City Council Candidate Question 3: MRIC and Its Fallout

Candidates Forum on March 12/ Photo by Eunah Cho of Davis Media Access
Candidates Forum on March 12/ Photo by Eunah Cho of Davis Media Access

For the next eight weeks, the Vanguard will be sending the Davis City Council candidates weekly questions.  They have 250 to 350 words.

Question #1: Do you support Measure A (Nishi) – why or why not?

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?

Question #3: What is your reaction to MRIC being paused and as a council member what would you do to move us forward on economic development?


WillArnold2016Will Arnold

I remain optimistic. Our community came together under an economic development strategy via the Innovation Park Task Force, including hiring Studio 30 on campus to research the most compatible features for Davis. After a long citizen engagement process, three proposals were submitted at the sites commonly known as Nishi, Mace and the Northwest Quadrant. I have always believed the Mace site to be the superior location, with the best existing infrastructure and I-80 frontage for access and visibility.

We need to reach out into the river of money that is Interstate 80, and divert some of it to flow our way. We cannot tax our way to “prosperity,” and I support our community driven process to increase and diversify City revenue.

We have an engaged, robust, active and informed citizenry, and I am a strong supporter of citizen-based planning. But our process does not work to its full potential when only the activists show up, and the end result of a community-driven process cannot be to kill every project that comes before us.

For that reason, I believe we must institute more action-driven community outreach policies and procedures to move forward our economic development strategy. We need to broaden and deepen our citizen engagement process to bring more of our community into the discussion. We must improve citizen outreach, deepen the direct budget connection, and broaden Davis’ leadership opportunities.

A few ideas to broaden citizen engagement on this issue include instituting a Wednesday Night at the Market City booth during the Spring to Fall season, Town Hall meetings at the school district’s MPRs that include child care, and identifying specific current and potential revenue streams as part of the quarterly budget updates.

Davis enjoys a unique location that lends itself to robust economic activity. We are the physical home of UC Davis and sit between the Bay Area and the greater Sacramento Region. We are known worldwide for education, and we should be known worldwide for innovation. I want to ensure our community does not just have a seat at the table, but that we are in the driver’s seat.


IMG-23Matt Williams

From the economic development perspective put forward by the Vanguard in this question, the MRIC “pause” is not an immediate crisis, but it is a setback.

Page 2 of the April 2016 EPS Land Economics Analysis states that the MRIC plan contains “approximately 129 acres of developable land accommodating approximately 2.7 million square feet of new construction.”

Page 49 of the September 2015 EPS Economic and Fiscal Impact Analysis states “Without formal Innovation Center concepts moving forward, the city would not realize the benefits of an agglomeration of development with sufficient critical mass, instead having a random patchwork of development spread out in various sites.”

According to Staff’s latest update to the May 2015 Mace Ranch Innovation Center Draft EIR, that “random patchwork” contains approximately 153 net acres in 32 properties, but only 52 net acres in 15 limited (spread apart, very small, and/or unable to accommodate medium and large sized businesses) properties are considered currently readily available for purchase and development.

In the short term, the City and the various owners of those existing properties need to work together to transform the random patchwork into a far more coherent communitarian whole.

———————————

Successful economic development strategy/tactics build on (and leverage) a community’s core competencies, and the strategy of leveraging the research programs and intellectual capital of UC Davis is solid.  The “pauses” of both the Davis Innovation Center and the Mace Ranch Innovation Center (“MRIC”) are because of tactical level failures.

Working more collaboratively with UCD, ideally on mutual timetables, is essential to making progress in building the innovation economy in Davis.

The City, the land-owners, and UCD need to work together to build documentation of clear examples of evidence of how close collaboration with a university’s research programs and intellectual capital produces innovation economy value creation.

Further, “non-innovation park” efforts (e.g. focused economic development activities in and close to Downtown, which leverage research and intellectual capital) are crucial to Davis’ economic sustainability.  In this “pause” era, that is even more true.  Building a joint community/university message that clearly shows how and why Davis is a cut above, will be a boost for those non-innovation park activities.

It is not too late to be creating that kind of evidence, and UCD and the community need to truly collaborate in its production.  The entire distributed innovation ecosystem in Davis will benefit from this collaborative and communitarian effort.


Lee-Brett-HSBrett Lee

I will just go ahead and say it – it does not surprise me that that the MRIC proposal has been put on “hold”.

I don’t think the developer was that enthusiastic about building a tech park without a housing component. Building tech parks in Davis with the high land prices and high community expectations (LEED this and solar that) with a 10-20 year buildout timeframe is quite speculative and may not pencil out in the end.  In addition, there is the added hurdle of having to win a citywide election.

Having said that, I did not and do not support including housing as part of the MRIC proposal.  The community’s interest and the developer’s interest are not always aligned.  My job as a city councilperson is to focus on the community’s interest.

As outlined in my editorial on this subject almost a year ago, a tech park could have provided very important revenue to the city, revenue to the community’s businesses and important job opportunities- all of which I support.  A housing development provides little of the above and has greater negative externalities especially given the site’s relative distance to the center of town.

This site is as far from the university and core area as you can possibly be – take a look at a map and you will see what I am talking about.  We all benefit from a city with a compact footprint (traffic, infrastructure costs, sustainability).  Any new housing should be built closer to the center of town in density and height appropriate infill projects. We have several infill proposals before us that total over 300+ apartment units in addition to the Nishi proposal.

If revenue to the city is of primary concern, building 5 acres of additional auto dealerships would result in nearly an equivalent amount of revenue to the city as the full 200 acre MRIC proposal without a 20 year buildout.  In last week’s answer, I outlined a few of the ideas I have for encouraging economic development – which needs to be an ongoing, multi-pronged approach – not based on a single development.


