Costs & Taxes

As of Dec. 24 the only costs information for the project that the author could find were a table within the Los Altos Community Center Master Plan Executive Summary as posted on the home page of the city web site.

The author copied it into a spreadsheet to check the arithmetic and added two columns on the right hand side.

One can see that Phase 1 which includes the community center, police and city hall is the most expensive part of the project accounting for over 50% of the total project cost. The Phase 4 theatre is the least expensive at 10% of the project cost. But as will be discussed below, parking options to accomodate the theatre are not included in the project total. And nothing has been decided about the options.

 

 

THE COSTS OF THE PLAN

 

What are “soft costs” anyway?

The total cost estimates are driven by the hard contrucstion costs, $88.9 million (undiscounted). That’s only 58 percent of the total. Another 20% is the “soft costs,” $31.1 million. “Soft Costs: expenses other than hard costs incurred in developing a project. Soft costs include design fees, permits, testing and inspections.” (Executive Summary p. 57).

What is “escalation cost” and “contingency”?

Escalation is inflation and adds $20.6 million. The planner is assuming that the construction costs in 2009 dollars will inflate around 2.47% to 2.84% a year.

Contingencies are possible cost overruns due to unknowns. “Contingencies” add another $12 million.

Total Cost of +$150M but without all Needed Parking?

The total cost of all 4 phases of this project is $152.6 million, including “hard costs, soft costs and contingencies.” The hard cost alone, which we take to mean construction, is just under $90M. That’s a big number, but we are still left with one question. On page 77 of the Executive Summary a number of options for mitigating an apparent parking shortfall are presented, along with the cost of each. The total cost of these eight options is $55.6 million. We have not been able to tell whether any or all of that total is included in the total project cost. If not, the project could exceed $200 million in total spending.

What’s the Tax Hike price tag? Possibly $550 per parcel, but in stages

It certainly would be nice to have some new facilities, maybe even these exact facilities as planned, but what price tag are we talking about? Since the city has not revised the project costs since 2009 or formed a public finance plan, we provide a back of the envelope guess. The last Library bond — $20M over 20 years — costs a residential parcel in Los Altos $76 a year. All residential parcels, pay $800 a year in parcel tax for the two LA School District bonds. Lou Cartalo, a citizen who spoke at the Dec. 13 Council meeting, estimated that a parcel tax that paid the interest only on the costs of all 4 Phases would be $800 a year.  Our volunteers have estimated that also paying back the captital would mean a parcel tax of $1600 a year.

If Ballot on Phase 1 fails, there will be no 2,3,4

It had been tentatively planned to “stage” the bond issues and votes. That means Phase 1 would be the first bond to be voted on. If that failed, there would be no Phase 2, 3, or 4. So the first bond could be for $80M over 20 years or $300 per parcel a year.

Election Consultants to Manage our Opinions

Discussion at the Dec. 13, 2011 council meeting confirms that an electoral consultancy has been hired by the city.  The first move in the campaign is to mail a “need” brochure to all residents.  You can find a page about the brochure here. Then the 30 people on the plan advisory committee will be prostelytizing at clubs and churches with a powerpoint crafted by the electoral consultancy.

An August Special Election means Low Voter Turnout

In March or April there will be an opinion survey to test if a ballot measure is likely to pass. If so the ballot will be a mail-in ballot in August.  This will result in a much lower total votes cast on the measure than if if were place in the 2012 general election.

 

Editorial Comment: Modern Democracy in action.