Wednesday, December 17, 2008
Fremont Budget Deficit
Fremont's budget situation turns dire, $11.2 million deficit expected next year. (from Mercury News). The city might want to use this to emphasis Fremont needs extra revenue. We can argue since Fremont is already in big deficit, don't waste extra cost! We can not afford such a big project. Comment?
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Here's an excerpt from the letter on the Ballpark I sent to Mr. Diekmann and the City Council:
ReplyDeleteWILL THE BALLPARK VILLAGE CAUSE MILLION DOLLAR CHRONIC DEFICITS IN FREMONT'S GENERAL FUND?
The Ballpark Village is advertised as bringing great economic benefits to Fremont. But a close examination of the ERA study shows that the Ballpark Village project is likely in even the best of circumstances to cause chronic deficits in Fremont's General Fund.
In 2008/09 Fremont will spend approximately $500 per Fremont resident on police, fire, and transportation services. The current levels of service have been described as unacceptable by many, including Mayor Wasserman. The Ballpark Village residential component would add about 9500 new residents to Fremont. In order to maintain Fremont's current unacceptable service levels this additional population will require additional General Fund revenues, in 2008/09 dollars, of $4,750,000.
Since the Ballpark Village's residential and retail components, under all scenarios, will be built in Fremont's Industrial Redevelopment Area, no property taxes from the residential or retail will go to Fremont's General Fund. The ERA study relies primarily on sales tax generated by the retail component and a $1,000,000 annual contribution from the Oakland A's to generate revenue for Fremont's General Fund. Using the 3% annual inflation rate from the ERA study, the additional revenue required in 2016, when the Ballpark Village housing is projected to be fully occupied, would be about $5,890,000. This does not include the cost of General Fund services required by the retail or the stadium.
According to the ERA study, the Ballpark Village project will generate approximately $4,800,000 in General Fund revenues in 2016 and thereafter. It will require at a minimum $5,890,000 in services. Thus the services required will be underfunded by $1,090,000. How will the City of Fremont make up the $1,090,000 annual deficit in the General Fund created by the project?
The ERA study projects that the retail component will be fully built and occupied by 2016, and generating per square foot sales at a premium rate, above that generated by Pacific Commons. What guarantees does the City of Fremont have that the Ballpark Village retail component will be fully occupied and generating premium sales tax revenue by the time the residential component is built, occupied, and requiring services?
How can the City of Fremont be assured that the Oakland Athletics will be able and willing to contribute $1 million annually to the City throughout the entire useful lifetime of the Ballpark Village residential housing?
An additional $1,090,000 annual deficit in Fremont's General Fund would require substantial reductions in already inadequate transportation and safety services. If the retail component of the Ballpark Village project is not fully occupied, or fails to generate sales tax at the projected rate, or the Oakland A's are unwilling or unable to continue their promised $1,000,000 annual contribution after they've built and sold 3,150 residential units, Fremont may be pushed to the brink of bankruptcy. I urge Fremont's planners and elected officials to make sure they have a sound and well-reviewed plan for funding the road and safety services required by the Ballpark Village before they proceed with this project.
THe pro-ballpark group will tell you that all costs will be paid for by the stadium planners. . . . but, there will be many, many indirect expenses that the city will have to pay that will occur outside the agreed-upon ballpark operations.
ReplyDeleteA traffic accident across town involving two A's fans - or an exchange of fisticuffs between two BART riders wont be paid for by the A's - - - but, the ballpark will definately be responsible for generating this kind of extra activity.
We dont have enough P.D. right now to effectively service residential needs. When our P.D. is working overtime to staff extra personnel required for game days - - - - how will your service level change ?? will it be better than it is today ?