In 2004, the voters of Davis passed a half-cent sales tax that was supposed to preserve city services from cuts. Instead what we saw is that the $3 million for sales tax went almost directly to a 36% pay increase for firefighters. It did not “preserve” city services from cuts, rather it increased the cost of city services to the taxpayer.
Fueled by the increased revenue from sales taxes and booming property tax revenues, the city went on a spending spree that it will likely pay for for the rest of our lives, obligating tens of millions to people well after they have ceased to work for the city of Davis.
With employee bargaining negotiations off the table until 2013 at the earliest, we are forced to contemplate what life without the half-cent sales tax, an additional loss of $3 million in revenues might look like.
That is the real the problem at this point. It would be easy in a world without consequences to simply vote against the sales tax and teach them a lesson that they will not soon forget. But, without $3 million we will face very real and very difficult cuts.
This gets back to the article a couple of weeks ago on the Measure Q debate between Councilmember Sue Greenwald and David Musser.
Councilmember Greenwald suggested that some people have been happy with the way we make our budget decisions while others are unhappy. “As people know, I’ve been one of the biggest critics of some of our budget decisions. I’ve worked hard to try to get my way.” But she said, “But we’re a democracy and we have the budget we have.” She went on to argue that it is really critical if we want to keep our current level of services that we renew this tax measure.
“If you’re not happy with the decisions that the council’s made,” she said, “the thing to do is run for office yourself or find someone who will vote the way you want them to. Otherwise, as I view it, it’s kind of cutting off your nose to spite your face.”
She said that the current recession has resulted in huge declines in local revenue. Even if this passes, she acknowledged, we will have to continue to cut city spending. However she said, “If it doesn’t pass, the situation’s really dire.”
“We don’t want to destroy the city out of some irritation with some decisions that we might not have agreed with.”
David Musser responded, “The reason that the city is a financial crisis is not because residents are failing to support the city with money, it’s because the city made some really bad decisions. Our residents are starting to pay for those decisions now.”
He was correct on this point, but he also made a fatal flaw in that he could not identify the areas that would be cut if a sales tax did not pass. This basically killed his argument. I can tell you, a number of people were on the fence on this before the debate, but without being able to see the world with $3 million less in money, no one wanted to take a plunge. That includes me.
We have a road system that is not great to begin with and we are looking at trying to get by with less money than it takes to maintain our current fair roadway grade. We have obligations in PERS pensions and the unfunded liability that could siphon an additional $11 million out of the general fund on an annual basis by 2015. I do not think people really understand how dire our situation is because the appearances in the budgets that we are shown do not demonstrate it to them.
At the same time, when I read the staff report for Verona I become alarmed at what I see. We are literally giving away millions of dollars that we could be getting. All of this are one-time monies, which means they cannot be used to fund on-going expenses. However, right now we are using one-time monies for road repairs.
I wrote a lengthy piece today on Verona that you should read thoroughly because you start to see where monies are going.
First, we have Chiles Ranch approved in June of last year, we have Willowbank Park approved in March where the impact fees are down to $3000 to $12,000 per market rate unit. Previously it had been $12000. So we are talking about a reduction of nearly $10,000 per unit. The rationale is that do to securing financing, the economic climate, and the real estate market these projects are not proceeding to the final map or construction and so they are giving away money in hopes of encouraging these projects to come on line.
But the alternative view shows a very different picture. These projects are going to come on line when the market improves. The city is really giving away millions of dollars for projects that will not be built now anyway. And the council majority continues to push for projects and push through development despite the fact that there is no demand for the projects right now out of some pre-September 2008 view of the world.
It is one-time money, but we could be using that to prevent potholes in our streets for the next five years, or perhaps to bolster our reserves.
That brings up the other interesting problems. The supplemental fees are already essentially being spent. The city needs to supplemental fees to do an EIR on a Sports Complex while they want the park in-lieu fees to do enhancements on Mace Ranch Park.
So here we have the situation where the city is cutting back services to the public, they are furloughing workers, they are leaving positions unfilled, they are asking the public to continue to pay $3 million a year for a sales tax and they are increasing the water rates by nearly 100% by 2015. At the same time, they want to continue to fund the same projects they were planning during a different time.
And this is just what we know from a single staff report, how much additional money is out there.
The problem is, all of it is one-time money and none of it adds up to $3 million in ongoing expenses. All of it except for the fact that the city fell half a million shy of ongoing savings through the MOUs, so instead of getting $1.25 million they budgeted in savings last year, they are hoping to get it to $850,000 but they will have to go through impasse to even get to that number.
