Sunday Commentary: Where Land Use and Fiscal Clash, We Lose

20 Year Deficit Chart

On Wednesday, opponents of a proposed new hotel on Cowell Boulevard pushed back that the benefits of the hotel are not site specific and would apply to any location in the city.  While true on its face, the problem that we face in this community is that if the hotel proposal is voted down – a distinct possibility, given the heated pushback – it will be just another defeat of revenue generating proposals in the last year and a half.

The list is long and getting longer:

  • Davis Innovation Center – withdrawn by the developers in the spring of 2015
  • Parcel Tax and other revenue generating measures – not placed on the ballot by council
  • Mace Ranch Innovation Center – twice withdrawn by the developers this spring
  • Nishi Gateway – defeated at the polls
  • Embassy Suites Hotel Conference Center – passed by council but held up in litigation

Those five items alone might have generated at build out between $15 and $20 million per year for the community.  That amount may not have completely fixed our burgeoning fiscal crisis, but it would have gone a long long way in doing so.

Mayor Robb Davis today lays out a very different picture of our revenue situation than his predecessor.  He writes, “Our inability, given current revenue, to pay for the maintenance and replacement of critical city infrastructure is a weakness.”

By most appearances, he says it appears that revenue has kept pace with expenditures.  But that is misleading because the current budget accounting system excludes unfunded expenditures.

The mayor writes, “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.”

He added, “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.”

One has to wonder if better leadership would have led to a better set of outcomes on the innovation centers, taxes, and hotels.  If instead of the previous mayor boasting that we have a balanced budget, a healthy reserve, and a more resilient budget picture – if he had said that we have made some good strides, but without added revenue, we will be unable to pay for critical infrastructure and city services – could he have rallied the community?

These are tough issues.  On the one hand, I understand the neighbors’ concerns about the impact of a hotel on their neighborhood.  At the same time, there is a bigger picture at play here.  If we do not start moving on these revenue generating processes, what will happen to the community?

The neighbors of Davis Innovation Center, who do not live in the city, had reasonable concerns that the proposal would impact their neighborhood.  The community as a whole would be impacted by the increased tax burden.  MRIC was proposing housing as a way to deal with financing and that produced strong push back from many in the community.  Nishi Gateway had concerns about traffic impacts among other issues, as did Embassy Suites.

The truth is that no matter where we put any of these projects there are going to be impacts.  The Mace Ranch neighborhood was concerned about the impact of Target in their backyards, even as the city argued they needed additional revenue.

The problem is that many of these concerns are real.  There are real impacts on neighbors and neighborhoods.  We cannot look into a crystal ball to see which of these concerns pan out and which ones turn out to be all right.  I suppose we can ask the neighbors at Mace Ranch if Target is really as bad as they feared.

But there is missing piece here and that is we know what will happen if we fail to generate the revenue we need to fund our infrastructure or if we have to divert resources from one place to another.

We know that roads, bike paths and sidewalks are underfunded by $4 to $6 million a year.   If we do not fund that gap, the conditions of roads will deteriorate, the costs for future repair will continue to rise, and it will be more difficult for people to drive or bike across this community.

We have probably $300 million and more in unfunded needs for parks.  We know that a huge part of this community is our open space and parks.  That means, for many, the closure of parks will negatively impact families and communities looking to have BBQs or other private events.

Some of that parks funding shortage is wrapped into greenbelts, which are a huge part of what makes Davis such a great community.  What happens if the city cannot afford to maintain its greenbelts, if the trees are not cared for – as we have seen with the hotel discussion, the greenbelt is a critical lifeline for a neighborhood, but lack of funding will put those in jeopardy.

We have seen the aquatic community come out in support of new pools and express concern about the long term maintenance of current pools, but without funding there, our pools will close and we will lose recreational and sports facilities.

But there are other factors as well.  In his talk a week ago, Chief Darren Pytel noted that the police department continues to struggle to recruit quality police officers to this community.  That and other equipment needs are having an impact on the police’s ability to keep our community safe.

Those who believe that cuts should be part of the equation – what do you cut?  It seems that the police actually need more in the way of resources to hire additional officers and keep the community safe.

