- “The blatant financial workaround — crosses the line. It is unnecessary. It is unjustified. And I believe it is unlawful. The courts will soon decide.” – Dave Taormino
Davis developer Dave Taormino is challenging the Davis Joint Unified School District’s decision to increase developer fees on his Palomino Place project, alleging the district violated state law and reneged on a written agreement. The dispute is now headed to court, where a ruling could shape how school districts apply fees under California’s housing laws.
In a writ of mandate filed by his attorneys at Taylor, Wiley, and Keasling, Taormino contends that the district’s move to subject Palomino Place to higher fees runs afoul of the California Housing Accountability Act and the Housing Crisis Act (SB 330). His legal team argues that by submitting a preliminary application under SB 330 on March 30, 2023, Palomino Place obtained vested rights, locking in ordinances, policies, and standards in effect at the time of the application.
The petition estimates the increased fees would add about $1 million to the project’s cost. For residential development, the fee rose from $2.97 per square foot to $5.17. “This unanticipated fee increase significantly impacts the overall feasibility of the Project and is precisely the type of mid-stream bombshell the Legislature sought to eliminate through the SB 330 Preliminary Application process,” the petition states.
In a public statement, Taormino argued that the district had reversed course after committing in writing to freeze fees. “The blatant financial workaround — crosses the line. It is unnecessary. It is unjustified. And I believe it is unlawful. The courts will soon decide.” He added, “It imposed the new fee anyway, six months later, and declared it would not honor the agreement it had made.”
Central to the dispute is a September 19, 2024, email from Superintendent Matt Best to Taormino and his attorney.
The email acknowledged their legal position, stating, “We agree with your position that, if the Board should increase the DJUSD developer fee rate, the Palomino Place development would be exempt from that increase so long as construction starts within 2.5 years (3.5 years for an affordable project), in accordance with SB 330. I have included the city manager, Mike Webb, in this correspondence, as the city currently collects our developer fees. Please let me know if you have any additional questions of the District. We are looking forward to seeing more housing in Davis soon!”
That same evening, however, the Board of Education unanimously passed a resolution establishing the higher fees, which took effect November 18, 2024. The petition cites the superintendent’s email as evidence of the district’s prior agreement and its subsequent reversal.
The district has declined to go into detail on the pending litigation but did issue a limited response. In a statement to the Enterprise, DJUSD acknowledged receipt of the petition and said, “The district declined to comment at this time as this matter is in litigation, acknowledging receipt of the petition and a statement penned by Taormino.”
At the September 2024 board meeting, the district presented its 2024 Developer Fee Justification Study as the basis for the new fee schedule. Lori Raineri, chief executive officer of Government Financial Strategies, told the board the study “analyzes the fiscal impact of new residential and commercial-industrial development on the district’s facilities needs” and “serves as the basis for the district’s developer fees.” She compared the analysis to preparing for peak moments of demand, likening it to a “Super Bowl halftime flush.”
The resolution set fees at $5.17 per square foot for residential development and 84 cents per square foot for commercial-industrial development. The district had not raised fees since 2009, when rates were $2.97 and 47 cents respectively. Under state law, public school districts can levy fees on new construction to mitigate impacts on school facilities, but cannot exceed the calculated fiscal impact of new development. The law also allows fees to be increased every two years to account for inflation in school construction costs.
The district emphasized that these fees are its only opportunity to mitigate the impact of new housing on public education facilities. California requires districts to provide free public education and adequate facilities, and developer fees are designed to help ensure that new residential growth does not overwhelm existing schools.
Taormino maintains the district’s actions undercut that principle by shifting costs unlawfully onto his project after it had already secured vested rights. He said the district’s reversal after the statute of limitations had expired on any challenge to its prior agreement demonstrates bad faith.
The case now moves forward in court, where a ruling will determine whether the district’s interpretation of its authority under state law prevails or whether Palomino Place is entitled to relief under SB 330.
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What a conundrum, DJUSD needs new housing in order to feed the beast (what many believe to be an oversized school system) but their fees make that development more expensive and costlier for families with children that may want to move in.
That’s a conundrum wrapped in an anomaly dipped in an enigma wrapped in a bacon-cheddar-cheeseburger.