Frerichs-Announce-2016-5Lucas Frerichs

My emotions have ranged from surprise, (yet not shocked) to annoyance and bewilderment. Above all, I am frustrated and I want a solution.

It’s imperative for the city to diversify its revenue stream away from taxes (whether sales, property or parcel). Providing space to attract new businesses, for local companies to expand, and small or new businesses to take root is a sure way for us to grow our local economy (create jobs, increase revenue and additional accessory spending) without continually “going to the well” for new or renewed tax increases.

The Request for Proposals that led to MRIC was the culmination of a long public process. The Innovation Park Task Force, (having served as Planning Commissioner and Councilmember) developed a strategy for dispersed economic development (sites at East, Northwest, and middle of Davis). It involved numerous public hearings over several years.

The process didn’t identify the properties east of Mace as sites for housing. The proposals that came forward were based on public input and clearly identified the East and Northwest Davis sites for business/commercial uses only.

Mace also has issues (many likely solvable) well beyond the inclusion (or not) of housing…the Ag mitigation chief among them.

We’ve been successful in attracting or growing new businesses: Blue Oak Energy, TDL, Mori-Seiki, Cedaron Medical, Expression Systems. Yet, some have left Davis, such as Bayer and Monsanto.

My proposed economic development plan includes these options:

  • Complete a comprehensive inventory of the available commercial/industrial parcels in Davis.
  • Play to Davis’ & UC Davis’ strengths- work on attracting/creation of ag tech & food-related businesses.
  • Collaborate with UC Davis to capture the technology transfer coming from campus.
  • Additional flex lab space is needed; Nishi Gateway would provide much needed R&D space.

We should double down on our efforts with Davis Roots, which has incubated six successful companies (and growing). We should also collaborate with Sierra Energy’s new Area 52 heavy incubator.

We need to examine or pursue the redevelopment of City Corp. Yard, PG&E parcel, or both. Let’s finish cleanup of Frontier Fertilizer Superfund site and pursue economic development opportunities there, as well.

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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46 Comments

    1. nameless

      That is entirely a matter of opinion.  Council member Lee states “We all benefit from a city with a compact footprint (traffic, infrastructure costs, sustainability).  Any new housing should be built closer to the center of town in density and height appropriate infill projects. We have several infill proposals before us that total over 300+ apartment units in addition to the Nishi proposal.”.  However there are many in Davis that don’t care for infill if it is built right next to them.  Infill also can bring traffic problems to any particular site – it does not necessarily improve traffic.  Depends on the project.

      1. Michelle Millet

        We have a housing a shortage in this community. We can choose to ignore it and deal with the negative consequences of that decision, or we can address it by building additional housing and deal with the negative consequences of that decision. I support Brett’s position that if we choose to build new housing that it should be closer to the center of town. I believe this choice has the fewest negatives impacts on our community as a whole.

    2. Mark West

      The take home message coming out of the last recession, and one of the main drivers for our push for expanding economic development, was the realization that Davis was too dependent on the sales tax revenues from the auto dealerships. The one specific that Brett mentions in his response is the idea of expanding the auto dealerships, thus making that problem worse. The great value to the community of the innovation centers will be the high paying jobs that will come with the new businesses, adding wealth to the community, not simply the tax revenues. I’m not convinced that Brett understands either of these issues.

      1. Michelle Millet

        The one specific that Brett mentions in his response is the idea of expanding the auto dealerships, thus making that problem worse.

        I think Brett used a car dealership as a hypothetical example to make the point  that we can generate the same amount of revenue on a 5-acre plot of land as on 200-acre. He was not proposing that as a solution.

        1. Mark West

          And my point is that they are in no way equivalent.  One generates thousands of high-paying jobs while the other does not. One builds far more wealth in the community than the other.  One reduces our dependence on one category of tax, making our fiscal situation more sustainable, the other does the opposite.  I think it is important for our ‘leaders’ to understand that the problem is not just increasing tax revenues.  That is the logic that got us into the mess in the first place, and unfortunately, the mistake that Brett continues to repeat.

    3. Matt Williams

      Brett Lee said . . . “In last week’s answer, I outlined a few of the ideas I have for encouraging economic development – which needs to be an ongoing, multi-pronged approach – not based on a single development.

      Brett’s bolded comment is an important observation.  One of the little talked about aspects of the MRIC project was/is that approval of the project effectively gives the Ramos/Oates/Perry team a Davis “land monopoly” for commercial development over the next 20 years.  The FBC discussions about the financial analysis put forward some ideas that would result in a more communitarian collaboration of the MRIC partnership with the City could produce a win-win for both the City and the developer.

      Unfortunately there wasn’t anyone from the developer team at the FBC meeting to engage those collaborative ideas that were more consistent with what Brett has argued for in his answer.

       

       

      dominant franchise  You also did not mention FRANCHISE argument:  i.e. we are using a land use monopoly by granting RAMOS for 20 years of city growth.

  1. The Pugilist

    I’m going to respond to each.

     

    Will: I don’t understand how he can “remain optimistic” – he lays out the IPTF and three proposals – two of which are dead and one is fighting for its life.  I agree on the need to engage the public, I don’t see how any of this does that.

     

    Matt: Wants collaboration with the university, but the bigger problem seems to be the lack of support from the public.  Therefore, the answer is to educate the public on why we need this stuff – we haven’t made this case to date.

     

    Brett:  Doesn’t support MRIC.  Okay that seems clear.  He doesn’t want housing.  That seems clear.  What doesn’t seem clear is what his plan is.  ” In last week’s answer, I outlined a few of the ideas I have for encouraging economic development – which needs to be an ongoing, multi-pronged approach – not based on a single development.”  But what about the need for larger spaces to housing Schilling or could have kept the Bayer in play.

