Commentary: The Key Question is Who Will the Council Represent on the CFD Vote?

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Cannery-undercrossingTonight, the Davis City Council will be asked to adopt a series of resolutions that form the CFD (Community Facilities District), including a landowner vote (with a single landowner), levy special taxes and approve a Funding and Acquisition Agreement for the proposed improvements.

Staff notes, “The City Council is also being asked to take a separate action to introduce an ordinance amending the Cannery Development Agreement as it pertains to the SW bicycle/pedestrian connection, pursuant to the direction provided by Council on February 17th.”

Following the controversy surrounding the CFD, Councilmember Rochelle Swanson asked for a modification in the CFD that they would meet with The New Home Company with the hope of reducing the size and scope of the assessments.

As a result of those talks, “The New Home Company has proposed lowering the maximum special taxes. The maximum tax rates for each category of land use are reduced by 32% to 47%.”

CFD-Rate

Staff notes that the biggest reductions on a percentage basis are on the smaller residential units, which represent the majority of the units in the project. The proposed rates on the two smaller housing sizes are nearly cut in half.

The Cannery CFD is cheaper on the lower end than the current rates for the Mace Ranch CFD, but more expensive on the higher one.

CFD-Rate-Mace-Comp

As staff notes, “Based on the analysis prepared for and presented to the Council at its February 17th meeting, the combined ad valorem, assessment and CFD tax burden for homes in The Cannery, including the DJUSD, CFD’s represent an overall effective tax rate of 1.63% of estimated market value for homes in The Cannery. Prior to the lowering of the maximum special tax rates by the New Home Company, the combined effective tax rate was 1.75%.”

The city is also reducing the term from 40 years in the original proposal down to 30 years.

Staff continues, “The reduction in tax rates significantly reduces bonding capacity. By our calculations, at current bond market rates, the net proceeds from the CFD bond would be reduced from approximately $12 million down to $8 million. Of this total, approximately $6 million would be used to reimburse New Home Company for Phase 1 infrastructure work in progress. This remaining $2 million would fund other potential improvements related to The Cannery.”

The question that must be asked is whether these compromises and reductions go far enough? Is the problem that the original CFD was simply too big or is the problem more philosophical?

Michelle Millet in her guest column on Sunday wrote, “When individual council members cast their vote on Tuesday on whether or not to approve the formation of the CFD, whose interest will they choose to represent – those of the community, or those of The New Home Company?”

Here she argued, “I understand that there is no free lunch, and that infrastructure cost associated with the development will be passed on to future Cannery homeowners, either through the formation of a CFD or an increase in the cost they pay for their home. But while the approval of a CFD has clear benefits for the developer, it has no clear benefit to future Cannery homeowners, or the Davis community at large, and instead has only potential negative impacts on both.

“While I appreciate the amenities The New Home Company has included in the Cannery Development, and the time spent on meeting with community groups and commissions, and their efforts to address the needs of these various groups, I do not believe that these actions obligate the city council in any way to approve their request for the formation of a CFD; to suggest otherwise sets a scary precedent for how our council will negotiate deals with developers in the future, especially large scale ones like those being currently proposed for future Innovation Parks on our towns peripheries.

“So who will our council represent on Tuesday? It is my hope that they fulfill their duty and the obligation as our elected representatives and vote, not in a way that protects the financial interests of The New Home Company, but instead in a way that protects the interests of the citizens and the community that they have been elected and entrusted to represent.”

One of the commenters on Sunday, wrote, “Career politicians need to scratch the backs of those whose hands feed them.  Follow the money and you’ll find the votes.”

It is an interesting point and an interesting question. To that end, we note that last year, Dan Wolk as a candidate for State Assembly received a $4100 contribution from The New Home Company itself, $1500 from Kevin Carson, The New Home Company President, and $1500 from Ashley Feeney, The New Home Company Vice President. He also received $1500 from George Phillips, who was the consultant on the Cannery Project.

