This column should be on the great decision that the Davis City Council made in hiring Steve Pinkerton as the new city manager. It should be on the responsibility that the council showed in implementing a new budget, even the face of heated criticism from city employees.
He also told me that he supports the water project and understands that we need to do it. Two things floored him, however. First, he could not believe how much the rates were going to go up under this plan.
Second, he told me he asked Public Works if they had looked into what the impact on business would be, and to his utter amazement they had not.
Mr. Yackzan then showed me his number, simple numbers that showed what he was paying now for his commercial properties versus what he will pay in five years.
Those who somehow believe that these increases will not be passed on to renters are fooling themselves. But even there it is problematic, with the housing downturn and the building of new units in West Village.
The bigger problem is what happens to restaurants like Sudwerks that uses water for all sorts of purposes. Mr. Yackzan asked me not to disclose the numbers, but the viability of some of these restaurants that operate on margins as small as one percent, particularly during an economic downturn, should give everyone pause.
This is a council that wants to prioritize economic development, but they threaten with their water rates to undermine that process.
From the council’s view, Mayor Joe Krovoza is quick to respond that Davis ratepayers pay far less than other cities and they have gotten away with low rates for quite some time. He said he hopes to have continued talks with businesses and citizen groups and find creative ways to make the rate increases less burdensome for businesses and ratepayers alike.
At the same time, he shut down some of the alternative suggestions, such as building in the rate increases over a longer period of time, or delaying the process a decade in hopes of softening the blow and it occurring during better economic times.
He told the Vanguard that other cities such as Sacramento have tried this, taken it to court, and lost.
He is also quick to point out the shortcomings of past decisions over which he had little control over. Past councils were willing to build the Wastewater Treatment Project costs into rates over time, but they failed to do the same for the water supply project.
That means that, instead of increasing rates slowly over a decade, where businesses and ratepayers could adjust their spending, we are increasing our costs in just five years.
But, there is a disconnect here that people like Joe Krovoza and some of his colleagues are not seeming to get. These policies threaten to put businesses out of business during the heart of the worst economic struggles to hit Davis.
And there are options out there. The Prop 218 process is mentioned, but even with the simplified protest form that the council has now created, it seems likely that any Prop 218 challenge would fail.
But that is not the end of the story. In fact it is the beginning of the story. The more serious threat facing the city may be in the form of a referendum. It is one thing when the angry rate payers were a bunch of left-leaning environmentalists and some in the slow growth community.
It is another thing if you see the kind of broad coalition that Randy Yackzan was talking about of business owners, developers, students, seniors, and environmentalists with people, energy, and yes, money.
Mr. Yackzan supports the project, but neither he nor other businesses can afford increasing their bottomline by that amount.
The question that city officials should ponder right now is let us suppose the ratepayers really do revolt in a referendum election and are able to forestall the rate increases, what would plan B look like?
This is, after all now, a real possibility. But even voting against the rate increases is not the end of the game, it just changes the relative negotiating strengths of the two sides. That can be bypassed right now by finding a common solution that can fund this project, while at the same time preventing the rate hikes from forcing business out of town and people out of their homes.
Will wiser heads prevail?
One line that continues to come up is that, traditionally speaking, a ten percent rate hike is considered very serious. A 20 percent rate hike is worthy of recall. What businesses face is about a 48 to 50 percent rate hike in the first year.
There is no way in this economy that any business, apartment owner or restaurant can absorb those kinds of increases.
So, where are we left? Council, despite all of their great achievements, are facing a crucial life or death decision on the issue of water, that was around for a long time.
We can blame Joe Krovoza and his colleagues that approved this deal back in December. We can blame city staff that projected a much smaller rate increase as recently as last summer.
But I think we also need to blame past councils who passed the buck repeatedly, especially Ruth Asmundson and Don Saylor, who were warned repeatedly this is coming, who supported the process all along, and who did nothing to make sure that costs and impacts were minimized.
It’s on them and they are the reason that Joe Krovoza and his colleagues have no answers now. But, unfortunately, while they have fixed other bad mistakes, this one is on them to get right or they, and not Saylor or Asmundson, will face the music.