While we might be able to reduce salaries for firefighters, the number of firefighters is going to have to stay relatively constant – that will limit the ability for the city to further reduce salaries there.

We have difficult choices to make – but if our answer to new projects continues to be no, we face the possibility that those services and amenities that make this community great will deteriorate and our community will begin to slide backwards.

—David M. Greenwald reporting

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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50 Comments

  1. Tia Will

    People don’t seem to care about this.  Maybe they would rather just tax themselves.”

    Well, that would be my personal preferred solution. However, I realize that not everyone shares my economic wellbeing nor my philosophy. That is why I favor a balanced approach with more taxes and a more balanced approached to business diversity.

     

    1. Eileen Samitz

      I have a similar view as Tia’s. I am willing to pay more takes to help with our fiscal picture, but it would mean accountability with it as well. Also, I understand we need more revenue, but it needs to not come at the expense of bad planning which would only bring more problems and impacts to our community, and particularly some neighborhoods. My sense is that the solution is not one but a combination of adding some taxation which is accountable, tightening the City’s belt of how it is budgeting and spending, making sure that any new projects are not bringing in more costs and causing impacts which only are to the detriment of our community.

      One thing which needs to be done is the City should be proactive in recruiting businesses and services which we don’t have rather than having duplication and predatory competition which simply transplants any sales tax revenue from one business location to another, and then one of the businesses goes under. Helping recruit needed stores and services should be part of the job of economic development. Years ago I repeatedly asked the City at public meetings to approach the small Sears store in Woodland which was then interested in having a small store also in Davis to offer appliances like refrigerators, and washers and dryers, etc. yet nothing ever was done to pursue it to my knowledge because I kept asking about it. Imagine the sales tax from appliances that the City would yield? So it would be helpful if City could be working to encourage complementary stores and services, rather than more duplication.

      1. Frankly

        Here is how we can define this.

        …anxious NIMBY. …

        …landlord NIMBY.  …
        …home equity NIMBY.  …
        … social class NIMBY.  …

        … lefty-class NIMBY.  …
        … bike … NIMBY.  …
        … NIMBY.  …
        [moderator] Edited. Post violated Vanguard Comment policy.

        1. Frankly

          Are you a NIMBY?

          If so, then maybe a sarcastic one.

          Which then leads one to question your NIMBYism.

          By the way, almost everyone is a NIMBY from an emotional perspective.  Who doesn’t get a bit upset thinking about change in their back yard?

           

  2. Frankly

    The problem is that many of these concerns are real.

    Mostly they are not real when accurately assessed with the alternative.  For example, most of the impacts people fear are traffic related, and even without much development Davis traffic has grown much worse.

    There are real impacts on neighbors and neighborhoods.

    Most of what is presented from the neighbors as their fears of impacts are made up things.  Where is it written that nobody has to accept any impacts from empty lots next to their property that have been zoned for development beginning the day they considered buying their property?

    We cannot look into a crystal ball to see which of these concerns pan out and which ones turn out to be all right.

    That would be a useless exercise because we can just note how the very people that oppose any and all development are currently the beneficiaries of previous development.   Too bad the rodents and owls didn’t have a voice when their fields were ripped up to build the houses that these now NIMBY neighbors live in.

    I suppose we can ask the neighbors at Mace Ranch if Target is really as bad as they feared.

    You don’t have to ask.  Just note the new normal.  Everyone has settled down and life goes on.  The sky did not fall.  The downtown did not close down and get boarded up.  Crime did not increase.  The lifestyles of the East Davis NIMBYs did not decline.   And people in town now have a place to purchase underwear.

    I absolutely reject this opinion that NIMBYs need to be coddled and have their views validated.  This is the problem.  It has established an expectation that even the smallest incremental fear can be used to block and defeat a development project that the city needs.   I am disgusted with my neighbors.   I am disgusted with so many people in Davis.  They are proving to be the most selfish and entitled people on the planet.  They are proving to be whiny children prone to tantrums and lacking the ability to get past their overblown feelings and come to the table with anything resembling rational and objective collaboration.

