by Matt Williams and Colin Walsh
The Davis Vanguard’s article of May 9, 2018 (“Commentary: Enough with the Weird Red Herrings”) is a disservice to the Davis Community. Instead of addressing the main body of the CivEnergy Measure J Forum (held on May 6 with video below), the Vanguard article goes down a rabbit hole of answers given in response to audience questions.
Let’s start with the basics. As was stated at the CivEnergy forum, there are three main reasons to vote against this project: 1) bad air quality, 2) financial impact, and 3) lack of integrity in the process. Today we will address reasons 1) and 2). Tomorrow we will address reason 3). Colin Walsh has prepared the Air Quality discussion and Matt Williams has prepared the Financial Impact discussion.
Air quality: Discuss air quality at the Nishi site.
- The experts cite the narrowing of the freeway and excessive braking as a source of hazardous fine heavy metal particulates as well as the exhaust from both the railroad and the freeway. They further explain that the elevated freeway and elevated rail line work together to form a bowl that helps hold the particulates and other pollutants in a more concentrated area. The experts state that the Nishi property is not appropriate for housing because of the health hazards resulting from exposure to the on-site pollutants.
- A preliminary study was done at a site near Nishi that suggests there is merit to the experts’ claim and the project’s Environmental Impact Report (EIR) declares there are “significant and unavoidable” impacts. The developers have one scientist who disagrees, without any supporting evidence from the Nishi site (and who has consistently failed to address or even mention the evidence from the Nishi site).
- Thomas Cahill (Professsor of Physics and Atmospheric Sciences at UC Davis) and others raised the alarm about the air quality issues over 3 years ago and recommended onsite testing, but neither the developer nor the City have ever performed that testing to determine what the pollution levels actually are on the Nishi property.
- It is irresponsible to build housing on the Nishi property without properly addressing the air quality concerns– starting with proper on-site testing to evaluate the problem.
- These tests would only cost about $30,000, far less than the hundreds of thousands the developer will spend on the political pressure to approve the development.
Financial: What is the impact of the Nishi development on City of Davis finances?
The Nishi 2018 project (also known as Nishi 2.0) project will likely cost the City of Davis and Davis taxpayers many millions of dollars over the coming years(over 1.5 million dollars every two years).
- Consider an analogy between a homeowner’s relationship to their house and the City’s relationship to Nishi. The fiscal analysis performed by the City for Nishi 2018 is analogous to a homeowner who only plans for for the immediate “cash payments” for the mortgage, the annual property taxes, insurance payments, utility payments, monthly bills, but …
- — No dollars for replacement of the roof when it succumbs to weather/heat/sunlight and needs to be replaced
- — No dollars for repair/replacement of the driveway when it cracks and develops holes
- — No dollars for plumbing or electrical problems
- — No dollars for removing the big tree that’s rotten and leaning towards the house
- — No dollars for painting the interior/exterior of the house
- — No dollars for replacing the carpets/flooring
- — No dollars for a new HVAC system
- — No dollars to repair a cracked foundation
- In other words, the City’s Nishi 2018 process has discarded/eliminated the realistic assessment of Full Life-Cycle costs. That is fiscally irresponsible.
- There is absolutely no cost to the City associated with being honest and transparent with its citizens and taxpayers. The City, and specifically staff, saw value in reporting to Council both the Cash Accounting margin ($1.4 million per year) and the Full Life Cycle Costing margin ($500,000 per year) for Nishi 2016. That was a job well done, and they used high quality resources from the City’s economic consultant EPS to do so.
- In Nishi 2018 the $1.4 million a year Cash Accounting margin has shrunk by 90% from $1.4 million down to $143,000. That is clear evidence that supports the“this 2018 Nishi project is inferior to the 2016 Nishi project”comments made by the Council members from the dais in February.
- Including the $900,000 annual saving for capital infrastructure repair/replacement recommended by the City’s economic consultant the annual $143,000 surplus reported by the Finance and Budget Commission becomes a $757,000 annual deficit. That is fiscally unsound.
- As published in the City Budget, Davis has an $8 million per year shortfall in the City Budget because we have ignored and deferred full life cycle costs year-after year-after-year.
- We can choose to ignore the professional opinion of the City’s economic consultants, but if we do we will be walking down the same road that past Councils walked when they ignored staff’s professional advice about the requirements of capital infrastructure maintenance and deferred that maintenance. The result of that short-sighted, politically-driven thinking is the current dilapidated state of our roads and the $8 million per year Budget shortfall reported by Bob Leland and confirmed by City Council as part of Chapter 4 of the City’s FY 2017-18 Budget.
Einstein’s definition of Insanity is “Doing the same thing over and over again and expecting different results.”
- Financial models are all subject to flaws based on their respective assumptions. Yes on Nishi is arguing that there is a “right” number. The truth is that every number is going to be “wrong.” Therefore, the wise decision-making approach (using solid Critical Thinking principles) is to calculate multiple scenarios to “bracket” the likely outcome. Balanced, informative fiscal analysis includes several scenarios. That is what staff and the city’s economic consultant EPS and the FBC provided Council with in the 2016 Staff Report which said:
“The Commissioners did not agree on the amount of benefit the City would receive. The final motion to conclude $1,400,000 of annual benefit passed on a 5-1-1 vote; dissenters agreed that the benefits would be positive, but suggested numbers in the $500,000 range.”
- Unfortunately that has not happened this time around. As a result, we are in the position where we have to make a rushed and under-informed decision. The 2016 consideration of the fiscal impact of Nishi was open, transparent, thorough and balanced. Staff made sure to convey BOTH the majority decision of the FBC (by a 5-1-1 vote) and the voice of the dissenters (which included EPS). The 5-2 vote of the FBC in 2018 closer than the January 2016 FBC vote tally, and if I had not been out of the country that night the vote would have been an even closer 4-3. For reasons that only they can explain, the City chose to suppress any mention of the dissenting opinions in reporting to both the Planning Commission and City Council. They also chose not to illuminate the 90% plunge in the “Cash Accounting” annual surplus from $1.4 million in 2016 to $143,000 in 2018.
- Bottom-line, the Nishi numbers don’t add up … honesty and transparency is missing.