     

    Lucas: He’s frustrated and wants a solution – good.  But he says he doesn’t support housing, says mace have issues, wants to double down on Davis Roots, but where are we going to put companies once they get beyond a few employees?  We don’t have a huge inventory – that’s what Studio 30 did four years ago and came to the conclusion we need Nishi plus either Mace or NW.

  2. Michelle Millet

    But what about the need for larger spaces to housing Schilling or could have kept the Bayer in play.

    I’d like to challenge the idea that we need large spaces to house Schilling or companies like Bayer in order for Davis to have a strong local economy. Creating large spaces is not our only option. When we believe it is, we risk making choices that are not in best interest of the community.

    1. Mark West

      If we don’t have the space the large maturing companies leave town, taking jobs, tax revenues and support for our community organizations with them. Your approach means that we invest in growing companies and just when they get to the point that the community will receive the huge multiplier effect of their being here, they leave.

      We already know what happens with your approach because that is how we have functioned the past 20 years. Is it any wonder we have a $30+ million hole in our budget?

      One important point where I think we might agree is that these large projects are not the only thing we should be doing.  We will make more progress if we combine the benefits of a large number of small efforts along with some medium and large projects.

    2. The Pugilist

      It’s not like we haven’t studied this – Studio 30 report was released in 2012.  They concluded, “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

      1. Michelle Millet

        I am not saying that we shouldn’t consider an innovation center, but I don’t think we should hold ourselves hostage to the idea that without one we don’t have a strong economic future. When you feel like you have no other choices you don’t always make the best decisions. I think Brett’s point is that yeah it would be great to have one, but not at any cost. I support this stance.

        1. Tia Will

          “The current isolated and dispersed sites that are available and appropriately zoned are not adequate in terms of size, location, or configuration (and related constraints) to address the emerging market need of an Innovation Center.”

          I think that it is important to note that what they said was that the current “isolated and dispersed sites…” are not adequate…..to address emerging market need of an Innovation Center”. What they did not say as Michelle seems to be pointing out is that they did not say that there was no other means to achieve a sustainable economy.

           I think Brett’s point is that yeah it would be great to have one, but not at any cost. I support this stance”

          As do I. In my experience, there is almost always more than one solution and the weighing of the pros and cons will always be dependent on one’s personal view of the world.

        2. Matt Williams

          Tia Will said . . . “What they did not say as Michelle seems to be pointing out is that they did not say that there was no other means to achieve a sustainable economy.”

          That is indeed true Tia.  They did not say that there is no other means.  With that acknowledged, what means do you advocate as a means to achieve a sustainable economy? Michelle, feel free to share your sustainable economy thoughts as well.

        3. Ron

          “That is indeed true Tia.  They did not say that there is no other means.  With that acknowledged, what means do you advocate as a means to achieve a sustainable economy? Michelle, feel free to share your sustainable economy thoughts as well.”

          It is not reasonable to expect those with slow-growth positions to “solve” the problem that was essentially created by pro-development forces.  By allowing large housing developments to be constructed (without a matching revenue creator), budget shortfalls were virtually guaranteed.  And now, those with pro-development views are asking those with slow-growth positions to “solve” the problem that pro-development forces largely created.  (Honestly not implying that Matt falls into any particular category.)

          The proposed “partial solution” (a commercial-only MRIC development on farmland, outside the city’s boundary) was reluctantly accepted by some who otherwise support slow growth.  Without adding even more revenue-losing housing, this commercial development seemed poised to offer a moderate level of financial benefit for the city.

          However, I also wonder why so many other cities (throughout California, that don’t restrict development as well as Davis) also have significant/severe budget problems.  Could it be that unquestioned development (of any type) is not necessarily the answer?

          O.K. – I’m ready for the flood of comments, regarding controlling costs, etc.  (Not sure that I’ll respond.)  And yes, I’m writing this in a purposefully challenging matter.

        4. Mark West

          Ron: “It is not reasonable to expect those with slow-growth positions to “solve” the problem that was essentially created by pro-development forces.  By allowing large housing developments to be constructed (without a matching revenue creator), budget shortfalls were virtually guaranteed.”

          You seem to understand that the problem we face today is an imbalance of the amount of residential and commercial development, with commercial space (the matching revenue creator in your words) being deficient.  I am going to ignore the history of how we go to this position, though will state that your simplistic explanation is faulty, but I will instead point out that the imbalance has existed for decades. The obvious solution to the imbalance today is to build more commercial space, with a ballpark estimate of at least a 1000 acres of commercial and retail eventually being required.

          Those who oppose new commercial development in town are working to block the ‘obvious’ solution to the imbalance (and the City’s fiscal shortfall). It is therefore perfectly appropriate and reasonable for others to ask – what is your alternative?

           

           

           

        5. Ron

          Mark:  “You seem to understand that the problem we face today is an imbalance of the amount of residential and commercial development, with commercial space (the matching revenue creator in your words) being deficient.”

          I didn’t say that commercial development is the only matching revenue creator.  Moderate tax increases may also be needed, at this point.

          It’s really unfortunate that (throughout California), retirement benefits for public employees were apparently allowed to be “unfunded”.  (What kind of accounting is that?)

        6. Mark West

          Ron: “I didn’t say that commercial development is the only matching revenue creator.  Moderate tax increases may also be needed.”

          Yes, it is a three-pronged solution. Grow the local economy through economic development, constrain costs, and (preferably) short-term tax increases. I don’t know what your definition of a ‘moderate tax increase’ is, but a $2000 per year parcel tax in perpetuity does not fit with mine.

          Without the commercial development (which many have consistently opposed) we will need large, permanent tax increases.

          “It’s really unfortunate that (throughout California), retirement benefits for public employees were apparently allowed to be “unfunded”.   

          I agree just as it is unfortunate the maintenance of the City’s infrastructure was allowed to be both un-funded and off-budget. There is little that the residents of Davis can do about the State’s approach to benefits accounting, but we can insist that our local representatives accurately address our own fiscal shortfalls. We have a $30-35 million hole in our annual budget, so everytime you hear someone proclaiming that our budget is balanced, you should be aware that they are being dishonest.