There are two issues that really burn me here. First, the three members that control council flat out refused to go to an outside negotiator. There were inherent conflicts of interest in the city’s negotiating team. There was the perceived problem of negotiating with the people they would have to rely on to carry out policy. There was the fact that the HR director negotiated on behalf of the city on her own contract and her husband’s contract.
The second issue which is becoming apparent is that there was no transparency in the process. This was plain as day on Tuesday night as the council was hearing things from the DCEA employees that they had no knowledge of previously and were not allowed to ask about on Tuesday night. So the council is basically taking the world of city staff as to what happened, but what if that is not accurate? When are public officials going to learn that when they keep things in the dark, it hurts them because people can make up their own facts if they are not laid out.
Despite all of this, the fact remains that we would hamstring a new council that even by June the majority of whom will have played no part in this mess, as Sue Greenwald voted against the worst of these proposals and the two new councilmembers will be coming in clean. We will spur on huge cutbacks in city services, they will be core services, not the things that you might hope get cut. It is doubtful that the employees will renegotiate their three year contracts and the people who get screwed are the taxpayers and those who rely on the services the most.
This is a mess and the only thing I think we can reasonably do is hope that new leadership, whoever that might be, has the will to try to fix the problems.
—David M. Greenwald reporting
Add to all you said the reorganization that staff has proposed which essentially takes advantage of retirements (which don’t come free to us taxpayers) rather than decide which positions need to go, stay etc. And the glut if supervising titles that was revealed in the discussion was very unsettling. I am not impressed with how city management has dealt with the financial issues in the last few years.
“First, the three members that control council flat out refused to go to an outside negotiator.”
Express your outrage with your vote,but don’t “cut off your nose to spite your face” with a No on Q. Send the message by rejecting the current Council candidate who Saylor-Asmundson have worked to promote. In addition, leave blank or a write-in, if in the district up for election,your vote for the upcoming County Supervisor seat. Send “elected” Supervisor Saylor to the County BOS with the distinction of having won the LOWEST percentage of his district’s eligible voting population ever.
DMG: “So here we have the situation where the city is cutting back services to the public, they are furloughing workers, they are leaving positions unfilled, they are asking the public to continue to pay $3 million a year for a sales tax and they are increasing the water rates by nearly 100% by 2015. At the same time, they want to continue to fund the same projects they were planning during a different time.”
And do you think an entrenched city staff headed by Bill Emlen, assisted by Paul Navazio and Harriet Steiner, is really going to change the way it does business just bc two new people are elected to the City Council? If voters keep caving in by essentially writing a blank check, bc the electorate is afraid to take a strong stand, nothing is likely to ever change… that is just the reality, like it or not.
Before I dive into the issue, I would like to thank Lamar Heystek
for taking a principled position by coming out against measure Q. That being said:
“That is the real the problem at this point. It would be easy in a world without consequences to simply vote against the sales tax and teach them a lesson that they will not soon forget. But, without $3 million we will face very real and very difficult cuts.”
If we further business as usual, we are furthering those consequences and those cuts, especially over the long term. The Vanguard has made a stronger case against Q than anything I could have said in its reporting of the fiscal mismanagement with regard to the employee contracts. If the city is not forced to stop, the money will be thrown away again and future programs will suffer as a result because the resources will be swallowed up with luxurious salaries in future negotiations.
David Musser responded, “The reason that the city is a financial crisis is not because residents are failing to support the city with money, it’s because the city made some really bad decisions. Our residents are starting to pay for those decisions now.”
He was correct on this point, but he also made a fatal flaw in that he could not identify the areas that would be cut if a sales tax did not pass. This basically killed his argument. I can tell you, a number of people were on the fence on this before the debate, but without being able to see the world with $3 million less in money, no one wanted to take a plunge. That includes me.”
I see. in other words, you talked a good game about the fiscal mismanagement that led us into this mess, but when push comes to shove….
My argument is twofold:
1. the city mismanaged the money
2. as a result, the city doesn’t have money for programs.
I don’t see how that argument is “killed” because I cannot wave a magic wand and get the city out of the problem it created for itself. If the city has this kind of control over the purse strings, it will never stop. As a result, we will go bankrupt. The citizens must say no, otherwise more money will be wasted – money we will need to weather the recession.
I find the Vanguard’s stance in favor of Q to be a little strange, especially when I read things like this:
“Originally staff and the Planning Commission called for $1000-$3000 per unit in fees. Perhaps staff received some blow back from our last article and have now modified that to $5000 which would produce $330,000. That would be a net loss of $500,000 for the city at a time when they are in budget crisis and asking the voters to extend a sales tax.”
