Monday Morning Thoughts: Should Council Have Simply Killed the Sports Park?

A Sports Complex is one of the potential projects listed by the city
A sports complex is one of the potential projects listed by the city

It is easy to understand why the Davis City Council took the action that they did last week by pushing the issue of a Sports Park to a special advisory committee, rather than dealing with it as a potential project to be funded by the proposed utility user tax.

Still, listening to the comments on Tuesday night, there was a real sense that most of the advocates for the Sports Park saw the world through the eyes of their narrow interests rather than the totality of the situation faced by the city.

It is this totality I wish to speak towards this morning, because Mayor Pro Tem Robb Davis probably hit on the overriding consideration when he said, “I have no illusion that we’re going to be able to raise enough money to cover all of the backlogs that we currently have.”

Everybody wants to celebrate that things are getting better – but the reality is that, while the economy has improved, the long-term picture looks very bleak. People want to talk about the importance of sports and youth recreational programs – and I agree – but there is also the importance of fiscal solvency and core infrastructure.

The truth is we live in a society where great universities erect stadiums for hundreds of millions of dollars, at the same time when faculty is being laid off and tuition for students is either pricing students out of school or saddling them with a lifetime of student loan debt.

Given that not one person on council and not one staff member disputed, refuted, or even questioned Robb Davis’ comment about not being able to raise enough money to cover our backlogs – do we have any business talking about sports facilities?

Right now we don’t really know the full extent of our infrastructure needs. How bad are the roads? The estimate in February 2013 was that the immediate backlog was $150 million and if we did not infuse tens of millions into road maintenance, the city could be facing a $444 million hole down the line. Ultimately, the council took on the scenario of pumping money into the problem but reducing the overall quality of our roads to about a PCI of 63 rather than the previous goal of 70.

What we do not know is how much more we will have to pay for parks, building, and other infrastructure. At the estimated $5.3 million in annual revenue, the tax is expected to provide about $106 million over the next twenty years. If the council can maintain its discipline and keep the $4 million currently reserved for roads, we may be able to fund most of our infrastructure needs with this tax.

But that assumes a lot.

As we have noted, our current projected budget forecast is precarious at best. We stay in the black, if we can continue the 1 percent sales tax past 2020-21 – but barely. That assumes no employee increases and continued economic growth, both of which at this point seem dubious to hold for the next decade.

City projections presently show the city fund balance returning to the red if voters do not renew Measure O in 2020 or the city employees get even a 1 percent annual COLA.

The model also assumes that the city remain at record low city staffing levels, down over 100 FTE since 2008.

While there are those who believe we will grow more quickly, our planning should assume a very modest and conservative growth rate.

That leads many to believe that the city’s savior will be economic development. Indeed, many slow-growthers such as myself saw economic development as the key to saving the city’s budget.

There was a brief window where this all looked possible. In the aftermath of the defeat of Mace 391,there seemed to be a consensus forming about the need for some sort of business or innovation park. The city put out for proposals and got three proposals, two of which resulted in applications.

However, in the last year, much of that momentum seems to be lost. The Davis Innovation Center has “paused” their process and there is no reason to believe they will restart. The city jettisoned its well-respected Chief Innovation Office and replaced him with someone lacking economic development experience, who comes with a much lower salary and total compensation.

There has been pushback on the parks from those in the community.

All is not lost of course. There is still the Mace Ranch Innovation Proposal. Nishi, while being modest in terms of innovation square footage, still has a fighting chance to win a Measure R vote.

There are also some internal options that figure to inject tax revenue down the line. One is the Hotel Conference Center that was pushed forward last week by the Planning Commission. The other is the Panattoni Business Park. And there are the startup efforts like Pollinate Davis and Davis Roots.

But in terms of property tax and sales tax generating projects, those were always going to be the innovation parks. A big question going forward is whether the council will put a Measure R vote on the June 2016 ballot next to their own candidacies.

Delaying the project, to late 2016 or 2017, delays the build out of the parks. We could reasonably be looking at these projects not breaking ground for two, three, even four years from now – even if they should pass a Measure R vote. That pushes meaningful taxes out potentially ten years or so.

There has been a lot of talk about economic development as the savior for the city, but even if that is true, we have pushed the time horizon out far enough that, realistically, we are looking at ten years at best before such revenue starts to help us – and if you looked at the projections lately, you would see that we need a lot of help before then.

Given all of that, should we be thinking about asking voters to approve a tax for a sports park? I do agree that such facilities are beneficial to the community – however, I would prefer to see it privately financed, privately run, and the operating expenses privately managed. If that happens, it is a win-win situation for the community.

But any talk of using tax dollars for a Sports Parks, even in a separate vote, diverts us from the current pressing needs which are quite serious and have implications that go well beyond sports facilities.