—David M. Greenwald reporting
Be assured that while options are limited on rates, all viable ideas are being checked, re-evaluate or honed. All public input is welcome and I am very open to such. The effects on Davis businesses — particularly apartments and restaurants — are real and understood, and everyone is sensitive to such. There are very real potential downsides to delay, even IF such is feasible from a regulatory standpoint. An excellent competitive bid process has begun for the water supply project, and if bids come in low, should we wait and hope they will still be low in five years? Will financing still be excellent in future years? How much in fines on the waste water side is Davis prepared to pay to the state? Woodland is paying monthly fines now. No question, this is a huge and complex project — one we have been studying and moving toward via 22 years of studies. I will continue to invite everyone to spend time on the CWA’s web site, both the FAQs [url]http://www.wdcwa.com/the_project/faqs[/url] and the reports [url]http://www.wdcwa.com/documents[/url]. This past week we completed our forth public forum on the project. Thank you to those who attended. — Joe
[quote]Mr. Yackzan supports the project, but neither he nor other businesses can afford increasing their bottomline by that amount.[/quote]
Mr. Yackzan supports the project, but he cannot afford it? If that were really true, I assume he would not support it…
[quote]The question that city officials should ponder right now is let us suppose the ratepayers really do revolt in a referendum election and are able to forestall the rate increases, what would plan B look like?[/quote]
Okay, so what would you suggest for plan B?
[quote]There is no way in this economy that any business, apartment owner or restaurant can absorb those kinds of increases.[/quote]
They afford it by passing along the costs to their customers/tenants…
[quote]But I think we also need to blame past councils who passed the buck repeatedly, especially Ruth Asmundson and Don Saylor, who were warned repeatedly this is coming, who supported the process all along, and who did nothing to make sure that costs and impacts were minimized.[/quote]
I was no lover of the City Council Gang of Three, but I do not believe the above statement is quite accurate. Public Works and the City Council majority were more than ready to start the process of slowly increasing the water rates, so that the increases could have occurred over a longer period of time. But Council member Greenwald kept reminding everyone how expensive this project would be, insisting that UCD experts be brought in. As a result, two UCD experts were consulted, indicating the surface water project should be done first and foremost, which would hopefully save $100,000 million on upgrades to the wastewater treatment plant. Council member Greenwald is to be commended for this, but it did result in halting the institution of the water rate increases over a longer period of time. And by the way, there was plenty of complaining when the sewer rates went up…
As Mayor Krovoza has said above, if members of the public have any ideas on how to save money or do the project differently so that the rates do not rise so steeply, the City is all ears. There is a difference of opinion within the community as to whether it would be advantageous to put off the water project for a number of years. Some believe market conditions might be more favorable now, some later. Only time will tell as to how the majority of citizens feel, based on the Prop 218 process, or a referendum if that occurs. But it would seem to me it makes more sense to come up with creative ideas on how to deal with the increase in rates first and foremost, before condemning the surface water project as it is out of hand. It is easy to complain about a perceived problem, but much more difficult to solve a problem… and there may be no good solutions… other than the one proposed…
As we argue about rates, still no discussion from Council and the Woodland-Davis Clean Water Authority about a competitive bidding process, penalties for cost-overuns and delays, and whether the pipeline and associated projects will be run as a public-public partnership not as public contract with a private for-profit corporation that must return profits to investors. The are many researched reports with analyses that make very clear that a public-private partnership should be avoided at “all cost.” So on what figures, exactly, are the rates based on?
Joe Krovoza:
“How much in fines on the waste water side is Davis prepared to pay to the state? Woodland is paying monthly fines now.”
Yes, how much would Davis have to pay in monthly fines and is that possibly a better route to go then the draconian rate hikes on all users?
I understand Dixon is paying the fines and I haven’t heard that their rates have skyrocketed.
Wonder who Randy talked with in Public Works. “Utter amazement” sounds like the appropriate reaction when one hears something that defys credibility. Maybe Randy needs to start talking with the same folks the mayor’s been hearing from…or track down the mayor himself to compare notes.
