Not So Fast – Why a Slower Track for a Second Tax Vote Makes Sense

road-failureBy Dan Carson

Davis Vanguard’s push for rapid City Council action to put a parcel tax on the November ballot is understandable but problematic. In my view, it is a needlessly risky approach that sacrifices sound and orderly fiscal planning and cuts short any meaningful opportunity for community engagement in a discussion of what millions in new tax money would be spent on. In a worst-case scenario, it could help result in voter defeat of a tax measure and the provision of no new resources at all for many years to repair potholed and cracking roads and worn-out parks and swimming pools.

The Vanguard recently urged the City Council to act immediately to put a sizable parcel tax increase, requiring two-thirds voter approval to pass, on the November ballot. That would require council action to place the matter before voters by mid-July.

I was an outspoken supporter of Measure O but also an advocate of the additional $1.2 million in budget cuts that are pending in the 2014-15 budget package. In keeping with my prior profession as a budget analyst, I am a believer in using sound fiscal and policy analysis as a basis for solving our problems.

As I discussed at the June 9 meeting of the city’s Finance and Budget Commission (representing my own views only), there are real problems with this rush to judgment on a matter that has grave long-term consequences for the fiscal health of this city. I’m not disputing that additional resources are needed to address important projects for deferred maintenance and new infrastructure. The problem is that city staff presented our commission and city staff with a cut-and-paste wish list of expensive proposals without vetting or explaining many of the items, let alone justifying them as a spending priority.

As city staff conceded in discussions with our commission on June 9, no comprehensive plan exists for addressing deferred maintenance and infrastructure needs – certainly nothing comparable to the commendable and well thought-out plan to start fixing our roads and bikepaths.

In that prior effort completed mainly in 2013, consultants carefully evaluated the condition of the city’s roads and bikepaths, estimated the financial resources needed to bring them up to snuff or to at least prevent their further deterioration, and gave the council multiple options to balance the desired goals of fixing them against the realities of what the city could afford. Armed with this sound information and analysis, the council made the decision to rev up the city’s investment in pavement rehabilitation by $2.5 million annually.

A comparable approach could be taken to pull together a package to finish the job on pavement rehabilitation and to address the other types of projects needed to deal with Davis’ physical plant and other facilities needs.

First, city staff could be directed to complete the task they have already started of assessing the city’s critical maintenance and infrastructure needs, especially General Fund-supported programs for which user fees and other resources are not readily available to pay the bill. From the start, the direction should be to prioritize those projects that are critical for the provision of public services rather than building as a grandiose and far-fetched wish list. If need be, the Council should write the check for any consulting expertise needed to provide an objective assessment of where the city stands in this area.

Such a study could consider a wide range of methods to pay for these critical projects so as to stretch General Fund resources, and the monies from any second new tax measure, as far as possible. Among the questions that could be examined:

— How much funding is already available in the city’s funding base for maintenance and repairs and improvements in future years? For example, the proposed 2014-15 Aquatics Division budget includes $120,000 for pool repairs and improvements. More will be needed, but we shouldn’t ignore the monies already built into the budget for such activities in preparing a comprehensive plan to keep city facilities in good shape over time. Is there existing program funding in the budget that could be redirected, even temporarily, to a push to fix city infrastructure?

— What federal, state, or regional (ex.: Sacramento Area Council of Governments) grants are available to pay for particular projects that are a high priority? Could new infrastructure projects that would otherwise be supported with city money be shifted to grants, thereby freeing up more flexible city dollars to pay for maintenance projects less likely to attract grant funds? Does pending legislation, such as a proposal to spend new monies from the greenhouse gas cap-and-trade system, offer new avenues to pay for things we need?

— What creative agreements could be worked out with the city’s private and non-profit and other partners to help keep city facilities from deteriorating or meet the needs of an expanding city population? We already share parks with city schools. Could we strike a bargain with UC Davis, for example, allowing the use, during the summer, while the college students are away, of their recreational facilities for city summer youth programs?

— Are there city assets that are no longer needed that could be sold off or leased out so that the proceeds could be dedicated to needed capital improvements? City staff is already at work reviewing the city’s extensive array of assets.

— Are changes possible in the way programs are structured or services are delivered that would affect the size and configuration of the city’s physical plant?