    I am really starting to think that Davis has big mental health problem… and it is not our homeless population.

    1. Tia Will

      Frankly

      For example, most of the impacts people fear are traffic related, and even without much development Davis traffic has grown much worse.”

      True as written ( although I believe that we would not agree on the use of the word “much”). But no excuse for doubling down on the obvious fact that we do have problems related to increasing traffic and continued reliance on the individual automobile in a town where this bad practice should be able to be minimized thus decreasing traffic congestion and improving both the environment and our individual and public health.

      1. Frankly

        Yeah Tia, you talk the talk but are unwilling to walk the walk.  Not impressive.

        There was Trackside… a good project to increase living density in the core area.  But you failed.

        So I think you lack credibility to lecture everyone else on reducing auto traffic.

        1. Tia Will

          Frankly

          Yeah Tia, you talk the talk but are unwilling to walk the walk.  Not impressive.

          There was Trackside… a good project to increase living density in the core area”

          A few points that you have either genuinely or conveniently overlooked.

          1. Trackside was a limited project which you yourself said would have no significant impact on the provision of housing in downtown.  If you do not recall saying this please check you previous post on how the number of people living there would not impact me. That is true because while geared to relatively few renters, the footprint of the building as initially proposed was well outside the General Plan and zoning guidelines and therefore would not impact me because my house is too far away. Remember ? Now it has become in your eyes a “good project to increase living density”.

          2. I have stated on a number of occasions that I would not have opposed Trackside if it had provided either low or a mix of low and mid range housing, or if it were geared towards students, all populations in need of housing.  It is true that I did not favor a luxury apartment building as I simply do not see that as a “need” for our community. You are often upbraiding me about my lack of ability to separate community wants from needs, and yet you favor a clearly “nice to have” ( if you don’t live immediately next door to it) luxury building only affordable by the wealthy over a “needed” project.

          3. I am quite literally “walking the walk” as most of my trips when not going to work in Sacramento are made on foot. This is not because I am an exemplary citizen. It is because I value a healthy lifestyle over “convenience” both for me, my family and my community. As another poster pointed out, there is no delay at the Richards underpass for those of us who are traveling by foot. The problem with traffic that I see is not that we do not have sufficient roads, but that we insist on putting too many cars on them, even when we could easily walk, bike or use public transport.

        2. Marina Kalugin

          Trackside is garbage pushed by some developer types and a city council member/developer… that would impact the neighborhood negatively…you know, those many neighbors who did their due diligence and bought their homes years ago, assuming the  city would keep it’s promises on the general plan and land use  and so on….

          [moderator] edited

      2. Frankly

        By the way, we are talking about traffic DENSITY.   Keeping Davis the same footprint while the size of UCD expands causes more traffic density.

        Traffic isn’t just people driving around.  It is people coming from somewhere and going somewhere.

        When you move people out to self contained neighborhoods they drive less.

        If you don’t want to do that and instead want to make everyone share the same neighborhood… or else keep it to only one shopping district where everyone else has to travel to, then we would need much taller buildings to support your utopia.

    2. Alan Miller

      most of the impacts people fear are traffic related, and even without much development Davis traffic has grown much worse.

      That ain’t much of an argument.

  3. Alan Pryor

    Why is the conversation about getting our financial house in order only focused on revenues. Any business person (as compared to a government bureaucrat) will tell you than controlling costs is equally important to increasing revenues to balance a budget. And the major line item in our City’s budget is employee compensation.

    (The following was also posted by me in response to Robb Davis’ article today)

    In addition to the increasing  pension and medical benefits costs, is an even larger problem (i.e. a major drain on City resources) the huge escalation of employee salaries?

    I have been told that we are paying more in total employee compensation and benefits now with 350 +/-  people on Staff than at the beginning of the recession in 2009 when we had over 500 employees. I was also told that the bulk of the increase was not increased pension or medical costs nor COLA increases but rather merit increases and employee promotions and that the average salary paid to an employee of equivalent rank has increased by over 30% since the recession began. I have no way of knowing if these numbers are true but knowing what huge salary increases a few employees are now being paid and what new hirees are being paid, I suspect the truth is not far off.