        7. Ron

          Mark:  Some (overall) agreement, here.  However, I’d like to clarify/add the following:

          Per Mark:  “I agree just as it is unfortunate the maintenance of the City’s infrastructure was allowed to be both un-funded and off-budget. There is little that the residents of Davis can do about the State’s approach to benefits accounting, but we can insist that our local representatives accurately address our own fiscal shortfalls.”

          I understood that a large portion of the unfunded liabilities (in cities throughout the state) were due to retirement (including health) benefits for retiring city workers.  (In other words, each city has contributed to the problem, by failing to address this issue.)  It doesn’t seem fair to completely “take these benefits back”, from those who were essentially promised them.  (Yes – the unfunded infrastructure maintenance is also a concern.)

          I have one other suggestion that would likely require a long-term effort.  (However, I’ve been suggesting it for years, to those who might listen.)  If tax revenues were shared (perhaps on a regional basis), competition between local cities (for commercial development) would essentially cease.  We would no longer be in a “race-to-the-bottom”, to see which city is most willing to “bend over backwards” to accommodate such commercial developments.  And, these businesses might then be essentially forced to offer a better deal to local governments/communities, to accommodate such developments.

          This might also allow each city to focus on its own “specialty” (e.g., West Sacramento and Woodland might better-accommodate large-scale commercial development, compared to Davis).  However, I’m admittedly not sure what cities like Davis can offer, to encourage tax-sharing.  (Perhaps this is something that might ultimately require legislative action.)

          In any case, I understand that such an approach has been implemented elsewhere.  (Someone on the Vanguard mentioned the location, but it eludes me at the moment.)

          I’m a little disappointed that none of our elected officials seem to be even discussing the possibility of sharing tax revenues, between cities.

        8. Mark West

          Ron: “It doesn’t seem fair to completely “take these benefits back”, from those who were essentially promised them.”

          They cannot be ‘taken back’ from existing or past employees except by a ruling of the bankruptcy court. They can be ‘given back’ by current employees as part of the negotiating process, and they can no longer be offered to new employees. Since the vast majority of the City’s expenses are compensation related, this is the primary area where we can address ‘cost containment.’ The average City employee costs us $150,000 per year in total compensation.

          “If tax revenues were shared (perhaps on a regional basis), competition between local cities (for commercial development) would essentially cease.” 

          Tax revenues are already shared, between the Cities, the County, and the State. I’m not sure why you would propose another layer of administration to share those revenues further. Just more expensive public employees inefficiently pushing tax dollars around.

          More important, though, why would you want a system where the houses are in one area and the jobs somewhere else? That is what we have in Davis right now, with a huge section of the population commuting to their jobs in another part of the region?  From an environmental perspective (the one you claim to favor) we would want people walking or biking to work, not driving an hour or more each day. Houses, jobs, and shopping should be developed in concert, and when one aspect is ‘out of balance’ we should work to restore that balance.

        9. Ron

          Mark:  General agreement, regarding your first point.  Cities should not promise benefits to new employees, without adequate funding sources.

          Some disagreement, regarding the following:

          Mark:  More important, though, why would you want a system where the houses are in one area and the jobs somewhere else? That is what we have in Davis right now, with a huge section of the population commuting to their jobs in another part of the region?  From an environmental perspective (the one you claim to favor) we would want people walking or biking to work, not driving an hour or more each day. Houses, jobs, and shopping should be developed in concert, and when one aspect is ‘out of balance’ we should work to restore that balance.”

          One might argue that this is the very reason that cities such as West Sacramento and Woodland “need” commercial development (more than Davis).  Shouldn’t residents in those cities have local employers, as well? In contrast, Davis has the “elephant in the room” (the University), which offers relatively well-compensated, stable jobs.  (Compared to other cities in the region, there is no shortage of good jobs in Davis.)

          I’ve previously discussed existing public transit (e.g. Yolobus) to accommodate the substantial number of workers who commute (from Davis to Sacramento), and those who live in nearby communities (and commute to Davis).  In other words, workers are commuting both ways, regardless.  It’s been going on for a long time.

        10. Mark West

          I’m pretty sure that Frankly could supply you with the statistics on the number of jobs per unit of population, for a typical California City.  He has posted some of the data before but I don’t know the source.  The gist though is that Davis has a deficit of thousands of jobs for our population. It would be interesting to see where Woodland and West Sacramento fall, but both cities have long had more commercial and retail developments than has Davis.

           

        11. Frankly

          There are 22,828.61 FTEs employed by UCD as of April 2015.  10,302 of those are Med Center employees.

          Go here and here.

          I cannot find any stats from UCD for how many employee live in Davis.  My guess is around 60% of those non-Med Center employees… or 7,516.

          Again just a guess.  UCD is certainly a large employer for the city.  An employer that pays no property tax.

          But go here to compare Davis to Palo Alto for an example of how far off we are for the number of firms and our retail sales per capita.  Also check our population density… and add another 8,000 on-campus students that come into the city to do their shopping, etc.  Then pick any other like-sized city in CA (preferably one with a world-class research university) and compare.

          We have UCD but little else.  Palo Alto has Stanford.  It is hard to find stats on the number of employees.  See here.   Looks like about 12,000.  Not sure if this includes the hospital employees or not.

          Davis has a much, much higher percentage of local residents leaving Davis every morning to commute to their jobs that any other comparable city… especially Palo Alto.

          We don’t have to aspire to be Palo Alto, just note that we expect to have city amenities like the Palo Alto and they have 3-times the general fund budget as does Davis.  ($150MM compared to our measly $50MM).  And our populations are identical… no scratch that… Davis has about 8,000 more students that live off campus.

