On Monday night, in a series of votes, the Finance and Budget Commission made recommendations regarding the state of the finances on Nishi, including the two most pointed: “The FBC recommends that the City Council does not move forward with any development project until such time as a method is found to ensure a profit to the City” and “The FBC recommends that the City Council does not approve development of innovation center projects until the economic analyses are complete and accurate.”
If the council adheres to the concerns of the Finance and Budget Commission, it would be compelled to push the Nishi vote back to November. The overwhelming sentiment was not that Nishi was a bad project, but rather that it wasn’t ready to go on the ballot yet.
At their January 11 meeting, the Finance and Budget Commission (FBC) passed a series of motions regarding innovation center development in the City. These recommendations came after several months of reports to the commission regarding both the Mace Ranch Innovation Center and the Nishi Gateway development.
The FBC recommends Scenario 3 (privatized park, open space and street maintenance) as the desired option when looking at development and that the council not proceed with the baseline as laid out. (Passed Unanimously)
The FBC requests that an infrastructure financing study be done with a 70% loan to value ratio so as to limit the use of a community facilities district (CFD). (Passed Unanimously)
The FBC requests an analysis of what a small second mortgage to augment the financing of the project would look like. (Passed Unanimously)
The FBC recommends that the city council does not move forward with any development project until such time as a method is found to ensure a profit to the city. (Yes-Knickerbocker, Salomon, Wood; No-Carson, Miller; Abstain-Weiss, Williams Passes 3-2-2)
The FBC recommends that the city council does not approve development of innovation center projects until the economic analyses are complete and accurate. (Yes-Knickerbocker, Miller, Salomon, Weiss, Williams, Wood; No-Carson Passes 6-1)
The FBC does not consider the current EPS report to be complete and accurate until the concerns contained in the handout submitted at the January 2016 FBC meeting and additional questions from commissioner Williams are answered. (Yes-Knickerbocker, Miller, Salomon, Weiss, Williams, Wood; No-Carson Passes 6-1)
Commissioner Hand Out:
Two Additional Questions from Commissioner Williams
- I believe the values in the Annual General Fund Expenditures section of Table 1 (Estimated Annual General Fund Revenue and Expenditures Summary at Buildout) on page 132 of the pdf file, should be broken into two separate columns (6 columns in total for the three) as follows. The first column should include the Incremental New Costs that the General Fund will incur, and the second column will contain the Existing General Fund Costs that are being Allocated to the respective projects. The result of that change is that we will be able to see both a New Net New bottom-line as well as a Fully Allocated bottom-line, both of which are meaningful to a fully informed decision.
- Table 1 as it currently exists is based on the City’s average costs (as described on pages 144 and 145 of the pdf document). I believe, especially in the case of Nishi, that a more demographically sensitive cost estimation method is appropriate, not to replace the average costs in table 1, but to supplement it with a Table 1-A that acknowledges the impact of the projected demographics on the City’s projected costs. For example, 95% of students in the rental units of Nishi are going to create road repair costs at a significantly lower rate than the average Davis resident currently imposes. Overstating or understating costs by choosing the easy to implement average costs method does a disservice to the City and its residents in informing their ultimate decision about either of these projects.