    It would go a long way to settling citizen distrust of City Government if the Finance and Budget Commission actually did their long-awaited examination of the efficiency of City expenses (an “audit”) and these results were made public.

    1. Frankly

      The problem with the expenditure side is state-wide and even nation-wide to some degree.  It is a more complicated problem caused by the labor union – Democrat politician connection… and much of the insanity is memorialized with legal protections that are impossible to change.

      However, the revenue problem is uniquely Davis and really quite easy to change if we just round up about half of our NYMBY population and ship them to Venezuela.

      1. Alan Pryor

        Boy, Frankly, you’re starting to sound just like some of our erstwhile government employees and civic development boosters…”<em>Just keep buildin’ and developin’ and givin’ up that revenue …</em>”.

        And I see that continued government-supported and subsidized commercial development programs are also important not only to government employee salaries but also to the profits of many private business people in town whose business model is dependent on such government largess, handouts, and/or guarantees.

        Funny that it is often these same business people on the government dole in one way or another who rail about government handouts for social support programs. So I think it is those government money-sucking private business owners and developers who should be shipped off to Venezuela.

        (can I help you pack?)

        1. Frankly

          You’re as tone deaf on this as is a standard issue politician.

          When including the cost/value of their benefits, we grossly over-pay the average Davis city employee.  We grossly over-pay the average California state employee.  We grossly over-pay the average Federal government employee.

          I am all for changing that.  I have ranted consistently about it… demanding we do mark-to-market pay adjustments for all government employees to match the prevailing wages for like jobs in the private sector.

          But the corruption is rampant… so many with their pay-for-political-support hand in the cookie jar that it isn’t going to be easy.  Especially in Davis where it is a government business company town.

          Davis has the same expenditure problem as everywhere else.

          But Davis has a unique revenue problem… we take in much, much less sales tax and other commercial-generated revenue than any other comparable city.

          I know this is an inconvenient fact for you and your tribe of no-grower grumpy old folks and fools, but there it is.

    2. Topcat

      Any business person (as compared to a government bureaucrat) will tell you than controlling costs is equally important to increasing revenues to balance a budget. And the major line item in our City’s budget is employee compensation.

      Alan, You have identified one of the major problems I see with the discussions about financial sustainability.  Like you, I think that employee compensation (including benefits and retirement) are a major component of the problem.

      I can understand why City employees don’t want this issue looked at, but the Council should be representing the citizens and so the Council members should be looking long and hard at this issue.

  4. HouseFlipper

    Two interesting points the Vanguard has not included in this article are:

    1) The City Council is considering the merrits of becoming a charter city at the Council meeting on Tuesday night. There is zero financial analysis on the costs of changing forms of goverment included in the staffe report. Charter cities may be able to impose different taxes and fines, but running a charter city can be more expensive than running the city under the current form of goverment.

    2) The City Council has begun the 8 month process of planning or to update the general plan. The last General plan update process cost the city millions of dollars.

      1. Eileen Samitz

        Don,

        Thanks much for posting this article which is a great summary of all the problems that  Charter City would bring. A Charter City seems to me more of a crap shoot rather than having structure and community engagement. Meanwhile the Staff report seems to not cover the drawbacks that are well covered by the article by you and the others.  Davis has enough problems without bringing this Excedrin headache on as well.

      2. quielo

        One typical use of charter cityhood is to increase salaries and benefits of the administrators and CC. If you look at several of the high profile corruption cases in CA many were preceded by a Charter City vote.

    1. Eileen Samitz

      Houseflipper,

      Thanks for bringing attention to this Charter City item which I did not notice. This Charter City issue has been discussed in the past and is it was made quite clear by the community on what a bad idea it was and not a good “fit” for Davis. With the added cost issue I hope that the City does not waste anymore time resurrecting this , what we thought was a settled issue. Our City has bigger problems requiring our City’s time and attention. Don Shor posted an excellent article link just now summarizing all the problems with a Charter City below for readers to better understand.