    3. Frankly

      Michelle, there is a big disconnect evident in this comment.  You are not alone.

      Business requires space.  Other than the type of business/property required, is the very next thing that the commercial real estate broker asks the customer when the customer comes knocking.   Unlike housing where there is this demand from the environmental-mental residents to make everyone live small, business does not work that way.  The size of a facility is tied to the business plan.  Moving to a new facility is disruptive and costly and can actually damage a business.

      Now, you can take the typical Davis attitude that you can control everything in the universe just by policy, and limit the amount of land available so that only smaller businesses can locate here… but then you reduce the pool of prospective good business that could locate here.

      Ideally we have a diversity of business here.  Because as Mark West points out, and just like most of us should understand if we have a 401k, a diversified portfolio helps weather the economic storms better than if all of our eggs are in one basket.

  3. Matt Williams

    One of the key issues that affects our whole community is the antiquated state of our telecommunications infrastructure.

    To address both quality of life and an economic development issues, Davis needs to build take proactive steps to upgrade its telecommunications/broadband network, replacing the current Comcast-provided  network (predominantly coaxial cable, with some fiber) with an all-fiber to the premises (“FTTP”) DavisGIG network.  Why DavisGIG?  Because every home and business in Davis would have lightning fast Internet speeds of up to one Gigabit (1000 Megabits) per second.

    To accomplish that, the City has chartered a Broadband Advisory Task Force (“BATF”) to study options for improved broadband access for the City, and make recommendations of future courses of action to the City Council.  

    The BATF in conjunction with Davis Community Network (“DCN”) is currently seeking proposals for a FTTP Feasibility Study that will present the recommended business direction and operating principles for municipal delivery of fiber optic broadband services to every home and business in Davis. 

    The Feasibility Study’s business plan, analysis and strategies will focus on how the Davis FTTP market opportunity should be approached from a range of business dimensions including marketing, product design and pricing, organization structure, financial planning, and considerations of risk and competitive behavior.

    Improving our telecommunications infrastructure will not only support our community’s economic sustainability, it will also open up opportunities for students in the DJUSD system as they think about their career choices and electronically network/collaborate with people with similar interests.  The DJUSD robotics team CitrusCircuits is a perfect example of how exciting that kind of collaboration can be.

  4. David Greenwald

    “I also wonder why so many other cities (throughout California, that don’t restrict development as well as Davis) also have significant/severe budget problems. Could it be that unquestioned development is not necessarily the answer?”

    I think the answer is obvious – there are two sides the revenue equation – spending and revenue. A lot of cities have not controlled costs and therefore even with larger general fund budgets than Davis, they have a net revenue problem. To fix this, you need to continue to control costs as you increase revenue. Can we do that? I don’t know. But unless we do both, I think this city is in trouble fiscally and we will not have the services and amenities that we are used to having.

    1. Frankly

      Exactly.

      Almost every city in California spends more than it takes in… no matter how much it takes in.

      Davis has TWO problems… too little money coming in and too much money being spent.

      The latter problem is more difficult because it is political, union, legal… and in Davis’s case we have a large percentage of voters that are government workers, and they tend to like six-figure retirement benefits at age 57.   Just consider if Davis had a majority of voters working for a large sludge company in town… Putah Creek would be filled with sludge.

      That problem will not be fixed until we make public sector unions and collective bargaining illegal.  And that will not happen until we run out of other people’s money.

      The first problem is one that Davis is both lucky and unlucky with.  It is lucky because unlike a lot of other communities, we have a world class research university here and there is a great demand for good companies to locate here.  Also, we are in a growing region that helps to drive demand.  However, we are unlucky in that we have Measure R and too many of our voters are old, puckered-up fools that think the Davis can and should remain in a time warp.

  5. Tia Will

    Matt

    With that acknowledged, what means do you advocate as a means to achieve a sustainable economy?”

    I am a little surprised to hear you ask this question since I know from your previous responses that you usually read my comments. I have posted ( granted without numbers, since you know how well I do with those) previously the approach that I prefer. I am happy to repeat. I favor the following approach :

    1. Pay as we go for what we want. This would mean that we would have to have accurate debt/cost accounting and yes, we would have to pay more in taxes. I would be willing to pay much more…..and would be willing to contribute to compensate for those legitimately unable to pay more and remain in town.

    2. Spend less. I am by nature a minimalist. I am certainly willing to accept some deterioration of our roads, although not our bike paths and sidewalks as I believe that we should be encouraging their use over that of our roads.

    3. I would encourage small fee additions and increases such as paid parking downtown and at the peripheral shopping centers. This would also encourage the use of feet and bikes for trips in which only a few items are being purchased.

    4. I would add and increase certain types of taxes such as cigarette, vaping, soda , alcohol taxes and ultimately marijuana.  Basically whatever is harmful to one’s health. People say that this poses an unfair burden on the financially disadvantaged. I say on the contrary, it likely benefit them the most in terms of health care savings over their lifetime if they were indeed deterred from buying these harmful products.

    5. I am a proponent of small businesses development such as the newly announced Nishi collaboration. I believe that it is possible to do much more in terms of small business development in conjunction with the university and that Davis is uniquely positioned to benefit from these kinds of endeavors.

    You have previously dismissed this approach as not generating enough money. I agree that each step is a relatively small one, but in aggregate, if we were also willing to adapt our thinking from our desire to always have more, to an acceptance that what we have is truly unique in our region and worth preserving, I believe that with conservation of what we have and a willingness to pay for it out of our own pockets, we would probably do fine without expecting someone else to pay for what we want which is at the heart of the “grow as fast as we can” model.

    1. Matt Williams

      Tia, thank you for this contribution to a robust dialogue.

      Regarding your past post, I wouldn’t go as far as “dismissed” and what you have outlined above is more comprehensive than that prior post, in part because the question posed to you this time is less narrowly stated.

