Sunday Commentary: Move Marks Shift of Power to the County in Economic Development Discussion

City Manager Dirk Brazil signals policy changes with move of hiring new Chief Innovation Officer
City Manager Dirk Brazil signals policy changes with move of hiring new Chief Innovation Officer

It was just a year ago, when departing Chief Innovation Officer Rob White presented a staff report for the council to act on for a proposed Request for Expressions of Interest (RFEI) on the Innovation Center, that Councilmember Lucas Frerichs expressed concerns about the process, “in particular with regards to the county.”

He noted that this was taking place “on a number of properties  in the county. In terms of process, has this been… have we had these conversations with the county thus far? I’m not sure that has occurred and frankly I think it might need to occur as a local governmental partnership with our county partner in this case, before we… I’m all in favor of fast-tracking this and getting out to the public, we definitely need to get this moving.”

Shortly thereafter, at a discussion at the city-county two-by-two, Supervisor Don Saylor raised the prospect that the innovation park discussion was a developer-driven process. He asked that the city and county establish a community engagement process.

Supervisor Saylor noted that a few years ago the county proceeded with a general plan update studying the same areas we are discussing now, “and the city was not interested in that, in fact I was one of the people on the city council at the time so I know some of the discussions that happened and the community response to that consideration.”

“So for the city to proceed brings up some sort of question about what we’re doing here,” he continued. “A developer making a plea in a private office is not a community based process.”

Before closing, however, he would add, “I don’t want this to be interpreted as opposition to economic development in this area.”

Just over a year later, the entire scene has dramatically shifted. Dirk Brazil was at that meeting back in May of 2014 as the county’s Deputy CAO (County Administrator, or chief administrative officer), he now sits as Davis City Manager. And Rob White will be leaving the city at the end of June and he will be replaced by Don Saylor’s Chief Deputy, Diane Parro.

The deck of cards that existed at the meeting on May 1, 2014, was completely shuffled with Mayor Joe Krovoza leaving, Dan Wolk ascending to Mayor and Robb Davis joining as mayor pro tem.

The county has been looking for ways to get additional revenue from the city in exchange for facilitating the annexation process. Back in December, the county held a discussion about getting a larger take from annexation processes, although they did seem to downplay the impact of a new policy on Davis – setting their sites on Woodland.

The bigger question is political and that is where it gets complicated. While Supervisor Saylor made it clear he was not an opponent of the innovation parks, he plays a complex role in it all.

One source told the Vanguard that there was little question that Supervisor Saylor is looking to push development to the county, where it came become a source for revenue for the cash-strapped entity. Don Saylor was very adamant from the start that West Village would remain outside of the Davis City limits, which put a damper on any possible move to annex the university-developed housing project.

That source told the Vanguard that, from the start going back to discussions over Mace 391, any other peripheral development needed to be secondary to Nishi.

While the Davis City Council itself sets city policy, you now have a city manager with a county orientation and Mr. Saylor’s chief deputy coming in as chief innovation officer – and it seems very likely that we will see a shift in prioritization of the peripheral innovation parks as opposed to Nishi and the downtown.

Indeed, City Manager Dirk Brazil told the Vanguard as much on May 1 of this year, when the Vanguard met with the city manager and former City Manager John Meyer. At that time, Mr. Brazil explained that it was not he was opposed to the innovation parks, but rather that he felt that the city’s resources had disproportionately shifted to the peripheral sites and away from the downtown.

He wanted to make sure that the downtown was taken care of and, in his words, “figure out the balance.”

However, others familiar with Mr. Brazil’s views have been more explicit, telling the Vanguard that Mr. Brazil does not see a need for either of the innovation parks, believing that the city should focus on Nishi and the downtown.

This comes at a time when we saw one of the proposed projects – the Davis Innovation Park – put their project on hold, while community voices like James Zanetto and Judy Corbett suggested that we need to put a hold on peripheral innovation parks, arguing that perhaps Davis voters are not ready to approve one or more large peripheral developments.

They see that a “long-term, urban design solution is needed to address our city’s fiscal issue.” They argue, “Working with community residents, we need to develop a vision of a compact, vibrant community that recognizes the talent in its world-class university, that preserves prime agricultural land and that continues its tradition of bicycle- and pedestrian-based land-use planning through sustainable development practices.”

So, instead, they focus inward at sites like PG&E.

But the shift of balance of power to the county with the hiring of Dirk Brazil, and now Diane Parro, opens another possibility. There was always a fear on the part of the city that, with the end of redevelopment, the pass-through agreement would wither and lose influence.  Clearly, it signals that Don Saylor’s view of economic development will be much more influential in the current regime.

The county could seize on that to build their own innovation parks on the edge of Davis without the need for voter approval. However, one of the reasons that this possibility was downplayed was that the county would still need access to services like sewer and water in order to build these parks and that gave the city the leverage it needed to preclude such a move.

However, with a more favorably disposed leadership team from Davis, the door may be open to an arrangement where the city would lease or rent the water and sewer, much as it does to places like El Macero.