—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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17 Comments

  1. Davis Progressive

    i think the point that we should not even be contemplating additional costs and projects when we are short on critical needs is a good one that got overlooked last week.

    1. Miwok

      With all the fine comments on this, I think they should change the name to the Transportation Tax, and not spend it on roads? That may be better than calling it a Utility Tax and not spending it on Utilities?

  2. Frankly

    Ok Mayor Dan.  Symbols matter, right?  You called the MRAP a “tank” and demanded it be returned because it symbolized the military… and we know that in Davis anything military is politically incorrect.   Even though the MRAP was called back in to respond to the murder-suicide in west Davis, you slept well knowing that your leadership prevented that bad symbol from infesting our lovely city.

    But now you are eager to saddle us with yet another symbol of fiscal irresponsibility.   If you manage to pull enough levers and switches of political influence and get your sports park approved, if not having solved our huge long-term liability problems, won’t this just be another lighting-rod symbol of government-gone-wild… spending, spending, spending… and kicking that fiscal can down the road?

    Will you sleep well at night knowing that you were responsible for cementing that symbol onto Davis?

    Say you had a family member that was so far into debt and with a long list of unfunded maintenance projects around their house, and that family member decides to take an expensive vacation using new credit cards?

    What would the symbol for that type of behavior be?  Irresponsible?   I think so.

  3. Anon

    Given all of that, should we be thinking about asking voters to approve a tax for a sports park?

    In so far as I am aware, Mayor Dan Wolk is the only one that even contemplated using the UUT to pay for a sports park, and that was in his initial article in the Davis Enterprise only.  It seemed pretty clear to me the rest of the City Council was not interested in going there once the issue was under discussion at the last City Council meeting.  I see no harm in forming a task force to see if there is grant funding or community support for a fund drive to contemplate building a sports park, or eventually using mitigation funds from an innovation park(s) to assist.

    1. Davis Progressive

      i see it as a big problem.  first, you don’t kill the initiative to begin with.  that gives the sports folks hope that by organizing and bringing numbers they can win the day.  also, if they don’t get the council to do it, they can put it on the ballot themselves.  this is a huge threat imo.

      1. SODA

        I agree DP. As I watched the CC the same thoughts crossed my mind. The CC were swayed by the special interest groups as expected and wanted to mollify. Not necessarily bad but takes the community eye and energies ‘off the ball’.

        1. Anon

          What I would like to see is the mayor push for innovation parks as a way to fund a sports park – that would be useful IMO.  It is all in the way one frames the sports park issue.

      2. Anon

        To DP: Not following you here.  Why is talking about the possibility of a sports park sometime in the future, especially one that could be funded by mitigation money from the innovation parks, a problem?  What would be the “danger” if the proponents of a sports park put it as a separate ballot measure?  They have every right to do so, but it is not likely to be approved by voters in light of greater needs like road repair and building maintenance.

  4. CalAg

    How to pay for a sports complex? Easy.

    Terminate the Pass Through Agreement and bond for $25M+/- to pay for redevelopment and/or expansion of our sports and recreation infrastructure.

    This can be done by Wolk and colleagues immediately without going to the voters. The questions are (1) has the secretive PTA changed in some material way after end of the RDAs that would preclude this, and (2) if not, does the council have the guts to actually execute on something historic.

    The PTA has been costing us more than $3M per year which allegedly goes to the county “off-budget” (by lowering the city’s tax receipts before they hit our general fund). The total liability to the city is approximately $70-80M over the remaining term of the agreement.

    All we get for the PTA is a redundant layer of growth control which is already adequately provided by Measure J/R. Via the PTA we pay “protection money” for the right to veto any county urban development in our sphere of influence. We already have control of annexation and connections to city services (water, sewer, etc.). The PTA is a waste of precious money that should be put to better use – like maybe fixing our sports and recreation infrastructure problem. The remainder could go to supplement the UTT or parcel tax revenue for roads and bike paths.

    1. Matt Williams

      CalAg, there is some question about the future of the annual funding source for the Pass Through Agreement, which has historically been the Redevelopment Authority (RDA). With Governor Brown’s termination of RDAs statewide, once their “wind-down period” is ended there may be no funding to terminate, Which would make your idea into a suggestion without portfolio.

      1. CalAg

        My understanding is that the PTA was an RDA scheme to transfer Davis property taxes to Yolo County in exchange for veto power over county approval of urban land uses within our Sphere of Influence.

        If this is correct, the RDA wind-down does not change the fact that these are property taxes that should be going into the General Fund. Whether the City Council terminates the agreement or the RDA dissolution voids the agreement makes no difference as a practical matter. Accordingly the funds are presumably available regardless of what the state does – and could be used for example to pay for a sports complex, or to purchase massive amounts of publicly accessible open space on the borders of Davis, or to offset part of the infrastructure tax burden.

