Image by Ian Britton.

With one notable exception**, new, high tech, high growth companies aren’t looking to locate themselves in The Canyon. Most of the building stock in The Canyon is old and starting to get dilapidated. It’s missing most of the infrastructure that can be found in newer buildings, especially the IT networks that any modern company needs to be competitive. These older buildings aren’t as energy efficient as newer buildings, and often times they can’t handle the power load that newer companies require for their operations. Finally, these older buildings are simply ugly, most companies that are focused on the future (i.e. tech companies) want to be located in buildings that are new and fresh, not stale relics from a bygone era.

Unfortunately, developers are not interested in redeveloping The Canyon, it simply does not make financial sense to do so. It is easier and cheaper to build new office and industrial buildings on virgin land, where there isn’t the added cost of demolition of the existing buildings. Companies can locate their offices in Irvine and other south county cities and still pull from the same pool of job candidates as they would be able to in Anaheim.

The City of Anaheim needs to find a way to encourage developers to demo existing buildings within The Canyon and rebuild newer, more modern buildings. The only way to do this is to make The Canyon as valuable place to build as the Irvine Business Complex. The City of Anaheim needs to find a way to offset the demolition costs so developers build new buildings in The Canyon.

One way the city could help offset the demolition costs is by waiving building plan check and permitting fees for any property owner who pulls a demolition permit for their entire property and whose new building can be developed by right, meaning that they don’t require any General Plan Amendments, Zone Changes or Variances to build their proposed building. Putting this policy in place would ensure that more new development would happen within The Canyon and that the new development would fit in with the planning department’s vision for The Canyon.

Many people would say that this is nothing more than a handout to the developers, or that the city can ill afford to be giving away potential revenue when the budget is so tight. However, without these incentives, little new development will take place in The Canyon. This policy would be an investment in Anaheim’s future, ensuring higher property values (and more tax revenue) in The Canyon, and providing new jobs for Anaheim area residents, which will have the secondary affect of raising home prices and additional tax revenue.

The City of Anaheim has been doing a lot of good work to encourage businesses to locate within The Canyon. However, the city needs to fully realize the competition it has for those businesses and understand why they are not moving to Anaheim. The only way to get companies in new and growing industries to locate in The Canyon is if new development comes to the area and that will only happen if the developers can make as much money building in Anaheim as they can in Irvine and south county. Waiving building plan check and permitting fees is one good investment that would level the playing field between Anaheim and its competing cities.

* There will be a community workshop to discuss the specific plan and get ideas and feedback from the community. It will be held on February 15th from 4 to 6 p.m at the new Kaiser Permanente medical campus located at 3450 E. La Palma Aveune.

** The City of Anaheim was able to convince Fisker Automotive, a manufacturer of high end electric sports cars, to locate their headquarters in The Canyon. Unfortunately, it seems as if Fisker’s main reason for locating in Anaheim is that the real estate is relatively cheap, at least compared to much of Irvine and south county. Fisker is currently in a cash crunch, even having to lay off 71 workers earlier this month.

In reviewing the votes of the Anaheim Planning Commission over the past several years, you’ll start to wonder why we have any zoning regulations at all. Every time a developer goes before the commission for a General Plan Amendment, Zone Change or Variance the planning commission will grant the change or waiver the developer is seeking. The General Plan and zoning regulations are important tools any city has to guide their future development. By allowing developers to change that guidance at their will, the City of Anaheim is indicating that it’s not interested in where it goes in the future.

By contrast, the most economically successful city in Orange County, Irvine, has an unbelievable set of rules that are enforced with vigor. This has been especially true since Irvine recruited a number of people from Santa Monica into their planning department a few years ago. Irvine’s success has attracted many large and successful companies that pay top wages, especially in technology. Not everyone wants to live in a hyper-planned community like Irvine, but it is where people want to work and companies want to locate.

The path that Anaheim has set itself on ensures that many businesses will want to locate within the city. Unfortunately, they’re the wrong type of businesses. Anaheim is currently attracting businesses that have very low margins and are looking for any advantage they can find to improve their bottom line. They are willing to give up on nice buildings and smooth roads because they simply don’t have the money to afford to locate in a nicer area. Unfortunately, these are the same businesses that tend to have lower wages.

