The agenda for Tuesday’s Council meeting sets aside three hours for the item on the Encinal Terminals development project, and the usual contingent of public commenters, from both the pro-housing and the slow-growth sides, can be expected to queue up to have their say.
But, with all due respect to thoughtful advocates like Laura Thomas and Paul Foreman, there are two people the Merry-Go-Round thinks Council – and the public – really ought to hear from: Police Chief Paul Rolleri and Fire Chief Edmond Rodriguez.
Previously, we have urged our elected and appointed officials to consider the impact of a proposed project on the City’s finances when they’re deciding whether to approve a development agreement. True, as a matter of official policy, only development at Alameda Point must be “fiscally neutral.” Still, we think it’s important to evaluate whether a particular development project, once built, will cost the City money it doesn’t have to provide the additional municipal services – like police and fire protection – the new project requires.
We thus were pleased to see that the agenda package for the Encinal Terminals item contained a “fiscal impact analysis.” And we were even happier to read that, according to the analysis, the project “is likely to have a large positive impact on the City’s General Fund at buildout, generating more than sufficient revenues to offset costs of City services provided to the Project’s residents and employees.” Indeed, it is anticipated to add a net $855,500 to the General Fund every year!
Unlike the fiscal impact analysis for Alameda Point, which was done by economic consultants selected by City staff and paid for with City funds, the one for Encinal Terminals was prepared by a firm hired (and, presumably, paid) by the developer, Tim Lewis Communities. By itself, this may not undermine the legitimacy of the report’s conclusions. But when we dug into it, we began to wonder how realistic those conclusions, especially those relating to public-safety costs, truly are. And this is where the police and fire chiefs come in.
The fiscal impact analysis prepared for Tim Lewis calculates the annual police and fire costs generated by the Encinal Terminals development using a formula based on the current staffing and budget for the two public-safety departments. This formula computes the total number of new cops and firefighters required to service the project by applying the current Citywide ratio of police and fire personnel to population to the expected “daytime service population” at the site. It then multiplies these numbers by the current “average operating expenditure” per officer and firefighter to come up with the total annual police and fire costs.
The results are striking. According to the analysis, only 1.87 new police officers and 1.39 new firefighters will be required to provide police and fire protection for the Encinal Terminals development and its estimated 1,414 residents and 69 on-site workers. And the project will generate additional costs of only $315,129 annually for police and $351,511 annually for fire.
But are the results realistic? This is a question that someone on Council ought to direct to our top public-safety officials. Tell us, Chief Rolleri, whether you can protect the new residents and workers at Encinal Terminals for only $351K a year. And tell us, Chief Rodriguez, whether you can give those residents and workers the level of service Alamedans have come to expect from their fire department for only $351K a year.
We frankly don’t know how the two chiefs would answer this question. But we suspect that Chief Rolleri might be more inclined to go along with Tim Lewis’s consultant’s conclusion than Chief Rodriguez will be.
From our perspective, it seems reasonable to assume that the way to provide police protection for more people is to hire more cops. At present, the police department divides the City into five sectors. At least one police officer is assigned to each sector at all times, and the goal is to have two officers in three of the sectors – including sector 2, where Encinal Terminals is located – whenever possible. If the two police officers patrolling sector 2 can’t provide the additional police protection needed for the Encinal Terminals development, maybe all it will take to cover the project is two (or, more precisely, 1.87) more cops.
Or maybe not. There’s one person who can speak to the issue with authority, and we’d hope someone on Council will give Chief Rolleri the chance to do just that.
Fire is another matter. From our perspective – and this is a conclusion we think even our good friend and fellow bicyclist, IAFF Local 689 president Jeff DelBono, will agree with – it doesn’t make sense to assume that the enhanced demand for fire services created by the Encinal Terminals development can be met by hiring one additional firefighter – or even 1.39 additional firefighters. Either the fire department already has sufficient capacity to cover the proposed project or it doesn’t. And if it doesn’t, the only apparent way to increase capacity is to add equipment, together with the personnel required to staff it.
At present, the fire department operates four fire engines, two fire trucks, and three ambulances. (The City recently received another fire engine from the California Office of Emergency Services that, according to a City press release, “can be used . . . to provide critical fire and emergency medical service (EMS) response to our community.”) On each of three shifts, every truck and engine is staffed by a captain, an apparatus operator, and a firefighter, and every ambulance is staffed by two firefighters.