“many believe”
Many? How about a small minority?
Do some 1,200 out-of-district students (many of which were essentially “created” by Taormino) constitute a “small minority”, in your opinion?
That has nothing to do with my comment.
Really? The fact that DJUSD has sufficient capacity to accommodate that many out-of-district students isn’t a sign of “excess” capacity, in your opinion? In general, your opinion is that sufficient capacity should remain in place (in declining-enrollment school districts) in order to poach students from other districts?
Do you also think that all prisons should remain open, as their population declines?
Taormino actually has a valid point (or would have a valid point – if he didn’t essentially cause what he’s now complaining about, per yesterday’s article).
He said many people think… He being Keith. I disputed that many people think that.
“He said many people think… He being Keith. I disputed that many people think that.”
That depends on how many “many” is.
How can you possibly refute my statement? Have you taken a poll?
Apparently “many” equals the plural of more than one, as the one other person who believes the district is oversized piped up (and he doesn’t live in Davis, nor does he have any children in school here–in other words just a meaningless kibitzer.)
I have no idea why 1200 district transfers would think the district is oversized.
Apparently you have no clue either how “many” think that DJUSD is oversized according to the city’s actual student demographics. Clue, you can’t go by how “many” post on the Vanguard about it because only a handful ever post on here about anything.
So now are we going to argue over how “many” a “handful” is?
It was a talking point in the no on the parcel tax campaign that passed by a greater than 70-30 margin. I feel like it’s on pretty safe grounds to conclude this is a minority view.
I said “many”, I never said a “majority”.
But it would be safe to say “many” as in several thousands of voters.
And of the voters that voted for the parcel tax, how many voted that way full well thinking that the DJUSD is oversized because they will always vote for school parcel taxes no matter what?
Keith, you used “many” to suggest a large number, but once the actual numbers suggested that number might be well under 30 percent, you had to scale it back. And then by shifting to claims about voter intent, you blurred the line between how many voted and why they voted.
“Keith, you used “many” to suggest a large number, but once the actual numbers suggested that number might be well under 30 percent, you had to scale it back”
What are you talking about? I never scaled back anything. I said “many” and I stand by that. I never said a majority. If I wanted to say a majority I would have said it. Quit twisting what I actually wrote.
Since Davis voters approved DJUSD parcel taxes (which benefit out-of-district families – such as those living in Spring Lake), perhaps that’s a sign that they actually do support the type of out-of-district sprawl that Taormino helped create.
But my guess is that Davis voters either don’t know about the extent of the situation, or don’t care. And of course, with all of the exemptions (for seniors, and multi-unit property owners – which pay the same amount per parcel as a single-family dwelling), that could be another factor.
There’s also non-resident property owners who can’t vote, but likely incorporate (or essentially account for) those fees into the rent they charge.
Or they … wait for it… DON’T AGREE WITH YOU
I just provided reasons that they may not agree with me (or may not care), including the corruption built-into the system which results in this outcome. (But the corruption factor could create an outcome which otherwise wouldn’t reflect voter opinion.)
But there is no question (this isn’t even an “opinion”) that the school district has excess capacity, when compared to the needs of actual Davis residents.
And this is also the basis of Taormino’s claim – that out-of-district students are “using up” that capacity. And that he shouldn’t have to pay to increase the capacity created by his own Davis development, as a result.
You refuse to understand that the problems are not that of capacity but rather that of declining enrollment – and it’s an artificial problem caused by Davis land use issues that are forcing university employees to commute to campus and therefore drop their kids off as they enter the city with a whole host of collateral consequences. By looking at a single silo, you are missing the problem.
If the prison population is declining, would you say that the “problem” is a lack of prisoners – or too much capacity?
Regarding UCD employees (who drop off their kids at Davis schools) – they could just as easily drop them off in their own district. It’s not as if Davis schools are right next to UCD. But I actually don’t have a problem with this – either way. (But maybe UCD itself needs to contribute to the cost it’s creating.)