— What financing approach – bonding or pay-as-you-go or a mix of the two– offers the best bargain for the taxpayers and the best chance for a sustainable city budget? Could a general tax measure requiring a majority vote be structured to provide enough assurances to voters so as to avoid a parcel tax measure requiring much more challenging two-thirds voter approval? How can the principle of “user pays” be applied to cover the cost of what the city needs? Can public accountability measures on the expenditures of any new tax monies be crafted to boost public confidence in the spending plan?

Once this difficult, analytical work has been accomplished, the public could be provided with a transparent accounting of the findings and engaged in a discussion about priorities and strategies.

What a perfect opportunity for participatory budgeting that the City Council has long been interested in implementing. The public could be invited to workshops to assess which projects are a public priority, and consider the tradeoffs in terms of higher taxes or fees. The expertise on the Finance and Budget Commission, and other city commissions, could be exploited to fine-tune the work has been done. In keeping with school district practices, Davis citizens could be polled to see if they are willing to ante up for the projects before a tax measure is put on the ballot.

This kind of in-depth analysis could not be done by the mid-July deadline for the Council to put a tax measure on the ballot. It would require postponing a public vote on such a tax measure to next year or even longer.

The Vanguard fears any delay in moving forward to the ballot would cost tens of millions in higher project costs. This is based on the assumption that asphalt road costs will grow 8 percent a year. That’s a highly speculative claim. While asphalt costs have grown significantly in the past, that has not been true of late. As shown in the attached graph, California Paving Asphalt Price Index data shows that asphalt costs are generally lower than they were 18 months ago.

CPAP-Index

Rushing ahead without a good plan, in contrast, ensures missed opportunities to make smarter decisions and a waste of taxpayer monies for some projects that the public will not support. And, if too many Davisites decide not to support a new tax measure (just one-third of the voters plus one would block approval of a parcel tax in what is likely to be another low-turnout election in November), efforts to address the city’s maintenance and infrastructure needs could be thrown in reverse for years.

I will be urging the City Council to take the time it needs to develop a comprehensive and thoughtful strategy to “rebuild Davis.”

Dan Carson is a member of the city Finance and Budget Commission. He retired as deputy legislative analyst of the California Legislative Analyst’s Office after 17 years in that nonpartisan fiscal and policy office.

About The Author

Dan Carson worked for 17 years in the Legislative Analyst’s Office, a nonpartisan fiscal and policy adviser to the California Legislature, retiring in 2012 as deputy legislative analyst, and serves as a member of the city’s Finance and Budget Commission. This commentary reflects his views only and does not represent the position of the commission on this issue.

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4 Comments

  1. Davis Progressive

    i really disagree with dan carson here.

    you study things further when you want to delay or postpone action. i think we know that we need funding for roads and the only question is how much.

    also carson attacks the vanguard on the asphalt appreciation but fails to respond to the central point on cost inflators – pavement deterioration and the exponential cost increase of that. 8% is not going to kill us even over two years. assuming we have a $100 million tag, 8% only increases the costs $800,000 per year. that’s not going to cripple the city. the bigger costs are the per-yard increase in costs as pavement conditions slip and that’s why the city is willing to borrow off a parcel tax to get a chunk of money up front.

    1. Michelle Millet

      As city staff conceded in discussions with our commission on June 9, no comprehensive plan exists for addressing deferred maintenance and infrastructure needs – certainly nothing comparable to the commendable and well thought-out plan to start fixing our roads and bike paths.

      I think the city should create comprehensive plans for other infrastructure needs, but I don’t think this should delay a parcel tax to pay for fixing the roads and bike paths.

  2. DavisBurns

    Given the demands on staff time, it might make sense to have a comprehensive list of maintenance and infastructure needs but I don’t see how they can put a cost to deferred maintenance when they don’t have a budget or a timeline. Frequently funding is project specific so the things that need to be done first don’t get done first. Instead, the thing that is funded gets done first. And with the streets, the cost depends on how long before it is done. Maybe they could identify three samples of highly traveled roads and give us the cost to fix it this year vs 2015 and 2016. Or, since Olive Drive was recently fixed (hallelujah) they might tell us how much it cost us and how much it would have cost if it had been done sooner. PGE dug the street up to replace gas lines which made it even worse so maybe that’s not a good example but they also did a part (but not all) of B street that was in bad shape.

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