Fremont’s budget woes

A handful of articles have been put out over the past few months questioning how infrastructure will be paid for at Pacific Commons should a ballpark come in. Chief among these concerns is the extra policing that will be required for event security, traffic control, and additional presence in the new “entertainment district” that should be expected., a police industry website, has the Argus story from June detailing Fremont’s budget woes. In the story are the following nuggets:

  • AT&T Park typically has 18 SFPD officers on staff for a Giants game, 24 for Giants-Dodgers games
  • The Giants pay for security inside the park, SF City/County pays for traffic/crowd control outside the park.
  • In 2005, overtime for Giants games cost $250,000.
  • Fremont typically has only 16 officers deployed at any one time throughout the entire city.
  • Fremont has slashed its budget by cutting $25 million and 220 jobs over the past few years.
  • Fremont may have to dip into its reserve fund to pay for 2006-07 city services.

Sounds daunting, doesn’t it? It does, but only when viewed through the prism of those facts above. There are several things to keep in mind:

  • Population has grown 1-2% in the past 5 years. That along with the state’s budget crunch have severely limited appropriations to Fremont. With the creation of new housing at Pacific Commons (5,000-10,000 new residents), by law appropriations will grow proportionally.
  • Rezoning and reassessment of the remaining Pacific Commons should increase property tax revenues significantly, on the order of several million dollars per year. Fremont gets 15% of every property tax dollar, while Alameda County gets 20% into its general fund.
  • New retail development will increase sales tax revenue. Of the 8.75% sales tax rate in Alameda County, a 0.5% chunk automatically goes towards local public safety. Should 250,000 new square feet be built, that small 0.5% chunk would translate to as much as $500,000 per year alone for local public safety (based on $400 per square foot, per year in sales).
  • Hotel tax revenue growth has been flat since the dot-com bust. The creation of a new hotel (a new Hilton to replace the old Fremont Hilton?) and buzz in the South Fremont area could translate into increased revenues, especially the Fremont Marriott. Fremont’s hotel tax is 8%, lower than both Oakland (11%) and San Jose (10%), so there is room for a hotel tax hike if it’s warranted.

If all of that fails to bring in the necessary revenue, there is always one possibility: a ticket tax. Historically, such a tax has proven unappealing to teams because they see a ticket tax as eating into their own ticket revenue. However, even a nominal tax – say, 50 cents per ticket – should produce upwards of $1 million per year depending on attendance. That should go a long way towards funding the necessary police presence at Pacific Commons. The introduction of such a tax will be a bone of contention. The good thing about it is that the tax wouldn’t be used to pay down any bond-related debt, only for budgeted services.

If anything, the big question is where the staffing will come from. Fremont certainly isn’t going to hire a dozen or so police officers just to staff A’s games. Much of the time stadium detail is overtime work and is charged accordingly. It’s possible that staff will have to come from neighboring jurisdictions such as Newark and Union City. The Alameda County Sheriff’s department may be tapped as well. The Sheriff’s department has grown as a result of the closure of the Oakland City Jail, though I’m no expert as to how prison guard work translates into stadium detail.

Fire and emergency services are no small requirement either, and both of those have been hit by the budget crunch. Again, the incremental increases in revenue should help this even if the state’s budget problems remain. The fact is that the city needs to grow economically to insulate itself against future crises.

As Fremont celebrates its 50th anniversary, its leaders need to plot how the next 10, 20, 50 years will look. A decision on the ballpark development will go a long way towards establishing that legacy.

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