The Truth about El Dorado Hills Cityhood

The Truth about El Dorado Hills Cityhood:
Straight Answers to Bob Dorr's Claims

SierraFoot acknowledget the copyright claimed explicitly by SaveEDH.com. Direct quotations below are reproduced subject to the Fair Use provisions of U.S. copyright law, 17CFR107.

This is one proponent's rebuttal to Bob Dorr's arguments on his web site, www.saveedh.com, presenting his web site's claims and discussion exactly as shown on August 5, 2005. Responses variously annotate each point and link to supplemental information. Responses are in this color of dark blue, the arguments they respond to are in black.

This is only a rebuttal to arguments against cityhood. For discussion of other positive values of incorporation see the web site of the Yes on Measure P / Yes on Cityhood Committee.

Any opinions expressed in the responses are mine alone (I am Paul Raveling), but experience has shown that similar if not identical opinions are shared and expressed openly by virtually all community leaders. The only substantial opposition to cityhood (Measure P) that I have personally heard is from Bob Dorr and Mason Liu.

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Questions Cityhood Proponents Don't Want to Answer Actually, I personally love to answer these, and I'll bet other proponents do too!	Additional sections answered at the end of this web page:

	1.	Will the new city raise new taxes?

	2.	Who pays the cost of running city government?

	3.	Will the new city be forced to grow?

	4.	Where to put housing for very poor people?

	5.	Would affordable housing increase crime?

	6.	What's the difference in services?

	7.	Can the road projects be disrupted?

Issue #1: Deceptive Budget

According to the CFA, the revenue available to the future city is about $14 - $17 million (2007 - 2008 forecast). The revenue may be feasible to run a city government, but the number is extremely low compared to other cities. South Lake Tahoe for example, which has a similar population of 34,000, had an operation budget of $51 million in 2004.

South Lake Tahoe is an atypical city. It has a very large itinerant population of tourists, gamblers, boaters, skiers, people simply passing through on US 50, and more. It operates an airport, it budgets a million dollars per year for snow removal, and its police department is unusually large, with 2.3 sworn officers per thousand people in the permanent population. (click here to see City of South Lake Tahoe web site)

The cities of South Lake Tahoe and Placerville fund their own fire departments from city budget. Our fire department will continue to be separate from the city and had a 2004/2005 budget of almost $15 million. (click here to see EDH Fire Department 2004 Annual Report)

To compare EDH with South Lake Tahoe and Placerville we need to use the sum of EDH's city budget and its fire budget. That will conservatively be around $30 million to $35 million -- roughly triple the amount of Placerville's budget.

Such low revenue in the EDH forecast will give an immediate excuse for the city management to call for tax increase or commercial development once incorporated. (click SLT city website and see the budget info).

The revenue is not low and the incorporation project's independent consultants, Economic & Planning Systems, found the city to be entirely viable under all analyzed projections of future conditions. (See Comprehensive Fiscal Analysis document) Even if the new city wanted to increase taxes California law (mainly Proposition 13 and Proposition 218) requires voter approval.

Among cities SLT is the fiscal oddball, not EDH.

When you check the South Lake Tahoe city website also check the SLT Police Department's site. Its home page explains why they have "a few unique characteristics when it comes to alcohol violations" -- such as 24-hour partying and drink service at neighboring casinos. The web page also shows a marine-patrol photo, they also operate on Lake Tahoe. Add these to factors already cited and it's clear that comparing SLT to any other city is a classic case of apples versus oranges. For example, SLT's budget per capita (permanent population) is double that of Placerville.

Issue #2: New Bureaucracy, Same Services

According to the CFA, a municipal government generally requires 20% of the budget for overhead. In the immediate term, that would cause a 20% shortfall of funding for services. Someone has to pay for overhead. Using the lower budget, the price tag for the new bureaucracy is $3 million dollars. What the 20% overhead buys us is only to transfer 10 of the 18 services currently provided by the county to the new city plus a new service, the cemetery.

The Comprehensive Fiscal Analysis does not say this, the claim is factually wrong. The Final EIR even says explicitly in comment E-4 that "There is nothing in the Draft EIR or CFA that suggests that new taxes or fees will be required to operate."