We need to be completely fair here. First of all, there is nothing improper legally about these contributions, which were received within a day of each other. Second, at the time these contributions were made, the Cannery had just been approved and Dan Wolk seemed more likely than not to win an Assembly seat.

Obviously they were not made in some sort of anticipation of the CFD vote – the CFD wasn’t even on the radar screen at the time and there was no belief, even if it were, that Dan Wolk would be on the city council.

Dan Wolk has been fairly consistent on the Cannery, at least since his first meeting on the subject – he has been supportive of the need for new housing for families in Davis.

He sang the praises of the Cannery at the State of the City Address in January, which he said “reestablishes Davis as a leader in innovative housing.” The mayor said that we have two demographical issues in Davis – the cohort of those between 25 and 45 years old, “that demographic is shrinking. That really is concerning for the future of our city.”

At the same time, one of the biggest concerns that “good government” people have is the corrupting influence of money in the system. Whether The New Home Company actually bought influence with Mr. Wolk, let alone his vote, seems questionable. But the average citizen doesn’t have the access to that kind of money.

The typical citizen does not have $8600 to give from four different entities. There is no legal conflict of interest here. However, the appearance of conflict is troubling. We want to make sure that our public officials are considering all interests, whether they have money or can deliver voting blocs or whether they are simply individuals with modest means.

We want to make sure our public officials are voting for our best interests and the best interests of the entire community. And so, when we see a public official receiving $8600 in donations from a company that has business before the city, we have to at least pause.

On a 3-2 vote as the Cannery was in November of 2013 as well as a month ago, one vote can change the entire outcome.

These are questions that we have to ask. Clearly the council heard some of the community dissent and worked with the home builders to reduce the size and scope of the CFD, and the question really is whether it goes far enough and whether any CFD can be acceptable.

—David M. Greenwald reporting

 

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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38 thoughts on “Commentary: The Key Question is Who Will the Council Represent on the CFD Vote?”

  1. zaqzaq

    David wrote,
    “Dan Wolk as a candidate for State Assembly received a $4100 contribution from The New Home Company itself, $1500 from Kevin Carson, the New Home Company President, $1500 from Ashley Feeney, the New Home Company Vice President. He also received $1500 from George Phillips who was the consultant on the Cannery Project.  …   Obviously they were not made in some sort of anticipation of the CFD vote – the CFD wasn’t even on the radar screen at the time and there was no belief even if it were that Dan Wolk would be on the city council.”

    You have to be kidding me.  Are you blind?  The CFD may not have been on the public’s radar screen but it definitely part of the plan for the New Home Company.  Have you ever heard of hedging your bets.  They champagne was flowing at New Homes when their “Developer Dan” did not place in the top two.  Are you trying to claim that their was no linkage between the Cannery project and those donations.  How much money was given to Joe Krovenza (spl?) by New Homes or these individuals.  It you are New Homes your $8,600 investment just turned into millions.  I wish I could get that rate of return on my own investments.  That was a pathetic defense of “Developer Dan” by David Greenwald. Just pathetic.

      1. hpierce

        Ok, so if an injury is to be inflicted, it is better to only break one leg, instead of two?  How about not inflicting the injury in the first place?  Truly, only breaking one leg is “cushioning the blow”.

        1. Barack Palin

          Hpierce, how do you feel about council members taking donations from companies where they later take votes that might enrich millions of dollars for those same companies?

        2. hpierce

          I sense a ‘hook’ in that ‘baited question’, BP, but I’ll bite anyhow….

          As long as the contributions meet legal limits, are fully disclosed (in a timely manner), and don’t ACTUALLY affect the vote, I see no problem.  “concerns” can be raised by the disclosures.  Particularly in local, ‘non-partisan, elections’.

          You said, “…how do you feel about council members taking donations from companies where they later take votes that might enrich millions of dollars for those same companies?”  Ok… how do YOU feel about PACS who dump money into Republican and/or Democrat coffers, without disclosing what companies gave THEM the money (another reason I am neither Republican nor Democrat). Now THAT’S CORRUPT, and, unfortunately legal.

