Category Archives: California

From: Willmore Doug
Sent: Wednesday, December 14, 2011 3:00 PM
To: rspackman@chevron.com
Subject: Value proposition

Rod,

As promised, I wanted to send you a short email detailing the use and value of the revenue we are talking about.

The City’s only desired usage of the subject revenue is for infrastructure. We would dedicate the revenue entirely to that purpose.

When I came to the city, I have to say that I was astounded at the backlog of capital maintenance and infrastructure projects there were. For example, the Plunge would not have been allowed to be open to the public in Salt Lake County it is in such disrepair, and I daresay in many other counties and cities in the United States it would not be open either. The street repairs that are behind schedule for being repaved are in the tens of millions. I have a list of infrastructure projects that adds up to $110M. These are not pie-in-the-sky projects like a performing arts theatre or something like that. They are repairing the Plunge, and repaving streets, and expanding the library so that children are not sitting on the floor from 3 to 7 after school.

So, when we talk about revenue levels with Chevron, the city is primarily interested in a dedicated revenue stream that we can use to repay an infrastructure loan.

So, for example, $6M/year of new revenue for 10 years produces about $48M in projects. $6M/year for 15 years produces about $70M in projects. $6M/year for 20 years produces about $88M in projects. Our plan would be to start almost all of these projects immediately – the planning, the engineering, and the construction, so that most, if not all, would be complete in the next three years.

Thus, reducing the time frame of the agreement to 10 years doesn’t work for the Council and they would be likely to take their chances at the ballot seeking $12-16M/year of new tax revenue. 20 years is ideal because it hits most of the deferred revenue list. But, I think they will settle for 15 years as an ideal middle ground – both in length of agreement, as well as amount of new revenue (app. $6M – difference between $4.7M and $10.5M as I proposed). … Continue reading →