The CFA does already include overhead, it is not omitted. It also focuses in on finer levels of detail to identify overhead for major departments and functions. For example, it analyzed existing operations, determined that Sheriff's costs to EDH included an internal overhead of $571,466 (21% overhead). The CFA added a 2.5% overhead contingency allowance and factored this projection of overhead into its forcast of costs for the new city.

Issue #3: Forced Growth

According to the CFA, the city has to grow 50% in the next 10 years just to pay for the cost of running a city government. That is mainly due to the fact that EDH's revenues are mainly coming from property tax.

El Dorado Hills' problems do not include not lack of growth.

Recent statistics show that about 1,300 building permits per year are issued for single family homes in El Dorado Hills. At that rate EDH would reach buildout under current land use planning before the end of the next 10 years. Buildout potential is listed as 20,038 homes, 58,511 people [see Final EIR Table 1-2]. This level of growth is already legally committed by development agreements entered into by the county.

The CFA's projections for actual growth are conservative and include scenarios for 25% less growth than even the conservative forcasts. The city is fiscally viable under all of these scenarios.

Results could be better. For example, page 24 of the CFA describes why sales tax receipts could actually grow between $136,000 and $860,000 per year more than its conservative estimate by 2014.

Issue #4: Low-income Housing

According to the EIR, a part of the affordable housing allocation to the ED county has to be re-assigned to EDH city. Due to EDH's high percentage of the population of ED county (about 20%), a significant number of affordable housing has to be allocation in the EDH area. It is very important that the Community leaders develop the housing allocation plan prior to the incorporation election. Delaying that allocation would only transfer that issue to the city and create another unforeseen cost to the city. That cost is not included in the CFA.

Affordable housing quotas for a "fair share" of regional affordable housing are assigned to city and county governments by SACOG, the Sacramento Area Council Of Governments. No quota has yet been assigned to El Dorado County, including El Dorado Hills.

The new city inherits affordable housing policies from the county's General Plan, which states that "To the extent feasible, very low, low, and moderate income housing produced through government subsidies, incentives, and/or regulatory programs shall be shall be distributed throughout the county and shall not be concentrated in a particular area or community."

In El Dorado Hills, feasibility is limited by existing development agreements already entered into by the county. These are legally binding and dedicate almost all undeveloped land within the new city to other residential uses (not low-cost housing).

The combination of these factors would appear to constrain legal ability of SACOG to assign substantial amounts of affordable housing to El Dorado Hills. Reference to the county policy in Final EIR Response L-5 adds: "Because it involves a smaller, more manageable and homogeneous area, the new City is more likely than the larger County to comply with its affordable housing allocation."

Issue #5: Property Valuation

Affordable housing would also have an impact on the property values due to the high number of units would be allocated to the area. The CFA only calculates the forecast based on the current General Plan; which treated EDH as an unincorporated area. The housing plan will no longer be valid once EDH becomes incorporated. Also the EIR did not consider this issue and needs to be revised.

No units have been allocated to the area yet, and a search of the Final EIR document finds 55 occurrences of the phrase "affordable housing".

An equally viable conjecture to this one about risk of dropping property values is that high values in a desirable area bring up low values in or near it. There may be an example in the Bay Area: For many years homes in Palo Alto have been expensive while those in East Palo Alto have been low-valued and would be considered low-income housing. A recent news report indicated that values were rising in East Palo Alto.

Issue #6: Incorporation can delay current road projects

The county currently has 12 major road projects being done in El Dorado Hills. Incorporation would cause these projects to be transferred to the city.

Only projects not yet started are to be transferred to the city. Projects which are partially complete will be finished by the county.

There are no provisions in the city budget for a project engineer to administer these projects.

New cities, and sometimes even mature cities, contract out for project engineering work instead of maintaining in-house staff.

The first year budget for the city is already showing a $500,000 deficit.

The first-year deficit is due to the transition from county to city government. During this time the county continues to supply services while the city starts up its own government. A first-year deficit is normal for all new cities; The EDH CFA shows the city to be in the black as soon as the transition year is complete.

Thus these projects would, at best, have to be delayed because of lack of funds to administer them. Another example of how incorporation will give us less government service.