To be sure, the Davis City Council remains in control of policy decisions, but the movement towards the county here opens a lot of doors for more subtle shifts in policies. Stay tuned.

—David M. Greenwald reporting

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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37 Comments

  1. Davis Progressive

    it’s pretty clear – nishi is going to be the priority.  they may still try to push mace through to save schilling.  but the focus is now on nishi and downtown.  the county might try to jump in with their own project now that the city is no longer aligned to stop it.  pretty bleak.

  2. davisite4

    Thank you for this insightful analysis.  I hope you’re wrong, but everything you say seems to make sense and fit together as a picture, so I fear that are correct.

    One question: What does it mean for the pass-through agreement to wither?  Can you explain for those of us less in the know?  What sort of force does the pass through agreement have?  Is it a law or something more informal?  What exactly is the pass through agreement?  (Please feel free to point me to a link if that would be easier).

    1. Davis Progressive

      i think the question is where is the future money going to come from with the end of redevelopment.  the assumption then is that the pass-through may cease and therefore the county might be more willing to violate it in the future.

      1. hpierce

        If it expires/ceases to exist, there can be no ‘violation’.

        The only reason the pass-through agreement existed, was in the context of the Redevelopment Agency.

        Now, the status quo, absent provisions to the contrary, reverts to the situation prior to the RDA.

        1. Don Shor

          Historical point: the Davis RDA was created specifically to fund the pass-through agreement (and a highway overpass, if I recall). It all arose out of the Mace Ranch fiasco. No RDA, no pass-through. But there are other mechanisms the city and county could create if they so chose.

          1. Matt Williams

            Don’s comment could erroneously be interpreted … with the erroneous interpretation that since the RDAs have been eliminated by Governor Brown that the Pass Through Agreement payments have ceased. The City’s Fiscal Year Budget documents and CAFRs (Comprehensive Annual Financial Reports) would appear to confirm that cessation because the Pass Through Agreement transactions appear nowhere in either of those documents. As part of my formal communication with Yvonne Quiring, the City’s recently “retired” Finance Director, I followed up on that absence and Yvonne confirmed that since the RDAs ended the Pass Through Agreement payments have been paid each year using another method. The State distributes monies to the County, which then forwards the City’s share of those monies to the City after deducting the Pass Through Agreement payment amount.

            When I expressed to Yvonne that failing to include the revenue decrease transaction and the Pass Through Agreement payment transaction was neither complete reporting, nor transparent reporting, she indicated that she did not see their handling as either incomplete or non-transparent given the circumstances. I respectfully expressed my disagreement, noting that increasing the General Fund Revenues and the General Fund Expenses both by the offsetting amount would take exactly two entries into the City’s general Ledger. Not exactly an onerous task.

        2. hpierce

          Sorry Don, I believe you were mistaken about the order…. the City wanted the RDA .  The pass-through was to circumvent opposition from the school district and the county.  The trade-off with the County was to pass-thru the money and the county would defer to the city prior to approving any development outside City limits, in the vicinity of the City.

  3. Anon

    Firstly, PG&E has made it clear in at least two letters to the city they are not interested in selling their property, so that idea is a non-starter.

    Secondly, and the Vanguard might want to investigate this issue, it was my understanding that if there is a tax revenue sharing agreement between the county and city, the county is limited in what it can ask for.  Essentially what I got out of it was the county cannot make a “profit” but only charge for the services it provides.  What was not clear to me is if services included all of Davis or what it would provide only to the innovation parks.  Murky issue – I would like to understand this aspect of Davis innovation parks better.

    Thirdly, the city is hardly out of the fiscal woods, so if a majority of City Council members suddenly shifts away from innovation parks other than Nishi, and Nishi is not going to generate much tax revenue to the city in comparison to Mace or DIC, the City Council would have some heavy explaining to do.  The Davis City Council sets policy for Davis, not the county, not the City Manager, not city staff.

    Fourthly, if the county is thinking about building an innovation park on the edge of Davis, it would behoove Davis to beat them to the punch.  Otherwise Davis will have all the impacts of innovation park development without any of the tax revenue benefits.

     

  4. davisite4

    Since several of you seem knowledgable enough about the pass through agreement to opine about it, would one of you mind taking a few minutes to explain it to a fellow citizen or at least point that citizen to the relevant information online?

      1. hpierce

        If that is M Fitch’s accounts, he has many errors throughout the work.  A copy of the pass-thru agreement is avail. thru the City clerk’s office, but is old enough that I doubt whether it was ever incorporated into an official website.

        1. Matt Williams

          d4, the fact that Don and I don’t talk to one another either here or in our non-Vanguard lives doesn’t prevent us from trying to help others in similar ways.

      1. hpierce

        Matt… good sleuthing… as I read the writing of Rosenberg, I could find no discrepancy from what I remember at the time, and I was involved on the periphery (technical end).

  5. TrueBlueDevil

    Good article.

    So if the focus will now be downtown, does that mean higher density? Mid-rise development? This Minimalist approach doesn’t seem to make sense with so many needed basic infrastructure projects on the table.

