Public Comment

Why are Berkeley citizens so upset about the proposed settlement agreement between the City and UC Berkeley? Reasons are many, but three stand out:

1. Secrecy:

Like the flawed 2005 deal that it is designed to replace, the current "settlement" was reached in secret, and debated among council members in secret. Critical though it is to our future, we are faced with a done deal, with no public review whatsoever. This violates open government laws and is a betrayal of multiple promises that the mistakes of 2005 would not be repeated this time around.

2. Dollars:

The law exempts UC from local property and other taxes. However, the courts have held that cities may seek reimbursement for goods and services provided by them to the University, like fire and police protection, emergency medical care, etc. In 2003, Berkeley's net UC generated expenses were independently calculated at $11,374,100 per year.[1] But in 2005, the city agreed that the University needed to pay only $1.2 million in yearly reimbursement. Current payments under the 2005 deal are reported at $1.8 million, an increase which accounts for only half of the 49.5% inflation which has actually occurred since 2003.[2] In real dollar terms U.C. currently pays less today than it agreed to pay in 2005.

And a lot more than simple inflation has happened since 2005. The big issue has been the expansion of the Berkeley campus from an estimated 31,800 students in 2005 to 40,955 in 2018, and with a further projected increase to 50,000.[3] The impact on the City's university-related costs should be obvious, with the Economic & Planning Systems, Inc. (EPS) analysis putting them at $21,415,000 (net of all receipts) as of 2018, or nearly double what they were in 2003.

Early reports were that UC under the 2021 settlement would pay the City $4.1 million/year in current dollars, with an inflation adjuster, or a total of $82 million over a 16-year term. Proponents proudly say this is double what was agreed to in 2005. But when the 2005 payment is adjusted for inflation and for the added costs of a near doubling of the student body, it is obvious that the new deal is as bad as the old. Indeed, it is worse. The annual subsidy by Berkeley taxpayers to UC as of 2003 was $11,374,000.[4] Using 2018 numbers as the base line, (they are the only ones publicly available), the annual subsidy will increase from $17,315,000 in Year 1 to $26,976,206 in Year 16, or a total of $349,108,399 over the life of the agreement.[5]

Things are worse yet when we consider the non-money parts of the settlement.

3. An Illusory Agreement:

Because of the City's passion for secrecy, we did not learn all the details until July 27, when the Mayors office released a fully executed and "final" settlement document. Skeptics' fears prove justified. For example, only $2.8 million of the advertised $4.1 million will go to the City's general fund. The rest is earmarked for special projects that must be (a) within a half mile of the campus, and (b) jointly negotiated with UC.

It also turns out that that the City has agreed to permanently withdraw from current litigation involving UC's Long Range Development Plan ("LRDP") and must support all UC expansion projects now in the works. Not only must it accept current expansion plans, but "poison pill" provisions prevent the City from enforcing the limits set by the LRDP. Should UC choose to expand beyond the 50,000 students forecast by the LRDP, or to build beyond the limits of the LRDP, Berkeley's only remedy would be to withdraw entirely from the Agreement, and to lose the promised compensation for fire, police, medical and other services provided by it to UC. Settlement Agreement (copy upon request), paragraphs 6.3, 7.3 and 7.4.

While most of UC's promises are illusory, the City's are very real. They threaten decades-long efforts to preserve what makes for a quality life in Berkeley, including adequate infrastructure, affordable housing (especially for young families), a healthy environment (clean air, uncongested streets, green spaces), and a balanced relationship with the University. There are no meaningful caps on student and staff totals, and no requirement to mitigate the housing crisis that results in large part to ever increasing UC demand.[6] There is no relief for local taxpayers' who must continue to subsidize tens of millions in costs that under the law should be borne by the State as a whole.

In short, our mayor and his captive Council have secretly agreed to a deal that will bring irreversible and long-term harm to us all. They should rescind their approval, explain their conduct, and allow us the input to which we are entitled under the law. 

David Wilson 

Dean Metzger 

Editors: 

Berkeley Neighborhoods Council (BNC) Executive Committee 

Claremont Elmwood Neighborhood Association (CENA) Board of Directors 

Attachment 1 

https://www.cityofberkeley.info/uploadedFiles/Clerk/Level_3_-_General/UC%20SEIR%20LRDP%20HEARST%20041219.pdf 

UC Berkeley Economic and Fiscal Impact Study starts on Page 46 

D RAFT MEMORANDUM 

To: Mr. Jordan Klein, Economic Development Manager, Office of Economic Development, City of Berkeley 

From: Benjamin C. Sigman, Jason Moody, and Ashley Boots, Economic & Planning Systems, Inc. 

Subject: Preliminary Fiscal Impact Analysis of UC Berkeley in 2018 

Date: March 27, 2019 

The City of Berkeley (City) has engaged Economic & Planning Systems (EPS) to analyze and document the economic and fiscal effects of the University of California, Berkeley (UC Berkeley). The EPS study ultimately will provide new data and analysis to inform City input to long-range campus planning and associated impact mitigations to be negotiated between the City and the University. While the EPS study will be developed throughout calendar year 2019, UC Berkeley recently released California Environmental Qual Act (CEQA) documentation that Amends the 2020 Long Range Development Plan (LRDP) Environmental Impact Report, and there is a near-term need to evaluate the current fiscal impact of UC Berkeley on the City. 

The release of CEQA documents presents an opportunity for the City to provide comments and express concerns related to the University’s recent growth. In this memorandum, EPS presents preliminary fiscal impact estimates to assist the City in developing comments on the University’s CEQA document. The 2018 fiscal impact estimates reflect analytical methods established by the UC Berkeley Fiscal Impact Analysis conducted by EPS for the City in 2004 (Appendix B). 

This memorandum describes EPS fiscal impact estimates from 2003 and updated estimates for 2018. To the extent possible, the 2018 estimates incorporate new City revenue and cost data, UC and City population counts, and consumer spending data, in combination with fiscal impact factors derived from EPS’s prior analysis of the University’s impact. While the 2018 fiscal impact estimates presented here are preliminary, and the outputs of EPS’s ongoing comprehensive study surely will differ, the estimates presented in Figure 1 offer a reasonable first look at UC Berkeley’s annual impact on the City revenues and costs in 2018. 

See page 2 for the summary of UC Berkeley’s Fiscal Impact on the City of Berkeley 

Figure 1 Summary of UC Berkeley’s Fiscal Impact on the City of Berkeley 

Net Fiscal Impact 2003 - $11,374,000 2018 - $21,415,000 

Attachment 2