Written by David Greenwald Saturday, 09 February 2013 06:43
There were, in fact, two really interesting reactions. One was by Mayor Pro Tem Dan Wolk who felt like, and quite reasonably, that he had already cast one tough vote on this.
"We knew at the time it was a very difficult vote to basically move $1 million into the roads and $200,000 into the bike paths," he said. "That was a difficult vote and we knew at the time... that that really wasn't going to solve the problem by any means."
"But seeing this report shows you how really a drop in the bucket it really is," he said. "It's very daunting and sobering to realize and think about where we're going to find this $150 million."
Then there was Councilmember Brett Lee, who has yet to cast a tough vote on the budget.
He said, "I must admit I was surprised and also saddened by it. We come to this job and we know we have to make hard decisions and I was thinking we would get the labor in order, we're going to do certain things and then it's the nice time when we get to make the parks nice and keep the pools open longer and this is like a bucket of cold water."
"But it's the reality that we're faced with," he said.
As discouraging and demoralizing as this reality has to be for the council, they deserve great credit because they did not try to diminish it, they did not run from in it, and while there are tough decisions in the end, we know they will make them.
At the same time, there is a truth here and the truth is that the job of this council has been made much tougher by the lack of action, by the councils that came before them, on so many different issues.
One councilmember on Tuesday simply suggested that there was so much fighting that the previous council never got to address these critical issue. I have to disagree with that - I think they played a much more active role.
We shall compare these two councils on five critical points to demonstrate that this was not an accident and they did not overlook these problems. They simply made the wrong decisions over and over again, and this current council is having to dig the city out of a tremendous hole because of it.
In 2009, Bob Clarke, now the acting Public Works Director, presented a report to council on the issue of the street maintenance contract and the growing budget gap. At that time, it was funded at the $810,000 baseline level. However, that funding level was insufficient and it was reported that current funding would lead to the deterioration of street conditions.
At that time, the funding to address the backlog would require an increase to $2.8 million per year, and full funding to maintain the desired pavement index was deemed to be in excess of $3 million per year.
What did the council do about this? Nothing, and Bob Clarke had virtually the same report in 2010 and even 2011.
What changed? In the Spring of 2011, I was invited to meet with Mayor Joe Krovoza and Mayor Pro Tem Rochelle Swanson. It was a new council, with Dan Wolk recently appointed to replace Don Saylor.
At that time, Paul Navazio, the acting city manager, had put forth a budget that did not address any of the critical retirement issues. And, in fact, there was absolutely zero funding in that budget for road repair.
In addition to having the discussion on PERS (Public Employees' Retirement System) and OPEB (Other Post-Employment Benefits), I warned the two councilmembers at that time of the coming crisis on road maintenance.
They took this warning very seriously, and a few months later when the proposal was developed to reduce employee compensation by $2.5 million, $1 million of that would go to road maintenance.
After two highly contentious meetings, Joe Krovoza, Rochelle Swanson and Dan Wolk would support the budget by that 3-2 vote. Unfortunately, Paul Navazio would never implement the $2.5 million in cuts and by the time Steve Pinkerton had his feet settled after the September 6 meeting and the water vote, it was too late for road maintenance in the next spring.
Council continued the $1 million into the next budget. But, as we know, that amount is insufficient to address the backlog.
Given the rate of inflation and the rate of decay of road conditions, one wonders what would have happened if, in 2009, the council had heeded the warning of Bob Clarke and had fully funded road maintenance. Clearly, we would not be facing this magnitude of a problem.
Budget - Personnel Compensation
In 2009, the city of Davis faced a short-term budget shortfall but long-term liabilities stemming from retirement benefits, including pensions and health, along with a huge amount of unmet needs which included road maintenance. They put forth a budget that projected a general fund savings of $850,000 from labor negotiations with the bargaining units.
In what was a bold move at the time, Councilmember Lamar Heystek attempted to get the city to take a more realistic approach by increasing the number to $1.5 million in his alternative budget proposal.
