May Actually Cost the City Money on an Annual Basis, and The Development Agreement Is Non-Binding and Weak
by Alan Pryor and Nancy Price
Forward: The Davis City Council has approved a sprawling senior housing development project located in West Davis along Covell. Voters will have a chance to approve or reject the project in this year’s November election. The project is called West Davis Active Adult Community (WDAAC).
On Tuesday, 8/28, Part 1 of this article was published in the Davisite, which discussed the massive reductions in Development Fees given away by the City to the Developer. This is Part 2 of the article.
- The City Projects a Positive Annual Return to City Coffers as a Result of Build-Out of this Project. However, this Estimate is Based on Accounting Methods that Assume Unsubstantiated Reduced Costs on a Per Resident Basis for Providing Basic City Services such as Public Safety and Transportation.
The City’s Finance and Budget Commission analyzed the potential financial impacts to the City and made a number of projections about the project’s financial viability with respect to income or loss to the City. Their report to the City Council on February 12, 2018 can be found at www.cityofdavis.org/home/showdocument?id=9199:
The conclusions reached by 4 of the Commissioners (with two dissenting votes) made the following observations (with emphasis added):
- At the time of this analysis, the commission did not have available to it a development agreement with the city for the project. Therefore, any conclusions we have reached should be considered preliminary and subject to change….
- We recommend that the commission, or if necessary an FBC subcommittee, be provided a timely opportunity to review and comment on the fiscal provisions of the proposed development agreement before its presentation to City Council for approval. “
Surprisingly, the Finance and Budget Commission never did again review the Development Agreement before it went to Council. But nevertheless, City Staff assumed when otherwise calculating the project’s positive return to City coffers that the City’s average cost for providing services to the residents of WDAAC were only going to be 75% of the City's otherwise calculated average costs. Staff made this assumption without any quantitative explanation as to how they derived that 75% figure.