The City of Arcata is currently evaluating how to raise additional revenue in order to pay for needed City services. This was discussed at the December 6, 2023, City Council meeting — see video below, about 55 minutes. The results of the $38,700 survey can be seen here on Arcata1.com. It was presented at the April 2, 2024 goal-setting study session — no video recording, and a very sparse audience in attendance. (There is a rough audio recording available.)
Where’s our “Rich Uncle” when we need them?
There is a big untapped source of revenue for the City that has not been discussed. And that is the possibility of having Cal Poly Humboldt pay for their fair share of Arcata’s expenses.
We would like to assume that Cal Poly Humboldt pays for the usage of water, sewer, and stormwater fees. But, as it can be argued, the presence of the university and the many students who live here in Arcata also brings about an increase in costs to the City’s police, emergency services, and social services as well. In addition, there are the infrastructure costs of running and maintaining services in Arcata. In theory, the university should share in these costs too.
Other California State Universities pay a share of their host city’s costs
There are 23 Cal State University campuses and 10 University of California campuses. When I was researching this issue back in May 2022, I found info to the effect that 18 campuses had financial arrangements with their host cities. I believe that Cal Poly San Luis Obispo has a payment arrangement with the City of San Luis Obispo. Unfortunately I do not currently have hard data on this.
Court Cases say “Pay your share”
And in court cases in other cities, the court rulings have agreed: The local university should pay for their share of the costs resulting from university-oriented population.
(When Arcata’s stormwater fees were introduced, back in 1993, what was then Humboldt State University refused to pay. It was only after they owed Arcata around $200,000 was a settlement reached. The City Manager at that time (1988-1997) was Switzerland-born Alice Harris, Ph.D. — Arcata’s first female City Manager.)
Where did these court cases come from?
In 2021, a neighborhood group called Save Berkeley’s Neighborhoods brought a suit against the University of California, Berkeley. The basis of the lawsuit was that the University had violated its agreement with the City of Berkeley by increasing enrollment without adequately supplying housing for the incoming students. The case went all the way to the California Supreme Court, with the People prevailing. Only 11 days following the court decision, Governor Newsom signed a bill that effectively reversed the court ruling. For more, see: UC Berkeley lawsuit decisions may affect Arcata too (Did UC Berkeley bring in more students than they’d promised?) and A clash over housing pits UC Berkeley against its neighbors.)
During depositions of the “Berkeley v. Berkeley” court case, it came out that the City of Berkeley calculated that UC Berkeley costs the city roughly $21 million per year in services and infrastructure charges. Prior to 2001, UC Berkeley had been paying just $1.8 million per year. This was raised to $4.1 million — but in a separate lawsuit citizens are saying that this is still not an appropriate amount.
“An Alameda County Superior Court judge has ruled that UC Berkeley abused its discretion when it failed to study the impacts of increasing its student enrollment by 33.7%. — and told the university it must do a more comprehensive review.”
See below for articles on the 2021 Berkeley situation and As College Grows, a City Is Asking, ‘Who Will Pay?’ from 2027 about Santa Cruz.
This is the lawsuit that may be interesting for Arcata.
Why should the City of Berkeley get paid $4.1 when the cost to them is $21 million — about $17 million more than they are being paid?
And the same questions exist here in Arcata.
- How much does Cal Poly Humboldt pay the City of Arcata for water, sewer, and stormwater services?
- How much does Cal Poly pay for the costs of police, fire, and emergency services that arise from having 6,000 students living here in Arcata — and possibly increasing to 12,000 students?
- Is the university contributing to the City’s infrastructure and maintenance costs?
The articles
UC Berkeley will more than double what it pays the city under new settlement agreement
July 2021
Berkleyside News
By Frances Dinkelspiel July 14, 2021
www.berkeleyside.org/2021/07/14/uc-berkeley-payment-settlement-agreement
Original story, July 14 UC Berkeley will start paying the city of Berkeley about $4.1 million a year for its use of city services, more than doubling the $1.8 million it paid until recently.
Over the course of the next 16 years, the payments for fire, police, emergency services and the oversight of the health department should top $82.6 million, according to broad terms of an agreement between the two entities.
In exchange, Berkeley will withdraw from two lawsuits it is involved in, one over the university’s 33.7% jump in student enrollment and plans to build a new academic building for the Goldman School of Public Policy (known as the Upper Hearst Project) and one over the development of volleyball courts at the Clark Kerr campus. Berkeley also agreed not to file a lawsuit over the new 2021 long-range plan and environmental impact report UC Berkeley recently prepared.
Berkeley has also agreed not to oppose the Anchor House project, which will add 772 beds but involve the destruction of eight rent-controlled units, or a project for about 1,200 beds planned for People’s Park.
