If you have watched Davis City Council Meetings for the past several months and certainly longer, one gets the impression that there are seldom consequences for policy actions and in particular policy decisions made by council, as though we can balance the budget in a manner that is fairly painless to the community.
The reality now is that the failure of the council to achieve the targeted cash savings has immediate and very serious consequences for city services.
This explosion of employee compensation was fueled in part by the real estate boom that kept property tax revenues soaring and also a sales tax increase of a half-percent that added an additional $3 million. That latter was to go for increased services and instead went almost entirely to salary increases for the highest compensated bargaining group in the city – the firefighters.
Unfortunately, while the city targeted $1.25 million in savings from the new bargaining contracts, they only reached perhaps $825,000. Moreover, the lateness of negotiating the contract agreements meant far less savings. Couple that with a downward revised sales tax revenue and the city has had to backfill the gap by dipping into its reserves.
The result is that the city is looking to close an additional $1.7 million gap, with a portion of that going to restore the 15% reserve and around $1 million to close an ongoing structural deficit. That structural deficit exists because of the failure of the city to achieve the needed savings from the employee bargaining contracts on a continuing basis coupled with the continued sluggishness of the economy.
The result is what is advertised as a major organizational restructuring. But that phrase too is largely smoke and mirrors. The staff report lays it out:
“Recent attrition of several executive and management-level positions, combined with vacancies maintained through selective hiring freeze implemented over the past 18 months provides an opportunity to explore extensive restructuring options, and staff-level reductions.”
At last night’s workshop, there were some questions that were asked with regards to this point, but the suggestion from staff was largely that the city could absorb these cuts with minimal impact on the public.
The staff report at the end, admits that there will be “a reduction in the capacity of the organization to meet the needs and expectations of the community – at least in comparison to the levels of service and responsiveness enjoyed prior to the need to implement extensive budget reductions, beginning in FY2008/09.”
When Councilmember Lamar Heystek pressed staff on the issue of who will be laid off, both City Manager Bill Emlen and Finance Director Paul Navazio were evasive, suggesting that it was too soon to tell who and how many would be laid off.
Moreover Councilmember Heystek pressed city staff on public safety cuts. It is interesting to note that city is counting on staff reductions to the fire department as a means for balancing the current budget. I point this out, because these very staff reductions to the fire department were supposedly to be used to offset the increased cost of a battalion chief model to be implemented by the city at a later point in time. They cannot have it both ways, except they are doing exactly that. It appears they are using the cost savings for two separate and distinct functions.
Because of the length and complexity of the material presented on Tuesday, we want to have several different discussions here. Today, we are looking at the broad overall view of the budget. We will in the coming days look at the pension issue and unfunded liabilities, which are in the view of many, myself included, a ticking bomb. And from the looks of things, that bomb could be far worse than we anticipate.
The bottom line in this discussion is that the city failed through the bargaining process to achieve the needed savings. Due to that failure, there are additional cuts being made, that means that service to the taxpayers is being cut because the city failed to control costs to employees which represents 71% of its general fund budget.
The city is dodging questions as to how much of an impact this will be on city services, but commonsense tells you that when 35 positions are cut, there will be huge impacts to the public unless the city was extremely inefficient in its operations (which it probably was).
Thus far there has been no accountability by the city for policy failures and no acknowledgment of the consequences for these policy failures.
All of this makes this city council election extremely important. It is fair to say that the balance on council is at stake. The public may have the opportunity to elect two new councilmembers who are not beholden to city employee groups especially the firefighters and upper management who cost the city the most money in unsustainable retirement benefits per employee. In the coming weeks, hopefully we will find out who those candidates are and what they plan to do.
—David M. Greenwald reporting
“The fact of the matter is that the city is saving money not through some sort of organizational restructuring but primarily by permanently deleting vacant positions. How many positions are being deleted? Try 35 between last year and this year.
At last night’s workshop, there were some questions that were ask with regards to this point, but the suggestion was largely that the city could absorb these cuts with minimal impact on the public.”
If cutting 35 positions won’t have a significant impact on the public, then why did we have the 35 positions in the first place?
“The staff report at the end, admits that there will be “a reduction in the capacity of the organization to meet the needs and expectations of the community – at least in comparison to the levels of service and responsiveness enjoyed prior to the need to implement extensive budget reductions, beginning in FY2008/09.””
