By David M. Greenwald
Executive Editor
Davis, CA – This week the Davis City Council voted to put the revenue measure on the ballot that would raise sales tax by one percent. As I pointed out earlier this week, the council for reasons that really escape me, decided to pick an unnecessary fight on commissions.
Forget about the politics for a moment—the city made a series of very bad fiscal decisions in the first decade of the 21st century, coupled with the economic collapse of the Great Recession, and the city has spent now the better part of a decade and a half trying to dig out from those mistakes.
In 2014, the city was able to pass a half percent sales tax.
But since then it has been one stumble after another failure. The council failed to put a parcel tax on the ballot in 2014 when they probably had the best chance to succeed.
They failed to get economic development on the ballot the same year.
When they did finally get those things on later ballots, the voters shot them down—Nishi in 2016, a parcel tax in 2018, DISC in 2020 and 2022.
The result is that the city was unable to get revenue generating economic development projects passed by the voters. It was unable to get an infrastructure (roads) parcel tax to the two-thirds threshold and thus the city’s fiscal condition is no better than it was a decade ago—and you could argue a good deal worse.
The Vanguard in 2016, compared Davis to both regional cities as well as other college town communities and found that the city lagged in per capita retail sales.
If anything it is probably worse now.
As one reader noted—the downtown has seen a decline in retail and overall.
Retail
2012: 84
2024: 49
Food service:
2017: 99
2024: 61
(Note: these numbers are unconfirmed, I asked the city to verify them but the city did not get back to me either way. However, the numbers meet the eyeball test—retail and food have declined and there is more vacant space in the downtown).
While I am sympathetic to the city’s fiscal woes, I once again question why they would choose to antagonize a large segment of the engaged population by ramming through the commission consolidation over the objections of many.
Moreover, while I agree that the fiscal condition of city is problematic, I am not convinced it is the biggest threat—particularly in the long term.
Ultimately, I think housing is the far bigger concern—we just haven’t seen the full impact yet. Rising housing costs and scarcity of available housing are going to drastically alter the dynamics of this community.
The data that I point to once again is that, over the last 16 years, the city has built just 700 single-family homes. Much of that was at the Cannery. And many of them were on the expensive side, meaning that it really didn’t address the housing crisis.
I am dismayed that the council pushed off consideration of the peripheral projects until 2025 and 2026. I am disappointed that the council chose not to try to address Measure J reform.
The result is that we are getting closer and closer to the state forcing the hand of the city with respect to Measure J.
One of the biggest impacts of the housing crisis is that it has cut off the community from housing that could house families with children.
We are seeing more and more UC Davis faculty and staff living outside of the city and commuting in—adding to the traffic woes, the environmental concerns and also disconnecting those young faculty and staff from our vibrant community.
We have been able to shore up declining enrollment by offering enrollment of their kids at DJUSD, but that is starting to slow down as well.
And so the third crisis is the potential declining enrollment that could start eroding the backbone of this community—its schools.
We have seen recent parcel taxes that shore up critical funding only narrowly pass. We have seen recent scares of school closure and declining enrollment and it’s only a matter of time before the full force of this third crisis hits our community.
As I pointed out this week, the council decided it wanted to tackle the fiscal crisis first with a huge band-aid—the sales tax. It decided it needed to clear the lane to do that. And it then it mucked things up with the contentious and unnecessary (or at least not time-sensitive) commission consolidation.
Given how many times the city has tried and failed to address revenue in the last 15 years, one becomes even more perplexed by the missteps here—and I pointed out the danger from the start, having lived through the 2007-08 attempts to do the same thing.
At some point, we can’t just put band aids on our problems, we need to stop the bleeding and rebuild our economic base, fix our housing crisis—and, in so doing, shore up our schools.
Forget about the politics for a moment – the city made a series of very bad fiscal decisions in the first decade of the 21st century, coupled with the economic collapse of the Great Recession, and the city has spent now the better part of a decade and a half trying to dig out from those mistakes.
David, the bolded part of your statement above is not supported by the facts. The City has done (almost) absolutely nothing over the past two decades “trying to dig out from those mistakes.” What they have actually don is to compound those mistakes … making them worse. Can you point to a single example where the City has actually done something to “dig out”?
