At the last city council meeting, city staff presented a report that showed the city is spending about $10 million less on infrastructure on an ongoing basis than it needs to do. These include everything from roads and sidewalks to parks and pools to city building maintenance.
While the city has downgraded the projected cost of the roads backlog, the unfunded deferred maintenance remains over $100 million over a 20-year period and the Vanguard continues to believe a revenue measure is needed to generate the necessary funding.
The problem is not only is there no consensus on what to do, but other priorities seem to be getting in the way of sound decision making.
On December 15, the council voted 3-2 to approve a motion to ask staff to return with information on a TOT (Transient Occupancy Tax), a parcel tax focusing on infrastructure needs that are critical to be addressed immediately, and more information on the sugar-sweetened beverage tax.
The substitute motion was to focus on TOT and parcel tax. That motion, supported by Dan Wolk and Rochelle Swanson, subsequently failed.
The motion effectively took the Utility User Tax (UUT) off the table. In one of her letters to the editor, Elaine Roberts Musser lamented the decision of the council in setting aside, by a 3-2 vote, “a utility user tax with almost no explanation.”
In our December 18 article, Councilmember Brett Lee explained his reasoning somewhat.
Councilmember Lee said that, had the city gone in the direction of the UUT, he would have been more in favor of taxing cable and other more discretionary costs. He noted that people can choose whether or not to get the premium $200 cable package, saying, “if you have that sort of money, then paying a percent on that, I’m not too troubled by it. If you’re getting basic cable paying $30 a month, 3 percent on that is essentially 50 cents, it’s a very small fee. Something like that wouldn’t make Davis less affordable.”
On the other hand, he noted that people “do not have the ability to not have electricity, they do not have the ability to not use water, they don’t have the ability to not pay sewer fees.” He said, “So those fees were problematic. I was hoping to have the ability to have a tax that ideally was more discretionary.”
Meanwhile, a soda tax proposal has come forward. On December 1, a group of former elected officials, including Senator Lois Wolk, came forward supporting a soda tax.
Two weeks later, after Mayor Dan Wolk had seemed to be supportive of the tax, he attempted to take it off the table. 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.
Meanwhile, Mayor Wolk trumpeted his record on public health concerns, then stated, “In my mind, the soda tax does not meet those three requirements.” He noted, “I think we’ve had a taste of the opposition here tonight.”
While the move caught many off guard, the Vanguard has learned that the mayor backed off due to pushback by the beverage industry, including threats to fund his opponent(s) in the impending assembly race.
Mr. Wolk quickly shifted to pushing for a parks tax.
Mayor Dan Wolk, during his comments, noted that “we have an exacting amount of defined needs that we need in the area of parks and rec.” In expressing his concerns “over going the route of a soda tax to fund those items, it seems like it might behoove the council to look at something like an increase in our parks tax by a certain small amount or moderate amount to be able to begin to pay for some of these items as opposed to going the route of a soda tax.”
“That would be something that I’d be interested in sort of seeing,” he said. He suggested a $50 increase in the parks tax to $99, “which would be a special tax and require two-thirds vote but it [would] provide needed funds for our infrastructure.”
He added, “I don’t think we can shy away at this point from… I’m not willing to wait another year before putting something on the ballot.”
Mayor Wolk was joined by Billy Doughty, head swim coach, Davis Aquadarts, with support from Charlie Russell; Kellie O’Neill, president, Davis Tennis Club; and Elaine Roberts Musser.
They write, “On a potential revenue measure in June, we agree with Mayor Dan Wolk. We need a revenue measure that will be assured to go toward parks facilities, has proper oversight, has a proven track record of broad support without funded opposition, and can pass at the ballot box.”
But given the games being played, will a parks tax be able to pass at the ballot box?
Our view remains that the city needs revenue for streets and infrastructure. As such, a parks tax that is devoted to park infrastructure – while certainly needed – does not go nearly far enough in generating revenue for other infrastructure needs.
Moreover, the Vanguard is concerned that the move for a parks tax is essentially bait and switch, pivoting the mayor away from the beverage industry while at the same time appearing to support children’s needs.
The soda tax, which would directly target obesity and diabetes, would generate revenue not for the general fund but more specific programs and therefore should not be viewed as a city revenue measure.
Finally, in the discussion over revenues, a Transient Occupancy Tax has been floated as another revenue generator. After City Manager Dirk Brazil pushed back on the council at the last meeting, Councilmember Rochelle Swanson suggested “TOT” as the push for the city.
But TOT revenue is limited at best. A 2 percent TOT increase would only generate $250,000. While it seems like low-hanging fruit from the standpoint that it doesn’t tax existing residents, it also fails to generate enough income to justify putting it on the ballot.
Given all of this – it is not clear that we have consensus to move forward with any revenue measure in 2016.
Some of the soundest advice comes out of two motions from the Finance and Budget Commission that the Vanguard published on Thursday. As Matt Williams succinctly put it, many are focusing on revenue, “in effect saying ‘The City of Davis needs more money to spend.’ The Finance and Budget Commission (FBC) unanimously passed a motion at our December meeting that strongly argues for a different approach.”
He added, “Rather than focusing on increasing revenues, the FBC believes the most pressing issue for the City of Davis is being honest about our costs … and taking definitive, proactive steps to control (and where possible reduce) those costs. Until we know “what we owe” it is premature to be talking about spending more.”
The Finance and Budget Commission instead recommends that “the Davis City Council not approve any new tax measures or utility rate increases for placement on a ballot measure until such time,” among other things, that the staff provides a detailed “scope of proposed and/or deferred capital infrastructure projects, as well as proposed new services.”
The previous motion recommended that “the city update its multi-year projections of underlying city revenues and expenditures.” Moreover, the city should review things like staffing and other personnel issues “to help free up city funding resources to address gaps in funding for infrastructure.”
The Vanguard believes this is a wise course of action. While the Vanguard believes that the city needs additional revenue, particularly for infrastructure, it is concerned that the city has not adequately projected costs and revenues into the future, making it difficult to convey budget information to the public in an accurate and credible way.
—David M. Greenwald reporting