The new council voted 4-1 to approve the Police Officer’s Association MOU. The loan dissenter was Sue Greenwald. On Wednesday, in Rich Rifkin’s column he took the new councilmembers to task.
He continues, “Joe and Rochelle proved themselves on Monday to be more of the same, just as the new contract with the Davis Police Officers Association is more of the same.”
“As a test of reform, of moving in a new direction, of no longer making decisions today that will bite us in the future, this memorandum of understanding is a failure,” said Mr. Rifkin.
“There is barely a line in it that improves on the bad contracts our council agreed to – with Lamar Heystek and Sue Greenwald dissenting – earlier this year. With Lamar now retired from the council, only Greenwald is left to stand up for fiscal sanity,” he continues.
“Other than getting rid of four hours of mandatory overtime every two weeks built into the previous deal – which saves $120,000 a year – all the changes in this contract are a mirage,” he said and I agree.
The idea that this contract does anything other than provide temporary budget relief is false. Rich Rifkin is exactly right when he shows that the contract is more of the same. He is exactly right when he says that it does not fix the cafeteria cash out, it does not fix our unfunded liabilities, and it does not fix the pensions. It does not. In fact, it is not even a start in the right direction.
Mr. Rifkin then goes on to cite my interviews with both Rochelle Swanson and Joe Krovoza from the Vanguard as evidence that their rhetoric from the campaign did not match their actions on Monday.
I agree with just about everything that Mr. Rifkin said in his column on Wednesday except for one thing, I do not believe we know that Rochelle Swanson and Joe Krovoza are more of the same. There will be plenty of time in the next nearly four years for us to find out.
Am I concerned with some of the votes I have seen so far? You bet. Would I have voted for the contract on Monday? No.
But, and this is a huge but, the issue of the MOU is not nearly as cut and dried as one might think. Here is the problem with using that as a measuring stick. Four years ago, the police officers could have demanded the same contract as the firefighters where the firefighters got 34% pay increase. But they did not.
In part, they did it because they they thought the firefighters got too much and it would come back to bite them in the behind. And it has. So the police officers did the right thing when they signed the previous MOU. They got a pay raise, but it was 18 percent not 34%.
Now they are last up this time except for the on-going dispute with the Davis City Employee Associations (DCEA). So we’re going to, by that virtue, give them the worst deal of all of the bargaining units? And, oh by the way, it is only a two-year deal ,which means that all of the employee groups will be on the same timeline in two years.
On the other hand, this does not start us on the road toward fixing our fiscal problems. Not one inch. Not at all. Anyone who tells you it does is either LYING or does not get it.
We just lost two years to deal with the problem with the police and we lost three years to deal with the problem with the other bargaining groups. DCEA is pissed off now; wait until they see what happens when their next contract is up. Because if we do not fix things very drastically the next time up, we are going to belly up.
The current contract that was just approved adds 3% to the employee contribution to their retirement but does so by offsetting it with a pay increase that negates any real savings. Increasing employee contributions is not going to save us. It is not even moving in the direction of saving us.
There are only two things that in my estimation will save us and none of the contracts even remotely begin to address these.
First, on pensions, we need to lower the rate of the defined benefit. We can no longer afford to give public safety 3% for every year they work and we can longer afford 2.5% for all other workers. Moreover, we have to change the calculation so that instead of final salary, it’s the average of the final three years of the salary. And by the way, a right-winger by the name of Jerry Brown is proposing the exact same thing.
More importantly we need to stop reducing the age of retirement. There is no reason for people as healthy as we are in this day and age to retire at age 50 and 55. We need to start by raising that to 55 and 60 if not 60 and 65 (that’s for safety and non-safety respectively). The current MOU does not even address this.
I do not want to hear about age as a factor for public safety, I was watching guy over 45 play major league baseball the other day. Certainly, people can still perform their tasks up to 55 and if not, put them somewhere behind a desk for five years.