Key is the phrase “dig out” rather than “correct.” Multiple revenue measures and economic development projects attests to this. You can count at least 6 to 8 measures before the public that aimed to increase revenue – whether or not you agree with that approach, it’s clear that was an effort to dig out.
It was at best a half-way effort … not even half of a burro. There was no effort to educate the constituents on what the actual fiscal situation was, or how the City got into that situation, or how the money would be spent in order improve the situation.
Compare the efforts made by the City for any of those “revenue measures” to the effort that the City invested in the Water Project. (1) they acknowledged that they had a problem, and (2) assembled and executed a thorough, participative, transparent assessment of the problem, then (3) brought forward alternative solutions, and (4) selected one solution that had risen to the top based on the results of (1) (2) and (3). But they did not stop there. As step (5) they conducted a series of a dozen or more educational sessions with staff, consultants and WAC members there to answer the questions posed by water rate payers, water consumers, and other constituents in attendance. Only after step (5) was thoroughly completed did the City go to the voters. For the revenue measures, none of those five steps have been done with any vigor or effectiveness.
Accountability, transparency, and fiscal responsibility have been treated with a “See no Evil, Hear no Evil, Speak no Evil” approach that was evident in spades in City Council’s midyear Budget Update item. Everything was discussed at the 100,000 foot level.
— No illumination of which items were over Budget was provided.
— The solution proposed did not return the General Fund Reserve back to 15%, it only arrested the decline from going further below 7.5%.
— No analysis of the consequences of the steps taken was provided.
— Two questions that weren’t answered were …
ooooo What long term impact does defunding the budgeted Medical Costs payments have?
ooooo What long term impact does defunding the $1.5 million of road maintenance have?
“It was at best a half-way effort…”
That was the whole point I was trying to make…
Here’s my comment in context… “the city has spent now the better part of a decade and a half trying to dig out from those mistakes. In 2014, the city was able to pass a half percent sales tax.
But since then it has been one stumble after another failure. The council failed to put a parcel tax on the ballot in 2014 when they probably had the best chance to succeed.
They failed to get economic development on the ballot the same year.”
David, you are still missing the point. Getting something on the ballot is a tiny part of the job. That is like driving your child to a gymnastics meet location. If you haven’t sent in an entry for the meet, and included a check with the entry form with the required fee, and made sure your child has been trained to the appropriate level of gymnastics proficiency, then driving to the meet is a waste of time.
When you had to make a presentation at school, did you try and make that presentation without doing your homework?
You’re missing my point – at no time did I say that the action was effective or sufficient.
You mean, other than all the planning and discussions and requests for proposals and ballot initiatives and attempts to reconfigure UMall and on and on over the last 15 years?
“The City” has done what the city can do with regard to economic development. “The City” doesn’t build malls or business parks or remodel existing retail centers. The voters obliterated any meaningful economic development plans. Developers won’t touch this town now.
So that leaves a simple choice: reduce services or increase taxes.
Let us know which services you want to cut.
Don, in terms of services to cut, I will defer to Mark West.
With respect to planning and discussions and RFps, and ballot initiatives, et.al. … talk is cheap. None of those efforts included one tenth of the constituent education effort that went into the City’s water project effort. It is worth noting that the City receives over $14 million a year of additional revenue from Davis Tax/Rate payers because of that water project effort.
To put this into a Redwood Barn Nursery equivalent, it is similar to you getting a special order from a customer, looking up the item on the websites of your suppliers, and choosing which supplier you want to order the item from, but never actually placing the order. That is what the City has done over and over and over and over again.
Hilarious!
The people who need to provide the list of services to cut are those who opposed the expansion of economic activity in town over the past couple of decades. For instance, those who argued against adding new hotels, who proclaimed that there was no ‘proof’ of a need for new commercial space, and who disingenuously stated that economic expansion would worsen a historic housing shortage while simultaneously claiming that no housing shortage existed (among many other examples). The frank dishonesty in the discourse has been rampant.
Tax increases are bandaids that might reasonably be proposed to hold the line while waiting for economic expansion to expand the budget. Those who actively or passively opposed economic expansion in town are the ones responsible for making tax increases and service cuts our only available options. The most prolific of those opponents to economic development should now be putting forward their list of preferred service cuts, not falsely claiming that others are responsible for doing so.