    BTW, the new person will make substantially less ($110,000?) that what Mr. White ($240,000) made, but still roughly a 20% raise for the ‘account services’ background.

    I asked this elsewhere but haven’t seen an answer. David has suggested that at some point the campus could consider developing land in Solano County. Is that contiguous to the main campus / city, right across Highway 80? Or is it a few miles away? Thank you.

    Does the Yolo County Visitor’s Bureau really spur many visitors to actually visit?

    1. Frankly

      The $110,000 versus $240,000 is a PR stunt since one is total compensation including benefits and the other is just the base salary.

      It is still less, but I expect we will get what we pay for in this role.

      1. TrueBlueDevil

        Not to be dense, where is it? Is that right across highway 80, highway 113, or ???

        Might be a consideration for the World Food Center?

  6. Matt Rexroad

    The Raiders will need a new home soon.  North, South, East or West Davis seem like the perfect place to me.

    Matt Rexroad – 916-539-0455 cell

  7. Frankly

    As I understand, the city sends roughly $3 million per year to the county as a sort of bribe to prevent the county from developing around the Davis periphery.  With the innovation park opportunity, the county should scrap that agreement in a heartbeat… build the parks on county land… accept the long-term windfall in county tax revenue.  Then Davis gets to keep that $3 million… but later faces pressure to annex that county development that it had little to no hand in designing to meet its Davis DNA standards.

    Correct me if I am wrong here.

  8. davisite4

    According to this article , provided by Matt Williams above, the pass-through agreement was at one point extended to 2025.  Is that correct, and if it is, is it so easily broken?  Can one party simply withdraw?

    1. hpierce

      I believe the extension you speak to was predicated on the continuing existence of he RDA. Ask a good land-use attorney, but once the State eliminated the RDA’s, it effectively made the pass-thru agreement moot.

      1. Matt Williams

        I believe the extension you speak to was predicated on the continuing existence of he RDA. Ask a good land-use attorney, but once the State eliminated the RDA’s, it effectively made the pass-thru agreement moot.

        hpierce, your statement above is inconsistent with the fiscal realities that Davis has acted out since the RDA’s were eliminated. Davis has continued to pay the County the annual Pass Through Agreement payments … just with a different mechanism. That doesn’t sound like “moot” to me.

        1. hpierce

          Fiscal “realities” by force of law, or choice of politics.  Remember there is a “wind down” period for the state action.  This is a knowledgeable attorney question, not a question for speculative amateurs.  Hence, I have always couched it in what I remember, my opinion, and my belief… if the RDA’s vanished in a poof of smoke, we would not still be spending (as a successor agency) monies for which bonds had already been issued, and yet we are.

          Jeez Matt, we’re in a “wind down period”.  I was responding to longer term consequences. Go ask Harriet Steiner or County Counsel.

          Perhaps I should have said “the agreement is winding down, along with the RDA.”

    2. hpierce

      Davisite… the original agreement was done in 1985, with a twenty year life, unless mutually extended, which was done in 2005. For another 20 year term.

    3. Matt Williams

      if it is, is it so easily broken? Can one party simply withdraw?

      There has always been a voluntary aspect of the Agreement. The County has always had the option to approve development application(s) without getting the City’s blessing. The consequence of doing so would be that the City would stop making the annual payments because the Agreement’s terms had been violated. Similarly, the City has always had the option to stop making the payments without getting the County’s blessing. The consequence of doing so would be that the County would stop seeking the City’s input on County land in the Pass Through Agreement coverage area.

  9. TrueBlueDevil

    Naive question here. What does the country need all of this money for? I know Davis has a massive road repair backlog, city pools, city parks, etc. What does the country need? Do they want to funnel more money to downtown Woodland? Do they want larger county budgets for all of the bureaucrats, government paper pushers, and political patronage jobs?

    1. Frankly

      This will give you an idea…  http://www.yolocounty.org/home/showdocument?id=24867

      As for the pass-through agreement, it appears that the revenue coming from the city and going to the county is buried in their Countywide revenue account… it has an annual inflow of about $80 million.

      Countywide: The additional $3.3 million in net actual versus budgeted variance was caused by a combination of revenue and appropriation changes. The variance in countywide revenue was due to increased revenue from Teeter, Documentary Transfer and RDA pass-through. The appropriation variance was primarily due to the Department of Employment and Social Services not needing all its budgeted general fund dollars to be transferred in 2012-13, which was caused by lower appropriation usage than budgeted and higher than expected realignment revenue.

      But the Davis city budget shows:

      RDA Successor Agency – $3,721,076

      A 200 acre business park will provide the county much more than this.  So the county must be very happy that the West Davis Innovation Park developers pulled out.  In fact, one has to wonder if they just stopped talking to Davis and started talking to the County instead.

      1. TrueBlueDevil

        Does the county reap the same rewards as a city? Developer fees, mitigation costs, and then real estate and business taxes?

        Is Yolo County in need of more funds for it’s budget?  Is someone like Saylor known as an advocate for more or expanded social programs?

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