      Regarding your first suggestion above, I couldn’t agree more if I tried.  That is all about accountability and fiscal responsibility.  If our local government demonstrates to the voters that it is making well-informed and prudent fiscal decisions, then we will increase the level of trust in our community enough to handle each tax proposal as a “special tax” with its requirement of a 2/3 majority in order to pass.

      Regarding your second suggestion above, again I couldn’t agree more if I tried.  The FBC and Robb Davis have been explicit in their calling for a full staffing assessment building on the John Meyer engagement (see LINK), as well as a business process engineering assessment, so that we know that we are providing the right services in an optimally efficient and effective manner.

      Your fifth suggestion is very much in line with my answer yesterday to the Vanguard’s third suggestion, so in this “pause” era it is hard to argue with that suggestion either.

      Again thank you for engaging my “dialogue catalyst” question.

       

      1. Matt Williams

        I was able to go back and locate Tia’s prior suggestions, which were:

        1. Extend the current sales tax which will expire unless renewed. I would recommend an increase, but let’s just extend it for now and see what we get. I would not pose this as an “emergency” stop gap measure but as something that will be needed across the 20 year time span and inform people up front that depending on economic circumstances, more may be needed in the future.

        2. Charge for downtown parking during the hours of 8 am to 6 pm

        3. Increase taxes on tobacco and alcohol products and allow a vote on a soda tax. While we are at it on taxes, let the voters decide on which taxes they are willing to pay. When a fully formed idea for a tax comes forward ( such as using the Berkley model for a soda tax) we do not need the additional filter of the City Council who may or may not have ulterior motives for putting it on or keeping it off the ballot. Just let the voters decide. The voters are capable of “having a conversation” between the time of proposal and the election.

        4. A modest parcel tax. You get to decide what “modest” is and I’ll play along.

        5. We hear repeatedly that we tax for one purpose and then spend the funds on something else. How about a fresh approach ?

        Consider “go fund me” type means of raising funds for desired goals. For example, I care very much about the maintenance of our greenbelts, side walks, parks and recreational facilities….and much less so about our roads. I recognize that others feel differently. So why not post how much it would cost to restore and maintain a given piece of infrastructure,  and let people pitch in directly to meet that specific need. Then we could follow those costs directly on line. Talk about transparency !

        My response to those suggestions by Tia was as follows:

        Extending the full 1% of the Sales Tax is almost a certainty, but as Internet sales gain a larger and larger share of consumer spending, unless the sales tax laws are modified, the revenue from Sales Tax will decline.  Page 14 of the 2015 Comprehensive Annual Financial Report (CAFR) says, “Sales tax increased $3.0 million, primarily due to the passage of Measure P, to collect an additional 1/2 cent in sales tax.”  That would mean your suggestion of extending the full 1.0% of the Sales Tax would generate approximately $6 million per year . . . all of which was included in the 2015 CAFR revenues.

        Your paid parking proposal will produce a howl of protest from many in the Davis business community whose argument will be that changing from free parking will drive their customers away.  I believe an efficiently installed and managed paid parking system can actually provide better “free” parking for the customers of Downtown businesses than the current system.  In today’s computerized cash register world, providing a rebate to a customer at the time they make a purchase to compensate them for the cost of their parking will make the parking “free.”  Once a month the business’ sales software would tally the total of the rebates provided, and submit that to the City for reimbursement from the paid parking revenues.  That means window shoppers will pay for their parking, as will entertainment seekers.  The net amount left over after the expenses are paid will go to the City coffers.  It will in all likelihood be a modest amount.

        I’m willing to get on board with your suggestion 3, but at least at present, only if the tax is handled as a Special Tax, with a clearly spelled out plan for how/where the monies are going to be spent and with a 2/3 majority vote requirement.  No general taxes.

        Given your suggestions 1, 2 and 3 above won’t generate any appreciable incremental revenue over what we have in the Budget now, your suggestion 4 (a “modest” parcel tax) would have to generate the full $33 million per year, which works out to approximately $2,000 per parcel per year for the approximately 16,500 parcels currently in the City.   That $2,000 per parcel per year could come down somewhat if we identify other sources of revenue and/or methods for decreasing our current level of annual expenditures.

        My response to Tia’s GoFundMe suggestion 5 was as follows:

        Tia, my “significant amounts of money” comment pertained to parking meter revenue. I think your “go fund me” suggestion can and will raise significant amounts of money. In fact I am working with the DavisGIG folks to put together a “go fund me” effort in support of the Fiber To the Premises (FTTP) project.

      2. Tia Will

        Matt

         If our local government demonstrates to the voters that it is making well-informed and prudent fiscal decisions, then we will increase the level of trust in our community enough to handle each tax proposal as a “special tax” with its requirement of a 2/3 majority in order to pass.”

        I have seen many posts that imply this. I am not sure that I agree. We see a significant number of posts that imply that the poster believes that taxes are simply a way for “politicians to spend other people’s money”. They do not seem to believe, as I do, that money spent for common purposes is a necessary part of membership in a society. Some of you value the military very highly, some value the roads very highly. I value public health and the environment very highly…..and yet I am routine told on this blog that my values “are spending other people’s money” while their values are “necessary”. Now I am hard pressed to see what could be more important than the environment in which we must live…but I digress. My point is that I believe that “trust in public officials” in frequently nothing more than an excuse for not wanting to part company with what one values most ….. namely…. money.

        1. Matt Williams

          That is a very reasonable point Tia; however, I see it as a bit of a chicken-egg situation.  Getting to a point where the number of voters for a tax measure gets to 2/3 isn’t going to be accomplished by “spin.”  There is going to have to be real change in the trust levels of the community.