The City of Anaheim shouldn’t discourage any type of business to establish itself within the city. However, it should try to specifically attract companies that will offer high wage jobs even if that means some of the lower wage paying companies don’t end up locating within the city. Anaheim could attract companies like Blizzard Entertainment or Linksys into its business corridor, as Irvine has done, if it enforced planning guidelines and invested in beautifying and enhancing the roads and right-of-ways.

Anaheim is currently in a race to the bottom, but we seem to be racing against ourselves. We need to stop relying upon a doctrine that says less regulation creates economic growth and realize that one of our neighbors is eating our lunch by having more regulation than any other city in the county. The only way to attract good paying jobs into Anaheim is by creating a place companies want to call home. The only way to do that is by creating and enforcing rules ensure Anaheim is a desirable place to do business, that it looks nice, has low crime and a quality transportation network.

A few weeks after making my initial Anaheim Anytime request, I received a call on my cell phone from somebody saying they were with the City’s transportation department. They were calling about an email I sent and wanted to get some more information. Of course, I hadn’t sent an email and had no idea what the person I was talking with was talking about. I tried to ask for some clarification but had difficulty cutting into to this person speaking a mile a minute. Eventually I deciphered that the call was about my Anaheim Anytime request and we started to move on.

Now, if you have AT&T as your cell phone provider and live in Anaheim Hills, you’ll know that the cell service isn’t the most reliable. After a frustrating forty seconds on the phone, my phone started to cut out. I tried asking for a phone number to call her back, but it was too late, she could no longer hear me. And yet, I could still hear her, because as she was hanging up the phone, I heard her say to someone else, “That asshole hung up on me.”

Over the years, I’ve come into contact with many city staff members through my work, as a member of a city board, and simply as an engaged resident. Never before had a city employee spoken to me in anything but a respectful and professional manner. And it turns out that a city employee still hasn’t spoken to me in anything but a respectful and professional manner. Unfortunately, the City Council has decided to outsource many of the job from within the city to private companies. The person I was talking to about my Anaheim Anytime request happened to be an employee of one of these private companies.

There is no doubt that, over the long term, government employees are expensive. Mostly due to retirement benefits. To put this retirement benefit into perspective, it’s useful to look at the present value of their pension payouts. In other words, how much money would someone need in the bank today to retire with an annual income similar to what a government employee makes from their pension?

Let’s say that the retirement income in $40,000/year is current year dollars. Let us also say that the average inflation rate is 4% per year and that the income is taxed at 25%. Finally, let’s also assume you can get a return on your investments of 2% above inflation. Given these assumptions, a retiree would need $8 million in the bank to get the same type of income government employees make from their pension. Eight million dollars is a lot of money, more than most people save for retirement. In fact, to save $8 million, it requires putting away $130,000 per year over a forty year career (assuming it grows 2% above inflation and is tax free.)¹

The appropriate way to look at a public employees compensation is their salary plus $130,000/year in retirement benefits.

So we can see that public employees are expensive over the long term, and when you’re just looking at the bottom line it makes sense to try to outsource as many job functions as possible but in doing so we also lose a certain amount of quality in the work preformed by government.

Dead-weight loss is a term that normally refers to the affect taxes have on a standard supply and demand curve and describes the inefficiencies that come about through taxes. Because of taxes, producers make less profit on sales, so they produce less while purchasers have higher prices so they buy less. The relative burden on producers and purchasers is determined by the slopes of the supply and demand curves. Outsourcing jobs, as Anaheim has done, produces a perverse dead-weight loss, an inefficiency, that behaves just like raising taxes.

Instead of a tax bringing the quantity of goods produced down, the profit the private companies extract from their contracts with the city behaves in the exact same way that a tax would. Anaheim is paying a certain amount for services and instead of all of that money going to the people who are actually preforming the services, as it would if they were city employees, some portion of what the city is paying is being diverted towards profit for the companies it contracts with.

The end result of this type of dead-weight loss is that the city is unable to get the same amount of services as they would if they spent the same amount of money on city employees.

In the end, Anaheim is left between a rock and a hard place, but there is a way out as demonstrated over the past few years by the Anaheim Union High School District: negotiate with the public employee’s unions. Anaheim residents and tax payers are not getting the quality and quantity of services that they’ve paid for due to the city outsourcing many government jobs.