What is the significance of Randy’s secret numbers? And, what types of businesses are covered by them? Do his simple figures for Sudwerks and other restaurants confirm that they’ve been getting cheap water for decades? Do his confidential projections support your contention that the Davis businesses will go under trying to pay the new water rates? How do Randy’s numbers compare with the rates businesses are paying in other cities?
We’ve thoroughly apportioned blame for what’s happened in the past. What are you suggesting we do now? What should “wiser heads” do?What kind of “common solution that can fund this project” (other than water users’ rate payments) do you propose? Has anyone looked into RDA money? Combine the plant with our new parking structure?
Before we go much further up the option path you list (taxpayer revolts, political recalls, etc.), I think we need to see how real your doomsday predictions might be. Can we get a look at the secret numbers? There must be some reason that Randy still supports the project after (or because?) he’s known for years that it’s needed.
The other options you list, like taxpayer revolts and recalls,
Pls pretend I didn’t start to repeat myself with the last fragment. I just wanted to assur
Nobody seems to asking Randy the real question, how much is he willing to pay per house for water on the property he owns on the periphery? If you charged $25,000/house for water on new development on Covell Village, Con Agra, Northwest quadrant, Wildhorse Ranch, AKT, Nishei and any other frontier properties you could pay for the entire project with only 6000 homes. One of the big drivers is the law that developers had to have proven water supplies to build. So why not have them pay for the water to secure development rights. For a 1250 square foot house it would only add $20 dollars a square foot to new construction. For a 2500 square foot home it would only add $10/square foot. While it would effect the profit margins of the developers it would not be prohibitively expensive. There seems to be an unwillingness to discuss the development option but isn’t it the developers who need the water the most and aren’t they the ones who will benefit the most?
This may be a very naive question since I am so far outside my area of expertise. But if Mr Toad’s numbers are correct and the cost per square foot of construction is that variable depending on house size, would that not be yet another rationale for a developer to focus on building the large, more expensive homes that seem to be prevalent in our suburban developements rather than the affordable housing that we keep hearing we need ?
Houses are currently going for somewhere in the $250-275/square foot range and the land that the developers own will have a huge mark up if rezoned. $10-$20 more per square foot hurts their margins but my guess is that they would gladly pay it to get their projects through. If you are concerned and want to micro manage the market you could charge some amount per square foot instead of a flat rate per parcel. There are many ways to skin the cat. You could also build less and raise water rates for existing homes. Right now it seems that the proposal is that the existing water users pay all the costs for water that allows developers to have the water they will need in the future when the community finally allows peripheral development. My point is that if you think the cost is too high for your water there is another way to go but it requires that Davis adjust its utopian vision of Davis as Antioch West.
Still waiting to hear what the amount of the monthly fine that the State can impose on Davis for not conforming to the new water standards.
Anyone know?
[quote]There are very real potential downsides to delay, even IF such is feasible from a regulatory standpoint. An excellent competitive bid process has begun for the water supply project, and if bids come in low, should we wait and hope they will still be low in five years? Will financing still be excellent in future years? How much in fines on the waste water side is Davis prepared to pay to the state?–Joe Krovoza[/quote]Joe and I have debated this issue many times in public forums. With all due respect, we DO have alternatives to meeting our discharge requirements, and they ARE much less expensive than the surface water project. Our problems are in the intermediate aquifer, not the deep aquifer.
To argue that interest rates are low now but might go higher in the future is not very persuasive to me. First, there are two series of bonds that have to go out. We have no idea what the rates will be when we issue them, even if we start the project sooner rather than later.
Secondly, many economists are predicting that the economy will be in the doldrums for a decade. Further public sector salary concessions and lay-offs are expected in our public-sector dominated town. We run real risks not just because of questions concerning our own ability to pay, but also concerning Woodland’s ability to sell both issues of their bonds.
Our biggest problem is that we have to pay for the new waste water treatment plant at the same time as the surface water project. To the extent that we can phase in these two projects, we will keep our sewer/water bills more manageable.
