Decisions made by the Davis City Council in the past will be coming home to roost. And the danger is that the city not only threatens its own fiscal house, but may indirectly imperil the school district’s as well.
Starting May 17, the council is scheduled to receive formal introduction of the City Manager’s FY2011/12 Proposed Budget. The city has not released the budget as of yet, so we cannot start reviewing the numbers.
Writes city staff, “Following the introduction of the budget as part of the May 17th regular meeting, a Budget Workshop and public hearing on recommended modifications to City fees has been scheduled for May 31st, and a second Budget workshop is June 7th. Formal adoption of the FY2011/12 Annual Budget is tentatively scheduled for meeting of June 21st.”
In advance of having some numbers, we need to go through the list of problems. We are starting to get word that the city is starting out the budget cycle in the red, about $750,000. That amount will have to be closed. But the problems get worse from there.
Increased costs to pensions will likely eat up another $2 to $3 million that the city will have to find money to cover.
That number does not reflect the amount the city will have to pay to close the unfunded retiree health care liability.
But the most serious problems are not even on the city’s general plan budget. The surface water project is going to lead to a series of rate increases that will eventually take the yearly water rate from just over $400 to $1333 per year.
That is about a $900 increase, which is about 4.5 times greater than the school’s parcel tax.
But there is more, as next year the city will have to pass a parks tax again or face another couple of million in the hole.
We need to put this into perspective. Voters last week approved Measure A, which in the next two years increases their parcel tax by $200. Next year, the voters will be asked to renew at least $320 that was allocated by previous parcel taxes Measure Q and W.
The same people will be paying 28% more on their water (not counting sewer) and see their water rates over the next five years increase three-fold.
The same people will be asked to pay for a parks tax.
People were complaining about the $200 parcel tax increase in Measure A, so how are they going to feel once they get hit with the increased water rates, then the district hits them for $320 and the city hits them on the parks tax?
It does not take a crystal ball to figure out that the city may have trouble getting voter approval for its parks tax, and the school district may have trouble getting voter approval for its parcel tax.
I have always argued that we need to prioritize schools over municipal services, but at some point the voters are going to have to say enough, even in Davis.
The surface water project could potentially imperil both the city and school budgets.
One of the big questions for the next budget is whether the interim City Manager, Paul Navazio will show us the money. By that, I mean show us where the money is going to come from to pay for these increases. For the most part, Mr. Navazio has been able to paper over the problems in the past by creating overly rosy revenue projections.
I have yet to see a budget where the full force in the increases in the pensions and the coverage of the unfunded health liability are fully factored in. What happens if the surface water increases mean the public opposes the parks tax?
All of these things should be weighed in the budget that the council gets to look at and make decisions. They have tough decisions to make, but in order to do so, they need to see the truth.
—David M. Greenwald reporting
The City is going to have to cut back on labor–there is no other way around it.
We can do this the smart way or the dumb way. (I favor the former.)
The smart way involves looking at where the City can cut back without harming services much (if at all). Front and center should be our fire fighters. We could reduce crew size for a start and I am sure there are other reductions. The City does plan to look at this and it will be a test of whether its business as usual or a new dawn.
My guess is that Navazzio knows full well that serious cuts can be made on the fire dept., but its a politically loaded issue and the firefighters union has a great deal of (i.e., way too much) clout. Our new council seems less beholding to these special interests, but has not been put to the test yet.
The other issue DG mentions are pensions and benefits which will kill our City in the long run, especially as CALPERS is forced to adjust its overly optimistic forecasts in a few years. We can start now with health care costs where the City has flexibility to make some cuts now (e.g., cash out, etc.). I am sure there are other places where the City can cut and I hope it will do so but the firefighters are the low hanging fruit.
I agree with DG that other taxes will be much harder to raise, even if the folks in El Macero who voted measure A down are not included.
I voted for Measure A but will not vote for any other tax increase until the City gets its act together. I can afford and don’t mind paying more taxes, but I refuse to pay for anything till the City faces up to these issues in a meaningful way. The sooner we do this the better off we are. Many cities will fail the test. Vallejo, Stockton and other cities may not make it. We will, but how we come out of this fiscal crisis (which is what this truly is) depends on us.
The time to act is now.
Seems like the money spent for Zipcars was not a good idea. What other bad ideas were there?