          “Might” is a ‘big word’… there is, IMO a HUGE difference between a campaign contribution and a bribe.

          Certain CC members may well have “support” on their minds, but really don’t think any are “for sale”.  Hell, I’d give Lucas $500 bucks to ‘swing the other way’.  But I don’t think he would. At any price… I think he and two other CC members are ‘wrong’ on this, but I see no bribery.

           

  2. hpierce

    Staff report for this item:  
    http://city-council.cityofdavis.org/Media/Default/Documents/PDF/CityCouncil/CouncilMeetings/Agendas/20150505/07-Cannery-CFD.pdf

    Folk should note that the staff report says, “Note also that the $750,000 in additional CFD proceeds to be utilized at the City’s discretion as originally described in March is no longer provided for due to the significant reduction in bond proceeds.”

    Regarding the SW bike crossing options, that discussion begins on page 7 of the staff report.  It is complicated enough that I won’t even try to summarize.

    An ambiguity is reference to the ‘$6 million worth of improvements completed to date’.  The CFD is an acquisition agreement, and so, technically the improvements are to be completed and accepted as complete for City operation and maintenance prior to reimbursement.  It is unclear from the staff report whether this test has been met.

    Appears that the CC is trying to “split the baby”, and save face for the three CC members, particularly Lucas (to keep him “in tow”).  We’ll see.

    1. David Greenwald Post author

      That’s Hpierce, I meant to include both the link and the notation about the $750,000, for some reason I’m more tired than normal this morning.

    1. hpierce

      Don, I hope you mean that as ‘information’, not an ‘indictment’.  From what I understand from City staff who have worked with him throughout the Cannery process, he is a professional. Securing entitlements for clients is his profession.  Nothing wrong in that.  Have heard that he is affable, honest (as much as he can… he can’t expose his clients’ “cards” — definitely not deceitful), and has a lot of integrity.  Yes, he represents developers.  Somebody has to.  Just like someone has to represent the guy who killed 12 movie-goers in Aurora, CO.  Doesn’t mean his lawyer is a scumbag.

      1. Tia Will

        hpierce

        Have heard that he is affable, honest (as much as he can… he can’t expose his clients’ “cards” — definitely not deceitful)”

        I believe this to be an accurate characterization as far as it goes. However, I have a bias against evasiveness even when that may be a part of “one’s job”. I believe that the clients “cards”, as a matter of fact everyone’s “cards” should be out on the table. Otherwise, how can one bargain in good faith ?  At a community informational meeting, I pressed him about the anticipated price ranges of houses at the Cannery. After saying twice that he really couldn’t speculate, I pushed again naming the $400 – $600,000 price range. After a long pause, he answered “I would say that might be a reasonable estimate”.  So while he did not say anything deceitful, he definetely was not forthcoming and clearly did not want to say anything at all. This is a position that certainly does not help the average citizen arrive at any reasonable assessment of whether or not they see a project as in the best interest of the community when they are effectively being blindfolded as to the true nature and costs/benefits of the project.

        1. hpierce

          Tia, he spoke plain truth, and probably wasn’t evasive, as he is not New Homes, or a builder that New Homes will sell portions of the project to, much less in marketing.  Why would you think he is/was privy to that level of detail?  You might have well asked him, “yes or no, have you stopped beating your spouse yet?”.  He’s a “process guy”, and won’t probably get a penny more or a penny less for his efforts, whether New Homes loses money or reaps a fortune.  Now had you asked the question of someone fully privy to New Homes marketing strategy, or that of the ultimate builders, you might “have something”.   You don’t.

          Following your logic, every defense attorney should “lay all their [clients’] cards on the table”.  Might simplify the legal process.  (assuming the client even shared everything with their defense attorney).