The public employee’s unions want to keep the number of employees high, the more employees they have the more power they have. They should be willing to negotiate on pay and retirement benefits in order to stop the outsourcing of government jobs.

Unfortunately, the current mayor and city council seem to have no interest in negotiating with the employees and their unions and instead have worked hard to outsource as many jobs as possible within the city. While outsourcing these jobs might help the city’s finances in the long run, doing so also severely decreases the quality of services residents receive when interacting with Anaheim “staff”.

Besides transportation, the biggest reoccurring theme on this site so far has been civic participation in our governance process.  The City of Anaheim’s boards and commissions are a great way for regular people to get involved in the City’s decision making process. Each board makes recommendations to the City Council regarding a small range of issues.  The thought behind the boards and commissions is not only does it get more residents involved in the process, but the board members and commissioners are able to spend more time than the City Council members are able to and hopefully provide recommendations that are the best thing for the city.

Finally, in my post two months ago, Public Meetings the Public Can Attend, I said, “One way the city can [increase public participation and engagement] is by holding public meetings at a time the public can attend.” At tonight’s meeting, it looks like the City Council is prepared to make our boards and commissions do just that. The City Council will be discussing the times that public meetings are held in order to “provide an opportunity for public participation.” Unfortunately, the staff report for this item recommends waiting to make any changes until the City Council decides whether or not it wants to combine the Budget Advisory Commission, Investment Advisory Commission and the Senior Citizens Commission. However, I see no good reason why combining these three commissions should hold up a directive from City Council that all boards and commissions should meet no earlier than 5:30 or even 6:00 pm.

The staff report indicates that this is a change that Mayor Pringle has initiated.  It is clear, based on the Planning Commissions previous history discussing this issue, that he will face some opposition in this discussion.  Hopefully there will be enough residents that see how this benefits them and their ability to influence what happens at City Hall who decide to show up to support the mayor.  He is likely to need the support.

Fiscal Year 2010/2011 Budget Hearing
First and foremost, is the continuance of the City’s budget hearing from the May 18th meeting. This portion of the City Council meeting is starting at the abnormally early time of 2 P.M. As has been mentioned here before, it’s important for the City to hold public meetings the public can attend. Most people aren’t able to get off work early enough to make a two o’clock meeting.

Especially in these tough economic times, the City’s budget is one of the most important issues the City Council must decide on. While I understand the challenges of making these meetings at a time everyone can attend, since it makes the meetings end so late at night, it’s important to allow the greatest participation from the City’s residents to provide input on budget issues.

Exclusive Negotiation Agreement with Uptown Anaheim, LLC
Currently, a parcel of land on the northwest corner of N. Anaheim Blvd. and W. Lincoln Ave. is for sale by Pacific Bell. Bill Taormina, through Uptown Anaheim, LLC, is currently in escrow for the property for $6.55 million. The Anaheim Redevelopment Agency is proposing to take over Uptown Anaheim, LLC’s position in the transaction and purchase the site for itself. Along with that, the Agency and Uptown Anaheim, LLC would have three years to negotiate a Disposition and Development Agreement for Uptown Anaheim to develop the Agency owned land.

Quite simply, I don’t understand the value that either party, Uptown Anaheim, LLC or the Anaheim Redevelopment Agency, gain in this transaction. The staff report says, “The Anaheim Redevelopment Agency would like to ensure the Site is developed consistent with the Redevelopment Plan and the General Plan.” A developer would need to request a zone change and general plan amendment if they wanted to build something that is not consistent with the current Redevelopment Plan and General Plan. These changes would need to go before both the Planning Commission and the City Council.

The Anaheim Redevelopment Agency already owns a number of parcels along Anaheim Blvd that are either vacant or under-utilized. The Agency’s money would be better spent on improving the land it already owns instead of buying an economically viable site that a developer would be happy to build on.

Revitalization of the Avon/Dakota Neighborhood
Of all of the neighborhoods in Anaheim, Avon/Dakota needs the most help. A while back, Dakota was the most crime ridden street in all of Anaheim. The Anaheim Redevelopment Agency is looking to shift some money to help revitalize this neighborhood.