      1. quielo

        Eileen,

         

        I read the link that Don helpfully provided. While it provided arguments against alleged benefits of becoming a charter city it did not actually provide any reasons to not do it.

        1. Pam Nieberg

          Don:

          Thank you for posting the link regarding the Charter City issue.  Here we go again.  Why are we even discussing this?  There are so many issues confronting us now that are vital to our community’s future.  This is not one of them.

          Power to the people.

          Pam

        2. Eileen Samitz

          quielo,

          I guess we each have a different impression on the article, but my take on it is that a Charter City is the last thing we need to be considering for Davis. Added to your earlier comments about how much corruption resulted in some of the cities that became Charter City’s why on earth would we want to invite more potential problems to Davis?

        3. quielo

          Eileen,

           

          “my take on it is that a Charter City is the last thing we need to be considering for Davis” I’d be interested in why they want to do this at this moment. Absent a compelling reason I am against it.

           

        4. HouseFlipper

          The point of bring up both the charter city item set for Tuesday’s Council agenda and the plan to update the general plan is to reinforce Alan Pryor’s point. If we are worried about City finances, we also have to look at what the city is spending its money on. How many potholes could have been filled with the money it cost to write the staff report on charter cities? Not to mention, what it would cost Davis to actually become a charter city?

          1. David Greenwald

            Versus ways that having a charter city would free the city to make cuts and utilize other forms of revenue. It cuts both ways. I’m tempted to oppose a Charter city, but I would like to see the process play out a bit further.

          2. Don Shor

            Again, it all boils down to trust. Not just the current council but all future councils. Trust that they would always provide proper notice for agenda items. Trust that they would not change quorum requirements. Trust that they would only vote staff and themselves appropriate pay increases. Trust that they would only vote to impose reasonable taxes other than those that require a public vote. Trust that the contracts they award without competitive bidding are fair and reasonable and properly vetted.
            And so on.

          1. David Greenwald

            Depends on how it is written. The last time, it was so vague that it was hard to know what would eventually occur.

        5. quielo

          The interesting aspect of becoming a charter city is that I believe it would be easier to align the school district with the city boundaries. This would leave UCD in another district. It would also leave several surrounding communities in an interesting position of having to choose between other schools are petitioning to be annexed.

          Highly speculative though.

        6. Barack Palin

          Don, I tried to look up the 15% tax on Oakland home sales (which sounded outrageous) and all I could find was a $15 per thousand transfer tax.  Is this what you were referring to.

        7. Marina Kalugin

          oh…the elusive “dropped” decimal….I find it interesting that not long ago Oakland, which still has many neighborhoods in the sub zero price range and was the sight of many, many gangs and uprisals, managed to get it’s property values close to SF…..at the same time, many neighborhoods in OAK are now paying an $18/hr minimum wage.

          On that wage though, hardly a person who makes that minimum can afford to live in OAK, therefore there is a huge commuter group arriving to work in Oak from the  “cheaper” surrounding cities….like Hayward and Fremont….

          Anyone know where the “charter city” came in time wise and what type of affect it had on the rest of these “details”  ?

  5. Tia Will

    Thanks for posting the comparison chart Don. I know that there are many issues for discussion here. However, the last comparison regarding zoning alone would be enough for me to oppose moving to the charter model.

  6. Marina Kalugin

    somehow I missed the whole deal about Charter Cities….. would love to hear more about it….

    as one who sees the huge benefits of Charter Schools, especially in these days of crazy CA regulations forcing Common Core on the non-GATE and non-charter students and families, and also for those families who want better choices for their children than forced vaccinations to be “allowed” to attend “public” schools….

    what would a charter city include,  and what could be the pros and cons if Davis were to become one?

    1. ryankelly

      FYI Marina,  The new law requiring vaccinations applies to all schools – public and private, including charter schools and preschools.  If parents don’t want to vaccinate their children and do not have a real medical reason for not doing so, they will have to keep their children home.

  7. Alan Miller

    I am all for choice voting.  In fact, we do not have anything approaching a democracy until that is the law of the land, the entire land.  The voting system we have is mathematically insane regarding choosing candidates we actually want.  Hillary or Trump anyone?

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