To dmg: Good analysis of the fiscal problems ahead for the city.
To Dr. Wu: Excellent observations.
To keithb: But oh, didn’t you know, Zipcar met its quota of use for the last 3 months (didn’t the previous months), which means it is currently “breaking even” – and therefore is justified project and was a “good idea”. Let’s see if Zipcar can SUSTAIN the necessary quota for an entire year. And of course the losses to the local rental car companies has not been factored in…
Off topic, as currently Zipcar is not a factor in the budget, but I’m paying around $1200/year in insurance costs, $150 in registration fees and about $1000 in upkeep on a 2006 vehicle that I’ve driven less than 30,000 miles ! I’m guessing that’s not unusual for retirees . If I had Zipcar available in my area I would certainly try it ! It seems rather silly to reject an idea solely on it’s novelty, especially one which seems to work well everywhere it is in operation !
I too agree with Dr. Wu. The cost of water is just the way it is, and I will continue to support the schools, but until the city council gets its act together and produces a budget that doesn’t depend on smoke and mirrors, I voting “no” on tax increases or even continuation.
[quote]If I had Zipcar available in my area I would certainly try it ! [/quote]
But would you give up your car? And would you agree w the Zipcar contract if 1) the city does not break even but loses money over an entire year; 2) it hurts local car rental companies that will generate less sales tax revenue to the city?
Doctor Wu: [i]”We could reduce (firefighter) crew size for a start and I am sure there are other reductions. … My guess is that Navazzio knows full well that serious cuts can be made on the fire dept., but its a politically loaded issue and the firefighters union has a great deal of (i.e., way too much) clout.”[/i]
Moving back to 4 on a truck from 3 represents a big savings. If we did so immediately, we would save the most money, but it would entail laying off a number of current Davis firefighters. My preference would be to change our minimum staffing on a truck from 4 to 3, but not fire any of the current firefighters. (I always prefer a solution which spreads the pain, in place of making a handful of people lose 100% of their income.)
By simply changing the staffing requirement, we would no longer face the problem that we now have when one firefighter has jury duty and say another is out on family leave or sick leave. When that happens, others who would be off duty are called in and paid overtime. Under my plan, a truck would simply go from 4 people to 3 on a day when someone was unable to come in.
Over the course of years, through retirements, we would eventually have just the amount of firefighter staff needed to man trucks with 3 per truck.
A second area of BIG savings in the next fire contract could be achieved by getting rid of mandatory overtime. Save readers of my column, I don’t think most people in Davis realize that our firefighters get overtime pay every paycheck, every two weeks. It is guaranteed the way their hours are allotted.
The problem is that in a 24-hour shift, we are paying our firefighters at full pay to sleep on the job 8 hours. We are also paying them when they are eating and shopping for food and so on.
What we could instead do–and this would end up taking away the mandatory overtime payments–is pay them for 16 hours of work for every 24-hour shift. That is legal, though I don’t know if it is done in any comparable departments. In effect, we would be saying to them: we are no longer paying you to sleep.
If the firefighters get a call in the middle of their sleep period, they would go back on the clock until they got back to the station. They would then go off the clock and be given the chance to sleep a full 8 hours in their 24 hour shift.
By changing to a 16-hour workday from a 24-hour workday, the City would save roughly 1/3rd of its salary cost for firefighters. Doing this would also make firefighter pay roughly equal to police officer pay in Davis.
I like your plan Rich. Jobs and money both saved. I’m sure the firemen would hate it, but too bad.
I like the idea of not paying firefighters for time spent sleeping; however, I think the problem with that is California labor law on on-call compensation for controlled time. By law, if any non-exempt employee is required to remain on the employer’s premises available for work as needed, then that employee is on controlled time… which means they are on the clock and must be paid for the time.
I understand that the Vallejo bankruptcy deal did not touch pensions benefits, but resulted in police and firefighter staffing reductions to help balance the budget. Seems ass backwards to me.
[i]” I think the problem with that is California labor law on on-call compensation for controlled time. By law, if any non-exempt employee is required to remain on the employer’s premises available for work as needed, then that employee is on controlled time… which means they are on the clock and must be paid for the time.”[/i]
Fortunately, Jeff, you are incorrect.