For sure, though – the situation is having a negative impact on Woodland’s school system. There’s a group of parents who have been trying to get WJUSD to build another school at the planned technology park (with its 1,600 housing units), but they have failed so far. (Truth be told, WJUSD also needs to shut down a school on the older side of town, where enrollment and facilities are declining.)
Also, there’s a number of DJUSD employees who live out-of-district (who also bring their kids to Davis schools). These employees may not even be needed, when they eventually close down a school or two.
Not the same – funding is tied to Average Daily Attendance (ADA). Each student who shows up generates a set amount of state funding, so the system is literally per-person based. Prisons don’t work that way. CDCR doesn’t get money “per incarcerated person” in the same formulaic sense.
Also, you do realize that parents (usually consisting of a working couple) may work anyplace in the entire region, right? And that it’s probably highly unusual for BOTH parents to work in one location (e.g., such as at UCD).
Curious as to whether or not other school districts (besides the one in Davis) encourage out-of-district students. (Maybe they do, since enrollment is declining in other places, as well.) Of course, a lot of the other districts don’t charge parcel taxes to property owners to the degree that DJUSD does.
In my opinion, a lot of this situation would be resolved if costs were shifted to parents, instead of “everyone else”. Or at least eliminated the corrupt system (discussed above) that they’ve designed to win approval. (If I recall correctly, even Bill Marshall had something to say about the system itself.)
No, they actually have to work at UCD or DJUSD
You don’t seem to be addressing the points I brought up.
Starting with prisons – pretty sure your concern is not related to how prisons are funded, in regard to their “excess capacity”.
Again, some of those DJUSD employees (who live out-of-district) won’t even be needed, when they shut down a school or two.
And again, one parent may work at UCD, while the other works in Sacramento. Does the one who works in Sacramento drop off their kids at Sacramento’s school system? (Something tells me they don’t.)
Places like Roseville also comes to mind, given that it’s largely a suburb. Do you suppose most parents (who probably work in Sacramento) bring their kids to Sacramento, on their way to work? Or, do they drop them off in their own (Roseville’s) school district? (Pretty sure I know the answer to that, as well.)
In my opinion, California should go off ADA as the way of funding schools. That would alleviate the problem of declining enrollment. Baseline schools to their current state funding levels and include an automatic yearly escalator. Schools where attendance is going up faster could then petition the state to reestablish their baseline funding.
David says: “That would alleviate the problem of declining enrollment.”
It absolutely would not “alleviate” declining enrollment. Demographics (fewer children overall) is driving that.
What we have here are organizations fighting over a shrinking number of “customers”.
Once again, no point discussing with you when you don’t seem to understand that the problem here is that funding is being tied to enrollment and that’s driving a lot of stuff you don’t like. One way to handle that is to disentangle the two, but you don’t seem to even understand that. I can’t help you.
You’re talking about funding, I’m talking about a declining overall number of students.
What you’re referring to seems to be advocating for increased statewide taxes, to educate a fewer number of total students.
What I’m concerned about actually has nothing to do with education itself. What we have here is a school district that won’t right-size, and is looking for the city to grow, instead.
In this particular case, it seems like they’ve “over-reached” and are biting the hand of those who normally support them (a developer). If there was some way for them to BOTH lose the pending lawsuit, that would probably be an ideal outcome.
Funding is the driver here. And yes, what I am suggesting is creating a funding mechanism that is separated from ADA. And yes, that will increase the amount of money per student as enrollment declines – if it continues to decline.
I understand your point, but what you advocate also seems to be a path toward inefficiency (e.g., “keeping all of the prisons open, despite fewer prisoners”).
(Ironically, some of the newer schools look and almost function like prisons – in regard to security. Take a look at the relatively new one in Spring Lake, if you want to see what a prison/school looks like. I believe it was largely pre-fabricated. Some homeless shelters look a lot better than that.)
Then there’s the drills in regard to “prison riots” (preparation/practice for potential school shootings everywhere these days – though I haven’t actually seen those drills.)
Depends on how you define efficiency. I happen to believe that we were under funding education, and as a result, we are grossly underpaying teachers, which is causing a big problem. You keep wanting to bring up prison look at what a prison guard gets compared to what a teacher gets.
