Two weeks ago, in the Vanguard’s weekly “My View” segment, I wrote that “Civil Pool repairs May Not Justify Inclusion in Parcel Tax.” In that column, I argued that, based on the staff report on civic pool repairs, and the estimated $50,000 not-to-exceed price tag along with the report that “sufficient funds are budgeted in the pool equipment replacement fund for FY14/15,” we should focus on roads rather than pools in a possible parcel tax.
However, in making that case I erroneously stated, “In the short term, Davis has sufficient money through the general fund to put about $4.7 million into road repairs, but that is not ongoing money. We need a funding mechanism.”
Dan Carson, a member of the Finance and Budget Commission, who has also agreed to serve a de facto public editor for the Vanguard, immediately challenged the claim. “I know the focus of this piece is the pools, but I am curious about the source of information for your claim in this piece that most of the $4.7 million budgeted for road and bike path pavement rehabilitation is one-time money. That’s not my understanding. About $3.8 million of the $4.7 million is from the General Fund. The five year budget projections released last April show the General Fund “base” for these projects staying in place over that entire period. Who told you the money is one-time? I welcome any clarification in case I am misunderstanding the situation.”
The source turned out to be a slideshow by the city from June, which showed $4.7 for 2014-15 and $1 million afterwards. Dan Carson agreed to research it further and get back to us.
City Staff has since verified that $3,930,000 of the $4,700,000 initially budgeted for 2014-15 is ongoing. This includes the $3 million in General Fund resources, $130,000 in monies from the Construction Tax Fund, and $800,000 from development impact fees that the City Council has added to the base budget for transportation infrastructure rehabilitation purposes over the course of 2013-14 and 2014-15.
There is a $3 million ongoing augmentation that has been added to the General Fund base and would continue through the five-year period.
About the slide I referred to, Mr. Carson stated, “City staff advises me that the slide you cite was ‘for illustrative purposes’ to reflect how the numbers would play out if the council only appropriated $1 million in future years. They noted that it did not reflect the actual funding commitment to date reflected in the five year fiscal forecast.”
In addition, Mr. Carson told me, “City staff advises me that the carryover of prior appropriations, as well as some new appropriations of funding by the City Council for the Eighth Avenue Street Improvements made in August, will bring the total monies committed to the pavement rehabilitation program in 2014-15 to about $5.9 million, even higher than the $4.7 million initially budgeted for the pavement rehabilitation program. These indeed are one-time monies. So, taking into account these additional resources, just over $3.9 million of the $5.9 million available for the program in 2014-15 is ongoing.”
Back in February 2013, the Davis City Council received a report that showed that the city’s street and bike paths were in worse condition than previously believed and the level of deferred maintenance was far higher than previously known. The PCI for the city streets was 62 with bike paths at 59.
Pavement conditions decline at a rate of about two to three points per year, so the city now believes that roads are at around a 60 while bike paths are at 56.
The report recommended that the city consider increasing pavement expenditures from $1 million per year to a level that would maintain the current deferred maintenance.
The cost of that would be about $140 million over 20 years or $7 million per year. In follow up meetings, council would discuss scenarios that would allow the city to attempt to meet the funding options. They quickly centered around a scenario that would pay about $25 million up front ($15 million in year one and $10 million in year two, and obtained through a parcel tax) and then $2 to $4 million per year after that for pavement maintenance.
City Manager Steve Pinkerton last year suggested that low-interest loans or increased revenue would be the best approach to create the large, up front funds.
As a September 8, 2014, staff report from Michael Mitchell, the Principal Civil Engineer noted, “City Staff have allocated $4.7 million to a paving program (Capital Improvement Project 8250). While this amount is less than the $15 million mentioned above for the first year, it is better than the $1 million previously allocated. The $4.7 million will go toward a crack sealing and base repair project this fall and an overlay project next construction season on most or all of the streets that will undergo this season’s crack sealing and base repair. The overlay project next year will include some bike paths and concrete curb, gutter and sidewalk repair as well as ADA compatible ramps.”
Based on this information, the city has the ongoing funding in place. Council deserves a lot of credit for prioritizing funding within the existing general fund budget. What the city lacks however, is the $25 million up front to be able to pour into roads.
However, as the discussion went last spring, there are potential limitations to how much the city can spend in a year, anyway.
Based on this analysis, a smaller parcel tax might be all that is needed to generate the city’s needed revenue for roads. The question is whether the city also wants to pump money in for pools, parks, and city buildings.
—David M. Greenwald reporting