On the issue of retirement health benefits, the age of retirement is crucial because when people retire at the age of 50, we are paying for 15 years of medical coverage until Medicare kicks in at age 65. We are paying for ten years for other employees. Reduce that coverage by even five years across the board and we save 30% without having to go through a fancy accounting system to fully fund our benefits, which is going to take $4 million per year in additional money out of our general fund.
Between our retiree health care and pensions, we are going to be paying within five years between $10 and $15 million for people who do not work for the city. That’s more than one-third of our general fund going to pay people not working.
So far the solution we have seen from the city finance director is to shift our unfunded liability from “pay as you go” to “full-funding” and while that is an improvement, it is still a costly endeavor. We need to reduce our obligations. And the last round of MOUs did not touch it.
We just lost three years in this fight. That means that we will have to do far more the next round. We elected the new councilmembers in part because of their commitment to fiscal discipline.
And Rochelle Swanson gets it, as does Krovoza. Rich Rifkin cites the quotes from the Vanguard. Rochelle Swanson told me, “One thing that I think that stands out is the age of retirement.” Bingo. “People live much longer. People are much healthier as they age. – What people need to remember is that when one person retires, we hire somebody in their spot and so you end up with a system where you’ll potentially be paying for the same employee slot.”
Likewise Joe Krovoza, “When we hire a city employee, depending on how old they are, we may be taking on a 40-, 50- or 60-year obligation to that employee and hopefully one that we would be able to keep. Bringing the benefit down to an adequate level and making sure it’s not overly generous is the right thing to do.”
I am willing to give Joe Krovoza and Rochelle Swanson longer than August of 2010 to show their true colors, but this is now on them. They now own this problem. Because they, like their predecessors, have voted to kick the ball down the field. Did they have good reasons to do this? Yes they did. But Sue Greenwald and Lamar Heystek voted against these contracts every time they had a chance and Mr. Krovoza and Ms. Swanson did not.
The other problem that I have is that I do not believe city staff is reckoning with council as to how serious the problem is. They are hoping they can piecemail a solution. They have sugar-coated this crisis from the start. We need to get an independent analysis and we need to get outside negotiators next time, because as we saw with DCEA, and their going to war over the same contract everyone else got, the employees are going to fight the real reforms that come down the line. All the more reason to start the battle earlier rather than later.
So to be clear, I do not agree that we know yet that Rochelle Swanson and Joe Krovoza are more of the same. By the same token, they have now lost the benefit of any future doubt and this is now their problem. They have to fix it. If they don’t, then Mr. Rifkin’s words will be prophetic.
—David M. Greenwald reporting
This idea makes no financial sense !
””””I do not want to hear about age as a factor for public safety, I was watching guy over 45 play major league baseball the other day, certainly, people can still perform their tasks up to 55 and if not, put them somewhere behind a desk for five years.””””
So keep employees on the payroll for ” 5 years”, but then hide them behind a desk , wow !
That’s an if necessary clause. Gauging from the health of most of our employees, that will be a rare occurrence. The problem right now is that we’re double-paying for positions, for every employee, we’re paying for retirement for an extra five to ten years for people still young enough to work at the same time, we’re paying for a new employee. In the rare instances that there is a health consideration, we can shift their job. In most cases, that doesn’t happen automatically when someone turns 50.
Political campaigning is to governing as poetry is to prose.
dmg: “I am willing to give Joe Krovoza and Rochelle Swanson longer than August of 2010 to show their true colors, but this is now on them. They now own this problem. Because they like their predecessors have voted to kick the ball down the field. Did they have good reasons to do this? Yes they did.”
What “good” reasons were those? At what point is it necessary to start being fiscally responsible as a City Council member? Later rather than earlier?
The dogs may change, but the kennel stays the same. The political cost of offending DPOA is obviously greater than the short lived and soon forgotten outrage of the press, who will give the voters a hundred more things to worry about before the next election. Meanwhile DCEA must pick among the scraps left by police and fire.