He also pushed for more realistic revenue projections, whereas the finance director, Paul Navazio, had revenues increasing in the out years. Mr. Heystek either had them flat or decreasing for those years.
However, the council majority ultimately fought back. Councilmember Stephen Souza would present his own alternative, which was a middle-based projection, including $1 million in savings from personnel.
Mayor Pro Tem Don Saylor was downright dismissive and would later criticize Councilmember Heystek, saying he preferred to use Navazio's "real numbers" rather than "making them up."
Mr. Heystek's number would prove far more accurate than Paul Navazio's "real numbers."
The personnel savings that the council actually achieved from the 2009 round of MOUs was far less than the million dollars that Mr. Heystek had to fight for.
It would take two years for the city to take up this issue again. This time with the new council in place, it was not the $850,000 that the city proposed or even the $1.5 million that Lamar Heystek asked for, but rather $2.5 million.
That proposal generated a huge amount of opposition from city employees. 150 of them showed up in June of 2011 on a scorching hot evening where the air conditioning was futile in its efforts to cool the room.
Leading the opposition was Bobby Weist, the union president of the firefighters.
Mr. Weist told the council, "I didn't hear one dime of that $2.5 million going into retiree medical or anything else. I heard it going into roads and other things and infrastructure, nothing else."
While the council was able to pass the $2.5 million in cuts, much of it remain unimplemented as Paul Navazio either actively or passively resisted the cuts, and by the time Steve Pinkerton took over in September he faced a water crisis.
By the time the 2012 budget rolled around, we were looking at not $2.5 million in cuts, but $4 million in reductions due to labor negotiations. And another $4 million in savings from reorganization.
The failures of the 2009 council were magnifying and will continue to magnify.
Getting the council to deal with the looming problems of personnel compensation proved difficult - the amazing thing is that the council majority in 2009 into 2010 not only failed to cut enough on paper, they fell short of even those meager goals.
Worse yet, they tried to "spin" their way out of the problem.
To understand the problem, I can simply pull from a January 13, 2010 column entitled, "Council Majority in Need of a Math Lesson on MOU."
Three years ago, I wrote: "Last night the Davis City Council ratified yet another MOU by a 3-2 vote with Councilmember Sue Greenwald and Lamar Heystek dissenting. The contract with the management group was a small step forward over the firefighters' contract, however, on the whole it fails to deal with the most serious structural issues in a meaningful and sustainable way."
I continue: "The discussion on Tuesday was particularly enlightening, as the Council Majority essentially made three points. First they argued that this contract represents a savings of $744,000. Second, they argued that, while not as much as they might have liked, this contract marks the first time that the council has decreased the size of contracts. Finally, they argue that this contract begins to deal with the structural issues."
The problem was that they were using "phony math" to spin the savings. In essence, the council factored the savings not using the 2009 budget as the baseline but rather projecting the future MOU into the future and calculating the savings by continuing previous pay increases.
So Councilmember Stephen Souza justified his math as follows: "This is a $744,000 savings over what people are being paid right now. What they're being paid in the baseline in salary and all-funds benefits this is a savings of $744,000, that's the math I was taught in school. And that's the math that I see when you add the numbers up. Calculating what is being paid on an annual cost this year, or salary from last year, if you look at 08-09, it was $8,638,000. You multiply that times three you end up with $26,414,000. If you take the contract, all funds, in this MOU, you have $25,670,000. That is a savings of all funds of $744,000. I think that's all funds that we're talking about, not just salaries."
As I noted at the time: "The math I learned in school tells me that $8,638,000 multiplied by three is not $26,414,000, rather it is $25,914,000. You subtract this MOU from that and you end up with $244,000 in real savings over the next three years, not $744,000."
That council had refused to bring in outside negotiators by a 3-2 vote, with Sue Greenwald and Lamar Heystek dissenting, and the result was a series of MOUs that did not deal with the key planks: PERS, OPEB and cafeteria cash-outs.