Here is an explanation ([url]http://www.flsa.com/fire.html[/url]) of the federal FLSA (Fair Labor Standards Act): [quote] The FLSA permits employers to exclude up to 8 hours from work time when shifts are exactly 24 consecutive hours (private sector) or more than 24 hours (public sector), as “sleep time.” To permit a sleep time exclusion requires that there be an “agreement” with the employees. An employee who takes a job which has a sleep time exclusion in place will be deemed to have “agreed” to it. There must also be adequate sleeping facilities, and the employees must normally have the opportunity to obtain 5 hours of sleep. The 5 hours need not be consecutive, and if an employee does not have the opportunity to get at least 5 hours of sleep no sleep time exclusion is permitted. Any time during the sleep period when an employee is actually performing work must be counted as work time. [/quote] And here is the state of California law ([url]http://www.dir.ca.gov/dlse/dlsemanual/dlse_enfcmanual.pdf[/url]) on the same subject (see page 175 of 300): [quote]On the other hand, time spent taking a break from travel in order to eat a meal, sleep, or engage in purely personal pursuits not connected with traveling or making necessary travel connections (such as, for example, spending an extra day in a city before the start or following the conclusion of a conference in order to sightsee), is [b]not compensable[/b].[/quote]
One difference in California law from federal is that the sleep time must be 8 hours of uninterrupted sleep.
[i]”Uninterrupted Sleep Time . DLSE enforcement policy has historically allowed eight hours to be deducted if an employee is scheduled for 24- hour work shifts and is required to remain on the employer’s premises during the work shift and, in fact, receives eight hours of uninterrupted sleep.”[/i]
I can imagine the 8-hour rule inviting some abuse (where one “odd” call here and there gives them 8 extra hours of pay). However, it also seems impossible to me that such a change in policy could not achieve some major savings for the Davis taxpayers.
One thing I know many departments have changed to–to avoid paying for their firefighters to sleep–is 12-hour shifts. That mayb be a good idea, but it does not achieve any savings.
Yeah, ERM, I’d give up my personal vehicle for a reliable, more affordable and more useful alternative . As someone who drove hundreds of thousands of miles in my work life, much of it in tiny increments, I have become keenly aware of the social, economic and environmental impact of automobiles . Automobile accidents are the number one killer of teens 15-19 , twice as common as homicide and suicide combined. We are engaged in protecting oil supplies around the world at the cost of American lives, largely to feed our driving habit. Many on this blog believe that oil prices drive the course of our whole culture and economy . I hope, but have little faith, that enough folks will be far-sighted enough to make changes in their lives and influence others with their positive results, that, like killing weeds with used crankcase oil, the use of personal, internal combustion, automobiles will become a humorous oddity.
[i]”Yeah, ERM, I’d give up my personal vehicle for a reliable, more affordable and more useful alternative.”[/i]
It’s possible that for many people a Zipcar might be more affordable than owning a car. It seems unlikely it is more reliable and more useful for most.
[i]… I have become keenly aware of the social, economic and environmental impact of automobiles.”[/i]
Last I checked, Zipcars are automobiles.
[i]”Automobile accidents are the number one killer of teens 15-19 , twice as common as homicide and suicide combined.”[/i]
Using the Zipcar won’t change that.
[i]”We are engaged in protecting oil supplies around the world at the cost of American lives, largely to feed our driving habit.”[/i]
You can buy your own electric car or PHEV if you don’t want to burn oil.
[i]”Many on this blog believe that oil prices drive the course of our whole culture and economy.”[/i]
Many not on this blog likely believe that, as well.
[i]”I hope, but have little faith, that enough folks will be far-sighted enough to make changes in their lives and influence others with their positive results, that, like killing weeds with used crankcase oil, the use of personal, internal combustion, automobiles will become a humorous oddity.”[/i]
I have a great faith that people will always respond to incentives. If it becomes cheaper to drive an electric car than it is to drive a gas-powered car, people will change over to electrics and PHEVs.
I think this changeover will become inevitable, as electric autos become cheaper and batteries get better. However, we can encourage the change to electric faster by subsidizing their purchase (as we are now doing) and by taxing petroleum even more than we are now doing.
One thing which we should be thinking hard about now is how to produce a lot more clean electricity to replace all that petrol.