We will be paying about $10 million a year in interest payments for the water project alone, once we issue the bonds. If we postpone the project, for all practical purposes we are saving $10 million a year, since we will be making these payments for about 40 years. At the back end of those 40 years, there would be no waste water plant payments, so the bills will be lower (I would recommend looking at a 25 year loan for the waste water plant so that we are in a position to embark on the surface water project sooner.)
[quote]Still waiting to hear what the amount of the monthly fine that the State can impose on Davis for not conforming to the new water standards.
Anyone know?[/quote]Rusty, our new discharge limits are not even set yet; they will be set next year. We will be doing our due diligence to assure that our limits are as flexible a possible.
Our deep water aquifer is not likely to be out of compliance. We will doubtless have to leave the intermediate aquifer, re-plumb some of our intermediate aquifer, etc.
Again, I have every reason to believe that we will be able to meet our discharge requirements through means other than the surface water project, hopefully until we pay off our new waste water treatment plant.
[quote]Be assured that while options are limited on rates, all viable ideas are being checked, re-evaluate or honed.– Joe Krovoza[/quote]Joe Krovoza is correct: Short of delaying the project, options are very limited when it comes to rates. Once the bonds are issued to build the project, we will owe about $10 million a year. Prop. 218 limits our ability to restructure rates. The $10 million a year is owed regardless of how slowly or quickly we ramp the rates up. If we ramp the rates up less in the first 5 years, we will be paying more than currently predicted after that.
Joe Krovoza points out that we have been planning for this project for 22 years. That is correct. But when was I was first elected to the council in 2000, we did not know that we would have to pay for a new waste water treatment plant, and it was assumed that we could get significant state and/or federal funds to help with the surface water project.
Things have changed in the last 22 years. There are currently no significant state or federal funds to help us, and we have to build a new waste water treatment plant. This means that we have a difficult choice to make.
Many citizens who can afford the price would like to have the softer water. We would all like to have the dual water sources. But we can’t pretend that we can do anything about the exorbitant rates other than postpone the project until economic times are better and perhaps even all or most of the waste water treatment plant is paid off.
In short: We have difficult choices, but we do have choices.
[i]We will be paying about $10 million a year in interest payments for the water project alone, once we issue the bonds.[/i]
The Davis RDA collects $9.8 million in property taxes annually.
[quote]The Davis RDA collects $9.8 million in property taxes annually[/quote]Don, most of this is back fill from the state. It will be a lot less in the future.
Also Don, there is debt service from much of the infrastructure that connects North and South Davis, the pass-through to the county and affordable housing expenditures.
Deduct all of those, and you still would have significant funding available to reduce the water and sewer rate increases. If the RDA were dissolved, its assets transferred back to the city, its expenses wound down, there would be money available for the water and sewer projects — probably at an increasing amount over the lifespan of those projects.
I don’t have the RDA budget in front of me, but in principle we are talking about shifting the South Davis incremental property tax back to the general fund. If there is funding available in the RDA for the hotel project, for the downtown parking structure, and the other smaller projects listed in the latest RDA budget on the city web site, then we do indeed have choices. We know that at least that much money is available to reduce rate increases for the water/sewer infrastructure.
It has often been mentioned that city voters are likely to resist tax renewals for the city budget as their rates increase. Just imagine how they’re going to feel as they watch large building projects using tax dollars going on as their rates are going up. The argument that it’s another budget, can’t be used, etc., is not likely to assuage them. Particularly when the city council had the option of dissolving the RDA and chose not to.
Interesting op-ed in the Enterprise about Davis’ demographics today. Housing prices had caused a hollowing out of the 25-44 year olds. the solution is, of course, to build more housing, increasing supply and lowering prices. This can also help reduce the amount people need to pay for water by extracting hook up fees from the developers. Yes this will squeeze their margins, but so what, Davis has been under building for so long that pent up demand will still allow them to make a fortune when the land is rezoned. The days when Davis could simply go to the existing homeowners for extra cash are coming to an end. It is only a matter of time before the voters turn on the city and the water rates are probably the tipping point. In the end the no growth advocates will see the unintended consequences of their misguided beliefs come home to roost when Davis and its Davis lifestyle become victims of the success of the anti x pro j and r crowd.
