation documents, and financing for various PFDs. As consultant to the state Department of Commerce, she has provided independent financial feasibility reviews relating to formation of a PFD by Asotin County and for development of a Sports Complex and Event Center by the Lewis County PFD. It is hoped that the information provided in this review will be helpful to the State and the County, its partners and constituents as formation of the PFD is being considered. [List of Referenced Materials to be Attached in Appendix xx]