[i]”So the police officers did the right thing when they signed the previous MOU. They got a pay raise, but it was 18 percent not 34%.”[/i]
It’s true the raise for the cops was less than fire. But I think you got the numbers wrong. The police (who I believe deserve to make more than fire) got a 28.6% nominal dollar increase in salary over the four years of their contract*. (AFAIK, they did not foregive any of their raises.)
Here are the increases for the police in their previous four-year contract:
Year 0 = 100.00
Year 1 = 109.00 (9% raise)
Year 2 = 115.54 (6% raise)
Year 3 = 122.47 (6% raise)
Year 4 = 128.60 (5% raise)
*Keep in mind that you cannot add up their increases. They compound on one another.
By contrast, here are the increases for the firefighters in their previous four-year contract:
Year 0 = 100.00
Year 1 = 110.00 (10% raise)
Year 2 = 118.80 (8% raise)
Year 3 = 128.30 (8% raise)
Year 4 = 136.00 (6% raise)
[i]”Now they are last up this time except for the on-going dispute with the Davis City Employee Associations (DCEA). So we’re going to, by that virtue, give them the worst deal of all of the bargaining units?”[/i]
There is another way to look at the DPOA contract: that it is the first contract in a new round, not the last. That is, the contract voted in 4-1 on Monday could have been the first contract to set the terms for our future. Instead, Jo and Ro made the fundamental mistake of thinking we have time to put off fixing our future until HALF OF THEIR TIME IN OFFICE IS OVER!
As such, it is going to be nearly impossible to solve the problem without bankruptcy. That’s what happens when you have mounting debts, huge increases in costs (for retiree care) built in, no substantial revenue increases (in fact they may fall over the next two years) and you make the Ro and Jo statement: let’s just punt for the next two years. That’s a huge boner.
[i]”The current contract that was just approved adds 3% to the employee contribution to their retirement but does so by offsetting it with a pay increase that negates any real savings. Increasing employee contributions is not going to save us. It is not even moving in the direction of saving us.”[/i]
That is true for the police and fire contracts. However, increasing employee contributions to fund pension expenses for all of the other contracts is a hugely important reform that needs to be implemented.
The last round of contracts made very minor, almost insignficant changes to this effect. However, the fact is that Davis is still way out of step when it comes to funding non-safety pension funding.
For those on a 2.5% at 55 pension, the employee contribution is 8% of salary. The employer contribution is now (roughly) 12.48%. In other words, if an employee has a salary of $100,000, it costs $20,480 to fund his 2.5% at 55 pension. The problem in Davis has been that the taxpayers have paid both the agency contribution amount and the employee contributions amount. Nothing was ever deducted for the supposed employee contribution.
But that started to change in the most recent contracts–at least for some on 2.5% at 55. For PASEA, for example, starting July 1 of this year, the employees are contributing 1% of salary to their pension funding. The taxpayers are still picking up the other 7% for the “employee contribution” and all of the employer contribution.
In July of next year, the employee share will rise to 2%, which is still only one-fourth of what they should be paying under the PERS system. The majority of cities and counties in California (according to Pension Watch) charge from 5-8% of the 8% to employees, with most of them charging the full 8%. We are barely crawling to get off the floor to 2%.
Yet another huge problem is looming, one which begins to kill us July 1, 2011. The employer rates — due to market losses for CalPERS — are going to go up. I am not certain by how much they will rise, though it seems likely (over a few years) by at least another 10%. That means that to fund the pension for our $100,000 a year employee, it will cost $8,000 for the employee share ($6,000 from the taxpayers) plus $22,480 for the employer share.
We have no money to cover this added expense. It will either come from cutting back on services — which means firing a substantial portion of the city’s workforce — or reducing total compensation. There is no other choice.
[i]”So to be clear, I do not agree that we know yet that Rochelle Swanson and Joe Krovoza are more of the same.”[/i]
What will it take for you to know it?
