For the next eight weeks, the Vanguard will be sending the Davis City Council candidates weekly questions. They have 250 to 350 words.
Question #2: While the city’s budget picture has improved, the city is still in need of funding for things like roads, parks, greenbelts, pools, buildings, as well as some unfunded retirement needs – what measures would you support to increase city revenue and why?
We have a big hole to get out of, that much is clear. It took many years to get us here, and it will take longer to get us out.
There is no magic solution. We cannot cut our way to sustainability and keep the community we love. Our taxpayers cannot foot the entire bill. No single project will save us.
No tactic will be enough on its own, nor is any approach mutually exclusive of another. Our strategy must be taken as a whole to address our needs. Ignoring one approach for the sake of another is unnecessary and throttles our efforts to achieve fiscal sustainability.
Thankfully, our work to fix this problem is also years in the making.
We’ve cut our budget, though more cuts are likely needed. We’ve found efficiencies, but there are not enough efficiencies in the world to make a sizable dent. We’ve increased taxes repeatedly, and plan to do so again, keeping our fingers crossed that this isn’t the time the taxpayers finally say “no.”
And we’ve talked about prioritizing economic development. We’ve talked about generating revenue from outside of our own pockets. We’ve talked about the opportunity created by our region and UC Davis. We’ve talked about welcoming those who want to invest in our community, create jobs, and stimulate our economy.
We’ve talked for years, come together as a community, and made a plan of action. But we have yet to act.
I believe we will, eventually, take the all-hands-on-deck approach our city needs, one that includes the economic development strategy our citizens and elected leaders have identified.
We will realize that the choice to do nothing is itself a choice, and that a single-minded focus on not wanting our city change has resulted in changes we cannot control and are loathe to address. We will come together in a spirit of compromise, collaboration, and community.
The only remaining question is how long will it take us.
Thankfully, Davis’ budget has greatly improved since the Great Recession. We’ve seen increased consumer spending; leading to greater sales tax revenue. Increasing home values led to additional property tax revenue. Passage of the modest 2014 Measure O sales tax increase also contributed to the improved revenue.
We’ve done a decent job of being fiscally responsible by reigning in spending- although we’ve not done as much as some would have liked. After no raises since 2009, we approved a modest 3% COLA (over 2 years) to most of our employees last November. Although, we also instituted cuts to benefits in our previous round of negotiations, including reducing cafeteria cash out from $1500 down to $500/month. Our city council is now funding our pension obligations, and we have employees covering a more of their pensions.
We’ve been spending millions of dollars on significantly needed road and bikepath repairs. Newly paved roads include 8th St, L Street, Lake Blvd, Lillard Drive, East Covell, and more are on tap in the years ahead.
The state and federal governments have significantly reduced the amount of money provided for infrastructure, and are partly responsible for the sad state of infrastructure affairs. Davis has been successful in winning government grants, and will likely continue to do so.
Infrastructure costs for the city are immense, yet we are not in a unique position; nearly every local government faces a similar situation.
We’re in the process of getting the full scope/report of the state of our infrastructure needs/city fees structure. We will prioritize and act accordingly, although it takes time.
In the meantime, we need to continue to enhance revenue through economic development, (fostering Davis Roots and small company development). With the news that MRIC is “on hold”, we’ll need to market/develop our vacant commercial parcels and redevelop others to assist in revenue generation.
We’ll need to look at the right mixture of taxes to fund infrastructure needs.
Among other ideas, I’d be supportive of a transportation parcel tax and would look at the viability of how it could shift over time, as transportation mode demands shift.
The clumsy approach would be to use a parcel tax to address the entire shortfall. But equally clumsy would be to pin our revenue “hopes” on a single, massive development.
A balanced approach would be to do three things:
- add some additional revenue generators
- increase the success of our existing businesses
- find ways to cut costs and minimize expenses
Item 1 is in progress. We recently approved a new hotel conference center and we are close to approving a new extended stay hotel. These two projects alone are expected to yield in short order about $3.6 million in additional city revenue each year (see the hotel revenue study). Should the voters approve the Nishi Project, we would gain another $1-$2 million per year.
Item 2 is not as complex as it seems. Davis’ internet connectivity is slow and expensive. By having the city invest some upfront money in fiber optic technology/infrastructure (DavisGig), the city would not only recoup its investment it would allow existing businesses to be better able to compete in the marketplace. I was recently involved in a site selection process for my company and we were evaluating two potential sites – one had fiber optic, the other traditional broadband – any guess as to which we selected as a finalist? In today’s world and even more so in tomorrow’s world slow connectivity is a deal breaker. Sadly Davis currently is in the slow/expensive category. In addition, the CCE partnership should help lower electricity costs for our businesses.
And of course not all solutions needed are high tech – there is the need to provide for greater zoning simplicity as well as improved parking management/capacity for our downtown.
Item 3 is a work in progress and will be for many years. We have an ability / obligation to make our city services more efficient. As an example, for our fire service we moved from 4 on an engine to 3. By having a deeper look at service calls (type/time/location) we can maintain service and cut costs further by strategically planning our fire house locations and staffing/response models.
This second Vanguard question focuses on how to extract additional dollars from the taxpayers. The problem with that focus is that it doesn’t answer the much more fundamental question, “Are we spending our money efficiently and effectively?”
Rather than starting with questions about raising money, we should begin with a focus on cost containment, which should quickly start by conducting a full staffing analysis (building on John Meyer’s April 2015 “Organizational review of general operations” study), to determine a systematic match between service delivery needs and staffing.
Finance and Budget Commission discussions have also strongly expressed the belief that a thorough Business Process Re-engineering engagement is necessary in addition to the staffing analysis. Staffing poorly designed, inefficient, ineffective service delivery processes makes no sense. Einstein said it perfectly, “Insanity: doing the same thing over and over again and expecting different results.”
Once we have a good understanding of our spending needs, then matching appropriate funding sources to those needs can be accomplished with appropriate accountability metrics and milestones incorporated into the annual Budget process.