I found this week interesting. I have long upheld and, in fact, fought for slow growth principles in this community. In fact, I continue to rent a home and live in this community because I like the small town, and the intellectually rigorous, progressive atmosphere of this community. I have fought to keep that.
I came to my current position on innovation parks slowly – very slowly – over a period of perhaps 18 months. This is not a position that I have taken lightly. I have weighed the pros and the cons. I have run numbers and done the math.
The bottom line – and Rob White yesterday did an excellent job of laying it out – is I do not believe that the status quo can hold. We are at a crossroads and something will change no matter what we decide to do.
For weeks I have been laying out the decision framework, giving us three basic options for process given the rate of growth in costs for both employee compensation and infrastructure versus the lack of growth in revenues.
We have three basic alternatives – cuts (reduction in employees, cutting back on compensation), taxes (increased taxes every five years or so to accommodate the cost increases and pay for infrastructure), or economic growth.
The way I see it is a few 200-acre innovation parks might be the best way to keep this city where it is now. Innovation Parks are the key. If we design them well, they could look and act as extensions of the UC Davis college campus.
One of our posters posted the idea of the Innovation Park from the Student 30 Report at UC Davis: “The first question facing Studio 30 was to define a 21st Century Innovation park. The business park concept has been rapidly changing as the market demands new places to do innovative work. ..
“Although Studio 30 focused on Innovation Parks, there are many similarities between the research park concept and an innovation park located in Davis. Studio 30 found ARUP’s definition of a university research park clear and comprehensive and adopted it.”
What I see here are possibilities to be able to generate revenue to pay for basic city services, while keeping this community largely as we see it today.
Is there risk? There is risk in the status quo.
Some have told me that we should have one more round of cuts – well I see that happening regardless of what we do. We simply don’t have much choice because, even in the most aggressive – and perhaps unrealistic scenario – Schilling Robotics might be ready to move to Mace Innovation Center by 2017, which I count as two and a half to three years from now.
Rob White had made the point that, without much effort, we can add a quarter to half a million square feet of space per year, but that is still going to be a slow ramp up of tax revenue. Bottom line is that nothing that we do in innovation will preclude us from another round of cuts when the contracts come up.
But I think Rob White also raises important points there, as well. The issue of employee compensation is tricky. On the one hand, the Vanguard had led the charge to ratchet down runaway employee compensation from the last decade, but it looks like the market is going to open back up.
So we have a dilemma. Davis’ spending problem has never been Davis’ alone. The Vanguard has agreed we need to raise the salary for city manager candidates to be more competitive – but it is clear there will be upward pressure across the board.
Some readers believe that we can find quality candidates for less money. Perhaps we need to take the approach of Billy Beane and the Oakland A’s, as captured in the book and movie “Moneyball,” where the Oakland GM recognized that the A’s would never be able to compete financially with the Yankees for the best ballplayers and so he developed innovative ways to remain competitive despite these handicaps.
We cannot simply write this off as one reader did – my neighbor has a BMW, I could not afford a BMW, so I didn’t get one. The problem with the analogy is that having a BMW rather than another vehicle is that is more luxury than necessary from a perspective of quality and output. Moreover, you are not directly competing with your neighbor in any way, shape or form, other than perhaps ego boost.
Here at the Vanguard we have often criticized the poor quality of city staff. I have grave concerns about this as we move forward and ask our staff to do more with less.
It may be, however, that we are never going to out-compete for money with even regional leaders, so perhaps we get smarter. Hiring good quality employees and asking them to do neat and innovation projects might be a way to attract people, to a great community like Davis, with things other than money.
There are, of course, other ways to skin a cat besides cuts. As Rob White points out, “For a city the size of Davis, we have a larger per capita amount of parks, recreation facilities, off-street bike lanes and open space than many comparable regional neighbors. These are exceptional ‘quality of life’ attributes, but they all cost money to maintain and operate.”
He adds, “Many of the City’s facilities (such as City Hall, pools and playgrounds) are of an advanced age and require significant funds to maintain (and replace) them.”
Finally, “The community has enjoyed many services in the past without paying the true costs. This can be done when there are other revenue sources. As an example of how other communities might accomplish this, if you have significant retail dollars from a shopping mall, you can subsidize after school and recreation programs. We have amazing quality of life programs and services, but the true costs of these has just now been realized and is a driver for the structural imbalance in the budget.”
We may not know the total cost, but we know enough to be concerned. We have an idea what roads alone will cost. Amenities like recreation programs, soccer fields, tennis courts, swimming pools, parks and greenbelts are all going to have huge increases in costs.
Do we want to do away with them? People lament the browning of lawns, but imagine the browning of greenbelts or the introduction of another development – development on additional greenbelts, as a multifaceted way to at once get rid of costs, satisfy our demand for new housing, and gain short-term construction fees for the city. Is that the approach we want to take?
We are having trouble putting a $100 parcel tax on the ballot when we will probably need a $500 one at some point if revenue comes in. 58% of the people were willing to support a sales tax increase in June, but what happens when it becomes a half-cent increase every six years just to keep what we have?
So, if you are concerned about parks and pools and the amenities that make this community great and unique, and you don’t want people taxed out of the city, what is the best solution?
I am sorry – that’s really where we are. Things are going to change. We will either get by with far fewer amenities, fewer city services and more cut backs to employees, or we will have to raise taxes every six years – or we can utilize our unique place and put in some relatively small (200 acres) but very cool and innovative business parks.
I’m not going to settle for just anything – we need something that the voters will support and will generate the revenue we need.
But the bottom line is this is not a sellout, this was a calculated decision arrived at over a long period of time and taking in a number of factors. The best way to keep Davis Davis is to support economic development as laid out by this process.
—David M. Greenwald reporting