Norberg Speaks on Solano 360 Plan

City doesn't need potential cash drain

By Paul Norberg, retired CFO

5/10/13

Letter originally to Vallejo City Council

I attended the Planning Commission meeting on 4/29/13 and spoke to the Commission about a number of my concerns with the Solano 360 Plan. As none of my concerns or the concerns brought forward by other members of the public were addressed at the meeting, I am now bringing those concerns to the City Council.  Please make this letter a part of the official record of the deliberations on the Solano 360 Plan.

I am in favor of an entertainment use for the fairgrounds, but I am very worried about the financial impact on the City of Vallejo. The preliminary city budget for FY 13/14 shows a deficit of $5.5 million before any savings from employee contract negotiations. The Solano 360 plan requires the City of Vallejo to provide police and fire services, street maintenance, landscape maintenance, traffic signal maintenance and bridge maintenance. The just released revenue sharing agreement with the County requires the City to give the County 63% of its revenue for the first 3 years, then 97% in years 4-9, 55% in years 10-30 and then at the end of the project the City will receive 76% of the revenue. The County consultant stated that the revenue is only shared if there is additional revenue, but regardless of the amount of additional revenue the City is responsible for all the services listed above.

It appears to me that the cost of the city services was significantly understated in the analysis prepared by the County. Police services are estimated at $54,693 per year in years 2 and 3, $116,564 in years 4-5, $225,261 in years 6-15 and $407,408 in years 16-50. The EIR document includes a letter from Police Chief Nichelini stating that the police department is seriously understaffed and he estimates that initially he would need 2 additional police officers growing to 6 additional officers at build out. As the cost of one police officer is $246,000 a year, it appears that the cost estimate for police services is significantly understated.

Landscape and street maintenance is another area that appears to be understated in the County financial analysis. Road maintenance starts at $5,911 for the first 5 years and then goes to $10,133 for years 6-50. There will be 14 acres of roads in the project and after 15 to 20 years will need significant maintenance. I seriously doubt that this can be done for $10,133 per year. Landscape construction cost is estimated at $5.2 million plus $2.5 million for the water feature and this level of investment will require constant maintenance. The fair complex includes a 4 acre Midway event lawn, and the parking lots will have trees planted every 6 spaces. There will be over 4,000 surface parking spaces plus 4,250 in parking garages. Is the City responsible for all of this landscape maintenance plus maintenance of the 6 acre creek park? If so I doubt that the budget of $80,650 a year for years 6-50 will be sufficient. As we are seeing in Hiddenbrooke after 15 years landscape needs significant replanting to maintain the desired appearance.

Who is responsible for paying for the 137 acre feet of irrigation water? The plan calls for using non-potable water from the water feature, but that will still require some treatment and pumping. Will the City water department provide irrigation water at no cost to the project? Can non-potable water be used in drip or bubbler irrigation? I understand that non-potable water works well in turf irrigation but does not work in drip systems.

Access to the project is predicated on a major rebuilding of the Redwood/I80 freeway interchange and the EIR states that the project can’t go forward to Phase 2 or 3 until the interchange is rebuilt. As Phase 2 starts in year 6, will the interchange be completed by that date? The Solano 360 Plan estimates the interchange will cost $28.2 million with the project contributing $2.8 million. Where will the remaining $25.4 million come from? If a portion of this is from City funds, will that impact the resurfacing of other roads in Vallejo that are full of potholes? The ABAG/MTC One Bay Area Plan updated in March 2013 lists this project as number 230313 with a cost of $96.4 million. What is the true cost of the project and where will the funding be obtained? The EIR states that the Redwood/I80 interchange is currently unfunded.

It also appears that the City may be responsible for a portion of the cost of widening Fairgrounds Drive to four lanes at a cost of $5 million plus $1.6 million for improving the HY 37 interchange. The Solano 360 Plan is providing $1.6 million and $0.4 million for these two projects. Is the City of Vallejo paying for the remainder? If so where is the money coming from and could it be better used in other parts of the City?

There is also the question of flood control and the canal that will be built around the project. Will this new canal handle a 100 year flood? If not what level of protection will be provided and what is the impact on the mobile home park just south of the Fairgrounds? A letter dated 1/8/13 from the Vallejo Sanitation and Flood Control District stated that their preferred solution was to bring the creek directly across the center of the project. The letter did not approve the peripheral canal idea. What is the official position of VSFCD?

If the project does not successfully sell the planned 327,571 SF of retail, commercial, entertainment and office space, up to 50 residential units may be built. Are these market rate units? I doubt many people would want to live next to a roller coaster. If they are developed as low income housing the city will be providing additional police and fire services with no additional property tax revenue to support these services.

The project is being built on County land. The County will receive ground leases for the commercial portion of the project and will receive approximately the same amount of property tax as the city. I don’t understand why the City would share any of its revenue with the County. The Revenue Sharing Agreement also states that the City will not charge any Impact fees on the public purpose areas unless agreed by both the County and City. How does that impact water hook up and building inspection fees and permits on the public portion of the project? Is the city expected to provide these services at no cost to the County?

I would like to see the Fairgrounds developed into a regional entertainment showcase, but I am very concerned about the City getting adequate compensation for services provided. The City is just exiting bankruptcy and doesn’t need another cash drain as it gets back on its feet.

Note: All opinions expressed in the "Primal Scream" column are those of the writer and not necessarily those of the Vallejo Independent Bulletin