Nobody has proposed developments in the starter price range. Hence, the few 25-44 y/o families capable of qualifying for a loan are buying about 5 minutes up the road.
Don,
I don’t think that eliminating the RDA and putting ALL of the available funds towards the surface water project would lower fees much. After we take away debt service obligations, pass-through obligations, state back fill, affordable housing, etc., there would not be much left, and we would be left with no protection of Davis borders. Most of our current redevelopment projects also anticipate major returns on our investment that will last far longer than the redevelopment agency. The hotel, for example, is expected to bring in over $500,000 new revenue every year.
Remember, our $50 a year parcel tax brings in about $1.3 million. Hence, another $100 parcel tax would bring in $2.6 million. I wouldn’t expect much more than that back to our general fund by eliminating our RDA, and $100 per household(or $150 dollars a year if you want to be optimistic) is hardly a drop in the bucket compared to the $2,400 dollar a year expected water/sewer/garbage rates.
$2400 per year would bring in $62 million each year. That would pay off the water and sewer projects in no time. Let’s compare apples to apples.
You said the debt service for the water project would be $10 million per year. At 26,000 households, it is about $385 per year to fund that. I’m not sure what the rest of the $2400/year is going to. $10 million is almost exactly the current tax income going to the RDA.
I understand your point that it is not all available. On revenues of $9.8 million in 2008 – 9, debt service was $1.7 million (2007 – 8 figures), pass-through was $2.6 million. state back-fill (if I understand it) was $500K, in 2008 the state did a one-time backfill of $660K, and so on. So let’s say half or so of the money is obligated to other things.
That leaves money for the following listed projects for the RDA which total $8.6 million over a five-year period. Those can be found at the pdf document on the city web site titled “Davis_2008-2013Plan RDA”. Readers will find them in Table 1.
Or that money could go to reduce the portion of the rate increase Davis ratepayers will be funding toward the $10 million in debt service for the water project.
Of course, if the RDA continues, and the city council continues to take on debt obligations, there will be even less potential RDA tax revenue available for the water and sewer project. So South Davis residents will be paying for debt on downtown projects of no direct benefit to them, for water and sewer improvements by separate rate increases — and if I recall South Davis would be the part of the city that wouldn’t get the surface water.
[i][quote]”…and we would be left with no protection of Davis borders.”[/quote][/i] [b]Sue[/b], has it ever occurred to you that there might be something ___foolish, ___immoral, ___outrageous, ___ wasteful, ___ embarrassing, about Davis willingly participating in the county’s protection racket?
How much total “protection money” have we passed through to the county with the unenforceable expectation that they won’t put one of Mr.Toad’s new subdivisions near our city limits? How much of this money will the city get back if they violate the “contract”?
If this annual million-dollar enterprise were not coming out of the RDA monopoly money pot, would you still think it’s a worthwhile use of our tax money? [s]If[/s] When the RDA bonanza is over, what programs would you cut so we can keep sending the check to Woodland. Have you had second thoughts, like I have, when it turned out the money is supporting Mr. Saylor’s improved political lifestyle?
I say we should investigate Don’s alternative financing ideas a little more before dismissing them.
[b]JustSaying[/b]:
The citizens of Davis care very much about controlling their own future growth. You and Toad might respectfully disagree with that policy, but it is the desire of the overwhelming majority of Davis citizens.
But control over our growth is only a bonus that the RDA helps us attain. The RDA brings us more revenue than we would otherwise receive. We need that revenue because Prop. 13 has eroded our revenue. The average housing unit has to be assessed at around $500,000 a year just to break even in operations and maintenance, and we don’t come close to approaching that, given the number of apartments and affordable housing units. Unless you want every dime of our revenue to go to operations and maintenance and nothing to infrastructure, the RDA is the best option to bring us a little of that extra needed revenue.
