Election law limits discussion of fiscal impact to "the amount of increase or decrease in revenues or costs to the county if the proposed measure is adopted." Accordingly, analysis of broader potential economic impacts, while they may be significant, is outside the scope of this statement.

Estimating the effect on the County General Fund is difficult because the measure does not set forth specific uses, commit funding or specify a development timeline for the El Toro property. Instead, the measure restricts development to a range of potential uses.

The scope of the development resulting from the measure, and the resulting development costs to be borne by the County, while unknown, are likely to be minimal and could be absorbed within existing budgetary resources because:

• Competition for County discretionary funds is intense. It is not likely that development of additional recreation venues would be ranked high when compared to other pressing demands for County resources.

• A slow paced development could proceed financed primarily by interim uses of existing facilities. An independent consultant determined that approximately 1,162 acres (862 acres for recreational use and 300 acres for education compatible uses) could be developed over a 19-year period at a total County cost of $37 million. Changing the size of the development or its timeline would modify this cost.

• The uses permitted by the measure will likely result in the transfer of the property by the Navy at no cost.

• Environmental clean-up costs will likely be borne by the Navy.

• There is a possibility that the City of Irvine would annex the property – in which case the nature of development and its related costs would be determined and borne by the city.

Passage of the measure would eliminate the possibility of accruing approximately $82 million in net General Fund revenues attributable to an airport at El Toro over the next 19 years as projected by the County County’s Airport System Master plan. This net revenue assumes an 18.8 million passenger per year airport and 1,273 acres of non-aviation development including approximately 700 acres for recreational uses.

A less quantifiable factor affecting any development at El Toro is the unknown level of environmental risks associated with the property. Although the Navy is ultimately responsible for cleanup, there is no required timeline that the Navy must follow. Transfer delays could be caused by requiring a new Environmental Impact Report to be filed if the measure is successful. Revenue and expense projections of either a park or airport development could be greatly affected through delays resulting from the discovery of undisclosed environmental hazards during construction.

David E. Sundstrom, CPA

Orange County Auditor-Controller