          Transforming our current culture of political calculation to a culture of accountability is the best way to accomplish that “real change.”  Otherwise, no tax measure votes will achieve the 2/3 level to causer anyone to have “to part company with what one values most ….. namely…. money.”

          This election and my campaign are about whether you believe doing the same things over and over will produce different results.  To be effective and successful in meeting the challenges Davis faces we must change how we make decisions.
           

           

        2. Doby Fleeman

          Tia & Ron,
           I believe it really is worth listening to what both Mark and Matt are saying.

          As I see it, the truly massive issue associated with unfunded liabilities, unfunded deferred maintenance and unfunded mandates is that nobody, but nobody is charged with sorting the whole thing out – in a way that is reasonably equitable to all parties who are expected to participate in resolving the problem.

          The biggest problem, under our system of government, is that there is no political capital to be gained by a campaign platform that says to everybody – “Let’s take the long view and recognize that its time to cut benefits, cut programs and raise taxes……..if we are to begin down a new path which isn’t totally dependent upon dumping these liabilities upon our kids and grandkids.”

          That’s one problem.  The other challenge is twofold in that every interest group is mono-focused with laser-like precision on executing their own particular agenda or campaign – a situation ready made for manipulation by political forces eager to curry favor – and, secondly there is no effective gatekeeper in the system to help the community prioritize the necessities from the nice to haves.

          Don’t get me wrong, it can be done – we can ask the pilot to take the airbus up to 40,000 feet where we can all begin to get a good, bird’s eye view and a better appreciation of the “totality of things” and the essential, integrated nature of what it takes to establish and maintain a community and all the services we have come to expect – but take a concerted effort to make the ask.

          What is often missed or disregarded in this conversation is the relationship of “how taxes are generated” by different classes of enterprise.  It just so happens we live in a community where a very large percentage of our jobs are situated with employers who pay no property taxes and collect no sales taxes – and believe it or not, but that actually makes a big difference in a community’s ability to afford its essential government services.

          It’s not just about the number of jobs.  It is also very much about the kinds of jobs, the kinds of employers, and the kind of taxable activities in which they engage. 

          It’s not just the high ratio of state, federal, and municipal and district employers – none of whom pays any property taxes – it is also the high number of non-profits including hospitals and other important community service groups, many of whom are fully or partially exempted from property tax.  On top of that it is important to recognize the high ratio of service provider and professional service businesses – all of whom are exempt from participation in any kind of local sales tax collection efforts.  Lastly, as we gaze out over the view from 40,000 feet is the realization that majority of land we see is zoned as agricultural and therefore taxed at a relatively low basis (with some exempted entirely) when compared with property employed in most commercial enterprise.

          Kudos to the Vanguard and our Finance and Budget Commission for bringing these thorny issues to table.

          We can continue this conversation divided by our many unique and individual areas of interest and concern, and likely not make very much real progress no matter how hard we try.  Or, we can ask our elected leaders to take up the matter in earnest and help us all to gain a better functional understanding of the major tidal currents at play in this complex equation.

    2. Doby Fleeman

      Tia,

      Concerning recommendation number 3, do you realize the City currently has no jurisdiction over the parking policies of private property owners?  Should we assume that you are proposing we assign a new authority giving the City the power to establish and enforce paid parking on private property?  Might be a great way to encourage reduced VMTs, but I would first encourage you to consider how such a policy might be received by your employer, for example, along with fellow employees and local Davis patients?

      1. Tia Will

        Doby

        My recommendations were actually made in a general sense since I have no special knowledge nor expertise regarding who owns and/or controls which parking lots. One possible contribution that private businesses that rely on automobile parking for their customers could be for them to pay a quarterly or annual fee for the presence of a financially noncontributory parking lot within city limits. The rationale would be that they are using space that they could be using to generate more revenue for no purpose other than for people to store their cars. Charging for parking is done in many cities in both private and public parking areas. I was seeing this as a means of generation of funds, not pretending that I know the legalities of how it might be accomplished.

  6. Ron

    Mark – I overlooked one of your statements:  “Tax revenues are already shared, between the Cities, the County, and the State. I’m not sure why you would propose another layer of administration to share those revenues further.  Just more expensive public employees inefficiently pushing tax dollars around.”

    I’m not sure that another layer of administration would be needed.  (Someone on the Vanguard pointed out that this approach has been successfully implemented, elsewhere.)

    Local officials are currently only representing their own cities (and interests) regarding commercial development, causing unneeded competition between local cities.  (This also creates incentives to engage in extremely poor planning, regarding development in general.)

  7. Tia Will

    Mark

    You seem to understand that the problem we face today is an imbalance of the amount of residential and commercial development, with commercial space (the matching revenue creator in your words) being deficient.”

    I agree that there is an imbalance as you have stated.  However, I do not believe that this is the only problem. Another aspect of the problem is that we, as a society, are very impatient. We want everything and we want it now. What we do not seem to realize is that every change that we make requires adaptation to that change, and we don’t want to allow time to accommodate or adapt to the changes we embrace.  Let’s suppose that we had been what some would have seen as “successful” and MRIC, the west side project, Nishi, and every housing project had all been approved and acted upon. Do you not think that we would now be experiencing significant problems related to all of the construction and new people with their needs for space and services ? And what happens to all of this new and supposedly bustling activity when we hit the next economic downturn as we inevitably will in the boom and bust cycling that accompanies our supposed “free market” economy ?

    This is not an argument for “no growth”, it is an argument for slow growth with time for adaptation. It is an argument to prioritize changes and assess what has worked and what problems have been encountered with each major change in order to choose more wisely in the future.

  8. Tia Will

    Doby

     I believe it really is worth listening to what both Mark and Matt are saying.”

    I appreciate your very thoughtful post which supports some of the points of Mark and Frankly in a manner which is much easier to consider since it includes no invective, no claims that those who do not agree are simply selfish, stupid, or too old to understand. I would also point out that not being in agreement on all points does not mean that one is not “listening” or even valuing an opposing opinion.