What if, come January, a trio of Swanson, Krovoza and Souza (sans Greenwald) picks a replacement for Saylor whose political history and friendships in Davis ties her/him into the ‘Davis political establishment’? Say they pick Gina Deleiden* or Tim Taylor* or Sydney Vergis. Would that tell you Ro and Jo are ‘more of the same?’
I really do expect that to happen in January. It will mean that Ro and Jo and Stephen are more-less of the same mindset; and that Stephen, the senior member of the trio, will be our mayor after Don goes to Woodland.
*If they take someone off of the school board, my preference would be Richard Harris. At least he has a history of standing up against the DTA–one time anyhow. I don’t have anything against Tim or Gina. In fact, I think they and Sheila are good council candidates. My point is that those two are part of the same political crowd.
Correction: “I don’t have anything against Tim or Gina [b](or Susan Lovenburg, who is also from that same crowd)[/b]. In fact, I think those three and Sheila are good council candidates.
Don’t firefighters and police need to physically re-qualify once or twice a year? I’d like to have a 52- (or 57-) year-old experienced and fit firefighter carry me out of the building. Or police of the same age to protect me from the dangers in Davis. Or someone working as an inspector if they’ve been injured or otherwise can’t meet the standards.
This vote could have gone the opposite way (3=2) if our two newest had wanted to let everyone know that it was time to pay attention to business…or at least delay the decision long enough to study and discuss the issues.
David, I too would like to know what possible “good reasons” exist to justify voting against one’s own major campaign commitments during the first month in office.
Rich, now wouldn’t you have more confidence in the Mayor’s replacement coming from a vote of the citizens rather than an appointment by the existing establishment? I still would like to see Saylor do the right thing (get out in time to allow the “cheaper” election to be conducted). Of course, it sounds like you’re a little disappointed that we selected Rochelle and Joe….
[quote] Jo and Ro made the fundamental mistake of thinking we have time to put off fixing our future until HALF OF THEIR TIME IN OFFICE IS OVER!
[/quote]
…and until they are two years closer to their own next campaigns, if and whatever they may be.
[i]”Rich, now wouldn’t you have more confidence in the Mayor’s replacement coming from a vote of the citizens rather than an appointment by the existing establishment?”[/i]
I would.
I favored a special election for this November. That would have required Don Saylor to have stepped aside by July 14. I favored Don being appointed to his old seat as the interim council member and the mayor until a replacement was elected. But Don (and the labor groups he has enriched) vetoed that plan.
So now we face either an appointment or a very expensive special election. With that choice, I favor appointment. I don’t think elections are normally “a waste of money.” But given our dire financial circumstances, I think we are better off not spending for a special election next year. Let the ruling triumvirate pick a 4th member of their caucus.
“The other problem that I have is that I do not believe city staff is reckoning with council as to how serious the problem is. “
City Staff has a serious conflict of interest here since they also benefit from the present system; its like the fox guarding the hen house.
There is no excuse for business as usual in this climate. If Jo and Ro continue to act this way someone may want to suggest a recall. It would fail, but might wake them up. Ro won by a very narrow margin and clearly courted many folks who read this blog. Now that they both have been elected its easier not to rock the boat, but we need to remind them that there are folks who care about budget issues.
Not to Worry… Budget Deficits Roll Down Hill
Today the state is out of budget gimmicks. The state is at its back breaking point of no return… within a year or two it will roll down to counties and cities who will be out of budget gimmicks. Then the City of Davis will face its “Oakland moment” for layoffs.
I am sure council members will say “Who could have seen this coming?” and city employees, cops and firefighters will cry about their own layoffs in a state with unemployment well above the laughably lowball manipulated BLS U3 rate of 12.3%…U6 north of 17%…
We had a chance to vote for some non main stream candidates, beholden to no one who would have affected change… but you the Davis public voted for the same old same olds. Why don’t we just put Vergis on the council next time and you can enjoy even more of the same while your little town finances go up in flames…