This revitalization comes at the perfect time. Directly adjacent to the Avon/Dakota neighborhood, the City is looking to build an affordable housing development. These two projects, along with Colony Park directly across South Street, will make a significant impact and will improve the neighborhood substantially. This is a great investment because it will be able to leverage the improvements that are already happening around this neighborhood.

Affordable Housing Agreement for the South Street Site
Near the beginning of the year, the Anaheim Redevelopment Agency issued a Request for Proposals to build an affordable housing development on a site the Agency owns on South Street. A number of developers submitted proposals, including my employer, but the Related Companies put together one that was really great and therefore the Agency selected them to develop the site.

Not only does the proposed design fit in well with the neighborhood, they’ve also committed to doing some improvements in the neighboring Avon/Dakota neighborhood. As I mentioned above, this will allow for some synergies between the work the Agency and Related are doing and improve the “bang for the buck” that the City is expending.

November Ballot Measures
The Anaheim City Council is looking to amend the City’s charter in a couple areas. Charter amendments must be decided upon by the voters as a whole, so the City Council is looking at putting two such measures on the ballot in November.

The first item is a ban on all red light traffic cameras in the City of Anaheim. Many cities have been using these types of cameras as a way to raise money. There is no evidence that suggests these cameras make motorists any safer, and even some evidence that they cause more accidents than they prevent. This ballot measure will ensure future city councils aren’t able to take the easy way out of budget crunches by creating new fees on motorists.

The second item is to allow design-build contracts for public works projects. Under a design-build contract system, the contractor both designs and builds whatever needs to be built. This is different from a design-bid-build contract system where an architect or engineer designs something that is then bid out to contractors who then build what was designed.

There are some advantages and disadvantages to design-build vs design-bid-build. The advantages are largely cost and scheduling. Much of the time, design-build is both cheaper and faster than design-bid-build. The downsides are that there is less oversight of the contractor and normally less design skill from the contractors engineers.

What it comes down to is that design-build is great for things that are fairly basic and are built all the time. Things like roads and utilities are perfect for design-build. There is no reason the city should be paying more or wasting time being confined to a design-bid-build contracting system for public works projects that are done every day.

A couple of months ago this very question came up before the Anaheim Planning Commission.  The Planning Commission is one of the two most impactful commissions in Anaheim after the City Council itself.  Many important decisions are made regarding Anaheim’s future built environment at Planning Commission meetings.  It is absolutely vital that community members be able to attend and have their voices heard without having to miss work to do so.

Unfortunately, when the Planning Commission addressed this issue, they decided no to move the time of their meeting from the mid-afternoon.  While two of the commissioners did support the move, the other five offered a range of excuses for not wanting to change the meeting time.  Most loudly heard, commissioners did not want to take that time out of their private lives to serve the community.

With that type of attitude towards public service, these commissioners should be removed from office.  It is clear that they are putting their personal concerns over the public good, which makes me question why they agreed to serve on the Planning Commission in the first place.  The City Council should make an effort to stress the need to have these meeting in the evenings.  If the Commission does not voluntarily change their meeting time, the City Council should pass a policy, or even propose a charter amendment, that requires all public meetings to begin after 5:30 pm.

First, I do plan on continuing to post here.  I know there hasn’t been any new content in nearly two months.  Thankfully, this has been because I’ve been very busy at work.  In this economy, all work is good work, even when it pulls me away from my hobbies a bit.  There have been a few interesting things going on in Anaheim over the past two months that relate directly to the topics addressed on the site.  Over the next few weeks I’ll be circling back to address those.

Secondly, I don’t want to make this into a political blog.  If you want to talk politics, about who’s running for what office, the latest dirt on the candidates, or whatever else you’re interested in, there are plenty of other sites to read that type of information.  To me, that petty, partisan politics is boring.  While there are definitely candidates I support, I’m going to continue to focus on policy and a vision for Anaheim that everyone can get behind.

Please continue to look forward to new posts here.  I promise, I’ll continue to envision Anaheim’s tomorrow so we can start working on it today.

