UC Davis' proposed on-campus housing development could one day be annexed to the city of Davis.
Leaders from Davis, Yolo County and the university are set to begin negotiations on annexing the proposed development for about 4,300 students, faculty and staff.

A fiscal analysis of annexation has been released by the university and shows the city would lose $336,000 per year, while the county would gain $428,000.

County and city officials say a revenue-sharing agreement between the two jurisdictions must be crafted if the project is drawn into the city's borders.

"All the pieces are there to make it work," said Davis Mayor Susie Boyd.

Some county and city leaders who will negotiate the revenue-sharing agreement have said annexation makes sense for Davis. But leaders from both jurisdictions have said that the annexation cannot go through without such a deal.

Yolo County Supervisor Dave Rosenberg said that he expects county officials will "negotiate hard to ensure sufficient revenues flow to the county."

Also, if the project were not part of the city, its residents could not vote in city elections.

"Essentially they're building a mini-city there," Rosenberg said. "I would think the people living there would identify with Davis and would be surprised if they couldn't participate as voters in Davis elections."

The university has proposed building a 224-acre housing development on agricultural research fields west of Highway 113 and south of Russell Boulevard. The project, which would include commercial businesses as well as an elementary school, is intended to help the university provide housing for an expected influx of new students, faculty and staff.

UC Davis, like other UC campuses in the University of California system, has been directed by UC regents to plan for an increased number of students and employees. The expected enrollment boom, sometimes called Tidal Wave II, comes as the children of baby boomers reach college age.

UC Davis enrollment is 26,000, and the university is preparing for another 5,000 students by 2010. An estimated additional 2,000 faculty and staff will be needed to accommodate the enrollment increase.

Initially, UC Davis proposed a 385-acre development for about 6,850 residents. After harsh criticism from local residents who said the project was too large, officials scaled it down.

The project, however, still has critics who say the university should not build houses on agricultural research land.

"The university took (that land) years ago under eminent domain for its research purposes, and now it's going to build on it," said local environmental advocate Shawn Smallwood. "It's a shame."

Karl Mohr, of the university's Office of Resource and Planning, said he was pleased the fiscal analysis shows that there is enough money for the local jurisdictions if annexation is pursued. Mohr said the tenor of the initial discussions with local officials has been positive.

Mohr and John Meyer, vice chancellor for Resource Management and Planning for UC Davis, know the politics and finances of Davis intimately. Mohr was the city's former finance director, Meyer the former city manager. Both have played key roles in planning the new development.

The fiscal analysis, by the Goodwin Consulting Group in Sacramento, studied potential city and county costs for providing the new community with police, fire and other services. That figure, subtracted from the combined property, sales and other taxes that would flow to the jurisdictions reveals how much the city or county would gain or lose.

The study also analyzed whether the university could provide those services without a fiscal loss if the neighborhood weren't annexed. According to the analysis, the university would have to levy an annual fee of about $950 on each dwelling to pay for the services the city would provide.

Mohr said university leaders want to avoid levying such a large fee.

A Davis city ordinance -- Measure J -- requires voter approval for annexations of land designated for urban reserve or agriculture. That ordinance would not apply to the proposed university annexation because the land is designated as university property in the city's general plan.

Negotiations over the proposed annexation are scheduled to begin in July. UC regents are expected to vote on the proposal in November when they consider the university's long-range development plan. Mohr said groundbreaking on the project could begin next summer.