        What I find disturbing about this is the extreme lack of transparency related to the PTA. To the best of my knowledge, there has been a $2-4M per year transfer of funds from the Davis taxpayers to Yolo County since the early 2000’s, with a total remaining liability of $70-80M and current payments well in excess of $3M/year.

        Is this information correct? If so, in my opinion there should be a serious public dialog about the PTA given that the City Council is debating both new taxes and public liabilities.

        There is a Redevelopment Agency Successor Agency Oversight Board (the public officials tasked with this oversight are Wolk, Provenza, Colby, Fernandez, Hess, Smedley, and Vink) that should be able to provide the facts.

        It seems to me that this should also fall under the purview of the F&BC.

        1. Matt Williams

          CalAg, your understanding is only partly correct. As explained By Dave Rosenberg (see http://daverosenberg.net/articles/Agreement.htm ) “In 1987, as I was serving as Mayor of the City of Davis, I embarked on what I consider to be the major achievement of my 12 years of service on the Davis City Council. In that year, I played a leading role in creating the Davis Redevelopment Agency and in negotiating an historic agreement between the City of Davis and the County of Yolo. This agreement has become known as the “Pass-Through Agreement” and is absolutely unique in California. In simple terms, the 1987 Davis-Yolo Pass-Through Agreement provided the city land use protection in exchange for sharing (“passing through”) redevelopment revenue to the county.

          As noted in that last sentence, the revenue that was shared was “redevelopment revenue.” As I understand it, the reason Governor Brown dissolved RDAs was that they diverted significant property tax revenues from other taxing entities, and particularly from the State, which bears ultimate responsibility for financing public education. As a result the RDA revenue will not, as you have argued, be going to the City, but rather to the State, which will use it to fund Schools.

          I completely agree with you that the F&BC should be getting a clear explanation of what the fiscal future of both the wind-down period RDA and the Pass-Through Agreement. Council member Robb Davis has been asking for the same information.

        2. CalAg

          Matt, you also don’t understand and I would wager that only a few individuals in the entire City fully understand how to “follow the money.” That’s what worries me. The PTA was a huge transfer of wealth from the Davis taxpayers to Yolo County. There is $70-80M in play and hardly a word of substance in either the Enterprise or the Vanguard.

          I think you are incorrect that all the RDA revenue will be going to the State rather than the City. My research suggests that the State will take a cut for education, but the remainder (and possibly the majority) will go back to the City. I just don’t have access to enough facts to figure this out.

          You might want to look at this document:

          http://www.lao.ca.gov/analysis/2012/general_govt/unwinding-redevelopment-021712.pdf

          It’s dated and there has been additional legislation to complicate the situation. However, there are a couple of key principles to highlight:

          Ending redevelopment changes the distribution of property tax revenues among local agencies, but not the amount of tax revenues raised.

          The decentralized process for unwinding redevelopment promotes a needed local debate over the use of the property tax.

          This obviously hasn’t happened in Davis. That is the fault of the City Council and our local Oversight Board (names listed in previous post).

          Members of oversight boards will have significant authority and responsibility to compare the merits of continuing a specific redevelopment project [I’m counting the PTA as, for all intents and purposes, a “redevelopment project”] against alternative uses for its resources by other local agencies. Oversight board members might decide that a redevelopment project meets local community priorities and continue it, or that the project’s funds could be put to better use by the other local agencies in the area and terminate the contract. In many ways, the oversight board process allows local communities to have the first local debate regarding the use of property tax revenues that California has had in decades.

          I guess we missed that part in Davis. I hope the F&BC can shed some light.

           

          1. Matt Williams

            CalAg, there is a reason that I use the phrase “to the best of my understanding.” I suspect that the “reality” is both very muddy and quite variable from jurisdiction to jurisdiction. With that said, I suspect that if we put our collective knowledge together the whole will be greater than the sum of the parts. I also suspect that you know that I am a member of the F&BC, so getting together will quite possibly move closer to the goal you state in your last sentence. Please feel free to contact me at my e-mail mattwill@pacbell.net.

        3. Mark West

          Re: Pass Through Agreement

          “In 1987, as I was serving as Mayor of the City of Davis, I embarked on what I consider to be the major achievement of my 12 years of service on the Davis City Council. In that year, I…”

          Is it just me, or does anyone else think that a ‘crowing’ politician might not be the best source of facts on an issue such as this?

           

           

  5. Alan Miller

    This seems to me a brilliant political move on Wolk’s part.  Bring forward a sports park, and be the champion for it in the eyes of a large constituency in Davis with kids, people busy raising families and less likely to be following local politics such as long-term budget problems.  No one else on the council will go for it, so there is no danger in actually harming the city budget.  Wolk is seem as a supporter of families and wins more votes when he runs for higher office.  Everyone wins.

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