“Third, what is becoming clear is that the city not only is approving developments during a time when they will not be built, but they are doing so at greatly reduced impact fees. So we are forgoing in the course of the three most recently approved projects millions of dollars for developers to get approval for projects that will not be built in the near future. That is money that should be going into reserves and perhaps to augment things like crumbling road infrastructure. It is one-time money but at least it could buy us two to three years.”
Instead it appears we are set to use money for new projects like a Sports Complex EIR. Perhaps we should accept the fact that we cannot build a sports complex right now in this economic time. Granted this is one time money, but frankly we need one-time money now to do basic city services.
I wonder how much more money we are forgoing that could be used for these purposes. It seems irresponsible of the city to ask its employees to sacrifice, the residents to sacrifice in city services and to continue to pay higher tax rates, while at the same time, council priorities have not changed and they are subsidizing developers to build project that are not going to get built anyway in the near future.
The city that so desperately needs additional sales tax dollars is giving away millions to developers.
Again, the vanguard makes the argument against Q better than anything I could have said.
I find it interesting that you came to the conclusion that I was making an argument for Q. I was not saying I was voting for Q nor was I advocate anyone else do so. I was instead trying to lay out an accurate portrayal or the city’s fiscal situation and what would actually happen if Q failed or passed.
I think you dismiss too easily the fact that if Q fails, someone has to govern the city and without laying out a plan for them to do so, you are leaving that work for someone else. I am passing judgment on that. One of the reasons Lamar, who you expressed appreciation for, laid out an alternative budget last year was to avoid precisely that scenario.
So I believe if you want to intellectually honestly advocate for a no on Q scenario, then you need to figure out how the city survives without that money. You can do whatever you want, but I don’t suspect you will pick up much sympathy from people in the middle, that is what happened at your debate and why I think you lost the debate at that time.
Unlike you, I have looked into scenarios with three million less in money, and none of them look particularly appealing. That’s a problem. And does give me pause.
I think go on and lay out the city’s fiscal situation which I think is far worse than being portrayed and should give everyone pause. Will taking away $3 million make us do better? I just don’t know. That’s where I’m stuck. If you want to determine that from that I’m voting yes on Q, i suggest you are misreading me severely.
I’ve always voted for “Q” and would do so again if I had any reason to believe that the council would do anything other than pass it on to the municipal unions and developers. But I don’t, so I won’t.
find it interesting that you came to the conclusion that I was making an argument for Q. I was not saying I was voting for Q nor was I advocate anyone else do so. I was instead trying to lay out an accurate portrayal or the city’s fiscal situation and what would actually happen if Q failed or passed.
you are correct that I don’t really know what you are going to do at the ballot box. but after reading the following statment, I’m willing to take a wild guess:
“I can tell you, a number of people were on the fence on this before the debate, but without being able to see the world with $3 million less in money, no one wanted to take a plunge. That includes me.”
time will tell though.
“So I believe if you want to intellectually honestly advocate for a no on Q scenario, then you need to figure out how the city survives without that money. You can do whatever you want, but I don’t suspect you will pick up much sympathy from people in the middle, that is what happened at your debate and why I think you lost the debate at that time.”
First of all, the yes on Q scenario didn’t pan out, because the city got what it wanted to begin with, and look where we are now.
second, I’m not sure what you mean by “middle of the road.” it depends on your ideological bend where you think “middle of the road” is. Furthermore, I recognize that my message did not necessarily reach every davis voter. There are a lot of people in this town who don’t follow politics that closely, or read newspapers, or have the internet, but they still vote.
second, the arguments I made against Q and the fiscal mismanagement are the same ones you yourself have made repeatedly on this blog. so I’m not sure where the “intellectual honesty” issue is here.
you rightly point out:
“That would be a net loss of $500,000 for the city at a time when they are in budget crisis and asking the voters to extend a sales tax.”
“Instead it appears we are set to use money for new projects like a Sports Complex EIR. Perhaps we should accept the fact that we cannot build a sports complex right now in this economic time. Granted this is one time money, but frankly we need one-time money now to do basic city services.”
you and Rich Rifkin have also pointed out all of the money wasted on employee contracts, the same arguments I have used.
finally, if the city takes the money and then mismanages it the way they have done in the past (which has been well documented here) the city won’t survive either. Thus you could write a check to the city for ten million, only to see it funneled into big developers, more hefty city employee contracts, only to be back to square one again, with less money in people’s pockets. you may as well flush that cash down the toilet, because you are not “saving the city” with it.
“Originally staff and the Planning Commission called for $1000-$3000 per unit in fees. Perhaps staff received some blow back from our last article and have now modified that to $5000 which would produce $330,000. That would be a net loss of $500,000 for the city at a time when they are in budget crisis and asking the voters to extend a sales tax.”
