City Needs To Solve Its Fiscal Problems First Before Going to the Taxpayers for a Renewal of Existing Taxes
At the risk of sounding somewhat well… Republican, there is something to this at least from the standpoint of local government. It is really not that I am opposed to new taxes, it is that there needs to be some incentive for the city to negotiate hard this with the various bargaining units. Let us back up a few steps first here.
If done correctly, the city can use the short term problem to give them the leverage to fix the longer term problem. However, that remains one gigantic “if.” The temptation is going to be for the bargaining units to attempt simply to hold off on the tough decisions until the economy improves. So many of them will likely push to simply extend the current contract. The city must fight hard against that urge.
At last week’s city council meeting, it became clear that neither the council nor city staff wanted to raise or impose any new taxes in the near future to solve the city’s growing problem of unmet needs. While I agree with that approach, it does not solve the city’s problems either in the short term or the long term.
Instead they have suggested that they will simply place the current taxes back on the ballot. That would include an extension of the Parks Tax, which is a parcel tax requiring two-thirds vote and an extension of the half-cent sales tax.
In order to get the sales tax on the ballot for a vote in June of 2010, they would need to have it ready by January 2010. To me that gives the city nearly one year to get their house in order. Because if they do not get their house in order, for the first time in my life I will not only oppose a new tax (which I did previously with the Parks tax), but I will actively work against the tax. I will get a group of citizens together, we will walk precincts, we will raise money, and we will run a campaign opposing a new sales tax.
In other words, the city will have to run a tax against organized and financed opposition.
Honestly, I do not want to do this for a variety of reasons. First and foremost, despite rumors to the contrary, I simply have better things to do with my time. Moreover, I actually believe there are vital services that the city offers and will not be able to do if they do not have that tax revenue. Frankly the services I would least like to see cut will be the ones that go if the tax revenue disappears.
On the other hand, we need changes and we need to give the city leverage to make those changes. Right now the residents of the city of Davis, many of them do not realize the peril that their city is in. Although as I talk to more and more people at Farmer’s Market, it becomes clear that many are aware of these problems.
The city needs to negotiate hard on behalf on the citizens to fix these structural problems that loom.
First, it needs to be made clear, city employees are not the targets of this. The real concern is the rise of top-end salaries. If you look at the list of 100K jobs for the city of Davis, most of them are public safety employees and most of those are in exactly one department–fire.
The city needs to hold the line on the top end salaries. City Manager Bill Emlen showed good faith by not taking a raise, we need a wage freeze across the board for top end employees.
Second, we need to change the way we finance our pensions. We get another opportunity here with the problems that PERS is facing and the fact that city’s are going to need to cover a higher percentage of the yearly contributions because the fund is running a deficit due to drops in the Stock Market and some bad investments.
The city needs employees, especially those on the top end, particularly those getting 2.5% at 55 and 3% at 50 to contribute to their retirement pensions. If we do that, we do not need a two-tier system that most public employees and their unions deem unfair. And if we do that, the city will face much less risk in the future from the rising costs of these pensions.
Third, and this falls mainly on the fire department, we need to change the way we deliver these services. We are one of the few municipalities that uses four-men teams to fight fires. And we don’t often fight fires. The vast majority of the calls are for medical emergencies. Why are we sending in four-men fire fighting teams for medical emergencies? If you ask the fire department, in part, it’s because if they get another call, they need all of their equipment and manpower. But the result of this practice is inefficiencies and a waste of money.
I’m not going to try to come up with the answer. That is for the fire department and city staff to do. However, that is a lot of money for not as much service as we are led to believe.
In addition, there has long been a push for a fourth fire station. That is something that we can look into when we fix the staffing situation. I think an innovative approach here can save the city money and also enable the fire department to get the tools they think they need to be effective.
But in order to be effective these other things have to be solved first. We have a window of opportunity. Everyone is going to have to give this year. We have a chance to fix some of these problems because of the unfortunate situation with the economy.
If the city knows that the public will not support a tax measure without fixing our fiscal health, the city will have the leverage it needs to get a more favorable agreement from the various bargaining groups.
Once again, I want to reiterate this. People have used this opportunity to attack all city employees. The majority of city employees are making $60K or less–which is not a whole lot given the cost of living in this city. The problems are really on the top end. In better times, I would be absolutely supportive of the average city employee getting a pay raise. Unfortunately these are not good times. However, these employees are not part of the larger structural problem. They do not deserve to be attacked or disparaged in this process.