    Or, we can ask our elected leaders to take up the matter in earnest and help us all to gain a better functional understanding of the major tidal currents at play in this complex equation”

    On this point, I would like you to elaborate. This is exactly what I thought we were doing when we elected Robb Davis and Brett Lee to the council. So who of the current candidates do you see as best equipped to help us gain a “better functional understanding of the major tidal currents at play …..” ?

    1. Doby Fleeman

      Tia,

      As much if not more, it is the political environment in which our councilmembers must operate that makes the task so difficult.  That said, I think that Robb is the most acutely attuned to our underlying fiscal challenges of any incoming Mayor I have seen in my several years in the community.  Whether he can move the conversation on to the front burner is another question.

      The biggest problem I see is the absence of actionable data from which to even launch a plausible, informed conversation.  Clearly, we are getting closer on the finance side.  At some point, sooner than later, there will be a serious conversation about how we intend to backfill a $30MM annual shortfall without any new revenues – other than more new taxes.

      Perhaps my biggest disappointment over the past several years has been the failure to follow up on the study recommendations of the former Business & Economic Development Commission issued in 2011.  If there had been concerted efforts to address the issues they identified, starting in 2011, we wouldn’t be having this conversation about the importance of a long term, sustainable economic development strategy – it would be obvious. 

      That’s not to say that everybody would agree with notion that more robust economic activity is necessarily a good thing for their town, but they would have had an opportunity to more fully flesh out their concepts for the increased taxes and reduced services that would have “fit” their alternative views.

      This isn’t a case of analysis paralysis – it is simply a question of not understanding how and why we got to where we are today, what are the costs of standing idle on the topic of development as communities all around us are making big decisions and undertaking even bigger investments, and how will things look twenty years from now if we opt to simply pull up the drawbridge and make do with what we have today?

      Under these conditions, expecting our elected leaders to lead is problematic at best.  How can anyone be genuinely enthusiastic about leading down a path that hasn’t yet been explored?   And, that seems to be about the size of it as matters stand today.

  9. Mark West

    Do you not think that we would now be experiencing significant problems related to all of the construction and new people with their needs for space and services ?

    No.  I don’t think most people would even notice unless the construction interrupted their normal commute/drive pattern. We would need to add 10’s of thousands of people in a short time span for it to have a noticeable impact on most people’s daily lives.  In fact, I suspect that the only people who would notice any difference are those who are looking for something to complain about.

    “Another aspect of the problem is that we, as a society, are very impatient. We want everything and we want it now. What we do not seem to realize is that every change that we make requires adaptation to that change, and we don’t want to allow time to accommodate or adapt to the changes we embrace.”

    We have been seriously discussing the need for economic development for more than a decade. Exactly how long do you think you will need before you are ready for the City to act? Another 10 years? 20? One of the big problems in Davis is that we talk things to death, and when we finally come to a conclusion on how to act, someone comes along and proclaims that we need to discuss it further – because we aren’t ready and need more time to adjust. Honestly, Tia, I think that the quote above is just another version of your selfish excuse you use to try to justify your desire to keep things just as you like them.

    I grew up in this town and have lived here most of my adult life. The City has changed quite a bit since the days when Pole Line was the East edge of town and the Cannery made the entire town smell like stewed tomatoes every summer. Even with the changes, however, there really hasn’t been that great of a change in the quality of life. It was a good town to grow up in, back in the 60’s and 70’s, and in my experience, a good town to raise kids in, both in the 90’s and today. The two big changes, in my opinion, have been the recent deterioration of our roads, pools, parks, and other infrastructure, and the increase in volume from the vocal ‘stuck in the mud’ crowd who cannot see beyond their own selfish wants.

    Davis will eventually outgrow the ‘no changes’ nonsense, but at our current pace, it won’t happen until after an adventure in Federal Bankruptcy Court. We need to increase the economic vitality of the City by increasing jobs through business development, contain the growth in costs of City services so that costs do not rise faster than revenues (as they currently are) and raise taxes in the short-term (perhaps significantly) to properly address our fiscal needs. The time to act on all of these areas is now, not sometime down the road when you finally decide that you are ready. We have spent more than enough time discussing the problems, it is time to start acting on them.

  10. Frankly

    I don’t think most people would even notice unless the construction interrupted their normal commute/drive pattern. We would need to add 10’s of thousands of people in a short time span for it to have a noticeable impact on most people’s daily lives.  In fact, I suspect that the only people who would notice any difference are those who are looking for something to complain about.

    This is an important point.  It gets to the heart of a point about irrational aversion to change.  It also covers a point about lifestyle bias.

    With respect to the irriation change aversion, people wire to a new normal pretty reliably.  How many current change-averse no-growther types 40 years ago would have screamed in protest against a Davis that looks like Davis today?  Yet, a lot of those people have stayed and have not moved away.  They seem to like Davis fine the way it is.  And assuming all new development is smart development, they will likely still like Davis the way it is years and decades from now.

    Of course we will read in response from some of these people that they liked Davis better 40 years ago… but the point is that they are still here… so I really challenge that statement.

    On the point about lifestyle bias,  there are a lot of people living in the LA area and the Bay Area… most that choose to live there.  I have failed to hire talent from those places simple because Davis didn’t fit their idea of a good place to live and work.  Of course this isn’t a suggestion to become like LA or the Bay Area… it is just to point out that there is nothing more righteous nor more accurate with respect to lifestyle choice and bias… it varies.

    I see many people lacking the ability to visualize a future state and or to support a dynamic state, and are just made axious by them.  These are people that might struggle to remodel their home, or to make a big purchase decision for something they have not previously bought.

    Generally it is not a good idea to let those people have too much control of the agenda… because they are people that typically require a lot of help to make good decisions.

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