“The city that so desperately needs additional sales tax dollars is giving away millions to developers.”
here you admit the city is the cause of the problem, not voter approval of the sales tax.
bottom line is if you give them the money, you are trying to cure a major disease by merely treating the symptoms instead of the cause.
I had not heard of this “Sports Complex” project. Where is it supposed to be? Remember when Whitcombe’s “carrot” for one of his early Covell Village projects was some of his “dirt” for a “sports complex”? We all are well aware that Emlen has been a strong advocate of master-planning development of Whitcombe’s property in conjunction with the old Hunt-Wessen property(does Whitcombe now own this as well?). Emlen, as city manager, has not relinquished his personal-ego dream of being the master-planning “zaar” of future Davis residential development.This is all coming to a head now before the current City Council’s political complexion(the majority now being Whitcombe proxies)changes with Krovoza and Swanson being elected and Saylor leaving for the BOS.
I would suggest that Sue Greenwald consider voting yes on this Sports Complex EIR as the 3 votes necessary are all current Whitcombe proxies. This would allow her to bring it back before the Council for reconsideration when the Council make-up changes. This strategy was probably relevant to the Verona “give-a-way” as well.
DMG: “So I believe if you want to intellectually honestly advocate for a no on Q scenario, then you need to figure out how the city survives without that money. You can do whatever you want, but I don’t suspect you will pick up much sympathy from people in the middle, that is what happened at your debate and why I think you lost the debate at that time.”
People I have talked to thought David Musser won the debate! And DPD, you do appear to be contradicting yourself. You either have the courage of your convictions or you don’t. Lamar did, including voting “no” on the overly generous employee packages. Do you honestly think that City Manager Bill Emlen is going to take the $3 million in sales tax revenue if Q passes, and spend it on road repairs? I very much doubt it. I suspect it is much more likely to go towards paying for frills like developing a new Sports Complex…
David:
“I can tell you, a number of people were on the fence on this before the debate, but without being able to see the world with $3 million less in money, no one wanted to take a plunge. That includes me.”
In other words, if I decide to vote against this, I would lay out at least in my head what the city would look like with a 10% budget cut on top of what we have already cut.
But David, the bottom line here is that I agree with you that the city has mismanaged its money – as does Sue Greenwald, the question for Q is whether the city will be better or worse off with less money. We already saw that the current budget deficit was not sufficient to get the council to dramatically change its budget priorities. Therefore, it appears to me the best solution is to change the council and I think we are going to get that in two weeks.
“bottom line is if you give them the money, you are trying to cure a major disease by merely treating the symptoms instead of the cause. “
Actually I think you have this backwards. The cause of the problem has been council policies and leadership at the top. If you believe that changing the money supply will change the policies, I think we have examples of that not being the case. The solution here is what Sue Greenwald posits, changing the leadership. At least that’s a start.
That at least is one argument. I have not seen an argument from you that would explain (A) how the city functions with $3 million less and (B) explains how it would get the city to change its policy.
Elaine:
“People I have talked to thought David Musser won the debate!”
I don’t know who you talked to, everyone I talked to at the event did not believe that is the case.
“And DPD, you do appear to be contradicting yourself. You either have the courage of your convictions or you don’t. Lamar did, including voting “no” on the overly generous employee packages.”
I don’t think things are so black and white. I support what Lamar did both with his no votes on the generous employee packages and his no vote on the renewal of the tax without fiscal change.
“Do you honestly think that City Manager Bill Emlen is going to take the $3 million in sales tax revenue if Q passes, and spend it on road repairs?”
Your question implies that we would be getting an additional $3 million. As you know, the passage would simply keep the level of spending the same, and we know what the budget for next year looks like. So we know the answer to that and do not have to ponder it.
Right now we do not have money for road repairs. We also do not have money to pay probably $7 to $11 million additionally for our pensions. That is money that has already been spent that we will owe.
Where is the three million going to come from? David can’t answer that question. Can you? Because right now it appears that the city failed to cut enough from employee contracts and are locked in to the new agreements for three years.
The only ways we can save money are to cut salaries or cut employees. What we have done so far is the easy stuff, we have taken a bunch of people who have retired or transferred and eliminated their positions and then tried to move people around to cover. That comes with some service cuts, but for the most part, we have cut the fat off the top. Now we’re going to have to do cuts to core services. I don’t know where that comes from, but it’s going to start hurting pretty badly when you want your basic services.
I’m not saying I’m voting for Q, because right now I’m not. But let’s not pretend this is an easy decision to make either.