The bottom line again is that the city has the opportunity to hold the line and fix some of its longer term fiscal problems as it tries to deal with its shorter term budget deficit. Hopefully they will use this time wisely.
—David M. Greenwald reporting
Amen brother. I will walk the precincts with you! I was talking this issue with a bunch of friends the other day and they also understood the severity of the issue, and how strong the urge to cover it over and push the issue forward will be. They all agree we should take on the structural problem now while we can. I hope the city council chooses to do the smart and right thing for the long term financials health of the city.
I love parks, I care about this city and the tax would cause me no pain- but I wholeheartedly agree with you. A little restraint is in order.I feel strongly that a volunteer fire department is the path to the future for Davis- it would result in a profound cost savings and a refocusing of effort on fighting fires instead of trying to create work to justify salaries.Folks who say that safety is at risk should read the statistics from other cities that have taken the same approach. It works.
Freezing top salaries is not enoough-we created a salary structure for a diferent time. we need to be looking at saalry reductions for those making over 100,00- in total compensation. Regarding the fire department I agree we should return to 3 person engine companaies and revisit whether we should have emts to respond to medical rather than fire companies. Also we should look at whether we could privatize the fire department and save significant money. the police need to be government employees since they need the power of the state to do their jobs. there is no such need in fighting fires.
David:I will bring a voter registration card right over. Welcome.Matt Rexroad662-5184
Thanks Matt.7:36:I disagree. This needs to be looked at as a cost-containment strategy long term. Basically if you hold the line on the top salaries, you can get the rest in order. The city can afford to allow lower and middle employee salaries to grow at a rate that keeps pace with inflation. Once you go below that you put people making $60K at an extreme disadvantage, they won’t be able to keep up. Now in the short term, we probably have no choice, but over the next 10 years, I see no way we can hold the lower and middle salaried people below the rate of inflation.The key is at the top end, do not get into the bidding war with neighboring cities over management level employees. Contain costs on the retirement end which have been explosive. Restructure the staff. If we do all of that, we’ll be okay long term.There is one other factor that should be at least considered, local communities would benefit greatly from some sort of universal health care plan, rising health costs are also eating away at city coffers. That’s a more macro situation though.
Without some numbers to back up your ideas, they appear nothing more than another attack on upper management.Please show us the cuts by the numbers and what savings it would produce.
He never said cuts.
We should elect fiscal conservatives to city council. Next year is going to be an interesting election- how many taxes will be on the ballot and will Ruth and Lamar be running for re-election? I wonder how bad the budget situation will still be in June 2010 and will people vote with their wallets this time?
The federal government could encourage volunteerism by incorporating procedures to stimulate it. In particular, the IRS could allow a deduction against earned income using the formula: no. of hours volunteered X minimum wage. Such an innovation would encourage an all-volunteer fire department (as Mike Hart suggested), could give hope to our stressed out City Manager as he tries to balance a our tight City Budget, and would reward the tax-paying families of Davis who volunteer. Allowing people to keep more of their hard earned money through volunteerism is change I can believe in!
Why stop with an all-volunteer fire department? Why not just make ALL city employee positions volunteer, think of the money that would save (ha-ha). Seems everyone wants to pick on the fire department these days (no I am not a fireman!). A while back someone mentioned the potential increase in homeowners insurance if the fire protection rating for Davis is decreased based on a volunteer fire department (a tax of sorts, just paid to a private entity). Maybe we should cap the total compensation for individual city employees to a percentage of their base salary (thus limiting the extraordinary gross annual salaries we see for some). Overtime may be necessary in some instances, but at least spread it around. Maybe we just need ti hire another person at base salary to work those …overtime hours at base pay versus time and a half wages.
I kind of agree with Jon here, right now just looking at ways to save money, I think staffing is a good start.Although it was interesting talking to a councilmember from Minnesota, they have something like four times the service calls we get and use an all-volunteer fire department, although they have professional management. I would suggest it is at least worth examining. I can’t imagine they have a greater risk than we do.
I have often been a lone vote to contain high-end employee costs. However, PLEASE keep in mind that the impact of the proposed combined water-sewer project on our tax/rate payers is orders of magnitude higher than would be the effect of any plausible restructuring of employee compensation.Costs must be contained at every level, but primary focus should remain on our water/sewer project costs and attendant rate increases, or we will be pricing many Davis residents out of their homes.