The RDA helped fund the freeway interchanges, overpasses and bike/ped crossings between North and South Davis. They have helped fund the work on the at-grade crossing on Olive Drive. The application work alone for the at-grade crossing comes to about $130,000 — the work itself could cost from $1.5 to $3 million, according to staff.
For the remaining RDA funds: I hope that they can be put to use bringing us businesses and improvements that will bring future net new revenue to the city long after the RDA expires. There aren’t too many ways for a city to make net new revenue these days. Hotels are one of the biggest net revenue generators, by far.
[b]Just Saying:[/b]For the record, we do not give the county substantial additional money over what they would make if we opted out of the pass-through agreement. The county gets a little more revenue than they would otherwise, but fundamentally breaks even. Basically, the state ends up helping out the city and, to a much, much lesser extent, the county.
As I have said, that revenue is important because prop. 13 has eroded municipal revenues.
I’m sorry, but the RDA doesn’t bring us any extra revenue. It simply diverts revenue. The RDA funding is created by taking the difference in valuation of the property in the district from what it was at the time the district was created. The argument is made that the increase in valuation is caused by the projects funded by the RDA. I suspect the majority of the increase in valuation was simply caused by the bubble in property values. It is difficult to argue that South Davis property values increased dramatically because highway overpasses were built.
The redevelopment district simply locks up that tax revenue for specific uses for the city through a body governed by the same individuals who sit on the city council. If the RDA didn’t exist, the revenue would be part of the general property tax divvied up between the county, the school district, and the city. If in fact it is creating greater revenue for Davis, it is at the expense of those other entities. Ask the school board associations how they feel about the RDAs.
What county property development proposals do you think the pass-through agreement is preventing? Which supervisors do you think would vote to develop land on the border of Davis, without the consent of the voters of Davis?
Don, that is just plain wrong. The RDA brings us about 2 additional dollars for every dollar that would otherwise have gone to the city. This is because the state back fills the school district share. That’s why cities establish RDAs.
Yes, the state is giving cities some additional revenue through this mechanism, and that is why they have wanted to end it. We feel it is important to keep that revenue, especially in light of the fact that our revenues have eroded over time under Prop. 13.
To clarify, the state gives the RDA the school district share of the tax increment in the RDA area, and then the state back fills the schools’ share.
It is a way for the state to give cities some additional revenue, much as the state provides matching revenues to schools for school construction.
Now I can see why some people can’t understand why we want to keep the RDA. We wouldn’t have traded money with constraints for money without constraints if we weren’t receiving three times the revenue and if we couldn’t put the money to use to satisfy major infrastructure needs or to bring more net revenue to the city.
Just like any of our funds, or any government or private sector budget decision, there are times when we could have put the money to better use, but by and large I think we have done a great job.
I remember when South Davis citizens felt isolated and stranded and felt angry and disenfranchised. We used the RDA funds to connect South Davis with North Davis, and the South Davis citizens seem way, way happier than they used to.
Similarly, I remember when the downtown was a ghost town during the summer and holidays. When my husband was being recruited to Davis, they took us to Woodland for dinner to show us how cosmopolitan the region was. The train station was a dusty dead end, and half of central park was an unpaved parking lot.
The RDA has done amazing things for this city.
Now I can see why some people can’t understand why we want to keep the RDA. We wouldn’t have traded money with constraints for money without constraints if we weren’t receiving three times the revenue and if we couldn’t put the money to use to satisfy major infrastructure needs or to bring more net revenue to the city.
Just like any of our funds, or any government or private sector budget decision, there are times when we could have put the money to better use, but by and large I think we have done a great job.
I remember when South Davis citizens felt isolated and stranded and felt angry and disenfranchised. We used the RDA funds to connect South Davis with North Davis, and the South Davis citizens seem way, way happier than they used to.
Similarly, I remember when the downtown was a ghost town during the summer and holidays. When my husband was being recruited to Davis, they took us to Woodland for dinner to show us how cosmopolitan the region was. The train station was a dusty dead end, and half of central park was an unpaved parking lot.