Teachers have never been well-paid, partly because they have so much time off. Another factor (no doubt) is that it’s historically a field dominated by women (who may also not be the primary breadwinner in a family).
But I do believe that some of them are in more physical danger than some prison guards are, depending upon their location.
Overall, it’s not a good time to be entering the field (maybe either one).
Nurses (also primarily women) are becoming pretty well-paid. (I believe that’s generally a more-demanding field.)
Another way to look at it:
Per pupil K-12 – $12 to $13K
UC cost – tuition plus state funding – $30 to $35K
Prison – $133K
my last comment
Pretty sure that almost every prisoner has attended public school. Maybe there’s a correlation, there? :-)
Of course, prisons also provide room and board.
Not sure about that cost per prisoner, but I suspect there’s a wide variation. In my opinion, the manner in which prisons operate could be vastly improved to encourage better outcomes upon release – while also reducing cost. There’s an enormous amount of prisoner capability that’s going to waste. These are people (just like everyone else) who have innate skills, some of which haven’t been encouraged for their own benefit (as well as society’s benefit).
There is supposedly a reason they’re called “correctional facilities”.
I lack the time to continue going down this rabbit hole, but I would suggest that since between 40 and 68 of incarcerated people lack a diploma or GED, perhaps if we invested more in K-12….. Can I please be done now? I have work to do.
Ron O: “Really? The fact that DJUSD has sufficient capacity to accommodate that many out-of-district students isn’t a sign of “excess” capacity, in your opinion?”
David: “You refuse to understand that the problems are not that of capacity but rather that of declining enrollment – and it’s an artificial problem caused by Davis land use issues that are forcing university employees to commute to campus and therefore drop their kids off as they enter the city with a whole host of collateral consequences. ”
This exchange says it all. Last night, at the Davis City Council, many people spoke out for new housing saying that their own kids, who grew up here, can’t afford to live here.
Is it any wonder then that the schools have declining enrollment after 25 years of self imposed no growth policies. If declining enrollment was associated with a declining economy what Ron O. is saying about overcapacity would be correct but the local economy is strong and growing. In such a case declining enrollment is the byproduct of political choices and not the economic realities of a town with a multi-billion dollar world class university.
Ron G says: “Last night, at the Davis City Council, many people spoke out for new housing saying that their own kids, who grew up here, can’t afford to live here.”
You never know what people’s motivations ACTUALLY are. (I wouldn’t be surprised if some of the folks whom you claim were there work for the school district, or have interests they’re not acknowledging.)
But if anyone actually believes that housing prices are going to decline as a result of something like Village Farms, I’d refer them to The Cannery – which might have even INCREASED prices for existing houses.
I grew up in the Bay Area (as many people in/around Davis did). I watched housing prices rise when I was still a minor/young adult, but never even thought about destroying land for my personal sake.
I knew that my time would eventually come, if I want to go back there.
Also, I strongly suspect that the people whom you claim were concerned about their own kids’ ability to buy a house don’t want to see their own house decline in value (nor do their kids – who will inherit it).
I do acknowledge that I’m fine with people getting priced-out of communities, as I was. Again, I knew that I can’t always get what I want, when I want it. And if the development activists had their way, I wouldn’t even want to return.
I’ve also since realized that the Bay Area isn’t the only nice place on the planet. (Though it’s a lot better than Davis and the rest of the Sacramento valley.)
There’s other factors occurring since I was “priced out” of my original home town, such as the increased pursuit of the technology industry. On the other hand, there’s also a population (in general) that’s now experiencing decline (unlike the baby boom years), so that has the opposite effect.
Young people aren’t having kids at replacement levels (and nowhere near it, for that matter).
Bottom line is that there is no housing shortage.
As a side note, I know someone who recently moved TO Davis to be close to their daughter and grandkid (who apparently ALREADY LIVED in Davis). And they moved from one of the most-expensive cities in the state to “comparatively-cheap Davis”, in order to be closer to their daughter and grandkid.
So apparently, Davis is one of the “best/cheapest places around” for multi-generational situations, such as that one.
Ron O.: “I grew up in the Bay Area (as many people in/around Davis did). I watched housing prices rise when I was still a minor/young adult, but never even thought about destroying land for my personal sake.”