The proposed settlement does not require UC Berkeley to build a specific number of beds for its students nor does it propose an enrollment cap.
UC Berkeley must review impact of student enrollment increase, judge rules
July 2021
The ruling comes as the city and Berkeley are nearing an agreement on issues surrounding payments, housing, and enrollment.
Berkleyside News
By Frances Dinkelspiel July 13, 2021
www.berkeleyside.org/2021/07/13/uc-berkeley-student-enrollment-increase-ceqa
An Alameda County Superior Court judge has ruled that UC Berkeley abused its discretion when it failed to study the impacts of increasing its student enrollment by 33.7% — and told the university it must do a more comprehensive review.
While UC Berkeley did follow CEQA properly while analyzing how a new academic and housing project for the Goldman School of Public Policy would impact the environment, its examination of how student growth would impact housing in Berkeley, noise, and uses of city services was “legally insufficient,” Judge Brad Seligman wrote in a decision handed down Friday. UC Berkeley had argued in a supplemental draft environmental impact report that it did not study the impacts of the enrollment increase because it was not a “project” per se like constructing a building.
A June ruling by the California Court of Appeal found otherwise: “CEQA requires public universities to mitigate the environmental impacts of growth and development,” Seligman noted.
Phil Bokovoy, the plaintiff in Save Berkeley Neighborhoods, one of the two lawsuits that Seligman ruled on, said the judgment has huge consequences for UC Berkeley.
“It’s a big deal,” said Bokovoy. “They will have to build housing or reduce enrollment — those are their only two choices,” he said.
UC Berkeley, however, had an entirely different reaction to the judge’s ruling, which is not final. “Overall, we are pleased with the court’s findings,” Dan Mogulof, a university spokesman, said in a statement. “We do not anticipate this ruling will have an impact on future enrollment or requires us to analyze past enrollment increases.”
Going forward, UC Berkeley will have to study the physical impacts of enrollment growth but not the social or economic ones, according to UC Berkeley’s interpretation of the judge’s ruling, said Mogulof.
Tom Lippe, the attorney representing Bokovoy’s group, Save Berkeley Neighborhoods, said Mogulof’s words are “PR, just boilerplate legalese.” CEQA does not require a body to study the social and economic impacts of a project.
“The court is requiring them to analyze the impact on housing, meaning the displacement of people,” said Lippe. “They have to go back and study the impacts.”
Save Berkeley Neighborhoods and the city of Berkeley have 10 days to draft an order on how UC Berkeley should comply with the judge’s ruling, said Lippe. That is just the next step in the process. After UC Berkeley performs its impact analysis, it may lead to certain steps, like a reduction of enrollment, said Lippe.
City Council to consider broad settlement with UC Berkeley
The city of Berkeley and UC Berkeley are in final negotiations of a settlement, however, that could put to rest for now how the university will pay for the impacts it has on the city, according to a number of sources who asked not to be named. The city council will discuss the settlement, which has not been made public, and could vote on it as early as this week.
The proposed agreement apparently addresses a number of points of tension that led Berkeley to file a suit against UC Berkeley in June 2019 about the increased student enrollment. Those tensions — around the campus population, the university’s inability to house the majority of its students and its use of city resources — resurfaced this spring after UC Berkeley released a new long-range development plan and environmental impact report that charts its course through the 2036-37 academic year. The university has just finalized those plans and the UC Board of Regents will vote on them next week.
UC Berkeley is not paying for city services currently
The city of Berkeley and UC Berkeley currently don’t have a working agreement between them for the university’s use of city services. It lapsed a few months ago after the terms of the 2005 long-range plan lapsed. UC Berkeley has been paying about $1.8 million annually for its use of Berkeley’s fire, police, emergency and public health services. Berkeley now contends that the actual cost is around $21 million a year, a number that UC Berkeley disputes.
Berkeley has long complained that UC Berkeley does not provide enough housing for its students. In fact, Cal provides the lowest percentage of beds of any campus in the UC system. In the last long-range development plan approved in 2005, UC Berkeley said it would build about 2,500 student beds, but has actually constructed half that number, Berkeley pointed out in a scathing response to Cal’s future plans.
UC Berkeley’s new LRDP states that it will build 11,200 beds in the next 15 years. Two projects, the Anchor House project on University Avenue and Oxford Street, and one on People’s Park, are in the planning phases and will create about 1,900 beds. But as Berkeley pointed out in its response to the LRDP and draft EIR, there are no consequences if those beds are not constructed. In addition, that will still mean 70% of Cal students won’t have university-provided housing.
Residents decry ‘non-transparent process’
Numerous citizen groups plan to address the city council this afternoon and the Board of Regents when they meet on July 20-21. They are concerned that the city of Berkeley is committing itself to a settlement with UC Berkeley without allowing public input. This is a repeat of 2005 when Berkeley and UC Berkeley also reached a financial settlement behind closed doors, some critics contend.