Maybe, after just a few weeks on the job, Chief Rodriguez would be willing and able to declare that the fire department can take care of the Encinal Terminals development as well as the rest of the City with its existing complement of engines, trucks, ambulances, apparatus operators, and firefighters. But that conclusion would run contrary to what Council, and the public, has been hearing for years. During the FY 2015-16 budget workshops, for example, former Fire Chief Doug Long stated that the current staffing level represented the “bare minimum” necessary to protect the citizens then living and working in Alameda. If Chief Rodriguez now were to assert that no additional equipment or personnel would be required to serve the new 1,414 residents and 69 on-site workers at Encinal Terminals, he not only would contradict his predecessor, he’d prompt an outraged rebuttal from the firefighters’ union.
But if existing capacity isn’t sufficient, how much more is needed? For the Alameda Point fiscal impact analysis, the fire department told the City’s consultants that extending service to the site would require, in addition to a new fire station, a new 12-person engine company and another 1.5 “full-time equivalents” for inspections and fire prevention. The Encinal Terminals development, of course, isn’t the same size as Site A at Alameda Point – although the total number of new housing units (589 versus 800) isn’t that much fewer – so it may not mandate the same treatment. The problem, though, is that the fire department can’t add only half a fire engine or staff it for only half a day. If the department is going to expand service, it’s going to need to augment the equipment list and boost the head count.
Moreover, let’s keep the bigger picture in mind. Encinal Terminals is just one of several development projects planned for the northern waterfront, including Tim Lewis’s own long-delayed Del Monte warehouse. By our estimate, these projects will bring about 7,500 new residents to Alameda. At some point, the case for buying more fire engines and trucks and hiring more firefighters to provide fire protection on an ongoing basis for these new residents – as well as the people who will work in the new commercial and retail areas – will become compelling. The real annual fire cost for any of the new developments, including Encinal Terminals, is its share of the overall cost of operating and maintaining the new equipment and paying the salaries and benefits of the additional staff required for the newly developed area as a whole.
And that cost is hardly modest. The Alameda Point fiscal impact analysis pegged the annual expense of expanding fire services to the Point at $3,557,864. But that number was based on the FY 2014-15 budget. Since then, cops and firefighters have received three consecutive annual salary increases, and the City’s annual required contribution to CalPERS for pensions has gone up dramatically. We wouldn’t want even to hazard a guess what the annual cost would be today to bring on board one new engine company and 1.5 additional fire inspectors.
Yet even if that’s all the additional personnel the fire department will need to service the upcoming developments along the northern waterfront like Encinal Terminals, the actual cost will be higher – a lot higher – than today’s cost. After FY 2017-18, at least three more rounds of police and fire salary increases are scheduled under the current MOUs, and the annual required contributions to CalPERS will skyrocket. The yearly cost of providing public-safety services to the new developments will escalate apace. And this will happen during a period in which the City already is projected to incur a string of accelerating annual operating deficits.
If this sounds scary, so be it. But no one should take our word for it; our elected officials should rely on the City’s own experts. To begin with, someone on Council ought to ask Chief Rodriguez Tuesday what he thinks his department needs, in terms of equipment and personnel, to provide fire protection not just for the Encinal Terminals development but for all of the to-be-developed area along the northern waterfront. Based on that information, City Finance Director Elena Adair could come up with a realistic cost estimate to plug into a fiscal impact analysis.
The economic consultants hired by the City for Alameda Point described their mission this way: “The main purpose of the fiscal impact analysis” is to “protect the City’s fiscal position.”
Somehow, we suspect, the consultants hired by Tim Lewis for Encinal Terminals saw their role differently. Indeed, the report they produced often reads more like a marketing document than a financial analysis. (Why, we wonder, does the report devote four of its 16 pages to regurgitating the description, already found in the master plan, of the project’s “Community Benefits”?) After finishing it, we couldn’t help but think of the one-page “analysis” recently prepared by the Treasury Department to “prove” that the Senate tax-cut bill really would “more than pay for itself.”
Let us be clear: We’re not arguing that the City should refuse to enter into an agreement with a developer unless the proposed project will generate net revenue annually for the General Fund (or even have a neutral effect). There are a host of factors to consider in deciding whether any given development will benefit or harm Alameda and its citizens. But we do think fiscal impact is one of those factors. Not only should Council (or the Planning Board) insist on a fiscal impact analysis as part of the review process, they should take steps to ensure that the analysis is objective and reflects the real-world expertise of the City’s managers, not the mechanistic formulas of the developer’s consultants.
We’ll see if anyone on Council agrees.
Alameda Point fiscal impact analysis: 2015-06-16 Ex. 10 to staff report – Alameda Point Fiscal Impact Analysis
Encinal Terminals fiscal impact analysis: 2017-12-19 Ex. 4 to staff report – Fiscal Impact Study