The Japanese situation should be an eye-opener with regard to nuclear power. I think it is a very important possible source of electricity, but it is not without some serious risks. Obviously, the Japanese made huge mistakes in not properly evaluating some worst case scenarios, all of which hit them.
I am very dubious of this “clean-coal” future, but maybe better CO2 sequestration will make that a viable option.
I love the idea of more and better solar and wind, but those technologies are very expensive (compared with other ways to generate electricity, such as buring natural gas). And those technologies take up huge amounts of land, a premium resource virtually everywhere we want to generate electric power.
Regardless of what methods we turn to for more electricity production, we need to have a lot more electricity if we are going to be driving electric cars and filling them up over night.
Rich, I think with CA law the key is “purely personal pursuits”. For example, when I send a non-exempt employee to a conference, I don’t pay them for time spent sleeping. But if I send that employee to a branch office to cover an emergency situation that required them to be on premise and on-call while sleeping, then I think under CA law I need to compensate them for that time.
I think the rule is “if the employee is required to remain on call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes”, it is considered “controlled time” and requires compensation.
I will dig a little deeper to understand this better… since I am the HR “expert” (yikes!) at my company, and I need to know this stuff.
Personally, I think we go overboard with this. Note that as an employer, I can, frankly, abuse exempt (salaried) employees with just about anything I can justify as a requirement of the job. Of course there are rules for exempt vs. non-exempt, and a firefighter would never be able to be classified as exempt based on these rules. However, it is irritating to me that this nuanced distinction can result in such vastly different compensation rules.
From what I can tell, there are 12 firefighters plus three shift captains per station. With fifteen firefighters per station that is 600 person hours available per week assuming an eight-hour week. Four firefighters at eight hours per day times three shifts times seven days equals 672 person hours. So, obviously, with four per truck and sick leave and vacation and holidays we have to require more than 40 hours per week… and pay overtime. With three per truck the total person hours is 504. That barely covers it. It seems that trying to reduce firefighter expense by reducing FTEs is futile unless we close a station or find another way to reduce services. Not compensating for sleep time seems like a solution, but I cannot find another example of this being done. Another idea (I understand that San Diego does this), is to “brown out” a truck for a shift or more per week in each station. For example, looking at the patterns for service calls, pick the shift(s) that gets the fewest calls and make a truck unavailable for that time (rotating this per station so that we always have at least two trucks ready to roll… and three for the peak periods). In this case we might be able to reduce personnel.
Other than closing a station or reducing services, it seems the best approach for cost savings is to cut the pay and benefits – including the obscene pensions – for firefighters. There are plenty of capable people that would do the job for 2/3 the total compensation currently paid. Were the stations owned and run by a private, for-profit company, this is exactly what would be done.
Rifkin-For most people, the decision to drive a car vs. walking, biking, or taking public transportation is heavily influenced by the comfort and convenience of a personal car in the driveway. Fewer private cars would equal fewer person/miles driven .
Kudos to Rich and Jeff for thinking outside the box on how to get our city employee salaries/overtime compensation under control. Now if we could only get our city/City Council to climb aboard the creative train…
[quote]Yeah, ERM, I’d give up my personal vehicle for a reliable, more affordable and more useful alternative . [/quote]
Rich Rifkin’s response on my behalf was spot on (Zipcars are cars too), but there is more to think about. You didn’t answer the rest of my question – would you be willing to support Zipcar by not only giving up your car, but support Zipcar if Zipcar ends up costing the city money and hurts the local car rental companies? So far, according to tonight’s column by Bob Dunning, Zipcar has thus far cost the city $8,000, and has obviously eaten into our local rental car market. How is that benefitting local citizens as a whole? It may be benefitting a few people who use Zipcar, and city staff who get to use a Zipcar for free, but it certainly seems ridiculous to sign onto a contract that loses money for the city, when the city is in such dire straits it does not even have enough money to fill its own potholes.
[i]”For most people, the decision to drive a car vs. walking, biking, or taking public transportation is heavily influenced by the comfort and convenience of a personal car in the driveway.”[/i]
It depends somewhat on how far a person lives from where he needs or wants to go, but in general I agree with your statement. That is to say, people want to have their own cars because it makes life more convenient for them.