          You could have also demanded City staff explain exactly how much each home would cost.  Did you do that?  If so, were they evasive?  I’d hope so, on the’guaranteed price’ issue.  They, like the ‘processing guy’ have no control, and a questionable amount of info.

        2. hpierce

          BTW, Tia, in my experience, I’ve found the best way to handle conflict is:

          Start out with your heart’s desire.  Listen to your antagonist, who will tell you their heart’s desire.  Play “poker”, and negotiate.  If that doesn’t get you to yes, you start looking for ‘common ground’ and if the other party seems receptive, then fine.  If not, but you think you are close, only then do you get to “showing your hands”, but then you must expect they will show you theirs.  If you come into a conflict, the absolute WORST thing you can do, starting out, is “show all your cards”.  The other party will use that as a “baseline”, and push to talk you down from that.  And will threaten impass if you don’t capitulate.  Reality.  Not the utopian plane.

  3. SODA

    hpierce….sorry on the run and can’t read the staff report, but am I hearing you right that the $750K ‘windfall’ to the city will not happen?

  4. Davis Progressive

    for months we kept asking what do the councilmembers get out of this – now we know.  wolk got a huge amount of money from these folks.  i suspect lucas wants to run for higher office someday too, and he will stake his claim to a nice piece of the action.  i know its cynical but follow the money – right?

  5. Tia Will

    DP

    I can’t help but want to believe that sometimes doing what you perceive as right coincides with what may be perceived as personally advantageous. I had a lengthy personal conversation with one of the council members who apparently genuinely believes that this was a transparent and correct process and outcome. I do not happen to agree, but I do not automatically assume that there is nefarious intent.

    1. Frankly

      I agree with you here Tia.  I think it is a difference of “hard” and “soft” negotiations with the developer.  Some CC members see Davis as being justified to take a more hard line.  Others seem to be conciliatory with the developer.

      I started out writing in support of the CFD because I saw it as just a payment method difference because the buyer will pay for the amenities one way or the other.  But later I turned against it because I want the city to have a more firm and business-like relationship with developers.  Mostly because I don’t want future Measure R votes to struggle with opposition claiming the city will roll over like a ping pong ball every time a developer blows a new demand.

  6. Barack Palin

    I’m surprised there’s not more comments regarding the $8600 in campaign donations from New Homes Company and others associated with the company to Dan Wolk.

  7. davisite4

    City Council members,

    This makes no difference.  As David suggests, this is a philosophical issue about who this action benefits (not the City and not the Cannery community), not about the amount of money.

    So, we are watching.  And we will remember how this vote goes when you want to sell us on peripheral business parks or if you want to run for office again (whatever office that is).  If you vote for this CFD, we will know who you represent, and we will know that it isn’t us.

    1. Davis Progressive

      there’s also a chicken and the egg syndrome – did they vote that way vecause they got the contribution or did they get the contribution because they were more likely to vote that way.

      1. Don Shor

        Contributions are for access, IMO, not for a particular vote. Most people nowadays are smart enough to avoid a specific quid pro quo (certain unions, I would say, are exceptions to that). The contributions to Dan’s campaign make perfect sense; he had already clearly stated, during the campaign, that he was supportive of the Cannery project (as had Rochelle).

  8. Barack Palin

    Even though I’m sure council members feel they are too honorable to get bought might past contributions from developers lead to “implicit bias” when it’s time to cast that vote?   LOL

     

    1. hpierce

      I watched,but got distracted at a point.  My guess (from what I watched) is that it was not mentioned, but might well be wrong.

      Only Michelle spoke to the lack of community/new resident benefits. [might be wrong on that, too, due to distractions]

  9. hpierce

    Deal was done.  CFD in place ( 3-1-1 [Lee wimped out]), council unanimously modified DA per staff recommendation.  The die is cast.

    hpierce reporting…

    1. Brett

      That’s funny. I could have sworn I voted against the CFD.