The RDA has done amazing things for this city.
“The citizens of Davis care very much about controlling their own future growth. You and Toad might respectfully disagree with that policy, but it is the desire of the overwhelming majority of Davis citizens. “
Yes this has been true, but the costs of doing so, both financially and environmentally, are adding up.
Financially because maintaining the current choke hold on development will cost current residents dearly while the water will go to the eventual development of frontier properties. Just look at Yackzan’s rhetoric, notice that he never mentions the benefits of the water deal to peripheral development yet he would benefit greatly if it were allowed. Nobody has asked him the question how much would he pay to the water system for development rights? I think that if we had an honest debate that showed people how much they could save by having the beneficiaries of the water pay the costs it would blow up the no growth attitude of many residents. Maybe that is why you have refused to bring it up Sue, because, you know quite well exactly what I am talking about when I write about the link between water development and peripheral growth.
Environmentally because the no growth policies have resulted in the worst kind of development, leap frog development, According to the Enterprise article almost 500 kids (that’s enough to fill an elementary school ) are being brought in just to the public school through inter-district transfer. This doesn’t include those being brought into St. James, Waldorf or UC. They are all probably driving instead of walking, biking or riding the bus. So the no growth policies are actually a mirage that contributes to more cars on the road and greater distances traveled and this is just for students. Add in workers who commute who could live closer if we open up development and the consequences to the environment are even greater.
Now the main benefit of no growth has been to property values, and, I know you have personally done well, Sue, as a result of no growth policies, although I doubt that is your motivation, because I do respect that you are a misguided but true believer in population control. Still one of the worries about new development is that adding supply will lower prices for existing home owners but with my idea some of those prices will be shored up by having new parcels pay for the costs of the water. So new development could save current residents on their soaring water bills while those costs for the real users of the water, new development homeowners, would cushion the fall in prices from new development.
Now I understand that your arguments about not building the water system and digging ever deeper suit your own vision of Davis, one I might add shared by many, but it seems that given a full range of options articulated by both myself and Don Shor and whoever else might have an alternative idea the dynamics of the political consensus could change and I thing you know it too which is why you haven’t made a stronger case that the water will go to new development.
[quote]While it would effect the profit margins of the developers [to pay for the surface water project] it would not be prohibitively expensive. [/quote]
The developers would merely pass the cost along by increasing the price of houses to cover the costs of whatever fees were assessed to them to pay for the surface water project. The developers are not about to pass up on their profits – they are in business to make money. New homeowners are already having to pay steep Mello-Roos fees, realtor fees, etc. Tack on fees to pay for surface water projects, and you are going to have housing that becomes more and more expensive…
I’ll add my voice to Don’s and in particular Toad’s. The absence of any conversation about development and fees assigned to development is considerably disappointing. These kinds of projects are largely paid for by developer fees in other communities.
[quote]These kinds of projects are largely paid for by developer fees in other communities.[/quote]
And the developer merely passes the cost on to the customer…
“And the developer merely passes the cost on to the customer…”
I think I addressed this. Yes they pass along the costs but it reduces their margins.
[quote]Now the main benefit of no growth has been to property values, and, I know you have personally done well, Sue, as a result of no growth policies, although I doubt that is your motivation, because I do respect that you are a misguided but true believer in population control.—Mr Toad[/quote]Thank you for giving me the benefit of the doubt, Toad.
In fact, my home is adjacent to the downtown, and I, along with my neighbors, fought against rezoning our neighborhood to commercial. That rezone would have doubled my property value, yet I fought against it, so I think that supports the contention that my pursuit of personal wealth has certainly not informed my support of slow growth policies.
In fact, rapid growth plus the rezone of my core area property would probably be the policy that would maximize my personal wealth, i.e., a commercial property downtown in a larger city. In fact, I opposed both those policies.
[quote]I think I addressed this. Yes they pass along the costs but it reduces their margins.[/quote]
If businesses pass all the costs onto the customer, how does that reduce business margins? I have to assume you are perhaps referring to fewer customers?