In other words there will be cuts to services – the previous statement to the contrary that there will NOT be a significant impact on city services by the 35 cuts is doublespeak. The city cannot have it both ways.
We have previously had the city put services it could no longer provide placed in an “unmet needs” category, then have it pronounced by the city there is a “balanced budget”.
We have had the city divide Parks and Community Services into two departments, with people getting promotions out of it, and told this was a “cost savings”. Now we are being told these same two seperate departments must now be combined into one for a cost savings. The city has no credibility when it comes to the budget – NONE. Frankly, I don’t believe a single word they say when it comes to the budget – and with good reason.
Mark my words, frills will be saved (in the form of fat salaries to mgt, etc.) while basic city services are cut – to achieve the following:
1) Make the taxpayer hurt by cutting basic services;
2) To ensure the proper atmosphere is created for renewing/increasing taxes to keep paying for the frills.
An interesting development-
San Carlos is on the verge of outsourcing both Police and Fire. Fire to CAL Fire and Police to the County Sheriff.
[i]”If cutting 35 positions won’t have a significant impact on the public, then why did we have the 35 positions in the first place?”[/i]
That is a good question.
One thing which is important to keep in mind, even when positions just go unfilled or are erased upon the retirement or transfer of an employee, is that someone–hopefully someone who was really doing a job which was necessary–is out of a job because of that decision.
In other words, when we eliminate an open position, the person who needs a job and who would have taken the job had it not been penciled out is 100% s.o.l. That is not just a theoretical loss of income to that person. It is a huge financial hit to him or her.
Yet “saving money” by keeping 100% (or in the case of Davis, 105%) of our compensation packages intact for everyone else in the city–everyone else whose hours were not drastically cut back, that is–we are pursuing a top-down approach which serves the best interests of our highest paid employees and harms people at the bottom. The $200,000 a year (total comp) fire captain keeps all of his money in this “pro-labor” arrangement. The $65,000 police department patrolman who is never hired is s.o.l.
It is very much like Greg Kuperberg’s complaint about Measure J: the people who have the power and have the best positions already are being selfish, saying to everyone else who does not own a home or has not yet moved to Davis: “Screw you; we got here first.” The patrol officer who gets laid off or gets his hours cut by 25% or never gets the job because it was penciled out in order to fund a $150,000 a year pension for someone who gave generously to members of the city council has no say in the vote which screwed him over. By contrast, the high-priced fire captains, deputy department heads, department heads, et al., who make the big money and have tremendous influence over their contracts, completely ignore the interests of the workers left out in the cold.
[quote]An interesting development-
San Carlos is on the verge of outsourcing both Police and Fire. Fire to CAL Fire and Police to the County Sheriff. [/quote]
It should be said that though Calfire/CDF would probably save city money in a number of ways, their unique work schedule (72hrs on, 96 off) and lower pay would make it nigh impossible for the city to fight off union opposition. That’s not to say it hasn’t happened before.
Another recent example of outsourcing is Atwater, CA.
In the Davis Enterprise a couple of weeks ago Bill Emlen and Paul Navazio stated that the state of California is responsible for raiding our city of $ 32 million dollars ! Perhaps this has caused a money flow shortage .
Rich Rifkin ,
The $65,000 police department patrolman who is never hired is s.o.l.
Is this $ figure total compensation ?
Shouldn’t that also be ” police officer ” just incase it was a woman ?
[i]”The $65,000 police department patrolman who is never hired is s.o.l. Is this $ figure total compensation?”[/i]
You make a good point. On one I noted total comp and on the comparison just salary. My bad.
For cops, I didn’t bother to look up the numbers, but (since you posted that) I have now. The starting salary for anyone with the title, “Police Officer” is $67,998. The total comp for that job is substantially higher when you include cafeteria benefits and pension benefits paid by the city.
Watch out folks! The next public service to be outsourced – privatized – will be public water services, including drinking water and wastewater treatment/sewer services. Veolia Environment has public-private contracts with many cities around the Bay Area and is always prospecting for new opportunities to return profits to their investors/shareholders and pay CEO and management salaries. However, the City of Petaluma recently terminated the contract because of problems with service.
A contract with a private for-profit multinational water services corporation will certainly lead to increased rates for residents, but “the City” will make savings.
Shouldn’t the community/residents be allowed a choice and to vote on whether our public water services are “outsourced?” I think so! In other cities, for example Akron, Ohio where city residents voted on a ballot measure, a long-term public-private contract was rejected at the ballot box.