Mark, reading is fundamental. Go back and reread what I said. You have already provided your list of services to cut. No one is asking you to answer that question (of Don’s) again. As I said in my comment, I defer to your answer, which sums up the evens of the past decades very well.
My personal record of statements either for or against the various iterations of economic development is as follows:
— I actively pursued and published the statistical evidence that showed that adding new hotels would not only help the Davis economy by bringing “other people’s money” to Davis, but would also benefit all the existing hotels much like the Coke versus Pepsi Wars benefited both Coke a Pepsi.
— Regarding ‘proof’ of a need for new commercial space, we have a very timely and clear opportunity to see what impact new commercial space has on the Davis economy … the 3808 Faraday building,Iwill be interesting to see whether as it fills up wit tenants, whether they represent new jobs and nw companies for Davis.
— Te argument that the DiSC economic expansion would produce more demand for additional housing in Davis than additional housing supply it proposed to add is impossible to refute … mathematically. The numbers are the numbers. You can’t change that. However, looking at the numbers in a vacuum was myopic in my opinion. Economic development comes with trade offs, and the added jobs (if there were any actual jobs to be added) wold have in concept made the Davi economy more resilient.
There was no “frank dishonesty” in the discourse. Just differences of opinion.
Sorry Matt. Your pathetic attempt to rewrite history doesn’t work for those of us who were here and attending at the time. Lots of gullible people in town, though, which might explain why some might still think you are relevant.
Mark, when you can’t address the issues, then attach the commenter. That is the tried and true approach of a person addicted to ad hominem logical fallacies.
Michael Bisch, and the owner of the Holiday Inn Express (last name Patel) and the director of the UC Davis Convention Space Management office can all verify my activities during the period of the Hyatt House application. I suspect there are also quite a few comments and possibly an article of mine here in the Vanguard. The hotel situation was very straightforward. As confirmed by my discussions with the UC Davis Convention Space Management director there were insufficient hotel beds in Davis for her to host any of the annual national gatherings of the many academic disciplines that UCD has. Being able to host those annual gatherings would have brought lots and lots of out of town dollars to Davis, with many of those dollars going for hotel rooms and restaurant meals and purchases at retail stores like The Artery.
You seem to be in a modified Rominger-West mindset … trying to sell a whine before its time.
Mark, you piqued my curiosity, so I Googled “Matt Williams” “Vanguard” “hotels” and this was the first hit that came up. https://www.davisvanguard.org/2016/12/commentary-hotels-represent-just-first-step-toward-fiscal-resiliency/#comment-346759
That comment was followed by a response with questions from Roshan Patel the owner and manager of the Holiday Inn Express, to which I replied.
If you see any revisionist history in that information Mark, please point it out.
Don, my answer above is incomplete. Mark West’s approach is one perfectly valid way to answer your question.
Another way would be to look at the historical financial performance of each of the services the City provides. The City’s audited financial statement(s) are a good place to start that research. Unfortunately, the most recent audited financial statement published by the City is for the July 2020 through June 2021 period. The numbers from that statement are (A) rather stale, and (B) for the first full year of the COVID pandemic. The City hasn’t explained why they were three years behind in publishing their audited financial statements at the beginning of 2024. Nor have they shared with the public what problems the Auditors have uncovered in the City’s finances. We don’t need to go very far across the Yolo Causeway to see a cautionary tale that may be a foreshadowing of the City’s situation … specifically Audit finds CapRadio mismanaged funds, questions station’s ability to pay for costly downtown projects
Another way that I would actively pursue would be to look at the current City services and identify the ones that have historically been provided by other municipal jurisdictions. In that realm, social services have always been the responsibility of the County, yet nonetheless the City has chosen to duplicate some of the County’s services. Inter jurisdictional cooperation is not one of the City’s strengths.
I’m sure there are more ways to answer your question Don, but the ones above are a good place to start.
Passing a revenue measure is not actually evidence of “digging out.” There is only digging out if the additional revenue actually fills part of the very bad fiscal decisions “hole.”