Am I contradicting myself? Yes I am. You know why? I have competing thoughts and considerations. I’m not simply willing to implode the city because I am angry at the way the last three councils have done business since 2004.
” I very much doubt it. I suspect it is much more likely to go towards paying for frills like developing a new Sports Complex… “
THe city is not going to spend money on developing a sports complex other than the EIR that we have talked about. I have plenty of reasons for opposing it right now, but it’s not primarily a budget issue.
[i]”Do you honestly think that City Manager Bill Emlen is going to take the $3 million in sales tax revenue if Q passes, and spend it on road repairs? I very much doubt it. I suspect it is much more likely to go towards paying for frills like developing a new Sports Complex… ” [/i]
Elaine, that’s not the problem–spending on “frills.” The real problem in the city budget is with employee compensation. That is the beginning, middle and end of the problem.
We are giving every career employee a retirement package worth a minimum of $2 million in Present Value. Our compensation per hour worked is roughly 6-10 times the amount most workers in the competitive private sector get for similar jobs, such as landscape maintenance, building maintenance, janitorial and so on.
We also have a very top-heavy administration, where too large of a percentage of the city’s workforce is paid to “supervise” or “manage” when it is unclear who these second-level administrators are supervising or managing. Every one of these second-level administrators costs us (by my back of the envelope calculation) about $350-$400 per hour of work*, when you account for salary, all benefits, the funded cost of pensions, and the unfunded cost of future retiree medical.
*Note that they don’t work very much. They get 8.5 weeks of paid vacation; and then they retire young.
CORRECTION: “They get 8.5 weeks of paid vacation; and then they retire young.”
They don’t get THAT MUCH paid vacation. That figure includes the 14.5 paid holidays and their lengthy paid vacations.
DPD: “That at least is one argument. I have not seen an argument from you that would explain (A) how the city functions with $3 million less and (B) explains how it would get the city to change its policy.”
let me see if I can understand this. you are criticizing me because I don’t have a plan for the city to throw away millions to developers and lucrative employee contracts (as mentioned here ad nauseam), and still have wads of cash leftover? You are criticizing me because I can’t come up with a plan on how the city can have its cake and eat it too? I’m not allowed to withold wasted tax dollars because I cannot pull a rabbit out of a hat for the city? excuse me, but who’s fault is it that we don’t have this money? quite frankly, I think the money would be better used if it were simply distributed back to the tax payer as toilet paper.
as far as your B argument goes, if the city has to do with less money, they will be forced to make good decisions, not squander $ to developers because there won’t be the safety net they have always counted on. that is how it works.
I will agree with you that we need good council candidates though.
I’m criticizing you because despite all of that we still need to have a functional city.
Rich Rifkin: “Elaine, that’s not the problem–spending on “frills.” The real problem in the city budget is with employee compensation. That is the beginning, middle and end of the problem.”
I agree the real mammoth problem of employee salaries/benefits is the real problem. But so too is the way the city budgets. If there are basics that need to be attended to, the city puts those things in the “unmet need” category and waves a wand and declares the budget balanced. It is this type of voodoo economics that hides the ball that allows the City Manager to declare the city is saving X dollars for implementing the batallion chief model in the DFD. Or saving X dollars in the last round of budget negotiations over labor contracts. To hear Bill Emlen tell it, the city is in OK shape…
Secondly, a new Sports Complex is going to take huge amounts of money to build – money the city does not have. And make no mistake, starting an EIR sets the ball rolling on this project. Furthermore, $5000 here, $680,000 there that the city spends on frills, eventually adds up to a lot of money – money that could have been used for basics like road repairs.
Elaine: As I understand it the city is not going to pay for the complex to be built. The reason they are doing the EIR is they are trying to figure out where to do it. Now personally, I don’t think any of the proposed locations are particularly good options, and I would prefer not pulling kids and sports out of the core of the city where they will have to drive rather than bike or walk.
DMG: “I’m criticizing you because despite all of that we still need to have a functional city.”
No, I think David Musser is criticizing you for assuming that we need to preserve everything in the face of wasteful spending the taxpayers can no longer afford. The reality is hard times are upon us, and worse is coming with the next state budget revise. No longer can taxpayers afford to shell out infinite dollars for infinite wants. The city has got to cut back on its spending/services, and it may have to get rid of some of its personnel (e.g. city planners). But if the taxpayers keep writing the blank check, the city will continue to waste tax dollars. Interesting how UCD managed to find $500 million in savings when it was forced to – even tho it insisted to students it was not possible.
I would agree with your reasoning if we were talking about raising taxes. right now, I fail to see how this city would be better with less money.