But don’t you live on land that was once farmland?
Ron O.: “Young people aren’t having kids at replacement levels (and nowhere near it, for that matter).”
Extrapolating macro data to micro markets isn’t necessarily applicable.
Ron O. :”But if anyone actually believes that housing prices are going to decline as a result of something like Village Farms, I’d refer them to The Cannery – which might have even INCREASED prices for existing houses.”
There you go again saying things that make no economic sense and defy the law of supply and demand.
I’ll say this, as predicted, rents are going down in Davis, because we added supply.
Ron G says: “I’ll say this, as predicted, rents are going down in Davis, because we added supply.”
The main problem regarding your argument is that rents haven’t gone down. Another problem that you have is that Davis is part of a regional market (with the possible exception of rental housing specifically directed at students).
In any case, you’re conflating “for sale” housing with rental housing. There is a relationship, but it is not a straight-line one.
As “for sale” housing prices rise, “for rent” housing does not keep up (regarding return on investment). (I believe this is true everywhere.) This is also the reason that investors (for the most part) don’t buy single-family homes in San Francisco, for the purpose of renting them out. (Even though they’re exempt from rent control.)
I don’t believe there’s even a single example of private equity investors purchasing single-family houses in Davis, either.
“I don’t believe there’s even a single example of private equity investors purchasing single-family houses in Davis, either.”
How would you know?
You’re wrong about the rents not going down.
From the UC Davis report: ” Rents increased by a combined average of 1.6%.”
That’s a decrease in real terms because it is well below the rate of inflation.
Rising by 1.6% is not “going down”.
But maybe a better comparison is what occurred throughout the region. (I don’t know the answer to that.)
Regarding private equity (in the Davis single-family housing market), are you aware of any examples of that? Davis is not the type of town where the rental returns would justify purchasing a single-family house in order to rent it out. It’s actually a pretty easy calculation, overall. (Compare investing $800K, vs. investing it somewhere else. Add in all costs, and the opportunity cost of not investing it where the return is more-favorable.)
“ Rising by 1.6% is not “going down”.”
Do you not understand inflation?
I do. Do you not understand “regional market” (broader trends)?
Housing prices (including rental prices) have been dropping without even considering inflation, in many markets – including in Sacramento.
The only “true” local market is student housing – and even that has its limits before students start living in Woodland, for example. (Pretty sure that some of them already do.)
For that matter, housing prices are a factor regarding university selection in the first place, for some students (see UC Merced – or at the other end of the spectrum, UCLA or Berkeley – or your local CSU or community college. Or, a trade school.)
Alternatives (a very broad category) are part of the law of demand, in the supply/demand model.
The same reason that “everyone” doesn’t try to move to the Silicon Valley.
There is clearly no point to having a discussion with you
I’ve noticed that you always say that, when you run out of arguments. About half the time, you also sometimes add some kind of personal insult. (In this case, it’s an “implied” one, rather than the blatant ones you sometimes put forth.)
Note how I don’t do so with you. I’m willing to discuss actual arguments/debates.
Ron G: I’ll go ahead and respond to both of your comments in this one post.
Yes, I currently live on a plot that was once farmland (though I don’t believe the soil is high-quality). I’m not sure if the place where I grew up (and was priced out of) was ever actually a farm (I don’t think so).
But I’m failing to see your point. Maybe the real question is why my original hometown pursued policies which resulted in me getting priced-out. (Here’s a hint: It wasn’t due to “housing shortages”.) And if you want to refer to an even-earlier time (which really isn’t that long ago), maybe you should ask the Spanish and Mexican governments about the mission system and the impact that had.
Or the reason that my own ancestors (whom I never met) immigrated to this country.
All I can tell you about that is that I wasn’t consulted (and didn’t even exist) regarding any of this.
Regarding “macro” vs. “micro” markets, it’s up to the housing activists to define that. I’d consider “North, North Davis” (Spring Lake) to be part of the local housing market.
I’ve heard from two people, one who is a partner in hundreds of rentals, and, one who is a partner in thousands of rentals in Davis and both told me rents are down. I think those guys know whats happening in the Davis rental market better than Ron O.