[i]”Watch out folks! The next public service to be outsourced – privatized – will be public water services … A contract with a private for-profit multinational water services corporation will certainly lead to increased rates for residents …”[/i]
Do you also suggest we end our city garbage contract with Davis Waste Removal, which is a private company, and instead have city employees take out the trash? If so, how about the city contracts with Coast Landscaping and G.P. Landscaping, which maintain half of our greens in Davis?
“In the Davis Enterprise a couple of weeks ago Bill Emlen and Paul Navazio stated that the state of California is responsible for raiding our city of $ 32 million dollars ! Perhaps this has caused a money flow shortage . “
That’s occurred first of all over a long period of time and a lot of it recently came from redevelopment, not the general fund. How much of this year’s deficit can be attributed to state raiding money? How much of it is due to the fact that we simply did not cut enough in last year’s budget?
Looks like Saylor and Amandson both realize the ship is sinking and are getting out while the getting is good. Poor Souza will be the only one left to do the ‘splaining of the decisions made by the Gang of Three.
After watching this Council meeting it appalling to me to hear that city workers who HAVE been doing their jobs competently have been targeted to be laid off. Meanwhile, former Director of Community Development Katherine Hess, who is directly responsible for causing the NewPath lawsuit to the city gets a job transfer as a Community Development “Administrator”. Why hasn’t she been fired or laid off? This is supposed to be a “new and improved reorganization”? Whose idea was this to simply “transfer” an incompetent upper level staff person who has cost the city (i.e. us, the taxpayers), financially, in a BIG way?
Katherine Hess incompetence goes beyond the NewPath debacle. Hess has alienated the community in a number of planning disasters including her leading role in the city’s betrayal of the Chiles Ranch neighbors Memorandum of Understanding. Why on earth is Hess not being fired for the NewPath disaster and the millions she has cost us in the mismanagement of the affordable housing program when she was in charge of it? Eliminating her position would save the city around $100,000 or the city could save two or three lower level staff jobs of city workers who are needed.
We need to preserve the jobs of the lower level staff and fire the incompetent management staff such as Katherine Hess. This situation begs the question, why is City Manage Bill Emlen firing the good city workers and protecting the incompetent upper level people like Hess? If Emlen as the City Manager can’t get this right, then HE needs to be fired.
Surely, Rich, you are being facetious about garbage collection. But, just for the record: yes, Davis Waste Removal is a private company and, does the city every request competing bids on this contract?
[i]”… does the city ever request competing bids on this contract?”[/i]
I don’t think so. I believe it is a no-bid contract with built-in inflators.
I have no problem with DWR. I think they do a good job. However, I do know we pay in Davis about 20-25% more than people do in Woodland and West Sac. (I researched this once for a column I never wrote.) What I don’t really know is how good the service is in those places and if we are getting more services they don’t receive.
What does not make sense is to have more than one garbage company in Davis. I happen to know this because my brother owns a home in a city (much larger than Davis) which has (I think) five or six competing garbage companies. Homeowners, once a year, each choose which service they want and they pay that company to pick up and haul away their garbage. The companies compete on price and the result is lower costs to homeowners. But that lower monetary cost comes with a secondary problem–six days a week one or another company’s noisy garbage trucks come rambling down your street or alley making a ruckus and spewing exhaust. The trucks skip all the houses they don’t have a contract with and stop here and there where they do have a contract. … I think it’s worth the peace and quiet to pay a bit more for just one visit a week.
Like a lot of municipal provisions — water, gas & electric*, cable TV, etc. — garbage is a “natural monopoly.” It might make sense for that to be a publicly owned monopoly; or it could be better if it is private. The most important thing is that the folks who are negotiating on behalf of the ratepayers are not bought and paid for by the monopolist or the workers for the monopolist.
*For the record, I was strongly in favor of joining SMUD. I don’t know if the state PUC which regulates the prices is corrupt — it would not surprise me if they were — but the evidence is pretty strong that MUDs provide power to their customers for less everywhere in California than the private utilities do. Once you know that, you would have to be crazy, as a ratepayer, to not prefer having a MUD sell you your electricity. (One factor, not widely known, as to why the MUDs have cheaper electricity is because they get first dibs on all the electricity produced by federal water projects. That electricity is far, far cheaper than electricity produced by natural gas or other fossil fuels or by wind, solar, nuclear, etc.)