How were the half percent sales tax revenues used? A substantial portion was used to give employees raises. The history of raises handed out is legend. As you very well know, one of the raises given to the City of Davis Firefighters was a 36% raise over 4 years (9% per year). That didn’t “fix” anything. It only made the fiscal situation worse. We are living with the consequences of that decision, and many more like it, today.
The reason they did not get economic development on the ballot was that they have no Economic Development Plan. Mark West summed up the situation very succinctly on Thursday.
This was referring to 2014, when the city clearly did have an economic development plan.
No David, the City did not have an Economic Development Plan. It had a part of an Economic Development Plan. If the City were a UCD MBA student and they turned the 2014 Economic Development Plan in to their professor for a grade, that Plan would have been gven an “F” by the professor.
Just as an Income Statement has three parts (1) revenues, (2) expenses, and (3) a bottom-line Income, an Economic Development Plan has three parts (1) resources of the planning entity to attract (2) market participants who have synergy with the resources and the economic where-with-all to pay for access to the resources, and (3) a plan for bringing the market participants and the resources together. In a generic Economic Development Plan (often called a Business Plan) (1) is called an analysis of Supply, (2) is called an assessment of Demand, and (3) is the Vision/Mission/Goals of the entity making the plan. The 2014 plan (ironically it was put togeer bynUCD students for the City) only covered (1). It ignored (2) and barely paid lip service to (3).
Visually, that complete picture looks like this https://www.davisvanguard.org/wp-content/uploads/2024/06/Screenshot-2024-06-21-at-4.41.52 PM.png
Where would the “market participants” locate?
If you have no market participants they can locate anywhere.
Right now they can locate at 3808 Faraday Avenue. It will be very interesting to see how quickly 3808 Faraday fills up with tenants … and who those tenants are … and where those tenants come from.
Herein lies the problem. Matt seems to think that economic development requires a plan that lays out all of the steps (in detail, with pretty graphs) and controls all of the outcomes. His top down ‘command/control’ approach is probably the least effective method of expanding economic activity in town, which is also why he likes it so much. Matt wants to waste years in planning and meetings, while actively obstructing any real change.
What we should want as a community are a multitude of small projects and small changes, interspersed with a few big projects, that in total add up to significant expansion of City revenues. Most of these activities should remain ‘under the radar’ and be of no concern to the community at large, but this is exactly what Matt and his friends fear. If the City simply functions without the input and approval of Matt, how could he and his friends justify their existence?
And here in lies the root of Davis’ problems. In fact Davis local politics play into the stereo typical characterization that liberals/Democrats like to tax and spend with little thought to the fiscal consequences. I say this as a criticism of the backwards stuck in the 1960’s this is the a small college town…the only answer are strictly fairy-tale “new urban” infill development that doesn’t effect anyone’s backyard and the pro-growth ” the sky is falling ” for all the poor people that can’t afford to live in this idealize paradise that is Davis, CA.
One thing I thought had been made abundantly clear over the last few years is that HOUSING IS A COST TO THE COMMUNITY. It costs to provide more fire, police and general city services (roads, rec offerings…etc…). New housing adds to the traffic in the city which requires better planning and regulation of the roads and possibly/hopefully mass transit. But the the city has no choice in adding housing because of state mandates. Also, if the city has any hope of future economic development; new housing will be part of that plan.
The city has to be able to pay it’s current bills (and no I don’t believe they have a balance budget….there’s a lot of obvious delayed maintenance going on…..my kids are still waiting for the diving board at Manor Pool to be fixed….the playground in Central Park is in an embarrassing condition) before it can look at adding additional growth expenses. What I mean is that planned economic development needs to happen CONCURRENTLY with planned new housing. Prioritizing new housing over economic development is like someone who is barely making their ends meet, buying a house and then figuring how to pay for it.
Thank you Keith. Well said … very well said.
No pun intended … David is looking to build the housing on a foundation of sand.
If UCD were a for profit company inside the Davis City limits the City of Davis would be a very wealthy municipality. Instead Davis get’s nothing directly from UCD and only a very small amount of secondary sales tax revenue. It’s time the UC’s start contributing financially directly to their host cities to help cover their impacts.
Wow, a three pronged triple crisis and it doesn’t even include the 50 foot wall of fire raging across the bypass on its way towards Davis.