      Actually Hpierce, there were three things we voted on:

      1. To form a CFD – I voted no.  3-2 vote

      2. To certify the “election” ( where the city clerk counted the 4 ballots submitted by the property owner) – I abstained; clearly the clerk was able to count the 4 ballots. To vote no would imply that the “election” was not correctly held or the ballots were miscounted. 3-1-1 vote

      3. To modify the developer agreement so that a 3rd bicycle access point to the West could be considered eligible for funding. I voted yes, as did all of us. 5-0 vote

  10. Joe Krovoza

     

    Not quite sure what to say to all of this.  For starters, I didn’t receive any funding from New Home, ConAgra or any of their associates for my Assembly run.  I believe the Cannary was/is a good project on balance and I was pleased to work constructively with New Home and George Phillips on many of the elements over a period of years leading to its adoption.  Ultimately, I did not cast my vote for the project, believing very strongly that two grade-separated crossings (at the SW and SE of the project) could easily have been funded by the project, and are essential for bike/ped/car safety and our city’s culture and GHG reduction goals.  The pro forma on the project showed then, and suggests even more today, that there is plenty of room to fund the crossings.  I was forthright about my desire for the crossings from the very first hearings on project elements.  As to the CFD being part of the DA, there’s a provision in the DA allowing such that’s clearly being exercised now.  I was opposed to a CFD seeing no need given the pro forma, and it wasn’t discussed with me seriously in any forum leading up to project approval or during the Council’s two November 2013 deliberations on the project.  That’s all I can add.

  11. #me

    Some David Greenwald quotes from the article …

    “… one of the biggest concerns that “good government” people have is the corrupting influence of money in the system. Whether The New Home Company actually bought influence with Mr. Wolk, let alone his vote, seems questionable. But the average citizen doesn’t have the access to that kind of money.”

    “There is no legal conflict of interest here. However, the appearance of conflict is troubling. We want to make sure that our public officials are considering all interests, whether they have money or can deliver voting blocs or whether they are simply individuals with modest means.”

    “… when we see a public official receiving $8600 in donations from a company that has business before the city, we have to at least pause.”

    “These are questions that we have to ask.”

    I didn’t receive any funding from New Home, ConAgra or any of their associates for my Assembly run.  Joe Krovoza

    Joe Krovoza has chosen to both insinuate moral superiority over his opponent in the Assembly race and actively insert himself into the CFD debate on this and previous threads, so I think it is fair to apply the same high-minded principles articulated by David Greenwald above to the former mayor.  Because Krovoza is also a member of the Vanguard team, I’m sure Greenwald is also concerned that members of his organization are above reproach.

    During the campaign, Krovoza routinely stressed that he played a key role in delivering the surface water project.  So is there any evidence of the corrupting influence of money?  Is there even an appearance of conflict of interest that we should find troubling?  Do we need to at least pause and consider the potential influence of any future campaign contributions?  Are these questions that we have to ask, as we did with Dan Wolk and the CFD?

    According to the California Secretary of State website, Krovoza received $10,250 from the Tsakopoulos family for his Assembly race. Note that this sum does not include any bundled funds that may or may not have been coordinated by the Tsakopoulos organization  According to the 12/4/2013 Davis Enterprise, Davis and Woodland will pay the Tsakopoulos group $2,600,000 per year for 24 years beginning in 2016 (with a 2% per year inflation adjustment) for surface water from the Sacramento River.  By my calculation that works out to just under $80,000,000.

    Here’s a link to a picture of Krovoza and the Tsakopoulos team just 8 days before the campaign money started to come in.

    http://www.davisenterprise.com/media-post/conaway-ranch-water-project-photos/attachment/conawayw/

    I’m not saying there was a quid pro quo. I’m not saying there was a conflict of interest. I’m not saying that Krovoza put his political agenda ahead of the interests of his constituents. I don’t even agree with Greenwald that “these are questions we have to ask.”

    I’m just pointing out the hypocrisy.

     

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