There hasn’t been anything of note in either the City Council or Planning Commission agendas over the past few weeks. However, there are two items of interest in the agenda for next Monday’s meeting.  The first is a proposal Mayor Pringle first announced at the State of the City last month to refund half of all city sales tax on large purchases.  The second is a zoning code amendment to help minimize the opportunity for graffiti in Anaheim.

Item #10 – Providing a partial rebate of local sales tax to encourage and promote major purchases

If approved, this new program called the Anaheim Purchase Initiative (API), will provide a rebate on all purchases over $20,000 made in Anaheim. The City of Anaheim receives 2% of the price of goods bought in the city as its portion of sales tax. API will refund half of its share of the sales tax, 1% of the purchase price, back to the buyer. The net affect for buyers will be a 1% reduction in the cost of goods in the City of Anaheim.

This program is a bit of a gamble, even the staff report says there is an unknown impact on the City’s general fund. The logic behind API is that businesses will take advantage of this program and start spending money now instead of waiting until the economic recovery is more established. In other words, this will move spending up and hopefully jump start new growth for Anaheim businesses. The risk is that companies will take advantage of this program now instead of spending money later. If Orange County faces a double dip recession, API might not spur the medium-term growth and renewed economic vitality that is hoped for.

Even knowing that API is a gamble, this is a good proposal.  If we do suffer a double dip recession, and Anaheim doesn’t see the returns on investment that might be expected from this program, all that will be lost is a bit of tax revenue.  An amount that will be a drop in the bucket considering the entire size of Anaheim budget.  However, if we’re truly coming out of this recession and this program is successful, this will spur growth in Anaheim, buoy its employment base, and in the long run increase the desirability of Anaheim as a place to live and work.  This, in turn, will raise property values and property taxes, which will increase the City’s general fund many times over the cost of this program.  API has its risks, but they are risks worth taking.

Item #15 – Zoning amendments relating to various anti-graffiti measures

Over the past couple of years, Anaheim has been cracking down on the graffiti throughout the city.  The City itself has the Anaheim Community Anti-Graffiti Effort and residents have made Anaheim Beautiful much more active in combating graffiti.  Now, the City is working on finding ways to change our built environment to discourage graffiti.  While I’m a big proponent of using design to change behavior, this specific proposal is too narrow in scope.

First, there is this change:

.020 Landscape Maintenance. All landscaping, including parkway landscaping, shall be maintained in a neat, healthy and clean condition. A regular maintenance schedule shall be submitted as part of the landscape and irrigation plans. Any dead or diseased plant shall be immediately removed and appropriately replaced in accordance with the requirements of this chapter. All pruning or trimming of required trees and specimen trees shall be in compliance with the standards for street trees adopted by the International Society of Arboriculture, and consistent with Chapter 13.12 (Street Trees) of the Anaheim Municipal Code.

If I’m reading this correctly, if a plant next to a wall or fence dies, the property owner will be forced to replace that plan with a non-deciduous vines or shrubbery to cover the wall. It doesn’t matter if the vines or shrubbery fit in with the overall landscaping of the property, or if the wall has been a target for graffiti, the property owner will have to comply with this section of the zoning code or be at risk of being cited for being out of compliance with code.

I do understand designing new developments to address the problem of graffiti and even to work towards reducing the amount of graffiti on existing buildings.  But this proposal seem onerous and expensive for Anaheim’s property owners.  This code amendment imposes a one-size-fits-all approach to addressing Anaheim’s graffiti problem.  There are many ways of changing the existing built environment to reduce graffiti.  The City of Anaheim needs to explore other alternatives for property owners.  Additional vegetation on walls and fences is just one solution to this problem, it is not the only one.

Over the past few years, many of the cities that are still expanding geographically have been building into their infrastructure a recycled water system, often referred to as a purple pipe program on account of the color of the pipes used. A purple pipe program both reduces demand for new water and increases the supply of water. Water from the purple pipe is used only for irrigation and a few other indoor uses, since it’s not considered potable (although in truth, it would be perfectly safe to drink.) But irrigation is one of the biggest uses of water, so reducing the use of “clean” water for this single purpose can have a huge impact on the overall demand for water.