In the most recent rounds of MOUs, that every bargaining unit except fire and DCEA have agreed to, the city finally was able to do what it needed to do three years earlier. They addressed the issues of retirement benefits, created a second tier for new employees, reduced the cafeteria cash-out from $1500 per month as a maximum down to $500 per month, reduced the costs of retiree medical benefits, and increased the employee contribution for pensions.
For the full agreements and a summary of the changes, see here.
In June of 2008, a Grand Jury report came out that accused the Davis firefighters' union of a number of breaches of the public trust. While the mainstream news focused on the more salacious details of firefighters getting drunk and sleeping it off at the firestation, the core of the complaint was a hostile work environment and retaliation for those who spoke out.
To their credit, the council and city decided to hire then-Police Ombudsman Bob Aaronson to investigate and create a report.
In perhaps the single most appalling vote, on December 9, 2009, the the Davis City Council voted 3-2 to abdicate their duties to the citizens of Davis.
The Davis City Council voted 3-2 not to read the full report that the city, the taxpayers of the city of Davis, had paid for from the independent investigation by the city's Ombudsman Bob Aaronson.
Mayor Pro Tem Saylor said, "We actually employ those two [pointing at Harriet Steiner and Bill Emlen]. Those are the two we employ."
"In terms of policy issues, in terms of behavioral issues that are addressed in a grand jury report, we should hear from the city manager and hear his report. How he has gathered information to arrive at the conclusions and findings that he is going to be presenting to us is his responsibility," he continued.
He added, "Just so that's clear, I'm interested in hearing from the city manager what his conclusions are based on whatever he has done to arrive at them. I don't need to know what exactly was stated by any person, at every point in time."
Councilmember Stephen Souza said plainly, "I don't need all fifty pages, I just don't."
"I don't need to have the 'he said, she said' full story. I don't. I am not in charge of personnel, except for as Councilman Saylor said, we are in charge of two personnel, that's who we're in charge of, we hire and fire them," he added. "That is our main task from a personnel standpoint. When it comes to this matter, I want to know from our ombudsman, through our city manager, how he arrived at his conclusions, and give me the pertinent information so I can come to my conclusions about it."
The decision made by the characteristic 3-2 vote eventually led to Bill Emlen writing a summary of the report that would be presented to the public. The council would be allowed to read a redacted version of the report in the City Manager's office.
It was not until last May that critical portions of that report were released to the public after the Vanguard filed suit and the new council voted 4-1 to release the report, with Stephen Souza still dissenting.
This was simply a culmination of votes that showed the strong influence of the Davis firefighters' union, which spent over $20,000 to install that council majority. Over the years there were critical votes on four-person fire engines, 3% at 50 retirement compensation, the 2004 contract that resulted in a 36% pay increase, and the vote for battalion chiefs that was wrapped in a false guise of cost savings - that in fact resulted from phony numbers. Essentially the cost savings was only produced because of vacant positions, that were vacant regardless, and the battalion chief model would have cost the city another $400,000 but it was never actually implemented after the 3-2 vote.
It would take until last month to undo some of this damage. The city asked interim Chief Scott Kenley to do an audit and in his audit he made recommendations for things like a boundary drop, changes to the response time that have been recommended since 2009, and later this month council will finally address the issue of staffing changes to reduce the number of firefighters per engine to 3.
As we sit in the middle of the water campaign, it is perhaps difficult to appreciate, regardless of whether you favor or oppose Measure I, how much better the proposal is than it was in May of 2010.
The council majority did the present council no favors when it ultimately approved a very modest 5% rate hike in 2010 that was at that time to increase to a 23% increase in 2011/12, and then 20% each of 12/13 and 13/14. At that time they were projecting that the rates would double - now we know those rates will triple.
As we have mentioned, they had no rate study, few community meetings, nothing like a water advisory committee, and they left the heaviest lifting to the current council.
There is no doubt that the current council screwed up when they passed rate increases on September 6, 2011. Rochelle Swanson and Dan Wolk could not get a third vote to do a one-year 10% rate increase and then study the issue more, and so the council passed 14% rate hikes, that really were a lot larger once you took out the 20% conservation assumptions.