The funds are there, there is no delay due to incorporating. Road projects can be delayed for other reasons, but not for this one. For example, the US 50/Silva Valley interchange design was ready in 1991; now the never-built design must be redone to handle a higher level of traffic. Whether or not the county deserves responsibility for this delay, it happened on their watch.

Overall, the CFA and EIR have once again shown that incorporation will result in service cuts, traffic increase, high density affordable housing, unplanned commercial expansion, and tax (fee) hikes.

This is simply incorrect.

The CFA says that the city will be able to increase service.

The EIR says that traffic will increase, but that's because of the county's planning decisions. It says explicitly that this is an impact that's inherited by the city, it's not caused by becoming a city.

EDH will have very little land available for affordable housing within its boundaries. This is constrained by existing (completed) development and by legally binding development agreements for remaining undeveloped land under the county's land use policies, which EDH will inherit. Affordable housing will always be an issue, but the constraints of law mean that SACOG will have no substantial alternative except to require affordable housing to be built mainly in areas outside EDH's city limits.

All expansion, commercial or otherwise, requires approval of the regulating agency. Incorporation moves that agency from the county to the city, providing a higher degree of local control.

Tax hikes are virtually out of the question due to state law (propositions 13 and 218). Fee hikes -- or even fee cuts -- are always possible, regardless of whether the agency receiving the fees is the county or the city. Given that the CFAsays that the city will have a fiscal advantage over the county, fee hikes should be more likely with county government than with city government. A comparison of building fees for a new house showed that they were only about 2/3 as much in the City of Folsom as in El Dorado County.


	"local control"?

	Local control, as demonstrated by the proponents of EDH city hood, really means that a small group of people with a special interest can get control of a local board. Once in "control", they can use taxpayer money for their own benefit. For example: the city hood proponents have gained control of the El Dorado Hills Comunity Services District (CSD) Board. All CSD directors, as private citizens, have personally adopted pro-cityhood positions as a result of their assessment of its value. No faction has "gained control" in order to promote a cityhood agenda; instead, our elected representatives have recognized the value of cityhood. I know of no exceptions Since they have been elected to this board they have spent a lot of board time and effort on incorporation issues. They have given $30,000 of CSD (tax) money to the incorporation committee for city hood studies. This money should have been used for parks and recreation purposes. When CSD dissolves and becomes a city department of parks and recreation it is projected to gain much more than this in funding. One source of new revenue will be a share of property taxes from the Business Park already dedicated to parks and recreation. The Business Park was outside the CSD boundaries but will be inside the city boundaries. Can you imagine what they could do with the money in a city budget? You will see a lot of the incorporation people trying to be on the city council. Of course some will step forward to serve, they have already served EDH in many capacities to advance the interests of the community. It will be interesting to see if new candidates come forward who don't have an established record of public service. If anyone wants to be on the city council for the sake of power and control of money (another form of power) it's more likely to be one of them than one of the proponents who have been pouring their own time and resources into this effort for up to 9 years.


Business Park Owners Concern About EDH Incorporation There are some who would prefer not to be in the city, and it's not clear that they understand the circumstances that they're concerned about. When an Incorporation Committee member surveyed 50 owners in the Business Park he found that 38 supported incorporation. Most of the rest had not yet formed an opinion.

•		Don't want to be the new city's cash cow. No one plans to milk business -- Town hall speakers from Citrus Heights, Rancho Cordova, and Elk Grove have all said that there is no downside for business in cityhood. In contrast, they have named several (about 10) specific ways that cityhood benefits business.

•		Don't want to be placed under city's CC&R (transfer from CSD) which had troubled many EDH residents. The Business Park has never been within the CSD's service area. Therefore CSD has never enforced its CC&Rs, and there is no enforcement function to transfer from CSD to the city. The Business Park is free to do its own CC&R enforcement, as are the HOAs that currently perform this service themselves rather than delegating to CSD. (Examples: Waterford, Summit, Serrano)

•		The impact on the current good services and relationship with the County. There may be some "Good ol' boy" relationships at stake. However, it's generally easier and less costly to do business with a local government in your own community than with one that's a half-hour drive distant.

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