Matt,Maybe you should bring a voter reg card to Sue as well.
The tax measures are the time to correct various city government issues. I am going to take a wait and see position until this fall.However, in defense of fair salaries for city staff, I don’t think many voters know how hard staff work on nights and weekends to service the city council and commissions. Having sat through so many meetings for four years, I know it takes countless hours to get ready for each of them, attend til late night, and do the follow-up for days after. The more senior staff work much longer hours than the 40 for a std work week.
speaking of taxes,apparently Obama thinks the best person qualified to be head of the IRS is someone who doesn’t pay any. stroke of genious.
Sue: …PLEASE keep in mind that the impact of the proposed combined water-sewer project on our tax/rate payers is orders of magnitude higher than would be the effect of any plausible restructuring of employee compensation….As horrible and pork-laden as I believe the (phony) stimulus bill is — see my column in tomorrow’s Enterprise for why I think that — one section of it may affect our local costs for a water project.This comes from the CBO analysis (see page 7): …Title VIII would appropriate a total of nearly $15 billion, including nearly $8.4 billion for the Clean Water and Drinking Water State Revolving Funds (SRFs). Under both programs, EPA provides grants or …seed money… to all 50 states plus Puerto Rico to capitalize state loan funds used by local governments to build water infrastructure projects.If Davis receives …seed money… for a water project, it sounds like the Feds would be picking up half the cost.
Sue doesn’t want river water or a bigger sewer even if Obama pays for it because it facilitates growth.
Lexicon Artist: I did the math when the stimulus figures were first announced, and unfortunately, the aid is unlikely to make a dent. $8.4 billion for the entire country. Davis’ project estimate: around $.5 billion. The percentage of people in the country who live in Davis?According to the L.A. Times (Jan.30), …The House bill would also provide California with $435 million for clean-water projects, such as those aimed at preventing beach pollution….Our Davis project alone is estimate to cost that much.Little hope for help there.
…The city needs employees, especially those on the top end, particularly those getting 2.5% at 55 and 3% at 50 to contribute to their retirement pensions….So that no one is confused by what David wrote here: ALL City of Davis employees in the 3% at 50 plan* contribute the maximum amount allowed by law (9% of their salaries) for their pensions. By contrast, no one in Davis on the 2.5% at 55 plan pays any part of his pension.CalPERS divides the payments into agency share and employee share. The employee share for 2.5% at 55 is 7% of an employee’s salary. In Davis, the taxpayers pay that plus the agency’s share.* Cops and fire are 3% at 50; everyone else is 2.5% at 55.
The water project is just a developer-driven dream to soak the Davis and Woodland rate payers for a source of water for massive new urban development in Yolo County. Even if the Federal Govt paid all of it, don’t be fooled.
Lexicon Artist: The City gave the 3% at 50 employees — police and fire — a 9% raise, so really the City pays those employees’ 9% PERS contributions. No one should think that fire and police are somehow more …generous… than the other employees.
I predict Lamar and Sue will continue to say …no… to lavish employee contracts when they come up for renegotiation. Will Ruth make it three? Don’t hold your breath…
And what is wrong with developers building houses Mike? Why is it okay for you to build but not someone else?
Mike: …The water project is just a developer-driven dream to soak the Davis and Woodland rate payers for a source of water for massive new urban development in Yolo County….Which developer are you thinking of? I had a conversation about this with the biggest developer/manager of rental properties in Davis and he told me he thought the idea of bringing in surface water was …a bad one… because of the expense. You may have other information about other developers. However, I think it is kind of weaselish to scapegoat …developers… as if they, as a group, are behind this idea.Anon 8:42You’re right. However, that was a long time ago. Since that 9% raise (voted in by Mike Harrington, I believe), they have had many more increases in salaries, year after year. In the current firefighter contract, which expires June 30 of this year, firefighters received an increase in pay of roughly 37% since July, 2005. Police got an increase about half that in their contract which is a year behind.–Rich @ Lexicon Daily
I predict Lamar will continue to say …no… to lavish employee contracts when they come up for renegotiation.I don’t see this happening…. I like Lamar as a person but when has he ever really put his foot down on something…
Trust me you don’t have to worry about it. The only question is whether Sue and Lamar can get a third vote.
Hey blog boy sounds like you got some politicians in your back pocket !!!………Trust me you don’t have to worry about it. The only question is whether Sue and Lamar can get a third vote……….Looks like your corrupting the system .
This is a test