By Robb Davis
Organizational strategic planning exercises often include a “SWOT” analysis analyzing Strengths, Weaknesses, Opportunities, and Threats. I offer the following brief SWOT analysis as a start to goal setting for the coming two years. Contact me at email@example.com with thoughts and reactions.
A great strength of our community is our vigilance and engagement. We watch over processes and policies and offer recommendations. We respond to challenges by creating a variety of voluntary associations. Many citizens volunteer their time to advise on a variety of topics including water, broadband, community energy options, transportation, finance, and others. We are privileged to benefit from local expertise on a wide variety of issue relevant to our community.
In addition to this wealth of “social infrastructure” we also benefit from state of the art physical water and wastewater infrastructure that will provide for our needs for 50 years and beyond. While many cities and regions in our state struggle to figure out how to provide water services, we enjoy a diversified and resilient supply. Our new wastewater treatment plant positions us to meet all regulatory requirements and provides treated water that we can use for public benefit.
A third strength is the quality of our police and fire services. There is much ferment, nationally, to redefine what a community-focused police force looks like. Our police department, in implementing a police auditor program, alternative dispute resolution, a restorative youth diversion program, body cameras, and crisis intervention training, is, arguably, a leader in the region. And because of shared services and a boundary drop between the City and University, fire service response times and coverage have improved.
As I look across the state and nation, it is hard to find communities that benefit from all of these core strengths.
Our inability, given current revenue, to pay for the maintenance and replacement of critical city infrastructure is a weakness. Over the past 15 years, total General Fund revenue has grown (nominally) by 95% (median +4.2% per year) while General Fund expenditures have grown by 92% (median +3.9%). Revenue appears to have kept pace with expenditures. However, when we dig into the expenditures—or rather what is NOT in the expenditures—we see that the picture is not positive.
Recent studies indicate that we should be putting approximately $8 million per year into street and path resurfacing and maintenance. In the immediate post-recession period we spent essentially nothing, and we are still $3-4 million short every year. Failing to spend today increases costs of maintenance for a given street.
Other recent analyses of city-owned buildings and parks estimate five-year funding needs of $33.5 million dollars. Staff has identified one-time funds but not ongoing funding streams for these needs. And according to a May 2016 report: Some specific areas not assessed: pools, buildings not directly administered by Parks staff, code compliance (ADA, County, State), structural integrity, and various environmental testing. In other words, there are additional buildings and parks maintenance/replacement expenditures that have not yet been accounted for.
The final FY 16/17 budget will show the estimated unfunded annual maintenance needs over the next 5 years.
A second weakness is our inability to develop unified collaboration across many fronts with the University. I want to be clear what I mean. We are, essentially, twin cities with different needs but great potential for collaboration. The weakness is failing to identify and work together to implement a strategic vision of collaboration.
Collaboration occurs but not in a purposeful way and it lacks acknowledgment of our shared interests and needs and where these diverge.
We lack a venue in which we can jointly discuss and plan for critical issues such as housing, infrastructure needs and improvements, joint public safety actions, caring for the needs of international visitors, providing practical learning experiences for students, and retaining university-inspired businesses in Davis.
Finally, a lack of a coherent plan to diversify our local economy to make it more resilient and increase the circulation of financial resources within the city and region is a weakness. It is not that we do not have a thriving local economy, rather that we have not articulated a vision for what will help make it more resilient—and keep more resources circulating within the local economic ecosystem.
Space does not permit a full articulation of this weakness but because we have spent the better part of two years conflating the concept of economic development with peripheral land development, we have failed to articulate the ends we want to achieve within our local economy given its strengths and constraints. It is not entirely up to the City Council to make this discussion happen.
Fifty years ago, bike lane installation and the Unitrans launch set the stage for important changes to our local transportation system. Today Davis is a US leader in the share of trips in the city by bike, walking and transit. People of vision and leaders willing to make decisions with a long view took these opportunities and altered the future course of the city.
Today we face opportunities that in 50 years will be seen as critical to the city we will become.
The first is community choice energy (CCE). We live in a rapidly changing electricity generation environment and CCE offers an opportunity to purchase—and incentivize production of local—renewable energy, at prices that are competitive with PG&E. CCE will also enable us to retrofit aging housing and commercial stock to make it more energy efficient. We are finalizing the formation of a joint powers authority with the County to launch a CCE program within 12-15 months.
A second opportunity is in community broadband. By controlling the backbone fiber infrastructure, we will be able to deliver faster and more reliant broadband to every home and business in the City. Community broadband can reduce the digital divide and set the stage for a more diversified economy.
Both of the foregoing opportunities create greater revenue circulation within our city—a key to a more resilient local economy.
A third opportunity is in the concept of restorative justice (RJ). RJ is a way of thinking about crime that builds accountability, meets the needs of victims and has been shown to reduce recidivism—especially among young offenders. In cooperation with the school district we are fundamentally remaking our youth discipline and crime diversion approaches. RJ offers a way to make our community more socially resilient.
There are significant threats to our city both fiscally and socially. The cost of pensions and medical care costs (for both current employees and retirees), continue to grow rapidly and, pension growth in particular, is largely outside our control. Notwithstanding a recent rollback in rates of growth for health care, the Congressional Budget Office expects rates of growth to increase over the coming decade.
In terms of pensions, we provide defined benefits to all city employees and these benefits cannot be reduced. Despite statewide pension reform in 2013, our pension costs continue to grow. CalPERS (the state pension fund) sets rates based on returns on its investments. It has assumed it can achieve an annual rate of 7.5%. In years when it does not meet this level, it requires agencies to pay greater amounts. Over the past 20 years CalPERS’ average annualized returns were 7 percent. CalPERS is reducing its estimated rate of return to 6.5% but doing so over 20 years. Last year CalPERS earned a mere 0.6% on its investments.
Pensions and health insurance costs explain, in part, how the median growth rate of total employee compensation over the past 15 years has been 2% per year, even as employee numbers have been reduced by over 25%.
A second external threat is the lack of funding for streets and roads from state and federal governments. Outdated revenue formulas, based on gas taxes, lead to severe underfunding of road repairs. Across the nation cities and counties have been putting off maintenance. Last year Governor Brown proposed a special session of the legislature to address the challenges but, to date, no proposals have been approved.
A third threat is the human crisis of untreated mental health problems and frequent self-medication using alcohol, methamphetamines and opioids that can end in chronic homelessness. Over half of Yolo County’s homeless population deal with substance abuse and a third have a severe mental illness. Recently the CDC declared an epidemic of opioid (including heroin) addiction.
Local government is about making decisions within constraints such as these. However, with clarity about our goals and with our rich community social capital, we will address our weaknesses, face the threats creatively and find a way of thriving in our home. In future articles I hope to dig into our goals for addressing the challenges.