“This nontransparent process disenfranchises Berkeley residents from knowing the details of what will have long-term consequences for our city,” Harvey Smith, a member of People’s Park Historic District Advocacy Group, which opposed the university’s plan to build housing on People’s Park, wrote in an op-ed for Berkeleyside.
A number of groups have allied themselves and set out terms they think Berkeley should demand from UC Berkeley. The Southside Neighborhood Consortium, a collection of neighborhood groups, has asked that UC Berkeley contribute $10 million annually to pay for city services and agree to a “legally enforceable cap of student enrollment that is tied to UC Berkeley’s production of student housing and mitigation of traffic impacts,” among other demands. More than 1,000 people have signed a petition put forward by a new group, Berkeley Citizens for a Better Plan, stating that Cal must adjust its growth goals to make them better for city residents.
Under state law, UC Berkeley, as a state institution, does not have to comply with city law. Other cities in California, notably Davis, San Diego, and Santa Cruz, have gotten the UC campuses in their cities to agree to enrollment and growth terms mostly through the courts.
Whatever agreement Berkeley and UC Berkeley make won’t affect the neighborhood group that just sued Cal and has won other CEQA cases, said Lippe. It might not satisfy the judge’s ruling either, he said.
“A settlement between UC and the city of Berkeley does not inherently satisfy the judge’s ruling,” said Lippe. “Only a new analysis done by CEQA satisfies the judge’s ruling.”
Follow the money (or lack of money) in the settlement deal between Berkeley City Council, UC Berkeley
August 2021
The Daily Californian Op-Eds Friday, August 20, 2021
By Leila Moncharsh
Leila Moncharsh is an attorney who represents Berkeley Citizens for a Better Plan, a group that opposes UC Berkeley’s 2021 Long Range Development Plan.
What did [Berkeley Mayor] Arreguín get in exchange for this concession? Not much. UC Berkeley promised to increase its voluntary contribution payments from about $1.8 million per year to $4.1 million per year, but that amount is still only a small fraction of the roughly $21 million per year city officials have estimated UC Berkeley costs the city in services and infrastructure charges. That $17 million gap will only get wider once UC Berkeley begins its planned expansion set out in its Long Range Development Plan approved by the UC Board of Regents in July, which the city agreed not to oppose in the settlement.
What’s worse, unlike taxes, which go into the general fund, UC Berkeley’s promised contribution payment is restricted and will be used on services and projects that largely benefit the campus, such as “wildfire risk management and fuel reduction on UC owned property” and improvements near the campus where the university owns property. The settlement also gives UC Berkeley some spending oversight, and if the campus does not like how the city spends its funds, it can stop paying.
The biggest problem with the settlement is its unequal enforceability. UC Berkeley gets the benefit of the bargain up front — all city lawsuits are dismissed and an enforceable bar to future lawsuits by the city challenging its development plans is implemented — while the mayor and City Council get an all-but-unenforceable promise to pay. This bar on future lawsuits is fully enforceable against the city even if UC Berkeley stops paying the $4.1 million, increases undergraduate enrollment to an extraordinary number and/or builds 30-story towers on Clark Kerr Campus, just to name a few possibilities. By giving up its ability to challenge UC Berkeley’s expansion plans in court rather than setting conditions on that bar depending on the campus’s performance under the agreement, the city gave UC Berkeley little incentive to comply. Why in the world would the City Council agree to that?
As College Grows, a City Is Asking, ‘Who Will Pay?’
January 2007
SANTA CRUZ, Calif. — For most of the last 40 years, this eclectic seaside city and its University of California campus have lived in relative harmony. With its beaches, bistros and relaxed intellectual vibe, Santa Cruz has long held an allure for those seeking a mellower college experience, a place where hiking trails, yoga mats and surfboards are as common as backpacks filled with books.
Santa Cruz’s appeal has made it into one of the most popular of the University of California’s 10 campuses. But this, in turn, has recently led to a deep rift in the cozy relationship between the college and the city, with accusations of bad faith, voter referendums and nearly a dozen lawsuits pending or in the works.
At issue is an ambitious proposal for a campus expansion, approved by the university’s Board of Regents late last year. It promises to transform the landscape and image of Santa Cruz, 75 miles south of San Francisco, from a relatively small undergraduate university into an internationally known institution, with new graduate schools, an elite faculty and hefty research grants.
The plan calls for increasing enrollment over the next 14 years by 30 percent, to 19,500. The university also intends to add 1,500 faculty and staff members, and several new professional programs and research centers. Redwood trees would have to be cut down to make way for some of the construction. [Note: Total increase = ~6,000 people.]
