Sunday Commentary: Optimism Gives Way to Challenging Times for the City

This week in a column that urged the city to recommit to an Economic Development Strategy, we quoted the mayor listing goals from a recent retreat and noting, “No magic bullets here but these are things that are within the control of the City Council, unlike the elements of the dispersed innovation strategy, which we shepherded for 2 years, and in one case, sent to the voters.”

“No doubt about it, we are in a difficult situation,” he writes.  “These are challenging times for our City.”

It reminds me that just ten months earlier, the previous mayor was issuing a call to “Renew Davis,” and noting that during 2015, it had “been nothing short of… a ‘Davis Renaissance.’”  That mayor cited as evidence a reinvestment in our infrastructure, our pursuit of economic development in the form of Mace Ranch Innovation Center (MRIC) and Nishi, the response to water scarcity, and the Healthy Families Initiative, among others.

At the time, some of those were questionable claims.  Elaine Roberts Musser wrote, “I agree that this city is heading in a good direction, and there are many positive achievements to be proud of. I am glad the Mayor highlighted these milestones. However, I think calling the budget ‘balanced’ is questionable. This may be true from a technical accounting standpoint, perhaps (don’t know – I am not an accountant). But the fact of the matter is the city still has huge basic infrastructure maintenance and repair issues that have gone unaddressed for years. In fact the city is considering new tax measures to address the economic shortfall for parks/pools maintenance and massive road repairs.”

Robb Davis at the time challenged those claims as well, noting a December 15, 2015, report where “City staff demonstrated that we are under spending on critical infrastructure and programs by over $10 million on an annual (ongoing) basis.”

He concluded that he was “left with questions…”  He wrote, “Is our budget balanced? Not if our budget accounts for all our costs (which it should). Are we fiscally resilient? Not without greater diversification of revenues. Is our local fiscal situation doing very well? I am simply not ready to say that.”

While there were definitely serious questions at the beginning of this year about the state of the city, in fairness to the previous mayor – the wheels have simply come off.

The balanced budget remains so on paper only and doesn’t incorporate real long term costs.  There are some questions about the real extent of the deficit, but our calculations suggest somewhere between $10 million and $30 million annually over the next 20 years is the gap between what we are spending on infrastructure and what we need to spend.

While the city is likely to revisit this issue, the council was unable to agree on a revenue measure for the June ballot and did not discuss putting one on for November.  That means, at this point, no additional funding for roads, parks, and other facilities.

Most notably, the wheels came off the economic development pursuit.  In July of 2014, the city had two peripheral innovation parks and the smaller Nishi project on the table as sites for economic development.

By the spring of 2015, the Davis Innovation Center closed its project a few weeks after the previous Chief Innovation Officer left.  MRIC was denied a mixed-use alternative by council and subsequently suspended their project.  And Nishi was dealt a narrow electoral defeat at the polls.

So we went 0 for 3 under the previous mayor and suffered the loss of potential jobs and revenue.

Even the Healthy Families program went down the drain with the abandonment of a potential  soda tax.

Mayor Davis’ comment about challenging times seems to hit the nail on the head, for there are no easy answers anymore.

The community remains not only divided on many of these key issues, but almost paralyzed.

A hotel conference center on Richards remains in limbo, at least in part due to ongoing litigation.

The city has seemingly abandoned the dispersed innovation strategy in the wake of the defeat of Nishi and the withdrawal of other projects.  As Robb Davis suggests though, “Anyone can submit any proposal related to the dispersed strategy at any time.  Nothing has changed.  Give us a proposal and we will act on it responsibly and in a timely way.  I will not apologize for a process that is broadly participatory for projects that are subject to a public vote.  That is the only way to do them.  Nearly all the sites in the peripheral strategy involve a Measure R vote. That is the reality we live with.”

But even projects that don’t involve Measure R votes seem bogged down.  The Hotel Conference Center is one example.  Then there is the hotel proposal at the Hyatt House, which was voted down by the Planning Commission amid concerns from the neighbors.  The council is set to act next week on two hotel proposals.

Then there are housing issues like Trackside, where a scaled-down version is still incurring neighborhood opposition.  A column came out today noting, “The Old East Davis Neighborhood Association supports development on the Trackside site, as specified by the Design Guidelines.  The Trackside Partners, however, appear to have bought the Trackside property speculating that the city would change the zoning for their project, superseding the Design Guidelines.”

They write: “City of Davis planning can no longer operate on ‘zoning by exception.’”

At the same time, an apartment complex proposed for the Fifth Street site formerly held by FamiliesFirst remains controversial with strong neighborhood opposition.

This paralysis is disconcerting on many levels, because the situation facing the city is increasingly challenging.  The road condition in the city remains critical.  Parks are underfunded and will increasingly become a challenge.  Our critical infrastructure is underfunded at best by millions.

This year turned out to generate very little in measurable progress. There are certainly plans that the mayor listed which could be helpful, but, in the big picture, the city needs revenue – and if it not going to be from economic development, then we need to start moving on a parcel tax and other tax measures to generate new revenue for critical infrastructure.

But right now that looks like a 2018 issue, which means two more years of waiting.

—David M. Greenwald reporting