Just before Christmas the local paper released the online version of “The Mayor’s Corner,” that will be featured in tomorrow’s print edition. Unfortunately, the mayor has used his space to foster his campaign and, in so doing, does a great disservice to the community because much of what he writes is either an overly-rosy picture or a flat out prevarication. But judge for yourself.
He writes that “our budget is balanced and resilient.” He adds, “Due to improved revenues and cost-cutting efforts, our budget is balanced with a healthy 15-percent reserve. Better yet, it is a fiscally resilient one in that we are paying what we need to be for our pension and retiree health obligations and are making substantial investments in our infrastructure.”
He does acknowledge, “Yes, there are still long-term challenges. But we are doing very well.”
While I suppose he is technically accurate, that the budget is “balanced” and “resilient” are subjective terms. I would argue that the budget really is not balanced in real terms as we remain in about a $10 million deficit (per a recent council meeting) on infrastructure needs. The mayor acknowledged at the last council meeting that we need a revenue measure for infrastructure.
However, my biggest issue is the notion that our budget is “resilient.” That comes directly from the council goals, but as we saw in the budget projections from just six months ago, the city is just above the black line thanks to the passed sales tax. If we end up spending money on employee compensation not projected at this time. we go into the red. If we end up not renewing the sales tax, we go into the red, and if we end up with the economy performing less well, we go into the red.
The chart above shows the impact of the tax as it pushed the city’s fund balance into the positive. However, last June’s projections show that, as soon as that tax expires, the city’s fund balance heads right back into the negative.
The city goes from being in the black in 2020-21 by nearly $2 million to being in the red in 2021-22 by about $3.4 million. And while revenues continue to increase modestly throughout the period, expenditures increase as well.
Most ominous is that this chart doesn’t show what happens with employee compensation increases.
The chart shows what happens with a one percent COLA and projects it out past when the tax increase will drop off the tax rolls.
These charts tell the story that the mayor neglects to tell, and what we have is not resilience.
The mayor next addresses infrastructure: “Reinvesting in our infrastructure. If there’s one thing that has marked ‘Renew Davis,’ it’s been the sight of so much construction. This includes our $230 million regional water project, a $90 million wastewater treatment plant, and a $12 million, two-year effort to improve our roads. And the city is exploring ways in which to fund more, particularly parks and recreation facilities.”
The good news is we finally were able to re-pave some of the roads. The bad news is we barely scratched the surface. The worse news is, as I wrote above, we need about $10 million a year on infrastructure and none of the proposed taxes that were pushed forward come close to addressing that.
Next, the mayor writes, “Pursuing economic development. Two significant projects — the Mace Ranch Innovation Center in East Davis and the Nishi Gateway mixed-use development, located at Richards Boulevard and Olive Drive — remain on schedule for a 2016 vote. These projects would contribute substantially to job creation and revenue generation.”
This is an optimistic account of what is happening. First of all, right now the projected take from these projects is just over $2 million. Maybe that can be expanded through an additional hotel and some Community Facilities Districts, but that’s a long way away.
In the meantime, the council has pushed back on Nishi which faces access and traffic concerns, and Mace is still working its way through the process. Both projects need to pass Measure R votes – the best I can see is that both of these are a work in progress.
Fourth, I take great issue with the following: “Accomplishing the Healthy Families Initiative. After challenging the community to do more for public health with the HFI, you responded. We have eliminated soda as the default beverage in kids’ meals, banned smoking in public parks, implemented a number of safe routes to schools measures, and worked with First 5 Yolo to fund an effort — called ‘Help Me Grow’ — to universally screen children for behavioral and developmental challenges.”
You have to be kidding me, right? The Vanguard has just reported that the mayor flipped positions on the soda tax. On December 1, a number of elected and former elected officials including the mayor’s mother, Senator Lois Wolk, came to council to push for putting a soda tax on the ballot. Two days later, the mayor told the Vanguard that he’s “working on it” and “likes the idea.”
Then the beverage industry catches wind, comes to down, drops some money, and threatens to fund the mayor’s opponent in the Assembly election and, at the last meeting, he bails on it.
Mayor Wolk used his prerogative as mayor to jump ahead of his colleagues in an effort to frame the message. He said, “We’re here tonight because council is concerned about the state of our community assets.”
He said that any revenue measure needs to address infrastructure, needs to have been studied and have public input, and finally needs to be successful at the ballot.
While Mayor Wolk trumpeted his record on public health concerns, he stated, “In my mind, the soda tax does not meet those three requirements,” noting, “I think we’ve had a taste of the opposition here tonight.”
So in the face of that opposition, he tried to kill it, only to have three of his colleagues keep it alive.
So the mayor trumpets the elimination of “soda as the default beverage in kids’ meals,” which generated no opposition from the beverage industry because, while it was the right thing to do, it really didn’t accomplish anything, and he bows down to the beverage industry in the face of their opposition on the soda tax.
For those who argue that the soda tax has no effect on consumption, the millions that the beverage industry is spending to defeat these measures belies that.
In the end, the mayor does not offer a factual account of the state of affairs in Davis. Instead, he fictionalizes that account, puts on his rose-colored glasses and delivers a campaign speech.
The reality is that the city’s finances are precarious at best, they were made more precarious from the passage of the MOUs, we have huge infrastructure obligations that the council seems unlikely to address through a sufficient revenue measure, and the mayor attempted to kill the very legislation that he is trying to trumpet.
—David M. Greenwald reporting