Unfortunately, Anaheim is not still growing geographically. For the most part, we are a built out city. Anaheim has a huge challenge to build a purple pipe program simply because it will require the retrofit of many streets to add the new pipes. It would be cost prohibitive to build the type of large purple pipe systems that Irvine has built in their newer areas. Instead, Anaheim needs to build smaller systems that can serve limited areas and later be connected to one another to form a larger system.

To this end, later this month the city is planning on starting construction on a Water Recycling Demonstration Project at City Hall. This project will take waste water from in and around City Hall to provide not only irrigation but also water for toilets and urinals within City Hall West. In the future, this system will be able to provide reclaimed water for nearby developments and parks that have been designed to use reclaimed water.

The Waste Water Demonstration Project is a perfect example of how the City of Anaheim needs to identify future needs and implement solutions today for those needs. The lack of water will only grow in future years. Small scale purple pipe systems are the only way forward for Anaheim, and the City is out to prove it’s possible.

One goal that Anaheim Public Utilities should try to advance is the creation of distributed power generation throughout the city.

First, what is distributed power? Most of our electricity comes from large centralized power plants. Coal, nuclear and hydro-electric plants, such as San Onofre and the Hoover Dam, are where the majority of our electricity comes from. Distributed power, on the other hand, is a large collection of smaller electric facilities located much closer to where the electricity is used. The most recognizable is rooftop photovoltaics, or solar. However, solar isn’t the only way to produce distributed electricity. There are also micro wind turbines that would work very well in Anaheim Hills and The Canyon.

There are many advantages to distributed over centrally produced electricity. Distributed power is more efficient, resilient and sustainable.

Large central power plants must produce considerably more power than will be used since power is lost when transmitting the electricity over long distances. Because electricity generated in a distributed system doesn’t need to travel as far, for instance from your rooftop to your living room, or to your neighbor’s house, it doesn’t suffer from these losses. This makes distributed power more efficient than centrally produced power.

Another advantage of distributed power is its relicensey. The power grid across America is amazingly fragile. California saw this first hand with the power crisis and rolling blackouts in 2000 and 2001, and then again in 2005 due to a key transmission line going down due to a faulty sensor. And while we didn’t experience it first hand, we saw the wholesale failure of the power grid in the northeast in 2003. While these issues are rare, they will become increasingly common as we continue to tax our power grid and fail to invest in it. Because of Anaheim’s unique position, it’s possible to mitigate these crises with a distributed power system. A distributed system does not have a single point of failure. If the power fails, but you have enough solar on your roof to generate as much electricity as you use, your power will still work. If your neighborhood’s subgrid generates enough power, your neighborhood’s power will still work. And if the City of Anaheim generates enough power within the city, and something happens to the rest of Southern California’s power grid, our lights will still turn on.

The final benefit of distributed power is that it is green and renewable. Fossil fuels, oil and coal, will become increasingly expensive as demand increases and supplies decrease. Most, but not all, distributed power systems are renewable, such as wind and solar. If we build these renewable systems, we will be able to ensure our electric rates stay low even as the price for electricity continues to rise for most of our neighboring cities.

While the advantages of a distributed power system are great and many, so are the hurdles to installing such a system. The biggest hurdle is two pronged: cost. For your average house, it will easily cost ten or twenty thousand dollars. For an apartment complex, a system can be a quarter million or more. This is a huge outlay of money for any home owner.

Coupled with the initial outlay of funds, a homeowner will never recoup their expenses from the savings they would expect to see in their electric bill because of Anaheim’s low electric rates. While some home owners will install such systems in an effort to be green, or because of other financial considerations that make such a system feasible, the majority of Anaheim will choose not to spend the money.

Another hurdle to adoption is the aesthetics of solar systems. While it’s clear that solar on the roof of one of Anaheim’s many historic homes would ruin the character of that house and neighborhood, newer homes can support solar without much problem. As solar becomes more prevalent, we will become accustomed to seeing it and it will therefore be less obtrusive.

Thankfully, there is a relatively simple solution to all of these barriers, although it will be unwanted by many. If Anaheim Public Utilities raises rates a little, not even to the same price as SCE or PG&E, just a little, and then uses that excess revenue to provide subsidies to homeowners who install solar or wind power systems, such systems will suddenly make financial sense. By attacking the cost issue from both sides, the initial outlay of money and its payback period, the city can minimize the burden on homeowners while still improving our power system.