“This plan allows us to continue the upward trajectory that has characterized U.C.S.C. over the past decade,” the acting chancellor, George Blumenthal, said in a written message to colleagues after the Regents approved the plan.
But local officials and residents in this city of 55,000 say campus growth has already changed the small-town feel of Santa Cruz, driving up housing costs, forcing out families and straining the infrastructure. Taxpayers often end up bearing the cost.
“The fact is, we don’t have the water, we don’t have the transport, we don’t have the housing,” said Don Stevens, 54, a graduate of the university who lives here and is a member of the Coalition for Limiting University Expansion, or CLUE, a plaintiff in several pending lawsuits. “If the university is going to grow, they should pay their way.”
University officials say campus growth is part of a legislative mandate to educate every eligible high school graduate in California. Some also point out that the university system is not obligated to answer to its host cities. Under the state Constitution, the University of California is deemed “entirely independent of all political and sectarian influence” and exempt from local land use controls and local taxes.
Campuses do pay for the services they use, like water and for on-campus repairs but not necessarily for building new infrastructure.
And the university’s tax-exempt status can be costly. For example, when Texas Instruments, which was paying $186,000 a year in [property] taxes, shuttered its Santa Cruz division, the university later bought the space.
“The property tax went to zero,” said a member of the Santa Cruz City Council, Michael Rotkin, a Santa Cruz graduate. “It may mean paying jobs, but the city tax base is losing” money.
The university’s independent status has been a recurring theme in disputes between campuses and cities around the state. But a state legislative report released this month may foreshadow change. The report, by the nonpartisan Legislative Analyst’s Office, cited “a lack of accountability, standardization and clarity” in how the university deals with the effects of its growth throughout the system.
“We don’t object to university growth, per se,” said the Santa Cruz city attorney, John G. Barisone. “What we do object to is the university taking steps to grow without having mitigation measures in place to counter the impacts.”
The university has argued that it is each city’s responsibility to establish a plan for a campus to help pay for infrastructure costs associated with expansion. But the legislative report found that “no U.C. campus has been able to reach such an agreement with a neighboring jurisdiction,” and therefore no campus has made a fair share payment, the report said.
Santa Cruz officials said that despite dozens of meetings with the university about its growth plan, no agreement had been reached. So the Council decided to try a new tactic, placing two measures to limit the campus’s growth on the November ballot. Each was approved by more than 75 percent of the vote.
One of the measures requires the university to pay not just utility bills for city services, but also a contribution toward the cost of building infrastructure, like water or transit systems. The other one requires voter approval before the city can extend services to university buildings outside city boundaries, as is called for under the expansion plan.
Citizen groups, the city and the county have filed lawsuits to block the university’s expansion unless it provides specific solutions to possible problems acknowledged by the university. The university, in turn, has countersued, including a legal challenge to the validity of ballot measures developed by a city that, as the Constitution states, has no authority over the state campus. The suit, intended to block or invalidate the city measures, also claims the city would breach long-term water contracts if it withheld service.
University officials said they had made many concessions to the city, including a decrease in proposed enrollment, which had originally been set at 21,000 students, and cutbacks in construction. A lawyer for the university, Kelly Drumm, said it was not legally required to describe its plans further.
“We think our environmental report was prepared in a legally adequate manner,” Ms. Drumm said. “It adequately reflects the needs of campus and community.”
In interviews with about a dozen students, sentiment over a campus expansion was divided. Michael Fisher, 18, a freshman from Los Angeles, said he had voted for the November ballot measures.
“I came here because I liked that the campus was small,” Mr. Fisher said. “A lot more growth will change the nature of the campus. We already have too many students.”
But Bokhtar Ehsan, 21, a senior majoring in business, said the city had “no right to be mad” over university growth.
“None of the local people complain when they charge ridiculous rents or when we spend tons of money downtown,” Mr. Ehsan said.
City leaders in Santa Cruz have promised to fight until they win. They said they were heartened by the legislative report and by a California Supreme Court ruling last July in a case addressing similar conflicts between the City of Marina and the California State University at Monterey Bay, about 40 miles south of Santa Cruz. Reversing an earlier Court of Appeals decision, the high court ruled that the university was required to mitigate significant environmental effects of an expansion project and negotiate fair share agreements for the cost of infrastructure improvements.
“There is no way we are going to back down now,” said Mr. Rotkin, the Council member. “We can’t afford to walk away. Ironically, it’s cheaper to fight than to pay millions to remedy the negative impacts.”
From the December 6, 2023, City Council meeting.
Agenda item “Potential Tax Measure for November 2024.” Report by City Finance Director Tabatha Miller.
1:15 in the video to 2:10. About 55 minutes.