Although this is counterfactual, take the idea or example of an Osage Indian living in the Great Plains say in the 1200s, long before the Pale Face had arrived in his domain. He had no horse–whitey had not yet brought the ridable equine to the New World–no buggy, no car, effectively nothing for transportation. So when he wanted to say catch a fish for lunch, he had to walk down to the river. And say his tepee was 2 miles to the river. So this Osage man walked round trip, roughly one hour.
But then, magically, say a horse appeared. And once he figured out how to catch the horse, tame it, train it and ride it, what do you think Mr. Osage would do: ride his horse fast for 8 minutes to the river? or leave the horse back at the tepee and walk for 30 minutes? My very strong guess is that Mr. Osage will do what is most convenient for himself. His wife also might be suspicious if it takes him a long time to come back. She knows that river has a lot of young Osage women who might be batting an eye at her husband. So it seems like human nature makes Mr. Osage the same as it makes most of us: we do what is most convenient most of the time, unless we have strong reason to do otherwise. It’s a rational decision. Convenience brings us utility. We like it. We are less happy without having that choice.
You have not said you would deny anyone else the human right to own and operate a car. But if you think that is wise, know that doing so is a way to make people much less happy, denying them the choice of convenience which is in their nature to like.
[i]”Fewer private cars would equal fewer person/miles driven.”[/i]
Certainly. But we should not collectively be concerned at all about the number of miles driven, unless the driving itself is irrational–such as a person with mental illness driving 600 miles a day, taking 30 trips to Woodland back and forth for no reason at all.
The fact is that when people choose to use their cars, they are getting value out of that which is important to them. If a person chooses instead to ride his bike to the train station and ride the train to his destination, he will do that if he gets more value out of that than any other options he has. But ultimately, each individual must decide what brings them value. I would never advocate for a system in which a tyrrany of the majority denies the individual the right to choose.
JB
II agree with your statement that you can abuse exempt employees. This is one of the reasons that those of us who support unions continue to do so. If, as you seem to feel, it is the right of business owners and managers to try to pay as little as possible to maximize their profits, then why should not the workers have the same right to demand as much as possible so as to maximize their compensation ?
medwoman: My employees like it when I “abuse” them this way. I abuse myself the same. When I say “abuse” what it really means is that I have expectations that they will get the job done no matter what it takes. I have the same expectation of myself.
We all like working hard to achieve great things for the company we work for. If my employees stop liking the way I abuse them the way I do they can always quit a get another job somewhere else… like a union shop where they can work less hard and be paid more… and I guess find otherways to find pride in their careers.
This “don’t like it then quit” point is one that seems lost on you and others supporting the union way. A job should not be an entitlement. If you don’t like working somewhere and don’t like your boss, then you can and should quit. If enough people don’t like to work for the business or boss, then that company should start having difficulty attracting and retaining quality employees. Eventually upper management or the board of directors would figure it out and fire the crappy boss when the company performance suffered because of lack of talent in the workforce.
When you use a union as a power broker to force job security, you essentially memorialize the crappy boss… except it becomes even worse because it is a crappy boss without power to get rid of crappy employees.
JB
1) ” They can always quit and get another job elsewhere ” ? Demonstrably not true if you are following current unemployment rates.
2). ” I abuse myself the same way”. Maybe, but you have the power to fire them. They do not have the same power over you.
3) “We are all working hard to achieve great things for the company we work for”. I am not sure that I have ever read a clearer description of putting the good of the company above that of it’s workers. It ignores one stark reality of life which is that many people’s first goal by necessity is not the profit of the company, but simply feeding themselves and their families.Followed to it’s extreme, the argument of working for “the good of the company” was what led to child labor “‘, farmworkers dying from heat exposure since providing water, shade and rest periods detracts from the “great things” namely profit of the company, which as you have pointed out many times, they will pay as little as possible to the workers.
4) “If you don’t like a boss, then you can and should quit”….. Even if that means that you lose your home or can’t feed your family since that “other job” doesn’t exist ?
medwoman: Thanks for the dialog on this. I really find it fascinating… the different perspectives we have over life and work. One important thing I notice about your perspective on work is some demonization of company, profit and boss… while holding the employee in some angelic regard. Here are some points for you to ponder:
– When the company does not exist, there are no jobs.
– When the company does not make a profit, then workers lose their jobs.