It took a referendum to get this right. The result of the referendum was the creation of the WAC, the eventual reduction of the size of the project, and the creation of a much more fair rate structure.
I would have preferred the council finding a way to link the vote to the Prop 218 process.
The voters will now decide on whether they wish to approve the current proposal, but there is little doubt (at least in my opinion) that this is a far better project than it was back in September 2011.
Had the last council had the foresight to have a rate study and a Water Advisory Committee back in 2009, we might be in a better position still.
---David M. Greenwald reporting
"Like communities across the globe dealing with the economic recession, our community has been through a very difficult period of adjustment in the past five years. Our schools and city are confronted with significant structural budget deficits. The Davis Joint Unified School District and City of Davis have cut a number of services affecting our quality of life with talk of more service cuts still to come.
Parcel tax measures and fee increases have been implemented with yet more proposals under consideration to fund remaining services. Deferred maintenance on streets, water, and other vital infrastructure continue to accrue with no clear strategy to address these deficits threatening to further degrade our quality of life. Yet many community opinion makers insist that we must maintain the status quo and abdicate our collective responsibility to effectively address these challenges to our quality of life. The Chamber PAC believes that our community and elected officials must take a more proactive role in this time of uncertainty."
-March 22, 2012 Chamber PAC press release
More from the March 22, 2012 Chamber PAC press release:
"The Chamber PAC has been charged with:
1. Crafting and executing electoral strategies that result in improvement of our members economic vitality and the quality of life for the entire community.
2. Interviewing all council candidates in a debate conducive to properly assessing their grasp of economic matters and the critical role a robust local economy has in fostering a sustainable community.
3. Considering recommendation and possible support of a council candidate or slate of candidates that support the mission of the Chamber.
4. Raising funds to support PAC activities.
5. Forming a broad-based, business community coalition to support these efforts.
Today, David writes of the current City Council:
"As discouraging and demoralizing as this reality has to be for the council, they deserve great credit because they did not try to diminish it, they did not run from in it, and while there are tough decisions in the end, we know they will make them."
-Michael Bisch, Chamber PAC
I cringe every time we reconsider the 2008 fire department investigation and the council's abdication of its duties once its own investigation was completed a year later. (Of the three other city officials/employees complicit in the scandalous episode--the city manager, city attorney and the firefighters' union leader--two are still on board, although justifiably less trusted than before.)
Consider how our differently the city's future might have played out if we'd found out three or four years earlier of this corrupt, anti-democratic relationship and its unhealthy impact on city decisions and finances.
This scandalous episode led to the Vanguard's finest hour so far, which certified the odd debate as Stephen Souza's worst performance while a councilman. It would be interesting to see how Stephen views this unsavory history. How did he got convinced to play a point role in hiding this report not only from the public, but from the council itself? It's likely more complicated than a simple political payoff tale.
David, could you who know all of the story please tell me where transportation dollars came from before the great economic recession of 2008? Also, Before June of last year when was the last Federal Transportation bill?
2008-09 Mid Year Budget Report
City Reduces Staff to Stabilize Budget
City of Davis Budget Summary 2010-2011
Transportation Funding in California 2011
Congress reaches deal on transportation bill, the first since 2005
Lastly do you understand the concept of personal confidentiality? If while getting information from let's say firefighters you tell them in interviews what you are telling me is just for the interviewers use and no one else. Then that information becomes known to the whole world. Do you think any other person will ever trust in the future the confidentiality of blowing the whistle on personnel matters?
Davis generates less than 1/3 the sales tax revenue as does a similar-sized city like Folsom. Davis Target is one of the most profitable. It is clear that the no-growth, no-development, no-downtown competition crowd shares responsibility for the city's lack of funds to keep our roads repaired.
I largely agree with your assessment that the actions of the group ( which I think you portray as far more cohesive than is really the case) certainly do share responsibility for city lack of funds.
There are two issues here to which I take exception:
1) I think your statement fails to separate those, such as myself, who are opposed to rapid population growth
and peripheral sprawl from those ( if indeed there are any) who oppose all economic development. It was
actually DT Businessman and Jeff Boone that helped me discern that distinction.
