As Elk Grove pursues $300 million zoo, taxpayer warning about general fund included in 5 year Capital Improvement Plan

Last week, Elk Grove taxpayers, Mayor Bobbie Singh-Allen, and her city council were provided a copy of the city of Elk Grove's five-year Capital Improvement Plan (CIP). Prepared by the city's public works department, the CIP will be discussed during the Wednesday, May 22 Elk Grove City Council meeting.

The 266-page CIP document covers projects pursued over the next five years by the city's public works department. It includes plans for new construction and modification, repair, maintenance, and replacement of city infrastructure.  

Funding for these projects comes from various sources, but mostly from three sources. The primary sources are the city's various Mello Roos taxes, development fees, and federal and state grants.

The five-year plan includes funding projects like the 9.65-acre park in the Southeast Policy Area, the so-called Park K. The $6.5 million cost is funded by developer fees collected for Fund 356, the SEPA Parks fund.

Another significant project that relies heavily on federal funding is the Laguna Creek Trail Crossing at Highway 99. This project will cost $12.5 million, of which $10.1 will come from federal funds and $500,000 from the state.

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Yet another type of project is included in the CIP - those planned but unfunded, such as the $4.3 million Laguna Creek Trail Segment 4. Although included in the five-year CIP, as the project summary notes, over $3 million comes from unidentified and unsecured grants. 

Better yet is the much-sought Kammerer Road extension to Interstate 5. The CIP budgets the project at $127 million, of which $73 million or 58 percent of the project has unsecured funding sources. 

As noted, most of the plans depend on developer fees, Mello Roos taxes, and federal grants, particularly for large-scale projects. For most of the projects, the city's general fund covers some initial costs like planning or design, but without the benefit of the outside-of-Elk Grove grants, many of these projects would never see fruition.

Typically, this serves Elk Grove and other municipal residents' needs across California and the country - we pay taxes to the state and federal government and receive some of that money back for our community's benefit.

The five-year CIP is estimated to cost $233 million, including $25.9 in federal grants and $2.3 million from the state. Of significance, over one-third of the budget, $84 million, is listed as potential grants.   

Put another way, for the budget to be fully realized and the project started and completed, the city must secure over one-third of its funding from various sources. As budget preparation goes, this is a standard operating practice. 

But what if things dramatically change in the next five years?

Interestingly, on pages 15 and 16 of the CIP, under the heading "Anticipated Funding Challenges," are the following statements:

"Competitive Grant Funding

Grant funding is becoming more competitive, often favoring disadvantaged or underserved communities and requires projects to meet several goals that address existing needs. Staff are often limited as to where in the City they can pursue grants and must tailor their grant requests to meet the grant program’s goals to be more competitive. In addition, projects that are more fully developed with right-of-way completed and/or are shovel-ready are also more competitive. Therefore, staff is not always able to pursue grant funding for projects with the greatest need and in some cases may consider lower need projects that may be more competitive or more fully developed when grant opportunities arise"

The follow-up statement on page 16 notes the following:

"Reduced Available Local Match

Transportation funding (Gas Tax,SB1, Measure A) is traditionally used for two purposes, funding

maintenance, and providing matching funds for capital projects (roadway widenings, safety

improvements, trails, etc.). Over the past several years, more emphasis has been placed on funding formaintenance and safety needs which means there is less funding for matching State and Federal grants on other transportation projects. The result is that sometimes transportation projects need to receive a General Fund contribution. This trend may need to continue in future years depending on fund availability."

There is a lot to unpack in both of these statements. However, as it relates to Elk Grove, the last two sentences in the latter statement are significant because they say if grants dry up and Elk Grove residents want something built, they will have to come up with their cash.

What happens if Elk Grove's extra cash is tied up paying interest for the next 30 years on its $114 million zoo bond debt and other funding sources disappear?

Possible scenarios

This November, Americans will vote for the president. Let's explore scenarios under both candidates.

Biden reelected

Generally, federal funding will continue to flow throughout the country. However, per the CIP Competitive Grant Funding statement above, funding will focus on maintenance and safety programs, like improving rail crossing safety. 

The statement suggests that more attention could be given to disadvantaged and underserved communities, of which Elk Grove does not qualify. A Biden continuation could mean more focus on mass transit projects, which could benefit the city by extending Sac RT's Light Rail to Elk Grove but not provide the funding needed for the much-desired Kammerer Road extension. 

Trump regains the Whitehouse   

During his first term, Trump did not slow federal spending. Regarding transportation and infrastructure, a Trump administration would be less focused on serving disadvantaged communities and building mass transit systems and more open to roadway expansion, which could be a boom for Elk Grove, especially the Kammerer Road project and the Southeast Connector road. 

However, there is a wildcard with a Trump presidency, especially if the House and Senate are Republican-controlled, which is a real possibility. Trump has shown extreme animosity toward Democratic or Blue cities and states. With an obedient House and Senate, federal funds could be directed toward more friendly Red or Republican states and communities.   

Trump has repeatedly signaled he seeks to punish political enemies, so is it that far-fetched for him to punish California, especially urban areas, when Rep. Adam Schiff becomes a U.S. Senator?

Regardless of the outcome of the presidential election and its possible implications for Elk Grove, if these funding sources dry up as suggested in Elk Grove's five-year CIP, once taxpayers have to start paying off the 30-year zoo mortgage and reserves dry up, something will have to give. 

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