– Everybody works for somebody… even CEOs work for their board of directors. Those owners of a private company report to their bank that provides them operating loans. If the boss does not demonstrate she is running a viable operation, the bank will not renew the operating loan and the company can fold… and workers would lose their jobs… including the boss.
– Bosses are just people too… no better or no worse than the average worker, just with a different role. That role certainly includes more power, but it is commensurate with the greater scope of accountability, stress and responsibility that comes with the job of manager. Of course you know that under CA law bosses can be sued and are personally liable for employee claims of harassment? Let’s talk about where the power really exists in this fine state. I think employees have so much power they don’t even know what to do with it.
– I know absolutely nobody that reports being less satisfied with their career after quitting working for a company or a boss they did not like. People that stay are the type of people that seem to gravitate toward unhealthy and abusive relationships or are so chronically risk-averse that it would take a pry-bar to get them to even change desks. They stay and they complain. So sad.
– Employees have a relationship with their company or boss. We spend more time at work than we do with our families. This fact is why there is so much drama in some employee-company and employee-boss transactions. It is understandable why emotions are involved, but why would anyone stay in any relationship that they are so unhappy with? Like all relationships we run into compatibility issues. Unions take away free will to associate with people that are compatible… it creates a sort of dysfunctional culture where the forced associations create factions of people spending more time protecting themselves than working for the good of the organization that employs them.
– The main exception to a “right to work” and “employment at will” approach is for low-skilled labor. People with low skills cannot as easily find another job. They become captive to abusive company/boss relationships. In many cases, the boss is also low-skilled in leadership. The boss also becomes captive. Both become resentful being unsatisfied with their work and unable to quit. It makes for a toxic work culture. However, well-managed companies will implement processes to combat this problem and preventing it from occurring. These are the companies that would be most attractive to employees. Think Nugget Market. It would allow the company to be more selective when hiring… choosing and retaining the most seasoned and quality employees. This then leads to a company that exudes positive energy and attracts customers.
Note that there is a very good thing about the challenge of being low-skilled… is should suck because it provides motivation to go learn a trade or profession. This is why I am so focused on our crappy public schools. We need to prepare kids for the working world armed with marketable skills so they don’t become captive to a life that sucks.
In case you’re curious about how the other half lives, here’s an interesting WSJ article about how the suffering citizens of Orinda are getting along.
In a Wealthy Enclave, No Money for Roads
[url]http://online.wsj.com/article_email/SB10001424052748703864204576313700392667780-lMyQjAxMTAxMDEwMjExNDIyWj.html[/url]
Two points:
One – [i]”Orinda is heavily dependent on property-tax revenue, which has to be divvied with the state, because the largely bedroom community has relatively few stores and other businesses on which to levy sales tax.”[/i]
Similar to Davis… keep out all those “ugly” big box stores to maintain a village lifestyle and then and pay the price.
Two – [i]”Mayor Victoria Smith said Orinda’s annual budget of $10 million, which also has to go to support essential services such as police and fire, isn’t enough to repair the roads.”
“They think there is already been a lot of money spent on a new library and a new city hall.”[/i]
Similar to Davis – better to pay obscene pay and benefits to safety employees… the union beneficiaries that then help their committed candidates win elections and then build new shrines for themselves… than use the money to maintain necessary infrastructure.
It is a cat and mouse game. Will residents tax themselves, or will they hold out until the whole thing collapses so they can rebuild an affordable model?
JB
It would seem that your philosophy as stated here has not kept up with the current economic climate.
I have patients within the past several years including accountants, legal aides, teachers, social service workers, nurses and researchers who have liostt their jobs and have had difficulty finding new ones. These are not the “low skilled “workers that you seem to feel are the only people who will have difficulty finding jobs. Your stated philosophy does not take into account factors such as part time nurses choosing to work full time to supplement their incomes or those nearing retirement deciding to work longer because economic losses have made it unfeasible for them to retire as planned thus affecting the employment opportunities for new graduates. You may not be seeing this effect in your business, but I am seeing it on a daily basis having a busy practice located near the university.
And while I agree with you that bosses are people too, and neither side has a monopoly on virtue, you have never chosen to address my point about the “race to the bottom” leading to situations such as child labor and hazardous working conditions which are both historical and current fact, not speculation.