2) I think you are failing to differentiate "lack of funds" from "lack of funds to keep our roads repaired".
These are not identical. We have City Council members and city staff whose job is to prioritize and spend
our funds wisely. One can make the case that slow growthers such as myself contribute to the overall lack
of funds. I do not think that these individuals area responsible for the possible misdirection of those funds.
The problem is as I understand it, the employees that were subjected to a hostile work environment continue to be harassed and retaliated against according to my best information.
I have a question about this for both Steve and David.
Within my system, if the issue is harassment or the existence of a hostile work environment, it must be resolved completely. If I cannot do this as middle management, I must use the "chain of command" which within my system means that it must go to either the chief of my department or to Human Relations. I do not have discretion on this and cannot promise the individuals confidentiality for these two issues as this must be moved up if not resolved to all parties satisfaction. It is my responsibility to inform them of this at the beginning of any interview.
So now to my question. Is there not a similar "chain of command " within the city ? If their is, where does the
"buck" stop ? If there is not a well identified "chain of command" I would strongly recommend developing a process that is crystal clear and that this policy be made public an be clearly stated to all involved at the beginning of any such investigation for the prevention of future such fiascos and the possibility of potentially very costly lawsuits.
Y'all do not have enough historical perspective. Street, bikepath, curb and gutter maintenance/rehab underfunding has consistently been reported to the CC for about 25 years.
In more recent times there was "stimulus" money and other funding (State/Fed) that allowed the City to rely on the 'outside' funding so that all the "feel-good" (but non-essential) functions of local government services were either spared or expanded.
Compare the reduction in City staff and other material resources, from Street/bikepath/ sidewalk functions, but we still have almost as many Planners, Bike/Ped coordinator, Open Space Coordinator, Affordable Housing, etc. staff and effort as we did 10 years ago, before 'the troubles' [my apologies to Irish-Americans who remember thiose all too vividly].
"I am sorry but I am unable to decipher the significance of your final "Hm", Does this mean you disagree, partially agree or fully agree with the quote that you are Hmmmming after? Could you please clarify?
I'd be happy to clarify, medwoman. If you compare David's characterization of where our community leadership is today to the objectives that the Chamber PAC publicly stated almost a year ago, you can clearly see that we are headed in the right direction. Meanwhile, David and others, even in this thread today, have stated that the Chamber PAC is not achieving its objectives. The naysayers are clearly mistaken, we are achieving our objectives. The CC is most definitely doing a better job of prioritizing, focusing on priorities instead of becoming distracted by lower ranking issues, and matching resources with priorities. Do we still have improvements to make? Certainly. Also from the 3/22/12 press release:
"These efforts are not intended to start and end with the June election. Rather, these efforts shall be ongoing..."
The naysayers can continue to focus on their objectives, whatever those might be, while we focus on ours.
-Michael Bisch, Chamber PAC
Medwoman: The problem in the chain of command as the report makes clear is that any one who complained to the chief had their complaint leaked back to the union president who then could retaliate. It seems that threat prevent most complaints and the members could not simply complain to the city manager and expect any kind of resolution. Not sure if that answers your question, but that seems to be what happened.
Thanks for the attempt at clarification. Unfortunately, I think this may have inadvertently pointed out a major flaw in the way the city conducts business. By "chain of command" I was referring to a process outside of the involved department. The way we structure it is that if an issue is resolved within the department amicably with all parties fully satisfied and willing to document this on paper, then the case is closed. If all parties are not fully satisfied, or if the supervisor feels that someone may be being pressured into agreeing it must always go to an authority outside of the department. It must always go to an authority outside the department if the complaint or even appearance of complaint involves a supervisor. In our case this is Human Relations. There are very strict rules against retaliation against an employee complaint of harassment up to an including loss of job. There is also an anonymous complaint line so that if an employee feels threatened, they can call in their concern anonymously and an investigation will be initiated by HR.
My question was, is there such a system within the city, and if not, why not ?